HCLTech Reports 3.7% Year-on-Year Revenue Growth in Q1 2026
HCLTech Achieves Impressive Revenue Growth in Q1 2026
HCLTech, a prominent global technology company, reported a solid revenue growth of 3.7% year-over-year for the first quarter ending June 30, 2025. The company announced that its revenue in constant currencies reached $3.55 billion, marking a 5.4% increase from the previous year. This growth reflects strong performance across various service segments, highlighting a significant rise in digital services.
In particular, the revenue from digital services soared by 15.2% annually in constant currency terms, now accounting for 41.6% of HCLTech's overall services revenue. Engineering and R&D services also saw a notable increase of 11.8%, demonstrating the company's expansive portfolio and versatile offerings. Furthermore, HCLSoftware reported an annual recurring revenue of $1.06 billion, indicating a 1.3% rise in constant currencies.
HCLTech's impressive performance is underscored by its strong deal pipeline, which includes a total of $1.8 billion in new business secured during the quarter. The company announced a dividend of 12₹ per share, marking its 90th consecutive quarter of dividend distribution. Looking ahead to the fiscal year 2026, HCLTech has made upward revisions to its revenue growth forecast, now estimating an increase between 3.0% and 5.0% and an operating margin of 17.0%-18.0%.
Strategic Investments and Growth Initiatives
C. Vijayakumar, CEO and Managing Director of HCLTech, emphasized the stability of revenue growth, citing a robust increase of 4.5% year-on-year in constant currency terms across service operations. He noted, “Our operating margin is 16.3%, which has been impacted by lower utilization rates and increased investments in generative AI and marketing operations.” The positive reception of HCLTech's AI solutions, particularly those developed in partnership with OpenAI, has bolstered the company’s attractiveness to clients.
Industry verticals driving growth include Technology and Services, exhibiting a remarkable 13.7% year-on-year growth in constant currencies. The Telecommunications, Media, Publishing, and Entertainment sectors followed closely with a 13.0% increase, alongside Retail and Consumer Goods at 8.2%, and Financial Services at 6.8%.
Geographically, the fastest growth was noted in the Rest of World segment, climbing by 15.0% year-on-year. Europe also showed significant progress with a 9.6% increase, highlighting HCLTech's strong international presence.
Workforce and Operational Efficacy
During this quarter, HCLTech expanded its workforce by hiring 1,984 new employees, with a considerable attrition rate of 12.8%, among the lowest in the industry. Financially, the company reported impressive cash generation metrics, with an operating cash flow to net income ratio at 129% and free cash flow to net income ratio at 121%. This strength underpins the resilience of HCLTech’s business model. The long-term return on invested capital also saw notable improvement, increasing by 353 basis points to 38.1%.
Significant Contracts and Partnerships
HCLTech continues to be a trusted partner for global enterprises, recently securing major contracts across various sectors:
1. A large U.S.-based hospital chain has partnered with HCLTech to modernize its IT operations with a focus on enhancing efficiency and patient outcomes through innovative solutions.
2. A global payment technology company has selected HCLTech to accelerate its digital transformation and enhance customer experience across all operations.
3. An American consumer goods company is extending its strategic partnership with HCLTech for the implementation of SAP S/4HANA to streamline operations and enhance value.
4. A global sports organization has engaged HCLTech to create an AI-driven feedback enhancement platform aimed at transforming live match broadcasts through dynamic analysis.
Awards and Recognition
During Q1 2026, HCLTech received numerous accolades, including multiple top-three placements in the Executive Team rankings by Extel, reflecting its leadership in the IT and software services sector. C. Vijayakumar was recognized as the best CEO in the Sell-Side category, while Shiv Walia was honored as the top CFO across all categories. Furthermore, Roshni Nadar Malhotra, HCLTech’s chairperson, was awarded for her exceptional leadership and philanthropic impact by the American India Foundation during its annual gala in New York.
In conclusion, HCLTech's robust financial performance, commitment to innovation, and strategic workforce management set the stage for sustained success as the organization navigates the growing demands of the technology landscape.