Infosys's AI revenue shot up 29% sequentially in Q2, now making up 10.5% of total revenue. This surge didn't prevent the company from cutting its full-year FY27 revenue growth guidance to a modest 1-2%. The core question for IT services remains: can AI-driven demand offset the efficiencies it brings?
How We Got Here
Infosys delivered $5.145 billion in Q2 FY22 revenue, up 1.5% year-on-year in constant currency. The revised FY27 guidance of 1-2% constant currency growth follows its earlier forecast of 1.5-3%.
The Numbers
- Infosys booked $5.2 billion in large deals in Q2, with 62% classified as net new business.
- This included a mega deal worth over $2 billion, as stated by CEO Salil Parekh.
- The company is deploying Cognition's Devin AI software engineer across internal operations and client engagements.
- Free cash flow for the quarter was $928 million, a 15.7% year-on-year drop.
- The outlook cut reflects cautious client spending and pricing pressure on traditional IT services.
What Happens Next
🇮🇳 Why This Matters for India
For Bangalore's large IT services workforce, Infosys's growth forecast cut indicates a cautious hiring outlook for junior and mid-level roles in the sector.
The Take
The headline AI revenue growth distracts from the deeper issue: AI's efficiency gains are likely eating into existing contract hours faster than new AI-driven deals can convert to revenue. This dynamic will keep IT services growth flat, even with big TCV numbers.
Source:
Analytics India Mag ↗