hSenid Business Solutions (HBS.N0000) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue was LKR 431.3 million, a 5% year-on-year decline in LKR but a 4% increase in USD constant currency; recurring revenue comprised 67% of total.

• PeoplesHR Cloud drove growth, with 10% year-on-year revenue growth in LKR and 23% in USD constant currency, accounting for over 60% of revenue and 99% of new deals.

• Exit annual recurring revenue (ARR) reached $4.0 million, with 30% YoY ARR growth and churn below 2%.

• Recurring subscription revenue grew 20% in LKR and 33% in USD constant currency year-on-year.

• Net loss for Q3 was LKR 99.7 million, including a forex loss of LKR 13 million; normalized EBITDA margin improved to -8% from -17% sequentially.

Financial highlights

• Gross profit for Q3 was LKR 201 million, with a gross margin of 47%.

• Normalized EBITDA margin improved to -8% in Q3 from -17% in the previous quarter.

• Net loss for Q3 FY25 was LKR 100 million, with a net margin of -23%.

• Free cash flow to the firm margin improved to -16% in Q3 FY25 from -46% in Q2 FY25.

• Cash position at end Q3 FY25 was ~LKR 581 million; IPO fund utilization at 86%.

Outlook and guidance

• Q4 is expected to achieve break-even at EBIT level, with net profitability anticipated in the next financial year.

• Sales closures in Q4 are projected at a minimum of $700,000, 2.5-3 times higher than the previous quarter.

• Recurring revenue is expected to grow 8-10% quarter-on-quarter, supported by a strong sales funnel.

• Focus on product enhancements, especially for compliance in GCC, and payroll automation.

• Strengthening sales and marketing alignment to drive lead generation and upsell/cross-sell opportunities.