Infosys

Infosys concluded FY26 with a strong performance, achieving 3.1% constant currency revenue growth for the full year, reaching $20 billion. Q4 FY26 saw a 4.1% year-on-year constant currency growth, though sequentially, revenues declined by 1.3% due to seasonality and slower decision-making in March. The company maintained a stable operating margin of 21% for FY26, with Q4 at 20.9%, demonstrating financial discipline despite a challenging environment.

The company secured significant large deal wins, totaling $14.9 billion for FY26, marking a 28% increase over the previous year. Q4 alone contributed $3.2 billion in large deals, with 55% being net new. The large deal pipeline continues to remain strong, indicating continued demand and future growth potential, particularly across AI strategy, engineering, data, process, legacy modernization, physical AI, and trust. The number of $50mn+ and $100mn+ clients also increased in FY26.

Infosys's AI strategy, leveraging its Topaz Fabric and Cobalt platforms, is resonating well with clients across six key AI areas. While specific AI revenue figures were not disclosed for Q4, management confirmed strong growth, stating it is 'much more growth' than Q3's 5.5% contribution. The company anticipates large opportunities in AI services to drive future growth, offsetting some of the competitive intensity and AI productivity impacts, and is well-positioned with its strategic roadmap and real-world toolkit.

For FY27, Infosys provided a revenue growth guidance of 1.5% to 3.5% in constant currency terms and an operating margin guidance of 20% to 22%. This guidance incorporates headwinds such as a 0.75% to 1% revenue reduction from a large European manufacturing client and the impact of acquisition-related amortization (50 basis points on Q4 margin). The company expects growth acceleration in Financial Services and Energy, Utility, Resources, and Services verticals, with H1 stronger than H2 due to normal seasonality.

Infosys reported a sequential headcount decline of 8,000 in Q4 FY26, though the full-year headcount increased by 5,000 to over 328,000. The company plans to hire at least 20,000 freshers in FY27, similar to FY26, calibrating requirements based on growth expectations and attrition trends. Voluntary attrition reduced to 12.6% for the year. Management stated no decision on wage hikes has been made, but it will consider various factors including performance, industry practice, and employee morale.

Infosys returned over $4 billion to shareholders in FY26, with consolidated cash and investments standing at $4.5 billion. The board proposed a final dividend of INR 25 per share, bringing the total FY26 dividend to INR 48 per share, an 11.6% increase YoY. The company closed the Stratus acquisition, which contributed 25 basis points to guidance, but two other acquisitions (Optimum and an Australian JV) are pending regulatory approvals and are not yet included in the FY27 guidance.

Management noted a cautious client spending environment, with a focus on cost optimization and operational resilience. While competitive intensity is high, Infosys believes its differentiated AI capabilities and strong large deal performance position it well. The company is seeing positive trends in Europe and specific pockets within the US, as well as new geographies like Japan and Nordic markets, contributing to growth despite macro uncertainties and geopolitical conflicts.