Infosys (NYSE:INFY) Q3 2026 Earnings call January 14, 2026 07:30 AM ET Company ParticipantsJayesh Sanghrajka - EVP and Group CFOJonathan Lee - Managing Director and Equity ResearchSandeep Shah - Director of Equity ResearchVibhor Singhal - Executive DirectorAnkur Rudra - Executive DirectorSandeep Mahindroo - Head of Investor RelationsSalil Parekh - CEO and Managing DirectorBryan Bergin - Managing Director and Equity ResearchConference Call ParticipantsAshwin Mehta - AnalystGaurav Rateria - AnalystKeith Bachm ...

Infosys (NYSE:INFY) Q3 2026 Earnings call January 14, 2026 07:30 AM ET Company ParticipantsJayesh Sanghrajka - EVP and Group CFOJonathan Lee - Managing Director and Equity ResearchSandeep Shah - Director of Equity ResearchVibhor Singhal - Executive DirectorAnkur Rudra - Executive DirectorSandeep Mahindroo - Head of Investor RelationsSalil Parekh - CEO and Managing DirectorBryan Bergin - Managing Director and Equity ResearchConference Call ParticipantsAshwin Mehta - AnalystGaurav Rateria - AnalystKeith Bachm ...

Infosys (NYSE:INFY) Q3 2026 Earnings call January 14, 2026 07:30 AM ET Speaker3Good day, and welcome to Infosys Limited Q3 FY26 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded, and I'll ...

Core Insights - The company revised its revenue guidance for the fiscal year, raising the constant-currency growth outlook to 3% to 3.5% while maintaining operating margin guidance at 20% to 22% [1][6] - The company reported a sequential revenue growth of 0.6% and a year-over-year growth of 1.7% in constant currency terms, with $4.8 billion in large deals signed during the quarter [2][6] - The company is accelerating AI adoption, working with 90% of its top 200 clients on AI initiatives and executing approximately 4,600 AI projects [5][14] Revenue and Financial Performance - Revenue grew 0.6% sequentially and 1.7% year-over-year in constant currency terms [2][6] - The company signed $4.8 billion in large deals during the quarter, with 57% being net new [2][6] - Adjusted operating margin was reported at 21.2%, with free cash flow totaling $915 million [2][6] AI Strategy and Adoption - The company is focusing on AI through its Topaz Fabric agent services, which aims to help clients manage and implement AI agents [5][11] - The company has generated over 28 million lines of AI-assisted code and built over 500 AI agents [5][14] - Six AI-led value pools have been identified to unlock incremental opportunities [11] Margin and Cost Management - Adjusted operating margin expanded by 20 basis points sequentially in Q3, with a nine-month margin standing at 21% [7][10] - Margin benefits were attributed to currency fluctuations and the Project Maximus efficiency program, offset by higher sales and headcount investments [4][8] - The company has onboarded approximately 18,000 of the planned 20,000 freshers, contributing to lower utilization rates [9] Vertical Trends and Client Engagement - The company is seeing improved trends in financial services and energy sectors, with AI adoption increasing among large financial services clients [6][13] - Positive signs were noted in retail, although some client-specific cost containment measures are in place [15] - The company works with 90% of its largest 200 clients on AI initiatives, indicating strong client engagement [14] Future Outlook and Strategic Initiatives - The company plans to provide a comprehensive view at an upcoming Investor Day [12] - Management is exploring acquisitions in areas such as cyber, consulting, and energy services, while remaining open to AI-focused acquisitions as the market evolves [18] - The company does not plan to change its flexible work arrangements and will provide next-year outlook details in April [19]

Financial Data and Key Metrics Changes - Revenue grew 0.6% sequentially and 1.7% year-on-year in constant currency terms [2] - Adjusted operating margin was 21.2% [2] - Free cash flow generated was $915 million [2] - Revenue growth guidance for the financial year revised to 3%-3.5% in constant currency [4] Business Line Data and Key Metrics Changes - Large deals amounted to $4.8 billion, with 57% being net new across 26 deals [2] - Significant large deal with the National Health Service in the U.K. valued at $1.6 billion [2] - Strong momentum in AI adoption, with 90% of the largest 200 clients engaged in AI projects [3] Market Data and Key Metrics Changes - Positive outlook in financial services and energy sectors, with good demand observed [8][18] - Manufacturing and Europe showed significant growth, previously experiencing softness [53] Company Strategy and Development Direction - Focus on AI capabilities, with six emerging AI-led value pools identified [3] - Plans to share a comprehensive view of the company's approach at an upcoming Investor Day [4] - Continued investment in sales and marketing, with a focus on building capacity for future growth [10][11] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in market demand, leading to headcount increases [8] - Positive outlook for the next financial year based on strong execution and large deal pipeline [8][18] - Management noted that while some sectors are showing improvement, others remain under pressure [18] Other Important Information - Adjusted margins expanded by 20 basis points sequentially, despite challenges from labor codes [24] - Ongoing impact of labor codes expected to be approximately 15 basis points annually [80] Q&A Session Summary Question: Headcount increase amidst job cuts in peers - Management indicated that the headcount increase reflects confidence in market demand and is part of their strategy to build future capacity [8][10] Question: Guidance upgrade factors - The guidance upgrade is influenced by large deals and strong execution, particularly in financial services and energy sectors [8][18] Question: Sequential margin dip despite currency tailwinds - Management explained that margins were impacted by various factors, including higher variable pay and lower utilization due to training new hires [10][11] Question: AI adoption and pricing models - Management noted that AI adoption is strong across client bases, with evolving pricing models being tested [19][20] Question: M&A strategy and market trends - Management confirmed ongoing discussions for potential acquisitions, focusing on areas like cyber, consulting, and energy services [31] Question: Labor code impact on margins and appraisals - Management clarified that the impact of labor codes has been accounted for, with no immediate changes to appraisal processes [80]

Infosys (NYSE:INFY) Q3 2026 Earnings call January 14, 2026 06:00 AM ET Company ParticipantsJayesh Sanghrajka - CFORishi Jhunjhunwala - Head of Investor RelationsSalil Parekh - CEOConference Call ParticipantsMansee Dave - AnalystAvik Das - AnalystPadmini Dhruvaraj - AnalystUma Kannan - AnalystSanjana B - AnalystShristi Achar - AnalystRitu Singh - AnalystPoulomi Chatterjee - AnalystHaripriya Suresh - AnalystJas Bardia - AnalystChandra Srikanth - AnalystRishi JhunjhunwalaA very good evening, everyone, and wish ...

Infosys (NYSE:INFY) Q3 2026 Earnings call January 14, 2026 06:00 AM ET Speaker2A very good evening, everyone, and wishing you all a very happy New Year. Thank you for joining us today. My name is Rishi, and on behalf of Infosys, I'd like to welcome all of you. As always, since this is the New Year, my rules don't really change. One question from each media house. We'll try our best. But with that, let me invite our Chief Executive Officer, Mr. Salil Parekh, for his opening remarks. Over to you, Salil.Speake ...