Mphasis (526299) Q4 25/26 earnings summary

Executive summary

• Closed FY26 with strong AI-led transformation momentum, platform-led execution, and measurable client outcomes, with clients moving from experimentation to scaled AI deployment.

• Direct business accounted for 98.6% of revenue, remaining the primary growth driver.

• Record annual net new TCV of $2.1 billion, up 68% YoY, with 69% of the pipeline AI-led.

• Outperformed initial growth expectations, delivering more than 2x industry growth and maintaining stable margins within the 14.75%-15.75% target band.

• Audited standalone and consolidated financial results for FY26 were approved with unmodified audit opinions from statutory auditors.

Financial highlights

• Q4 FY26 revenue: $463 million, up 2.5% QoQ and 7.1% YoY in constant currency; full-year revenue grew 6.7% in constant currency.

• Consolidated revenue for FY26 was ₹158,796.47 million, up 11.6% YoY; Q4 revenue grew 14.4% YoY and 6.0% QoQ.

• EBIT/operating margin for Q4 expanded by 20 bps to 15.4%; full-year margin stable at 15.3%.

• EPS for Q4: INR 26.7, up 8.6% QoQ and 13.7% YoY; FY26 EPS before exceptional items grew 10.4% YoY to ₹99.2.

• Operating cash flow for Q4: $21 million, normalized to $38 million after adjusting for delayed remittances; net operating cash flow for Q4FY26 was $52M.

Outlook and guidance

• Expect high single-digit to low double-digit revenue growth in FY27, driven by AI-led transformation demand.

• Margin guidance maintained at 14.75%-15.75% while continuing investments in platforms and capabilities.

• Operating cash flow to net income conversion ratio targeted at approximately 80%.

• Focus on AI-led propositions and recent acquisition of Theory and Practice (TAP) to enhance decision intelligence capabilities.