Infosys Ltd

A very good evening everyone and thank you for joining Infosys' Fourth Quarter Financial Results.

My name is Rishi and on behalf of Infosys, I would like to welcome all of you. Before we begin, I know we are slightly delayed, apologies for that, but I do request one question from each media house. Though there are lots of news today, but let us see what we can do best.

With that, I would like to invite our Chief Executive Officer, Mr. Salil Parikh, for his opening remarks. Over to you, Salil.

Thanks, Rishi. Good evening and welcome. Thank you all for joining us. We have had an excellent year in financial year 2025 – 4.2% growth, constant currency terms, 21.1% operating margin, $4.1 bn free cash flow and $11.6 bn in large deals. We feel the performance has been solid all around across the year.

We continue with our strategic expansion and acquisition in the energy and consulting space in the U.S.; acquisition in cybersecurity space in Australia; and a new strategic partner becoming part of our joint venture in Japan. So, all three areas are areas where we strategically look to expand, and we are further committed with this expansion in the U.S. in a very critical area for that market.

We have a set of capabilities that support clients in their growth, whether it is AI or cloud or digital, and in their efficiency, whether it is automation, cost reduction, lean and consolidation. So, we feel well positioned in this environment to look at both growth and both cost areas as clients look at them.

Based on what we see in the environment today and building on our large deal wins in the past quarters, our guidance for growth in financial year 2026 is 0% to 3% in constant currency terms. The environment is uncertain, and we will execute our plans with agility while keeping a close watch on changes. Our margin guidance for the financial year 2026 is at 20% to 22%.

Thank you, and then let us open it up for questions.

External Document © 2025 Infosys Limited 4 Thank you, Salil. Joining Salil is Mr. Jayesh Sanghrajka, Chief Financial Officer, Infosys. With that, the first question is from Ritu Singh from CNBC TV18.

Hi, Salil. Happy to be here. Jayesh, a quick word with your guidance of almost no growth in this year – 0% to 3%. If you could give us more in terms of commentary on what you are seeing? For instance, from TCS, we heard about delays in decision-making. From Wipro yesterday, we heard one of the large clients paused a transformational deal. So, what are you hearing? Are there ramp downs? Are there delays? Are there any sort of cancellations in large deals?

Also, for Infosys, in the last 12 to 18 months, we have not seen any mega deals being announced.

What is happening in the market? Are some of these large deals drying up? What is your sense, given that this puts larger reliance for you on discretionary spend picking up?

And just one question on the hiring and wages. The wages that were expected to be rolled out in the second phase in April – are you on track to do that? And your hiring plans for the year – 20,000 that you had indicated – if that is also on track? Thank you.

Okay, so thanks. A few questions. First on the environment, I think we see there is uncertainty in the environment. We have several deals that we closed in the last quarter and the quarters before.

Those are today moving into the appropriate next phases. We have not seen a change in that. We are seeing in areas where there is focus on changes which may come. There could be, in industries where there are changes that could come because of the changes in the regulations, there could be an impact. Jayesh will comment a little bit about how we have constructed the guidance based on that.

In terms of mega deals, we had two mega deals in the last financial year. We have a pipeline of mega deals today. What is, sort of what we saw in the past when things of this nature happen, which is changes in the environment, there is also an interest with clients on cost takeout, automation and efficiency and consolidation. We will see how it plays out because it is only a few days as clients have looked at it. But we have seen our large deals moving, meaning which we have closed, moving into the next phases as was evident.

External Document © 2025 Infosys Limited 5 Yes, adding to what Salil said on the guidance – look, we run multiple models which run up to the guidance at various ends of the guidance, bottom end, middle end or the top end. The fact that we gave a 3-point guidance reflects there is uncertainty in the environment. At the bottom end of the guidance, we have baked in some deterioration in the environment, some heightened uncertainty.

At the top end of the guidance, we have assumed steady to marginally improving environment at this point in time.

Coming to the second question on wages, we are on track on our wages – large part of the wage increments were rolled out in January and the balance is rolled out in April, effective 1st April. So we are on track on that. And in terms of FY'26 hiring, we are expecting to hire 20,000 plus freshers.

Sorry, can you clarify on the number of freshers? 20,000 plus, what we had said earlier, we are on track of it.

There were reports of Infosys laying off some of these fresh campus recruits because according to your own statement, there were 337 of these as opposed to media reports of 700 plus. And you said that was because of their weak performance. If you could clarify, what exactly happened there? Are you not able to find the right talent? Is the number still what you have said in your statement? Is it larger, just a statement from you on that?

So there, let me take that one. So first, we made some statements. So those are, we stand by those statements. In addition to that, within Infosys, we have an approach for making sure that we have a rigorous way to train and then to assess and test individuals. This is a process that has been ongoing for the last 20 years within the company.

At every time that the training batch comes in, they have three opportunities for testing. And at each time, if they succeed in that, they stay on. After three attempts, we have now found a way that we have found other opportunities for them and also supported them outside of Infosys in some training that can be offered to them. So that is the approach we have taken. In terms of the numbers, whatever the statements we have made in the past remain as they are.

External Document © 2025 Infosys Limited 6 Thanks, Ritu. The next question is from Haripriya Sureban from NDTV Profit. Haripriya Sureban Hi ir. Salil, give us some idea on -- like you said, you remain confident on the current deal wins that you have, but do you see any kind of changes going forward in your conversations with the client?

Any possibility of ramp downs or cancellations that you have visibility on right now?

And on the fresh deal wins that you try to bank on further, what kind of deal wins would mostly come in? Is this most towards the cost takeout side that would be expecting? And what is your read on the discretionary spending? Do you see that go down at least in terms of the sentiment? And would it pick later towards the year? And also, how many quarters are you expecting this uncertainty to stay on? Because one of your competitors said at least towards the second part of the year, things should get better.

And Jayesh, on the margins, stayed on the narrow band, what are the levers that you would have going forward? How do you plan to -- what are the impact that this current environment will have? And how would that be baked in?

So on the environment, what we see is, it is an uncertain environment. And as Jayesh shared, we have taken different scenarios to look at the way we have put together the guidance. In terms of specifics, as of now, we have seen the deals that we have won in the recent quarters are now continuing to ramp.

My view is, we will see because of the changes in the economic outlook, there will be some discussions which will be focused on more consolidation, more cost pressures with clients. But at this stage, we have not seen a change in that. However, the guidance has factored in what we anticipate in different scenarios, because all of this is happening in the last few days.

On the margins, if you look at FY '25, we have expanded margins by 50 basis points. That is a clear reflection of our endeavor, which we had said at the beginning of the year to improve margins. We have improved margins, despite multiple headwinds. We had a full year impact of the comp that we did in the previous year in November. We have paid higher variable pay to our employees. We had many of the large deals ramping up during this period.

External Document © 2025 Infosys Limited 7 We did an acquisition, so there was an acquisition-related impact. And despite all of those headwinds, we have been able to increase our margins by 50 basis points. So that is just a clear reflection of what we have been doing. And we do see opportunities in terms of increasing from VBS in terms of pricing etc., in terms of lean automation of doing more productivity, increasing near shore and multiple of our geographies etc., so there are opportunities to improve margins from where we are today.

Thank you. The next question is from Chandra Srikanth from Moneycontrol. Chandra Srikanth Hi, Salil. Just wanted to understand the 0% to 3% guidance. Does it bake in impact of tariffs? How much of it is happening because of GCCs? Have there been any project delays, cancellations? If you can give us a sense of that. And are there verticals or niche platforms that you are building which has outcome-based pricing? And is it time to let go of this 20% margin threshold? How are you sort of going to win deals in the current environment? And between U.S. and Europe, where do you see more uncertainty right now? Thanks.

So, on the guidance, Jayesh will give a view. On the platforms, let me start off and then we can come to the other ones. I think we are very clear with AI that there is a huge change in how agent-based platforms are being created. So, we have now work we are doing with clients where these are being leveraged. We have examples in telco clients. We have examples in financial services clients. We have examples in services companies. It is quite broad-based what we are seeing on platforms.

It is also building on the small language model that we have built in financial services, leveraging Finacle. We have also started to do work across other industries where we will build these sort of models. So, we see a lot of the platform activity expanding, and we think that that is something that we are well positioned to execute on. On the guidance...

Yes. So, on the guidance, as I said earlier, there are multiple models that we have built. At the bottom of the guidance, we have assumed heightened impact from all the macro environment. And on the top end of the guidance, we have assumed steady to marginally improving environment. It is very difficult to split out how much of that is because of tariffs, how much of that is because of GCC. But

External Document © 2025 Infosys Limited 8 on overall environment, when I look at, at the bottom of the guidance, we have factored in some increasing uncertainty. Reshab Shaw Hi Salil, Reshab here from Moneycontrol. So, in the last fiscal you said you will hire 15,000 to 20,000 which you are on-track. And this year, we see that you have added over 6,000 personnel for this fiscal. So are you losing out middle management to GCCs, if you could add a color on that?

Yes. So, overall headcount has increased by 6,000. We have hired 15,000 freshers. So, the balance is obviously the attrition at various levels that has happened. And the attrition is across multiple factors and multiple opportunities that people get outside. It could be GCCs, it could be competition, it could be employees going for further studies. There are multiple of those factors that play out there.

Thank you. The next question is from Shilpa Phadnis from The Times of India. Shilpa Phadnis Hello sir. We gather that Infosys has set up an internal business unit focused on GCCs specifically, it is called the Project Altius. Can you share more light on that? And we hear there is a new internal leader who is also going to be there.

The cost of deploying AI is also huge. And if you can talk about the economic benefit of AI has a longer gestation cycle. So, is it too early to read into it whether there is an impact at the developer level and the project level? Can you throw some light on that?

And secondly, the gestation cycle, especially for productivity gains, more and more customers are demanding that. Is it putting pressure on IT companies, especially with forward pricing on productivity gains? More customers are asking that this is going to put more pressure on the run part of the business. Can you throw some light on that?

Let me start off with respect to GCC. Over the last several years, we have had attention on working very closely with GCCs and working with clients either to help to set up or to scale or do different models for GCCs. Recently, we announced a very large win in GCCs with a services business, with an airline business. So, we feel quite good. There is no new unit or anything. It is something which

External Document © 2025 Infosys Limited 9 is there across all of our go-to-market areas and also with many of our service lines because the interaction with GCC is quite spread out.

Then I think the question was on the productivity. Most clients are looking for significant productivity benefits. Now, in the area of customer service, it is quite clear what that is and we are participating.

We do not have a large voice business or anything. We are participating in a joint ops and tech projects with clients where those type of benefits are visible and we are in a position to commit. What we are doing is making sure we share with clients what we are able to deliver and what is visible for us. They might sometimes meet with or not meet with what the clients are looking for.

On terms of the investments in AI, on the productivity of the developers and so on – so, there are some good examples. So if you look at Finacle, it is our own product. There we have seen, because the code base is very uniform and we built it over the years, in different places, 20% to 25% productivity benefit with tools that we have built on public models. We have also seen, for example, with some clients on user interface development, similar types of benefits through AI.

So, we see a huge impact to that. Overall, it is different because then we are working with different client situations. Sometimes it is higher, sometimes low, but we know that this sort of AI work, we have some great opportunity in. There are about 400 AI projects that we are working on, where we see a lot of these sorts of benefits that we are sharing with clients.

Thank you. The next question is from Beena Parmar from The Economic Times.

Hi, Salil. A few things. You mentioned about productivity benefits being passed on. Could you tell us what kind of percentage of revenue cannibalization are you seeing because of that? You mentioned about mega deals as well. Which sectors and spaces are these in? And what is your outlook on the different sectors? Which sectors are likely to be the most impacted because of the ongoing uncertainty?

Jayesh, you mentioned about increase in pricing, a probable increase in pricing that is still there for you. While you have seen active loss of clients in your number of clients, and this is also across most deal sizes, where do you see this increase in pricing that you are likely to see given the competitive environment and the uncertainties that continue? And lastly, what is the impact on the margins? What really led to the margin impact in this quarter? And what are the headwinds or tailwinds, rather headwinds in the quarter ahead?

External Document © 2025 Infosys Limited 10 So, let me start off on the productivity side. I think there, there is no sort of number specifically in terms of what is changing in that. There are productivity benefits that we see, for example, in customer service in the range of 30% to 40% that we mentioned. On software development, there are different ranges. And in each situation, clients look at it from a different perspective. Some of it becomes part of a discussion where they want to consolidate multiple partners. And there we are a beneficiary, that changes how much we can apply automation, lean or AI into that. But in general, we have seen last year 4% growth. So, when you put everything together with all this, we have still seen growth and that is the sort of momentum that we have seen with the deals that we had. And then, we have then put together the guidance as Jayesh was sharing on what we look at different scenarios like that.

On the industries, Jayesh will share a little bit of how we see the perspective. What we do see, for example, with the current situation, there is starting to be some impact that we will see in consumer products with what are the changes that are coming about. However, we see in many of our industries, for example in energy utilities, we see continuation of what is going on; in Financial Services, we still see with deregulation and strong first quarter that the clients have had, the calendar first quarter, we see that continuing on. All of this, however, we will have to sort of watch on a regular basis because not all the analysis and decisions have been made. So, as those play out, we will see what other impact there is.

Yes, so if I go back to your other question on pricing, I think pricing is across all the sectors. It is about how do you price it? We have had multiple tracks that we are running under the Project Maximus, whether it is about new age pricing, whether it is about change request, rotating our employees, deploying heightened lean automation in projects to get better productivity, which will mean better pricing in a way.

So, all of that has reflected in the pricing. It is not necessarily going and asking a higher price of what we were doing yesterday. It is about all of this coming together and reflecting in a pricing and that is what has helped, and we do see opportunity going forward as well.

On the margins for this quarter, our margins were 30 basis points lower quarter-on-quarter. The biggest headwind we had was because of the comp that we had announced, large part of our employees got compensation increase effective 1st of January and that impacted by 140 basis points. We had 40 basis points on account of amortization of intangibles for the acquisition that we made. So, those were the headwinds that was offset by lower post-sale customer support - 80 basis

External Document © 2025 Infosys Limited 11 points, 20 basis points on currency, 30 basis points on Project Maximus and 20 basis points because we had a lower third-party cost. So all of that put together reflected on 30 basis points decline on our margins. Outlook on margins?

Thank you, Beena. The next question is from Jas Bardia from The Mint. Jas Bardia Good evening. Just a couple of questions. One, if I look at your large deal TCV, it is down 34% year- on-year. Now, does it imply that FY'26 can be a little choppy in terms of growth considering the company started off strong in terms of deal wins? My question is on how India and growth markets kind of offset the slowdown blues for one of your peers? Now, suppose this happens in two of your largest geographies, say the U.S. and Europe. Is there a plan B in place to keep the growth going for Infosys?

Having said that, again, as Jayesh was sharing earlier and I shared, on the guidance, we have taken a view on different scenarios, building from the low to the high and slightly broadening, expanding to three points the range of the guidance. In terms of other markets, first, we had a very strong growth in Europe in the year that is just finished. We see that we have increased the percentage of our revenue in Europe over the years.

We have made several investments and scaled up in different geographies in Europe. So that is a good market for us. With the changes in the environment, we will sort of see what develops. We have a good business in India, but it is a small business. And we have a good business in other

External Document © 2025 Infosys Limited 12 markets, for example, in other parts of Asia, but relative to our overall size, still a small business. So the way the environment develops is what will drive and as the range that we shared, how we have constructed the scenarios, will drive the guidance there.

Thank you. The next question is from Avik Das from the Business Standard. Avik Das Avik, this side. A couple of questions to you and a couple to Jayesh. Salil, if you can throw some light upon the BFSI business, while you did talk about some green shoots emerging in the third quarter, small deals coming back which shows discretionary spend. Considering the impact of the tariffs, mainly perhaps on the manufacturing and the retail, do you see any impact on the BFSI market as well? It is turning conservative in terms of spending, both in cost optimization as well as in the discretionary spending part. And also, as you bank on large deals and you have a pretty robust pipeline, given the uncertainties, do you think that large deals, at least for this fiscal, will take longer time to actually materialize? Will that going to be a challenge?

Jayesh, one question was, will margins come under pressure as vendor consolidation takes place in this uncertain environment? What sort of margin pressure do you anticipate, if at all? And considering the guidance that you have provided and also you talked about hiring 20,000 freshers this fiscal, just trying to balance these like what gives you the confidence that you can actually go ahead with that strong hiring numbers for this year?

So on financial services, again, the first point is that we are in an uncertain environment. Having said that, what financial services is for our end clients, their own results what have been declared, have been fairly strong. So in some ways, that volatility has helped some trading business and so on.

We see from our client base, looking into the first quarter that there is activity, there is a good amount of work that we are seeing. So we are not seeing something that is changed in financial services.

Now, as things stabilize on the overall economic environment, we will get a better sense of what the eventual full year will look like.

But this is what we see on financial services today. I think on the deals, typically, we have a good large deals pipeline. What typically we have seen in the way we built our business portfolio is, when there is high economic growth, we have digital, we have cloud, we have new AI now.

External Document © 2025 Infosys Limited 13 When there is more cost focus, we have efficiency, automation, consolidation and productivity through AI. So we have both of those levers. And typically, when there is more cost attention as they might be in this environment, we will see large opportunities for cost takeout and consolidation. And we feel quite well positioned, as we have done in the past to benefit from that.

So far, again, things have changed in a short period of time in terms of what can happen with the economic outlook. So in that period of time, we have not seen anything, but it is a very short period of time. So for us to get a sense, we will see how it goes. But sometimes, again, this is from the past when there is a cost imperative. Also, sometimes decision making is quicker to say, look, can we get a cost takeout done quickly. So we do not know, we will see how that plays out.

On the other two questions, I will answer the last one first, which is on the hiring. If you look at the 20,000 hiring that we are talking about, it is a combination of backfilling the attrition and the growth.

We had 14% attrition this quarter. And if you look at the math, it adds up with the guidance that we have had. So we are very confident at this point in time of hiring 20,000 freshers through the year, in line with our guidance.

And on the vendor consolidation and the pricing impact, I think, if you look at the last few years, and we have been gaining market share, it is a clear reflection that we have been on the positive side of the vendor consolidation and that gives us a confidence that we would be able to retain the pricing and the pricing power there.

Thank you, Jayesh. The next question is from Sanjana B. from The Hindu Businessline. Sanjana B Hi, good evening, gentlemen. So, Salil, are you at all looking to reduce your reliance on the U.S. markets amid all the uncertainties that are prompted by the tariff discussion? If yes, what are some other geographies that you are concentrating on?

And from a sectoral perspective, are you at all seeing some initial tailwinds? If yes, what are those?

And while some of your peers reported some softness in Europe, you yourself said that you have seen some growth in the geography. Could you elaborate on what worked for you to prompt this growth? Thank you.

External Document © 2025 Infosys Limited 14 So first on the U.S., I mean, we have just announced an acquisition in the U.S. in energy and in consulting. We remain, in a longer term view, positive on tech, technology changes and positive on the markets we are in. We may see some uneven activity in the shorter or medium term, but in the longer term, we do. And that is one of the signals for us that we made the acquisition.

Having said that, we are looking to expand in other geographies in addition to what we are doing in the U.S. For example, the Japan announcement we have a new partner who is joined our joint venture, or the acquisition in Australia. So we are quite positive in the medium to long term on technology, how it will change, how AI will impact it and our role in all of that. We will see how it develops with the current uncertainty and how long that takes to change.

On Europe, we also commented last quarter, which holds today that while Europe overall, we have done well for the year, the automotive sector in Europe, we had already talked about, we had seen some slowness. And that continues in what we are seeing, even as we see the outlook today.

Thank you. The next question is from Sai Ishwar from Reuters News. Sai Ishwar Hi, gentlemen. My first question is that, I wanted to know why you have just given 4.2% CC growth last year. So it is kind of below the guidance. So I just wanted to know what went wrong in that aspect. So it is not met the guidance given last quarter. And also, it has been repeatedly asked, I just wanted to know, in terms of projects, have you seen any delays or pauses or any ramp downs or anything of that sort of cancellations? Thank you.

So I will start with the second one. At this stage, we have not seen. Having said that, all the changes have happened in a very short period of time, but the large deals that we won in the last few quarters are continuing in their trajectory as we had anticipated at this stage.

On the guidance, for this quarter we declined 3.5%, which was obviously higher than what we anticipated at the beginning of the year. But large part of that was on the back of third-party costs and revenues because pretty much two-third of our decline was on the back of that. And those are the deals which typically happens towards the end of the quarter and some of them slipped through that. So that is what has reflected both in lower third-party costs and lower revenue for us.

External Document © 2025 Infosys Limited 15 Sai Ishwar The revenue guidance of last year was 4.2%?

That is what I am saying. So because you had a lower third-party cost, you had lower revenue towards that. So that was one reason. And the second reason was Q4 generally has a seasonality in terms of lower working and calendar days and the volumes were lower, but two-third of that 3.5% decline was on the back of lower third-party costs and revenue.

Thank you. The next question is from Padmini Dhruvaraj from The Financial Express. Padmini Dhruvaraj Hi. So are you seeing any structural changes in large and mega deals in terms of tenure, scope or pricing, especially with Gen AI? And since this tariff talk started, did you see any changes in your clients budget for CY'25?

On the large deals and Generative AI, so it is been, let us say, an ongoing change through the last several quarters where almost a lot of large deal discussions have some part of Generative AI in it.

So there is not now too many deals, large deals or any deals that we are doing, which has not got some part of Generative AI. So that is one sort of qualitative change, because it is part of every discussion, whether it is on productivity, whether it is on solving a specific area, which is related to process, on engineering, customer service. So a variety of elements, Generative AI is very much part of it. And they are making a big difference in how those deals are developed now.

Thank you. The next question is from Rukmini Rao from Fortune.

External Document © 2025 Infosys Limited 16 Gentlemen, a few questions. One, Salil, could you please call out, how much of business does Infosys do when it comes to public sector in the U.S. and current exposure, maybe in the quantum of revenues from the U.S. geography, how much of it is -- what kind of exposure you essentially have to public services contracts with the U.S.?

And also given that we saw Accenture and others probably contracts getting rescinded, are there any such fears and being a non-U.S. headquartered company, do you see any sort of disadvantage going forward in bidding for contracts which may involve U.S. government or in general, if there is any sort of disparaging, if it is going to be difficult for non-U.S. headquartered companies to compete?

And two, also, can you specifically call out which are perhaps the gloomiest of the business segments, given the guidance? Are there any specific business segments that you see probably doing really badly in FY'26? Also, Jayesh, the technical subcontracting cost has gone up by about 3.5% year-on-year, right? Is that some sort of a strategy where your headcount remains low and as and when you require, you get people to do work that needs to be done? If some sort of color that you can give on the correlation, if there any exists?

And also, your top five client revenue has declined by about 50 bps. Any specific reason, is that like a client specific thing or are there ramp downs or anything happening with those top five clients of yours? Thank you.

Let me start off. I think we have a very small, almost immaterial in terms of public sector U.S. So, in that sense, we have, let us say, no impact from some of the things we have seen or read about other peers. We feel, in that sense, we do not have something -- something very small and therefore no impact on that at all. (Editor comment - inaudible) U.S. as an Indian company, a non-U.S. company?

So, we do not have a lot of those -- we do not have a lot of work in that area. We have a very, very small business in that area. So, it is not really material, whether the impact happens or not happen. So, we are not in that space that much.

External Document © 2025 Infosys Limited 17 Salil, also the U.S. subsidiary sort of services both U.S. as well as Canada, right? So would there be need for any special subsidiary if you need to do business in Canada that needs to be set up now, given what is happening in both those countries?

I think, so first, our structure is not exactly that, but our structure is well designed today to work with Canada and the U.S. and actually across North America, because the individual is not one box, the structure we have set up, but it is not a subsidiary in that sense.

On the subcontractor cost, I think the better way to look at it is on a full year basis. If you look at full year basis, our subcontractor cost has come down. If you look at percentage terms because our revenue has declined this quarter, you will see a slightly distorted picture there.

But if you look at full year basis, our subcontractor cost has constantly been coming down, and that is been one of the tracks of Maximus that we have been driving as well. We use subcontractor pretty much where there are short-term projects or where there are niche skills, where the talent needs to be fulfilled. So, that is the reason we use subcontractor, and there is nothing more to it… YoY top 5 clients?

Yes. So, I will come to that. So, YoY top 5 clients – I do not think there is again anything specific to read that. It is again a factor of the lower revenue that we got because of seasonality or the third- party cost, but that is the reason why you would have seen similar drop in the top five clients as well.

Thank you Rukmini. The next question is from Uma Kannan from The New Indian Express.

Hi, good evening. Given the present uncertainty and delayed transformation that you spoke about, are you finding it challenging to retain your existing clients? I mean, like number of projects from your existing clients? And another one, you spoke about SLM and agentic AI. So, I want to understand what kind of opportunities are you seeing and what is the overall scale of this? And what is the nature of work like, is it more discretionary oriented or cost or efficiency?

So, take an example, we are doing something with a global company, a European-based company helping them look at AI as a platform across their entire workspace and looking at where they can improve or make benefits, which could be in the range of 70% in some of their processes.

We are working with a telco where we are doing this, constructing a complete generative AI platform using agents that we have developed to make sure that the whole enterprise is improving its customer service activities. So, the work we are doing in agents I feel is quite leading. It is part of our Infosys Topaz and we have a lot of attention with our clients where we are making those transformations. The other question… Other question was about like, are you finding it challenging to retain more projects from your existing clients?

So, there we are working very well with our existing clients. The projects are going on. This change in the environment has happened recently. We will see there are discussions, as I mentioned, where on anecdotal basis, clients are looking at how that will impact their business. We want to make sure that we see that through as more clarity emerges on what the overall impact will be. But taking all that into account, we have made sure that we put that into the guidance that we provided.

Just one question on employees like, now 10 days of work from office is mandatory, right? So, are you planning to make it like five days like some of your competitors have done it? And what kind of feedback that you are receiving from your employees?

So there, first, what we have done is there are several clients of ours who have a different sort of prescription on work from home and work from office. At the company level, we are flexible with our employees on what they can do. There are some parts where there is a department or a division

External Document © 2025 Infosys Limited 19 where we have given flexibility to that department to say that in certain projects, we would like to have people coming in.

Having said all of that, the flexibility has been hugely appreciated by the employees. And we are seeing on a weekly, monthly, quarterly basis, an increase in the employees who are coming into campus and working. So, we feel good with the way we are progressing today.

Thank you, Uma. The next question is from Sonal Choudhary from the Deccan Herald.

Hello, Salil. Hello, Jayesh. I wanted to ask that even though you have given guidance and you will continue to watch out for whatever is going on in the macroeconomic environment, when do you foresee a recovery, if you could shed some light on that. You have said that there is no pressure in European markets or as per energy is also doing well?

However, will you play with caution given of whatever is going on right now? And on margins, again that would be hard to play out given that rupee is also depreciating and among other factors. Is there any strategy at play to make it better?

So, on the time horizon, what your first question is, so we do not have a view on it, but we will keep track of what is going on and how that plays out and how it affects economic growth or other factors which then will have an impact on our business. But we do not have a view on the time horizon.

On the margins, currency would generally benefit. So, if rupee is depreciating in the short term, it does benefit. But outside of the currency, we have launched Project Maximus, as we have said earlier, and there are multiple tracks within that, right from value-based selling to efficient pyramid to challenging portfolio, etc.. All of those tracks are working well which has resulted in margin expansion this year of 50 basis points, and our endeavor is to improve margins from where we are today.

On the European market and any of the segments, if you would play with caution?

External Document © 2025 Infosys Limited 20 On Europe, as I said, first we had good growth in the financial year that just ended. We also shared that there are areas, for example, automotive in Europe, where there is some slowing, so that we are watchful of. Outside of that, we have not made any other comments on that.

Just one quick question. This is regarding layoffs and sort of a behavior that was called out by the employees who failed the test and were sent out? During the last quarter, Rishabh had asked you a question regarding one of the folks who had spoken something over LinkedIn and you had said that an equal treatment is given to everyone. But yes, the behavior here was entirely different. Anything that Infosys would like to comment on that?

So there, what we have had at Infosys over the years has been an approach where we want to make sure that the new employees that are joining from college get the appropriate training, and then they have three attempts to make sure that they have taken that training in and then can contribute to our clients in the way we want that to happen.

As we have now looked at what has been going on with the employees, we have made sure that they have other opportunities, sometimes within Infosys, and we have supported for them if we can find a way for them to do training outside Infosys. So, we are making sure that we do everything to get them ready and yet be at the standard that Infosys has kept and this has been going on for the past 20 years in the way the high quality of delivery that Infosys is known for and that our clients are expecting from us. Thank you, Sonal.

With that, we come to the end of this Q&A session. We thank our friends from media. Thank you, Salil and thank you, Jayesh. Before we conclude, please note that the archived webcast of this press conference will be available on the Infosys website and on our YouTube channel later today. Thank you, and please join us for some high tea outside.

External Document © 2025 Infosys Limited 1

Infosys Limited Q4 FY'25 Earnings Conference Call April 17, 2025

Chief Executive Officer and Managing Director

Chief Financial Officer

Financial Controller & Head of Investor Relations

ANALYSTS

JP Morgan

BNP Paribas

Motilal Oswal

Morgan Stanley

Guggenheim Partners

BMO Capital

Citigroup

JM Financial

Equirus Securities

External Document © 2025 Infosys Limited 2

Nuvama Institutional Equities

Investec India

Axis Capital

Ambit Capital

BOB Capital Markets

External Document © 2025 Infosys Limited 3 Ladies and gentlemen, good day, and welcome to Infosys Limited Q4 FY'25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone.

Please note that this conference is being recorded.

I now hand the conference over to Mr. Sandeep Mahindroo. Thank you and over to Mr. Mahindroo.

Hello everyone and welcome to Infosys Earnings Call for Q4 and FY'25. Joining us on this earnings call is CEO and MD, Mr. Salil Parekh; CFO, Mr. Jayesh Sanghrajka and other members of the leadership team. We will start the call with some remarks on the performance of the company, subsequent to which the call will be opened up for questions.

Kindly note that anything we say which refers to our outlook for the future is a forward-looking statement that must be read in conjunction with the risk that the company faces. A full statement and explanation of these risks is available in our filings with the SEC, which can be found on www.sec.gov.

I would now like to pass on the call to Salil.

Thanks, Sandeep. Good evening and good morning to all of you. Thank you for joining us on this call. We had an excellent financial year 2025. Our revenues grew at 4.2% in constant currency terms.

Our operating margin was 21.1%. We generated $4.1 bn in free cash flow and we had $11.6 bn in large deals.

In Q4, we had year-on-year growth of 4.8% and operating margin of 21%. We are seeing growing demand from clients to partner with them on AI, they are moving from a use case-based approach to an AI-led transformational approach with AI agents playing a critical role. We are working on AI projects by bringing Infosys Topaz, a generative and edge AI-powered services and solutions for their benefit. Our AI work spans a wide spectrum of priority areas like process improvement, engineering, customer service, cybersecurity and employee productivity.

We are helping a large U.S. financial services company navigate the AI transformation to deliver hyperpersonalized conversational AI-powered customer experience with accuracy of over 80%.

External Document © 2025 Infosys Limited 4 We are working with a Europe-based company to create master solution, driving multiple AI-first transformation projects, i.e. automating 70% of their process landscape.

We continue with our strategic expansion with acquisitions, one in energy consulting space in the U.S., one in cybersecurity in Australia and with a new strategic partner joining our joint venture in Japan. All of these are areas of interest and strategic focus for the company.

We have a set of capabilities that support our clients in their growth areas related to AI, cloud and digital and in their efficiency areas related to automation, cost reduction, lean and consolidation.

Based on what we are seeing in the environment today and building on large deal wins in the past quarters, our guidance for growth for financial year '26 is 0% to 3% in constant currency terms. The environment is uncertain and we will execute our plans with agility, while keeping a close watch on events as they unfold. Our margin guidance for financial year 2026 is 20% to 22%.

With that, let me pass it on to Jayesh for his views.

Thank you, Salil. Good morning, good evening, everyone and thank you for joining the call today.

We entered financial year '25 with significant uncertainties relating to interest rates, elections in large geos and geopolitical situations. Over the course of the year, reduction in uncertainties, our strong market position, reflecting in robust deal wins and improvement in discretionary spend in financial services led to better growth than our initial projections.

A year ago, I started my journey as the CFO of Infosys with a vision to increase our market share, strengthen collaboration with business, drive Project Maximus to expand operating margins and improve cash flow. I am very glad that we have been able to achieve success in each of these parameters.

Let me start by talking about the key highlights for the quarter and the year. 1. We closed the year with revenues at $19.3 bn, a growth of 4.2% in constant currency terms and 3.9% in reported terms. Acquisitions contributed 80 basis points to the growth in financial year '25. 2. Financial Services, EURS and Manufacturing grew above company average for the year. 3. I am particularly glad that operating margins for the financial year improved 50 basis points over FY'24 to 21.1% after absorbing multiple headwinds. This has been a key focus area over the last year and I will elaborate over this later.

External Document © 2025 Infosys Limited 5 4. Sequentially, revenue declined by 3.5% in constant currency terms due to reduction in third- party costs and seasonal weakness. Approximately, two-third of the sequential revenue drop was due to reduction in third party with the decline being higher than our expectation. Balance one-third drop was due to volume decline and lower calendar and working day driven by Q4 seasonality. 5. Revenue increased by 4.8% on a year-on-year basis in constant currency terms in Q4.

Operating margin for Q4 was at 21%, a decline of 30 basis points sequentially, bringing the financial year margins at 21.1%, increase of 50 basis points from FY'24 level.

External Document © 2025 Infosys Limited 6 Higher travel and visa costs were offset by lower other costs leading to a decline of 30 basis points sequentially.

Utilization, excluding trainees, stands at 84.9%. On-site mix further reduced to 23.6% .We hired 15,000 freshers this year and expect to hire over 20,000 freshers in FY'26.

EPS increased by 1.8% in financial year '25 in rupee terms on reported basis and 8.3% adjusted for interest on tax refunds.

The increase in margins by 50 basis points over FY'24 was achieved, despite multiple headwinds from salary increases, higher variable pay, impact from large deal ramp-ups and acquisition-related amortization. These headwinds were more than offset through combined benefits from various tracks under Project Maximus, especially value-based selling, lean and automation, improvement in critical portfolio, improvement in utilization, etc. We have been able to institutionalize these initiatives and make a structural shift in our approach. We expect Project Maximus to further aid in margin improvements from current levels.

Consolidated cash and cash equivalents stood at $5.56 bn at the end of the year. Yield on cash balance was 7.13% in Q4 and ROE stood at 29%.

Coming to cash flows; FY'25 free cash flows are highest ever at $4.1 bn, increase of 42% year-on- year. Free cash flow as a percentage of net profit for the financial year was 129%. We expect FY'26 free cash flows to be above 100% of net profit. Excluding income tax refunds, our free cash flows for the year were at $3.5 bn, up 21% year-on-year. Free cash flow as a percentage of net profit were at 112%.

We expect effective tax rate for financial year '26 to be in the range of 29% to 30%.

The Board has proposed a final dividend of Rs. 22 for financial year '25. Including the interim dividend, the total payout for FY'25 will be Rs. 43, an increase of 13.2% once the final dividend is approved by the shareholders.

We closed 24 deals in Q4 with a TCV of $2.6 bn, 63% of this net new. Vertical-wise, we signed 7 deals in Financial Services, 5 in EURS, 4 in Manufacturing, 3 in Communication, 2 each in Hi-Tech and Life Sciences and 1 in Retail. Region-wise, we signed 12 large deals each in America and Europe. Coming to verticals,

External Document © 2025 Infosys Limited 7 In Financial Services, budgets are flat to slightly higher in AI, regulatory compliance and cost management. We anticipate steady growth in capital markets and cards & payments in large global banks and U.S. regional banks. Mortgage sector will see an uptick in spend if interest rates reduce going forward. Our investment in AI-related propositions, regulatory compliances, risk mitigation and cost management is expected to create growth opportunities. We have been selected as an AI partner for many of our clients.

Manufacturing sector has grown double digits over the last few years. For CY'25, budgets are lower for Auto and Industrial Manufacturing and flat for Aero. Recent challenges in terms of tariffs, market uncertainties and trade barriers are likely to lead to a subdued spend and delayed decision-making.

Weakness in Auto, especially in Europe continues. We are helping clients in Aerospace resolve bottleneck in the supply chain. Pipeline remains healthy with focus on cost takeouts, opportunities in infra transformation and consolidation and some traction in ERP modernization programs.

Retail sector has been impacted by economic uncertainty resulting in lower consumer spending in core markets. Due to recent tariff announcements, client budgets are expected to be tightened and there is increased caution. Decision cycles are getting stretched for discretionary spend and large deals. Across geos, there is increased focus on AI, cloud, estate modernization, cost takeout and investing in core tech capabilities.

Energy Utilities Resources and Services sector continues to grow and we see a strong pipeline of opportunities, both from existing and potential clients. Energy prices remain volatile, however, new markets in midstream and downstream energy are opening in the U.S. region. There is an increased M&A and tax-related work with services clients, focusing on cloud migration and vendor consolidation. Utilities is prioritizing AI-driven enterprise transformation and services and is seeing traction in software, services and IP deals. The acquisition that we announced today will strengthen our vertical expertise and open new buying centers in energy trading and risk management areas.

Communications sector continues to remain soft. Discretionary spend is under pressure with clients focusing on cutting costs, restructuring and consolidation deal. Our growth will be led by recent deal wins and opportunities in areas like cost reduction, AI and database solutions and cybersecurity.

Lower interest rates could improve the profitability of telco OEMs, which in turn can help increase IT budget.

In Hi-Tech, most clients remain cautious due to the macroeconomic headwind and tariff announcements, with discretionary spend still remaining under pressure. There is increased margin pressure on account of committed spend on data centers.

External Document © 2025 Infosys Limited 8 Exiting FY'25, global uncertainties relating to tariffs and impact of that on client sentiment and spend are taking center stage. Basis our assessment of the current macroeconomic environment and the visibility that we have today, we expect FY'26 growth to be 0% to 3% in constant currency terms.

This excludes the acquisition that we announced today and this assumes a reduction in third-party revenues versus FY'25 based on existing deals and the new deals in pipeline that we have today.

Our operating margin guidance for the year is 20% to 22%.

We will continue to keep a close watch on economic environment and its impact on client budgets and reassess our guidance as we progress during the year.

With that, we can open the floor for questions.

Thank you very much. We will now begin the question and answer session. The first question is from the line of Ankur Rudra from JPMorgan. Please go ahead.

Thank you. On the fourth quarter, can you talk a bit about the linearity...

Ankur, sorry to interrupt you, your audio is not clear. Can I request you to come in a better reception area, please?

Okay. So, question was in terms of the fourth quarter, can you talk a bit about the linearity? Did the softness or the relative miss to guidance play out only in March or was there something you saw over the course of the quarter?

Ankur as I said earlier, two-third of the decline was on account of third-party costs and the revenue related to that. Some of the deals that we had in the pipeline had slipped. So, the decline was higher than what we anticipated. And the balance was the usual Q4 seasonality and the volume decline that we saw. So two-third of our 3.5% decline was on the back of third-party cost and revenue.

External Document © 2025 Infosys Limited 9 I appreciate it totally. I was curious if that played out more in March or if that played out over the course of the entire quarter?

Yes. So generally, these deals happen towards the end of the quarter and that is where it slipped from there.

Okay, understood. If I talk a bit about the guidance, it seems to imply something like 0.8% to 1.9% ask rates for the rest of the year. Could you highlight if this will be a normal seasonality? Or is it going to be different given the heightened uncertainty you might be seeing right now?

Ankur sorry, can you repeat the question? It was not very clear.

The guidance, does it imply a normal seasonality for the year?

Okay, understood. Just the last question. You spoke a lot about the AI-led transformation that clients are expecting from you. Are you infusing AI into existing projects that might lead to any kind of revenue deflation which you have to overcome?

External Document © 2025 Infosys Limited 10 Okay, appreciate it. Thank you and best of luck.

Thank you. Next question is from the line of Kumar Rakesh from BNP Paribas. Please go ahead.

Hi, good evening and thank you for taking my question. My first question was, you spoke about that the third-party slipped towards the end of the quarter. So, how was the volume trend during the quarter? And does that imply that as they come back in the next quarter in the guidance you are expecting the third-party contribution to be higher in FY'26?

If you look at what I said, we had a softer start at the beginning of the quarter from volumes perspective, but we did see some recovery from there in terms of volumes. But on the third-party, we are expecting for FY'26 to be lower than FY'25, considering the deals that we have signed and the deals that we have in the pipeline. So that is baked in. And volume trend during the quarter?

Yes. The volume trend during the quarter, we had a softer start in January, generally, the soft month and then the volumes start stacking up and we saw a similar trend this quarter as well.

Great, thanks. My second question was from a longer-term perspective. Over the last 2, 3 years, we have seen all the froth which was created in many of the deals with very low ROIs being signed, they were reassessed by the clients and many of them were ramped down, and we saw the impact of that in terms of revenue growth. Do you see, there is still some scope left if clients start reassessing the projects again, if the macroeconomic uncertainty continues for a little longer, there is more of reassessment of the projects, which may again start happening the way we have seen over the last year or two?

External Document © 2025 Infosys Limited 11 Hi. First, the changes that we have seen in the economic environment, impact have happened very recently and over a short span. Having said that, the discussions we have had, specifically on some of the deals we have signed in the recent quarters, we have not seen a change in that, like the trajectory that we were anticipating, at this stage. However, we will keep a look out on that as we develop.

Thanks for that Salil. Just a clarification. So, my question was more around that ROIs now that we are offering in terms of the deals which we are doing for the client. Now has it on a portfolio level, has it improved so that we are no longer in a risk if such a reassessment happens or you still see that there are some of the projects which is at a risk which could be reassessed?

What we saw in the past was more of the discretionary spend where the clients had put a stop or there were ramp-downs. If the environment deteriorates, significantly from where we are, yes, the clients will relook at some of that. At this point in time, we are not seeing any of that happening significantly for us. Great. Thanks.

Thank you. Next question is from the line of Abhishek Pathak from Motilal Oswal. Please go ahead.

Yes, hi. Thanks for the opportunity. So, my first question was, could you please just expand a bit on the underlying assumptions at the top end of our guidance? Do we assume an acceleration in deal wins for this to be achieved or do you think a better-than-expected ramp-ups could probably take us to 2%, 3%? That is one.

And the second question was – which I think is probably partly answered. But considering a few of your peers have called out some deferrals or at least some uncertainty in decision-making. How does the next immediate quarter looks in terms of, let us say deferrals or ramp-downs? And do you see any significant risk in the extreme short term?

External Document © 2025 Infosys Limited 12 And lastly, do the current events kind of push-down the recovery in short cycle deals a bit more and do you feel short cycle deals are again, something that will struggle to take-off? Thank you.

Yes. So, leading up to guidance, we always run multiple models that leads us to the top end, bottom end or the middle end of the guidance. That is the same process that we have followed even at this point in time. The reason that we gave a 3-point guidance band was because there is an uncertainty.

So, at the lower end of the guidance, we have baked in some further deterioration in the environment.

And at the top end of the guidance, we have baked in steady to marginally improving environment.

So that is how the guidance has been panned out from the environment perspective.

Having said that, on the ramped downs, we have not really seen any major ramped downs at this point in time or major closures of the deals, we do see clients being cautious that decision making is delayed in pockets. But as I said, what we see today has been baked in in the lower end of the guidance from the uncertainty perspective.

Abhishek, do you have any follow-up question?

Yes, sorry. No, just the last bit on the wage hike impact for Q1 and how do we just model that in? Thanks.

Yes. So, Abhishek, most of our employees got the wage hikes in January and the middle level to senior level employees will get wage hike, effective 1st of April. The impact of that has been baked in in the guidance range that we have given.

As you could see for the financial year '25, we have improved our margins by 50 basis points. We are now at 21.1%, despite all the headwinds, whether it was wage hike, whether it was higher variable pay, the large deal ramp-ups, acquisition-related costs and our endeavour going forward is to improve from where we are in the current environment. Understood. Thanks a lot.

External Document © 2025 Infosys Limited 13 Thank you. Next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead.

Hi, thanks for taking my question. My first question is on small deals...

Gaurav, sorry to interrupt you, can I request you to speak little louder, please? Am I audible now? Yes, go ahead.

My first question is on small deal environment. Have you seen any change compared to a few months back? And is it fair to believe that the midpoint of guide assumes a stability in the environment on the small deal front?

So, Gaurav as I said, there are various models that leads to multiple ends of the guidance. At the lower end, I will repeat, we have assumed deteriorating environment. And at the upper end, we have assumed steady to marginally improving environment. So in the middle is anywhere between the two.

Okay. Got it. Second question is on margins for FY'26. Normally, what we have always been hearing is that when growth improves, it creates an operating leverage and provides a cushion to improve margins. But if I take this midpoint of your guide, it is kind of slowing compared to FY'25.

So is it fair to believe that kind of creates some operating deleverage and create some pressure on margin? So what would be the levers to offset that and still be -- stay within the band within FY'25 range? Thank you.

External Document © 2025 Infosys Limited 14 So Gaurav, if you look at the last year also, we had a large comp impact coming into the year because we had the previous comp which was rolled out in November. So full year impact of that came into this year and then we had additional comp that we rolled out in January.

So there was a comp impact. There was an impact of the large deals that we signed in the previous year, 30bps of impact from the acquisition that we did and so on. And despite all of those headwinds, we have been able to improve margins by 50 basis points by rewarding our employees better through a higher variable pay through the year.

So, we are confident at this point-in-time that there are opportunities where we can double down and improve margins. So at this point-in-time, the endeavour is to improve margins from where we are for FY'26.

Thank you. Next question is from the line of Jonathan Lee from Guggenheim. Please go ahead.

Great. Thanks for taking my questions. First question, can you clarify what the inorganic contribution is that is contemplating your outlook for fiscal '26?

So Jonathan, the guidance does not include the acquisition that we announced today. We have not closed them yet. The Board has approved the acquisition. We still have to go through the closing formalities that will take a few weeks to maybe a month or so. So, depending on the closure, we will figure out in the next cycle on the guidance. So at this point-in-time to clarify, the guidance does not include the acquisition that we announced today.

Thanks for that clarification. Second, how would you characterize the pricing environment through the quarter? And how does that compare to what you have seen since the beginning of this fiscal year?

External Document © 2025 Infosys Limited 15 We continue seeing stable pricing through the quarter, generally at the overall business levels.

Everything that has changed in the environment has been very recent. So we have not really seen any significant impact coming from them on the pricing environment.

Having said that, one of the key pillar on our cost optimization or the margin improvement program is the value-based selling, that is not only pricing, that is everything around pricing, including getting the change request for the scope creeps, rotating our long-tenured employees across projects so that we get better pricing on them, having differentiated pricing models for different services. So, all of that has helped in the last year and that endeavour continues in this year as well. Appreciate that colour, thank you.

Thank you. Next question is from the line of Keith from BMO Capital Markets. Please go ahead.

Hi. Thank you very much for taking the call. I wanted to return to AI on the delivery side. And really, I wanted to go back to the first question, which I was not sure, I understood your answer. But how is AI changing the nature of pricing discussions and/or structure? And how do you think that is going to unfold in FY 2026? In other words, does the deflationary nature of AI, is that impacting your performance-based contracts or any structure that you are putting in the contract? And is it leading to any different price discussions?

And if you could also call out, is there an area whether it is BPO or deployment or ADM that is being -- that you see using AI more in the delivery or is it all the different areas? Is there any one area specifically within your portfolio or solution portfolio that you think will be impacted more by delivery? Thank you very much.

So, on AI and pricing, what we are seeing is, there are areas where we have discussions with clients and this is building up through the last year, through the quarters and we anticipate seeing that going ahead as well. Where for example, if there are large customer service programs, we see that there could be benefits to the clients of 20% to 40%. If there are different areas where Generative AI can be applied, those discussions are very much at the forefront on clients minds.

External Document © 2025 Infosys Limited 16 Sometimes, the client view are maybe larger than what we are seeing in realization and so, we have a choice to make there. Many times, they are aligned and AI is one component of automation, of lean, then AI and then consolidation, all of which give some benefits in a cumulative way to the clients. So, we see that ongoing.

And with that, we also see AI gives us some new opportunities; One, there are new projects we are doing, for example, in credit risk or AI platform, for a telco, these give us new areas for revenue as well. So as a cumulative, while all this was still going on last year, we still saw 4.2% increase in revenue and that is the way we see it at a composite level.

Now on that, we superimpose the changes in the economic environment which is where we see some differences as Jayesh was sharing earlier in the range of the guidance, if that makes sense.

Okay. But just when, and for my follow-up when you mentioned there are some situations where AI is generating 20% to 40% efficiency gains, I think that is sort of similar to what IBM and Accenture have said.

On a like-for-like pricing in that situation, where you can deliver such meaningful efficiency gains to the client, how are those efficiency gains shared with the customer? In other words, is your revenues go down by 20%, 40% or how is that shared in terms of just on a like-for-like basis for a given contract and that is it for me. Thank you.

So there, where we have seen that range has been more, for example, on customer service. We do not have a large voice business. We typically bid on like a combination of technology and operations, and part of it could be that. So typically, these are not our existing book of business, that customer service is not something we have a large book of business in.

In terms of sharing, there are different ways. These are shared depending on the client situation like there are situations where there is a consolidation activity with the client, where there is a share in some part where customer service is not within our portfolio and there is consolidation which gives us some benefits. So it is not like one number which gets shared then with clients. But it is shared, yes.

Okay. Many thanks for the answers and I wish you all the best of luck.

External Document © 2025 Infosys Limited 17 Thank you. Next question is from the line of Surendra Goyal from Citi. Please go ahead.

Yes. Thanks a lot. Salil, Jayesh, just one question. You have been calling out improvement in discretionary spending through the course of FY'25. What did you see in the month of March and April so far and apologies if you have already answered this question before?

So, Surendra, March month has been usual. I do not think we have seen a significant change either ways in the environment in terms of volumes. We did have positive volumes in March. Understood. Thank you.

Thank you. Next question is from the line of Abhishek Kumar from JM Financial. Please go ahead.

Hi, good evening. Thanks for taking my question. I have a question on cost of third-party items. First is, when we say, some of the booking of the third-party item got spilled over. Does that mean that it will come back in Q1 and that will help Q1 revenue? And a related question is, is the visibility getting into Q1 similar to what we have seen maybe Q1 of last year; better, worse, any color on that? Thank you.

Sorry. Abhishek, if you could repeat the first question on the third-party, I did not get that well.

External Document © 2025 Infosys Limited 18 Yes. So I mean we said that some of the weakness in Q4 was because some third-party item got spilled over. So is that just a deferral and it will come back in Q1 or that is something that we have lost?

So Abhishek, at this point-in-time the third-party costs that, as I said earlier, two-third of our decline was because of the lower third-party costs and revenue, some of those deals slipped. It is uncertain at this point in time if and when these deals come back. So, at this point-in-time, they are slipped.

You should read that in conjunction of the fact that I also said FY'26 third-party cost and revenue are going to be lower than FY'25 third-party cost and revenue.

Okay. And maybe in that context, visibility overall for Q1, given we are in the midst of the uncertain macro, how are we looking at Q1 compared to previous years?

Yes. So I think both the years have had unique factors that led to an uncertainty. I do not know if you can put in a quantifiable terms, whether it is similar or not. We started the year last time, there were uncertainties around interest rates, geopolitical tensions, half the world was going through elections. So there were uncertainties around that.

And today, we have uncertainties around tariffs. We do not know the rate to the extent to which countries will get impacted, how those countries will retaliate, the timing of that and the downstream impact of that. So, I think all of that is uncertain as we speak, Abhishek. But the guidance that we have provided at this point-in-time is what we see today. Our philosophy on guidance has been to reduce asymmetry of information between us and our investors and we are guiding what we see today.

So, one quick question on margin. Two-third of 3.5% decline coming from third-party, but the margin uplift because of that has been very limited around 30 basis points. So, I was just trying to reconcile why the margin uplift is so low? Thank you.

Abhishek, the margin uplift on that is around 20 basis points. If you look at, the reduction in third- party cost is $100 mn, obviously we make some margins on those deals as well. So, you will only

External Document © 2025 Infosys Limited 19 get the benefit to the extent of the delta margin of the company versus those third-party deals and that is where the margins were impacted.

Sure. Thank you. That is helpful and all the best.

Thank you. Next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead.

Yes. Thanks for the opportunity. Salil, just wanted to understand in this uncertain macro environment, if discretionary spend is difficult to predict whether -- but at the same time, clients may not postpone their AI-related investment. So is it fair to assume client may start in terms of going doubling down on the outsourcing cost takeout kind of deals? Whether same is coming into your discussion and is it fair to assume that the deal pipeline could improve on the cost takeout and the mega deals could be a part of the deal wins entering FY'26 as well?

We will now see how that executes and what is the dynamic of the economic environment. But in general, our portfolio has got that ability, which is also on AI, cloud and also on cost takeout. So now we are emphasizing much more on the cost takeout.

Okay. And Jayesh or Salil, whoever can answer this, whether it is fair to assume the seasonality of 1H better than 2H may continue even in FY'26? What are your guidance assumptions for the same?

External Document © 2025 Infosys Limited 20 So typically, our 2H is softer because you have furloughs, you have lower working and calendar days, etc., etc., so that part of the seasonality will remain. As we see today, I do not expect that seasonality to change. But beyond that, in an uncertain environment like this, it is very difficult to predict how the quarters will look like.

As I said earlier, at the bottom and the higher end of the guidance, we have factored various scenarios and depending on how that will play out, we will have to see how the quarters progress.

But overall, we do not see a significant change in seasonality beyond the uncertainty.

Okay. And just last bookkeeping question. In terms of your margin walk, you have said the M&A- related cost being 40 bps as a headwind to the margin. Is it one-off and may not reoccur in the first quarter of the coming financial year? And if I assume both acquisitions being closed at the end of 1Q and maybe consolidated for 9 months, is it fair to assume it will add 40 bps, 50 bps to the revenue growth?

So, that is right. The 40 bps of charge that we took on related to the acquisition is one-off in a way.

If you recall, we had said earlier this year that the Automobile sector, especially in the German or European markets has been seeing softness. And that is why we have reassessed our customer intangibles, the value of customer intangibles and we had to take a charge on that. So, from that perspective, it is a one-off. Coming to the second question, what was the second question? The M&A?

Yes, the acquisition. If we close in the Q1, the benefit that we would get would be 40-to-50 basis points for the full year, which is not baked in the guidance. Okay. Thanks and all the best.

External Document © 2025 Infosys Limited 21 The next question is from the line of Nitin Padmanabhan from Investec India. Please go ahead.

Yes, hi. Good evening. The JV that we signed with Mitsubishi, how is that different from the one that TCS signed in the early part of the last decade, if you could just give some context there?

So Nitin, this is not a JV that we have signed. We have inducted Mitsubishi in the existing JV and we have diluted our share by 2%. So it is an existing JV where we have just inducted a strategic partner in the JV. It is endeavour to build a long-term relationship with a large giant in Japan.

Got it. And then just one last question is, as we entered the last year, which is as we entered fiscal '25, we had a large order book of large deals which we had to execute, which sort of helped us in the first half of last year. As we enter this year, how would you contrast that in terms of the order backlog, relative to last year, right?

I am asking this considering that our organic growth this year is possibly around 3.4% and in that context, our guidance at the top end is almost similar. So just wanted some context in terms of how it was then and how it is now?

So Nitin, you are right. If you look at just the purely, the quantum of the deals that were getting ramped up in Q4 of the previous year and compare that to quantum of deals that are getting ramped up, you will see a stark difference or you will see some difference. But we should also remember that many of those deals were in larger deals than a longer duration deals versus what we have today.

So, there is a delta between the tenure of the deals and mega deals are generally a much longer tenure deal. You will see some of the filings with respect to the mega deals that we have done with SEBI also or stock exchanges also earlier. So, we should see that in that context.

So, it is not that these deals have any anniversary impact at the moment or if there is a continued ramp that you are sort of anticipating there?

External Document © 2025 Infosys Limited 22 So, if you look at most of the deals that we had talked about earlier, which was signed in FY'24, they had ramped up in the Q4 of FY'24, and then we saw the benefit of them in FY'25. So they are pretty much at a steady state at this point-in-time.

Got it. That is very helpful. Thank you so much and all the very best.

The next question is from the line of Vibhor Singhal from Nuvama. Please go ahead.

So my question was basically on the growth trajectory that we are expecting. For the last two years, our growth has been pretty much first half heavy and seasonality of industry and our own seasonality have been coming in Q3 and Q4. This time, a lot of our peers have called out weakness in Q1, especially because of the uncertain macro.

So do you believe that could impact the growth trajectory that we see through the year, it could be more skewed towards, let us say, Q2 and Q3 or maybe the second half and the first half might not be as good as we have seen it over the past couple of years? Just some light on that will be really great.

So Vibhor, as I said earlier from a seasonality perspective, the regular seasonality perspective, I do not see a change in seasonality. The working days, calendar days impact would be similar to earlier years, the furloughs will remain. The uncertainty is the only unknown factor, and we will have to see how that pans out in Q1, Q2 to see if – and the implication of that to see whether Q1/Q2 is going to be better or worse versus earlier years.

External Document © 2025 Infosys Limited 23 we end up there, then you will see a regular seasonality in H1 and H2. But yes, at the bottom end of our guidance, it is going to be unpredictable.

Right, got it. So okay, let me just ask maybe just a follow-up on that. Are you expecting any, let us say, unexpected, extra weakness in Q1 because of the uncertain macro at this point-of-time?

Vibhor, we do not give quarterly guidance. So, we are going to stick to our overall guidance and that is what we see today.

I was just trying my luck. Lastly, on the margin front, where do we stand on the Project Maximus benefit? Do you believe there are still some fruits to be plucked from that? Or are we mostly done with that project?

So, if you look at this year, despite multiple headwinds, we have been able to improve margins by 50 basis points, right? We did absorb the comp that we did in the previous year. Full year impact of that came in FY'25. We gave higher variable pay to our employees. We have had ramp-ups of many of the mega deals, which obviously are lower margins in the beginning of the year. We had an impact from acquisition or intangibles of the acquisition.

So, I think we have absorbed all of that and delivered 50 basis points of margin expansion. There are multiple tracks which are still underway under the project, value-based selling is still delivering value. Lean automation is still creating value. So, I think there are opportunities that makes us believe that there is still opportunity to improve margins from where we are.

Got it. Great. Thank you so much for taking my questions and wish you all the best. Thank you, Vibhor.

External Document © 2025 Infosys Limited 24 Thank you. Next question is from the line of Manik Taneja from Axis Capital. Please go ahead.

Hi, thanks for the opportunity. You made a remark regarding the fact that we should probably be expecting some decline in the cost of pass-through revenues in FY'26. We have basically seen a very steady increase from this line item increasing from about 2% of revenues to about closer to 8% of revenues in FY'25.

Is there anything on the ground which is changing because of this you envisage a lower level? this number essentially being a drag on revenue growth? And how should we be thinking about this number playing out over the next 3, 4 years?

Manik, this is the third-party costs which are typically the costs which are embedded in multiyear large transformation deals. And we know what the deals that we have signed in the year and we know what are the deals in pipeline. When we analyze those two components and when we estimate what the cost is going to be, at this point in time, looking at what we have signed and what we have in the pipeline, we expect FY'26 third-party costs to be lower than FY'25.

Do we envisage this going back to possibly where it used to be FY '21?

Eventually, we will have to see where we will end up. But once the large and many of the mega deals that we have signed in the past, those transformation finishes, we will have significant reductions as well.

Sure. Thank you and all the best for the future.

Thank you. Next question is from the line of Ashwin Mehta from Ambit Capital. Please go ahead.

External Document © 2025 Infosys Limited 25 Hi, thanks for the opportunity. Jayesh, one clarification. In our cost of sales line, we have almost Rs. 145 crores negative number for consultancy and professional charges, have not seen a negative number ever here. So, what is driving this?

So Ashwin, this is an insurance claim that we got with respect to the cyber event that we had last year. So, this is a benefit of $20 mn that we got. I did not call it out in the margin walk because there were other negatives against that like utilization etc., so those kind of offsetted each other.

And a follow-up in terms of the provision for post-sale support as well, the reversal seems to be pretty high. So is that also related to this as well?

No. The post-sale customer support - there is a seasonality there. So typically, if you look at last few years trend, you will see a reduction in Q4 generally on that because many of the projects typically come to an end with the financial year-end. So that is one reason.

The second reason is, of course, there is a lot of things which we are driving under Project Maximus, whether it is in terms of effort optimization, whether it is in terms of change request, a tighter control of many of those projects, all of that reflects into lesser warranty in terms of SLAs, lesser warranty, lesser cost in future on many of those projects. So, all of that reflects in PSCS for us, post-sale customer support. Thanks a lot for the clarification.

Thank you. Next question is from the line of Girish Pai from BOB Capital Markets. Please go ahead.

External Document © 2025 Infosys Limited 26 Yes, thanks for the opportunity. Salil, are there any silver linings to the current macroeconomic situation around tariffs? Are you having any conversations with clients around the supply chain solutions or anything like that?

On supply chain, we are working to make sure that we provide, because we have a consulting business, which can give some insights. We also have supply chain tech solutions, if clients are rerouting their supply chains or if they want to optimize it, how we can support them in it? So, we are positioning for it. We do not know right now like what is the potential impact benefit, but we are definitely positioning for the cost and these sort of activities.

Okay. My second and last question has to do with AI and budgets around AI. Do clients have a separate budget for Gen AI or AI or is it coming from savings that you are doing on normal projects as things stand today?

Yes. If I look back at the last year, the overall tech budgets are there. Now there are some cases where a client is doing large transformation, we are able to fund that transformation from, let us say, a large opportunity on consolidation or cost efficiency.

In some cases, because at the start, AI was a little bit more distributed, not so much central. They were also some sort of distributed within the company, different divisions and budgets and so on. My guess is, it will become more and more one budget for the company from which there will be spend on our services for AI and so on. So we will see how that plays out, so that is what we anticipate. Okay. Thank you.

External Document © 2025 Infosys Limited 27 Thank you. Ladies and gentlemen, I now hand the conference over to the management for closing comments.

Thanks. Thank you everyone, and thank you for detailed set of questions. We can imagine with the changes, we are all looking for insights.

Conclusion from my side; first, we are delighted with the strong financial year '25 growth, margin, very good cash, large deals, net new. What we have built over the years is a balanced portfolio within the company with AI, cloud, digital for growth, cost, automation, consolidation, lean for efficiency.

And we find that this environment gives us a good ability to work on both and maybe do one more than the other, depending on how the environment will unfold. We will support our clients in that ability. We have also taken care to build guidance with how Jayesh described with different ends and assuming different scenarios.

Thank you very much, members of the management. Ladies and gentlemen, on behalf of Infosys Limited, that concludes this conference call. Thank you all for joining us and you may now disconnect your lines. Thank you.