Ladies and gentlemen, good day and welcome to Persistent Systems Earnings Conference Call for the Fourth Quarter of FY25 ended March 31, 2025. We have with us on the call today Dr. Anand Deshpande, Chairman and Managing Director; Mr. Sandeep Kalra, Executive Director and Chief Executive Officer; Mr. Vinit Teredesai, Chief Financial Officer; and Mr. Saurabh Dwivedi, Head of Investor Relations. Please note that all participants' lines will be in listen-only mode, and there will be an opportunity for you to ask questions after management's opening remarks. Should you need assistance during the conference call, please raise your hand from the participant tab on the screen. While asking questions, we request you to please identify yourself and your company. Please note this conference is being recorded. I now hand over the conference to Mr. Saurabh Dwivedi. Thank you, and over to you.
Thank you, Anand. Let me quickly outline the agenda for today's call. Anand will open the call with his opening remarks. Sandeep will then share an overview of our results and commentary on business. Vinit will take you through the financial details and key operational metrics for this quarter. I will then provide an overview of our key deal wins and awards and recognitions for this quarter. Sandeep will come back for a quick summary of the prepared remarks, post which we will open the conference for questions. Let me also remind you that as part of our prepared remarks and during Q&A, we may make certain statements which are forward-looking and may involve significant uncertainty. Persistent does not take any responsibility to update such forward-looking statements, and your discretion is warranted while making any investment decisions. With this, let me hand over to Anand for his remarks.
Thank you, Saurabh. This year marks the 35th anniversary of Persistent Systems, a journey that we began in 1990 with a simple but ambitious vision to build a technology company from India that delivers global impact. Over the past three and a half decades, we have stayed true to that vision, growing steadily and shaping ourselves into a digital engineering leader trusted by customers worldwide. Within that larger journey, this month we celebrate a special milestone: 15 years since our listing on the National Stock Exchange on April 6, 2010. This is a moment to pause, reflect, and to express deep gratitude. This journey has been about building with purpose, combining technology, talent, and trust to solve real-world problems. It has been about staying resilient and future-focused.
I want to take this opportunity to thank all those who have walked alongside with us: our passionate employees, committed leadership, forward-looking customers, and dedicated partners. A special word of appreciation to our investors and the analyst community. Your confidence, insights, and support have been invaluable in shaping our growth story and fueling our ambition. To give you a sense of what we have collectively achieved, INR 100,000 invested in Persistent shares at the time of IPO would be worth over INR 7,000,000 today, excluding dividends. I consider myself to be incredibly fortunate to have been part of this journey. With that, let me now hand over to Sandeep for the quarterly and annual updates. Thank you.
Thank you, Anand. Before I start with the update on the quarter, I'm pleased to share with you that our CFO, Vinit, has been inducted as an Additional Director on the Persistent board. I look forward to working with him for the continued success of our company. Let me now start with a quick financial summary. Coming to Q4 FY25 first, we delivered revenues of $375,200,000 . This translates to a growth of 4.2% quarter-on-quarter and 20.7% year-on-year. In INR terms, our growth for the quarter came in at 5.9% quarter-on-quarter and 25.2% year-on-year. In constant currency term, this translates into a quarterly growth of 4.5% quarter-on-quarter. This quarter marks our 20th sequential quarter of revenue growth. The EBIT margin for the quarter came in at 15.6%, translating into an EBIT growth of 10.9% quarter-on-quarter and 34.9% year-on-year. The Profit After Tax for the quarter came in at 12.2%.
Coming to the full-year financial year 2025, we achieved revenues of $1,409,100,000 , giving us 18.8% year-on-year growth. In Rupee terms, this translates to a year-on-year growth of 21.6%. The EBIT margin for FY25 came in at 14.7%, compared to 14.4% for FY24. The Profit After Tax for the full year came in at 11.7%. Vinit will go over with detailed color on the financials and margin moment later in this call. Now coming to the order book for the quarter, the Total Contract Talue for Q4 came in at $517,500,000 , with TCV of new bookings coming in at $329,000,000 . The Annual Contract Value of this TCV is $350,200,000 , out of which the ACV from new bookings contributed to $198,100,000 . The Total Contract Value for full financial year came in at $2,100,000,000 , while the corresponding ACV was $1,500,000 .
Most of you are aware that we typically see higher quantum of renewals and hence booking in the December quarter, given the fact that 80% of our revenues emanate from the US. This period corresponds to the end of financial year for our North American customers. The sequential decline of bookings in the quarter reflects this scenario that we have observed in previous years as well. Also, please note that our revenue conversion on a quarterly basis is a function of Annual Contract Value bookings done in previous quarters, as well as the conversion from multi-year deals booked in previous years, which are included in our TCV bookings that we announce on a quarterly basis. Coming to the client engagement size, now let me give you some color on our client movement across various reported categories.
This quarter, we witnessed healthy year-on-year growth among our client buckets, with our top five customer revenue growing by 35.3%, top 10 by 27.3%, top 20 by 25.1%, and top 50 by 23.3%. The contribution from top 10 customers is 42.2% in this quarter, compared to 40% in Q4 FY2024. All our top client buckets have shown good growth in this quarter compared to the same quarter last year. Customers with annual revenues more than INR 75 million increased from 2 to 4 on a year-on-year basis. Those with INR 50 million annual revenue increased from 3 to 4. In INR 10 million, the bucket increased from 17 to 21. I am also very pleased to highlight that we saw a significant jump in customers with annual revenues more than $5,000,000 , with the number of customers in this category increasing from 40 to 55 over the last one year.
Finally, the number of customers with annual revenue more than $1,000,000 increased from 178 to 191. These numbers demonstrate our ability to scale customer relationships significantly over time. Coming to the details of our geographic presence performance, in terms of year-on-year growth this quarter, in USD terms, North America revenue grew 21.3%, Europe grew 30.6%, India grew 10.6%, and the rest of the world grew 8.6%. For the Full Year 2025, North America grew 20.6%, Europe grew 7.4%, India 12.5%, and the rest of the world grew by 34.5%. Now let me give you this quarter's performance from an industry segment perspective. Compared to the same quarter last year, healthcare life sciences and banking financial services industry verticals grew by 33.6% and 26.6% respectively on a year-on-year basis. Our software, high-tech, and emerging verticals registered a growth of 9.7% year-on-year.
For the Full Year 2025, healthcare and life sciences vertical grew 54%, banking financial services grew 17.8%, while software and high-tech vertical grew 3.7%. Coming to an update on the dividend side, our Board of Directors recommended a final dividend of INR 15 per share. This is in addition to the interim dividend of INR 20 per share that was declared in January 2025. It's our endeavor to maintain a consistent dividend payout ratio while we augment our growth through capability-led acquisitions. Coming to an update on our customer events, in keeping with our tradition, we mark the end of each financial year by organizing customer events in major cities, connecting with our customers, and expressing our gratitude towards the strong partnerships that they have with us. Our New York event this year was hosted in the iconic NASDAQ Tower, which was well attended by our key customers, partners, and employees.
On this occasion, we also marked the US launch of the Persistent Foundation with a $1,000,000 commitment towards the same. We'll also be having similar events in the Bay Area as well as Seattle over the next one week. Coming to the progress we have made on our AI roadmap across the two key pillars, AI for technology and AI for business. As previously discussed, our AI strategy is anchored around four pillars. First, coming to AI for technology, here we are pivoting on two sides. On one hand, we are working with leading technology companies and hyperscalers in helping them engineer their platforms, leveraging our core expertise in product development, as well as creating robust back-end connectors, enabling seamless integration and scalability for our enterprise customers. Our work with these companies is foundational to the ability to enable agentic AI in enterprises over time.
Another paradigm of this AI for tech pivot includes building our GenAI-enabled platform, Sasva, to accelerate software development for technology companies as well as application development for our enterprise customers. Sasva has end-to-end capabilities natively built into the platform and also integrates with third-party ecosystem partners across the software development lifecycle, helping our customers leverage their existing investments. Our second anchor is with respect to AI for business, as a part of which we are incorporating an agentic reasoning layer to transform traditional back-end business logic into dynamic agent-driven workflows. Our investments in GenAI Hub and iAURA platforms are accelerating our agentic AI roadmap with our enterprise customers. Our solutions span across industry verticals, delivering agentic experiences such as fraud detection and loan origination in banking and drug discovery, patient engagement, and prescription refills in healthcare, just to give you some examples.
Building these agentic workflows is also spawning off a significant amount of data plumbing and engineering engagements for us with our enterprise customers. A testament to this is the 50%+ growth of our data and AI practice in each of the last two years on back of significant wins across Fortune 1000 customers on such programs. The third pillar of our AI strategy is undertaking inorganic investments to enhance our capabilities. The acquisition of Starfish has given us the ability to disrupt the contact center domain from a horizontal solution perspective and is very relevant to our customers in the tech domain, our banking financial services, or healthcare life sciences. Adding on to that was our acquisition of Arrka that enables us to add important capabilities with respect to data privacy and governance, whether it comes to our platforms and offerings or our offerings based on third-party platforms.
Finally, the fourth pillar is to use all our AI-related investments and capabilities to transform business models in which we engage with our customers. Our endeavor is to get into more outcome-driven and other differentiated commercial models so that while we create significant value for our customers, we are also able to retain a relevant part of this benefit for ourselves and invest in increased R&D as we go along. This should reflect in revenue and margin per employee on our end, getting enhanced over a period of time. Let me now share with you some details on the progress we have made on Sasva and some key case studies. In terms of Sasva, we have filed 15 new patents this quarter, taking the total patent count to 35, covering innovations like backlog prioritization, LLM-driven security simulations, and dynamic data pipeline orchestration.
In addition to these patents, recent feature updates to Sasva include OSS Remediation Factory for automated open-source vulnerability management, Modernization Factory for structured application migration and tech debt remediation, and AI-powered L0 to L3 support integrating GenAI into enterprise support workflows. We are seeing Sasva adoption in customer programs such as technical debt remediation, tech stack monitoring, language upgrades, core product transformation, and automated bug fixes. One of the largest deals that we won in this year in this domain, and which is in current execution, is for a large SaaS provider where we are helping them adopt Sasva enterprise-wide, enabling modern ways of product development, boosting developer productivity, and accelerating product release cycles in a major multi-year engagement.
Now coming on to the strategic partnerships, in terms of the various partnerships that we have with hyperscalers and others, just a brief update on that, we have established a strategic partnership and integrated GenAI Hub with NVIDIA Inference Microservices, NIM in short, for agent-based AI using NVIDIA's AI Foundry models. In terms of Google, we continue to enhance our partnership, and we have been recognized as an implementation partner for Google's Healthcare AI Developer Foundation, and we are working closely with Google to launch AI solutions specific to Healthcare and Life Sciences. An example of such a solution is our Pi- Omni KG, aimed at accelerating biomedical research for healthcare companies. This was launched in Q4 in collaboration with Google and Neo4j.
In terms of IBM, we were awarded as the first runner-up in the 2024 Call for Code Ecosystem Engagement based on our IBM watsonx AI-powered sustainability platform. In terms of Salesforce, we have successfully completed 10,000-plus Salesforce certifications and also expanded Agentforce adoption across 32-plus of our customers. Coming to data and AI-specific partnerships, we have developed an agent-based AI framework and solution for managed services offerings, leveraging i AURA for Databricks and Snowflake platform-led engagements. In summary, we are very pleased with our performance in Q4 FY25. I would now like to invite Vinit to give a detailed color on the quarterly financials and related matters.
Thank you, Sandeep. Good day to all of you. Thank you for taking time out to join us today. Let me now take you through the financial highlights for the quarter and year gone by. Q4 of FY25, revenues stood at $375,200,000 registering a year-on-year growth of 20.7%. In rupee terms, it translates to INR 32,421.1 million, a growth of 25.2% year-on-year. Revenue for the Full Year 25 was $1,409,100,000 with a growth of 18.8% year-on-year. In rupee terms, the same stood at INR 119,387.2 million, a year-over-year growth of 21.6%. EBIT margin for Q4 FY25 came in at 15.6%, a 70 basis point improvement sequentially, and a 110 basis point improvement year-on-year. In rupee terms, EBIT for this quarter was INR 5,052.9 million, translating to a growth of 10.9% quarter-on-quarter and 34.9% year-on-year. EBIT for the Full Year 25 stood at 14.7%, as against 14.4% in FY24. Let me now give you a quarter-on-quarter EBIT margin walkthrough. Starting with the tailwinds this quarter, improved utilization helped margins improve by 20 basis points.
Reduction in Sales, G eneral, Administrative cost has helped us to margins with 30 basis points. A marginally higher earn-out credit versus the previous quarter helped margin improve by 20 basis points. Please note that all earn-out related adjustment for the acquisitions done till FY2024 have now been accounted for. Finally, favorable currency movement helped margin improve by 40 basis points. Certain multi-year managed services deals, which include lab setup for the customer along with procuring third-party tools and licenses, have increased the component of IP revenues this quarter, some of which contributed to lower margins, leading to a headwind of 40 basis points. All these headwinds and tailwinds put together resulted in a net increase of 70 basis points in our EBIT margin sequential.
Also taking into account company performance for FY25, one-time realignment was made between ESOP costs and salary wages and bonus offsetting each other with no material impact on the P&L. Other income, net of finance cost, stood at INR 153.5 million against INR 118.4 million last quarter. Some of you may remember that we had invested INR 430 million in fixed deposit of IL&FS, for which we had subsequently taken a 100% provision in Q4 of FY20, given that IL&FS went through an insolvency process. As a part of the NCLT process, we have now received INR 21.2 million during Q4 of FY25, which has been partly contributed to the increase in other income. We will update all of you if we receive any more payments in future against this investment.
There was a foreign exchange loss of INR 154.3 million as against a gain of INR 144.7 million in Q3, primarily in the account of rupee appreciation towards the end of the quarter, which results in restatement of our outstanding receivables and our outstanding hedges. Effective tax rate for the quarter came in at 21.7% compared to 22.6% in Q3. Effective tax rate for the Full Year 25 was 23.2%, and we expect our overall effective tax rate to remain in the range of 23%-23.5% going forward. Profit after tax was INR 3,957.6 million, a growth of 25.5% year-on-year. This translates to PAT margin of 12.2%. Earnings Per Share were INR 25.60 per share in Q4 of FY25 compared to INR 24.30 per share in the previous quarter. Year-on-year growth in EPS was 23%. We registered a full-y ear PAT of INR 14,001.6 million in FY25, translating to a growth of 28% year-on-year.
PAT margin for the Full Year FY25 stood at 11.7% as against 11.1% in the previous year. EPS for full year financial 2025 was at INR 91.20 per share with a growth of 25.9% year-on-year. Excluding cash from capital employed, Return on Capital Employed for Q4 FY25 came in at 39.7% versus 35.7% same quarter last year. Total cash and investment stood at $270 million as of 31st March 2025. In this quarter, billed DSO came in at 58 days, an improvement of 6 days compared to the last quarter, while unbilled DSO came in at 23 days, an increase of 1 day compared to Q3 of FY25. Our OCF to PAT for Q4 FY25 stands at 108.4%. Forward contracts outstanding as of 31st March 2025 were $300 million at an average rate of INR 86.3 per dollar. Now let me give you some key operational updates.
At the end of Q4, our total headcount stood at 24,594, an increase of 744 from Q4 of previous financial year. Trailing 12 months' attrition this quarter came in at 12.9% compared to 11.5% in Q4 of last year, and it continues to be within our acceptable range. I'm pleased to share with you that in line with our endeavor to maintain a consistent dividend payout ratio, the Board of Directors has recommended a final dividend of ₹15 per share, taking the total dividend for the full year to ₹35 per share. This is to acknowledge the 35th anniversary of the company and the 15th anniversary of listing on the National Stock Exchange of India. This translates into a dividend payout ratio of 39%. The final dividend recommended by the board is subject to approval by the shareholders at the ensuing Annual General Meeting.
Coming to ESG updates for the quarter, Persistent was featured on the NASDAQ Marketsite Tower in Times Square for winning awards at the ICSI Business Responsibility and Sustainability Awards and National Awards for Excellence in Corporate Governance. Additionally, we were recognized at the Institute of Chartered Accountants of India Sustainability Reporting Awards 2023-2024, highlighting our dedication to responsible and transparent practices. Persistent has been included in the top 10% of S&P Global 2025 Sustainability Yearbook, reaffirming our commitment to responsible business practices and long-term ESG impact. Out of 7,690 companies assessed, only 780 across 62 industries were included in the 2025 Sustainability Yearbook based on the S&P Global Corporate Sustainability Assessment Score. Since February 2025, we have achieved 100% renewable energy sourcing for all our own locations in Pune, Nagpur, and Goa through solar rooftops, wind energy, and green tariffs from DISCOMs.
Let me now hand over to Saurabh for commentary on the key tailwinds and awards and recognitions we have received during the quarter.
Thank you, Vinit. Let me begin with software, high-tech, and emerging industries, our largest vertical. Persistent was selected by one of the leading Security Service Edge companies, providing security products to large banks and Fortune 500 companies to accelerate its product engineering roadmap. Persistent's strong relationship with the private equity owner of the company and strong security domain credentials were instrumental in winning this engagement. The benefit to the customer includes acceleration of its product roadmap across Data Loss Prevention and hybrid Secure Web Gateway offerings, as well as improved product robustness and compliance. Persistent was selected by one of the leading software providers to nonprofit organizations to set up an offshore research and development center.
Persistent's product engineering heritage, along with the experience of working with private equity-sponsored technology companies, was instrumental in winning this engagement. The benefit to the customer includes AI-driven innovation across product lines and driving operational efficiencies through the offshore research center of excellence. Persistent was selected by one of the leading cybersecurity companies to take over its Offshore Security Operations Center. Persistent's existing capabilities in the SOC domain were instrumental in winning this engagement. The benefit to the customer includes 24/7 monitoring of the customer SOC, service-level benchmarking, and its continuous improvement. Coming to banking, financial services, and insurance, Persistent was selected by a global leader in tax, accounting, and cash flow management software to develop, enhance, and maintain an AI-driven analytics platform for its analysts. Persistent's long-term engagement and understanding of the client's technology architecture were instrumental in winning this engagement.
The benefit to the customer includes the availability of curated data to improve the productivity of business analysts who are leading automation and inciting initiatives. Persistent was selected by one of the largest US-based financial services firms to create a data platform for regulatory compliance. Persistent's capabilities in and successful delivery on multiple data and analytics projects for the customer were instrumental in winning this engagement. The benefit to the customer includes smooth integration across multiple applications and improved accuracy of regulatory reporting. Persistent was selected by a leading U.K.-based payment solutions provider to undertake architectural assessment, followed by development and modernization of its payments platform. Persistent's capabilities in the payments domain and in cloud and contact center space were instrumental in winning this engagement. The benefit to the customer includes enhanced compliance and security, improved integration with contact center and other platforms in the payment network.
Finally, within our healthcare and life sciences vertical, Persistent was selected by one of the largest healthcare companies in the world for migration of data assets from Teradata platform on-premise to Databricks and Snowflake on the Azure Cloud. Persistent's successful track record in the migration domain and AI and machine learning capabilities helped in winning this engagement. The benefit to the customer includes scaling AI adoption for enhanced patient data management, faster claims processing, and advanced analytics across the organization. Persistent was selected by one of the largest contract research organizations to become a product engineering partner to its research and development solutions organization. Persistent's SaaS-led solution approach, coupled with successful delivery across other projects with the customer, was instrumental in us winning this engagement. The benefit to the customer includes 30% faster releases, improvement in engineering productivity, and quality assurance.
Persistent was selected by one of the leading contract research and development organizations to transform its IT infrastructure and provide managed services support. Persistent's extensive experience with contract research and development organizations was instrumental in winning this engagement. The benefit to the customer includes GenAI-led operational efficiency and compliance with Good Manufacturing Practice in the life sciences services industry. Moving on to the awards and recognitions for the quarter, this quarter saw us get continued recognition from industry-leading analyst firms and associations. To cite a few, Persistent was named a leader in the 2024 ISG Provider Lens for Advanced Analytics and AI Services US and featured in the Gartner Market Guide for Generative AI Services for Banking. This highlights our expertise in delivering GenAI solutions for efficiency, risk mitigation, and digital transformation. Persistent was named as a leader in Everest PEAK Matrix Assessment on Custom Application Development Services 2025 Global.
We were commended for Sasva, our AI-powered platform that delivers productivity gains and automation across the customer application development lifecycle. Persistent won the Google Cloud Infrastructure Modernization Partner Award for successful execution of one of the largest Google Cloud migrations. We were recognized for migrating 6,000 plus microservices, 100 plus petabytes of data, and large-scale AI/ML workloads for a leading e-commerce platform to Google Cloud. Persistent was cited a leader in 2024 ISG Provider Lens Insurance ITO Services Mid-Market North America. Persistent was recognized for deep domain expertise built through collaboration with leading insurers, third-party administrators, fintechs, and diverse industry players. Persistent made a powerful debut with top rankings for client satisfaction and innovation in the European IT Outsourcing Study by Whitel ane Research. Persistent was ranked fourth in the overall ranking and second in the category of transformative innovation.
Persistent was named a leader in 2024 ISG Provider Lens Intelligent Automation Services US. Persistent was recognized at the prestigious Economic Times Human Capital Awards 2025 across multiple categories, underscoring our excellence in people practices. Finally, our CEO, Sandeep Kalra, was honored as a Tech Titan at BT India's Best CEO Awards 2025. With that, let me hand it back to Sandeep.
Thank you, Saurabh. Let me conclude the prepared remarks by saying that we will continue to strengthen our capabilities in the upcoming areas such as AI, as well as in our sales channels, and proactively engage with our customers while striving for top quartile growth in our sector. Given the recent developments in geopolitics and macroeconomic factors around that, we see an increased level of caution in decision-making from our customers and prospects.
However, as always, we are focused on being close to our customers and prospects, helping them solve their business challenges, be it growth or cost optimization. We remain committed to our goal of reaching $2 billion by the end of FY27 and are well on that trajectory. With this, let me request the operator to open the floor for questions. Operator.
Thank you, sir. We will now open the call for Q&A session. We will wait for a few minutes until the queue assembles. We request participants to restrict to two questions and then return back to the queue for more questions. Please raise your hand from the participant tab on the screen to ask a question. The first question is from Ravi Menon.
Hi. Thanks a nd congrats on a good quarter in this challenging environment. I wanted to ask you about the healthcare vertical in particular. There are concerns that providers and payers are under a lot of pressure because there are unexpected costs in Medicare customers and also lower payments from the US federal government. I know that you have a relatively small wallet share among these customers, but do you see this as an opportunity, or do you think there are possible headwinds in these accounts?
Thanks, Ravi. Very valid point. From our perspective, if you look at it, we have continued to grow in the healthcare segment really nicely. There are puts and takes with the DOGE attempts and the USAID attempts to cut costs in various departments, and that is downstream also leading to a certain amount of our customers getting impacted. I'm pretty sure in a bigger picture, if you look at it, this is going to emanate newer opportunities for us to help our customers optimize their costs and so on. Overall, we are bullish on the healthcare sector. Again, as a company, if you look at it, last year, healthcare grew very well. Towards the last two quarters, we saw the banking financial services as well as the tech sector come up very nicely for us. As sum of parts, we are very confident of overall growth. Even within healthcare, we are pretty confident we will have a decent trajectory. There may be a few quarters here or there because of all these macroeconomic and the DOGE and USAID impacts to our customers. Overall, both healthcare and the company should do well.
Thanks, Sandeep. On banks specifically, BFSI, we've seen really good report results by the banks, but people are worried that their due spending might actually be cut back on discretionary programs. I think there is overall a perception that Persistent perhaps is more exposed to discretionary programs. When it comes to cost takeout, you may not benefit. Can you talk a bit about that, please?
Yeah. I think, Ravi, it's been many, many quarters. We have clarified many times whether it is a good economy or a bad economy. We have proven it over the last several cycles. We are not dependent on discretionary spend. If you look at it in the last quarter, when we announced a fairly large win from a financial services customer, it was a vendor consolidation among other things that we did with them. We are very well poised for cost optimization, vendor consolidation, and the likes. Even our platforms like Sasva, if you look at what we are trying to do there, they lend themselves very well to bringing more productivity gains, not just through labor arbitrage, but through technology usage. We are very confident we have to figure out our own revenue pools with our existing customers and new. That should not, I do not think discretionary spend should be a concern for our investors.
One last question. You were talking earlier about how you wanted to now let the SCNA leverage play out because we have made heavy sales investments over the last couple of years when the market was slow. This year, it looks like the market will still be slow. Do you want to continue to invest in sales, maybe even if it means margins don't improve?
Yeah. Two parts to it. If you look at our margins, I'll start with that. Our exit run rate is 15.6% from an EBIT perspective. Our full year is at 14.7%. Our last year was 14.4%. So, 14.4% to 14.7% year- on- year. Last quarter exit 15.6%. If we execute in a disciplined way, even if we were to look at the investments that we plan to do, and we do plan to invest in sales and marketing, if we invest in line with the revenue growth that we intend to have, growth will always be the priority number one. Margin improvement, priority number two. We are on a decent trajectory. At an entry run rate of 15.6% for the year, even if we were to keep it flat or a tad bit lower, we will still deliver 100 basis points. Aspirationally, that is our goal. We will let the market conditions and other things pan out. We control what we control from an operational perspective. We have a good hand. I will leave it at that.
Thanks so much and best of luck .
Next qu estion is from Sandeep Shah.
Yeah, thanks. Thanks for the opportunity and congrats on a good execution in a difficult environment. Just wanted to understand, Sandeep, regarding one of your large accounts in the healthcare has given a profit warning just a few days back. Will it create any uncertainty, though you sounded optimistic about the healthcare, but may result into some large client-specific issue in this account? Also, in terms of your view in the sector vertical-wise growth in the coming year, given the macro uncertainty being higher? I have a couple of questions for Vinit.
Sure. So at a high level, if you look at it, yeah, I understand what you're talking about, the large customer. Our healthcare vertical, obviously, the large customer is there, and then there are many others. Within the large customer that we have, we have multiple different programs that we are engaged on. Some of these are long-range programs which are spanning multiple years. As of this point in time, we do not see a reason for us to be worried on that. We are working very closely with our customers, large or small, in understanding how we need to help them in their challenges. Now, outside of that, if you look at it, if I was to pick the order, Persistent is a sum of parts of these three industry verticals: healthcare, life sciences on one side, BFSI and tech. In my mind, BFSI and tech should lead the growth in this year, followed by Healthcare Life Sciences. Healthcare Life Sciences has led the growth for the last six quarters. It is in a fairly good shape. I do believe BFSI and tech should lead the growth for the coming year.
Yeah, just the last couple of questions. This year, if you look at intangible asset under development, it has gone up and closer to 50 basis points to the revenue on an incremental basis. What I'm saying is the entry, which is reflected on the balance sheet rather than the P&L. What is the nature of the same? Second, on the operating cash flow, if you look at the improvement, it has not been in line with the revenue growth. Any aspirational target entering FY2026 in terms of cash generation?
Sandeep, in terms of the intangible asset, it is on our two counts. One, we did acquisitions during the year, as a result of which there is an addition to the intangible asset. Secondly, as Sandeep mentioned in his opening comments, we continue to invest on Sasva, our AI platform. As a result of that, there are many patents that have been filed. There is a lot of intellectual property that also is getting developed as a part and parcel of the overall, as a part of our overall contribution. As a result of that, there is some increase there.
The second part, in terms of your OCF, operational cash flow, if you look at this quarter, it has improved to 108.9%. And this remains to be our range. We want to be in the 100%-120% range. If you compare it with the last quarter, it has shown a significant amount of improvement. If you look at our DSO, which is a major driver to the OCF, it has improved by six days. The billed DSO has come down by six days. Our aspiration continues to remain that OCF should continue to be above 100%, and we are working on it.
Thank you. All the best.
Next question is from Manik Taneja.
Hi, thank you for the opportunity and congratulations once again for a steady performance. This question was with regards to our healthcare vertical once again. When I look at this revenue split up by customers, it appears that the top single customer has once again grown while we've seen a sharp decline in the rest of the healthcare portfolio. If you could talk about that as well as the potential margin implications of some of the one-time gains that we saw in FY 2025 not being there, in that context, what will be the levers to drive margin expansion in line with our three-year strategy?
If you look at the healthcare vertical, as we said before, there are multiple factors happening there. On one side, there is the DOGE impact on various things, whether it is the Department of Health and Human Services, and so on. The other side is the US AID funding getting cut for various folks across the globe, including the U.S. and others. As a part of that, if you talk to many of the stakeholders in the healthcare ecosystem, anyone who was doing research and was funded by the government, all of that funding has vanished overnight. Similarly, if you look at it, that funding is used to buy software, equipment, services for clinical trials, many other things from the various parts of the ecosystem. That is putting a little bit of a stress on the system. That also is putting a stress on government-funded healthcare plans. One of our customers did have a little bit of a rundown. Adjusted for that, also healthcare vertical for us grew. If I look at our overall pipeline, if I look at our overall scaling of healthcare or overall the company, and as sum of parts, if I look at the BFSI vertical, if I look at the tech vertical, we are fairly confident the company will grow. Healthcare, we have a very decent pipeline outside of the bigger customer and any of those impacted customers by whatever I said. We are reasonably confident that we live in a bigger macro. We'll let it pan out. We are confident the company will grow. Again, we have proven in the last three cycles across the last five plus years our ability to pivot in different kinds of environments. I will leave it there. In terms of the margin levers, I'll let Vinit talk about it.
Yeah. A t the end of the day, look at it that even if healthcare doesn't grow as much as what it has grown in FY25, there are other verticals which are growing, and they are going at a pretty decent pace, and they are generating enough margin. There are many levers at this point of time. As I said, we have been, while our utilization is high at this point of time, we anticipate that this may remain in the tight range for some more period of time till the uncertainty prevails. There are pricing levers that we work on very, very diligently to improve and get incremental impact on our benefit on our revenue. These are all the things which will continue as day in day, while as a percentage is closely watched, we'll continue to make investment. At the same time, the investment also yields benefits in terms of the growth that we are delivering. Net net, we are pretty much confident. We are pretty much on track in terms of delivering our aspiration target of improving our margins by 200-300 basis points as we hit the $2 billion revenue target by FY2027.
Thank you. Next question is from Abhishek Pathak.
Yeah, hi. Am I audible?
Yes, please.
Yeah, hi, Sandeep. Congrats again on a consistent quarter. I had a couple of questions, right? Firstly, as you say, you are still on track to hit that $2 billion revenue run rate by FY2027. How should we think about the growth split between FY2026 and 2027? I mean, in the context of the current macros, should we expect a bit of short-term snags and then maybe an acceleration in 2027? Are you confident that your deal wins and your pipeline give you sort of probably an even split between now and, let's say, FY2027, right? That's one. The second question is on the healthcare deal. I understand that there could be offshoring that might come in from next quarter. Do you think this probably gives us an added benefit in terms of margins going forward? How should we model this as a particular event going ahead? Just the last question on the platform-led revenues and Sasva, do you think the current sort of development kind of pushes back the uptake of your platform services by, let's say, a few months? Is there any way to quantify what percentage of our incremental revenues are coming from platform services and how they should, let's say, evolve going forward? Thank you so much.
There is a bunch of questions in that. Let me first address that. Let's start with the basics. The quarter we delivered was $375.2 million. We multiplied that by four. We are at a run rate of $1.5 billion. Now, you take the growth rate on that if we were to deliver a certain growth rate over the quarters. I'm not just looking at one quarter, two quarters. The life we are living in right now, the macroeconomic thing changes on a day-to-day basis. We don't give forward-looking guidance. It'll be unfair for us to put out any number for this year versus next. All we are saying is we have eight quarters to reach the destination that we have aspirationally of $2 billion. That's an aspiration. That's not a guidance, but we can clearly see the path to that.
We are on that path. Whether it happens more in this next quarter or in the next several quarters the acceleration happens, it will happen. We have proven over the last 20 quarters the ability to increase revenues in different kinds of environments. That is the first part. I am not going to give you the split, but we are relatively confident we will be there. Now, the second part of it, the healthcare deal, offshoring, and so on. As I have repeatedly said over the last several quarters, it is not one deal. It is multiple deals in multiple parts of one customer plus multiple deals in other parts of the healthcare ecosystem. If you look at it, this offshoring also, we have said it has started to happen. It is happening every quarter. We are winning newer business also in the biggest customer and other customers.
I would not be too worried about that. Does it give us a margin lever? Yeah, it does. If you look at it, if you study our financials this quarter itself, our subcontracting cost went up. That went up in this quarter because we basically did a vendor consolidation with a large BFSI deal win that we announced last quarter. That also gives us a lever. In a running business, there are multiple things that are happening which provide you the levers. Please keep in mind, if our entry run rate is 15.6% EBIT, and we work diligently towards improving it, it already is at a good clip with respect to the last year. I will leave that. I sincerely believe we are on a good trajectory both from a revenue and a margin perspective.
We will deal with the macro as it comes. Our intent would be to give it our best, grow better than the sector, and we will see. Now, in terms of the Sasva part of it, look, Sasva is a good tool for anyone, whether it is an enterprise software company or an enterprise, to look at doing the same with less. I sincerely think if we are able to execute the way we are thinking, the percolation should happen at the same pace as we would have thought and t ough macro would actually give an incentive to companies, whether they are PE portfolio companies having multiple products, to adopt Sasva or enterprises to do that. We will let things pan out. We are fairly confident of the traction that we are seeing in the market. Obviously, if the macro becomes tougher, the growth rates will be relative, but we'll let the time pan out.
Thanks a lot, Sandeep. Thanks for that. If I could just chime in with one small follow-up. On the $5 billion FY2031 aspiration, any update on acquisitions over there? I mean, are we closer to finalizing anything over there? What areas are we looking at? Just a small update would be very helpful.
Thanks. Look, if there's an update, we'll clearly call it out. We may even do a call if we do something. In terms of our acquisition strategy, just to remind everyone, there are two or three pivots there. First, we have very clearly said we want to do a revenue diversification. If we do a scaled acquisition, it may be in Europe or related areas. Second, we have said we will do capability-led acquisitions if it is in the US to basically further our journey in the AI space or in a micro vertical or a sub-vertical of the BFSI or healthcare kind of verticals. Third, there are some horizontal use cases in GenAI like we did in contact center space or we did the Arrka acquisition to bring in more capabilities to round up our GenAI offering. Those are the pivots. If we have anything to announce, we'll call for a call and we'll announce. At any point in time, we are evaluating multiple assets. That's all I can say.
Thank you. All the best. Thanks.
. Thank you. Next question is from Dipesh Mehta.
Yeah, thanks for the opportunity. I just want to get sense about the macro uncertainty. Whether we are seeing, let's say, some kind of delay in ramp-up, deal closure, decision-making elongated, as well as some cancellation. If you can give some sense compared to, let's say, three months late, how you are finding overall situation. You indicated caution by client, but if you can give some more detail on it and whether it could have implications in terms of deal signing, what we have very strong deal in take signing over the last few quarters, whether you expect some bearing on it because of overall conditions. The second question I have on Sasva, if you can give some sense about, let's say, how Sasva is impacting overall revenue for us, any quantified number or qualitative color compared to, let's say, four quarters back, how Sasva is impacting overall either deal pipeline, deal booking, or revenue, if you can give some contextual things.
Lots of questions there. I'll try and summarize it faster because we have eight minutes in the call. Dipesh, two, three things. In terms of the macro environment, see, when the US election results were announced, there was a euphoria around the certainty being there. People had started looking at a positive economic uptake and so on and so forth. The discussion had started becoming healthier and newer things were being thought about. In the last month to six weeks, the way things have gone, there are fears in our customers' minds, and they really are seeing an uncertain kind of an environment. Things are very kind of fluid, if I may say so. Having said that, we have not seen any cancellations. Let me put it straight. We have not seen any cancellations. We are seeing a certain amount of feet dragging in terms of deal closures. I do believe personally, in our industry, we will need more pipeline to be able to do the bookings, whether it's Persistent or somebody else. We are at it. We may do investments in sales and marketing and in our go-to-market accordingly. I will leave it there. From overall perspective, again, these are fluid things. Things may change over the next one or two months, but things have slowed down. That's where I'll put it. Now, in terms of Sasva, look, we have no intent of announcing Sasva the revenues, etc. We are using Sasva two ways. We are using Sasva to enable deal wins at scale and implementation at scale. A number of times when we pitch Sasva, the customer may not necessarily buy Sasva, but the customers understand our capabilities. They may leverage our capabilities to help them build a Sasva equivalent, a micro platform for their own business use case or in their overall, let's say, data plumbing, data engineering kind of a thing. To give you an example, right now, if I look at the last 12 months, our data practice has grown to 56% against the company growth rate that you are seeing. There are multiple benefits of that. There are use cases where we are going to software companies and taking over entire products on an outcome basis for leveraging Sasva, productivity gains, and so on. That is where it is. It is a significant part of us growing at the levels we are. I'll leave it there.
Thank you.
Thank you. The next question is from Vibhor Singhal.
Yeah, hi. I hope I'm audible. Thanks for the opportunity and c ongrats, Sandeep and team, for a very tough, solid quarter yet again. Sandeep, my question was related to the macro. I know you've answered it in multiple parts before. If we hear the commentary of other players up till now, I think manufacturing and retail vertical are the two verticals which seem to be hit the most because of the tariff uncertainty, because of the input cost that they're looking at. These are the two verticals which, of course, we don't have much of a presence. That kind of insulates us from the impact to a large extent.
Given our target of $2 billion and $5 billion and our plans to maybe incubate new verticals, where are we on the plans to basically look at these verticals? How are we looking at this? How do you see them playing out? Let's say any, I mean, let's say milestones that we could see in these over the next, let's say, one or two years.
Thanks, Vibhor. Two parts to it. First, the key pivot for us going to $2 billion and beyond $2 to $5 is going into micro verticals in the existing verticals that we have. We have said it multiple times. See, in any economy, in any GDP, if you were to bisect it, BFSI and healthcare are the largest vendors. We have a fairly good business, but a small business as compared to many of our peers.
We believe whether it is that or the capability that we have historically on our product engineering side gives us enough addressable market to be able to grow at a significant rate. That is the thing first. From an organic perspective and even tuck-in perspective, we will do this. Second, if we want to go into the newer verticals, whether it is manufacturing or others, we may do, as we go along, acquisitions so that we enter it with a dominant force rather than incubate and be a weaker player in that. We have clearly laid out our aspirations. We are on the path. If you look at it, we are pretty much midway to $2 billion. We'll keep executing on each one of these. We talked about our M&A strategy earlier in this call as well. Important.
If I could just maybe dwell on that a bit more. I think given the run rate that we have at this point of time, I think the path to $2 billion is fairly visible. Do you think, I mean, I know you mentioned that we'll probably look at other verticals, but do you think these three verticals can actually take us to that $5 billion mark? To reach that mark, we will definitely need some new greenfield verticals.
Look, these verticals have enough addressable market for us to keep growing for the next seven. Between now, if you look at it, we are in 2025. We are talking of 2031. We have enough time to take decisions on adding a vertical or multiple verticals as we go along. For now, we are heads down in execution.
We have rolled out a sub-vertical strategy within the company. We have hired the leadership for sub-verticals in many places. We are on that path to execute on that. As opportunistically, if we get a very good acquisition target which fulfills the various criteria we have laid out, we will execute on that. Rest assured, look at the last five years. $481 million was our revenue for FY2019- 2020, in that range, right? We have tripled the company from there in five years.
Thank you. Got it.
The next question is from Nitin Padmanabhan.
Thanks, Sandeep. So, w hat are your thoughts on the utilization rate? It is at an all-time high. How is it operationally changing for us? We have never operated at these levels. Is there a sort of new band we can operate at? That is number one. Number two is this. What are your thoughts on the GCC business that we have? How large is this? And how has it sort of evolved since you sort of started? That's the second thing. I think these are two primary questions here.
I'll try and quickly answer this. We have just two minutes left in the call. As far as utilization is concerned, we are comfortable in this trend. There are two parts to it. One, I can say with pride, there are enough and more people who would love to join our company. We have come to a point where people are able to hire is not a question mark. Two, the market environment is such there are only a handful of companies which are growing.
The war for talent is not at that footing that we need to have a big bench and so on and so forth. We are fairly comfortable where we are. These are things that we will keep tuning in line with the macroeconomic environment, both from a cost and a demand perspective. We'll see where it goes. In terms of GCC, GCCs are a fair play for us for a fairly long period of time. If you look at any of our top customers, we have co-existed. We have cooperated with their GCC and their parent. I can't quantify a percentage for you on this call, but maybe we'll get back to you offline on this. With that, operator, I would want to just summarize the call, and then you can pretty much close the call. It is a tough macro environment out there.
We have a good pipeline. We have a good set of customers. We have scaled our customers, whether you look at any of the categories we talked about, whether it is greater than $5 million or greater than $75 million. We are confident of delivering within the same macro, better than industry results. Whatever hand is given to us, we'll try to do our best in that. With that, we'll stop here, and we'll look forward to meeting you and giving you an update in t he next few months. Thank you.
Thank you very much to Persistent Systems Management Team. Ladies and gentlemen, on behalf of Persistent Systems, that concludes today's conference. Thank you for joining us, and you may now disconnect your line and exit the webinar. Thank you, everyone.