Q2 FY27 call: IT services revenue $2.61 billion, $2.6 billion deal wins, Q3 guidance minus 1.5% to plus 0.5%
Transcript of the Q2 FY27 earnings conference call held on October 15, 2026.
By ScoutQuest · · 3 min read
- IT services revenue
- $2.61 billion, flat sequentially, up 0.6% year-on-year in constant currency
- Operating margin
- 16.5%, an improvement of 0.5% over last quarter
- Q3 FY27 guidance
- sequential IT services revenue growth of minus 1.5% to plus 0.5% in constant currency, with seasonal furloughs
What this update is
This is the transcript of the Q2 FY27 earnings conference call held on October 15, 2026, the record of what management told analysts and institutional investors. The call included forward-looking statements that the company says are subject to risks and uncertainties.
Quarter two in numbers
- IT services revenue was $2.61 billion, flat sequentially and up 0.6% year-on-year in constant currency.
- Operating margin was 16.5%, an improvement of 0.5% compared with the previous quarter.
- Total contract value closed during the quarter was $2.6 billion, with nine large deals signed.
- Bookings were described as a healthy mix of new business and expansion of existing engagements.
How the markets performed
- Europe grew both sequentially and year-on-year, with broad-based growth led by BFSI, Consumer and EMR. APMEA also grew both sequentially and year-on-year, led by Consumer, Tech and Comms.
- Americas 2 grew sequentially, driven by EMR with encouraging momentum in BFSI.
- Americas 1 declined sequentially, which management attributed to client-specific issues and softness in healthcare.
What management said about demand
- The demand environment remained largely unchanged, with clients balancing efficiency and productivity against accelerating AI adoption.
- In BFSI, clients are focused on cost optimisation, legacy modernisation and scaling agentic AI across the enterprise.
- Growth in the technology sector is coming from digital native and new-age firms, with investments in custom silicon, design-to-manufacture and physical AI.
- In the Consumer sector, traction is in CPG, travel and transportation, and recent wins plus revenue from the Olam deal supported performance.
- US healthcare continues to be affected by policy changes, while cost pressures across payers and providers are creating new outsourcing opportunities.
Deal examples shared
- A global financial institution engaged the company to accelerate its transformation through an AI-enabled operating model, covering modernised software development and AI-powered ways of working.
- A global mid-market consumer products company selected the company to set up an AI capability centre in India, covering ERP modernisation, cloud-native platforms and AI capabilities.
Investments and AI
Management said strategic investments such as Mindsprint and HARMAN DTS are beginning to show returns, and that it will continue to invest even where this creates near-term margin headwinds, as these strengthen its strategic position and expand addressable markets. The AI native unit launched in April is working on outcome-based deals, with work including an SLM deployment for a US retail bank, an AI-powered digital plant for a petrochemical company in the Middle East, and an enrolment and billing SLM for a US healthcare payer. Investments are also being accelerated in AI services across AI data centres, AI foundry services, physical AI, AI devices and design-to-manufacturing.
Guidance for the next quarter
Q3 will remain impacted by seasonal furloughs. Management is guiding for sequential IT services revenue growth of minus 1.5% to plus 0.5% in constant currency.
Points a reader may want to track
- The guidance is a range in constant currency for sequential growth, and management ties the softer end to seasonal furloughs.
- Margins improved slightly even as the company says recent investments create near-term margin headwinds.
- Growth is coming from most markets, while one region and US healthcare are weaker.
- The AI-related commentary describes capability building, deal examples and the pipeline of work.
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More numbers
- Q2 FY27 IT services revenue$2.61 billion
- IT services revenue growth year-on-year, constant currency0.6%
- Q2 FY27 operating margin16.5%
- Operating margin improvement over last quarter0.5%
- Total contract value closed in the quarter$2.6 billion
- Large deals signed in the quarternine large deals
- Q3 FY27 guidance, lower end of sequential revenue growthminus 1.5%
- Q3 FY27 guidance, upper end of sequential revenue growthplus 0.5%
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