- Infosys (INFY -5.3%) is "definitely having a weak quarter three," says COO Pravin Rao. He adds the IT outsourcing giant's problems are more broad-based than usual, and that verticals such as financial services are seeing larger seasonal IT spending changes. FQ3 (calendar Q4) margins will be pressured by lower revenue growth and higher investments.
- Infosys is looking to offset top-line pressures by scoring more deals in the $1.5B-$2B range (compares with a current average size of $500M-$550M). Adoption of public cloud platforms such as Amazon Web Services and Microsoft Azure has been a headwind for IT services firms in general (see IBM's numbers).
- The remarks come a month after Infosys cut its FY16 (ends in March) revenue guidance, in spite of an FQ2 beat. Peer Cognizant (CTSH -1.9%) is off moderately.