Infosys Q3 FY26 Results: Revenue Grows 9% YoY, Margins and Profit See Pressure

Infosys reported a steady revenue performance in the third quarter of FY26, even as higher costs and operating expenses weighed on margins and profitability. The IT major also reported strong large deal wins during the quarter, indicating stable demand despite a mixed global environment.

Infosys Q3 FY26 Revenue Performance

For the quarter ended December 31, 2025, Infosys reported consolidated revenue of ₹45,479 crore. This marked a year-on-year growth of 8.9% compared to ₹41,764 crore in the same quarter last year. On a quarter-on-quarter basis, revenue grew 2.2% from ₹44,490 crore in Q2 FY26.

During the quarter, Infosys reported a constant currency quarter-on-quarter growth of 0.6 percent and year-on-year growth of 1.7 percent. This shows that the company saw a real improvement in demand and that growth was not driven only by currency movements.

The steady growth was supported by deal wins and continued demand for digital and technology services, even as certain regions and segments remained under pressure.

Cost, Operating Profit and Margin Trends

Cost of sales for the quarter increased to ₹32,652 crore, up 12.1% year-on-year. Gross profit stood at ₹12,827 crore, showing a marginal year-on-year increase of 1.4%, but declined 6.3% on a sequential basis.

Operating profit declined to ₹8,355 crore in Q3 FY26 from ₹8,912 crore in Q3 FY25. On a year-on-year basis, operating profit fell 6.3%. Operating margin came in at 18.4%, down from 21.3% a year ago and 21.0% in the previous quarter, reflecting pressure from higher costs.

Net Profit and EPS Performance

Infosys reported a net profit of ₹6,654 crore for the quarter. This was a decline of 2.2% year-on-year and 9.6% quarter-on-quarter. Profit before tax stood at ₹9,229 crore, compared to ₹9,670 crore in the same period last year.

Basic earnings per share came in at ₹16.17, down from ₹16.43 last year. Segment-wise Revenue Performance

• Financial Services continued to be the largest contributor, accounting for 28.2% of total revenue, with a year-on-year growth of 4.8%.
• Manufacturing delivered strong growth of 10.8% year-on-year, while the Communication segment grew 11.6%.
• Retail revenue declined 3.8% year-on-year, while Hi-Tech saw a decline of 2.6%. Life Sciences revenue fell 3.1% during the quarter, highlighting uneven demand across verticals.

Geography-wise Revenue Mix

• North America remained the largest market, contributing 55.9% of total revenue, though it declined 1.2% year-on-year.
• Europe emerged as a bright spot, growing 13.3% year-on-year and contributing 32.7% to overall revenue.
• India revenue declined 6.2% year-on-year, while the rest of the world reported a growth of 2.4%, reflecting mixed regional demand trends.

Large Deal Wins and Client Metrics

Infosys reported large deal wins with a total contract value of $4.8 billion during Q3 FY26. Notably, 57% of this large deal TCV was net new, indicating fresh client additions and new project wins.

The total number of active clients increased to 1,949, compared to 1,876 last year. Infosys added 121 new clients during the quarter.

The top 10 clients contributed 20.6% of total revenue, while top 25 client contributed 35% of total revenue.

Conclusion

Infosys delivered steady revenue growth in Q3 FY26, supported by strong large deal wins and growth in key segments like Manufacturing and Communication. However, rising costs led to pressure on margins and net profit. Going ahead, margin recovery, demand improvement in North America and execution of large deals will be key factors to watch for the company’s performance.

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