Why did INFY's Q3 2025 EPS exceed forecasts significantly?

Infosys' Q3 2025 EPS exceeded forecasts significantly due to several key factors:

1. **Strong Revenue Growth**: Infosys reported a revenue of $4.939 billion for Q3 2025, representing a year-on-year growth of 6.1% and a sequential increase of 1.7%. This growth was driven by sustained client spending across multiple industries, including Financial Services, Retail, Communication, Energy, Utilities, Resources, Services, Manufacturing, Hi-Tech, and Life Sciences.
2. **Operational Excellence**: The company's operating margin improved to 21.3%, marking an increase of 0.8% sequentially and year-on-year. This improvement reflects Infosys' focus on operational efficiency and resilience in maintaining margins despite macroeconomic challenges.
3. **Large Deal Wins**: Infosys secured $2.5 billion in large deal wins during Q3 2025, with 63% being net new business. These significant deals underscore the company's ability to secure major contracts and its strong market position.
4. **Strategic Focus**: Infosys' continued investment in enterprise AI capabilities, particularly generative AI, has seen increasing client traction. This strategic focus aligns with the growing demand for AI solutions, positioning Infosys well to capitalize on the long-term structural tailwinds of cloud deployment and enterprise AI integration.
5. **Free Cash Flow**: The company reported an all-time high free cash flow of $1,263 million, marking a 90% year-on-year increase. This strong cash flow generation supports Infosys' capital return commitment and provides a buffer for potential investments and growth opportunities.

In conclusion, Infosys' Q3 2025 EPS exceeded forecasts significantly due to robust revenue growth, improved operational efficiency, significant large deal wins, strategic focus on AI, and strong free cash flow. These factors combined to deliver exceptional financial performance, positioning Infosys well for future growth and value creation.