Infosys AI revenue jumps 29% in Q2 and now makes up 10.5% of total
Infosys said its AI revenue grew 29% quarter-on-quarter in the second quarter and now accounts for 10.5% of total revenue. The IT services company also reported $5.2 billion in large deal wins and revised its FY 27 revenue growth guidance to 1%-2% in constant currency.
- Infosys Q2 revenue was $5,145 million, up 1.5% year on year and 1.2% sequentially in constant currency.
- AI revenue grew 29% quarter-on-quarter and reached 10.5% of revenue.
- Large deal TCV was $5.2 billion, 62% net new, including a mega deal of over $2 billion.
- FY 27 revenue growth guidance was revised to 1%-2%, with operating margin guidance kept at 20%-22%.
- The Board announced an interim dividend of ₹26 per share, up 13%.
Second-quarter results
Infosys reported revenues of $5,145 million for the quarter ended September 30, 2026. In constant currency terms, that was growth of 1.5% year on year and 1.2% sequentially. Reported revenues grew 1.3% year on year.
Operating margin was stable at 21.0%. EPS growth was 8.7% year on year in rupee terms, while basic EPS in dollar terms was $0.20, a decline of 0.3% year on year.
Free cash flow was $928 million, down 15.7% year on year, with FCF conversion at 113.3% of net profit. For the six months ended September 30, 2026, revenues were $10,227 million, up 2.1% year on year as reported and 1.9% in constant currency. H1 operating margin was 21.0%, basic EPS was $0.40 (up 1.7%), and free cash flow was $1,883 million, down 5.1%.
Large deals and AI momentum
Total contract value (TCV) of large deal wins reached $5.2 billion, of which 62% was net new. According to the company, this included a mega deal of over $2 billion.
CEO and MD Salil Parekh said AI revenue was at 10.5% and grew 29% quarter-on-quarter. He described the growth as "a recognition of our differentiated market positioning and client confidence" as enterprises move to AI adoption at scale. Parekh added that Infosys is advising some of the largest global enterprises on their AI strategy and continues to invest in domain and technology capabilities.
CFO Jayesh Sanghrajka said the company held margins at 21.0% "amidst heightened volatility" through cost and operational efficiency measures while still making required investments. The Board announced an interim dividend of ₹26 per share, an increase of 13% from last year.
Guidance and client engagements
For FY 27, Infosys revised its revenue growth guidance to 1%-2% in constant currency. Operating margin guidance was retained at 20%-22%.
The company listed a range of client wins. It worked with Mondelez International on supply chain transformation through AI-enabled decision-making and data standardization, and entered a ten-year strategic agreement with Crocs, Inc. to accelerate IT transformation. Other engagements include Knorr-Bremse, Metsä Group, NTN Corporation (SAP cloud adoption), Telia (network and cybersecurity operations, using Infosys Topaz) and KnitWell Group, for which an AI-powered customer engagement platform called Engage was built. Infosys Finacle was selected by Investec to drive digital banking transformation through the Finacle SaaS platform on Microsoft Azure.
The release also lists employer, sustainability and training awards received during the quarter.
What it means
The figures show AI becoming a measurable share of Infosys revenue, even as overall growth stays in low single digits and full-year guidance is set at 1%-2%. The large deal intake, with a majority of net new value, is what the company points to as a foundation for future growth. Stable margins and a higher dividend accompany the results, while free cash flow declined year on year.
