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Strong Q3 Performance: Sequential Revenue Growth of 0.6% in CC, Large Deal Wins of $4.8 billion

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Revenue Guidance for FY 26 revised to 3.0%-3.5% BENGALURU, India, Jan. 14, 2026 /PRNewswire/ -- Info...

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AI Summary

Infosys revised FY26 revenue growth guidance to 3.0%-3.5%. Q3 revenues reached $5,099 million with 1.7% YoY growth. Free cash flow generation was strong at $915 million, 112.8% of net profit. Total contract value (TCV) of large deal wins was $4.8 billion. Infosys is positioning itself as a leader in AI-driven digital transformation.

Sentiment Rationale

The growth in revenue and large deal wins indicates healthy demand and future prospects.

Trading Thesis

The positive financial metrics and increased client engagements might uplift INFY's stock in the near term.

Market-Moving

  • Infosys revised FY26 revenue growth guidance to 3.0%-3.5%.
  • Q3 revenues reached $5,099 million with 1.7% YoY growth.
  • Free cash flow generation was strong at $915 million, 112.8% of net profit.

Key Facts

  • Infosys revised FY26 revenue growth guidance to 3.0%-3.5%.
  • Q3 revenues reached $5,099 million with 1.7% YoY growth.
  • Free cash flow generation was strong at $915 million, 112.8% of net profit.
  • Total contract value (TCV) of large deal wins was $4.8 billion.
  • Infosys is positioning itself as a leader in AI-driven digital transformation.

Companies Mentioned

  • TCS (TCS)
  • WIPRO (WIPRO)
  • HCLTECH (HCLTECH)

Earnings

The article highlights significant growth metrics and large deal contracts that influence investor sentiment positively.

Infosys Reports Strong Q3 Performance with Sequential Revenue Growth of 0.6%

Infosys (NSE: INFY, BSE: INFY, NYSE: INFY), a global leader in digital services and consulting, has announced its third-quarter results, showcasing robust financial performance. For the quarter ending December 31, 2025, Infosys reported revenues of $5,099 million, marking a year-on-year growth of 1.7% and a sequential growth of 0.6% in constant currency. The firm also experienced a solid increase in its operating margins and free cash flow, highlighting its resilient business model.

Key Financial Highlights for Q3

  • Reported IFRS operating margin: 18.4%
  • Adjusted operating margin: 21.2%, reflecting a 0.2% percent increase sequentially
  • Free cash flow (FCF): $915 million, with adjusted FCF reaching $965 million
  • Total contract value (TCV) of large deal wins: $4.8 billion, with net new deal contributions of 57%
  • Headcount increase: 5,043

Year-to-Date Performance

For the fiscal year to date ending December 31, 2025, Infosys saw a 2.8% increase in revenues in constant currency, with total reported IFRS revenues at $15,117 million. The YTD operating margin stood at 20.0%.

Management Insights

Salil Parekh, CEO and Managing Director of Infosys, expressed confidence in the company's Q3 performance, stating, “Infosys delivered a strong Q3 performance demonstrating how our differentiated value propositions in enterprise AI, through Infosys Topaz, are consistently driving higher market share.” He emphasized the company's commitment to reskill and empower its workforce in an AI-augmented environment.

Guidance for FY 2026

Looking ahead, Infosys expects revenue growth for FY26 to be in the range of 3.0%-3.5% in constant currency, along with an operating margin target of 20%-22%.

Client Collaborations and Innovations

During the quarter, Infosys extended several key collaborations, showcasing its expertise across various sectors:

  • Metro Bank: Partnering to enhance finance operations with Workday solutions.
  • Lufthansa Systems: Working together to set up a Global Capability Center aimed at digital transformation.
  • NHS Business Services Authority: Delivering a new workforce management solution to support the 10-Year Health Plan.
  • Telenor Shared Services: Modernizing HR operations through Oracle Cloud HCM solutions.
  • Nu Skin: Launching Infosys Topaz Fabric™, an AI-driven suite for enhancing technological operations.

Conclusion

With a reported adjusted operating margin of 21.2% and hefty large deal wins amounting to $4.8 billion, Infosys continues to demonstrate strong capabilities in the digital services sector. As it looks forward to FY26 with promising guidance, the company remains committed to innovation and enhancing client value through its advanced AI solutions.

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