TCS reports $7.5bn Q3 FY25 revenue, bolstered by AI growth
Tata Consultancy Services (TCS) has reported revenue of $7.50bn for the quarter ending 31 December 2025 (Q3 FY25), a slight decrease from $7.53bn reported in the same period last year.
The Q3 FY25 revenue reflects a 0.6% increase from the previous quarter and a sequential growth of 0.8% in constant currency.
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Net income of the Indian IT firm stood at $1.5bn in the reported quarter, a 3.1% year-over-year increase, with the net margin improving by 40 basis points to 20.0%.
AI services have been a significant growth driver, with annualised revenue hitting $1.8bn, marking a 17.3% increase quarter-over-quarter in constant currency.
The operating margin remained stable at 25.2%, and cash flow from operations was robust at 130.4% of net income. The total contract value for the quarter was reported at $9.3bn.
TCS CEO and managing director K Krithivasan 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.
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By GlobalData“Our AI services now generate $1.8bn in annualised revenue, reflecting the significant value we provide to clients through targeted investments across the entire AI stack, from Infrastructure to Intelligence.”
During the quarter, TCS partnered with TPG to enhance its AI data centre business, HyperVault, aiming to build AI-ready infrastructure exceeding a gigawatt in capacity.
Additionally, TCS signed an agreement to acquire Coastal Cloud, a Salesforce Summit partner, for $700m, in a move to bolster its Salesforce consulting capabilities. This deal was announced last month.
The company has expanded its partnership with Google Cloud by adopting the Gemini Enterprise AI platform, empowering TCS’ workforce to develop advanced AI solutions and improve operational workflows.
TCS has also extended its collaboration with ABB to modernise its global hosting operations and strengthen its digital infrastructure.
The Indian IT firm said that it has been selected by the NHS Supply Chain for application development support and maintenance of its core business systems over a five-year period, deploying cloud and AI-enabled solutions to enhance operational efficiency.
Further partnerships include agreements with Aviva, Canada Life, Cathay, and a leading North American semiconductor company, focusing on transforming IT operations, enhancing customer experiences, and driving digital transformation across various sectors.
TCS executive director president and chief operating officer Aarthi Subramanian 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.”
In sustainability efforts, TCS has partnered with Tata Motors to accelerate its environmental initiatives using the Prakriti platform, powered by TCS’s AI-driven Intelligent Urban Exchange.
TCS has also announced the launch of an AI Experience Zone and Design Studio in London, reinforcing its commitment to the UK economy. The company plans to create 5,000 new jobs in the UK over the next three years as part of its ongoing investment in employment and talent development.
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