Infosys (NYSE:INFY) held its fourth-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
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The full earnings call is available at https://event.choruscall.com/mediaframe/webcast.html?webcastid=NEVleMBS
Summary
Infosys Ltd reported a full-year revenue growth of 3.1% in constant currency terms, with Q4 showing a year-on-year growth of 4.1%.
The company secured $14.9 billion in large deals for the year, marking a 24% increase from the previous year, with $3.2 billion in Q4 alone.
Infosys Ltd highlighted its AI strategy, showcasing projects with companies like Ralph Lauren, Hertz, and BP, which have led to substantial business improvements.
The company formed strategic collaborations with AI and tech giants such as Anthropic, OpenAI, Google, Nvidia, and Microsoft to enhance its AI capabilities.
Guidance for FY27 projects a revenue growth of 1.5% to 3.5% and an operating margin of 20% to 22%, with expected growth in financial services and energy utilities.
FY26 revenues surpassed $20 billion, with communication and manufacturing verticals and the Europe region driving growth.
The company plans to onboard 20,000 freshers in FY27, with a strategic focus on AI-driven initiatives and cost optimization.
Infosys Ltd maintained a strong cash flow, with a free cash flow of $33.5 billion for FY26 and a dividend increase of 11.6% over the previous year.
The company signed 96 large deals in FY26, with a total contract value of $15 billion, of which 55% were net new.
Full Transcript
OPERATOR
Ladies and gentlemen, greetings and welcome to Infosys Ltd Q4 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Mahindra. Thank you. And over to Mr. Mahindra. Thanks everyone.
Sandeep Mahindra
Welcome to this earnings call to discuss Infosys Q4FY26 financial results. Joining us on this call is CEO and MD Mr. Sahil Parikh, CFO Mr. Jayar Sangra, along with other members of the leadership team. We’ll start the call with some remarks on the performance of the company, subsequent to which we’ll open up the call for questions. Please note that anything we say that refers to our future outlook is a forward looking statement that must be read in conjunction with the risk that the company faces. A complete statement explanation of these risks is available in our filings with the SEC, which can be found on www.sec.gov. I now like to pass on the call to Salal.
Salil Parikh
Thanks Sandeep. Good afternoon, good evening, good morning to everyone. Thank you for joining in. We delivered a strong performance in the financial year 2026. We had a growth of 3.1% for the full year. In constant currency terms, our Q4 revenue growth was 4.1% year on year. In constant currency terms, we had strong growth in financial services, in the communications industry and manufacturing industry and for the Europe geography For the full year last deals were strong. For the full year we had $14.9 billion of large deals. This is a growth of 24% over the prior year and for Q4 we were at $3.2 billion, a strong showing for the quarter. We shared our AI strategy during our AI Investor Day a few weeks ago. We see a large addressable market for AI services across six areas. AI strategy and engineering, Data process, Legacy modernization, physical AI and trust. With a Topaz fabric platform for AI, a COBOL platform for cloud, we have differentiated capabilities to serve our clients across the six areas of AI. Some examples of the work we are doing For a consumer products retail company, Ralph Lauren, we helped build a conversational and personalized AI tool that led to converting customer interest into a shopping experience. This resulted in an increase in their revenue by 12% and customer engagement by 50%. For a large transport company, Hertz, we helped with a legacy migration to bring 3 million lines of Cobol code to a modern microservices environment using AI foundation models. The cost was 60% lower, the timeline was 60% quicker than how they would have done it without AI for a large energy company. BP, we deployed 50 AI agent initiatives across trading, supply chain sustainability and core operations to transform the software development, knowledge automation, legacy modernization and digital decision support. This resulted in 95% payment accuracy, 50% faster contract validation and 18% improvement in it operations efficiency. We have strategic collaborations with emerging foundation model companies such as Anthropic and OpenAI which help us support our clients transformation for software development, legacy modernization and agent building. We also have established strategic AI collaborations with Google, Gemini, Nvidia, Microsoft AWS, Google Cloud, Google Cloud and Intel among others. We’ve deployed over 30,000 developers on GitHub Copilot as we look ahead to financial year 2027, we see large opportunities in AI services, continued competitive intensity and AI productivity impact. With a clear AI strategic roadmap and real world toolkit of Topaz fabric, we are well positioned to support our clients transformation technology and operations objectives Our revenue growth guidance of financial year 27 is 1.5% to 3.5% year on year in constant currency terms. We expect acceleration in growth in financial services and the energy utilities resources services vertical. From financial year 26 to 27 we expect H1 to be stronger than H2 consistent with our normal seasonality. Our operating margin guidance for financial year 27 is 20% to 22%. With that, let me hand it over to Jayesh for his update.
Jayesh Sangra
Thank you Sandeep Good morning, Good evening everyone and thank you for joining the call today. Financial year 26 performance demonstrates our ability to maintain financial discipline and operational excellence in a challenging and evolving business environment. Client spending is guided with greater focus on cost optimization engagement as against growth led transformation programs. We are seeing increasing momentum in AI driven initiatives particularly around productivity, automation and platform led modernization initiatives. Let me start with the key highlights for the year and the quarter. FY26 revenues crossed 20 billion and grew 3.1% in constant currency terms within the upgraded guidance band given in January. This was after lower third party cost which was down by 1% as percentage of revenue and 0.7% reduction in on site mix. Acquisitions contributed about 70 bids on full year growth for FY26. Communication, manufacturing vertical and Europe geography grew more than double the company average led by ramp up of the large deal wins. Additionally, FS and EURs grew above the company average in constant currency terms. Volumes for the year were flattish. Growth was led by increase in realization thanks to Project Maximus. Adjusted operating margin was stable at 21%. Gains from currency and maximus were reinvested in talent, AI investment and sales and marketing. Q4 revenues grew by 4.1% year on year. Sequentially revenues declined 1.3% in constant currency due to seasonality and slower decision making. In the month of March growth in Q4 was broad based across major geographies. Communication, EURs and LS verticals grew well above the company average on a year on year basis. In Constant currency terms Q4 operating margin stood at 20.9% down 0.3% sequentially adjusted for the labor code impact in Q3. On site mix further reduced to 22.8% from 23.1% in Q3. Utilization excluding trainings was 83% in Q4 and 84.4% in FY26. Utilization including trainees was at 81.1% for FY26 reflecting the investment made towards creating future capacity. Strong focus on collections aided by technology interventions helped us reduce DSO including an unbilled net of unearned to 78 which is the slowest in seven years which is the lowest in seven years. Reported EPS in INR terms grew 23.8% YoY in Q4 and 11% in FY26. EPS adjusted for income tax orders and the labor code grew double digit for the year at 13.9% in Q4 and 12.1% for the full year in INR terms. Free cash flow adjusted for the labor codes and income tax refund stood at $33.5 billion for FY and 882 million for Q4 adjusted. Free cash as a percentage of net profit continue to be well above 100% at …
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