Newgen Software Technologies is a global software Company and is engaged in the business of software product development including designing and delivering end-to-end software solutions covering the entire spectrum of software services from workflow automation to Document management to imaging.
Q3 FY26 Earnings Results
- Revenue from Operations: ₹400.3 crore, flat QoQ vs ₹401 crore in Q2 FY26 (-0.25% QoQ), up 5.0% YoY from ₹381.1 crore in Q3 FY25.
- Total Revenue: ₹420.3 crore.
- EBITDA (reported / adjusted):
- Adjusted EBITDA (operational): ₹106.2 crore, down 1.9% YoY from ₹108.3 crore; EBITDA margin 26.5% vs 28.4% in Q3 FY25.
- Profit Before Tax (PBT): ₹115.15 crore before exceptional item, up 9.3% QoQ and 8.0% YoY.
- Exceptional Item: One‑time New Labour Codes charge of ₹35.09 crore in Q3 FY26.
- Profit After Tax (reported): ₹62.81 crore, down 23.1% QoQ from ₹82 crore and down 29.4% YoY from ₹89 crore; reported PAT margin about 15.8%.
- Profit After Tax (adjusted, ex‑Labour Codes): About ₹90 crore, implying adjusted PAT margin of ~22.5% and sequential growth vs Q2.
Management Commentary & Strategic Decisions – Q3 FY26
- Management attributed the sharp drop in reported PAT primarily to the one‑time ₹35 crore New Labour Codes provision; operationally, PBT and adjusted PAT grew QoQ and YoY, with underlying profitability remaining healthy.
- Revenue growth was described as muted (5% YoY, flat QoQ), reflecting deal‑timing and macro caution, but subscription/SaaS and annuity revenues continued to scale, supporting margin resilience.
- Strategic focus areas:
- Increasing share of subscription/recurring revenues and scaling platform‑led deals in BPM, content services and low‑code automation.
- Continued investments in R&D and product innovation (AI, automation, cloud‑native platforms) to drive higher‑value, IP‑led growth.
- Geographical balance: US and APAC posted healthy YoY growth (US +20.8% YoY; APAC +7.4% YoY), while India and EMEA were softer, leading management to push deeper into developed markets.
Q2 FY26 Earnings Results
- Revenue from Operations: ₹400.8 crore, up 11.0% YoY from ₹360.4 crore in Q2 FY25 and up 24.9% QoQ from ₹321 crore in Q1 FY26.
- Total Income: ₹426 crore, up 3.7% YoY.
- EBITDA: ₹102.4 crore, up 23.4% YoY; EBITDA margin 25.5% vs 23.0% in Q2 FY25.
- Profit Before Tax (PBT): ₹105.3 crore, up 13.8% YoY.
- Profit After Tax (PAT): ₹82 crore, up 16.2% YoY from ₹70.3 crore and up sharply QoQ from ₹50 crore in Q1 FY26; PAT margin 20.4%.
- EPS: ₹5.82 vs ₹5.02 in Q2 FY25.
- Business mix & metrics:
- Subscription revenue: ₹126 crore, up 20% YoY.
- Product/license revenue: ₹74 crore.
- New client additions: 15 logos in Q2 (12 in Q1).
Management Commentary & Strategic Directions – Q2 FY26
- Management described Q2 FY26 as a “strong” quarter with a sharp rebound in revenue (up ~25% QoQ) after a soft Q1 driven by project‑timing issues, confirming underlying demand remains intact.
- Margin expansion (EBITDA +250 bps YoY, PAT margin 20.4%) was credited to operating leverage from higher volumes, improved revenue mix towards subscription/IP, and disciplined cost control.
- Strategic priorities highlighted:
- Scaling subscription and SaaS revenues as the primary growth engine, backed by continued double‑digit growth in recurring revenues.
- Expanding in EMEA and APAC, while deepening presence in the US via larger digital‑transformation and automation deals.
- Sustained R&D investment (around 9% of Q1 revenue, similar focus in Q2) to enhance the product stack and maintain competitive differentiation.
To view the company’s previous earnings and latest concall transcripts, click here to visit the Alphastreet India news channel.