NIIT Learning Systems (NIITMTS) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 revenue grew 20% year-on-year and 5% quarter-on-quarter to INR 4,757 million, validating the AI-first strategy and recognized for AI leadership in learning.

• AI-enabled revenues now represent 10% of total business, with industry analysts noting leadership in this area.

• Acquisition of MST Group in Germany completed in July 2025, adding seven marquee clients, 84 employees, and strengthening presence in the DACH region and industrial verticals.

• Profit after tax for Q2 FY26 was INR 470 million, with EPS at INR 3.43.

• Revenue visibility increased to $409 million, up from $388 million last quarter and $368 million a year ago.

Financial highlights

• Q2 revenue: INR 4,757 million, up 20% year-on-year and 5% quarter-on-quarter; constant currency growth at 15% year-on-year and 3% quarter-on-quarter.

• EBITDA: INR 966 million, up 2% quarter-on-quarter, with EBITDA margin at 20%-20.3%, down 324 bps year-on-year.

• PAT: INR 470 million; EPS: INR 3.43, down from INR 3.62 in the previous quarter.

• Operating cash flow: INR 777 million; free cash flow: INR 677 million; net cash position: INR 5,917 million.

• DSO at 66 days; cash and cash equivalents at INR 8,079 million; CapEx for the quarter at INR 99 million.

• Net other income was negative INR 89 million, impacted by lower treasury income, acquisition-related expenses, and forex losses.

Outlook and guidance

• Q3 constant currency growth expected at 2%-3% quarter-on-quarter; full-year constant currency growth expected at 12.5%-13% year-on-year, with organic growth guidance retained at 10%+.

• Margins expected in the 20%-21% range for both Q3 and full year.

• Robust contract pipeline and continued investments in AI, consulting, and sales/marketing to drive future growth.

• Global growth is expected to slow, with IMF projecting a decline from 3.3% in 2024 to 3.1% in 2026.

• Clients are focusing on cost efficiency, automation, and compliance amid macro uncertainty.