Infosys (INFY) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue grew 3.8% year-on-year and 2.6% sequentially in constant currency, reaching $4,941M, with broad-based performance across major industry groups and geographies.

• Large deal wins totaled $3.8 billion, with 55% net new, reflecting robust client demand for AI, vendor consolidation, and digital transformation.

• Enterprise AI leadership drove growth, with over 300 AI agents deployed and significant productivity gains for clients.

• Basic EPS rose 8.6% in rupee terms and 5.8% in dollar terms year-on-year.

• Board approved and paid a final dividend of ₹22 per share for FY25 in June 2025.

Financial highlights

• Consolidated revenue was $4,941M (up 4.8% YoY, 2.6% QoQ); INR 42,279 crore (up 7.5% YoY, 3.3% QoQ).

• Operating margin stood at 20.8%, down 20–30 basis points sequentially and year-on-year, absorbing compensation hikes and higher variable pay.

• Free cash flow reached $884M, representing 109% of net profit, marking the fifth consecutive quarter above 100%.

• Net profit was $809M (up 5.9% YoY); INR 6,921 crore (up 8.7% YoY).

• Consolidated cash and equivalents were $5.27 billion after FY25 dividend payout; yield on cash was 7.2%.

Outlook and guidance

• FY26 revenue growth guidance revised to 1%-3% in constant currency, reflecting continued macro uncertainty and cautious client spending.

• Operating margin guidance maintained at 20%-22%.

• Free cash flow expected to remain above 100% of net profit for FY26.

• H1 expected to be stronger than H2 due to seasonality; environment remains uncertain with elongated decision cycles.