Infosys Q1 FY26 Results: Revenue Up 7.5%, Large Deals and European Growth Support Performance

Infosys has announced its Q1 FY26 results, and we’re going to break them down step by step. We’ll look at how the company performed in terms of profit, margins, and cash flows. Then we’ll go deeper into how each business vertical and geography contributed, assess the deal wins and future visibility, and finally, review the management commentary. Let’s start.

Financial Performance of Infosys Q1

• Revenue stood at ₹42,279 crore, growing 7.5% year-on-year and 3.3% quarter-on-quarter.
• Operating margin was 20.8%, slightly lower by 0.1 percentage points compared to last year.
• Net profit after non-controlling interest came in at ₹6,921 crore, marking a growth of 8.7% year-on-year.
• Free cash flow stood at ₹7,533 crore. While this was down 17.7% from last year, it represented a strong 108.8% conversion of net profit.

Constant Currency (CC) Revenue Growth

Constant Currency (CC) growth removes the impact of currency fluctuations and provides a clearer picture of real business growth across geographies. Company reported 3.8% year-on-year CC growth and 2.6% quarter-on-quarter CC growth in Q1 FY26.

Revenue by Geography

IT companies in India have very high exposure to other countries in terms of revenue, and therefore it is necessary to understand which geographies drive Infosys' growth and growth in those geographies.

• Europe led Infosys’ regional performance in Q1 FY26, contributed 31.5% to overall revenue, and increased by 12.3% year-on-year in constant currency terms.
• North America remained the largest market, contributed 56.5% of revenue, but growth was muted at just 0.4% in CC terms.
• India contributed 2.9% of revenue but declined by 1.0% in CC terms.
• The Rest of the World accounted for 9.1% of revenue and increased slightly by 0.4%

Revenue by Business Segment

Like geography, Infosys serves different sectors/industries as well, and therefore, in this segment, we will understand revenue contribution from each segment and its growth in constant currency terms.

• Financial Services remained the largest business segment, contributed 27.9% of revenue, and increased by 5.6%.
• Manufacturing performed strongly, making up 16.1% of revenue and growing 12.2%.
• Energy, Utilities, Resources & Services contributed 13.6% to revenue and grew by 6.4%.
• Retail contributed 13.4%, with flat growth of 0.4%.
• Communication made up 12.0%, growing 4.0%.

Deal activity in Infosys

• Infosys signed large deals worth $3.8 billion in total contract value.
• 55% of this value came from new deals, showing growth in market share.
• There was strong momentum in areas like AI and digital transformation.

Guidance and Outlook

• FY26 Revenue Growth Guidance (CC): 1% to 3%.
• Operating Margin Guidance: 20% to 22%.
• Guidance was lowered due to soft IT demand and some delays in deal execution.

5 Key Takeaways from Infosys Q1 Results

1. Steady Growth Despite Weak Markets: Infosys reported 7.5% year-on-year revenue growth in Q1 FY26. This came even as demand remained soft in North America and India. Growth was supported by stable performance in key sectors like Manufacturing and Financial Services.

2. Europe Led Regional Growth: Europe grew 12.3% in constant currency. It was the fastest-growing region for Infosys. This growth was driven by demand in digital and AI services.

3. Stable Margins Despite Cost Pressures: Operating margin stood at 20.8% during the quarter. This was maintained despite wage hikes. Cost control programs and better working capital use supported the margin.

4. Large Deal Wins and AI Demand: Infosys signed large deals worth $3.8 billion. Of this, 55% came from new contracts. Digital transformation and AI services saw strong demand, especially in Europe and Manufacturing.

5. Lower Growth Guidance Reflects Caution: Infosys expects 1% to 3% revenue growth in FY26 in constant currency. This reflects slower IT spending and possible delays in deal execution due to macro uncertainty.

Conclusion

Infosys delivered stable performance in Q1 FY26 with strong contributions from Europe and the Manufacturing sector. While near-term guidance was revised down, the company continued to focus on client needs, digital investments, and disciplined execution.

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