Amagi Media Labs Limited — Q3 FY26 earnings call

Call held 12 Feb 2026

Management summary

Amagi Media Labs reported a strong Q3 FY26 with revenue growing 22% YoY to INR 404 crores and adjusted EBITDA doubling to INR 58 crores, driven by broad-based growth across all segments and operating leverage. The company saw robust growth in key operational metrics like content hours and ad impressions, while strategically investing in AI for future productivity gains. However, Q3 revenue growth was impacted by a timing difference in revenue recognition from a top customer, and Q3 EBITDA included one-time seasonal benefits, with a normalized steady-state margin of 10%.

Highlights

  • Strong revenue growth: Q3 revenue up 22% YoY to INR 404 crores; 9M revenue up 30% YoY to INR 1109 crores.

  • Significant margin expansion: Q3 adjusted EBITDA doubled YoY to INR 58 crores, with margins at 14.3%.

  • Robust operational metrics: 800,000 hours of content (64% YoY growth), 9,000+ deliveries, 13 billion ad impressions (60% YoY growth).

  • Strong cash generation: Q3 operating cash flow of INR 124 crores and free cash flow of INR 118 crores.

  • Strategic focus on AI: Significant investment and opportunity identified for productivity improvements.

Concerns

  • Timing impact on revenue recognition: Q3/Q4 growth rates appear softer due to a top five customer's revenue being fully recognized in H1 FY26, which was spread across all four quarters in FY25.

  • One-time items affecting Q3 EBITDA: Seasonal strength from holiday advertising flows and accounting recognition contributed to the 14.3% margin, with a normalized steady-state margin viewed at 10%.

  • Concentration risk: Top 10 customers account for 40% of revenue, which management is actively de-risking.

Key financials

6 periods

Headline

  • Cash and Investments
    ₹803 Cr
  • Normalized Indirect Cost Base
    ₹220 Cr

Q3 FY25

  • ESOP Expenses % of Revenue
    8.4%

Q3 FY26

  • Revenue
    ₹404 Cr
    YoY +22%
  • Operating Costs Growth
    14%
  • Adjusted EBITDA
    ₹58 Cr
    YoY +100%
  • Adjusted EBITDA Margin
    14.3%
  • PAT
    ₹31 Cr
  • PAT Margin
    7.7%
  • Operating Cash Flow
    ₹124 Cr
  • Free Cash Flow
    ₹118 Cr
  • R&D % of Revenue
    21.8%
  • ESOP Expenses % of Revenue
    6.6%

9M FY26

  • Revenue
    ₹1,109 Cr
    YoY +30%
  • Operating Costs Growth
    17%
  • Adjusted EBITDA
    ₹116 Cr
  • Adjusted EBITDA Margin
    10.5%
  • PAT
    ₹37 Cr
  • Reported Cash Flow
    ₹-76 Cr
  • Free Cash Flow
    ₹-96 Cr

9M FY26 underlying

  • Operating Cash Flow
    ₹47 Cr

H1 FY26

  • R&D % of Revenue
    23.4%

What they filed

Q4 FY26: revenue up 20.3%, net profit up 325.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ3 FY25Q4 FY25Q2 FY26Q3 FY26Q4 FY26
Revenue330 309 375 404 397 +20%
EBITDA-1 -13 -3 31 24 +2500%
Net profit8 -11 3 31 34 +325%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

medium confidence

Pipeline

other

Amagi's business is NRR based with minimal logo churn, and growth is driven by volume adoption and cross-selling of products.

Amagi's business is driven by content volume (800,000 hours, 64% YoY growth), deliveries (9,000+ to 408 locations), and ad impressions (13 billion, 60% YoY growth). Customer additions are accelerating due to market transformation towards cloud and streaming. The company focuses on long-term contracts to de-risk concentration with top customers and relies on NRR and minimal churn for growth.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹6 Cr
    For the first nine months operating cash flow on underlying basis was INR47 crores, reported cash flow was negative INR76 crores primarily due to one-time IPO expenses and buyback related to ESOPs in the first half of the year. Free cash flow also was negative INR96 crores driven by those same one-time items that I highlighted which impacted the first half. We ended the quarter with about INR803 crores of cash and investments on the balance sheet.
  • Liquidity Cash ₹803 Cr
    We ended the quarter with about INR803 crores of cash and investments on the balance sheet.

Guidance & targets

Revenue

  • Underlying Q3 Revenue Growth (adjusted) Revenue · Q3 FY26 · High confidence 25-30%
    I think we would be around the 25% to 30% range Kawal. ... This is constant currency. So I think we wouldn't see much of a departure. So 25% to 30% is a reasonable sort of zip code to assume for that as well.

    — Vijay NP

Margin

  • Steady-state EBITDA Margin Margin · Q3 FY26 · High confidence ~10%
    If you normalize for these, we view steady state EBITDA margins at approximately 10% which we believe is more sort of representative indicator of the underlying profitability in the quarter.

    — Vijay NP

  • Long-term EBITDA Margins (aspirational) Margin · Long-term · Medium confidence ~25%
    If you look at vertical SaaS companies worldwide or software companies worldwide you'd see that you know they operate at scale at about 25% sort of margins.

    — Vijay NP

R&D

  • R&D as % of revenue R&D · Going forward · High confidence Continue to see leverage
    Yes so R&D is an area where we'll continue to get leverage Kawal.

    — Vijay NP

Growth & Profitability

  • Long-term Growth and Margin Trajectory Growth & Profitability · Next two to three years · High confidence Replicate past performance
    our endeavour would be to kind of consistently deliver the growth rates that we've delivered over the last couple of years. And replicate the margin trajectory that we've seen over the last couple of years in over the next two to three years as well.

    — Vijay NP

What to watch in Q4 FY26

Steady-state EBITDA margin

next quarter
Current Q3 FY26 reported 14.3%, normalized to ~10%
Target Maintain ~10% or show further expansion

Why it matters

This indicates the underlying profitability trend, excluding one-time seasonal benefits.

If you normalize for these, we view steady state EBITDA margins at approximately 10% which we believe is more sort of representative indicator of the underlying profitability in the quarter.

Risks & concerns

  • Revenue concentration with top customers

    medium

    Top 10 customers account for 40% of revenue, which management is actively de-risking through long-term contracts.

    Today it's at a good 40% for the top 10 customers. So that's a call that we intentionally make, but I mean what we are aspiring for here is making sure that we lock in long-term secure revenue instead of short-term optics on price increases.

    Management acknowledged

  • Lumpy customer additions and revenue recognition

    low

    The number of customers reaching a threshold scale for enterprise agreements can be lumpy quarter-to-quarter, impacting revenue recognition timing.

    It is ongoing. What is unpredictable is the number of customers that will reach threshold scale in a quarter. That could be lumpy.

    Management acknowledged

Q&A highlights

7 direct
Customer acquisition acceleration and future outlook. Direct
One is if you look at it the market transformation is starting to happen. Then I talked about Cloud Modernization and we seeing acceleration of that trendline of customers wanting to move to the cloud. I think that's a clear trendline that's driving some of the customer acquisitions that you're starting to see number one.

Explains the drivers behind increased customer additions, linking it to market trends (Cloud Modernization, streaming growth) and Amagi's platform strategy.

Asked by Vivekanand from Ambit Capital

Underlying Q3 revenue growth after adjusting for one-time items. Direct
I think we would be around the 25% to 30% range Kawal. ... This is constant currency. So I think we wouldn't see much of a departure. So 25% to 30% is a reasonable sort of zip code to assume for that as well.

Clarifies the true organic growth rate for the quarter, removing the distortion from accounting recognition.

Asked by Kawaljeet Saluja from Kotak Securities

LTV to CAC and gross profit margin payback period. Partial
So Kawal this is as you can imagine we are limited by the amount of metrics we kind of disclose. But our model lends itself to scaling a good chunk with our existing customers, right? And that's why you see significant leverage especially in sales and marketing and other costs. And given the sticky -- I'll speak about that in LTV terms and CAC terms. ... our logo churn is very minimal, low single digits.

While not providing specific metrics, management highlighted the business model's inherent leverage and low churn, which are positive indicators for LTV/CAC.

Asked by Kawaljeet Saluja from Kotak Securities

Relevance of Amagi's vertical SaaS model in the context of GenAI and declining custom build costs. Direct
I think Kawal I think first thing is I think AI we're extremely bullish about the whole Al wave that's starting to happen and for a couple of reasons Kawal. If you look at it as I really point out we're a vertical software company, where the deep understanding of the domain and the customer pain points is super critical here.

Addresses a key investor concern about GenAI's impact on custom software development and reaffirms Amagi's value proposition as a specialized vertical SaaS provider.

Asked by Kawaljeet Saluja from Kotak Securities

Renegotiation with largest customers and potential pricing pressure from new technologies. Direct
We try to maybe sort of extend the contract for a longer duration because these are long gestation period contracts. The top five customers wouldn't be routine course of business. It's something that we've intentionally made a call to look at our concentration risk and de-risk that a little bit. Today it's at a good 40% for the top 10 customers.

Provides insight into strategic contract renegotiations aimed at de-risking customer concentration and securing long-term revenue, rather than short-term price increases.

Asked by Manish Adukia from Goldman Sachs

ESOP expenses going forward. Direct
So I mean ESOP expenses is an area where we also have seen some leverage. So in Q3 FY '25 I think we indicated this in the shareholder letter that it was roughly 8.4% of revenue. That's gone down to about 6.6% of revenue. As a percentage of revenue given that revenue will obviously scale sort of quicker, we expect these to kind of be a little more tempered and follow the trajectory that we've seen over the past year in the coming years as well.

Provides clarity on the trend of ESOP expenses as a percentage of revenue, indicating a declining trajectory due to operating leverage.

Asked by Omprakash Kavadi from Avendus Spark

Managed Services revenue proportion and differentiation from typical services companies. Direct
Manish largely if you look at it, we are a technology company. So essentially given our customer cohorts who are large enterprise to mid-tier enterprise customers who need it, we provide a thin layer of a service which is it's really literally a very, very small percentage points that I don't think we disclose that number but it's actually not even meaningful fundamentally from a number standpoint.

Clarifies that Managed Services is a very small, non-material part of revenue, emphasizing Amagi's core identity as a software technology company rather than a services firm.

Asked by Manish Adukia from Goldman Sachs

Pricing model: perpetual contracts vs. variabilized contracts, and growth drivers. Direct
It would be suffice to say that a lot of our growth comes from customers adopting more products than pure sort of price appreciation if that's the question behind the question. We've been largely able to kind of hold price, but we are seeing a significant sort of uptick in in volume adoption which is what's driving the growth.

Explains that growth is primarily driven by increased volume adoption and cross-selling of products rather than price increases or specific contract types, indicating strong product-led growth.

Asked by Rohan Nagpal

2 min read 6 chapters

Detailed narrative

Strong Q3 & 9M FY26 Financial Performance

Amagi reported robust financial results for Q3 FY26, with revenue growing 22% year-over-year to INR 404 crores. For the first nine months of FY26, revenue increased 30% year-over-year to INR 1109 crores. Adjusted EBITDA for Q3 FY26 doubled year-over-year to INR 58 crores, achieving a margin of 14.3%, while PAT reached INR 31 crores with a 7.7% margin.

Operational Metrics Indicate Robust Business Growth

The company demonstrated strong operational growth, with content hours flowing into Amagi's system increasing by 64% year-over-year to 800,000 hours. Deliveries expanded to over 9,000, reaching 408 locations across 40+ countries. Ad impressions delivered surged by 60% year-over-year, totaling nearly 13 billion in Q3 FY26, highlighting significant volume adoption.

Strategic Focus on Cloud Modernization and AI

Amagi continues to drive Cloud Modernization, enabling TV channels to migrate from on-premise infrastructure to a cloud-based software environment. A significant investment is being made in AI, which is seen as a major lever for productivity improvements and expanding the total addressable market. The company is already engaged in design partnerships and proof-of-concept initiatives with customers for AI-driven solutions.

Revenue Recognition and Margin Normalization

Q3 FY26 revenue growth was influenced by a timing impact, as revenue from a top five customer was fully recognized in H1 FY26, unlike FY25 where it was spread across all quarters. While Q3 adjusted EBITDA reached 14.3%, management indicated that a normalized steady-state margin, excluding seasonal and one-time accounting effects, is approximately 10%. Operating costs grew at roughly half the rate of revenue, demonstrating operating leverage.

Customer Acquisition and Long-term Contract Strategy

Amagi added over 40 customers in the last year, driven by market transformation towards cloud and streaming platforms. The company emphasizes an NRR-based business model with minimal logo churn. A strategic focus is on securing longer-term contracts with top customers to de-risk concentration (top 10 customers account for 40% of revenue) and ensure predictable, secure revenue streams.

Capital Allocation and M&A Outlook

The company reported INR 803 crores in cash and investments on its balance sheet. Capex for Q3 FY26 was modest at INR 6 crores, contributing to a free cash flow of INR 118 crores for the quarter. While Amagi maintains an active corporate development strategy and explores M&A opportunities, no specific acquisitions were 'in the bag' this quarter, with management indicating updates in future quarters.

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