Infosys Reports 12 Percent Profit Decline in FY25 While Expanding AI Agent Development

Infosys announced a net profit of $814 million for the January–March quarter of FY25, marking an 11.7% decline from the $959 million reported in the same period last year. Despite the drop in profit, revenue grew 7.9% year-on-year to $4.7 billion, with total annual revenue reaching $19 billion (a marginal 3.9% growth).

AI Leadership and Client Demand

CEO Salil Parekh emphasized the company’s strong position in generative AI, revealing that Infosys has developed over 200 AI agents and is working on 400+ AI projects for clients. "Clients are shifting from a use-case approach to an AI-led transformation approach," Parekh stated during the press conference.

• Strategic acquisitions in energy, consulting, and cybersecurity were highlighted.
• Generative AI is now a key part of all deal discussions, including large contracts.
• Infosys is scaling domain-specific AI models, such as those built using Finacle in financial services.

Workforce and Attrition Trends

• Attrition rose to 14.1% in Q4 (up from 12.6% a year ago).
• Total headcount increased to 323,578 employees, up from 317,240.
• The company plans to hire 20,000 freshers in FY26, following 15,000 hires in FY25.
• Parekh addressed reports of layoffs at the Mysuru Campus, clarifying that employees who did not clear training assessments were offered external support.

Financial Outlook and Challenges

For FY26, Infosys provided a conservative revenue growth guidance of 0–3%, citing macroeconomic uncertainty. CFO Jayesh Sanghrajka noted that the operating margin is expected to remain between 20–22%.

• Large deal wins in FY25 totaled $11.6 billion.
• Clients are prioritizing cost optimization and vendor consolidation, though no major deal cancellations have occurred.
• Infosys faces competition, including a $1 billion IT contract battle with HCLTech for Volvo Group’s business (read more).

Industry-Wide AI Focus

• TCS and Wipro are also heavily investing in AI, with generative AI becoming central to deal discussions.
• Wipro closed 17 large deals worth $1.8 billion in Q4, with AI playing a key role.
• Despite economic headwinds, AI adoption continues to accelerate across the IT sector.

[Correction: An earlier version misstated attrition and headcount trends; both actually increased.]