Happiest Minds Technologies (HAPPSTMNDS) Q3 25/26 earnings summary

Executive summary

• Achieved up to 10.7% year-over-year and 2.4% sequential revenue growth in Q3, with nine-month growth at 10.2% and 297 active clients, 92% repeat business.

• Launched 'AI First' as the 11th strategic transformation, embedding AI across offerings and delivery, with over 600 AI specialists and 75%+ GenAI-enabled developers.

• AI-led engagements are scaling, with 32 GenAI and Agentic AI use cases moving to production.

• Recognized for people-first practices, diversity, and as a top employer in India, with 27% gender diversity and presence in 16 countries.

• Management remains confident in delivering 10%+ revenue growth over four years, with potential for higher guidance.

Financial highlights

• Q3 FY26 revenue: $65.7M (up to 2.4% sequential, up to 10.7% YoY in INR; 4.8% YoY in USD); nine-month revenue: up to $195.2M (up to 10.2% YoY).

• EBITDA: INR 123 crore (20.4% margin, up from 20.2% in Q2); operating margin improved to 17.4%.

• Adjusted PAT for Q3 FY26 at ₹6,992 lakhs; PAT at ₹4,030 lakhs, impacted by a one-time wage code charge of ₹2,203 lakhs.

• Adjusted PAT margin: 11.6% (vs. 11% in Q2); net profit margin at 7% for Q3 FY26.

• Utilization at 82%, highest in recent times; trailing 12-month attrition at 17.4%.

Outlook and guidance

• Reiterated 10%+ constant currency revenue growth and 20–22% EBITDA margin guidance for FY26.

• AI First strategy expected to drive higher growth; updated guidance to be provided with Q4 results.

• Plans to grow AI/GenAI team to 1,000 by FY27 while maintaining financial discipline.

• Digital revenues remain above 94% of total, with continued focus on AI, cloud, and digital transformation.

• Management highlights strong pipeline in AI-driven solutions and expects continued growth in BFSI and healthcare verticals.