Infosys(US:INFY)2026-01-14 12:02Financial 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]