Strong large-deal momentum, expanding margins, and a raised growth outlook underscore Infosys’ push to emerge as an enterprise AI partner of choice
Bengaluru, NFAPost: In a seasonally weak quarter for the global IT services industry, Infosys delivered a performance that reinforces its strategic narrative: disciplined execution, accelerating enterprise AI adoption, and robust cash generation. The company’s Q3 FY26 results point to steady traction across clients even as macroeconomic uncertainty continues to temper discretionary spending.
For the quarter ended December 31, 2025, Infosys reported revenues of $5.1 billion, recording 1.7% year-on-year growth and 0.6% sequential growth in constant currency. Reported IFRS operating margin stood at 18.4%, while adjusted operating margin expanded to 21.2%, reflecting improved operational efficiency and tighter cost controls. Free cash flow remained a standout, with $915 million generated during the quarter, translating to more than 112% of adjusted net profit.
Large Deals and AI at the Core
Deal momentum remained strong, with $4.8 billion in large deal TCV, of which 57% was net new—a metric that underscores Infosys’ success in winning fresh transformation mandates rather than relying solely on renewals. Management attributed this momentum to growing client confidence in its AI-led offerings, particularly under the Infosys Topaz umbrella.
“Infosys delivered a strong Q3 performance demonstrating how our differentiated value propositions in enterprise AI, through Infosys Topaz, are consistently driving higher market share,” said Salil Parekh, CEO and Managing Director.
“Clients increasingly view Infosys as their AI partner with demonstrated expertise, innovation capabilities and strong delivery credentials.”
The quarter also saw the launch of Infosys Topaz Fabric™, a purpose-built, agentic AI services suite designed to unify data, models, applications, and workflows into a scalable, enterprise-ready ecosystem. Early client endorsements—from banking to aviation and healthcare—signal that AI is moving from experimentation to industrial deployment.
Margins, Cash, and Capital Discipline
From a financial stewardship perspective, Infosys continued to distinguish itself through margin resilience and cash generation. Adjusted operating margins expanded 20 basis points sequentially, even as the company invested in talent and next-generation capabilities. Headcount increased by over 5,000 employees, reflecting confidence in future demand.
“Our performance was broad-based in Q3 with sequential revenue growth, margin expansion, stellar large deal wins and robust free cash flow generation,” said Jayesh Sanghrajka, Chief Financial Officer.
“In line with our capital allocation policy, we completed the largest-ever buyback of ₹18,000 crore and paid an interim dividend to shareholders.”
For the nine months ended December 2025, Infosys delivered 2.8% year-on-year growth in constant currency, with reported revenues of ₹132,248 crore and an adjusted operating margin of 21.0%, highlighting consistency across the fiscal year.
Outlook: Confidence with Caution
Reflecting improved visibility, Infosys revised its FY26 revenue growth guidance upward to 3.0%–3.5% in constant currency, while reiterating an operating margin band of 20%–22% (excluding one-time labour code adjustments). The guidance signals management’s confidence in deal ramp-ups and sustained demand for AI-driven transformation, even as clients remain cautious on discretionary spend.
As global enterprises increasingly seek measurable outcomes from AI investments, Infosys appears well-positioned to convert its strong deal pipeline into durable growth. The Q3 performance may not signal a sharp cyclical upturn—but it does reinforce a more important message: Infosys is steadily reshaping itself from a traditional IT services provider into a trusted, large-scale enterprise AI partner.
