Tata Consultancy Services, India’s largest software exporter by revenue, reported a 14% decline in net profit to Rs 10,657 crore for the quarter ended December 2025, hit by one-time severance and new labour code costs. However, revenue grew 5% YoY to Rs 67,087 crore, with AI services showing strong growth.
The annualized AI services revenue stood at $1.8 billion, up 17.3% QoQ in constant currency. The total contract value (TCV) for the third quarter stood at $9.3 billion.
K Krithivasan, Chief Executive Officer and Managing Director, said “The growth momentum we witnessed in Q2FY26 continued in Q3FY26. We remain steadfast in our ambition to become the world’s largest AI-led technology services company, guided by a comprehensive five-pillar strategy. Our AI services now generate $1.8 billion in annualized revenue, reflecting the significant value we provide to clients through targeted investments across the entire AI stack, from Infrastructure to Intelligence.”
Aarthi Subramanian, Executive Director - President and Chief Operating Officer, said “We continued to see AI acceleration this quarter. We helped customers identify valuable AI opportunities through Innovation Days and deployed solutions faster with Rapid Builds. Our customers continue to invest in Cloud, Data, Cyber and Enterprise Transformations to build readiness for AI. We further strengthened our Salesforce capabilities with Coastal Cloud acquisition, building on our investment in ListEngage.”
The operating margin for the December quarter stood at 25.2%, stable sequentially.
Samir Seksaria, Chief Financial Officer, said, "Our sustained margin performance and strong cash conversion this quarter, reflects our disciplined execution and financial resilience. Backed by a robust balance sheet, we continue to invest confidently in strategic growth areas. Executing our five-pillar AI strategy at speed and scale is central to our transformation into an AI-first enterprise, and delivering long-term value for our stakeholders."
TCS’s headcount reduced by over 11,000 employees in Q3 closing the quarter with a total employee strength of 582,163 people. Voluntary attrition on a last-twelve-month basis stood at 13.5% in IT services.
Sudeep Kunnumal, Chief HR Officer, said “Our associates are at the heart of our transformation into an AI-first enterprise. As of this quarter, there are over 217,000 associates with advanced AI skills, directly powering client success at scale. We doubled our intake of fresh graduates with higher order skills, rapidly expanding our next-generation talent pool. The passion and commitment our associates show in mastering next-gen capabilities gives us the confidence to innovate responsibly and deliver sustainable value as AI reshapes the services landscape.”