Oct 29, 2026 earnings call — AI Builder strategy and margin expansion
Revenue grew 4.8% Y-o-Y in constant currency to $5.7 billion and adjusted operating margin was 16.3%.
Revenue $5.7B (est $5.6B) · EPS $1.49 (est $1.46)
Key quotes
"To the end of quarter 3, we estimate more than 50% of our software development was AI-assisted and we have over 8,500 AI engagements."
"Financial Services accelerated to 12% year-over-year constant currency growth, its third consecutive quarter of double-digit growth."
"We now expect total cost of $180 million to $250 million, down from our previous estimate of $230 million to $320 million."
Analyst Q&A 5
Bookings and AI impact
Q (Tien-Tsin Huang · JPMorgan): Analyst asked how bookings came in versus plan and how backlog and pipeline compare to last year. He also asked about the 40% of the business seeing AI tailwinds and what faster growth there implies for the remaining 60%.
A: Management said trailing bookings showed strength with book-to-bill at 1.3 and more of the bookings now coming from new business rather than renewals; new bookings are about 60% versus renewals near 48% and new bookings are 12% higher on a TTM basis. They said health care has regulatory uncertainty that should rebaseline into 2027, and financial services has had strong bookings and growth. They also said four services (BPO, infrastructure, cybersecurity, industry solutions) account for the 40% that sees AI tailwinds while the remaining 60% is not growing as fast.
"Combined, this account for 40% of our portfolio, and they are growing faster." — Jatin Dalal (CFO)
Q4 guidance and Project Leap changes
Q (Tyler DuPont · Wells Fargo): Analyst asked whether Q4 exit organic growth is a reasonable proxy for 2027 and how growth should accelerate into next year. He also asked about the rescoping of Project Leap, lower severance, and expected incremental cost savings for 2027.
A: Management gave a Q4 organic guidance range of 3.2% to 4.7% and said the recent exit datapoints for Q4 total and organic are 2% and 4%. They said even with the reduced guidance, 2026 would be a robust performance and that Project Leap scope was reduced because training and redeployment allowed lower personnel restructuring; they noted 95,000 employees completed an advanced AI certification, restructuring spending and savings timing changed, and they will provide 2027 program details with next year's outlook.
"Of course, the most recent data point that you have for 2027 is the exit total and organic of Q4, which is at 2% and 4%." — Jatin Dalal (CFO)
What will unlock discretionary spend and margins
Q (James Schneider · Goldman Sachs): Analyst asked what is needed to release discretionary spending headwinds (e.g., geopolitical or Mid East clearance) and how quickly clients might re-ramp into 2027. He also asked if gross margin expansion can be sustained into 2027.
A: Management said the discretionary unlock is macro stability and that clients already see production value from AI, so as macro stabilizes other industries should follow financial services' growth. On margins, they intend to remain in the “winner circle”: expand margins and grow EPS faster than revenue, citing tailwinds from Leap, pricing, AI services, offshore mix, and high utilization; they will provide 2027 margin guidance at the start of the year.
"So I would say the discretionary unlock is macro stability." — Ravi Kumar S (CEO)
Resale revenue and India listing
Q (James Faucette · Morgan Stanley): Analyst asked why resale revenue (resale of software/infrastructure) may slow in the December quarter and how that fits into delivering full solutions. He also asked for an update on the India listing plan and timing.
A: Management said they are increasingly bundling infrastructure, software, cybersecurity and AI with services to deliver outcomes, and that the resale component is progressing but likely will be similar in Q4 as a percentage of growth, not higher. On the India listing, they said progress continues and they are awaiting draft regulations expected in a few weeks and will make a final decision after seeing the draft.
"We are awaiting the draft regulations to come through, which we expect in a few weeks' time." — Jatin Dalal (CFO)
Furloughs and Q4–Q1 seasonality
Q (Yu Lee · Guggenheim): Analyst asked why the outlook now assumes a lighter furlough impact changed, how much visibility the company has into Q4, and what assumptions are baked into the high and low ends for furloughs, large deals, and short-cycle work. He also asked whether Q1 should follow normal seasonality versus improving.
A: Management said they initially expected a lighter furlough given BFSI demand, but with greater visibility the furloughs look more or less similar to previous years and that view is baked into the revised guidance anchored at the midpoint. They added volumes are stable though mix is shifting, Medicaid and Medicare uncertainty has affected Q4 but should stabilize next year, and historically quarter 4 to quarter 1 has been flattish on an absolute basis so they will update guidance at the end of January.
"However, as we are at the end of the year and we have a greater visibility, that has actually remained more or less similar to previous years." — Jatin Dalal (CFO)