Infosys Q2 Earnings: ‘We Remain The Preferred AI Strategy And Deployment Partner For Our Top Clients,’ CEO Says

AI revenue reaches 10.5 percent of total revenue and grows 29 percent sequentially, while two mega deals lift large-deal TCV to $5.2 billion.

Infosys remains the preferred artificial intelligence strategy and deployment partner for its top customers as enterprises move towards adopting AI at scale, CEO and managing director Salil Parekh said.

Speaking during the company’s second-quarter FY27 earnings call, Parekh said AI revenue represented 10.5 percent of Infosys’ revenue in the September quarter, up from 8.2 percent in the previous quarter.

AI revenue grew 29 percent sequentially, making it one of the strongest business signals from the quarter.

“AI revenue was a standout at 10.5 percent of our revenue, growing at 29 percent sequentially, and last quarter it was at 8.2 percent,” Parekh said.

Enterprises are accelerating AI adoption and looking to deploy the technology across broader business and technology transformation programs.

“We remain the preferred AI strategy and deployment partner for our top clients,” Parekh said. “As AI remains central to enterprise transformation in the years ahead, Infosys is well positioned to help navigate this shift.”

The company said the growth in AI revenue reflects its market positioning and client confidence as enterprises adopt AI at scale. Infosys continues to invest in domain and technology capabilities and an integrated ecosystem to help businesses generate value from AI deployments.

Infosys Works Across Open And Closed AI Models

Parekh positioned Infosys as an ecosystem integrator that works with frontier-model companies across open-weight and closed-model environments.

He said the company’s investments in Infosys Topaz Fabric enable enterprises to navigate between different AI models, optimize token usage and focus on value realization.

“As an ecosystem integrator, we continue to work closely with the frontier model companies, both open-weight and closed models,” Parekh said.

“Our deep investments in Topaz fabric help our clients seamlessly navigate between models to ensure token optimization and value realization.”

The approach positions Infosys to advise enterprises on AI strategy and help them select and integrate models based on their business requirements.

Parekh said Infosys continues to gain market share, particularly where program economics align with stakeholder interests.

Large deals provided another major business signal during the quarter. Infosys reported large-deal total contract value of $5.2 billion, with 62 percent of the value coming from net-new business.

Parekh said the total includes two mega deals.

The first is a net-new engagement worth more than $2 billion with a large international company. The seven-year contract is expected to contribute more than one percentage point to Infosys’ revenue growth in the next financial year.

The second mega deal is a $1 billion renewal.

“Large deals were another standout at $5.2 billion for the quarter. This includes two mega deals,” Parekh said.

“One of these mega deals was for over $2 billion, with a large international company for a period of seven years, and this is net new. This deal is expected to contribute over 1 percent revenue growth in the coming financial year. The second mega deal was for $1 billion for a renewal.”

Parekh said the large-deal pipeline remains healthy and includes other mega deals.

In the earnings release, he said the $5.2 billion in large deals reinforces Infosys’ position when clients undertake large and complex transformation programs.

Enterprise AI Moves Into Core Operations

The client engagements disclosed during the quarter show AI being deployed across supply-chain operations, network and cybersecurity management, customer engagement and enterprise technology transformation.

Infosys worked with Mondelēz International on supply-chain transformation through AI-enabled decision-making, data standardization and intelligent enterprise workflows.

The engagement focuses on bringing together people, processes, data and technology while creating the foundation for more autonomous and responsive workflows as AI adoption moves towards agentic AI.

Telia selected Infosys to support an AI-powered transformation across its network and cybersecurity operations. The engagement used Infosys Topaz and the company’s telecom capabilities to modernize operations and improve efficiency and agility.

KnitWell Group worked with Infosys to develop Engage, an AI-powered customer-engagement platform designed to help store associates engage customers more efficiently.

Infosys also worked with Knorr-Bremse on an AI-enabled enterprise transformation and expanded its relationship with Metsä Group to support an AI-led transformation of the company’s IT landscape and sourcing model.

Beyond the two mega deals discussed on the earnings call, Infosys entered a 10-year strategic agreement with Crocs to accelerate its IT transformation and support scalable global growth.

The engagement focused on optimizing operations, reducing costs, using automation and creating a stronger foundation for digital resilience and future growth.

The long-term agreement added to a quarter in which Infosys reported $5.2 billion in large-deal TCV and said its pipeline contains additional mega-deal opportunities.

Microsoft Azure And SAP Commerce Cloud Support Transformation Wins

The quarter also included client engagements built around major enterprise cloud platforms. Investec selected Infosys Finacle to drive its digital-banking transformation through the Finacle software-as-a-service platform on Microsoft Azure.

The engagement will help strengthen Investec’s digital foundation, support scale, improve personalization, and help the financial-services company operate more efficiently.

Meanwhile, Infosys worked with NTN Corp. on its adoption of SAP Commerce Cloud. The migration is designed to streamline IT operations, improve agility and create a foundation for further digital growth.

These engagements show Infosys combining its services, industry capabilities and platforms with technologies from hyperscalers and enterprise software vendors.

Infosys reported Q2 revenue of $5.145 billion, increasing 1.2 percent sequentially and 1.5 percent year over year in constant currency.

Chief Financial Officer Jayesh Sanghrajka said cost and operational-efficiency measures enable Infosys to maintain its margin amid heightened volatility while continuing to make necessary investments.

“We delivered operating margins of 21 percent in Q2 amidst heightened volatility. Focus on cost and operational efficiency measures while making the required investments have led to stable margins,” Sanghrajka said.

Free cash flow reached $928 million, representing 113.3 percent of net profit.

Based on its second-quarter performance and revised outlook for the remainder of the year, Infosys expects FY27 revenue growth of 1 percent to 2 percent year over year in constant currency.

The company retains its full-year operating-margin guidance at 20 percent to 22 percent.

For the first half of FY27, revenue grew 1.9 percent year over year in constant currency, while operating margin remains stable at 21 percent.

The quarter gives Infosys two significant growth signals. AI revenue now represents more than a tenth of the business, while the large-deal portfolio includes two mega deals, including a $2 billion-plus net-new engagement.

“As AI remains central to enterprise transformation in the years ahead, Infosys is well positioned to help navigate this shift,” Parekh said.

This article originally appeared on CRN sister website CRN India.