Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
IRIS RegTech Solutions Ltd (NSE: IRIS) Q4 2026 Earnings Call dated May. 18, 2026
Corporate Participants:
Asha Gupta — Investor Relations
K. Balachandran — Co Founder, Full Time Director and Chief Executive Officer
Analysts:
Samarth Nagpal — Analyst
Harsh Mulchandani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to iris Regtech Solutions Limited Q4FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference, please signal the operator by pressing STAR and then zero on your touch tone telephones. Please note that this conference call call is being recorded. I now hand the conference over to Ms.
Asha Gupta, Eny LLP Investor Relations. Thank you. And over to you Ma’. Am.
Asha Gupta — Investor Relations
Thank you. Farah. Good evening to all of you. Welcome to Q4FY26 earnings
Operator
Call of Iris Tech Tech Tech Solutions Ltd. The results and presentation have already been mailed to you and you can also view it on our company’s website. In case anyone does not have the copy of press release or presentation or you are not marked in the mail, please do write to us and we will be happy to send you the same. To take us through the results today and to answer your questions we have the top management of iris Rectech Solutions Ltd. Represented by Mr. K. Balachandran, Co Founder, Full Time Director and CEO and Ms.
Dipta Rangarajan, Co Founder and whole time Director along with other team management team members. We will start the call with brief overview of the quarter and year gone by which will be then followed by the Q and A session. Before we proceed, I would like to remind you that the discussion may contain certain forward looking statements that may involve known or unknown risks or uncertainties and other factors. It may be viewed in conjunction with our business risks that could cause future results, performance or achievements to differ significantly from what we have expressed or implied by such forward looking statements.
Having said that, I will now hand over the call to Mr. K. Balachander. Over to you sir.
K. Balachandran — Co Founder, Full Time Director and Chief Executive Officer
Good afternoon and welcome to this very fourth quarter earnings call. As usual we are grateful for the time you are spending with us and this time around we advanced a call to 4pm from our usual 5pm slot. If that is inconvenient going forward, please let us know from the Irish side we have Dipta, Thomas and I attending this call apart from our senior business leaders. We uploaded an investor presentation on the Exchange website Today afternoon, around 1 o’ clock in fact and we hope that some of you had the opportunity to see this as well.
As usual we have been maintaining that a business like ours is best examined through the lengths of annual results then quarterly numbers and we would like to talk more from an annual point of view on our financial and business performance. Now coming to the commentary on our performance, we are pleased to report that over the past one year both our subtech and rectech businesses have further strengthened. Obviously subtech segment has contributed materially in the growth of our revenues while in the rectech segment specifically for IRIS Carbon, this has been sort of a milestone year where our foray further into the enterprise which is also a largely non mandatory area, has borne fruit and we have scored credible wins.
Our focus on the enterprise business which is termed as our rectech segment is unequivocally to grow the annual recurring revenue for the previous year iris carbon ARR the annual recurring revenue grew at 33% on the back of several wins in the management space. We also opened our account in the ESG Reporting solution area which is an additional module on IRIS Carbon. On our BFSA Automated regulatory reporting solution iHearts ideal, the ARR grew at 17% despite the fact that we faced some delay especially in the first half of the previous financial year in purchase decision making at customer rents, especially in Indian market.
Going back to Iris Carbon, I would say that it’s a business where we see substantial headroom for steady growth and our efforts are focused on making this happen. Towards this we are now working on multiple fronts including direct sales, partner development, marketing and new product features. We have also been able to break into large enterprise accounts and which gives us a lot of confidence in competing with the best in the market and we have articulated before we plan to spend in a matured and well thought out manner as we increase investments in key areas such as sales and marketing along of course with product enhancements on the BFSA regulatory reporting business which is IRIS Ideal, we are now actively exploring markets other than India and we see potential slowly unfolding in both Africa and the Middle East.
Let me now look at the subcut business briefly. We added three new logos in FY26 which included the Government of Qatar for tax reporting. This is industry and new area and combined with our Deposit Insurance management segment this opens new markets for IFILE subtech reporting platform with new regulators. We are also expanding this product suite to offer more end to end features for the regulatory customers which includes risk based supervision, licensing and decision management and a few other modules as well.
The idea is to expand the product suite so we are a one stop shop as far as regulatory reporting requirements are concerned for any financial regulator and even people who are in financial and operational regulatory segments. From a regulatory perspective coming to our financial performance, our growth has been steady for the full year with total revenues growing at about 33% while the EBITDA margin came in at about 14%. We have mentioned before our endeavor is to partially balance customer acquisition expenses in the SaaS business with profits emanating from the subtech business so that EBITDA numbers are not severely impacted.
Post the tax divestment, our balance sheet has strengthened considerably and cash right now in the books is at around 155 crores as on March 31, while the net worth has moved to rupees 200 crore from rupees 76 crores as of March 31, 2025 and the book value has gone up as well to about rupees 98 from rupees 37. Before I close, I want to briefly touch upon a couple of global developments. We have been asked time and again by a few of you about whether the AI revolution that is spreading across the globe is an opportunity or a threat.
Our honest take at this point of time is that it is both, but for us we feel it opens significant opportunities in the space we operate, even as customer expectations move up proportionately. We see it as being critical for us to embed AI technologies in both our product stack and in the software development process itself, and we are doing that efficiently, with speed and focus. Our initial presentation also includes a couple of slides which talks about our product initiatives on the AI side. On the whole, let me say that we are both watchful and excited.
We have also been asked about the impact of the Middle east crisis on our business. It is possible that a prolonged Middle east crisis might have a possible adverse impact on the subset pipeline. Having said that, so far we have not seen any indications along these lines, but it would be a fair to factor in this possibility if the crisis goes well beyond the first quarter of this financial year. And this applies to, I think most businesses which are operating in the Middle east area. And from our point of view we operate in Asia quite a bit as well as in Africa.
So if there is fiscal constraint with government experience at highly elevated oil prices, it might have some impact on government regulatory budgets, though we haven’t seen it yet emerging now. We also mentioned our first fleet that our datatech business we are spun off into subsidiary to give it sharper focus. And finally, I want to say that we are pleased to mention that we have moved to a new office which is in New Bombay itself. It’s in Turbay Station and you are welcome to visit us when you get an opportunity.
Thank you so much. And now we can leave the Floor open for question and answers.
Questions and Answers:
Operator
Thank you very much sir. Ladies and gentlemen, we will now begin with a question and answer session. Anyone who wishes to ask a question may enter STAR followed by one on the touch tone telephones. If you wish to remove yourself from the question queue, you may enter Star and 2. Participants are requested to please use only handsets while asking a question. We will wait for a moment while the question queue assembles. To ask a question. You may enter star and 1. The first question is from the line of Samarth Nagpal.
Please go ahead.
Samarth Nagpal
Hi, am I audible?
Operator
Yes sir.
Samarth Nagpal
Yeah. Thank you. Thank you for the opportunity. Sir, just a couple of queries. So I’m a new shareholder so pardon me if I ask something which I’m not aware of. So after divesting our business and building a healthy cash balance, just wanted to understand what’s our aspiration going to be in terms of growing the business faster. I mean I read somewhere that we are targeting 500 crores of revenue. So what’s the roadmap for that and by when latest can we expect that? Just some color on that.
K. Balachandran
Okay, this is something we mentioned the previous financial year and we stick to this number. This is our aspiration and we are, you know, setting the conditions for reaching this target. And this will require a little about 30% growth I would say at this point of time over the next four to five years. And our aspiration on the SaaS business is to definitely grow this at about 35%. And we expect the subtech business with a combination of one time revenues plus recurring revenues to move little at a lower rate.
But there could be surprises as we go forward. So the short answer is the target is 500 crores and we feel we are getting into position with our new products also getting accepted in the market to grow at a higher rate compared to previous few years where we grew in the mid twenties. Got it sir. Got it sir.
Samarth Nagpal
And sir, I saw a couple of slides on AI initiatives. So to a layman, how is AI helping us? And on the flip side, can it lead to any increase in the competitive intensity also for us, I mean some color on that.
K. Balachandran
So the second part of the question about competitive intensity, of course there are theories doing, you know, going around saying that enterprises can create their own software or a native companies can come in for us, we haven’t seen that yet in the markets we operate. But our customers are getting excited about what AI can do to their requirements. So we’re getting inquiries and we are building offerings as we speak. And we expect this to deepen our value proposition for our customers and that could help us go deeper as well as expand into new customers as well.
So far we haven’t seen, but we know one has to be very, I would say, cognizant of what is happening around us. So we are making sure that we are adopting AI technologies very quickly and making this part of our stack. So on the whole we feel it’s an exciting opportunity for us. AI could be an accelerant for us rather than constraining our business.
Samarth Nagpal
Understood sir. And sir, on this Middle east crisis, I know we don’t have a concrete answer to this, but keeping in mind that it extends into Q2 and all that, so how is the year looking for us? I mean, would we still be able to manage maybe a lesser conservative number, but would it hamper our business significantly?
K. Balachandran
So on the SaaS business part, which is enterprise oriented business, we don’t see much of an impact because our SaaS business is predominantly Europe and US focused and to some smaller extent in India as well, we don’t see much of an impact. On the subtech side. To some extent the pipeline is linked to the Middle east with discussion with Middle east regulators as well there also it is progressing but I wouldn’t be surprised if there is some delay if this whole thing continues beyond that point.
But so far, as I mentioned in my opening remarks as well, we are not worried too much unless this really prolongs. So I would be, you know, I would start getting worried post June, I would say.
Samarth Nagpal
Understood.
K. Balachandran
We are looking at three to four wins in the subtext side as usual every year and this could be more or less given the situation and at this point of time it looks we have to be watchful but not unduly worried.
Samarth Nagpal
Understood sir. And sir, just one final question. If I can squeeze in on the data tech side, I think the Peridot app, if I’m pronouncing it correctly, has a good amount of active users. So what’s the ambition here in terms of catering to the MSMEs and all that? What’s the ambition here and how do we plan to scale this up
K. Balachandran
As far as Iris MSME is concerned, which is now offered, or we are catering to the Iris MSME market through Iris Peridot app. The idea is to increase the number of users on Peridot by offering a slew of deeply enablers for MSMEs which includes invoicing, which includes government scheme mapping and also now loan facilitation. The loan facilitation we have rolled out starting from February in a pilot basis. Now we are slowly increasing the number of lenders and we are also reaching out to MSMES in a calibrated fashion.
So the business model at some extent is linked to working as a loan aggregation platform for MSME loans. And we are at an early stage, but I would say that we are getting MSMES on our platform inquiring about loans, and there are three lenders who already come in. So this is a very initial stage. But we are, we are quite hopeful that this can scale going forward. And we are trying to see how to, how to scale it in a way which is not too onerous in terms of our spends.
Samarth Nagpal
Yes, sir. So maybe in a couple of years we can see the monetization part going up significantly and the revenue starting to trickle in. Right. Is that fair to assume?
K. Balachandran
Yeah, I would be happy if it is earlier than that, let me say. Sure. Internal target earlier than that.
Samarth Nagpal
Sure, sir. Okay, sir. Thank you, sir, for answering all the questions and wish the team a very. The very best.
K. Balachandran
Thank you so much.
Operator
Thank you. Participants, if you have any questions at this time, you may enter star followed by one on your handset. The next question is from the line of Harsh Mulchandani from Toro Wealth Managers. Please go ahead.
Harsh Mulchandani
Yes, thank you for the opportunity. Understand that what is the plan with respect to the funds which we are owning? Are we planning for some acquisition or to develop some new product in house or enter some new business vertical?
K. Balachandran
Of course, the first and foremost path we want to pursue very vigorously is organic growth. And we’re also already deploying the excess money in carbon sales and marketing. And we want to do it, as I mentioned, in a measured and calibrated fashion. And we’re already seeing 33% IRR growth and we want to up it as we go forward. On the inorganic side, if you want to look at whether we can deploy it inorganically, nothing is off the table but will be displayed. And there’s a lot of volatility in the market.
We don’t know how it is shaping up in terms of a impact on enterprise software. So we don’t want to do a deal just because we are the capital. We’d be open to editing opportunities, particularly in adjacencies that could enhance our early days. But we are just on a wait and watch mode even now. Things have changed quite a bit over the last six, seven months.
Harsh Mulchandani
Got it.
K. Balachandran
Development. We are aggressively trying to enhance our stack of AI offerings. So that is going on.
Harsh Mulchandani
Okay. Okay. So out of about 150 odd crores, you know, entirely won’t be spent on marketing. Right. So any number on your mind how much would be spent on marketing say over the next one to two years and how much of revenue we can expect coming from that or some thought process how you are planning and obviously understand the bulk of the money you are keeping as a reserve to see how things pan out and maybe in future you would decide
K. Balachandran
So on the sales and marketing side, especially for our SaaS offerings, we have said that in the previous in the conference calls as well. We are well below the SaaS benchmarks where people spend at times more than $2 for $1 of net AR. We are at about the 1.1, 1.2 levels. We might go a little higher than that but we don’t want to, we don’t want to be spending indiscriminately and we are looking at net AR growth of around 35% or more. So that will give some indication of our marketing spend and we could spend more aggressively if we see for example the market is shaping up well, for example on the ESG side or even in detailed reporting across financial reporting on latest energy reporting, etc.
But there is some sort of, I would say volatility in the market. So right now we are going with these numbers and we would be a little more aggressive as a base growth for Iris Carbon because we don’t want to be doing this in a negative mode. We want to make sure that main EBITDA positive and still grow the business. So there will be money left post the marketing expense. But we want to keep that with us because there could be inorganic opportunities which might come up and we don’t want to be at that point of time, you know, be left with inadequate capital.
And when things are anyway you know, little uncertain with the current environment, I think it is prudent to keep some capital with an eyes
Harsh Mulchandani
Absolutely fair. Thank you so much for the detail. Thank you.
Operator
Thank you. Participants. If you have any questions at this time you may enter star and one on your handset. The next question is from the line of Vikas Kasturi from Focus Capital. Please go ahead.
Asha Gupta
Good evening sir. You spoke about a growth of 30% CAGR going forward for next few years. Could you just provide more clarity on or could you just provide some more color on how you plan to go about achieving it? Are you, which are the market that you want to focus on? Are you going to be adding new products to your current verticals or are you going to add more salespeople and so on. So could you just please throw more light on that?
K. Balachandran
Okay. Okay, Vikas. So I would take a shortage. So primarily if you look at the product segment that we have, we have this enterprise product segment where we have ICE Carbon as the flagship product, plus we have the automated reporting for banks. Iris Carbon right now is looking at financial reporting. We have ventured into ESG reporting as well. So here we definitely want to make sure that we grow at a good pick. And this could be 35% is the benchmark we have set for ourselves and be more internally speaking, but this is what we are externally communicating.
And on top of that we are also looking at adjacent markets in the SaaS reporting area which we are now trying to explore, which could be in capital market related reporting, it could be energy reporting, but these are early days for that. Outside that we have the bank reporting, bank automated regulatory reporting area where we are very strong. In the Indian markets, we are currently trying to expand outside here it is a combination of subscription revenue and at times there is an implementation revenue plus license revenue as well.
We are looking at the African and Middle east markets more than other markets. Of course. We are also looking at Europe and see whether we can provide a compelling value proposition there. This is the second part then in terms of geographies, we see a lot of headroom in the US and European markets because discourse management as a category is still fairly young. And when we speak to our customers, when we look at people who are doing structured data reporting, there are many prospects out there.
So if you look at how we are going to focus our efforts, we could be certainly looking at these developed markets first, then working our way downwards. And as far as Ifile is concerned, which is our subtech offering, which is the regulatory reporting platform, we are expanding the portfolio so that we are not just in data collection and associate analytics alone. We are looking at for example, licensing, registration management, which regulators need to do. We are looking at risk based analytics and we are also looking at case management going forward.
But these are modules you want to build on the existing platforms so we can go deeper. And we see the subtech platform going at a good clip, may not be matching the SaaS growth revenues, but here there is the possibility of getting lumpy revenues as well. It is linked to the regulators push for digitalization. And we see many regulators are still at a very early stage. And when we speak to some of them, we hear that many of them want to go digital very fast because they feel they will go digital, they will miss the air Revolution which is slowly taking shape in those countries as well.
So we remain bullish on this and we need to see how this plays out over the next three, four years. Our footprint is that we need to go deeper into the existing subtext segments.
Asha Gupta
Would you also be hiring more in these markets, these developed markets?
K. Balachandran
Certainly, yes. Certainly yes. We have plans to deepen our presence in sales and marketing including you know, on ground hires in these markets. Clearly yes, we have made, we have started, you know, looking at that activity now.
Asha Gupta
Got it sir. One of the things that we saw, so I think invested in following your company for a long time. So one of the things we saw was that the cloud adoption, so private companies would, let’s say adopt cloud much faster than the regulators. So you know, given that they tend to be a little more cautious and so on. So would you, so would they be, would they be sort of late adopters as far as AI is concerned as well, talking about the regulators? Because they would say that this is all financial data, you know, we have to proceed with caution and so on.
Right. So you can’t just like trust AI to do everything because there are mistakes, then who owns it all, that it might lead to other issues. So would you say that the regulators are more cautious as far as AI adoption?
K. Balachandran
I think you are absolutely right. We have been speaking to regulators. In fact we have actually one regulator already on the cloud which is PFRDA in India. That’s the private cloud which they are using. But when you talk about AI services and cloud based architecture, there is reluctance on part of the regulators to embrace that completely. So there are multiple ways to overcome this. We are also looking at, you know, a small language model which can work, which is, which is a structure where the data doesn’t go out.
So the LLMs which some of the regulators can use, which could be their private or sovereign LLMs. So that is a structure we are talking about. In fact, you know, in couple of Middle east implementations this is a subject which has been further, you know, explode. So I would say that you know, when it’s public data or report information which needs to be further, you know, structured and taken into regulators, you can definitely use public AA services. When it is confidential data there could be, there could be some reluctance or there could be great reluctance by regulators to go back to, you know, generic AI services.
Asha Gupta
And one final question sir. So the days receivable has been trending downward. So is it because of more effort on our part to collect our money regularly? Is there something to call out there?
K. Balachandran
I think the combination of, I think, you know, of course, enterprise part of the business has been slowly moving up. That’s number one and number two on the subtext side also. So I think regulators have been, you know, I would say more amenable to, you know, making prompt payments.
Asha Gupta
So it’s a good situation. It’s
K. Balachandran
A good situation. But I would say that, you know, to improve, further improvement, you know, will become progressively difficult.
Asha Gupta
Okay, so around 80 days is what we can accept.
K. Balachandran
Yeah, I would say that 75 to 80 days is what we would be comfortable. But if the enterprise SaaS revenues really gallop going forward, it could further improve. But we need to wait for that.
Asha Gupta
Thank you for your answers and questions. Thanks.
K. Balachandran
Pleasure to have you as usual.
Operator
Thank you. Ladies and gentlemen, if you have any questions at this time, you may enter Star and one on your handset. To ask a question. Please enter Star and One. Participants, if you have any questions at this time, you may enter Star and one. As there are no questions from participants, I now hand the floor over to the management for closing comments.
K. Balachandran
Thank you so much. This time it has been a shorter investor call. I hope all of you are happy with the way we are progressing and I hope we have been able to address all of your questions. Please free to write to us if you have further questions and we are open to interacting with you on a face to face basis as well as through emails. Thank you so much. Have a good day ahead. Bye.
Operator
Thank you very much on behalf of iris RegTech Solutions Ltd. That concludes this conference call. Thank you all for joining us and you may now disconnect your lines. Thank you.