Newgen Software Technologies (NEWGEN) Q3 25/26 earnings summary

Executive summary

• Nine-month revenue reached INR 1,122 crores (Rs 11,217 million), up 7% year-over-year, with 34 new logos onboarded, reflecting strong business momentum and global enterprise trust.

• Q3 revenue was INR 400 crores (Rs 4,003 million), a 5% year-over-year increase, despite a high base from last year’s strong license sales.

• Adjusted profit after tax for Q3 was INR 90 crores (Rs 901 million, 22.5% margin), and for nine months was INR 222 crores (Rs 2,216 million, 19.8% margin).

• Annuity revenues grew 20% year-over-year in Q3 and 15% for the nine-month period.

• AI-driven solutions and next-gen products are gaining traction, with significant investments in AI and employee upskilling.

Financial highlights

• Q3 annuity revenues were INR 250 crores, up 20% year-over-year; subscription revenue within this was INR 134 crores, up 29% year-over-year.

• Total income for Q3 FY'26 was Rs 4,203 million, up 7.9% year-over-year.

• Adjusted EBITDA for Q3 FY'26 was Rs 1,062 million (26.5% margin), and for 9M FY'26 was Rs 2,536 million (22.6% margin).

• Net profit for the quarter was ₹6,281.51 lakhs, compared to ₹8,900.17 lakhs in the same quarter last year, reflecting a decrease due to exceptional items.

• Basic EPS for Q3 FY'26 was Rs 6.42 (up 0.9% YoY), and for 9M FY'26 was Rs 15.79 (up 6.7% YoY).

Outlook and guidance

• Confident of license recovery in upcoming quarters, supported by a strong deal pipeline, though large enterprise deals face elongated decision cycles.

• Expecting healthy recovery in traditional markets and well-positioned to capitalize on emerging opportunities, especially with AI-led products.

• Subscription and annuity models expected to provide more predictable growth, while license revenues remain lumpy.

• The business model remains resilient with large annuity revenue streams and diversification across geographies and verticals.

• The company continues to monitor regulatory changes, particularly regarding the new Labour Codes, and will adjust accounting as needed based on future government clarifications.