TCS Q1 revenue hits USD $7,421m, highlights AI & security wins
The company's latest financial results indicate a 1.1% year-on-year drop in revenue and a 3.1% decline on a constant currency basis, but reveal robust deal wins, with total contract value reaching USD $9.4 billion for the quarter. Operating margin stood at 24.5%, expanding 30 basis points quarter on quarter, while net margin rose to 20.1%, up 90 basis points compared to the previous year. Net income was reported at USD $1.5 billion, up 3.5% year-on-year.
TCS ended the quarter with 613,069 employees, reflecting net headcount addition of 6,071 over the past year. Attrition in IT services was at 13.8%. Cash from operations was USD $1.5 billion, representing 100.3% of net income over the quarter.
Market and segment performance
By industry, Banking, Financial Services and Insurance (BFSI) led growth with a 1% year-on-year increase. Growth was also recorded in Technology & Services (1.8%) and Energy, Resources and Utilities (2.8%). However, declines were noted in Life Sciences & Healthcare, Communication & Media, Manufacturing, and Consumer Business.
From a geographic perspective, North America contributed the largest proportion of revenue at 48.7% but saw a 2.7% decline. The UK and Continental Europe, accounting for 18.0% and 15.0% of revenue respectively, also recorded small drops. Conversely, Latin America, Asia Pacific, and Middle East and Africa posted growth of 3.5%, 3.6%, and 9.4%, respectively. India experienced a 21.7% year-on-year decrease.
Strategic focus on AI and cybersecurity
This quarter saw TCS highlight its continued investments and expansion in AI, generative AI (GenAI), and cybersecurity offerings. Commenting on the performance and market environment, K Krithivasan, Chief Executive Officer and Managing Director, said: "The continued global macro-economic and geo-political uncertainties caused a demand contraction. On the positive side, all the new services grew well. We saw robust deal closures during this quarter. We remain closely connected to our customers to help them navigate the challenges impacting their business, through cost optimization, vendor consolidation and AI-led business transformation".
AI and Data services saw increased enterprise adoption, with clients moving from pilot to scaled GenAI deployments, especially in automation and data platform modernisation. TCS also reorganised its cloud business to integrate public cloud and infrastructure services, and broadened strategic partnerships with key technology providers including Microsoft. In cybersecurity, the company noted rising demand for managed detection, identity management, and AI-powered security solutions.
Aarthi Subramanian, Executive Director – President and Chief Operating Officer, commented, "Across industries, clients are increasingly shifting their focus from use case based approach to ROI led scaling of AI. We are investing across the AI ecosystem including infrastructure, data platform solutions, AI agents and business applications. Launching TCS SovereignSecureTM Cloud, TCS DigiBOLTTM, and TCS Cyber Defence Suite, to accelerate India's AI led transformation was a particular highlight of this quarter".
Partner ecosystem and customer programmes
Key partnerships were expanded or newly established with a range of global organisations. Noteworthy programmes include collaborations with a European-headquartered global Life Sciences company for an SAP S/4HANA-led transformation across 80 countries, a partnership with IBM focusing on quantum research in India, and an agreement with a Canadian bank for enterprise data transformation via AWS Cloud. Further, TCS established new Automotive Delivery Centres in Germany and Romania to support development of next-generation mobility solutions.
Several customers commented on their partnerships with TCS. Oli Byers, Chief Financial Officer of Virgin Atlantic, stated, "We exist to make our customers smile, it's that simple. As we look ahead to this next phase of our digital transformation, technology will enable us to deliver smarter, simpler, and more memorable experiences. TCS has been a partner for more than two decades and together we'll continue to build towards our vision of becoming the most loved travel company, powered by AI technology to modernize our systems, drive efficiency and deliver for our customers."
Alan Jensen, CIO of Salling Group, commented, "At Salling Group, everything we do is ultimately to help make our customers' lives better. This project is no exception. Our partnership with TCS will help us better respond to their changing needs and do so responsibly and sustainably. This partnership helps us drive our 'Aspire 28' strategy that includes goals of more stores, acquisitions and mergers in existing and new markets."
Other customer statements echoed the focus on leveraging TCS solutions for business transformation, operational efficiency, and customer engagement.
Milind Lakkad, Chief HR Officer, commented on workforce development: "Talent Development is core to TCS. In this quarter, our associates invested 15 million hours in building expertise in emerging technologies, enabling them to lead the transformation journey for our customers. It is gratifying to note that TCS now has 114,000 people with higher order AI skills".
Financial position and awards
As of 30 June 2025, total assets were USD $19,686 million, up from USD $18,931 million at the end of March. Shareholders' funds totalled USD $11,679 million. Operating income for the quarter was USD $1,815 million, against USD $1,851 million in the same period the previous year.
The company reported it had applied for 8,987 patents as of the end of the quarter, with 4,939 granted, underscoring ongoing research and development activity. TCS received multiple awards in the quarter, including recognition among Kantar BrandZ's Top 50 Global Brands, two golds at the New York Digital Awards, and top rankings for workplace and sustainability by various independent institutions.
Industry analysts ranked TCS as a leader in 38 competitive assessments across digital services, application management, and AI-related disciplines in the first quarter of FY26.
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