---
endpoint: analytics
pattern: Technology
status: done
latency_ms: 149794
conversation_id: d49de88d-3048-4c8d-a605-8c47f64db088
citations: 13
created: 2026-05-31 21:10:37Z
---

# What is Infosys’s core business franchise and the key components of its operating model?

# Infosys (INFY) — Core Business Franchise & Operating Model

## 1. Core Business Franchise

Infosys is a global IT services, consulting, and next-generation digital-services firm headquartered in Bengaluru, India. The franchise rests on five pillars:

### 1.1 Revenue Engine — IT Services + BPM
Per the FY2025 Form 20-F, the Group derives revenues primarily from **IT services comprising software development and related services, cloud and infrastructure services, maintenance, consulting and package implementation, licensing of software products and platforms across the Group's core and digital offerings (collectively "software related services") and business process management (BPM) services** [1]. Contracts are structured on **time-and-material, unit of work, fixed-price, or fixed-timeframe** bases [1].

FY2025 revenue: **US$19,277 million**, a reported-currency growth of **3.9%** YoY and **4.2%** in constant currency [1].

### 1.2 Vertical Segmentation
Infosys reports along eight industry segments [2]:

| # | Business Segment |
|---|------------------|
| 1 | Financial Services |
| 2 | Retail |
| 3 | Communication |
| 4 | Energy, Utilities, Resources and Services |
| 5 | Manufacturing |
| 6 | Hi-Tech |
| 7 | Life Sciences |
| 8 | All other Segments |

Each segment is reported with segment-level revenue and segment profitability metrics for management review [2].

### 1.3 Service-Line / Capability Portfolio
The franchise is delivered through deep horizontal practices anchored on an **"AI-first" strategy**:

- **Application Development & Modernization (ADM)** — custom software builds using an AI-first, cloud-agnostic, agile, product-centric approach; offerings span cloud-native development, vertical-package rollouts, business-process re-engineering, product & platform engineering, and custom industry solutions. Strengthened by a Domain Consulting Group (DCG) that creates **AI-first industry blueprints for 23 different industry segments** [8].
- **Enterprise Cloud Application Solutions (ECAS)** — **a decade-plus Salesforce partnership** (Summit partner) delivering end-to-end consulting, implementation, integration, and support across Sales Cloud, Service Cloud, Marketing Cloud, Data Cloud, Agentforce, and Industry Clouds; bolstered by the **Fluido and Simplus acquisitions** in Nordics/Americas [12].
- **Oracle, SAP, ServiceNow, Adobe Practice areas** — strategic-advisory + business transformation across ERP, supply chain, CX, HCM, and infrastructure modernization.
- **Enterprise Application Integration (EAIS)** — Cloud-first Integration, Cloud-Native Development, Digital Process Automation, Low-Code/No-Code, Digital Supply Chain.
- **Data & Analytics (DNA / Infosys Topaz®)** — AI-first data engineering, analytics, and applied AI; Topaz® is the generative-AI brand.
- **Digital Experience, Engineering Services, Cybersecurity, Quality Engineering.**

### 1.4 Products & Platforms — EdgeVerve Subsidiary
A material differentiated franchise sits inside **EdgeVerve**, Infosys's software-products subsidiary [5]:

- **Finacle®** — industry-leading digital banking suite; cloud-native + SaaS; serves banks in over 100 countries covering core banking, lending, payments, treasury, wealth, analytics, AI and blockchain [5].
- **Infosys McCamish** — insurance BPM and platform business (VPAS® platform for life, annuities, employer benefits, retirements) [5].
- **AI Next / Unified AI Platform** — agentic-AI platform for enterprise transformation [5].

Other proprietary platforms include **Infosys Cobalt®** (cloud), **Infosys Topaz®** (gen-AI), **Infosys Aster** (AI marketing suite), the **Polycloud Platform** (vendor-agnostic multi-cloud), the **Automation Suite**, and **Infosys Live Enterprise Application Development Platform (iLEAD)** [11].

### 1.5 Scale
- **323,578 total employees** as of 31 March 2025, of which **306,599 are billable service-delivery professionals** [10].
- Geographic talent base: **250,553 in India, 34,388 in the Americas, 20,701 in Europe, 17,936 in the rest of the world** [13] — confirming the **India-centric, globally distributed offshore-leveraged model**.

---

## 2. Key Components of the Operating Model

Infosys's operating model is purpose-built to convert IT-services demand into margin-accretive recurring revenue through industrialization, leverage, and reskilling.

### 2.1 Industrialized, IP-Based Service Delivery (Global Delivery Model)
The backbone is an **industrialized, IP-based service delivery model, leveraging Infosys' Live Enterprise Automation Platform (LEAP)** and partner tools to enhance productivity and ensure consistent, data-driven, high-quality service delivery [3]. Infosys layers a **repository of pre-built, ready-to-deploy AI agents** built on a proprietary agentic framework to orchestrate application-operations workflows with self-healing and predictive ops [3].

### 2.2 Onsite / Offshore Pyramid
A core economic lever: **cost of operations is higher onsite than offshore, so Infosys maintains most of its bench offshore** [6]. The mix of onsite vs. offshore effort directly drives gross margin, and large-deal transitions carry **higher onsite efforts, transition costs, and other deal-specific costs… introducing volatility in margin profile** [6]. India remains the dominant delivery hub (~77% of headcount) [13].

### 2.3 Pricing & Project-Margin Architecture
- Engagement structures: **time-and-material, unit of work, fixed-price, and fixed-timeframe** [1].
- Pricing increasingly bundled with **productivity-improvement commitments**, especially with AI/code-generation expectations from clients [6].
- **Project Maximus** — internal margin-expansion program built on **Value-Based Selling (VBS) and Lean & Automation**, identified as a key driver of FY2025 segment profitability improvement alongside FX translation benefits and improved utilization [7].
- Third-party items (software/hardware) are pass-through in delivery and have grown as a percentage of revenue, weighing on gross margin even as effort-cost as a % of revenue declined [7].

### 2.4 Talent Operating Model — Continuous Reskilling
**Continuous learning and reskilling has always been integral to Infosys's operating model** [4]. The reskilling program has two stated objectives: (i) increase fulfilment of demand for digital skills on client projects and (ii) enrich workforce expertise in next-generation tech [4]. Concrete elements:
- **Lex** — proprietary anytime-anywhere learning platform with **36,000+ curated courses** and **307,000+ active users**, featuring telemetry, gamification, certification [4].
- **Over 270,000 employees are "AI-aware"** through scaled digital and gen-AI reskilling [4].

### 2.5 Localization & Near-Shoring
Infosys has invested in **expanding the local workforce in the US, UK, Europe, Japan, China, Canada, and Australia**, establishing **innovation hubs, near-shore centers, and digital design studios** with associated university and community-college partnerships for talent intake and joint research [4].

### 2.6 Strategic Partnership Architecture — QEP Model
A formal **four-tiered Quality Engineering Partnership (QEP) model** governs partner leverage [9]:

| Tier | Partner Type | Example Partners |
|------|--------------|------------------|
| QEP1 | Productivity-improvement / automation | Tricentis, UiPath, Microfocus |
| QEP2 | Domain / functional package providers | SAP, Salesforce, Adobe |
| QEP3 | Cloud service providers | AWS, Azure, GCP |
| QEP4 | AI solution providers & startups | OpenAI, Nvidia |

This tiering institutionalises the **hyperscaler + ISV + AI-startup** ecosystem central to modern IT services delivery [9].

### 2.7 Hybrid Work Model
Since 2022 Infosys has operated a **hybrid work model** — three pillars of "work, workspace, workforce" — designed to balance flexibility with social-capital building [10]. Investment continues in physical and digital infrastructure to support this configuration.

### 2.8 Inorganic Growth Engine
Acquisitions reinforce capability gaps and geography expansion. Recent FY26 examples: **The Missing Link** (completed 30 April 2025) and **MRE Consulting Ltd**, an energy-consulting firm in the US (up-to-$36 million consideration, completed 30 April 2025) [12]. Earlier tuck-ins **Fluido, Simplus, GuideVision** built out Salesforce and ServiceNow practices [12].

### 2.9 Physical & Technological Infrastructure
Infosys operates across **292 locations in 59 countries** with **>100 group companies**, with $109 million of contracted capex commitments at FYE March 31, 2025 — including expansion of existing facilities and construction of new Tier-2 city centers in India to enable hybrid working [10].

### 2.10 Cost Structure & Profitability Levers
FY25 margin movement decomposed [7]:
- **Cost of effort (employee + technical subcontractors) ↓** as % of revenue — driven by **reduced onsite mix and improved utilization**.
- **Third-party items ↑** as % of revenue — partially offsetting the effort-cost gain.
- **Selling & marketing ↑** 20bps on branding spend.
- **Administrative expenses** broadly flat.
- Net: operating margin improved, with **0.4% gross-margin tailwind from cost-of-sales reduction** and 0.2% from admin [7].

---

## 3. Synthesis — What the Franchise Actually Is

Infosys is best understood as a **globally distributed, India-leveraged labour arbitrage platform** that has been progressively layered with three margin-defending overlays:

1. **An industrialized delivery substrate** (LEAP + automation + pre-built AI agents) that decouples revenue growth from headcount growth [3].
2. **A proprietary IP & products layer** (EdgeVerve, Finacle, McCamish, Cobalt, Topaz) that secures defensible, higher-margin recurring revenue beyond pure services [5][11].
3. **A partnership-and-acquisition flywheel** (QEP model + Salesforce/Oracle/ServiceNow tuck-ins) that buys capability faster than it can be grown [9][12].

The operating model's lifeblood is the **onsite-offshore pyramid** [6], its margin lever is **Project Maximus (VBS + Lean & Automation)** [7], its talent moat is **Lex-powered continuous reskilling** [4], and its scale is **323,578 people, 8 vertical segments, ~$19.3bn FY25 revenue** [1][2][10].

---
**Sources**
[1] Infosys Limited — Form 20-F FY2025 (Revenue policy & FY25 revenue) — SEC Filing
[2] Infosys Limited — Form 20-F FY2025 (Business Segments) — SEC Filing
[3] Infosys Limited — Form 20-F FY2025 (Industrialized IP-based delivery model / LEAP / AI agents) — SEC Filing
[4] Infosys Limited — Form 20-F FY2025 (Reskilling, Lex, Localization) — SEC Filing
[5] Infosys Limited — Form 20-F FY2025 (EdgeVerve, Finacle, McCamish, AI Next) — SEC Filing
[6] Infosys Limited — Form 20-F FY2025 (Onsite vs offshore cost structure) — SEC Filing
[7] Infosys Limited — Form 20-F FY2025 (Project Maximus / cost of sales / margin walk) — SEC Filing
[8] Infosys Limited — Form 20-F FY2025 (Modern Application Development / DCG) — SEC Filing
[9] Infosys Limited — Form 20-F FY2025 (Four-tier QEP model) — SEC Filing
[10] Infosys Limited — Form 20-F FY2025 (Headcount, hybrid work, locations) — SEC Filing
[11] Infosys Limited — Form 20-F FY2025 (Polycloud / Automation Suite / Cobalt) — SEC Filing
[12] Infosys Limited — Form 20-F FY2025 (ECAS / Salesforce / Fluido / Simplus / MRE / Missing Link) — SEC Filing
[13] Infosys Limited — Form 20-F FY2025 (Geographic headcount distribution) — SEC Filing

## Citations

- [1] **FY 2025 Infosys Limited** · external
- [2] **FY 2025 Infosys Limited** · external
- [3] **FY 2025 Infosys Limited** · external
- [4] **FY 2025 Infosys Limited** · external
- [5] **FY 2025 Infosys Limited** · external
- [6] **FY 2025 Infosys Limited** · external
- [7] **FY 2025 Infosys Limited** · external
- [8] **FY 2025 Infosys Limited** · external
- [9] **FY 2025 Infosys Limited** · external
- [10] **FY 2025 Infosys Limited** · external
- [11] **FY 2025 Infosys Limited** · external
- [12] **FY 2025 Infosys Limited** · external
- [13] **FY 2025 Infosys Limited** · external

