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TCS Posts Modest Revenue Beat as AI Demand Lifts North America Growth

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Tata Consultancy Services reported a slim third-quarter revenue beat on Monday, driven by artificial intelligence-led demand, with its key North America market returning to growth for the first time in two years.

Consolidated revenue for India’s largest software services firm rose 4.9% year-on-year to 670.87 billion rupees ($7.44 billion) for the quarter ended December 31, slightly above analysts’ estimate of 666.76 billion rupees, according to LSEG data. The traditionally weak December quarter benefited from increased AI spending by clients, with AI services generating about $1.8 billion annually and accounting for roughly 5.8% of total revenue.

Chief Executive K Krithivasan said strong deal momentum and growing leadership in AI underpin the company’s outlook. “Based on the client conversations, strong deal momentum and the leadership we are gaining in AI, we are confident of a good calendar year 2026,” he said during a post-earnings analyst call.

North America, which contributes nearly half of TCS’s revenue, posted growth for the first time since the July–September 2023 quarter, signaling a potential bottoming out of the slowdown. Five of the company’s eight geographic regions recorded growth, led by the Middle East and Africa with an 8.3% increase, followed by Continental Europe at 3.5%.

TCS Campus Siruseri, Chennai - MGS Architecture

Despite these gains, caution persists across India’s $283 billion IT services industry as clients remain wary of non-essential technology spending amid macroeconomic uncertainty in the United States. Analysts cited ongoing concerns around tariffs and proposed $100,000 visa fees as additional headwinds. Ambarish Shah of Systematix said North America’s recovery is likely to be gradual as structural weaknesses continue.

TCS noted that softer performance in banking and financial services and retail was largely due to year-end seasonality, with an expected recovery from the current quarter. The company’s total order book stood at $9.3 billion, down from $10.2 billion a year earlier.

Quarterly net profit fell 14% to 106.57 billion rupees, missing analysts’ expectations of 130.24 billion rupees. The decline was attributed to one-time restructuring costs linked to layoffs, the impact of India’s new labour codes enacted in November 2025, and other legal expenses.

The Mumbai-based firm declared a dividend of 11 rupees per share, along with a special dividend of 46 rupees per share. TCS shares listed in Mumbai closed 1.3% higher ahead of the results.

Peloton Shares Surge as CEO Peter Stern’s Turnaround Strategy Shows Early Success

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Peloton Interactive’s shares rose 7% on Friday after the fitness technology company beat Wall Street’s revenue expectations, driven by its revamped product lineup, AI-powered features, and price hikes across both hardware and subscriptions. The results have strengthened investor confidence in CEO Peter Stern’s turnaround strategy, aimed at returning the brand to profitability.

Peloton reported quarterly revenue of $550.8 million, exceeding analyst forecasts of $539.82 million, according to LSEG data. The company’s renewed focus on cash flow improvement, debt reduction, and streamlined operations has begun to resonate with investors after several years of financial turbulence.

Since taking over in January 2025, Stern has prioritized reshaping Peloton’s identity beyond its pandemic-era boom, repositioning it as a sustainable, subscription-based fitness ecosystem. The latest relaunch introduced AI-driven workout recommendations and upgraded connected fitness equipment, marking Peloton’s most significant product refresh in years.

Analysts at J.P. Morgan called the results “encouraging,” citing improvements in profitability and free cash flow, while cautioning that it remains to be seen if these changes will deliver “durable revenue growth.”

The positive earnings sent Peloton’s stock to one of its best weekly performances this year. The company currently trades at a price-to-earnings ratio of 79.95, reflecting investor expectations of sustained earnings momentum.

Datadog Shares Surge 23% After Revenue Beat and Strong AI Demand

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Datadog shares soared 23% on Thursday, marking the company’s second-best trading day ever, after the cloud software firm posted third-quarter results that exceeded Wall Street expectations and projected robust growth for the final quarter of the year.

The New York-based company reported $885.7 million in Q3 revenue, up 28% year-over-year and well above analyst estimates of $852.8 million, according to LSEG data. For the current quarter, Datadog forecasts between $912 million and $916 million in revenue, surpassing Wall Street’s $887 million projection.

Adjusted earnings reached 55 cents per share, topping FactSet estimates of 45 cents. The company also recorded net income of $33.9 million, or 10 cents per share, compared to $51.7 million, or 14 cents, a year earlier.

CEO Olivier Pomel credited the company’s momentum to continued innovation in artificial intelligence (AI) and cloud security tools. “The Datadog R&D team is innovating rapidly to help our customers solve problems in the AI space,” he said in a statement.

Datadog has rolled out a series of AI-focused products this year, including Bits AI Agents for SRE, which can automatically investigate system alerts and generate response drafts, and expanded features for LLM Observability, designed to monitor large language models. The firm also unveiled its MCP Server, which connects AI agents to enterprise data sources, and TOTO, its proprietary foundation model.

The company said the number of customers generating over $100,000 in annual recurring revenue rose 16% in the quarter, signaling sustained enterprise adoption.