Capillary Technologies India (CAPILLARY) Q1 26/27 earnings summary

Executive summary

• Achieved 43% year-over-year revenue growth in Q1 FY27 to ₹2,566.44 million, with EBITDA up 132% to ₹460.06 million, driven by strong organic NRR (111%) and strategic acquisitions, notably SessionM and Kognitiv.

• Normalized PAT for the quarter was ₹254.4 million, adjusting for a one-time cyber fraud loss and deferred tax liability; reported PAT was a net loss of ₹95.52 million.

• SessionM acquisition integrated and profitable within two months, contributing to North American and LATAM expansion; Kognitiv Solutions Inc. acquired to enhance North American presence.

• AI-driven products (aiRA) gaining traction, with 26 customers live and ~10 paying, and expected to contribute 5%-10% of revenue in the coming year.

• Business is on track to meet FY27 guidance of ₹10,650 million revenue and ₹1,720 million Adjusted EBITDA.

Financial highlights

• ARR reached ₹10,266 million in Q1 FY27, up 43% year-over-year; organic revenue up 17% year-over-year to ₹1,551 million.

• Adjusted EBITDA margin improved to 17% (Q1 FY26: 11%), with consolidated EBITDA at ₹460.06 million.

• Subscription revenue grew 50% year-over-year to ₹2,425 million, now 94.5% of total revenue.

• Gross margin for subscriptions at 66% overall, with organic gross margins above 75%.

• TTM New ACV (excluding a large healthcare customer) grew 75% year-over-year to ₹926 million.

Outlook and guidance

• Management expects to exceed previous guidance of ₹10,650 million revenue and ₹1,720 million profit.

• Anticipates continued strong organic and inorganic growth, with further margin expansion from M&A synergies and platform upgrades for acquired customers.

• aiRA expected to contribute 5%-10% of revenue in the coming year.