Nucleus Software Exports Limited (NSE: NUCLEUS) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Vishnu R Dusad — Managing Director
Parag Bhise — Executive Director and Chief Executive Officer
Tapan Jayaswal — Financial Controller
Swati Ahuja — Manager
Ashish Khanna — Head, Product Management
Analysts:
Raghu Maheshwari — Analyst
Rushab Shah — Analyst
Rahul Jain — Analyst
Sanjay — Analyst
Chinmay Neymar — Analyst
Presentation:
operator
Good afternoon everyone. This is Madhuri. A very warm welcome to all of you for this Nucleus Software earnings conference call for the quarter and nine months ended on December 31st, 2025. For discussions we have here from the management team. Mr. Vishnu R. Basad, our Managing Director. Mr. Parag Bise, CEO and Executive Director. Mr. Anuragmanshi COO. Mr. Ashwa Kumar Bura, Chief Financial Officer. Mr. Apurwa Kamaria, Chief Business Officer. Mr. Mukesh Bangia, Vice President. Mr. Abhishek Pallav, Vice President Mswati Patwardhan, Chief Human Resource Officer. Mr. Pradeep Malik, Vice President and Mr. Tapan Jaishwar, Financial Controller. As you all are aware, Nucleus Software does not provide any specific revenue earnings guidance.
Anything which is said during this call which may reflect company’s outlook for the future or which may be construed as a forward looking statement must be reviewed in conjunction with the risk that the company faces. An audio and the transcript of this call would be shortly available on the investor section of company’s website www.nuclearsoftware.com. with this we are now ready to begin with the opening comments on the performance of the company. And post that we would be available for the question and answer session. With this I now pass it over to Mr. Vishnu. Over to you sir.
Vishnu R Dusad — Managing Director
A warm welcome to our investor call. For quarter ending 31st December 2025. We continue to be grateful to you. For your continued interest in nuclear software this quarter. We are delighted to welcome Apoor Chamaria. Our Chief Business Officer. Who brings more than two decades of. Very rich experience with companies like hcl, raid gain, techmindra and Google. We look forward to his contributing to. The betterment of the company. And with those words I pass it on to Taraji.
Parag Bhise — Executive Director and Chief Executive Officer
Thank you so much sir. And my warm welcome to everyone who has joined this call. And I would also like to welcome Apu to the Nucleus family. And looking forward to learn from his experience and his contributions. Yeah. This quarter also has been a quarter of steady performance for us I would say both on the order booking side and on the implementation side. And otherwise we continue to work on our long term strategy as we’ve been talking about. Thank you.
Swati Ahuja — Manager
Yeah Madhvi. Now we can start with question and answer. You. Thank you.
operator
With this we are now open to question and answer.
Swati Ahuja — Manager
Yes, we can start with the. Mr. Tapan, financial comment. Sir, over to you.
Tapan Jayaswal — Financial Controller
Am I audible? Yes sir, you’re audible. Please go ahead. Our consolidated revenue for the quarter Is at rupees 220.03 crores against 213.51 crore quarter on quarter and rupees 205.7 crore year on year. Overall revenue in foreign currency including India rupees revenue is US$24.92 million for the quarter against US$24.47 million quarter on quarter and US$24.41 million year on year. Product revenue for the quarter is at rupees 185.58 crore against rupees 181.02 crore quartering quarter and rupees 174.83 crore year on year. Revenue from projects and services for the quarter is at Rs. 34.45 crore against rupees 32.49 crore quarter on quarter and rupees 30.87 crore year on year.
Moving on to expenses. Cost of delivery including cost of product development for the quarter is 70.2% of revenue against 73.9% of revenue quarter on quarter and 70.7% of revenue year on year. In absolute terms this is rupees 155 crores against rupees 157.7 crore quarter quarter and rupees 145.49 crore year on year. Marketing and sales expenses for the quarter is 7.8% of revenue against 7.3% of revenue quarter on quarter and 5.6% year on year. In absolute terms this is Rs. 17.2 crore against Rs. 15.67 crore quarter on quarter and Rs. 11.55 crore year on year. GNA expenses for the quarter is 6.9% of revenue against 8% of revenue quarter on quarter and 7.6% year on year.
In absolute terms this is Rs. 15.10 crore against rupees, Rs. 17.07 crore quarter on quarter and Rs. 15.64 crore year on year. EBITDA for the quarter is at Rs.32.72 crores against Rs.23.08 crore quarter on quarter and Rs.33.02 crore year on year. Other income from investments and Deposit is at Rs. 14.87 crore against rupees 13.50 crore quarter on quarter and Rs. 14.78 crore year on year. Total other income for the quarter is at Rs. 15.12 crore against Rs. 16.16 crore and Rs. 15.57 crore year on year. Total taxes 96 crore against rupees 9.12 crore quarter on quarter and rupees 10 crore year on year.
Net profit is at rupees 20.7 crore for the quarter against rupees 26.29 crore quarter on quarter and rupees 34.97 crore year on year. Other comprehensive income is at Rs. 3.58 crore for the quarter against rupees 2.77 crore quarter on quarter negative 1.69 crore year on year. Total comprehensive income which includes net profit and other comprehensive income is at Rs. 24.28 crore for the quarter against rupees 29.06 crore quarter on quarter and rupees 33.28 crore year on year. EPS for the quarter is at rupees 7.86 as against rupees Rs. 9.99 in the previous quarter and rupees 13.28 year on year.
In terms of foreign currency hedges on December 31st we had US$3 Million of forward contracts at an average rate of 89.38. There is a mark to market loss of rupees 0.37 crores which is taken to hedging reserve in the balance sheet. Revenue contribution from the top five clients for the quarter is 27.02% against 27.12% in the previous quarter. The order book position is Rs. 656.68 crore including Rs. 588.74 crore of the product business and rupees 67.94 crore of projects and services business. On September 30th the order book position was R6 671.1 crores including Rs. 579.67 crore of product business and Rs.
91.43 crore of projects and services business. Total cash and cash equivalent as on December 31 are rupees 971.6 crore against rupees 961.66 crore as on September 30. This includes balances in current accounts of Rs. 41.15 crore, various schemes of mutual fund rupees 634.30 crore fixed deposits of Rs. 263.17 crore, investments in tax free bonds of Rs. 32.98 crore. With regards to receivables we are at Rs. 117.44 crore against Rs. 116.19 crore in the previous quarter. During the quarter there is a gross addition of fixed assets of Rs. 2.94 crore consisting primarily of Rs. 0.18 crore on computer and servers, 0.01 crore on office equipment, 0.17 crore on plant and machinery, 0.15 crore on furniture and fixtures and Rs.
2.43 crores on so software. I’ll hand it over to Swati.
Swati Ahuja — Manager
Thank you sir. With this now we are open for the question and answer session. Over to you Madhavi.
Questions and Answers:
operator
Thank you ma’. Am. With this we are now open for the question and answer session. If you wish to ask a question, may please press star N1 on a telephone keypad and wait for your name to be pronounced. If you wish to cancel your request, please press Star and one again. First question comes from Raghu Maheshwari from Kamyakya Wealth Management. Please go ahead.
Raghu Maheshwari
So we have been following this company and there was doubt about migration of the legacy customer base from Fin1 to Finland team. So last time the management had mentioned that the migration is going on sir. And so could you give us a qualitative sense of where we are in this journey? Like in terms of your total install base Are we 30% through the migration or 50% or just starting? And what is the target by this, you know upcoming year end?
Parag Bhise
Yeah, thank you for your question. This is paragra so difficult to quantify. I would only say that the migration process is on. We are getting customers move to the new platform. I had also mentioned earlier that. It. Is a time taking journey. Customers are comfortable with our existing products. So though technology obsolete is a challenge but and of course the. Any change is difficult. So we have migrated some large customers, some are in progress both in India and other geographies and we are encouraging everyone to upgrade but at this time difficult to give any definitive response on timelines or numbers.
Raghu Maheshwari
So is it by when are we planning to complete this migration?
Vishnu R Dusad
Look, we would want to do it at the earliest possible but yeah difficult and as such with our customers on older platforms we’re not facing any challenges. We are serving them also we are having maintenance contracts with them so we are not we would want them to migrate at the earliest at the same time. But if we have to talk about some timeline then maybe I think next three to four years.
Raghu Maheshwari
And sir my next question would be around cost of delivery. I think from last quarter our cost of delivery has come down to 70% something and I think this is a contribution given by less employee cost because of this all migration and all happening. So sir, just to get an idea, is this cost of delivery sustainable for the coming time or can we see some uptick in this as well?
Vishnu R Dusad
So we will see, we should see a little jump because of this new labor code getting injected. I think that impact will definitely impact the P and L going forward as well.
Raghu Maheshwari
No, I’m particularly talking about cost of delivery sir.
Vishnu R Dusad
Was the cost of delivery includes the manpower cost as well. So that definitely is going to increase based on the recent labor code changes.
Raghu Maheshwari
So the hit which you have taken as I think somewhere around 18 crores. That is not a one time.
Vishnu R Dusad
So that is definitely a one time impact. But that has not got factored in EBITDA. That has got recorded as an exception item below EBITDA. But however going forward will start impacting EBITDA because then it will become business as usual.
Raghu Maheshwari
Understood sir. So this 70% can go a little bit higher than this right in the comment section.
Vishnu R Dusad
While I can’t quote a percentage because there are a lot of initiatives we would take to contain that. Maybe in a longer term. If you see adoption of AI may help reducing some cost but that might get offsetted by some, I would say marketing related expenses where we set our foot in a different geographical territory. So it will keep on getting impacted by these things. While we will keep a close watch on this should not increase exponentially. We will definitely figure out some way to contain it. But yes, these are the factors which will keep impacting us in form of cost.
Raghu Maheshwari
Understood sir. And lastly sir, have you added any new logos in this quarter?
Vishnu R Dusad
We do have added logos and if you talk about this full year, we have added around seven logos this year.
Raghu Maheshwari
So that makes around. Two logos. Right. And these are all coming for the new one, right? The 8.5 version or 8.4?
Vishnu R Dusad
Yes, absolutely, absolutely. Any new customer acquisition doesn’t make sense to acquire at any older version while we are chasing for upgrading them to the newer version. Obviously that is the, that is the thought process behind acquisition of each and every new customer.
Raghu Maheshwari
Okay sir, I have more question. I will join back in the queue. Sir.
operator
The next question comes from Rushab Shah from baguldms. Please go ahead.
Rushab Shah
Thank you. I’m audible.
Vishnu R Dusad
Yes, but you could be a little louder.
Rushab Shah
Yeah. Am I audible now?
Vishnu R Dusad
Yes, yes you are.
Rushab Shah
Yeah. So I had a question. We had entered the Australian market in 2015 and then again in 2021 when the bank of Sydney appointed Nucleus to lead its Digital lending transaction. But so we still in that market we are not able to scale up. So what challenges are we facing in that market?
Vishnu R Dusad
No challenge. I think the market is. High yield. Market but at the same time the number of players are not as many as it’s not as such a dense market as India or Middle east. So that’s one so no challenge as such. It’s just that things are moving slowly. Of course I would want to say that we are, we are still there, we have sales presence there, we have a few people position there and we’re also taking inputs from that market and continuously working on aligning our products to what what would sell in that market. So, so that work is continuously on.
Rushab Shah
As you said there it is not as dense market. So do we have let’s say there are less number of players in that market. So do we have an upper hand in Australian market?
Vishnu R Dusad
Yes, because okay, we it’s not that we are coming across a lot of competition. Our products, whenever, wherever we switch is we are able to make an impression. We are able to impress people with what we have. So that way if you say yes, we are very reasonably placed there.
Rushab Shah
Okay, so my second question is that when we launch a new product, let’s say it’s an upgradation of an existing software so how difficult is it for existing customer to convince him to upgrade to the newer version? Because historically we have had problems with conversion of customers to newer version of the software.
Vishnu R Dusad
So I’ll explain it in two parts. One is what I spoke in the in response to an earlier question. The first question our from old platform to new platform that conversion is a bit difficult because as I said customers are one very comfortable with the old product and that journey is still I would say even for customer a heavy investment because all the old product we come out with a completely new product. But when it comes to upgrading our existing Fin1 Neo or Finexia customers to a higher version of same product that journey is relatively easy.
There have been instances where we’ve been able to upgrade our customers over a weekend and there’s a continuous effort to make that journey very smooth. So once they are on the new technology stack new product suit then it’s a very relatively very easy journey I would say but from the old stack to the new stack is we need to do more convincing and the efforts also there are more.
Rushab Shah
Okay, okay. And so my next question is since we work in multiple geographies is working of since we work in multiple geographies is working of banking industry similar in all, in. In all the geographies or is it that the different geographies require different types of software? So we have to make a customized. Software for our customers. So if we make the customized software for M, do the complexities of the software increase and are we able to command the pricing in our software?
Vishnu R Dusad
Yeah, my product specialist will answer this question.
Ashish Khanna
Good afternoon. So this is where the product capability. And consequen function and the. The value that the platform brings is the regional and the geographical nuances and capability that can be taken care by configurations. Of course platform is based built on layered architecture. So there is a dedicated layer for that and that takes care of the geographical aspects and bootstrapping.
Rushab Shah
Yeah. So the last question is in a couple of quarters. Back on the conference call you had said that in. In that quarter we had lost two cost two customers. So I wanted to know what were the reasons of losing those customers was and was it. It was that they got a better software somewhere or they were not comfortable with the price of the Nucleus software. And also how were they huge customers like did they contribute significantly towards our revenue?
Vishnu R Dusad
So we need to check because I don’t select any such. Yeah, some customers, I don’t recollect talking about specific customers. But then look, some customers do move out because their mergers happen, acquisitions happen. There are smaller customers who have moved out of, who have closed down their businesses. Those situations have happened. This happens specifically during COVID Some after that also those instances are there. Otherwise we don’t recollect talking about any significant movements out.
Rushab Shah
Okay, thank you sir. Thank you.
operator
Next question comes from Rahul Jain from Dholat Capital. Please go ahead.
Rahul Jain
Hello. Hello. Is my line open? Yeah, thanks for the opportunity. Couple of questions. So firstly on the investment that we’ve been doing for some time in terms of adding the manpower of the senior leadership to strengthen our business, we have done that job. We’ve been doing that for some time. However in terms of the order booking we have not seen any meaningful delta coming out yet. So is it right now setting into an expanded pipeline and may come into order book eventually over next 6 to 12 months or any other comment you want to share on that.
Vishnu R Dusad
So. Hi Rahul. Yes, these changes has been done in the organization and as it takes little time to settle and start reflecting into the results. I hope you will also appreciate the fact that these whatever deals we do are long drawn deals. These deals are. These deals do take time to come up fructify because there are a lot of steps which are discussed and debated before A deal is signed off or the order also comes. There are a lot of steps which are involved and it may take and it may go on for months and few may even change a financial year as well.
Having said that, you will be happy to know that in this financial year we have added seven new logos. So I think yes we are moving in the right direction, we are on the right trajectory and we are on the right path. And given the kind of leadership we have got now and with the team below us, I think we are on the right path.
Rahul Jain
Thanks for that Color. Now specific to the most buzzword which is AI. So what is our strategy right now in terms of embedding that into some underwriting tool like we hear in the market? Where are we on that journey? And secondly from a demand side of it, are the customers seeking incrementally AI powered solutions from company like us and where are we on that path?
Vishnu R Dusad
So AI strategy is part of our. Product roadmap and the organizational strategy, long term and immediate strategy. So we have a strategy that is being built and there is a draft version that has already taken a shape as far as AI baking into the product that is embedded AI. Yes, that is part of our product offering. Even assisted care decisioning has come up as part of RG 8.5 and more and more similar AI capabilities around the product capabilities are being built and some of them already exist as far as the customers demands are concerned or expectations. On AI is concerned.
Rahul Jain
Yes, we are getting inputs and guidance from our customers on what they are looking for and be it on the genai side or the deep learning or machine learning models or expectations. So that that is already on. So we are in touch with our customers and leaders, thought leaders and we are aligning, aligning our strategy towards that accordingly. So are we expected to have AI branded offering also something like Finland Fin one AI or something or if we would just embed those technology into the existing brand or product offering. Embedded, we’ll embed it as part of our product. Offering.
Vishnu R Dusad
That as a separate revenue line item coming up. It will always be an embedded because we want our customer to be able to serve their customers in a better way.
Rahul Jain
Yeah, yeah.
Vishnu R Dusad
So I hope that answers so while.
Rahul Jain
Some of good capabilities around financial literacy which is interactive statement of account 360 degree sentiment analysis on collection sites and there are others key capabilities has already come up and there are several others which are under pipeline being built that will be released as part of GA the upcoming year. Sure, sure, that’s good to know. And one last Question from my side is on the capital allocation side, this question keeps coming. Once in a while we’ve been accumulating cash, we’ve been generating a lot of cash. So is there any roadmap in terms of giving out a special dividend or doing a large buyback as a way of deploying this capital? Because as our business does not require a huge sum of capital but we keep generating every year and getting accumulated.
Vishnu R Dusad
So Rahul, as of now we would like to sit with some cash because as you know this AI thing is has heated up. Lot of, lot of stuff is happening. It might require a lot of investment at our end also we want to be, we are trading that path steadily and we will look into that maybe once a clear picture emerges in next one or two, three quarters and that is we will be in a position to decide.
Rahul Jain
Which way we want to go. Sure, sure. That’s it. From my side. Thank you.
Vishnu R Dusad
Thank you.
operator
The next question comes from Sanjay, an individual investor. Please go ahead.
Sanjay
Hello, good afternoon. Am I Aud?
Vishnu R Dusad
Yes.
Sanjay
Yes. So I just want to understand the quarter gone by Q3. So. I think we have closed couple of deals. And last call you also mentioned that there was delay in closure of the deals. Like customers are taking longer time. So to understand your view, the quarter gone by, how was the performance was as per your expectation or was it below expectation? And. How are we seeing that the deals closure will be happening in Q4? I mean some deals couldn’t close in Q3 but was it closing Q4?
Vishnu R Dusad
So definitely better than earlier quarters. We’ve been saying that we are getting traction from the market and now we are seeing that conversions also starting to happen. A few that have happened which Ashok talked about and yes, there is a significant pipeline that we have which we hope to convert in coming quarters.
Sanjay
Sure. And this recent updates happen on like a tariff deal with EU and usa. Are we seeing that that will be. Positive for the business going forward?
Vishnu R Dusad
We are into a, we are a product company and as such those arrangements are not going to impact much in any way. So we don’t have too much of traction anyway in Europe. And if you talk about us, we have minimal interest as of now there while we are trying to get our foothold there and gradually succeeding on that path. But Del per se is not going to have any significant impact on us.
operator
Thank you sir. The next question comes from Chinmay Neymar from Prescient Capital. Please go ahead.
Chinmay Neymar
Hi sir. Hope I’m audible.
Vishnu R Dusad
Yes.
Chinmay Neymar
Sir. In the last quarter you talked about growing through Partnerships, could you talk about how that initiative is has been going on? Have you been able to make any inroads in the quarter? Some color around that.
Vishnu R Dusad
So of course partnership with partners like AWS Oracles that is steadily progressing. We I think we had updated about a global head of partnership joining in and so groundwork has started and we are in I think exploratory stage as of now. These things take time of course on other side one area where we are progressing more is on establishing partnerships with various fintechs because that is the ecosystem today has become very, very highly integrated. So that part is moving faster. Of course bigger player partnership. That will take some time but we.
Chinmay Neymar
Are making progress on that. Got it. And secondly with the new hiring that has happened in the sales team and as well as the increase in the senior leadership, could you talk about what should be some of the key monitorables or milestones that you want to achieve over the next one year? So.
Vishnu R Dusad
As we’ve been saying we are focused on long term and we’ve been talking about various initiatives. At fundamental level we are taking one of the core parameter that we have set for ourselves is improving customer NPS and entire leadership team, entire organization is actually focused on that. This is by way of lean initiatives of course by strengthening the sales team and and leadership joining in that we expect to have more sales, more implementations but focus on existing customers and fundamentals is what is the key focus.
Chinmay Neymar
Okay sir, thank you.
operator
Dear participants, if you have any questions please press Star N1 on a telephone keypad and a follow up question comes from Raghav Maheshwari from Kamikya Wealth Management. Please go ahead.
Raghu Maheshwari
Yeah, hi. Thanks. So sir, my follow up question is basically on this client editions that we have done for this year like seven client edition. So can you tell us how many minutes what is the bifurcation of that into Penwind Neo? And so basically the lending management system and the transaction banking part of it.
Vishnu R Dusad
These seven are all lending.
Raghu Maheshwari
Okay, lending answer. What part of our current revenue let’s say H1 is lending sir, in person. In terms of percentage.
Vishnu R Dusad
I think Tapan talked about high level bifurcation. Beyond that we, we track it at that level.
Raghu Maheshwari
Understood sir. And sir, next thing I wanted a clarification was that we had introduced Fin1neo. It’s been, it’s been quite a while now and whatever clients like you mentioned we are adding, we are adding in the new, basically new version. So sir, as of now let’s say if you have 100 clients, what, what percentage of Those clients are into this new platform and what percentage are in just the fin one. If you can just give a prox range.
Vishnu R Dusad
Yeah. In terms of roughly. In terms of broad bifurcation that would be 50, 50. In terms of number of customers, roughly 50, 50.
Raghu Maheshwari
And by the end of next year, sir, are we targeting it somewhere around 60, 40 or 70, 30?
Vishnu R Dusad
Definitely. As we think the approach is that whether it will be 60, 40, 70, 30. That’s difficult to say under sister and.
Raghu Maheshwari
Sir, my next question is, sir, as of now what is your focus? Is it to get new client addition each quarter or to focus more on migration of existing ones into the ga?
Vishnu R Dusad
Both I would say because there are. These are different focus areas. So definitely there’s focus on new customer acquisition, there’s focus on giving new capabilities to existing customers as well as migration. So these are separate focus areas.
Raghu Maheshwari
Under sir. And lastly I wanted to talk about industry tailwind a bit. Sir, because we are seeing good credit growth on the retail sector coming in. All the banks are boasting good numbers. So I think there is some sort of industry tailwind if you can give some light upon that. And also for that matter sir, for the next coming year like FY27, can you tell us. I’m not asking for any guidance here but just some qualitative factors as in where can the growth come from?
Vishnu R Dusad
Yes. So we’ve been talking about growth of the MSME sector. I think the entire industry, government, regulators, everyone is talking about it. So that’s definitely a growth area. The other business lines that we are seeing traction is Gold Loan finance against securities co lending. These are the three areas from where we are getting a lot of traction.
Raghu Maheshwari
So what exactly are you doing in Gold Loan?
Vishnu R Dusad
So we have. We have as we call it lines line of business. So Gold Loan is also a line of business that is available with us. So is the finance against securities. So is co lending which is the newest one and of course all others that we already have.
Raghu Maheshwari
Understood, sir. All right, sir. Thank you. And I hope to interact with you in the next quarter.
Vishnu R Dusad
Thank you so much. Thank you.
operator
Thank you sir. As there are no questions now I hand over the floor to Mswati for closing comments.
Swati Ahuja
Now we would like to thank all the investors for joining us today on this call. Now I will pass over to Vishnu sir for his closing comments. Over to Vishnu.
Vishnu R Dusad
We thank you very much for your. Continued interest in nuclear software and would like to reassure you of our commitment. To deliver value to all our stakeholders in decades to come. Thank you very much.
operator
That concludes our conference for today. Thank you for your participation. You may all disconnect your lines now.