Mphasis (526299) Q2 25/26 earnings summary

Executive summary

• Achieved highest-ever quarterly revenue and EPS in Q2 FY26, driven by strong performance in insurance, TMD/TMT, and BFS verticals, with significant AI-led deal wins and robust pipeline growth.

• Launched NeoIP, a unified AI platform, and continued investments in AI-driven growth initiatives, resulting in a record pipeline and strong TCV wins.

• H1 FY26 TCV exceeded full-year FY25 TCV, with $528 million in new TCV wins for the quarter and last 12 months' TCV over $2 billion.

• Maintained stable EBIT/operating margins at 15.3% while executing large deals and expanding client relationships.

• Notable client wins included major US-based airline, hi-tech device manufacturer, and US wireless telecom company.

Financial highlights

• Q2 FY26 revenue reached $445 million, up 2% sequentially and 6% year-over-year in constant currency, marking the highest quarterly revenue.

• Direct business contributed 97.5% of revenue; direct revenue grew 2.2% sequentially and 7.9% year-over-year in constant currency.

• EBIT/operating margin stable at 15.3%; operating profit grew 4.4% sequentially and 9.5% year-over-year.

• EPS increased 10.2% year-over-year to 24.7; net profit for Q2 FY26 was ₹4,691 million, up 10.8% YoY.

• Operating cash flow was $54 million for the quarter.

Outlook and guidance

• Expect growth to exceed 2x industry average, driven by strong H1 performance and steady conversion of TCV wins to revenue.

• Targeting operating EBIT margin within 14.75%-15.75% band.

• Continued focus on scaling AI-led propositions and expanding NeoIP suite.

• Expect steady ramp-up of large deals in upcoming quarters.