Infosys reported a mixed third quarter, with revenue growth accelerating but profit slipping as margins came under pressure.
For the quarter ended December 31, 2025, Infosys posted revenue of ₹45,479 crore, up 8.9% year on year from ₹41,764 crore in the same quarter last year.
In Q2, Infosys reported revenue of ₹44,490 crore, indicating that Q3 added nearly ₹1,000 crore in incremental revenue in just one quarter.
Net profit fell 2.2% to ₹6,654 crore from ₹6,806 crore a year ago, reflecting higher costs even as demand improved. In dollar terms, the company delivered $5,099 million in revenue, with 1.7% growth on a constant-currency basis and 0.6% sequential growth.
The Bengaluru-based IT major also reported an International Financial Reporting Standards (IFRS) operating margin of 18.4% for the quarter.
On an adjusted basis, excluding the impact of new labour codes, operating margin stood at 21.2%, up 0.2% sequentially. Free cash flow was $915 million, while adjusted free cash flow was $965 million, which is more than 112% of adjusted net profit.
Large deal momentum was one of the strongest signals of demand recovery. Infosys recorded $4.8 billion in large deal wins during Q3, with 57% of the total coming from net-new business.
That is a sharp improvement over Q2, when the company had reported $3.1 billion in large deal wins, of which 67% was net new. The higher TCV in Q3 suggests that enterprises are signing bigger and more strategic contracts than in the previous quarter.
The company also showed steady progress sequentially.
Constant currency growth in Q2 was much stronger at 8.6% year on year, but Q3 delivered better deal flow and a higher revenue base, indicating that growth is becoming more durable rather than driven by a few large contracts.
Profitability, however, moved in the opposite direction. In Q2, Infosys posted a net profit of ₹7,364 crore, up 13.2% year-on-year. In Q3, profit fell to ₹6,654 crore, mainly due to margin pressures and adjustments linked to India’s new labour codes.
The drop in IFRS operating margin to 18.4% from above 20% in Q2 underlines that costs are rising faster than revenue.
Looking ahead, Infosys raised its FY26 revenue growth guidance to 3.0-3.5% in constant currency, compared with the 2-3% range it had given in Q2. “We believe we are uniquely positioned to capture market share across these value pools and emerge as the leading AI value creator for global enterprises,” CEO Salil Parekh said during the Q3 press briefing.
That upgrade reflects confidence that the stronger deal pipeline seen in Q3 will translate into sustained revenue growth in the final quarter of the year.
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