hSenid Business Solutions (HBS.N0000) Q1 2027 earnings summary

Executive summary

• Revenue for Q1 FY 2027 was LKR 603 million, up 28% year-on-year and 15% quarter-on-quarter, with 75% recurring revenue, driven by SaaS scaling and core offerings.

• Exit ARR reached USD 5.7 million, up 26% year-on-year and 5% quarter-on-quarter.

• Normalized EBITDA was LKR 100 million, margin expanded to 17% from 2% a year ago, reflecting improved profitability.

• Net profit was LKR 51 million, a turnaround from a net loss last year, with a net profit margin of 8%.

• Free cash flow was LKR 44 million, margin -7%, impacted by slower collections in April and May.

Financial highlights

• Recurring revenue comprised 75% of total revenue.

• Cloud revenue accounted for 68% of total, on-prem 14%, tracking devices 8%, managed services 7%, and other 4%.

• Gross profit was LKR 321.8 million, up 48% year-on-year, with a gross margin of 53%.

• Days sales outstanding (DSO) improved to 99 days from 160 over two years.

• LKR 46.8 million in other income mainly from FX gains; LKR 17.8 million exchange loss from subsidiary cash reserves.

Outlook and guidance

• Focus remains on accelerating cloud and Lexi AI adoption, expanding product innovation, and maintaining operational discipline.

• Sales funnel healthy across all regions, with expectations for stronger Q2 and Q3.

• Strategic priorities include driving new customer acquisition and upsell, especially in mid-market and enterprise segments across APAC and MEA.

• Sales and marketing costs expected to remain stable or decline as a percentage of revenue.

• EBITDA growth rates expected to exceed 20% due to high operating leverage.