Parekh: AI now provides 10.5% of Infosys’ revenue in Q2, up 29% sequentially – Unite.AI

Infosys reported revenues of $5,145 million for the second quarter ended Sept. 30, 2026, with an operating margin of 21.0% and large acquisitions with a total contract value of $5.2 billion, according to the IFRS earnings release released by the company on Oct. 23, 2026. CEO and CEO Salil Parekh said AI revenue grew 29% quarter-over-quarter and represents 10.5% of revenues.

The Bengaluru-based company reported constant currency revenue growth of 1.5% year-on-year and 1.2% sequentially for the quarter, with reported currency growth of 1.3% year-on-year. Basic earnings per share were $0.20, down 0.3% year-on-year, while earnings per share grew 8.7% in rupee terms. Free cash flow was $928 million, a decline of 15.7% year-over-year, representing a 113.3% conversion of net income. The council recorded the findings at a meeting held on 23 October 2026.

For the six months ended September 30, 2026, Infosys reported revenues of $10,227 million, growth of 2.1% in reported currency and 1.9% in constant currency, with an operating margin of 21.0%. Baseline EPS for the period was $0.40, up 1.7% year-over-year, and free cash flow was $1,883 million, down 5.1%, representing a conversion of 114.9% of net income.

AI revenue and big business

Parekh said the total large contract value of $5.2 billion, of which 62% was net new, included a megadeal of more than $2 billion, and said the wins strengthened the company’s position as a partner when clients undertake large, complex transformation programs. “Our AI revenue was 10.5% and grew 29% quarter-over-quarter. As businesses transition to large-scale AI adoption, strong AI revenue growth is a recognition of our differentiated market positioning and customer trust,” he said.

Parekh added that Infosys is advising some of the largest global companies on their AI strategy and is continuing to invest in domain capabilities and technology so that clients can extract value from AI at scale.

Comment on guidelines, dividends and margin

Infosys revised its revenue guidance for fiscal 2027 to growth of 1%-2% in constant currency and maintained its operating margin guidance of 20%-22%.

Chief Financial Officer Jayesh Sanghrajka said the company achieved operating margins of 21.0% in the quarter amid high volatility, with a focus on cost and operational efficiency measures along with required investments that produce stable margins. It said free cash flow, which represents 113.3% of net profit, underlines the company’s financial strength.

The board announced an interim dividend of Rs 26 per share, which Sanghrajka said represents an increase of 13% over the previous year. The company’s fact sheet lists a dividend of Rs 23 per share for the quarter ended September 30, 2025.

The customer wins in the quarter

The release names several customer commitments for the quarter. Infosys has entered into a 10-year strategic agreement with Crocs, Inc. to accelerate IT transformation and support scalable global growth. It has worked with Mondelez International on supply chain transformation embracing AI-driven decision making, data standardization and intelligent business workflows, and with Knorr-Bremse on AI-driven business transformation. It has also expanded its collaboration with Metsä Group to drive an AI-driven transformation of the company’s IT landscape.

Infosys worked with NTN Corporation on migration to SAP Commerce Cloud, with Telia on the AI-powered transformation of its network and cybersecurity operations, and with KnitWell Group to create Engage, an AI-powered customer engagement platform for its store associates. Investec has chosen the Infosys Finacle SaaS platform on Microsoft Azure for its digital banking transformation.

Operational metrics

According to the fact sheet, financial services contributed 28.0% to second-quarter revenue, while life sciences grew 32.5% year-over-year and retail declined 8.1% in the reported currency. North America contributed 54.6% of revenues and Europe 32.5%, with Europe growing 4.6% year over year in constant currency and North America declining 1.5%.

Infosys reported 2,060 active customers after adding 142 gross ones during the quarter, with 42 customers each contributing more than $100 million in revenue over the trailing twelve months. The top 10 customers contributed 19.8% of revenue and days of sales pending stood at 64.

At the end of the quarter, the company had 332,542 employees, of which 39.8% of the workforce was made up of women. In the last twelve months, voluntary abandonment of IT services amounted to 12.7%, while utilization, including interns, amounted to 81.9%. Consolidated cash and investments totaled $4,720 million and the statement’s balance sheet extract shows total assets of $17,060 million and total net assets of $10,389 million as of September 30, 2026.

The company’s investor relations page for the quarter listed a webcast press conference at 4.30pm IST and an earnings conference call at 6pm IST on October 23, 2026.