Infosys (INFY) Q2 26/27 earnings summary

Executive summary

• Q2 revenue was $5.145B, up 1.5% YoY and 1.2% QoQ in constant currency; operating margin was 21%.

• Large-deal TCV totaled $5.2B, 62% net new; AI revenue reached 10.5% of revenue and grew 29% QoQ.

• FY27 revenue growth guidance was revised to 1%–2% in constant currency; operating-margin guidance remains 20%–22%.

Financial highlights

• Q2 reported revenue was ₹49,244 crore, up 10.7% YoY; IFRS revenue was $5,145M, up 1.3% reported YoY.

• IFRS operating profit was $1,079M, up 1.3% YoY; net profit was $817M, down 2.5%; basic EPS was ₹19.32, up 8.7%.

• H1 revenue was ₹97,454 crore, up 12.3% reported YoY; operating margin was 21% and basic EPS was ₹38.51, up 11.7%.

• Q2 free cash flow was $928M, with 113.3% net-profit conversion; H1 FCF was ₹17,949 crore, up 4.3% YoY.

• Quarter-end cash and equivalents were $4.7B; the balance sheet was debt-free.

Outlook and guidance

• FY27 revenue growth guidance was revised to 1%–2% YoY in constant currency; the lower end assumes further macro deterioration and the upper end an improved environment.

• FY27 operating-margin guidance remains 20%–22%; H2 headwinds include compensation increases, weaker seasonality, AI productivity sharing and large-deal ramp-ups, partly offset by Project Maximus.

• Financial services and EURS are expected to grow above the overall average; H2 has seasonally fewer working days.

• A net-new seven-year mega deal is expected to contribute over 1% growth in FY28; transition is expected to begin in the second half of Q4.

• Management expects organic growth to be in good shape next year, supported by AI growth, the mega deal and a healthy large-deal pipeline.