Company: INFY
Filing Date: 2025-07-01
Form Type: 20-F
Source: 0000950170-25-091925
Chunk: 23

Company: Infosys Ltd
Filing Date: 2025-07-01
Form: 20-F
Item: Item 3
Chunk 23
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 can be terminated with or without cause, with a notice period as agreed in the contract. Our business is dependent on the decisions and actions of our clients, and there are a number of factors relating to our clients that are outside of our control, which might lead to termination, descoping of a project or the loss of a client, including:
•financial difficulties for a client including limited access to the credit markets, increased cost of debt service, increased cost of operations, insolvency or bankruptcy, adverse impact due to the macro economic factors, changes in tariffs or trade restrictions or geopolitical conflicts;
•a change in strategic priorities, resulting in a reduced level of technology spending;
•a demand for price reductions; or an unwillingness to accept higher pricing due to various factors such as higher wage costs, higher cost of doing business;

 

•a change in outsourcing strategy by moving more work to the clients’ in-house technology departments or to our competitors;
•the replacement by our clients of existing software with packaged software supported by licensors;
•mergers and acquisitions;
•consolidation of technology spending by a client, whether arising out of mergers and acquisitions, or otherwise; or
•sudden ramp-downs in projects due to an uncertain economic environment or a pandemic.

Our inability to control the client's decision with respect to termination of client contracts could have an adverse impact on our financial condition and results of operations. While there have been no material project terminations due to economic uncertainty, changes in tariffs or trade restrictions or geopolitical conflicts, a prolonged uncertainty could heighten the risk that certain of our clients may invoke termination clauses to reduce their expenditure which could in turn affect our anticipated growth and profitability.

Our client contracts are often conditional upon our performance, which, if unsatisfactory due to reasons whatsoever, could result in lower revenues than previously anticipated.

A number of our client contracts have incentive-based or other pricing terms that condition some or all of our fees on our ability to meet defined performance goals or service levels. In addition, certain client situations may require us to agree to higher contractual liability exposure limits. Our failure to meet these goals or a client’s expectations in such performance-based contracts especially due to dependencies on the client not clearly articulated in the contract, may result in us not being able to bill them for expended effort (unbilled) leading not only to a less profitable or an unprofitable engagement but may also result in penalties or fines impacting our overall financial health.

Our clients may seek more favorable terms from us in our contracts, particularly in connection with