Mphasis announced robust Q3FY26 results, driven by its AI-led strategy. Revenue increased 1.5% QoQ and 7.4% YoY in constant currency. Direct revenue grew 1.9% QoQ and 9.6% YoY. New TCV wins reached $428 million, with 62% being AI-led. The pipeline is strong, with 69% AI-led and significant large deals expected. Mphasis anticipates growth exceeding 2x industry average.
Financial Highlights
Mphasis reported a strong performance in Q3FY26, demonstrating the effectiveness of its AI-driven approach. Key highlights include:
- Revenue: Increased 1.5% quarter-over-quarter (QoQ) and 7.4% year-over-year (YoY) in constant currency.
- Direct Revenue: Increased 1.9% QoQ and 9.6% YoY.
- TCV Wins: New Total Contract Value (TCV) wins totaled $428 million, with 62% attributed to AI-led initiatives.
Segment Performance
Performance across different segments was solid:
- Americas: Demonstrated a YoY increase of 10.8% in Direct revenue.
- Europe, Middle East, and Africa (EMEA): Despite some headwinds, saw a Direct QoQ growth of 3.9%.
- Applications (APPS): Registered a Direct YoY growth of 12.8%.
AI and Pipeline Strength
Mphasis is seeing tremendous momentum with its AI-first strategy:
- AI-Led Pipeline: AI-led deals now constitute 69% of the total pipeline.
- Pipeline Growth: Overall pipeline has expanded significantly, up 66% YoY.
- Key Platforms: Mphasis NeoIP™ continues to be a key driver, influencing more than 50% of accounts’ revenue.
Vertical Performance
- Banking and Financial Services (BFS): Direct revenue grew 2.5% QoQ and 18.2% YoY.
- Insurance: Showed strong growth momentum with 8.1% QoQ increase in Direct Revenue.
Outlook and Strategy
Mphasis anticipates a strong finish to the fiscal year, expecting to surpass industry growth rates. The company is focused on:
- Continued conversion of the strong pipeline to TCV and revenue.
- Targeting operating (EBIT) margin within the band of 14.75% – 15.75%.
- Scaling AI-led propositions, leveraging the Mphasis NeoIP™ platform.
Source: BSE
