Infosys raises outlook as AI deals drive Q3 earnings beat

Infosys (NYSE:INFY) raised its full-year revenue forecast on Wednesday after reporting third-quarter results that surpassed Wall Street expectations, signaling a resilient recovery in enterprise technology spending.

The Bangalore-based outsourcing giant now expects revenue to grow between 3% and 3.5% for the fiscal year ending March 2026, up from its previous projection of 2% to 3%.

For the quarter ended December 31, 2025, Infosys reported net profit of $747 million, or 18 cents per share.

On an adjusted basis, earnings reached 21 cents per share, topping the 20-cent average estimate from analysts surveyed by Zacks Investment Research.

Revenue rose to $5.1 billion, exceeding the $5.08 billion forecast by the Street.

The upgraded guidance reflects a surge in demand for the company’s "AI-first" services, specifically its Topaz generative AI platform.

Infosys reported a large deal total contract value (TCV) of $4.8 billion for the quarter, with "net new" deals accounting for 57% of that figure.

Despite seasonal headwinds like winter furloughs in the U.S. and Europe, the company managed to maintain stable operating margins between 20% and 22%.

The results come as a relief to the broader Indian IT sector, which has faced concerns over sluggish discretionary spending.

While profit dipped 2% year-over-year in rupee terms due to the impact of new labor codes in India, the sequential improvement in margins and the volume of new deals suggest that the sector’s "winter of discontent" may be thawing.