MPS Limited (NSE: MPSLTD) Q1 2026 Earnings Call dated Jul. 18, 2025
Corporate Participants:
Unidentified Speaker
Rahul Arora — Chairman and Chief Executive Officer
Prarthana Agarwa — Chief Financial Officer
Srinivassaiah N — Project Lead
Archana Jayaraj — Chief Operating Officer
Analysts:
Unidentified Participant
Navid Virani — Analyst
Saurabh Surendra Shah — Analyst
Rahul Jain — Analyst
Abhilasha Satale — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to NPS Limited Q1FY26 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 Start then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Arora, Chairman and CEO. Thank you and over to you Mr. Arora.
Rahul Arora — Chairman and Chief Executive Officer
Thank you Ranju. Good evening from Singapore and a warm welcome to our Q1 FY26 earnings call today on the call I have with me Prachna Agarwal, CFO of MPS Limited, Srinivas TV COO of MPS Limited A warm welcome to Srinivas to his first online MPS Archana Jayaraj, Chief Operating Officer, MPS Interactive and MPS Europa. Pratna joins us from a corporate office in Noida, Sriniv from Bengaluru and Archana from Bengaluru as well. Pratna will kick things off in our opening segment today by discussing our financial performance. Then Srini will update us on our education and research solutions business segments.
Archna will discuss the progress in our corporate learning business. Finally, I will provide an update on the outcome of our board meeting held earlier today before opening the call to questions. Let’s get going. Over to you Pratna.
Prarthana Agarwa — Chief Financial Officer
Thanks Rahul. Q1FY26 was a soft start to what should be remarkable year for MPS. Revenue growth was muted at 3.9% over previous year though EBITDA grew by as much as 22.51%. Headcount has grown from 3,007 employees to 3,263 employees reflecting the scale up we expect as we progress through the FY. We brought DSO days back to 45 in Q1 FY26, an achievement my team and I are proud of and are looking forward to sustain. The excellent corporate governance around redistribution of surplus capital is being followed through by tight execution from Finance and Operations and working capital management.
I would like to highlight that we have reset our segment reporting to reflect how the management team views the business today and towards Vision 2027. Our reporting now will be on a market based approach rather than a product based or service based approach. Our core business segments based on the markets we target are research solutions, education solutions and corporate learning. Research solutions include content and e learning solutions for journals, books and MRWs inherited from Macmillan, ownership of MPS Platform Solutions from Legacy Macmillan, the acquisition of think in 2017 from Digital river and acquisition of Highwire from AKKR and Stanford University in 2020.
The acquisition of AJE from Springer Nature completed in February 2024. Education solutions include the Content platform and E Learning solutions. Business servicing education clientele inherited from Macmillan ownership of MPS acquisitions of Element in 2013 EPS in 2014 and TSI Evolve in 2015 acquisition of Medplus from Borneo Corporation in 2016 India operations that support the US education business acquisition of Topsin GmbH from Tata Industries in 2018 corporate learning includes acquisition of Tata Interactive Systems Limited and AG in 2018 acquisition of EI Designs in 2022 acquisition of Liberate Learning in 2023 our revised Go to Market strategy focuses on representing firm wide capabilities to the marketplace rather than our previous product based approach.
We unlocked this strategy first in 2022 and have since then scaled its execution. The CODM has evaluated the business activities and accordingly has realigned the composition of the business segments to reflect the changes in the internal organization structure. Accordingly, the segment revenue and results have been reclassified for all the reportable periods. I want to now hand it over to Srini to discuss the developments in our education and research solutions business.
Srinivassaiah N — Project Lead
Thanks Prarthuna the Education Solutions segment recorded remarkable growth with revenue soaring by 56.64% in Q1 of FY26. Given the operating leverage available in the business, EBITDA more than doubled compared to previous year and EBITDA margin was 36% in Q1 of FY26. What was even more happening was that this extraordinary success was entirely driven by organic growth since the last acquisition in this segment was way back in 2018. This impressive growth is driven by strategic collaborations with top tier educational platforms, continuing education institutes and globally recognized learning companies. The infusion of new high profile climbs and the robust pipeline underscores our relentless pursuit of excellence in this business segment.
Moving on to Research solutions. The aggregate snapshot in Q1 does not do justice to the remarkable business performance underlying we did witness a small decline in revenue over previous year in Q1 in the research Solutions and this decline was entirely due to intentional rightsizing of aje, which is now operating at an annual run rate of USD 12 million in revenue at impressive margins. The growth in the rest of the portfolio, particularly journal, editorial, office and peer review and content platform solutions for journals, books and MRW is lost in the AJE noise. However, for the diligent analysts it does show up in EBITDA growth which was nearly 10% in Q1 FY26 over previous year in research solutions business segment.
The EBITDA growth was driven by unlocking of operation leverage due to impressive revenue growth in the non AJE businesses and research solutions and a complete transformation of AJE which though truncated in size is much healthier in margins, quality of revenue and customer satisfaction. I would like to now hand it over to Archana to discuss impressive progress made in our E learning business.
Archana Jayaraj — Chief Operating Officer
Thanks srini we entered FY26 with a clear focus on innovation led differentiation and a deliberate effort to further tighten our operational levers for long term stability in a dynamically evolving landscape. In Q1 that translated into decisive progress across both our product strategy and our efficiency agenda. Structurally, we continue to drive greater agility reflected in a Lena team with headcount reduced from 288in Q1FY25 to 202in Q1FY26 while maintaining delivery strength and accountability. These shifts have allowed us to optimize workflows, improve throughput and strengthen governance across projects. Innovation has been central to our agenda. We have expanded our suite of AI powered client facing tools including interactive dashboards for real time analytics and visibility, bots for operational excellence, enablement and the rollout of Gen AI Studio, a growing ecosystem of curated free tools for both internal and external use.
These initiatives are already opening doors to larger and more strategic conversations and are laying the groundwork for scalable differentiated revenue in the quarters ahead. On the solution front, we launched offerings such as Adaptive Learning Pathways and CAM simulation tailored to address diverse enterprise needs in a range of domains across fmcg, Energy and the public sector. Across the various entities, we onboarded 12 new customer logos in Q1. Early strategic bets are beginning to convert into tangible outcomes, including the earlier invitation to join a prestigious conglomerate supplier panel now resulting in work north of USD 1 million to be executed in 2025 and an experience center project valued at USD 850k.
In summary, we are moving with intent. We are innovating boldly, delivering intelligently and scaling with precision. We’re building for resilience not reaction and that long term discipline gives us confidence in our FY26 trajectory. I would like to now hand it over to Rahul to conclude this opening session.
Rahul Arora — Chairman and Chief Executive Officer
Thanks Archna and thank you for the rich update team. Q1 was soft for MPs particularly in the context of what we expect to be a banner year. Though the headlines brush over some strong indicators. AJE has declined in Q1 but other things have not. Firstly, North America is growing again for us after dipping to 45% of our total revenue. Same time last year we saw a major bounce back in Q1 FY26 with a geography accounting for 51% of our consolidated revenue. So North America is growing with 60% type of growth in education business was entirely organic.
We now have a superior profile of customers including top tier educational platforms, continuing education institutes and globally recognizing recognized learning companies coming to our Research solutions. Business margins in research solutions continue to expand despite a one time contraction in AJE which was well planned and very intentional in the corporate learning business Order book and pipeline is moving in the right direction with some sizable orders around the corner. Our total headcount has increased reflecting what we expect as we progress through this year. Finally, we have a robust acquisition pipeline that should result in multiple deals in FY26.
Let’s now move to Board outcomes. Firstly, I’d like to talk about the scheme of amalgamation. I’m pleased to announce that the Board has approved the amalgamation of ADI BPO Services Limited with MPS Limited subject to stock exchange, stationary and other requisite approvals. As ADI BPO is the holding and promoter company of mps, this merger will simplify the shareholding structure, enhance operational flexibility and strengthen direct promoter alignment, all without affecting public shareholding. The removal of the intermediate holding company eliminates structural complexity and overcomes restrictions under current lane rules, clearing the path for inorganic growth for MPS and better strategic execution.
This is a key step in building a more agile, growth focused and efficient organization. Next, I’d like to talk about restructuring of the overseas subsidiary Transfer of shareholding in MPS Europa AG to MPS Interactive Systems in continuation. I’m pleased to share that the Board has also granted its in principle approval for the restructuring of our overseas subsidiary MPS Europa AG through the transfer of its entire shareholding to MPS Interactive Systems Ltd. Another material wholly owned subsidiary of MPS. This strategic realignment is a first step that could consolidate the group’s E learning business under a single focus entity, thereby enabling a unified, scalable and globally competitive E learning solutions platform with the potential to unlock operational synergies, revenue synergies, streamlining governance and enhancing global market positioning.
MPS Europea AG will now operate as a step down subsidiary of MPS Interactive Systems, enabling a more streamlined structure and sharper execution capability within the corporate learning vertical. The transaction will be executed at arm’s length and remains subject to valuation, due diligence and requisite regulatory and statutory approvals. Let’s now open the call to questions.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Navit Virani Bastion Research. Please go ahead.
Navid Virani
Hello. Am I audible? Yes, you are audible? Yes. So thank you for the opportunity. So, first one, I just wanted to understand regarding the overall growth in the last few years. If I look at the overall top line growth, it looks like it is mostly driven by acquisitions. And additionally, what. As an outsider, what I’m able to see is that his growth is mostly one time in nature. And so my understanding was that once we acquire an entity, there will also be some part of organic growth which will come with that entity. But that is not something that I’m able to see right now. I can be completely wrong. So can you just throw some light here and improve my understanding?
Rahul Arora
Sure. So let’s take Q1 FY26 itself. So if you look at this quarter, essentially what’s taken place is with aje, and I’m ballparking here. There’s been a year on year decline of about 20 crores in revenue. And that has been highly intentional. We have exited things that were not profitable and the focus has been entirely on making an unprofitable asset highly profitable. We have now hit ebitda margins of 23% standalone at Aje. So if you take AJE out, the business would have grown organically. If you take a decline of AJE out, the business would have grown organically at 10% for the research solutions business and at 15% for the overall business.
So the business is growing organically with the exception of AJE. This AJE hang will continue through FY26. But fundamentally, the rest of the business is growing. And this growth does not include any acquisitions. So this is pure organic growth.
Navid Virani
So if I understood your answer correctly, what you’re saying is that we are still taking some measures in terms of revenue as far as AG is concerned, that the profitability will continue to improve if I look at a at a standalone basis, Is that understanding correct?
Rahul Arora
Correct. So, like I said, Keeping AJ aside, the business is growing organically at 10 15% with AJE. As a result, the growth is fairly flat for this particular quarter. AJE standalone, like I said, is about 23% EBITDA margin in Q1. This will continue to improve as we progress through the year north of 30%. The Research Solutions business, where AJE is currently situated without. AJE is operating at 40% EBITDA margin. So again, just to give the margin numbers, AJE standalone today is 23%, heading to north of 30% very soon. And without AJE, the Research Solution business has an EBITDA margin of 40%.
operator
Thank you, Mr. Virani. Please rejoin the queue for more questions. Next question comes on the line of Khrushi Parikh with Google Rock pms. Please go ahead.
Unidentified Participant
Yeah, hi. So maybe if I can stick to AJ right now. So when you said 20 crores was. The impact on a quarter. On quarter basis. So on a yearly basis this would. Be around 80 quarters. 80 crores.
Rahul Arora
So the. The run rate for AG that we expect for FY26 is $12 million. And the impact that I was giving you was Q1 FY26 versus Q1 FY25. The 20 crores. And again, the 20 crores is the ballpark. Okay. And the run rate for FY26, we’re expecting about $12 million.
Unidentified Participant
Sure. And on the same lines, what is the rationale for. You mentioned that this was planned and intentional. So what was the rationale for? So I understand the margins part, but. Was it that the client to whom we were catering to was not ready. To, you know, help us with more margins or was it something else?
Rahul Arora
Yeah, like I said, MPS overall we’ve always been very disciplined with capital allocation and margins. Given that we are in an industry where you can grow organically at 10, 15%, you can’t grow more than that organically. And in order to grow at a higher clip, you need inorganic growth. And to fund that inorganic growth, you need cash flow. So we’ve always had the discipline to run high margin businesses and reinvest surplus cash into acquisitions to drive 20, 25% overall growth. So anytime a business is operating at a low margin, we try and solve for the issues in the business that are leading to that low margin.
That’s what we’ve done with aje. There were clear, definitive measures taken which meant that the revenue has declined. But we constantly are looking to improve the margins.
operator
Thank you. Mr. Parek. Please rejoin the queue for more questions. Next question comes from the line of Krish Masha with Envision Capital. Please go ahead.
Unidentified Participant
Good afternoon to the management team and thanks for taking my question. Curious to know what is this entire amalgamation leading to in terms of dilution. And any other outgo from mps?
Rahul Arora
At the moment there is no change in shareholding. There is no tax impact or any commercial impact to mps. This is simply a corporate restructuring at the Holdco level. So currently the way it was structured was that between the Ultimate Promoter Group and mps, there was an intermediary called Adi bpo. That intermediary is getting eliminated and collapsing into mps. So commercially, financially, even in terms of shareholding, there is no change. But yes, there will be one less entity between the promoter group and mps. Okay.
Unidentified Participant
And the promoter shareholding in terms of.
Rahul Arora
Percentage will also remain the same in the company. Remain the same. Exactly the same. Yes, exactly the same. Okay.
Unidentified Participant
And aj, when we acquired, what was the revenue? And now what is the fall that we are? I mean currently it is $12 million.
Rahul Arora
But when we acquired, what was the revenue last year? Last year it was 18 million 1, 8. And this year we’re doing 12 is what we expect on a conservative basis.
operator
Thank you, Mr. Shah. Please rejoin the queue for more questions. Next question comes from the line of Sourav Surendra Shah with Aum Fund Advisors. Please go ahead.
Saurabh Surendra Shah
Hi, Rahul. Again just focusing on aje. When do you expect to start showing. Some growth in Asia, which means, you know, your kind of lower end clients are completely taken off and you’re either able to increase business with existing clients or add more clients. Do you expect to see any of that in FY26? And you know, if not, then when. Do we start seeing, you know, the kind of growth that you are normally delivering?
Rahul Arora
A lot of active. A lot of activity is taking place, has taken place last year and is taking place in FY26. That is activities of three forms. One is we are entering into today. As of Today, the only B2B partnership that we have in AJE is its finger nature. We’re looking to expand that partnership to multiple publishers. So a lot of conversations, a lot of discussions and negotiations are happening. So we expect more B2B revenue. Today, B2B revenue is less than 10% at Aje.
Most of it is B2B2C. So we expect that to grow. Secondly, our product Rubrik, which is a DIY AI platform, we expect that to scale as well and contribute to the overall revenue of Aje. And finally, on the B2B2C side, we are now looking to expand beyond China. Given that China is the predominant market for B2B2C for age right now. So these are the three levers that we are unlocking. We expect results primarily to show up from Q1 of FY27. So April, April 2026 is when we start to see the results this year on a conservative basis.
We’re forecasting $12 million for AJ.
Saurabh Surendra Shah
So for myself from 18 billion down to about 12 million. So we expect this to be about 33% down on a full year basis. And FY27, any order of magnitude we should consider. You think this could go to $20.
Rahul Arora
Million from the three acquisitions. So I think pretty. If you look at the research solutions business without AJE, it’s growing at 10, 11% right now. So we would expect similar growth from AJE once this transformation settles. So back to 10 11% from Q1.
operator
Thank you, Mr. Shah. Please rejoin the queue for more questions. Next question comes on the line of Vikasmistry with Moonshot Ventures. Please go ahead.
Unidentified Participant
Thanks for the opportunity. Rahul, a couple of questions. Yeah. Last time when we did the AG acquisition, we have create criteria to just increase the revenues. Earlier the revenue of AG was 20 million. So we didn’t take some part of the business, we didn’t acquire some part of the business. Then we revenue was 18 million. Now it dropped down to 12 million. And before one year we are doing acquisition. We will have discussions that we continue to cross our. Our hybridize and continue to have clients to give further services of AG to other clients. But it is not happening. Do what what has been happening there? And do you think that that sharp downturn is because that some new competition has arrived and that are giving services at slightly lower rate and you are. Your margins are getting out?
Rahul Arora
Yeah. So just so when everyone understands the question. So when we acquired aje, there were two parts. One was Research Square, which was the Pre Prints platform, and the other was aje. We did not acquire the Preprints platform because it was not a profitable venture. We only acquired the AJE piece of the total company. The revenue has dropped from 18 to 12 million primarily because of cost cutting measures and making the operations more efficient. So that was the first. So the revenue has dropped to 12 million. Financially, this has been a pretty remarkable acquisition. We’re expecting a payback of two years.
So within two years, MPS would have recovered whatever amount has been invested in aje. So that’s a pretty significant financial upside when you think of it either from an IR perspective or an ROCE perspective. And in terms of what’s the revenue driver? Essentially, if you look at our competition in this market, B2B tends to be a pretty healthy, stable revenue stream for, you know, for, for our competition for us at AJE, today, B2B is less than, is less than 10% of our revenue. And as a result, you know, most of our revenue is coming from B2B2C, which, you know, has been.
Has been volatile based on the cost cutting and things that we’ve done, the path for us really is going to be to. The strongest lever for us is really going to be to enhance the B2B arrangements. Like I had earlier shared, today, we are entirely dependent on one publisher within Research solutions. We have 20 star accounts that we are knocking on to get into revenue share agreements with them. Unlike other parts of our business where we essentially supply services and solutions and in return get compensated, this is a different type of arrangement that requires more time and strategic discussion because we essentially entering into a partnership with our customers where they divert inbound inquiries about content services to us at aje.
So the lead time essentially is around a combination of leadership blessing IT contracts, blessing IT once they bless it, the IT teams firing up the microsites and the website to which this demand will be generated to. So a lot of setup and groundwork that needs to be done in order to get these B2B partnerships on the way. So like I was commenting on the previous question, we expect to use this financial year to form those partnerships, but really start to execute on the demand from those partnerships from next financial year.
Unidentified Participant
Yeah, that’s totally understable, at least on lead time side. But we are surprised that you are saying the recovery will take at least one more year. So either we have not done any work on the first year of acquisition or we are moving slow because two years in a world where everything is moving.
Rahul Arora
Yeah, I think. I think. I think there is a need to understand the domain and the overall construct of the market. Like I described already, the. Without aje, the business is growing. The Research Solutions business is growing at 10 to 15%. I don’t think MPS has ever been slow at anything. I think we have a very strong track record over the last decade. I don’t think we are slow movers at all. It is a function of developing a capability, a function of the customer entering into a partnership. Remember, these are not client vendor relationships. These are partnership agreements.
And they take time to set up and require sometimes even board approval from our. From. From the customer side. So, yes, it requires an understanding of the nuance of this, of the setup.
operator
Thank you, Mr. Mistry. Please rejoin the queue for more questions. Next question comes on the line of Tashit Surti with Girig Capital. Please go ahead.
Unidentified Participant
Hello. Am I audible? Yes.
Rahul Arora
Hello.
Unidentified Participant
Hi. So in your pnl, in the other expense line item, it has grown by 3% Q on Q basis. Can you Elaborate on like this line I considered and what has gone.
Rahul Arora
Sure. I just bring Pracha CFO in to answer the question about why other expenses in corner.
Prarthana Agarwa
Thanks. Yes, that’s correct. The other expenses have grown by 3.76 crores on a Q. On Q basis. The increase largely is on account of the outsourcing cost by 2.8 crores which. Which is in line with business and another 1.8 crores on account of hosting cost, which is largely our cloud and hosting cost for our platform and journals business. This overall increase was compensated by a decrease in marketing cost and overall translation cost. So there’s a net increase of about 3.76 crores. This cost very steam. This range going higher. Sorry, there’s a lot of background noise. I’m not able to hear you clearly. So this cost going ahead. Hello, Am I audible now? Sorry, can’t hear you. Oh, sorry. Is it better? Yeah, much. Hello? Yeah, so I was asking this cause. Yeah, so this cost will stay in this range going ahead. Yes. So as Pradna was explaining, this cost is in. So if you look at the side of the business that has grown, the education business has grown significantly. As a result, outsourcing related to the education business as well as the standalone research business has grown.
So this is in line with the revenue growth minus age. So yes, so this is the continue in terms of this particular particular level.
operator
Thank you Mr. Surthi, please rejoin the queue for more questions. Next question comes from the line of J. Chauhan with Trinitar Asset Managers. Please go ahead.
Unidentified Participant
Hello, good afternoon. Am I audible?
Rahul Arora
Yes, you’re audible.
Unidentified Participant
Yeah, thank you for the opportunity. So my question was around like how are the conversations around AI impacting client budgets? And is AI being viewed as a tool for cost savings leading to pressure on pricing or as a. Or as a value added service that commands a premium. Can you give more insights on the same, please?
Rahul Arora
Sure. So we are seeing AI in terms of engagements, you know, in two ways. One is the more dominant way is to drive operational efficiency. So that is the more dominant way where essentially, you know, turnaround times and throughput times of processes earlier managed by mps. You know, there’s a lot of pressure on to produce things faster as specifically on the research business where our customers essentially are subscription businesses. So the more content they push, the more they can monetize. Also there’s a lot of pressure on the supply chain to produce faster and AI is an enabler that is driving that operational efficiency.
So so far, you know, MPS through MPS Labs and Its deep domain expertise has been on the right side of capturing market share and growth in the business. So like I was pointing out earlier, if you look at research solutions alone, you know there’s good solid growth there without aje. And a lot of that growth is coming from volume growth from existing customers, which is largely to do with not just AI but also automation and leaner workflows. So that’s on the research side. On the education side, the focus is more around product development and how AI can be unlocked in the development of products.
And so there is less about efficiency and more about differentiation and that’s being embedded into the workflows. Finally, as Archna described, on the corporate learning side as well, our teams are using AI towards driving operational efficiency which is basically showing up in the margin expansion that you see across the board. In terms of revenue streams. We are getting consulting projects where customers are asking us to advise and advise them on how AI can be used in their workflows. We are getting good E learning projects around helping the organization prepare for the implementation of AI as well as gauging the organization’s towards AI.
So majority today is to drive operational efficiency which is helping us acquire market share but also margin expansion. And some of it is what to do with new revenue streams that we have developed. But currently the revenue streams are fairly small.
Unidentified Participant
Understood, Understood. That’s all from my side.
Rahul Arora
Thank you. Thank you.
operator
Thank you. Next question comes to the line of Ravi Naridi with Naridi, please go ahead.
Unidentified Participant
Thank you very much. Rahul, you. I am shareholder since last 15 years and in last 10 years you have so much confidence. Now you were having previously. Thank you very much for this. Nice pickup. Sir. This corporate Learning volume down 32%. So any specific reason?
Rahul Arora
Yeah, so I let Ajnath come in to talk about the turnaround she’s orchestrating on the corporate learning side. But essentially, you know, we have very intentionally started to turn around the corporate learning division. You know, our plan was to turn the whole thing around by Q1 and start to see some revenue growth. Through Q2 we are possibly trending one quarter behind, but overall margins have started to look better. Q2 margins look pretty good too and things are operating fairly to plan. So I’ll let Archana come in and talk more about the corporate learning business.
Archana Jayaraj
Thank you, Rahul. So continuing on to what rahul mentioned in Q1, we in fact had like I would say threefold priority. So the first was of course to continue strengthening our operational foundation so that we could continue expanding margins as planned and in parallel, we also accelerated our innovation, especially around AI. So we have built a suite of AI powered learning tools that would also be offered to our customers in addition to enhancing our own in house operational efficiency. And the third is, of course we’re also focused on a strategic growth opportunity and we believe that this will have a significant upside in the quarters to come.
Given all of this, I mean, yes, we.
Unidentified Participant
Okay. Second, whatever target you give for 20, 28, 29, five years ago, it is intact.
Rahul Arora
Yes, absolutely intact. And hoping to give a very strong guidance next quarter for FY26 as well. I understand everyone, all the shareholder base and everyone who follows NPS has now seen 6, 8/4 of phenomenal growth and this appears to be a stutter. So I actually came prepared to share a very Strong guidance for FY26. My CFO said no, we’ll share it next quarter. So next quarter we’ll also give you a guidance for FY26. But overall we are very confident about this financial year. Like I said, the troubles in Q1, I won’t call it troubles, are fairly.
The muted growth in Q1 is fairly limited to the decline as a result of AJE and the softness in the corporate learning business. But overall, very, very bullish about revision 20 and extremely confident about FY26 and will share guidance on the next earnings call.
operator
Thank you Mr. Nardi. Please rejoin the queue for more questions. Next question comes from the line of Rahul Jain with Dolph Capital. Please go ahead.
Rahul Jain
Yeah, hi. So I have a two part question. Firstly, of course you partially mentioned that you would like to come out with an official guidance probably in quarter two, but you also said in some other interaction. There are some other answers. In the X of age the business has already grown 10%. So. And you expect the AG business also to post normalization into this growth trajectory. So is it safer to assume that 10 12% growth should, should not be a problem X of AG this year and that should be the going forward run rate for the growth irrespective of the macro that we are facing.
Rahul Arora
Correct. In fact, the. The macros, if you see our education business segments are absolutely correct. Rahul, on the, on the observation and with respect to the macros, you know, macros for us actually have been more favorable. So if you look at our education business segment which has no acquisitions, the last acquisition that we did in the education vertical was back in 2018 of Topsim GmbH, that business has almost grown at 60% and a lot of that has to do with the macro environment. But because typically in such environments there’s a lot of emphasis on education, particularly higher education in the U.S.
Rahul Jain
Right, right. And one, clarity, what Prasna said on the other expenses side, given that the nature of those costs are usual, so it’s safer to assume that that remains the cost of runways.
Prarthana Agarwa
Yeah, correct. So those are in line with revenue growth. So the, the large part of that was outsourcing and cloud costs. Both are, both have to do with the underlying revenue growth. So they have moved in the same, in the same proportion. Outsourcing cost would be more pertaining to the corporate learning business, or is it education and corporate. Actually all three. Education would be the highest, highest of the, of the outsourcing. And then there’s outsourcing in research, the outsourcing in corporate. Corporate also. But education will be the highest in terms of outsourcing. Right.
Rahul Jain
And in general outlook, if you could share in terms of what are the trends right now to drive the research part of our business, which you see could, you know, trigger the momentum in this offering that we have.
Rahul Arora
So I think three, three major drivers, really. The first driver with what I like to call more of the same, where essentially we are seeing volume growth in the core, what we used to call the core production business, where you’re producing content for journals and books and MRWs. Because there’s a lot of pressure on our customers to produce more content. They’re looking at scale organizations like NPS that can deliver that content through a technology approach rather than a human approach. And therefore, because we’re able to execute on that philosophy and deliver to the turnaround time and the quality levels that they require, which you cannot deliver through a human approach.
For example, you cannot produce an article that you get as a manuscript in four hours if you’re using a human approach. Now customers are talking about producing articles in 30 minutes. So that’s the kind of level of transformation we’ve seen in turnaround times. Turnaround times that used to be 30 days. First came down to two weeks, then they came down to days. Now we’re talking about, then they came down to hours, now we’re talking about minutes. So as a result, volume is growing significantly and therefore we are seeing more market share expansion for mps because our proprietary Digicore platform enables most of that.
The second type of growth that we’re seeing is a brand new revenue stream. What they call journal, editorial office and peer review. This part of the value chain was never outsourced. It was kept in house. This has gotten unlocked over the last couple of years. In a fairly significant way. Initially this was outsourced to very small companies and then our customers realized that mom and pop stores can’t deliver to the scale that they require. And now this outsourcing is traveling more to organizations like mps. As of today, this is the fastest growing part of our research solutions business.
We have two customers that we are billing over $1.5 million for this work. We’ve added a third customer already and gradually we’ll get to 20 customers through the course of the next couple of years. So the second lever is journal editorial office and peer review, which is a brand new high growth revenue stream for mps. And here the solution of offering is subject matter expertise. So we are actually employing pretty seasoned research professionals. Including today we have employed almost 200 PhDs that provide this kind of service to the publisher. And the third lever around the growth of course is through the acquisition of aje.
We now are also participating to service the needs of the research individual researcher. Historically this market was simply about solving a very, you know, solving a very small problem of improving the language of a researchers paper. We are trying to step up the, based on all our expertise over the last 55 years in scientific publishing, we are trying to step up the value proposition, where the value proposition is not about improving the language of the paper, but improving the chances of the researcher’s paper getting published, which includes not just improving the quality of the paper, but improving the quality of the entire submission, which is beyond just the paper itself.
So those are kind of the levers within research which give us tremendous confidence that once age stabilises, you know, that 1015 growth that we’re seeing, you know, will continue to power forward.
Rahul Jain
That’s, that’s quite helpful. And last bit, if I could ask, and I know it’s not very relevant question to you, but maybe given your closer association, if you could help us understand that. We have seen this Magro filing for IPO a few days back. We have earlier seen one of your largest customers going for an ipo. So, so what explains, you know, the trend in this space and does it directly, indirectly help our business? Because these are very mature businesses but going for public much later in their journey, is there any, any development happening at their end which could directly, indirectly impact us?
Rahul Arora
So both the customers that you mentioned are in our top five customers. Both events have significantly benefited mps. In one’s case there was a strong push, given that they’re a scientific organization. There was a strong push on margin expansion which we helped deliver to them through transforming workflows through automation. So as a result, our business has done exceptionally well as our maturity as a supplier has improved for them. So revenue with them has grown over 20% between them filing for the IPO and the IPO actually happening. So we saw pretty remarkable growth with the other customer that you mentioned.
Unlike the first customer, where the focus is on margin improvement, for them, the focus is on product development. And if you see our education business grew at 60%, a large reason for that is extensive product development in the United States in education. So because our customers are producing more products ahead of this particular customer is producing more product ahead of the ipo, it’s resulting in larger spends with us. In fact, one of them has signed a three year agreement with us, a volume agreement, which is leading to a lot of revenue growth for us. In terms of why ipo, I think historically many of these companies were family owned for many, many years.
They then went to private equity ownership and now after having exchanged two, sometimes three private equity ownership, they are finally doing an ipo. So it’s kind of been an evolution where family owned businesses went to private equity or family offices, then they went to another private equity family office and then finally the second or the third group has now listed the company for their exit. Most of these companies, if you look at their, you know, how they’re performing, are actually performing very well. You know, margins are pretty similar to MPI’s. Valuations of course are higher given that they’re listed on exchanges in Germany and London.
But yes, that’s kind of been the evolution from our standpoint.
Rahul Jain
Thank you so much, I’ll join.
operator
Thank you. Next question comes from the line of Deepak Agarwal with Param Capital. Please go ahead.
Unidentified Participant
Yeah, hello sir. Am I audible? Yes, you are. Yeah, yeah. So my first question was on geographical concentration. So obviously North America now is 51%. Where do you see this settling? So is this a fair number or it could still go further for North America specifically.
Rahul Arora
Yeah. So you know, the business, the business segment that has the highest kind of exposure, biggest exposure to North America is the education business. And as a result, as the proportion of the education business is increasing, North America is becoming a more important geography again, corporate learning as well. We’re expecting the next wave of growth to come from North America.
My guess is that, you know, we’ll probably settle closer to 60% as 60, 65% even as growth continues to kick in. And do remember that North American revenue tends to be the highest margin revenue in the overall portfolio. So yes, we had a Bit of a change when we acquired aje where a large proportion was Asia packed, particularly China. But I think finally this settles at North America being 60, 65%. Got it, got it. And so my second question was on the number of clients billed. So we do see a substantial dip. So is it that you have mentioned that clients build excluding B2C customers.
So is it we are looking like, on like or is it say 514 in Q1, FY25 had those customers and now we don’t have. Yeah, it’s apples to apples. Yes. And wherever we have unprofitable partnerships, we tend to exit them. So we’re very disciplined in terms of making sure that whatever customers we’re serving, those relationships are profitable. That’s why you also see as you compare number of clients bill dropping, you also see margin expansion. And that’s the reason for that.
operator
Thank you, Mr. Agarwal. Please rejoin the queue for more questions. Next question comes from the line of Abhilash Satale with Quantum amc. Please go ahead.
Abhilasha Satale
Yeah, thank you for taking my question. So I have a question on the inorganic expansion. If you can just discuss your pipeline in brief. And lastly, you know, as you have paid 95% of the dividend, then how are you expecting if any inorganic acquisition to fund through?
Rahul Arora
Yeah, so first, I think the pipeline is very, very robust. You know, any given point of time, we always evaluating multiple deals. And at this point we have three deals that are at a very advanced stage. So we’re hopeful that some of them or most of them will conclude this financial year. So looking forward to that. In terms of the type of acquisitions, we are primarily looking at education as the market, which is basically these are the intersection of education and technology. So these are the markets that we’re looking at. And we’re looking at companies that have at least $10 million of revenue and at least 15% EBITDA margin and that have some tailwinds.
So that’s the kind of assets that we’re looking at in terms of financing these acquisitions. Unlike previously where we our philosophy was to acquire and operate, in these cases, we’re looking to invest and support the management teams and the promoters. So because we will most likely be acquiring majority stake and not the entire company, the outlay will be lower. So it could be anything from 51% to 60% kind of range in the first kind of tranche. And in terms of how we’re going to fund this, obviously there’s cash accruals, but there’s also we’re open to Raising debt, if that is something that we need to do.
And we’ve stated before that up to 150 crores of debt we’re fairly comfortable taking.
Abhilasha Satale
Okay. And the payback, whatever, you know, payback you would be looking for the acquisition that will be in the range of that 2 to 3% what you have been maintaining.
Rahul Arora
No. So I think with the distressed acquisition you see a rapid payback. You see a two year, two and a half year payback like and while I would not call age a distressed acquisition, I would call it, you know, an acquisition that had, that had financial and strategic upside and that’s why we pursued it. So AJ is trending towards 2. We think that these growth assets would be more like three to five years because essentially we are acquiring a vehicle for future growth. So I don’t expect these growth assets to have these two year type of paybacks because those are massive turnarounds.
Essentially you’re getting paid back to take that pain on. So there is no pain here that we’re taking on. So I don’t think we’ll be getting those two back two year payback type of assets anymore.
operator
Thank you Mr. Tale. Please rejoin the queue for more questions. Next question comes from the line of Arjun Balkushnan, an individual minister. Please go ahead.
Unidentified Participant
Hi Rahul. Thank you. Continuing on the acquisition pipeline, can you give any idea about is it going to be in the first, the first half of the second half?
Rahul Arora
No, that’s very, very like forward looking, price sensitive information. I can’t share that information. We are trying our best to close whatever we can this financial year.
Unidentified Participant
Okay. Second question I had was the stock, I mean is very liquid in the market. I don’t know how much, I mean you care about the market but I’m not sure how much you care about the liquidity. But it’s highly liquid. I normally don’t, I don’t normally think about stocks. But this is, you know, today you can see the reaction has been quite, I mean the results have not been so bad for an adverse reaction. It’s all down to liquidity. Is there a possibility to consider a split to increase liquidity? Otherwise it’s very hard to acquire more shares without being careful.
Rahul Arora
Yeah, we’ve discussed this earlier at the board level as well. And the thought, thinking is fairly clear that how many slices the pie has doesn’t really affect the size of the pie. Right. MRF is a great example of a stock that was very expensive.
Unidentified Participant
I agree.
Rahul Arora
Again the management team and the board. Yeah. So the management team and the board are entirely focused on improving the quality of the business and focusing on the earnings and the revenue. You know what the stock price is and those kind of things are really what market determined. We don’t think of that as something in our control. Our focus is essentially on building a compelling learning company of meaningful scale. Yeah, we don’t really look at stock price and that kind of thing. Our focus is entirely on building a resilient business.
operator
Thank you ladies and gentlemen. Due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to Mr. Rahul Arora for closing comments.
Rahul Arora
Thank you so much for a wonderful earnings call. Look forward to your active participation subsequently as well. We appreciate all your thoughtful questions. You know your outside in perspective always helps us to learn and improve. I want to. I want to thank all our stakeholders for all the continuous support and respect. Our journey together has been quite remarkable. And looking forward to taking your confidence forward and supercharging the scale of this company. I look forward to your continued support, feedback and partnership mindset. Thank you so much.
operator
Thank you. On behalf of MPS limited. That concludes this conference. Thank you for joining us. You may now disconnect your lines.