AMAGI

Amagi Media Labs Limited reported robust financial results for FY26, with revenue growing 30% to INR1,506 crores, representing a 23% constant currency growth. The company achieved PAT profitability of INR72 crores, a significant turnaround from a loss of INR69 crores in FY25, indicating a swing of INR140 crores. Adjusted operating cash flow also saw an 80% increase, reaching INR60 crores in FY26, up from INR34 crores in FY25.

The company demonstrated significant operating leverage, with adjusted EBITDA expanding sixfold to INR156 crores in FY26, resulting in a 10% margin, up from 2% in FY25. Total costs as a percentage of revenue declined from 118% in FY24 to 90% in FY26. This improvement was primarily due to reduced spend in sales & marketing plus customer success (from 44% to 24% of revenue) and R&D (from 33% to 23% of revenue).

Amagi's revenue quality strengthened, marked by a net revenue retention (NRR) of 126% in FY26, consistent with over 115% for the past three years. The number of customers contributing over $1 million in annual revenue increased by 25%, from 28 to 35, indicating deeper enterprise relationships. All three business segments—streaming unification, monetization & marketplace, and cloud modernization—grew over 25%, with streaming unification at INR838 crores (26% growth), monetization at INR381 crores (36% growth), and cloud modernization at INR286 crores (32% growth).

The company's AI investments are beginning to commercialize, with NEWSPULSE, their first agentic product, securing its first paying customer and undergoing trials with leading news networks. Management views AI as a compelling growth opportunity, enabling customers to extend content to new audiences and geographies, and absorb operational toil into software. They anticipate a roadmap of agentic products rolling out in the coming months and years.

Amagi successfully migrated AccuWeather's workflows end-to-end to its cloud, a key cloud modernization win. The company also secured new partnerships in Latin America with ADAMS and ad partner Anoki. Significant industry tailwinds, including the shift to streaming (48% of US TV viewing), the rise of FAST (Free Ad-supported Streaming TV), and growing CTV ad ad spend ($42.5 billion), continue to drive Amagi's growth.

While the full-year gross margin remained steady at approximately 69%, Q4 experienced some compression. This was attributed to customer pricing, minor AI-related costs, and 'double bubble' costs from exploring lower-cost alternatives. Management expects volume growth (monetized impressions up 62% YoY) to offset any modest CPM pressure, viewing the Q4 compression as a temporary 'speed bump' rather than a recurring signal.

Amagi operates as a global company, with the US market remaining a significant focus due to its size ($150+ billion media market) and historical accomplishments. However, management also sees India as an exciting and growing opportunity, particularly as streaming adoption increases and cloud maturity improves, despite its smaller current contribution to revenue. The company works with Indian customers like Zee TV and Viacom18.