Mphasis (526299) Q1 26/27 earnings summary

Executive summary

• Q1 FY 2027 delivered strong momentum with revenue growth of $471M, up 2.1% sequentially and up to 17.5% YoY, driven by rapid AI-led offerings, platform adoption, and major wins in technology, telecom, banking, and retail sectors.

• The pipeline reached record levels, up 8% QoQ and 28% YoY, with AI-led deals comprising 63%-70% of total pipeline and TCV wins at $461M for the quarter.

• Three large deals closed, including one over $100M, and rapid client adoption of the Tria platform compressed sales cycles and expanded recurring revenue streams.

• EPS increased 10.4% YoY to INR 25.6, despite a 4% sequential decline; net margin for the quarter was 11.2%.

Financial highlights

• Q1 revenue: $471M (+2.1% QoQ, up to 17.5% YoY); direct revenue: $465M (+2.2% QoQ, +9.9% YoY).

• Operating margin at 14.8%-15.3%, within the 14.75%-15.75% target band, but down 60 bps QoQ.

• EPS for Q1 was INR 25.6, up 10.4% YoY, but down from 25.6 to 23.2 sequentially.

• Operating cash flow: $39M; DSOs at 91-95 days, expected to improve.

• Net new TCV: $461M; trailing 12-month TCV: $1.8B.

Outlook and guidance

• Q2 expected to deliver the best sequential constant currency growth in three years, with management expecting further acceleration.

• FY 2027 guidance maintained: high single-digit to low double-digit constant currency growth, EBIT margin band of 14.75%-15.75%, and 80% net income to operating cash flow conversion.