Infosys announced a revision to its revenue growth guidance for FY’26, increasing it to 3%-3.5% in constant currency, driven by a strong Q3 performance. The company reported large deal wins of $4.8 billion with 57% net new. It continues to see strong momentum in Al adoption and is expanding strategic partnerships. The adjusted operating margin stood at 21.2%.
Strong Q3 FY’26 Performance
Infosys reported revenue growth of 0.6% sequentially and 1.7% year-on-year in constant currency for Q3. Large deals were strong at $4.8 billion with 57% net new, across 26 deals. The adjusted operating margin was 21.2%, and free cash flow generation was $915 million.
Revised Revenue Guidance
Based on the company’s strong year-to-date performance and robust deal wins, Infosys has revised its revenue growth guidance for FY’26 upward to 3% to 3.5%. The operating margin guidance remains at 20% to 22%. This excludes any revenues from the joint venture with Telstra.
Key Highlights
- Strong Revenue Growth: Achieved despite seasonality and lower third-party costs.
- Financial Services Momentum: Continues with 3.9% year-on-year growth in constant currency terms.
- Europe Leading Growth: Increased by 7.2% year-on-year in constant currency terms.
- Large Deal TCV: Stood at $4.8 billion in Q3 with 57% net new; total for 9 months stood at $11.7 billion.
Al Initiatives and Partnerships
Infosys is expanding its strategic partnerships with Al companies, including Cognition, combining Cognition’s Devin software agent with Infosys’ expertise. The company works with 90% of its 200 largest clients to unlock value with Al and is currently working on 4,600 Al projects.
Vertical Performance
Infosys sees continued momentum in Financial Services, led by large deal wins and discretionary spends. EURS companies are increasingly allocating budgets towards Al infrastructure, data readiness, cloud, and software platforms. The company sees an increase in discretionary demand in Utilities and Energy, expecting growth acceleration in FY’27.
Margin Details
Adjusted operating margins for Q3 expanded by 20 basis points sequentially to 21.2%. This includes a 40 basis point tailwind from currency movement and 40 basis points from Project Maximus.
Workforce and Talent
Net headcount increased by 5,000 to 337,000 employees. LTM attrition declined by 2% sequentially and 1.4% on a year-on-year basis, reflecting market conditions and focus on employee retention and upskilling.
Source: BSE
