Fractal Analytics (FRACTAL) Q3 25/26 earnings summary

Executive summary

• Achieved 21% year-over-year revenue growth in Q3 FY2026 to INR 8,544 million, with profit after tax up 10% to INR 1,001 million, driven by strong client expansion and new client additions.

• Net Revenue Retention (NRR) at 114% and Net Promoter Score (NPS) at 77, reflecting robust client satisfaction and retention.

• Expanded relationships with existing clients, secured preferred supplier status with two Magnificent Seven clients, and won Microsoft Partner of the Year 2025 in retail and consumer goods.

• Healthcare became the fastest-growing vertical with 78% year-over-year growth, and continued heavy investment in AI R&D, launching new products like Vaidya 2.0 and PiEvolve.

• Completed IPO in February 2026, raising INR 10,235 million via fresh issue and INR 18,104 million via offer for sale.

Financial highlights

• Q3 2026 revenue from operations was INR 8,544 million, up 21% year-over-year and 7% sequentially; profit after tax for Q3 was INR 1,001 million (11.7% margin), up from INR 922 million last year.

• Gross margin reached 47.2%, with adjusted EBITDA at 17.8% for Q3 2026; EBITDA for the quarter was INR 1,285 million, up from INR 884 million last year.

• Cash from operations in Q3 was INR 1,294 million, up 16% year-over-year; days sales outstanding reduced by 14 days to 78.

• Revenue per billable headcount rose to $85,000 (INR 7.4 million), up 6% in rupee terms.

• Fractal Alpha segment revenue up 51% year-over-year for nine months, with losses reduced to INR 10 crores and 276 bps gross margin expansion.

Outlook and guidance

• Management targets historical CAGR of ~30% and aims to capture growth in the $593 billion enterprise AI market.

• Expects continued expansion of gross, EBITDA, and PAT margins as AI adoption increases and ESOP charges decline.

• Anticipates further improvements in SG&A efficiency through internal AI tools and ongoing R&D investment.

• The group continues to monitor the impact of new Labour Codes and regulatory changes on employee benefit liabilities.