India · Delayed Price · Currency is INR Sonata Software Earnings Call Transcripts
Fiscal Year 2026
-
Leadership transition completed with a strong AI-led strategy, driving 18% of the order book and improved margins. Despite macro headwinds and client-specific challenges, PAT grew 9.3% YoY, with domestic business expected to return to historical growth soon.
-
Q3 FY26 saw resilient performance with 45% QoQ revenue growth, 21% YoY PAT growth, and EBITDA at 19.5%, despite headwinds from three large clients. AI-led order book rose to 14%, and two large BFSI deals were secured, with margins expected to remain strong.
-
Q2 FY26 saw resilient performance with EBITDA margin expansion to 17.3%, strong AI-led deal wins, and large healthcare contracts offsetting BFSI headwinds. North America now contributes over 70% of revenue, and PAT grew 10% QoQ. AI order book rose to 10% of total.
-
Q1 FY26 saw modest international revenue growth and strong domestic expansion, with large deal wins and AI-led services driving momentum. Headwinds persist in retail, manufacturing, and key BFSI clients, but management remains focused on top-quartile growth and margin improvement by year-end.
Fiscal Year 2025
-
Q4 FY25 saw revenue decline due to large client budget cuts and seasonal softness, but EBITDA margin improved sequentially. Healthcare and BFSI are driving growth, with a strong AI pipeline and large deal wins expected to ramp up in FY26.
-
Q3 saw strong growth in BFSI and healthcare, but a major high-tech client ramp-down led to margin pressure and a forecasted 2.5%-3.5% degrowth in Q4. AI services pipeline remains robust, and margins are expected to recover as one-time costs subside.
-
Q1 FY25 saw a return to growth with strong deal wins in healthcare, manufacturing, and BFSI, though margins remain under pressure due to upfront investments and deal delays. The $1.5B revenue target is delayed by 2-4 quarters, but H2 is expected to see stronger growth, led by high tech and banking.