HCLTech Reports Strong Q3 FY26 Performance with $15 Billion Annualized Revenue and $3 Billion Bookings

HCLTech Q3 FY26 Financial Highlights

HCLTech, a leader in the global technology sector, has demonstrated solid performance in its financial results for the third quarter of FY26, which concluded on December 31, 2025. The company achieved remarkable milestones, including a quarterly revenue of $3.8 billion, indicative of a consistent growth trajectory and substantial capabilities in various service areas. Notably, the revenue increased by 4.2% quarter-over-quarter (QoQ) and 4.8% year-over-year (YoY) when assessed in constant currencies (CC).

CEO C Vijayakumar remarked, "(We had) another standout quarter on all fronts… with a strong recovery of operating margin to 18.6%. The strong revenue momentum in the quarter has enabled us to cross $15 billion in annualized revenues. Our new bookings were exceptionally high at $3 billion. We are well-positioned to address the evolving AI demand of our clients across industries and service lines."

Key Growth Areas

The growth was driven by various segments, with services revenue showing a healthy 1.8% increase QoQ and 5% growth YoY in constant currency. HCL Software also shone brightly, witnessing a substantial growth rate of 28.1% QoQ and 3.1% YoY, attributed to seasonal demand and advancements in its data intelligence portfolio. The company’s annual recurring revenue (ARR) from HCL Software now stands at $1.07 billion. Furthermore, revenue related to advanced AI initiatives surged by 19.9%, achieving $146 million.

Engineering and R&D services revenue also rose by 3.1% QoQ and 5% YoY, while IT and Business Services, which forms a cornerstone of the company's revenue—accounting for 72.3% of the total—grew at a rate of 1.5% QoQ and 3.8% YoY.

Revised Revenue Guidance

Given the robust performance, HCLTech has elevated its revenue growth guidance to a range of 4.0%-4.5% YoY, alongside a more precise estimate for services revenue growth now adjusted to 4.75%-5.25% YoY. The EBIT margin guidance, however, remains steady at 17%-18%, excluding a one-time impact from India’s New Labor Codes, which affected EBIT by ₹956 crores (approximately $109 million).

Industry and Geographic Performance

In terms of industry verticals, Technology and Services led the growth with a stellar 14.4% YoY growth rate, followed by Financial Services, which reported an 8.1% growth. Public Services, comprising Energy & Utilities, Travel, Transport, Logistics, and Government sectors, experienced an 8% YoY increase. Regional growth also varied, with India showcasing a notable 15.8% growth (YoY CC), Europe at 4.6%, and the U.S. trailing slightly behind with a 1.5% increase. The Rest of the World recorded the fastest growth at an impressive 22.1% YoY in constant currencies.

Operational Excellence and Future Prospects

CFO Shiv Walia emphasized the company’s commitment to enhancing cash conversion, noting that in the last twelve months (LTM), free cash flow to net income ratio remained robust at 120%. The company ended the quarter with a record high cash balance of ₹34,306 crores. HCLTech's commitment to shareholder returns was also evident as it announced a dividend of ₹12 per share for this quarter, marking its 92nd consecutive dividend payout.

In terms of talent acquisition, HCLTech expanded its workforce by onboarding 2,852 fresh graduates during the quarter, bringing the total freshers hired in the last nine months to a remarkable 10,032. This led to a moderation in attrition, now at a competitive industry rate of 12.4%.

Major Deal Wins

HCLTech has secured several strategic partnerships during the quarter:
1. A significant five-year strategic engagement with a prominent global apparel retailer, valued at $473 million, to serve as its long-term AI-led technology partner.
2. A collaboration with a U.S. insurance company focused on transforming IT service delivery, utilizing HCLTech’s GenAI platform.
3. A mandate from a European food giant to design an AI-powered IT setup as part of its demerger process.
4. Management of next-generation AI data centers for a global technology leader with cutting-edge GPU stacks.

Exclusive AI Deployments

Additionally, the company secured exclusive deals focused on advanced AI deployments. This includes a U.K. mining client utilizing HCLTech's Physical AI solution and another partnership with an Asia-based financial services company to overhaul IT operations through AI-driven efficiency.

HCLTech has been recognized as a top performer in sustainability, receiving a Gold certificate from EcoVadis and earning a position among the top 4% of rated IT companies. The company’s rapid growth in the tech services sector was confirmed by Kantar BrandZ, naming it the fastest-growing tech services brand among India’s top 10 most valuable brands. Furthermore, HCLTech marked its sixth consecutive year on Forbes’ World’s Best Employers list.

Conclusion

HCLTech is poised to continue its growth trajectory propelled by a robust portfolio in AI, digital services, and a solid reputation across various industries. With its focus on operational efficiency, innovation, and client satisfaction, HCLTech aims to further strengthen its market position and deliver exceptional value to its stakeholders.