Tata Consultancy Services (TCS) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue reached INR 64,259 crore ($7.67 billion), up 7.6% year-over-year in INR and 6.4% in USD; constant currency growth was 5.5%.

• Operating margin was 24.1%, a sequential decline of 60 basis points, with net margin at 18.5%.

• Net income for Q2 FY25 was INR 119,090 Mn (₹11,909 crore), up 5.0% year-over-year, with EPS at INR 32.92.

• Free cash flow was $1.3 billion (₹11,932 crore), with net cash from operations at 100.2% of net income.

• Total contract value (TCV) for Q2 was $8.6 billion, with BFSI contributing $4.6 billion and North America $4.2 billion.

Financial highlights

• Revenue grew 5.5% year-over-year in constant currency; India led geographic growth with 95.2%.

• Operating income for Q2 FY25 was INR 154,650 Mn, up from INR 144,830 Mn in Q2 FY24.

• Net income: ₹11,909 crore (Q2 FY24: ₹11,342 crore); EPS: ₹32.92 (Q2 FY24: ₹31.00).

• Free cash flow at $1.3 billion (₹11,932 crore); invested funds at $6.4 billion.

• Interim dividend of INR 10 per share declared.

Outlook and guidance

• Demand environment remains stable, with cautious discretionary spending and deal cycles slightly lengthened.

• Pipeline is at an all-time high, with strong qualified opportunities across geographies and industries.

• Q3 expected to be seasonally weak; headwinds from client-specific issues anticipated to ease by Q4.

• Long-term margin aspiration remains at 26%-30%, with a focus on returning to 26% as soon as possible.

• Management remains focused on sustainable growth, disciplined execution, and industry-leading profitability despite ongoing macroeconomic caution and geopolitical uncertainty.