American depository shares in Infosys (NASDAQ:INFY) fell 8% in pre-market trading in New York as the software giant gave underwhelming guidance for the coming year, indicating that corporations are still cutting back on spending for software and IT projects.
Revenue for the fourth quarter of the India-based conglomerate's 2024 fiscal year was US$4.66 billion, down 1.2% from the preceding quarter. In rupee terms, revenue declined by 0.4%. It was the second quarter in a row where the top line had fallen.
Guidance was given for revenue growth for the new 2025 fiscal year of between 1% to 3%, which was much lower than the 2-6% that analysts had been expecting.
Management reiterated its EBIT margin target of 20-22%2, though.
Managing director Salil Parekh said the company was "seeing excellent traction with our clients for generative AI work. We have put GenAI in our services and are committed to the ethical use of AI."
US brokerage Wedbush said it was a "muted" set of results, including "relatively weak" revenue growth guidance, roughly 200 basis points below Wall Street's expectations.
"We believe guidance likely reflects heightened macro uncertainty (Fed's rate cuts pushed out) and elevated political (Middle East) turmoil."