Infosys Q1 FY26 Results: Profit Up, $3.8B Deals

What stood out in Infosys’ Q1 FY26 print

Infosys reported Q1 FY26 results with higher year-on-year profit, steady operating margins and a strong large-deal quarter, even as demand stayed uneven across geographies and verticals. Consolidated revenue from operations rose to ₹422,790 million, up 7.5% year-on-year and 3.3% quarter-on-quarter. Net profit after non-controlling interest came in at ₹69,210 million, up 8.7% year-on-year, with some reports also flagging a quarter-on-quarter decline of about 2%. In constant currency (CC) terms, revenue grew 3.8% year-on-year and 2.6% quarter-on-quarter.

Key numbers: revenue, profit, margins and cash

Operating margin for the April to June quarter was 20.8%, down 0.3 percentage points year-on-year and 0.2 percentage points quarter-on-quarter. Infosys maintained its FY26 operating margin guidance at 20% to 22%, indicating it expects to keep profitability within a narrow band. Gross profit increased to ₹130,550 million from ₹121,380 million in the year-ago quarter. Free cash flow (FCF) was reported at $184 million and also at ₹75,330 million, with cash flow conversion at 108.8% of net profit, marking the fifth consecutive quarter of conversion above 100%.

Large deals: $1.8 billion total contract value

Infosys reported $1.8 billion (or $1,800 million) in large deal total contract value (TCV) for the quarter. 55% of the large-deal value was attributed to net new deals, pointing to fresh client additions and incremental wins rather than only renewals. The company also reported that large-deal TCV rose from $1.6 billion in the previous quarter. Management linked deal momentum to enterprise AI capabilities and client consolidation decisions, alongside continued focus on digital transformation.

Guidance: lower end raised, range now 1% to 3% CC

Infosys raised the lower end of its FY26 revenue growth guidance in constant currency to 1% to 3%, compared with an earlier forecast of 0% to 3%. The company framed the change as a narrowing of the range against a global environment described as stable but cautious. Alongside revenue guidance, the operating margin band was retained at 20% to 22% for FY26.

Vertical performance: manufacturing leads, life sciences weak

Performance by business segment was mixed. Financial Services remained the largest vertical at 27.9% of revenue and grew 5.6% in constant currency year-on-year. Manufacturing, at 16.1% of revenue, posted double-digit growth, reported as 12.2% CC in one breakdown and 14.8% year-on-year in another disclosure. Life Sciences declined (-7.9% CC), while the “Others” bucket contracted (-15.3% CC), highlighting softness in select discretionary spend areas.

Geography: Europe leads growth while North America stays muted

Europe was the fastest-growing region and contributed 31.5% of revenue, with year-on-year growth reported at 12.3% in CC in one section and 16.2% in another. North America remained the largest market at 56.5% of revenue, but growth was muted at 0.4% to 0.5% in CC depending on the disclosure. India contributed 2.9% of revenue and declined 1.0% in CC. Rest of the World contributed 9.1% of revenue and increased slightly by 0.4%.

Workforce and delivery metrics: stable headcount, attrition up

Infosys reported a headcount of 323,788 employees, broadly stable quarter-on-quarter. Voluntary attrition (LTM, IT services) rose to 14.4%, with prior-quarter comparisons cited at 14.1% in one section and 13.1% in another. The company also reported utilisation of 85.2% excluding trainees and 82.7% including trainees. Women employees constituted 39.1% of the workforce.

Client metrics and concentration: additions continue

Infosys reported 1,861 active clients as of June 30, 2025, with 93 new clients added during the quarter. The company disclosed 1,011 million-dollar clients and 41 clients contributing more than $100 million each. Client concentration remained moderate, with the top five clients at 13.2% of revenue and the top 25 at 35.2%.

Market check: stock move and investor focus areas

On the NSE, Infosys shares finished 0.8% lower at ₹1,558.90 ahead of the results announcement. In the US, the ADR was indicated at $18.45 in premarket trade on July 23, 2025, up 1.04% from the prior close of $18.26, with a cited 52-week high of $13.63. For investors, the quarter’s key monitorables were the large-deal pipeline, the raised lower end of guidance, and margin resilience despite wage-related cost headwinds.

Snapshot table: Q1 FY26 at a glance

Why this quarter matters for Infosys and the IT sector

The combination of mid-single-digit constant currency growth, a 20.8% operating margin and $1.8 billion in large deals shows how Tier-1 IT firms are balancing cost control with investments in AI-led delivery. Europe’s faster growth versus North America’s near-flat performance reinforces a divergence in regional tech spending patterns. The company’s decision to raise the lower end of FY26 guidance to 1% suggests improved confidence in execution and deal conversion, even while acknowledging delays and soft demand in some pockets.

Conclusion

Infosys’ Q1 FY26 results highlighted steady execution: revenue grew, profit improved year-on-year, margins stayed within the guided band, and deal wins remained strong at $1.8 billion. The next signals to track will be conversion of signed deals into revenue, stability in North America demand, and the company’s ability to keep operating margin within the 20% to 22% range through FY26.