Ladies and gentlemen, good day, and welcome to RateGain Travel Technologies Q4 and full year FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on a touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bhanu Chopra, Founder and Chairman from RateGain. Thank you, and over to you, Mr. Chopra.
Thank you so much. Good afternoon, everyone. Thank you for joining RateGain Travel Technologies Q4 FY 2026 and full year earnings call. This call marks the close of a defining year for RateGain. One in which we materially expanded both the scale of our platform and the breadth of our market opportunity. This was an important year for us operationally, strategically, and structurally. The opportunity ahead of us is the largest we have ever seen. For Q4 FY 2026, we reported the highest ever quarterly revenue of INR 716 crores, up 175% year-on-year. Within this, the RateGain organic revenue stood at INR 311 crores, up 19.3% year-on-year, which is in line with the messaging shared with you in earlier calls of RateGain, getting back to double-digit organic growth by the end of fiscal year 2026.
Our adjusted EBITDA for Q4 came in at 23.5%, a growth of 177% compared to same period last year. The EBITDA is adjusted for the deferred team consideration related to the Sojern acquisition, which is due to be paid for three years given the team meeting agreed upon revenue growth and EBITDA targets. For the full year fiscal year 2026, revenue came in at INR 1,824 crores, reflecting a 69.4% growth year-on-year. This is ahead of the revised guidance we gave post the acquisition. We have also now crossed a new record of INR 2,850 crores on annualized revenue run rate basis. Given the strong momentum on free cash flow generation, we expect to retire the balance of acquisition-related debt by fiscal year 2028. By fiscal year 2028 end, we will be debt-free.
Before I go into the business segments, I want to set the strategic context for this year because the numbers alone don't tell the full story. FY 2026 was the year RateGain crossed a structural inflection point. The completion of the Sojern acquisition, the unification of Adara under the Sojern brand, and the creation of the world's largest source of travel intent data were not just milestones, they were the foundation of a fundamentally different company. We entered fiscal year 2026 as a strong travel technology platform. We are exiting it as the AI-powered operating system for travel revenue growth, connecting demand generation, distribution, and revenue optimization through one intelligent platform spanning marketing, data intelligence, and guest engagement. No other player in our market combines travel intent data at this scale, distribution infrastructure of this depth, and the AI-powered commercial intelligence under one roof. That integrated stack is our moat.
Just to give you an update on the Sojern integration, I'm pleased to state that it is ahead of plan. We've delivered the full cost synergies in Q4. Adara and Sojern have been unified under a single brand that is Sojern. The underlying technology platforms of Sojern and Adara are now consolidated into one platform. Full customer migration to that unified platform is on track and is set for completion by end of Q2. Equally important, we have also consolidated the data partnerships that Adara and Sojern each brought into the combined entity. RateGain today operates the world's largest single source of travel intent data at a scale no other provider in our market can match. The integrated platform now delivers two things at once, operational efficiency on the cost side and an unmatched data moat on the revenue side.
Both translate directly into pricing power and commercial momentum as we move through FY 2027. Our focus for FY 2027 is clear, driving GPM growth and converting platform strength into commercial momentum. With 13,000+ customers across the combined business, the cross-sell opportunity ahead of us is significant, and we are pursuing it with structure and urgency. Every product we are building, every promotion we are driving is aligned to three outcomes for our customers. Acquire guests efficiently, engage them meaningfully, and expand wallet share over time. That is the integrated thesis, and that is the opportunity ahead. Let me walk you through now each of our businesses. Our number one engine is our MarTech engine. MarTech continues to be our largest growth engine and an increasingly strategic differentiator for the company. I wanted to highlight some key points here.
The Sojern property business is performing well and with strong customer addition, improved conversion, and sustained pipeline momentum. Our value proposition for hotels is clear: drive direct bookings and improve marketing ROI. APAC is our priority growth engine for FY 2027, where we see the strongest pipeline and fastest adoption. Our travel intent data platform was showcased through the FIFA World Cup 2026 Market Pulse Dashboard, a free real-time intelligence tool built on Sojern's travel intent data, tracking booking signals across all 16 host cities in the U.S., Canada, and Mexico. This serves as an early proof point of the combined platform's value, generating significant global media attention and positioning us at the center of industry conversations regarding destination intelligence. As the world's largest travel intent data company, we are increasingly the source for major media seek out for expert commentary on global travel demand.
In the first five months of 2026 alone, our data has driven record-breaking coverage across the world's most influential business publications, including The New York Times, Reuters, the Financial Times, Bloomberg, CNBC, Axios, and The Seattle Times. 78 dedicated articles since March alone. A single Reuters feature built on our RateGain World Cup Index was republished 104 times across global outlets, including MSN, The Independent, The Economic Times, and The Straits Times. We are no longer simply a vendor of travel data. We are becoming the definitive read on global travel demand, and that is a position no competitor in our space holds today. AI strategic focus. AI remains a core focus with investment centered on helping travel brands remain discoverable and commercially optimized as travel behavior towards AI-powered and intent-led experiences.
Our MarTech team won eight 2026 HSMAI Adrian Awards, one of the hospitality industry's highest market recognitions, reinforcing the momentum the business is building. Let me now speak about our Distribution business. Distribution had a soft year on headline growth, but the strategic work done in FY 2026 has meaningfully strengthened the platform and positioned us well for FY 2027. Enterprise conversations are increasingly moving beyond connectivity towards broader distribution optimization, profitability improvement, and AI-native automations across the full stack. This reflects the maturity of the UNO platform. We are increasingly being viewed not simply as a connectivity provider, but as a strategic and outcome-oriented infrastructure partner for modern hotel commerce. A key strategic addition during the quarter was RateIQ, which addresses a challenge many large hotel chains face, being connected to dozens of OTAs without clear visibility into which channels are truly driving bookings and where revenue leakage exists.
RateIQ uses AI to surface gaps such as missing inventory, parity breaks, and underperforming OTA connections while quantifying the commercial impact of each. We announced Agentic ARI, making UNO industry's first channel manager built on intelligent distribution logic, prioritizing rate and inventory updates by booking urgency and commercial impact. Hotels are seeing up to a 30%-40% optimization in ARI traffic and meaningfully improved rate accuracy. This is a structural shift in how distribution technology works. One of the big global OTA has shown interest in piloting Agentic ARI platform to pre-process their traffic from other sources, so to increase effectiveness of their integration and revenue strategies. We introduced RG Pay, a unified embedded payments infrastructure bringing together localized payment acceptance. RG Pay is live with Juspay, Easebuzz, and Cashfree Payments and extends RateGain's role deeper into the commerce infrastructure layer of travel.
Let me talk about DaaS. The DaaS segment delivered steady performance through FY 2026 and continues to be a reliable contributor to overall growth. Our air segment, the air business continued its strong momentum with new airline wins across emerging and high-growth markets globally. Singapore Airlines extended its partnership with RateGain for an additional four years, while new customer additions included Tigerair, Myanmar Airways International, Mongolian Airlines, AZAL, and Air Serbia, further strengthening RateGain's global presence. The business also secured marquee long-term partnerships with Vietnam Airlines and Philippine Airlines, reinforcing RateGain's growing position as a global air travel intelligence platform. The product front, RateGain launched the new Route Performance Digest, providing airlines deeper visibility into route-level performance and competitive positioning. RateGain is also preparing to launch the industry's first agentic AI interface, enabling faster insights and more intelligent decision-making for airlines.
On the OTA, we continue to deepen our presence across key accounts and continue to see healthy volume momentum. In the car segment, we delivered a solid performance with continued engagement with existing enterprise partners and expansion discussions progressing well across key markets. On the hospitality side, we've evolved from a market monitoring tool into an active decision support platform with the launch of [Lens]. Our AI-powered conversational intelligence layer that enables revenue teams to interact with complex pricing parity and demand intelligence through a conversational interface. FY 2027 focus will be on scaling through these partnerships. Let me now talk about AI across our stack. Our approach is to really build AI agents that do the work in our industry. For instance, a revenue manager AI agent, a distribution AI agent, and a marketing AI agent.
They are semi-autonomous first and then fully autonomous as the customer has built comfort with the AI agent. We currently provide tools to this audience, ultimately we see that agents will do the work. Some of it I have already mentioned in my commentary, just to reiterate, we are building AI ads and campaign agents, running independent campaigns through AI agents to deliver higher ROI for our customers. Agentic AI that I spoke about earlier reduces the traffic by 30% to 40%, improves rate accuracy across channels. This data reduction translates directly into savings for our customers and reduction in errors. UNO VIVA handles voice reservations across 30+ languages, is available 24/ 7, with hotels reporting up to 40% increase in revenue. AI concierge deployed across Red Roof's 700+ properties is now delivering up to 300% improvement in ancillary revenue and 75% improvement in NPS.
At RateGain, AI is no longer experimental. It is embedded across commercial workflows, delivering measurable revenue impact, operational efficiency, and stronger customer retention. This intelligence spans marketing, pricing, distribution, and guest engagement. That integrated stack, embedded, measurable, monetizing, is our moat. Let me now talk about people and culture. We are now over 1,300 strong globally and recognized as a Great Place to Work for the seventh consecutive year in India and for the first time in Spain and U.S. RateGain was named Emerging Company of the Year at The Economic Times Awards for Corporate Excellence Award, one of India's most prestigious corporate recognitions. To be recognized alongside some of the most iconic business leaders in the country is both humbling and validating. It reinforces the credibility of our acquisition strategy, the strength of our integrated platform pieces, the discipline of our execution, and the ambition of our long-term vision.
Within people and capability development, we rolled out Delta, our AI-powered learning platform, delivering personalized role-specific learning journey. We announced the launch of RateGain Varsity, a digital marketing certification program for hotel commercial and marketing teams globally, bridging the clarity gap the industry faces in activating technology effectively. Let me now talk about the organic growth and guidance for FY 2027. We expect to grow the revenues to INR 3,000, INR 3,100 crores, which translates to 65%-70% growth for the full year FY 2027 over FY 2026. This implies an organic growth of 12% to 15% for the combined entity, both RateGain and considering Sojern numbers from the prior year. On the margins front, we expect to deliver an EBITDA of INR 650 crores to INR 700 crores. That's a margin of 21.5% to 22.5% for FY 2027. This does not include the earn-out consideration related to the Sojern acquisition.
In closing, FY 2026 was a year of transformation and foundation building and validation. As we enter FY 2027, our focus shifts from integration to monetization, scaling enterprise adoption, deepening customer wallet share, and translating platform scale into beautiful profitable growth. Our ambition is to build a billion-dollar revenue company by FY 2030-2031, is grounded in the platform we have built, the markets we serve, and the commercial opportunities now opening across the combined business. The platform is built, the data is unmatched, the integration is on track, and the opportunity ahead is the largest in our history. We're building an integrated AI-powered travel technology stack focused on three outcomes for our customers: guest acquisition, guest engagement, and guest wallet share expansion. We are doing so with measurable outcomes. With that, I will hand it over to Ankit Agarwal to walk you through the financials. Thank you.
Thank you, Bhanu, and very warm welcome to everyone on this call. It is pleasure to connect with everyone on the call today. This quarter marks another important milestone in RateGain's growth journey as we delivered a strong all-around performance across revenue growth, profitability, and strategic execution. Starting with an update on numbers for Q4 FY 2026. We have reported our highest-ever quarterly revenue of INR 716 crore, a growth of 175%, with operating margin coming at 20.5%, showcasing disciplined execution even as we continue to invest. This revenue includes full quarter of Sojern's revenue. RG organic revenue grew at a healthy pace, coming in at all-time high of INR 311 crore, growing at 19% compared to the same period last year. RG organic growth is back in double digit as we had mentioned earlier in the last quarter.
Within this, I'm happy to report that DaaS segment grew at 21.5% in Q4 FY 2026 with healthy performance across the organic DaaS business. RateGain MarTech business, excluding Sojern, grew at an impressive pace of 37.5% in Q4, with healthy performance across all three segments. As Bhanu had mentioned earlier, we have also reported an adjusted EBITDA margin of 23.5%, slightly ahead of our Q4 exit margin last year. This adjustment is part of earn-out consideration related to Sojern acquisition will be expensed over three years. This expense is in cash and SaaS will true up or down in line with the actuals since this entire payout is conditional in nature over a period of three-year basis revenue growth and EBITDA target. This amount will be in the range of INR 20 crore-INR 22 crore per quarter for 12 quarters from here on.
With the earn-out, consolidated EBITDA stands at 20.5%. RG organic Q4 EBITDA stood at 20%, ahead of the stated guidance. The adjusted PAT for Q4 stood at INR 90.9 crore with a margin of 12.7%, and INR 249.9 crore for FY 2026 with a margin of 13.6%. The PAT for the quarter stood at INR 70 crore with a margin of 9.8%, and INR 194.4 crore for the full year FY 2026. I would like to walk through the bridge from EBITDA to PAT as it is important context for projecting EPS for 2027 and beyond. The key recurring component of this delta are amortization of Sojern purchase price consideration. This is a running $2.8 million per quarter and will continue for a duration of amortization schedule. Finance costs are running at approximately $1.6 million per quarter and will continue to reduce as we repay principal.
On debt repayment, we have maintained strong discipline, having repaid $31.5 million to date, equivalent to 25.2% of the original loan through a combination of scheduled installment and prepayment. This brings our current outstanding balance to $93.5 million. Unlike Q3, which carries an exceptional one-time charge of INR 34.6 crore related to M&A cost and labor law changes, Q4 had no exceptional items. This is directly reflected in the strong sequential PAT recovery from INR 26.5 crore in Q3 to INR 70 crore in Q4. PAT has also been impacted by a reduction in interest income as the surplus cash previously earning interest was deployed towards the Sojern acquisition. This is a structural reallocation of capital and it should not be read as recurring operational drag.
At an overall level, recurring EBITDA to PAT delta is approximately $6 million-$6.5 million per quarter, comprising amortization of acquisition cost, finance cost, and forgone interest income on the fund deployed for the acquisition. It is worth noting that actual cash impact of this delta is only $3 million-$3.5 million per quarter as amortization is a non-cash charge. We are actively working to offset a significant portion of this through our cost synergies and operational leverage as integration benefits flow through. Sojern integration is progressing ahead of plan, and our focus remains on driving higher organic growth, accelerating cross-sell opportunities, and expanding our presence in high-growth geographies. To make calibrated investment where we see the right opportunities. On synergies, I'm pleased to report that we have exceeded our initial phase one target.
Annualized cost synergies now stand at $15 million, up from the $12 million we had communicated last quarter. This positions Sojern on a clear trajectory towards 19% to 20% EBITDA margins. Free cash flow generation in Q4 was healthy at INR 82 crore, bringing full year FY 2026 free cash flow to INR 230 crore. Going forward, we are confident of generating cash flow at a healthy pace and expect our free cash flow to EBITDA conversion to be higher than 75% in FY 2027. We continue to have a strong balance sheet with our net worth currently at INR 2,005.8 crore, and our cash and cash equivalent balance at end of quarter stood at INR 199 crore. Net debt as on date is down to INR 722 crore. The broader travel industry continues to prioritize technology investment that can deliver measurable revenue outcomes and operational efficiency.
We believe this positions RateGain strongly given our expanding global footprint, diversified product portfolio, and increasing relevance across the travel and hospitality ecosystem. As we move ahead, our focus remains sustaining profitable growth, driving integration synergies thoughtfully, and continuing to strengthen our platform capabilities for long-term value creation. With that, I would like to close my remarks, and we are happy to open the floor for the questions. Thank you.
Thank you very much, sir. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Karan Uppal from PhillipCapital India. Please go ahead.
Yeah. Thanks for the opportunity and congratulations on the recent set of numbers. The first question is on the MarTech segment. You mentioned about the scale of your operations combining Adara and Sojern. If you can just throw some further color as to how many data partners are there in total with the combined Adara and Sojern entity, how many unique travelers are being targeted by RateGain in a particular quarter? How does these metrics compare with the second or the third player, just to get some sense.
On the platform side, I'll take that part of the question. Essentially, both Adara and Sojern, as you know, are in the same realm of business of doing digital marketing and were using independent platforms. We took the decision to consolidate that platform into one platform. Essentially, we have now merged the platform, and every new customer that we bring on board will be executed on the new platform. In addition to that, we have now also, from a go-to-market perspective, consolidated the brand. Instead of operating as two separate brands, as Sojern and Adara and RateGain, we are now taking our MarTech brand largely as a Sojern brand. We have deprecated the Adara brand.
Similarly associated with that, we have combined now the different teams, the go-to-market teams, the product engineering teams into one consolidated entity into our MarTech business that we are referring to as Sojern. In terms of the number of data partners, Divik, would you be able to give those numbers?
Yeah. This is Divik. I think in terms of data partnerships, we would have on a combined basis over 320 data partners for the combined entity, combining both from Adara and Sojern onto the one platform. In terms of travel graph IDs that we are tracking, that would be over 1.5 billion graph IDs. That's not to say that that's individual travelers that we are tracking. Those are graph IDs that we are tracking.
Okay. Any metrics in terms of the peer comparison? How do you relate to the second largest or third largest player in the metric?
As I mentioned in my commentary, there isn't really a true competitor to us now, which is even anywhere close that is worth mentioning. We operate in largely three segments. On the property side, I would say there is.
Pretty much very limited competition. If I had to compare the second nearest competitor to us, that would be just one-fifth the size of our properties business alone. In fact, pretty much every major technology partner that requires digital marketing capability is white labeling our product now. On the DMO space, we are absolutely number one. The nearest competitor would be one-tenth our size in the DMO space. On the corporate side, I would say that we are largely competing with, when I say corporates, which is the large enterprise travel brands, we are largely competing with agencies which are non-tech, and we continue to see a shift of business from there over to us.
Got it. Thanks for that color. Bhanu, just on AI, because of the changing customer behavior, lot of planning and itinerary creation is happening on these platforms like ChatGPT. How does a player like Adara or Sojern capture the high-intent travel customers in this scenario? Do you plan to partner with these frontier AI companies to source this data? Or will they be open to it? Secondly, how does the customer targeting be impacted as lot of these high-intent travelers move to AI companies?
So we are in active conversations with all the AI services, both in terms of being able to get the data, but also being able to advertise. As you know, OpenAI is now contemplating selling ads, and we are in early conversations with them to enable and serve ads on their platform from a travel and hospitality perspective. Similarly, we are very heavily engaged with Google to leverage their platform, both from a perspective of using their ad inventory on the AI services and also in terms of data partnership.
Okay. Thanks for that. Thirdly, in terms of the organic guidance which you have shared, 12% to 15% in INR terms, if I just convert it in the dollars terms, it appears to be in, I think, mid-single- digit to maybe high single digit. It appears a bit conservative given the good tailwinds which we had. Is it due to, let's say, West Asia crisis, which is impacting travel? Any further color you can share on the organic guidance? Also if you can share the outlook across segments, DaaS, Distribution, and MarTech. Thanks.
On the USD guidance, we are at about, I don't know where you got single-digit. We still believe we are double-digit growth on the dollar guidance between 10%-12%. On the individual products, just give me a second. Divik, would you be able to give the—
Yeah, yeah.
—slides to me? Yeah.
I can do that. If we were to break this down, as Bhanu mentioned, on a USD terms, we are looking at 10%-12% kind of a growth is the outlook that we have.
The DaaS growth is probably expected to be a low double-digit number, which is going to be in the 10%-14% growth range is where we expect DaaS to grow, as we still continue to see good traction with some of the MarTech clients and volume growth opportunities over there. Distribution, I'm happy to report from a soft year that I think it's safe to say that this quarter it has kind of bottomed out. From here on, we do expect to see growth going into next year, which will be anywhere like a mid-single- digit growth is what we see.
On the MarTech side, at a consolidated level, we see opportunity for about, again, 12% to 15% kind of a growth for the MarTech segment as a whole, within which we do see properties business growth to be on the higher side and then low double-digit growth across our destination segment. SoHo, which is a very small piece, is expected to grow at a very healthy 30%+ kind of a number. Please do keep in mind, Karan, that we'll always be very conservative with our guidance going forward, and this 10%-12% number is the conservative number that we are guiding the market on.
Yeah.
The idea is to always outperform on guidance and beat it, and outperform on that front.
Perfect. Sure. Thanks a lot. I'll come back into the queue.
Thank you. Next question is from the line of Nitin Padmanabhan from Investec. Please go ahead.
Yeah, hi. Good evening. Thank you for the opportunity and congrats on a solid quarter. I had a couple actually. One is, you mentioned that APAC is seeing very solid traction in terms of deal wins and stuff. If you could give some color around what's driving that strength, how are you seeing UNO there, and how are we looking to sort of replicate this success in the other geographies? What at the moment are constraints to be able to sort of replicate that at the moment? That's the first one.
Yeah. Hi, Nitin. I think we talked about this a lot in the last few quarterly calls about our investments into go-to-market. We had talked about investing about $5 million largely in doing go-to-market investments. Most of those investments went into building out our APAC sales and customer success teams. Just to give you an idea, we were about 15 people at the beginning of FY 2026, and today we are almost sitting at 85 people in that team. We are seeing some excellent traction in terms of bookings velocity as a result of that. To your point about replicating similar process in other geographies, that's the intent. We intend to take up Europe next. We already have a significant team in Europe given the Sojern acquisition and, we have a bunch of people there already.
Our aim will be as long as our thresholds on sales and marketing investments are being met, then we will continue to reinvest. I do see acceleration of investment in Europe and LATAM. Then in the U.S., I feel like we have a fairly large footprint already, but we are continuously seeking opportunities where we can double down on investment.
Got it. In that context, while we did, let's say, $5 million of GTM last year, are we looking to up that? If I look at the guidance compared to this quarter's adjusted margins, you seem to be sort of highlighting a lower margin for next year. Is that sort of a certain level of GTM that you have in mind that you're already investing, or is this conservatism and this will sort of evolve as we go forward?
We're taking a calibrated approach. The idea is we made a lot of investments. We are integrating the teams in U.S. and Europe between Sojern and RateGain. As we normalize those efforts, the idea would be to continue to invest where we see the opportunity. It's hard to suggest a number as of this point, a definitive number. As you can imagine, integration has also created a larger footprint in some places. For instance, we may have from Sojern and RateGain more number of people servicing a certain geography, and we have the ability to reallocate that to under-penetrated geos. That's some of the work that we will do first, and then we will look to invest more. We will keep you posted as we sort of go along. It's hard to put out a number right now.
As I've been stating, the opportunity is there, and we will continue to accelerate the organic growth.
I asked that because the $ 15 million is a good almost 5% on revenue. In that context, the guidance appears relatively conservative. Yeah. That's where I came from. Perfect. That's helpful. The only other thing is that, if you think of geographies, at the moment, you're the most bullish on APAC obviously because a lot of work has gone into that geo last year. When you think of the other geographies, which geography do you think really leads growth from a geographic perspective between Europe and Americas which is seeing more traction at the moment? Finally, I think from a deal wins as well, looks like we have not included Sojern, right? While the deal wins have been solid on an organic basis, that number does not include Sojern, so maybe understated.
Just wanted your thoughts there as well in terms of how we should sort of broadly think about that.
Yeah. In terms of the growth regionally, I think the U.S. growth will mimic the consolidated growth numbers that we have projected, and as you know, it still is a majority of our revenue. I do see an opportunity of acceleration both in Europe and APAC. It's not that I'm not bullish about U.S., it's just that the revenue base in the U.S. is significantly higher now than other regions. I do see that ultimately APAC and Europe will probably be exceeding our overall consolidated growth numbers.
Perfect. Very helpful. If I may, I'll just drop in one more. In the context of a lot of transaction-based revenue and what we are seeing today in terms of APAC going up and all of those things, do you think that in some form is a potential risk to growth for us? How should one think about that broadly?
Yeah. I almost feel like our business is counterintuitive in terms of growth to the overall industry growth. What do I mean by that? I feel like people usually come to us when they are slightly troubled and need ways to unlock revenue through technology. I mean, just to give you an example, for instance, in what's happening in Middle East. The DMOs in Middle East, obviously they have paused on what they have been doing with us, given the situation there. The commentary they are giving to us, that as soon as things stabilize, the budgets that they have and what they will be willing to spend, is something that we have never seen before.
While the Middle East business may only go back up slowly, but because we are enablers of unlocking revenue opportunities, we will be seeing a lot more opportunity from our DMO marketing activation perspective. On the whole, it kind of does employ in other areas also, because if the hotel is full and it's able to charge more, we usually see a smaller need to use us. It's when they need opportunities to unlock revenue and drive more cost efficiency, that's when they think of us, even in good mood. Yeah. I'm not worried, and I see a very good opportunity ahead of us.
Super. That's very helpful, Bhanu. Thanks a ton, and all the very best for the next year.
Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please restrict yourself to one question only. Should you have a follow-up question, please rejoin the queue. Next question is from the line of Ankit Kanodia from Zen Nivesh. Please go ahead.
Thank you for taking my question. I have just one question. In fact, I happened to read one news article, which I got from your LinkedIn post only, which reads as, "Competing for relevance in the AI era." I would just request you to kind of little expand on this theme, how we are positioned for this, and how do we see our business evolving based on this? I'm not asking for a guidance, but maybe some color as to how our revenues will look like given this new era. If you can throw some light, that would be very helpful. Thank you.
Absolutely. Let me break the question into a couple of parts on how I believe AI is helping us internally and what we are doing with it externally, and what I believe is going to help in terms of our story and scale in years to come. Internally, what I am very excited about is, of course, the operational efficiency and the productivity that we are able to drive, our revenue growing in every function. What excites me the most is our ability to prototype and test new concepts very quickly. I'm happy to report to you that as a result of AI tools now, our ability to experiment has gone up several folds. The number of experiments that we are running is several fold versus what we could run earlier.
Also our cycle to prototype, take it to market, validate the thesis, has also shortened quite significantly as a result. As a tech company, ability to test new concepts and take it to market is very fascinating. I've talked about internally how we are using it from an engineering perspective, from a product perspective, even in our HR, a lot of our retention and hiring capabilities and processes now have AI embedded into it. We have our first AI HR person, which is REMO. REMO is available 24/7 and speaks 30 languages. On the external side, I talked about a lot of our capabilities that we have launched on our MarTech, running AI ads. We are running internal AI campaign agent.
One of the outcomes of being an AI-native product is to have an outcome-based pricing, which we already inherently had built it in our business model. If you look at our MarTech business, we usually go to the hotel and say that, "Look, we will take the onus of doing all your digital marketing, and for every booking that you get, you pay us an X percentage of that booking." There is no subscription fee to be paid. How we run those campaigns now internally is completely automated and being run by AI agents. On our Distribution side, I talked about Agentic ARI, which is reducing the traffic between the hotel and the OTA systems. We're very encouraged by what I talked about in our opening remarks.
We have one big OTA that wants to use our ARI agent to monitor the traffic between hotel, then to reduce that traffic, because that reduction of traffic could mean savings of hundreds of millions of dollars in token consumption and cloud bill. That's very exciting. Similarly, we are yielding more bookings because we are enabling more real-time sync between the hotel and OTA partners. On the DaaS side, we have now moved from just not providing intelligence, but actually doing the work. For a couple of segments, we are launching an AI revenue manager. Then one of the key AI offerings that we launched a couple of quarters ago that is seeing a lot of potential for us is our Viva product, which is an AI-enabled voice agent.
It basically enables a hotel to receive calls through this AI agent and can answer any discoverability-related questions about the hotel, take bookings, et cetera. A lot of our hotel customers, midsize customers that have reservation offices are seeing a huge advantage in deploying AI agents. Why? Because the AI agent is available 24/ 7, can speak multiple languages, does not need to be continuously trained, because as you know, call centers have a huge churn problem. We're able to solve for that. Overall, the fact that I've talked about this, data is the new oil in this AI world, and we are the largest producers of travel intent data, distribution, and pricing data.
That creates a moat for us in this AI world, and we are very confident of being able to commercialize this into AI agents that actually do the work for the segments that we serve. Instead of providing tools that a revenue manager, a distribution manager, and a marketing manager can use, we ultimately want to be able to provide autonomous agents that actually do the work. Think of us as being a vertical AI specialist that will be able to spawn out AI agents to take advantage of all these commercial opportunities that are presented.
No, that is very helpful. My question was more related to this point, which the article talks about, which is basically the next era of travel marketing will be defined less by volume and more by relevance. If you can probably expand on this one, that would be very helpful. Thank you. That is my last question.
Yeah. I'm sorry I don't recall the post because I have been posting a bunch about AI and also why companies like us are in a position to take advantage of this AI opportunity. If you're talking about my recent post about relevance of AI, I think that post is referring about how we are able to use, as I mentioned, our travel intent data to be able to personalize both basis pricing and the needs of the customer, to drive a larger conversion and thus a larger return on ad spend.
Thank you so much, and all the best for the future.
Thank you.
Thank you. Next question is from the line of [Miten Shah], an individual investor. Please go ahead.
Yeah. Am I audible?
Yes. Yes, sir, you are.
Thanks for giving me opportunity, and congratulations on great set of numbers. I just missed the initial con call during discussion regarding the FY 2027 guidance. Did I hear it correctly? I don't know, somewhere targeting around INR 3,000 crore top line and around INR 600 crore as the bottom line with 21.5% margin. Was my understanding correct?
We are projecting INR 3,000 crores-INR 3,100 crores in revenue, which translates to about 65%-70% growth over this year. On the margins front, we are targeting an EBITDA of INR 650 crores-INR 700 crores, which is a margin of 21.5%-22.5%, but this does not include the earn-out payments for Sojern.
Got it. Thanks a lot for that clarity. I believe, I don't know if you recollect, Bhanu, I've been attending the con calls since last four years actually almost since inception when we got listed, and I'm investor till then. My confidence keeps on increasing for every con call that I attend. Thanks a lot for your kind guidance. We expect $1 billion. Was it FY 2030, if I'm not mistaken?
FY 2031. FY 2030/2031.
FY 2031. I guess we are pretty much close to that. Only one thing what I wanted to ask, if I see the presentation, Bhanu. Of all the verticals, obviously hospitality seems to be the major chunk, somewhere around 45%. What I see is that the DMOs constitutes almost 1/4, almost 25%. Is that a larger TAM than even the airlines sector by any chance?
Sorry. Could you repeat the last question? I didn't follow it.
Yeah. If I see the presentation, the hospitality sector seems to be the larger chunk of our revenue, almost 45%.
That is correct.
I see that the DMOs constitutes almost 1/4, almost 25%, which is even larger than the airline sector. Is it that the TAM on the DMO sector is larger, or is it that we are less penetrated in airlines? I thought airlines would be a comparatively larger TAM as compared to the DMOs. Our DMOs constitutes 25%.
I think it's something that I'll have to come back to you. My sense on the TAM for airlines is that it's significantly lower. I will say, at the same time, we are quite under-penetrated. Given now the combined unit, I think there is a huge opportunity for us to cross-sell and upsell to RateGain customers because RateGain has a much larger footprint with airlines on the DaaS side. We will now have the ability to cross-sell and upsell our MarTech solutions to them, and we are seeing some very good early signs both on car rental and airlines. We'll have to come back to you on how big that TAM is for airlines versus hotels.
No, the only reason why I asked, because our revenues in DMOs are almost 25% as compared to airlines, which is hardly less than 10%. That's the reason why I asked this.
Yeah.
Mr. Miten—
Yeah.
I think I got a part of your question. I'll take this offline with you, and I'll send you an email and connect with you over a call on this.
Not an issue. Thanks a lot once again. Thanks for the opportunity. Wish you all the best.
Thank you.
Thank you. Next question is from the line of Anmol Garg from DAM Capital. Please go ahead.
Yeah. Hi. Thanks for the opportunity. Just one thing. In this particular quarter, how much was the impact because of Middle East war? Just wanted to understand that we are talking about APAC being fastest growth geography, while I'm assuming that the revenue from Middle East will still be impacted. How much does Middle East contributes to our APAC vertical, APAC geography, and within this, when do you think that this revenue will start coming through for us?
In terms of the exact numbers on what was the impact on Middle East, I will let Divik or Ankit answer that. Maybe we'll connect offline and share with you. I will say this, we were definitely impacted. As I was stating earlier, our DMO business was quite impacted. Our properties business was also impacted. Properties meaning hotels business was impacted. The exact magnitude of it, I'll let Divik or Ankit comment on it. In terms of when do we think that it will come back to normal? Well, look, I don't think anyone can give you a clear answer on that. I don't even think Donald Trump can give you an answer on that. It's difficult for me to say when things normalize.
As soon as they normalize, as I was stating earlier, I think it will be a big boon to our business because we do expect, especially the DMOs, to go crazy in terms of their marketing spend to rebuild that credibility and confidence to attract back the tourists.
Yeah, I can take the number question, Bhanu. As you asked, it's 4% of the total revenue that we get from Middle East. The impact which we are seeing is approx $2 million, and that too also deferred, not the revenue hit.
Okay. Understood. Just a small data point question is that within our Sojern and now combined Adara business, approximately how much of revenue comes directly from customers, while how much comes through agencies?
I think we can take that question offline.
Okay. Thank you.
Thank you. Ladies and gentlemen, we will take this as the last question for the day. I now hand the conference over to Mr. Bhanu Chopra for his closing remarks. Over to you, sir.
Yes. I want to take this opportunity to thank our customers, our partners, our employees, and more importantly, our shareholders for the trust they have placed in us through what has been a defining year for RateGain. The opportunity ahead of us is the largest we've ever seen, and we are pursuing it with everything we have. Thank you, everyone.
Thank you, sir. On behalf of RateGain Travel Technologies, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.