Infosys Faces $150M Revenue Risk as Daimler Seeks New Vendor
Overview
Infosys Ltd. risks losing $150 million annually from its Daimler contract due to execution delays and client dissatisfaction. The German automaker is reportedly seeking a new vendor for key software and equipment, a move that could impact Infosys's revenue amid broader client spending cuts and macroeconomic uncertainty.
Infosys Faces Significant Revenue Risk From Daimler Contract Loss
Infosys Ltd. is on the verge of losing a substantial portion of its business with German auto giant Daimler, one of its largest clients. The IT services provider risks forfeiting $150 million in annual revenue as Daimler seeks alternative vendors for crucial software and equipment. This potential loss stems from execution delays and disagreements over the delivery and billing of services.
Deal Details and Contract Uncertainty
The contract, initially signed in December 2020 as an eight-year IT transformation deal worth $3.2 billion, covered services across six business divisions. While cybersecurity and data center services have been renewed, the critical workplace solutions segment, responsible for procuring hardware and software like laptops and Microsoft 365 subscriptions, faces an uncertain renewal. Sources indicate differences over execution and billing have stalled progress, with an RFP process not being agreed upon by the client.
Market Headwinds and Competitive Bids
This potential revenue hit comes at a challenging time for the IT sector. Global macroeconomic uncertainty, tariff wars, and the rise of automation tools are already squeezing client spending. Industry analysts note that IT firms are increasingly focusing on strategic digital and core platform areas rather than solely on total contract value. Furthermore, another Indian IT firm has reportedly submitted a bid to secure part of the Infosys contract, intensifying competitive pressure.
Historical Context and Financial Impact
The Daimler project, dubbed the ‘twice as fast program’, significantly boosted Infosys’s revenue from manufacturers. However, the subsidiary created for this project has seen revenue decline and has been unprofitable for four consecutive years, suggesting the account may have matured. For the fiscal year ended March 2025, Infosys reported $19.28 billion in revenue, making the $150 million risk a notable, though manageable, 0.7% of its business.
