Good afternoon, everyone. This is Mohana. A very warm welcome to all of you for this Nucleus Software earnings conference call for the quarter and half year ended on September 30, 2026. For discussions, we have here from the management team, Mr. Vishnu R. Dusad, our Managing Director, Mr. Parag Bhise, CEO and Executive Director, Mr. Ashok Kumar Bhura, Chief Financial Officer, Mr. Anurag Mantri, Chief Operating Officer, Mr. Apurva Chamaria, Chief Business Officer, Mr. Mukesh Bangia, Vice President, Mr. Abhishek Pallav, Vice President, Ms. Swati Patwardhan, Chief Human Resource Officer, Mr. Bhavit, Chief Customer Success Officer, Mr. Pradeep Malik, Vice President, and Mr. Tapan Jayaswal, Financial Controller. As you all are aware, Nucleus Software does not provide any specific revenue earnings guidance.
Anything which is said during this call, which may reflect company's outlook for the future or which may be construed as a forward-looking statement, must be reviewed in conjunction with the risks that the company faces. An audio and the transcript of this call would be shortly available on the investor section of company's website, www.nucleussoftware.com. With this, we are now ready to begin with the opening comments on the performance of the company, and post that, we would be available for the questions and answer session. With this, I now pass it over to Mr. Vishnu. Thank you, and over to you, sir.
Thank you, and a warm welcome to all of you for this conference call. It is my pleasure to welcome you to this second quarter earnings call, and with this, I'll hand it over to Parag.
Thank you so much, Vishnu sir, and good afternoon, everyone, and thank you for joining us for this earnings call. Alongside our financial performance, I would like to briefly share a few important strategic developments from the quarter. We continue to make progress on our AI journey. This quarter, we continued to invest in upskilling our workforce with the objective of moving AI from a specialized capability used by a few to a core capability embedded across functions, which we expect will give us benefits in the quarters to come. A key milestone during the quarter was the launch of FinnOne Neo® 9.0 and FinnAxia® 9.0 in Vietnam, together with our strategic partner, FPT, at the first Nucleus Synapse, which is our customer event in Vietnam. Our capabilities continue to receive recognition across the industry and analyst ecosystem.
Gartner, an analyst firm, world-renowned, included Nucleus Software among the example vendors in its 2026 market overview for commercial banking cash management, and Nucleus has also featured in Forrester's cash management solution landscape. Since the close of the quarter, our Generative AI-powered Visual Report Agent received the Most Innovative Practice Award at the CII National AI Awards 2026. We were also recognized as Oracle's 2026 APAC ISV Partner of the Year. During the quarter, we continued to strengthen our engagement with the banking and fintech ecosystem through platforms including Global Fintech Fest, FIBAC, the CII NBFC and HFC Summit, the CNBC-TV18 Banking Transformation Summit, and Sibos 2026 in Miami. On the leadership front, we welcome Sudhanshu Tripathi as Chief Marketing Officer, strengthening our focus on global market positioning and growth across key geographies. We remain focused on disciplined execution and creating sustainable long-term value for our customers, employees, and shareholders.
With that, I will now hand over for the financial update to Mr. Tapan Jayaswal. Thank you.
I request Tapan sir to please highlight the financials.
Thank you, Swati. Am I audible?
Yes.
Yes.
As for our revenue, consolidated revenue quarter is at INR 227.7 crore, growth of 8.2% quarter-on-quarter and 6.7% year-on-year. Dollar terms revenue is $24 million, growth of 6.9% quarter-on-quarter, growth of [10%] year-on-year. As for half year ended period, our consolidated revenue is at INR 438.1 crore, growth of 1.6% year-on-year. In dollar terms, revenue is $46.5 million, degrowth of 6.9% year-on-year. Product revenue during the quarter is at 84.4% as against 83.9% quarter-on-quarter. As for half year ended period, product revenue is at 84.2% as against 84.9% year-on-year. As for geography revenue, India region constitutes 57.3% of revenue, followed by 12.4% from Middle East, 11% from South Asia, 5.7% from Europe, and rest others.
During previous quarter, India constituted 56.1% of revenue, followed by 12.1% from Middle East, 10.8% from South Asia, 5.5% from Europe, and rest others. As for half year ended period, India region constitutes 56.7% of revenue, followed by 12.3% from Middle East, 10.9% from South Asia, 5.6% from Europe, and rest others. During the previous half year ended period, India region constitutes 57.8% of revenue, followed by 11.9% from South Asia, 11.5% from Middle East, 4.8% from Europe, and rest others. Revenue from top five clients contributed 27% of revenue in this quarter, as against 28.1% during previous quarter. As for half year ended period, revenue from top five clients contributed 27.3% of revenue, as against 26.8% during previous half year.
As for expenses, cost of delivery, including cost of product development for the quarter is INR 167.9 crore, an increase of 4.7% quarter-on-quarter and 6.5% year-on-year. It constitutes 73.8% of revenue against 76.2% quarter-on-quarter and 73.9% year-on-year. As for marketing and sales expenses for the quarter is 11% of revenue against 10% quarter-on-quarter and 7.3% year-on-year. For half year ended period, cost of delivery, including cost of product development is INR 328.4 crore, an increase of 5.8% against last half year. EBITDA for the quarter is at INR 15.4 crore as against INR 7.6 crore quarter-on-quarter and INR 23.1 crore year-on-year. Margins during the quarter is 6.8% as compared to 3.6% quarter-on-quarter and 10.8% year-on-year.
As for half year ended period, EBITDA stands at INR 23 crore as against INR 56.8 crore year-on-year. Margins during the half year is 5.3% as compared to 13.2% in last half year. As for other income during the quarter is INR 16 crore, degrowth of 10% quarter-on-quarter, growth of 0.8% year-on-year. Income from investment and deposit is INR 11.8 crore. Other miscellaneous income is INR 3.4 crore, and forex gain is INR 0.8 crore. For half year ended period, other income is INR 33.8 crore, degrowth of 0.8% from last half year. Income from investment and deposit is INR 30.6 crore. Other miscellaneous income, INR 3.6 crore. Forex loss is INR 0.4 crore. This degrowth in investment income was driven by lower mark-to-market gains on debt mutual funds due to increase in interest rate in Q2.
Forward covers as on 30th September 2026 are $ 2.5 million at an average rate of INR 96.87 to a USD. Profit during the quarter is INR 21.3 crore, degrowth of 11% quarter-on-quarter and degrowth of 19.2% year-on-year. Half year period profit after tax is INR 45.1 crore, degrowth of 26.6% last half year. Order book position as on 30th September 2026 is INR 1,317 crore, out of which 90% is product and 10% is projects. On June 30th, 2026, the order book position was INR 1,244 crore, out of which product was 88.1%, and project was 11.9%. Total cash and cash equivalent as on 30th September are INR 942.1 crore as against INR 977.9 crore on June 30th, 2026. Receivables at INR 220.4 crore on 30th September as against INR 174.7 crore on 30th June 2026.
DSO stands at 80 days as compared to 63 days on June 30th, 2026. Total headcount as on 30th September is 2,006 as compared to 2,059 on 30th June 2000. I hand it over to Swati.
Thank you, sir. We are ready for our question and answer. Over to you, Mohana.
Thank you, ma'am. With this, we are now open for the Q&A session. If you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star and one again. Participants are kindly requested to restrict with one question in the initial round and join back the queue for more questions. The first question comes from Pooja Agarwal from Individual Investor. Please go ahead. Please go ahead, ma'am. There is no response, ma'am. I will take the next question. Ladies and gentlemen, if you have any questions, please press star and 1 on your telephone keypad. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. The next question comes from Samar Singh from TPF Capital. Please go ahead, sir.
Yes, good afternoon. Thank you for the opportunity. Regarding our order book, which has doubled over the last year to about INR 200 or INR 300 crores, our revenue is still around the same INR 200 to INR 220 crores, INR 230 crores. If you could just help me understand how much of the order book is now new customer license and implementation, and how much is the AMC renewals?
This order book, we don't give the breakup of this AMC and other revenues. If we talk about this order book getting into revenue, these are long implementation projects, and it takes time because these are complicated projects involving high-volume data migration, correction, and then making the system up and running for the customer. It definitely takes time. Healthy order book reflects our preference from the customer side for our product.
Okay. Historically, the way we used to calculate the order book, we used to have just one year of the AMC value in the order book, and we used to just sort of renew that every year.
Yeah.
Is that the way we still calculate it? Or now, for example, if you have a five-year contract, only one year of the AMC is in the order book, or is the full five year of the AMC in the order book as of today?
It is a combination. In some of the customers, it is for five years also, and in some of the customers, it is one year as well.
Have we changed the methodology of calculating the order book? Because I think in the past, it used to be only one year of AMC was included in the order book.
Never. We have always maintained the same practice.
Okay. How do we decide whether it should be the full-
Sorry to interrupt you, sir. Please join back with you for more questions.
Sure.
Thank you, sir. The next question comes from Bharat Sheth from Quest Investment Advisors Pvt. Ltd. Please go ahead, sir.
Yeah, thank you for the opportunity. To understand our AI embedded on our own kind of application, how are we seeing, like when you say that it's a huge data migration work, how that typically with AI coming in, time reduction we are seeing vis-a-vis earlier, I mean, say two, three years back, same kind of implementation?
Yeah. This is Abhishek. AI is very well being used on all such analysis, but as Ashok talked about the complexity of these implementations being enterprise platform, a lot of care has to be taken before we actually scan through. So end-to-end agents doing transformation, we have not reached to this stage, and there are significant amount of human in the loop investment that's still on. But gradually, the direction is to move towards that. It is too early to talk on those fronts as of this moment.
Okay. Is there any other way, I mean, say when you are talking, if you can give this, the order book is the world, I mean, like, so like to like color, if you want to give the earlier, say, implementation time was, say, three years or two years, vis-a-vis now the current order book timeline. If you can give broader color, we don't want to be directionally, if you can give some color.
These projects range from even three months to even 18 months. Various projects have various stages, and depending upon the LOBs which we get in the order. That is how each and every project has to be seen differently, and that implementation cycle ranges from basically three months to 18 months, and in some cases can spill over to even two years as well.
Okay. Sir, last question on the profitability side, where, I mean, we have done a lot of investment in front end, I mean, OpEx investment to, I mean, make our product, I mean, more versatile and marketing side also. If you can give color, when will we expect that our profitability to bounce back at original level?
If you talk about the investment, we continue enriching our product, we continue investing in AI, we continue investing in upgrading our talent to make them AI natives and investing in people and resources who are AI trained. If we talk about the reflection of that is reflecting in our order book as well. As and when the order book gets implemented, obviously that reflection will come in respective quarters.
I appreciate, sir, but can it be attained from FY 2028? Okay, thank you.
Hello.
The next question comes from [Prolin Yan from Individual Investor]. Please go ahead.
Yeah. Hello, am I audible?
Yes.
Yes.
Yeah. Just taking forward previous participant's question, this revenue run rate of INR 200 crores- INR 220 crores, we have been stuck in that range for quite some time now on a quarterly run rate basis, right? For almost like last 12 quarters. With the order book going up and you answered that, some of them are multi-year projects, but there would be some projects where you can see the revenue accrual in the near term, right? So, when do you see us breaking this INR 200 crores-INR 220 crores revenue run rate? If you can give some color of the order book, how much of our order book is backdated where implementation will take time? You mentioned implementation can take anywhere between three to 18 months.
Some color on, is large part of our order book backended or have we already started implementation in some part of our order book and we can see the order book getting converted into revenue in the near term?
Various projects are running in parallel across the globe, in India, SEA, Middle East. Each and every project is at different stage of getting converted into revenue. That is where it will start reflecting in subsequent quarters. If we talk about this particular quarter, you will see from last six quarters, this is one of the highest revenue we have clocked. Earlier, the revenue which we clocked seven quarters back, it was INR 228. We are able to touch back to those highs again. While I can't really give you the future guidelines on these numbers, I can only mention that we have a healthy order book and we have a healthy implementation cycle, and that will start reflecting in future quarters.
Sure. Sir, one more question, if I may. In the past, you have mentioned that in a way we are running two Nucleus within our organization, where one part of Nucleus is transitioned to the new FinnOne platform, FinnOne Neo platform, and another is still on the older platform. That is why we have to probably run a cost base which is higher. Where are we in that transition? How long do you think we'll still be running two cost centers?
I'll start from the last. From cost center perspective, it is all one lending cost center. We don't differentiate between the two. Transformation journey, I think past two speakers also reflected that these are enterprise products and transformation, especially transformations are time-taking and consume a lot of effort. Difficult to predict a timeline, but at the same time, that remains to be a focus for the quarters to come and the next financial year too. The focus on transformations is one of the key initiatives that the organization has at this moment.
Thank you and all the best.
Thank you.
Thank you, sir. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. The next question comes from Hardick Bora from Vireya Capital. Please go ahead.
Hi, good afternoon. Am I audible?
Yes.
Yes.
Yes, hi. So, first question is in the orders that we have won over the last three quarters, there is a clear reflection of the efforts we put on the marketing side. Can you just throw some color? It seems that we won some orders in the range of INR 1,200 crores-INR 1,300 crores of orders over the last three quarters. What proportion of these orders would be won in India and how much of it would be outside of India?
This is Apurva Chamaria, CBO of Nucleus Software. It would largely be in the same proportion of our current revenues. As we invest more towards overseas markets, you will gradually see the shift. But for retrospective, you can take it as same proportion of existing revenues.
Okay. So, there is no major shift in terms of how we have been winning orders historically. The broad makeup is the same.
As of now, yes, and you will start seeing that shift now.
Okay. Just one question on the, if you can allude to any change in terms of the pricing and the profitability potential of these orders. Are they different from what has been our historical experience? Are we facing some challenges on the pricing front, or is it again the same as what history has been for us?
Pricing is lot of times defined by the heightened competition and different geography and different needs or different price point. Lot of strategic calls also needs to be taken to enter into a particular geography. More or less on a blended basis, obviously, it should remain in a range-bound fashion, which we are seeing. That is all I can say on that.
Sure. I mean, there is no unusual stress that you are facing which you want to maybe highlight?
No, no. Nothing of that sort. Our product is very robust and customer patronize our product, and there is lot of, I would say, cross-reference across industry, across customer, and across geography as well. We don't see any kind of challenge in that way. Irrespective of competition getting heightened, that is not affecting us.
Thank you. With your permission, may I ask one more question?
Yeah, please go ahead.
Sorry to interrupt you, sir. Could you please
Yeah, yeah. Let him ask.
Okay.
Let him ask, please.
Okay. Thank you. This was just on AI. There are so many initiatives that you are taking. Your annual report is very descriptive of the effort that has been going into this front. Just if you can give us a longer-term view, how will this eventually start reflecting in our business? Will we start seeing maybe lower delivery cost over the long run, or will it first start reflecting in higher order win rate, like what is happening? Where will we start seeing some of the impact of this work that we are doing on the AI front? Just any color that you can give on the long run. Not asking for any short-term opinion, but just how will it start reflecting in our business is what I was trying to ask.
Our AI strategy has both inside-out strategy, which means that while we continue to focus on our SDLC to get transformed to ADLC, at the same time, streamlining the process and fixing this, or rather maturing the SDLC processes, that is the second part. The third part is ensuring that the collaterals are available for people to access and look at through a structured platform. The core focus would remain in ensuring high-quality releases with agility is the one. Second thing is the other part of the organization beyond product, increasing the operational efficiency as a whole. This is how we look at it. We have an AI strategy, and we are working on to ensure that we follow that.
Great. Thank you so much for your answers, and all the best.
Thank you.
Thank you, sir. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. The next question come from [Sanjay K], SKS Capital. Please go ahead.
Hello, good evening. I had joined this late. I do not know, I missed anything on the number of new logos added in last quarter.
We have added in H1, we have added five new logos this year.
Five new logos in last quarter?
Last year. Last in-
Six months
six months. This six months.
Okay. How about the last quarter?
Two logos. In Q1, we added three, and Q2, we have added two.
All right. My other question is about the employee cost, which we are seeing that quarter-on-quarter, it just keep increasing. It increased about 15% compared to last Q2 FY26, and about 8% compared to last Q1 FY27. Is it going to continue like this? Because the margins, for last so many quarters, the margins are not improving, and the employee cost is going up.
Primarily, the impact which you are seeing is on following accounts. One is, we are investing on AI talents, and currently, the market is heated up for AI talents. Everybody is scouting for those talents, and obviously, that comes at a higher cost than the current ongoing rates for the resources. Second is the Labour Codes change impact, which has come. This year, we have launched RSU policies for our employees, and that has also added to our cost.
Sure. Because what we have seen, I mean, your competitors or all these IT product companies, now they are getting advantage of this AI, and their employee cost is not going that much the way revenue is growing. Compared to Nucleus, I mean, we are still seeing the costs just keep going up. Is this something you want to improve in H2 now? I mean, the margins are going to improve, at least are we seeing that H2 will be better than H1?
The difference which I would just like to share is, those are AI companies where they have AI as a revenue stream. We do not have AI as a revenue stream. We work as providing AI as an embedded extension for our software, which helps our customer to serve their customers better. That is how we cannot directly attribute this to that. While our AI strategy has been clarified just some time back by Abhishek as to how we are going to use AI internally and how we are going to enrich our product for our customers. Obviously, once this gets stabilized, obviously margin will also see a reflection of that will be seen in the margins in the coming quarters.
Okay. Just last question about the employee, your annual increments have already happened or it will be happening in next quarter?
Yeah, it has already happened. It has been factored in.
All right. Thank you and all the best.
Thank you.
Thank you, sir. Participants are kindly requested to restrict with one question in the initial round and join back the queue for more questions. The next question comes from Kashish Mehta from Dolat Capital. Please go ahead, sir. Kashish sir, please go ahead.
Hi, am I audible? I am just a bit apologizing. There will be a bit of background noise. I mean, my point being that Europe as a geography, yes, not the biggest one in terms of revenue mix, but it has been consecutively growing the fastest for, I think, now two good quarters. Just wanted to understand or get a sense, like, what are we doing right in that geography, and is there any way those strategies or go-to-market strategies can be reflected in other geographies for accelerated growth in the upcoming H2? Thanks. That is it.
It is, I think, while in percentage terms it may be reflecting like that, but this is on account of one customer which we have, where a few people have been onboarded to serve them. So there is no specific strategy per se there which is very different than other regions. I think it is. Yeah, that is how.
Right. Do not worry. Thank you.
Yeah. It is a very small percent of our revenue.
Thank you, sir. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. We have a follow-up question from Samar Singh from TPF Capital. Please go ahead.
Yeah, thanks for the follow-up. If I just look at our cash flow statement, our receivables are up quite a bit for the last 6 months. On the same side, I think our advance billing and deferred revenues are also up. If you could just help us understand what is happening on both those line items, please.
Yeah, so in some case, the AMC got billed at the last part of the month, which got collected subsequently within next 10, 15 days. That is just an aberration for that particular quarter. Otherwise, if you see, it is more or less range-bound, and most of our datas are getting collected within reasonable timeframe.
Okay. The other part, which is the advance billing and deferred revenues, I think that is also up. If you could help me understand that one.
Sorry, deferred revenue?
Advance billing.
Yeah, so in case of AMC, it has been billed in advance, and the month or the quarter in which AMCs are getting billed, obviously you will see a higher, I would say, advance billing for the customers.
Okay. That point explains the increase in receivables, right? I am talking about the increase in current liabilities, which is normally is just our advance billing and deferred revenue line items.
Ha, so if we bill AMC in advance, those advance amount will get collected, and it will reflect in our liabilities. Because the subsequent period service is still due, that will reflect in liabilities.
Okay. All right. And amongst-
Sorry to interrupt you, sir. Please join the queue for more questions.
Okay.
Thank you, sir. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. Ladies and gentlemen, if you have any question, please press star and one on your telephone keypad. As there is no more participant, so I would pass it over to Ms. Swati.
Thank you, Mohana. We would like to thank all the investors for joining us today on this call. I would now request Vishnu sir for his closing comment. Over to you, sir.
We want to thank you very much for your continued interest in Nucleus Software. We would like to reassure you of our commitment to long-term value addition to the society and our customers.
That concludes your conference call for today. Thank you for participating. You may all disconnect now.