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Infosys Raises FY20 Revenue Guidance; Q3 Digital Revenues Up 40.8%

Infosys Limited (INFY), a global leader in next-generation digital services and consulting, increased its fiscal 2020 revenue guidance to a range of 10.0%-10.5% in constant currency. The company maintained its operating margin guidance range of 21%-23%.

Third-quarter earnings per share was $0.15 compared to $0.12, previous year. On average, 12 analysts polled by Thomson Reuters expected the company to report profit per share of $0.14 for the quarter. Analysts' estimates typically exclude special items. Operating profit was $711 million, an increase of 5.4% from prior year. Operating margin was at 21.9% for the third quarter.

Third-quarter revenues rose 8.6% year-on-year to $3.24 billion. Revenue were up 9.5% in constant currency. Analysts expected revenue of $3.24 billion for the quarter. Digital revenues were $1.32 billion (40.6% of total revenues), a year-on-year growth of 40.8% in constant currency.

Nilanjan Roy, CFO, said: "Cash generation was extremely strong with cumulative free cash flow crossing $ 1.5 billion. Return on equity increased further to 25.9% driven by margin expansion and increased shareholder payouts."

Separately, Infosys (INFY) reported that the Audit Committee of the Board has concluded its investigation on whistleblower complaints, and found that there was no evidence of any financial impropriety or executive misconduct. The Audit Committee reported that no restatement of previously announced financial statements is warranted.

Infosys Chairman Nandan Nilekani said, "I am pleased that after a rigorous investigation, the Audit Committee has found no wrongdoing by the company or its Executives."

The investigation also concluded that all allegations regarding personal matters of the CEO are without merit.

Shares of Infosys Limited were up more than 4% in pre-market trade on Wednesday.

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