Sonata Software (SONATSOFTW) Q2 24/25 earnings summary

Executive summary

• Achieved $1B+ revenue with a 15.10% 10-year CAGR, supported by 6,900+ engineers across global locations.

• Consolidated Q2 FY25 revenue was ₹2,169.8 crore, down 14% QoQ but up 13% YoY; H1'25 revenue grew 20% YoY to ₹4,697.2 crore.

• Won 3 large deals in Q2 FY25, including a multi-million-dollar Microsoft Fabric deal and a GenAI modernization project for a top pharma client.

• Maintains a strong partnership ecosystem with Microsoft, AWS, Salesforce, and others, and recognized for rapid YoY revenue growth.

• International IT Services revenue grew 2.3% QoQ in USD terms to $84.6 million, with strong BFSI & HLS verticals offsetting Retail & TMT slowdown.

Financial highlights

• Q2 FY25 consolidated revenue was $259.1M (INR 2,169.8 Cr), with international services revenue up 2.3% QoQ and domestic business GC up 2.5% QoQ.

• EBITDA before OI & Fx grew 0.7% QoQ to INR 177.3 Cr; PAT increased 0.8% QoQ to INR 106.5 Cr.

• Domestic business revenue declined 21% QoQ but grew 17.5% YoY; EBITDA up 9.4% YoY.

• International services EBITDA margin at 18.2%, with PAT up 5.3% QoQ and 26.6% YoY.

• DSO for International IT Services and Domestic Products & Services remained stable at 45 and 35 days, respectively.

Outlook and guidance

• Targeting $1.5B revenue by FY27, with international EBITDA in the low 20% range and 12% YoY domestic GC growth.

• Management remains optimistic about long-term growth, citing a healthy pipeline and continued modernization demand.

• Focused on expanding large deals, AI/GenAI, and cloud/data modernization, with a $91M pipeline in Microsoft and $67M in AI/GenAI.