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Infosys reported quarterly revenue exceeding the USD 5 billion mark for the first time, reaching USD 5,076 million for the quarter ending September 30. In Indian rupees, the reported revenue for Q2 was Rs. 44,490 crore, an 8.6% YoY increase.
The company saw a year-over-year (YoY) revenue increase of 2.9% in constant currency (CC) and a sequential growth of 2.2% in CC. For the first half of the fiscal year (H1), revenues grew 3.3% YoY in constant currency.
Operating margins and cash flow
The operating margin for Q2 stood at 21%, showing a minimal sequential growth of 0.2% QoQ but a 0.1% decline YoY. The margin for H1 was 20.9%.
Free Cash Flow (FCF) was particularly strong at USD 1.1 billion. This FCF generation converted at 13.1% of net profit in rupee terms. In rupees, FCF reached Rs. 9,677 crore for the quarter, an increase of 38%, with FCF conversion at 131.2% of net profit.
Deal momentum and talent
Infosys recorded a large deal total contract value (TCV) of USD 3.1 billion in Q2. Notably, 67% of this TCV came from net new deals. The company also increased its employee count by 8,203 people during the quarter.
CEO Salil Parekh credited the strong deal wins to the company's focus on Artificial Intelligence (AI), stating the Q2 deals "reflect our deep understanding of clients' priorities to deliver value from AI in this environment". He also mentioned that investments in embracing an “AI-first culture” ensured that employees are reskilled to thrive in a human+AI workplace.
Revised guidance and capital allocation
Infosys revised its FY26 revenue guidance to a narrower range of 2-3% in constant currency. The company retained its operating margin guidance for FY26 at 20-22%.
CFO Jayesh Sanghrajka highlighted a 13.1% YoY increase in Basic EPS in rupee terms for the quarter. In line with its Capital Allocation Policy, Infosys announced a share buyback for Rs. 18,000 crores and an interim dividend of Rs. 23 per share, a 9.5% increase over the last fiscal year.