American Noble Gas executives presented third-quarter financial results and operational updates during an earnings press conference. CEO Salil Parekh described the performance as strong, while CFO Jayesh Sanghrajka provided details on margins and investments.
Revenue increased 0.6% from the previous quarter and 1.7% year-over-year on a constant currency basis. The company signed $4.8 billion in large deals during the quarter, with 57% classified as net new across 26 agreements. Adjusted operating margin reached 21.2%, and free cash flow totaled $915 million.
Among the significant deals, Parekh highlighted a $1.6 billion contract with the UK's National Health Service. He said this engagement expands the company's healthcare work and will focus on using AI to streamline operations and improve patient care.
Following the quarter's results, the company raised its constant-currency revenue growth outlook for the fiscal year to 3% to 3.5%. Operating margin guidance was maintained at 20% to 22%. Parekh said the revision reflects large deals signed over recent quarters and strong execution in Q3. He noted improvement in financial services and energy, utilities, resources, and services verticals.
Sanghrajka said adjusted operating margin expanded 20 basis points sequentially in Q3. He detailed that currency provided a 40 basis point benefit, while the "Project Maximus" efficiency program contributed 50 basis points, mainly from value-based selling and automation. These benefits were offset by furloughs, working-day impacts, and higher variable pay accruals.
The company absorbed higher sales and marketing investments, which rose 50 basis points year-over-year, and lower utilization of about 1%, which management framed as an investment for future capacity.
On headcount, Parekh said the increase reflects confidence in demand conditions. Sanghrajka added that the company had planned to hire 20,000 freshers this year and has onboarded roughly 18,000 so far, with many in training.
Executives discussed the impact of India's labor code changes, noting an ongoing annual headwind of roughly 15 basis points. Sanghrajka said reported margins were impacted by these charges, but adjusted margins expanded sequentially.
Parekh outlined the company's AI strategy, highlighting the Topaz Fabric agent services suite. He shared that the company works with 90% of its top 200 clients on AI initiatives, is executing about 4,600 AI projects, has generated over 28 million lines of AI-assisted code, and has built more than 500 agents.
He described six AI-led value pools: AI engineering services, data for AI, agents for operations, AI software development and legacy modernization, AI deployed in physical devices, and AI trust and risk services. Parekh said the company plans to provide a more comprehensive view at an Investor Day later in the quarter.
On pricing, Sanghrajka said new approaches are emerging, including outcome-based and agent-specific pricing, but it is early to predict how models will evolve.
In financial services, Parekh said the company is seeing good traction across retail banks, mid-market banks, payments, and mortgages, with AI adoption improving. He referenced a recently announced partnership with Cognition.
Regarding North America, Parekh said performance reflected a mix across industries, with energy/utilities and financial services trends remaining strong while some other verticals are still recovering.
On retail, Parekh said there are positive signs but also client-specific cost containment in certain areas, and the company is working to convert a growing pipeline into revenue growth.
Sanghrajka said sequential changes in revenue from top clients can be influenced by seasonality like furloughs, and he did not see a significant change in year-over-year growth metrics.
On immigration, Parekh said no employee has been apprehended by U.S. authorities, but one employee was denied entry and sent back to India. He said the U.S. delivery approach remains unchanged, with the majority of U.S. employees not requiring visas.
Regarding mergers and acquisitions, Parekh said the company has pursued deals in cyber, consulting, and energy services and expects to continue with a similar approach. He said the company has a pipeline of potential targets and balance sheet capacity. On AI-focused acquisitions, he said there are not many AI services companies of scale today, and the company is partnering with AI-native firms while remaining open to acquisitions as larger players emerge.
Management said it does not plan to change its current flexible work arrangements and will provide next-year outlook details when issuing guidance in April.