Newgen Software Technologies (NEWGEN) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue was Rs 3,206 million (INR 321 crores), up 1.9% YoY, with profit after tax at Rs 497 million and a net margin of 15.5%.

• 12 new customer logos were added, with key wins in banking, finance, insurance, and healthcare across India, Saudi Arabia, and the Philippines.

• A new patent was granted for data compression, bringing total patent grants to 25, and the company was recognized in Gartner and Forrester reports.

• Q1 FY26 results were approved by the Board, with auditors issuing unqualified limited review reports.

• 53,600 equity shares were allotted under the ESOP Scheme 2022, increasing paid-up capital.

Financial highlights

• Subscription (SaaS, ATS/AMC) revenues grew 19% YoY to INR 121 crores, with annuity revenues forming 56% of total.

• Q1 FY26 EBITDA (adjusted) was Rs 450 million, down 5.6% YoY; FY25 EBITDA was Rs 3,762 million, up 31% YoY.

• Net cash from operating activities in Q1 FY26 was Rs 811 million; net trade receivables at INR 504 crores, DSO at 123 days.

• R&D investment was 9% of revenues; sales and marketing accounted for 26%.

• Q1 FY26 basic EPS was Rs 3.55, up 4.2% YoY.

Outlook and guidance

• Management expects gradual improvement in deal closures and growth in H2 FY26, with a strong funnel and focus on AI transformation.

• No formal revenue growth guidance provided; management remains committed to growth but notes uncertainty in achieving historical 20% growth rates.

• Margins are expected to be maintained, with cost optimization through automation and AI offsetting wage increases.

• Board recommended a dividend of INR 5.00 per equity share for FY25, subject to shareholder approval.

• Business model remains resilient with large annuity revenue streams and diversified customer base.