HCLTech reported a strong Q2 FY26, marked by broad-based growth and margin expansion. Revenue increased by 2.4% sequentially and 4.6% year-over-year in constant currency. The company achieved over $100 million in Advanced AI revenue, representing about 3% of total revenue. HCLTech is focused on scaling AI adoption and delivering significant productivity improvements for its clients.
Financial Performance Highlights
HCLTech’s Q2 FY26 results showcased a robust performance across various segments:
- Revenue grew by 2.4% sequentially and 4.6% year-over-year in constant currency.
- Services business increased by 2.5% sequentially and 5.5% year-over-year in constant currency.
- Subscription, Support and Professional Services revenue in the Software business grew by 9% year-over-year.
The company’s operating margin stood at 17.5%, reflecting an increase of 116 basis points sequentially. New bookings reached $2.6 billion, marking the first time the company crossed the $2.5 billion mark without any mega deals.
Advanced AI Revenue Milestone
HCLTech achieved a significant milestone by generating over $100 million in Advanced AI revenue during the quarter. This represents approximately 3% of the company’s total revenue, driven by diverse service lines and IPs. The focus areas include Agentic AI, Physical AI, and AI engineering.
Strategic AI Initiatives
HCLTech is actively transforming its services with a long-term view and investing in differentiated IP to accelerate AI adoption for clients. Key initiatives include:
- Launched v2.0 beta release of the Al Force platform, with GA planned for January 2026.
- Deployment of Al Force platform across 47 accounts.
- Added Al Factory and Al Advisory offering pillars under Advanced AI.
- Signed a major legacy modernization program with a leading European retailer.
Segment and Geography Performance
The company witnessed broad-based growth across key verticals and geographies:
- USA grew at 2.4% year-on-year.
- Europe grew at 7.6% year-on-year.
- Financial Services and Technology grew at 11.4% and 13.9% respectively.
Profitability and Cash Flow
HCLTech reported strong profitability and cash generation:
- EBIT at $637 million, representing 17.5% of revenue.
- Net income at $486 million, representing 13.3% of revenue.
- Operating Cash Flow at $2.62 billion over the last 12 months.
- Free Cash Flow at $2.48 billion over the last 12 months.
Revised Guidance
Based on the strong performance, HCLTech raised its full-year Services revenue growth guidance to 4%-5% in constant currency terms. The company maintains its full-year EBIT margin guidance of 17%-18%.
Source: BSE
