What Wipro (WIT) Said on Its Q2 Earnings Call

Key Points

• Q2 performance was broadly stable: IT services revenue was $2.61 billion, flat sequentially in constant currency, while operating margin improved 50 basis points to 16.5%. Net income fell 4.7% sequentially, primarily due to lower other income after the June buyback.
• AI-led transformation is a growing focus: Wipro closed $2.6 billion in total contract value and signed nine large deals, with some additional contracts delayed into Q3. Its AI-native unit now has more than 2,000 engineers and is supporting deployments across banking, healthcare, manufacturing and other industries.
• Near-term outlook remains cautious: Wipro forecast Q3 constant-currency revenue growth ranging from a 1.5% decline to 0.5% growth, citing seasonal client furloughs, healthcare weakness and a client-specific issue in Americas 1. Management continues targeting a sustainable 17%–17.5% operating margin.

Wipro NYSE: WIT reported flat sequential IT services revenue in its fiscal second quarter of 2027, while operating margin expanded and management highlighted growing opportunities tied to artificial intelligence, consulting and industry-specific transformation work.

IT services revenue totaled $2.61 billion for the quarter, flat sequentially in constant currency and up 0.6% from a year earlier. Operating margin rose 50 basis points from the prior quarter to 16.5%.

“This quarter, demand environment has remained largely unchanged,” Chief Executive Officer and Managing Director Srinivas Pallia said. “Our clients remain focused on efficiency and productivity while increasingly looking to accelerate AI adoption and drive long-term values.”

Regional and Sector Performance

Three of Wipro’s four strategic market units posted sequential growth. Americas 2 revenue rose 0.9% sequentially, Europe increased 0.6%, and Asia Pacific, Middle East and Africa, or APMEA, grew 3.1%. Americas 1 declined 2.1%, which Pallia attributed to client-specific issues and softness in healthcare.

On a year-over-year basis, Europe grew 5.1% and APMEA rose 13%, while Americas 2 declined 4.7% and Americas 1 fell 2.7%.

By industry, consumer revenue increased 2.6% sequentially and 6% year over year, while banking, financial services and insurance, or BFSI, grew 1% sequentially and 1.3% from a year earlier. Energy, manufacturing and resources rose 1% sequentially but declined 6% year over year.

Technology and communications revenue declined 2.6% sequentially but grew 7% year over year. Healthcare was the weakest sector, falling 3.8% sequentially and 6.5% year over year.

Pallia said U.S. healthcare customers continue to face policy changes, slowing membership growth and margin pressure. However, he said the conditions are also creating outsourcing opportunities, including among first-time outsourcing customers. Wipro expects healthcare to benefit from seasonal factors in the third quarter, though not to the extent seen in prior years.

AI Investments and Deal Activity

Wipro closed $2.6 billion in total contract value during the quarter and signed nine large deals. Management said the booking figure was affected by delayed contract signatures on two deals that are expected to be signed in the third quarter.

“The pipeline for quarter three, quarter four, and year ahead is extremely strong,” Pallia said, adding that the company expects stronger bookings in the third quarter as the delayed deals move forward.

The company cited a consulting-led, AI-powered transformation contract with a global financial institution, under which Wipro will modernize software development and expand AI-enabled ways of working. It also described a mid-market consumer-products engagement to establish an AI capability center in India supporting enterprise resource planning modernization, cloud-native platforms and AI capabilities.

Wipro said its AI Native unit, launched in April, now includes more than 2,000 engineers, including forward-deployed engineers. The unit has worked on a small language model deployment for a major U.S. retail bank, an AI-powered digital plant for a Middle Eastern petrochemical company, and an enrollment and billing small language model deployment for a U.S. healthcare payer.

Pallia said Wipro has also developed industry-specific small language models for wealth management, insurance, healthcare, aviation and asset-intensive industries. The company is investing in services across AI data centers, AI foundry services, physical AI devices, and design-to-manufacturing offerings.

Management also pointed to strategic investments including Harman DTS, which has expanded its engineering capabilities, and Mindsprint, acquired as part of the Olam engagement. Pallia said Mindsprint has strengthened Wipro’s position in food and agriculture, supply chain and farm-to-fork processes. He said the company will continue to pursue both organic and inorganic growth opportunities that support its consulting-led and AI-powered strategy.

Margins, Cash Flow and Outlook

Chief Financial Officer Aparna Iyer said margin expansion during the quarter reflected operational improvements and rupee depreciation, partly offset by continued investment in the business. She said Wipro aims to continue improving margins while investing in growth, including the AI Native unit and client-facing initiatives.

Net income was INR 32 billion, down 5% sequentially, as net other income declined 68% following a reduction in investable surplus after the completion of a buyback in June 2026. Earnings per share were INR 3.23, up 0.9% sequentially and 4.2% year over year.

Operating cash flow equaled 166% of net income, and gross cash stood at $4.6 billion as of Sept. 30. The company’s effective tax rate was 23.9%.

For the fiscal third quarter, Wipro forecast IT services revenue of $2.571 billion to $2.625 billion, representing constant-currency sequential growth of negative 1.5% to positive 0.5%.

Iyer said the outlook reflects customary third-quarter seasonal furloughs and fewer working days, with furlough assumptions broadly in line with the prior year. She added that successful closure of expected deals could support both in-quarter execution and the fourth-quarter revenue outlook.

Management said client-specific issues previously discussed are largely behind the company and should be substantially resolved during the third quarter. Wipro plans to hire from campuses in the second half as volumes increase, while also pursuing productivity gains from AI projects.

About Wipro (NYSE:WIT)

Wipro Limited NYSE: WIT is an India-based technology services and consulting company that helps businesses modernize operations, develop digital products and manage technology infrastructure. Its services include consulting, application development and management, cloud computing, cybersecurity, data and analytics, artificial intelligence, engineering, and business process services.

The company serves clients across industries including financial services, healthcare, consumer and retail, communications, energy, manufacturing, and technology.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.