Fractal Analytics (FRACTAL) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 revenue reached INR 9,125 million, up 20% year-over-year, with net income surging 92% to INR 723 million, driven by margin expansion and operational efficiency.

• Healthcare & Life Sciences led vertical growth at 69% YoY, banking/financial services up 36%, CPG/retail up 19%, while TMT declined 22%.

• Net Revenue Retention reached 117%, and Net Promoter Score rose to 77, reflecting strong client expansion and satisfaction.

• Major AI platform wins included a landmark healthcare deal and a pilot with Mumbai's BMC for Cogentiq Health.

• Unaudited consolidated and standalone financial results for the quarter ended June 30, 2026, were approved and reviewed by statutory auditors with an unmodified opinion.

Financial highlights

• Revenue from operations grew 20% YoY to INR 9,125 million; gross margin expanded to 46% (up 29 bps YoY); adjusted EBITDA margin rose to 17% (up 189 bps YoY).

• Adjusted EBITDA increased 35% YoY to INR 1,537 million; operating EBIT up 42% YoY to INR 1,031 million.

• Net income margin improved to 7.9% (up 296 bps YoY); diluted EPS up 78% YoY to INR 4.09; basic EPS at INR 4.31.

• Cash from operations was negative INR 1,030 million due to variable pay, but improved 20% YoY.

• Cash and equivalents stood at INR 16,378 million, including IPO proceeds; long-term debt fully repaid.

Outlook and guidance

• TMT vertical expected to recover with healthy sequential growth in Q2, driven by new deals with existing clients.

• Deal sizes and RFPs are increasing, with larger, more ambitious client engagements anticipated.

• License revenues (including Cogentiq) currently 3% of total, expected to rise as pipeline converts.

• R&D spend to increase up to 10% of revenue, funded by expanding gross margins.

• Continued focus on organic growth, client expansion, and platform-led delivery, with strategy emphasizing scaling with Must Win Clients and leveraging partnerships.