Latent View — Q3 FY26 earnings call

Call held 2 Feb 2026

Management summary

Latent View Analytics reported a strong Q3 FY26 with 5.7% QoQ dollar revenue growth and 24.6% adjusted EBITDA, marking its 12th consecutive quarter of sequential growth. The BFSI and Technology verticals performed well, while CPG & Retail faced headwinds. The company is actively pursuing Databricks partnerships and AI-driven solutions, while navigating challenges from labor code changes and client-specific re-evaluations in the technology sector.

Highlights

  • Achieved 12th consecutive quarter of sequential growth, with dollar revenue up 5.7% QoQ and rupee revenue up 8% QoQ.

  • BFSI practice is growing exponentially, increasing its share of overall revenue by almost 4% since the beginning of this fiscal.

  • Technology vertical returned to a growth path this quarter, driven by year-end projects and price increases in key accounts.

  • Reported adjusted EBITDA (excluding labor code restructuring) of 24.6% for the quarter.

  • Secured 4 joint wins with Databricks and identified over 30 leads, with a strong conversion rate of 30-35%.

Concerns

  • Muted performance in the CPG and Retail segment due to timing delays in projects and lack of follow-on work from Q2 one-time projects.

  • Anticipated annualized revenue drop of $5-6 million from a large technology account due to client re-evaluating vendor engagement models.

  • Impact of new Labor Code restructuring, expected to result in 10-15 basis points on earnings going forward, in addition to a one-time cost of INR 4.6 crores (USD 200,000) this quarter.

Key financials

  1. Dollar Revenue Growth 5.7% +5.7%QoQ
  2. Rupee Revenue Growth 8% +8%QoQ
  3. Reported EBITDA 22.4%
  4. Adjusted EBITDA (excl. transaction costs) 23%
  5. Adjusted EBITDA (excl. labor code restructuring) 24.6%
  6. EPS Growth 13% +13%QoQ

What they filed

Q1 FY27: revenue up 21.6%, net profit down 7.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue209 228 232 236 258 +23%278 +22%289 +25%287 +22%
EBITDA45 50 55 50 56 +24%62 +24%68 +24%57 +14%
Net profit41 43 51 51 46 +12%51 +19%55 +8%47 −8%
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.

Segment breakdown

  • BFSI
    4% Share of Overall Revenue Increase

Order book

high confidence

Total value

$16 Mn

as of 2025-12-31 range

Inflow this quarter

$1.7 Mn

Execution

Databricks revenue expected to reach $50 million in a couple of years

Pipeline

deal pipeline tcv

Over 30 leads identified for Databricks-related work

Cancellations & deferrals

  • cancelled: One-time projects in Q2 for large apparel manufacturer and FMCG company did not result in follow-on work in Q3.
  • deferred: Timing delays in projects for a large beverage manufacturer (Decision Point client).
The company is seeing strong momentum in Databricks-related work with a good conversion rate on leads and expects significant growth towards a $50 million target in a couple of years.

Source: Prepared remarks

Capital allocation

medium confidence
  • M&A Agentic AI Technology Companies Acquisition · Announced

    To cover part of the $80 million gap to reach $200 million revenue target and invest in specific solutions.

    Expected to contribute to the $80 million revenue gap for the $200 million target.

    There's an $80 million gap that we need to cover. Some of that will come through M&A.
  • M&A SAP-related acquisition opportunities Acquisition · Announced

    To get a significant bump up in capabilities, especially given Databricks partnership with SAP.

    And potentially, we will also look at acquisition opportunities in the space, specifically related to SAP, given Databricks partnership with SAP.

Guidance & targets

Revenue

  • FY26 Revenue Growth Revenue · FY26 · High confidence 19-20%
    But overall, for this year, I would say we are on track to deliver revenue growth of between 19% to 20%.

    — Rajan Venkatesan

  • FY26 Revenue Revenue · FY26 · High confidence $119-120 million
    So we should end the year with revenue between $119 million to $120 million.

    — Rajan Venkatesan

  • FY28 Revenue Revenue · FY28 · High confidence $200 million
    Now while we will sort of deliver to that promise this year, and which is what we don't want to lose sight of is to get to that $200 million revenue, right, by FY '28.

    — Rajan Venkatesan

EBITDA Margin

  • FY26 EBITDA Margin EBITDA Margin · FY26 · High confidence 24%
    On a full year basis, we expect that our EBITDA would be closer to about 24%, right, which is in line with what we had guided earlier in the year.

    — Rajan Venkatesan

  • FY27 EBITDA Margin Impact EBITDA Margin · FY27 · Medium confidence 1-2% drop
    but you could potentially see some front-ending of this investment, which could mean a 1% to 2% drop in the EBITDA margins in the coming year, but those are necessary for us to get to that $200 million mark, right?

    — Rajan Venkatesan

Tax Rate

  • Effective Tax Rate (ETR) Tax Rate · long-term · High confidence 26-27%
    I would guide you guys to model an ETR of between 26% to 27% because those are, I would say, the maximum tax rate across all the dose sections that we currently operate in. So 26% to 27% is safe to assume.

    — Rajan Venkatesan

Databricks Revenue

  • Databricks Revenue Target Databricks Revenue · next 2 years · High confidence $50 million
    Overall, I would say that we are on track for the $50 million target that we had from a 3-year perspective.

    — Rajan Sethuraman

Headcount

  • Databricks Certified People Headcount · next 2 years · Medium confidence 600-800

    From 300 today

    We are also expecting that the number of people who are certified and have core expertise will go up from 300 to 600 to 800 for that period of time.

    — Rajan Sethuraman

Vertical Growth

  • BFSI Sequential Growth Vertical Growth · subsequent quarter · Medium confidence strong sequential growth
    But as we head into the end of the fiscal, BFSI will continue to remain strong and continue to deliver strong sequential growth even in the subsequent quarter, right?

    — Rajan Venkatesan

  • CPG Vertical Expansion Vertical Growth · Q4 · Medium confidence expansion
    The good news is that these are now beginning to sort of get firmed up and signed up and you will start seeing expansion in the CPG vertical in this particular quarter, especially Q4, because we've seen a lot of these pipeline opportunities getting closed.

    — Rajan Venkatesan

Labor Code Impact

  • Incremental Cost on Earnings Labor Code Impact · going forward · High confidence 10-15 basis points
    But on an ongoing basis, the restructuring of compensation will mean that there will be an impact of between 10 to 15 basis points on our earnings going forward.

    — Rajan Venkatesan

What to watch in Q4 FY26

CPG & Retail Vertical Expansion

next quarter
Current Muted performance in Q3
Target Expansion in Q4 FY26

Why it matters

Indicates recovery and growth in a segment that underperformed this quarter.

The good news is that these are now beginning to sort of get firmed up and signed up and you will start seeing expansion in the CPG vertical in this particular quarter, especially Q4, because we've seen a lot of these pipeline opportunities getting closed.

Risks & concerns

  • Headwinds in a large technology account

    high

    One key stakeholder is re-evaluating vendor engagement, leading to an anticipated annualized revenue drop of $5-6 million, with impact expected until March 31, 2026.

    So there are multiple other threads that are going on right now, which should partially offset the drop in revenue that we anticipate from this particular consolidation excise. We expect the net impact of this in the order of, say, maybe on an annualized basis between $5 million to $6 million of revenue on an annualized basis.

    Management acknowledged

  • Impact of new Labor Code

    medium

    Restructuring of compensation to comply with new Labor Code will impact earnings by 10-15 basis points going forward, with a one-time cost of INR 4.6 crores (USD 200,000) incurred this quarter.

    But on an ongoing basis, the restructuring of compensation will mean that there will be an impact of between 10 to 15 basis points on our earnings going forward.

    Management acknowledged

  • Muted performance in CPG and Retail

    medium

    Lack of follow-on work from Q2 one-time projects and timing delays in new projects with a large beverage manufacturer led to flat results in Q3.

    And that was the primary reason for the muted performance in the CPG and retail segment.

    Management acknowledged

  • Softness in lower priority analytics initiatives in tech

    medium

    In the tech space, there is a general softness on lower priority analytics initiatives as companies prioritize capital expenditure on LLM and infrastructure.

    In general, in the tech space, there is a bit of softness on lower priority analytics initiatives, and they will pick only the most impactful ones.

    Management acknowledged

Q&A highlights

7 direct
Databricks linked revenue and conversion rates Direct
Right, the conversion rate is a little easier. I mean, we are seeing at least 30%, 35% success there. ... For the 4 logos that we won, I think this year, if I'm not mistaken, the revenue that's coming through the joint approach is close to $1.7 million. ... So, we expected that,$16 million to $17 million number, which is the overall Databricks revenue, that is the number that is expected to get to the $50 million mark in a couple of years from now.

Provides specific numbers for Databricks contribution, conversion rates, and future targets, indicating strong traction in this strategic partnership.

Asked by Srinivasu K.

Defensibility of AI accelerators and IP Partial
Actually, nothing proven them. I mean it is just a question of focused effort, right, in that area and the extent to which you are able to bring the combination of the domain technology, the architecture expertise. And the strength of the relationship that you are able to build with the partner ecosystem as well.

Addresses a critical question about competitive advantage in AI, with management emphasizing a combination of factors rather than a single defensible IP.

Asked by Srinivasu K.

Flow of Databricks revenue into verticals and future growth Direct
Right, I mean till date, the growth in relation to the Databricks revenue has been largely led by the work that we do in the consumer goods space, in the industrial space and in technology itself. ... I'm expecting that the 20% will get bigger. In fact, the MigrateMate solution is seeing traction with auto component manufacturers that I mentioned, for example, there is quite a bit of work around moving the data into the data base. But several of the leads that I mentioned earlier, the 10 needs are related to that as well. My expectation is that the 20% will likely become 30%, 40% in the coming quarters.

Clarifies the current vertical distribution of Databricks-related revenue and projects a shift towards more migration work in the future, impacting the mix of services.

Asked by Srinath V.

CPG/Retail slowdown and technology vertical headwinds Direct
Specifically in relation to the headwinds that we're seeing in technology, I wouldn't say it's a broad-based vertical specific issues, it's probably more a client-specific, I would say, condition or situation that is playing out where one of the stakeholders that we work with in this large account is reevaluating the way they engage with contractors or vendors. ... We expect the net impact of this in the order of, say, maybe on an annualized basis between $5 million to $6 million of revenue on an annualized basis.

Provides specific details on the reasons for the CPG/Retail slowdown and quantifies the revenue impact from client-specific issues in the technology vertical.

Asked by Pritesh Thakkar

Renewals, pricing pressures, and Q4 margin outlook Direct
So overall, I would say, renewals for the next year continue to look fairly healthy with no big anticipated budget cuts as well as price reductions, except this one particular large account where like I already mentioned, the impact could be anywhere between $5 million to $6 million in terms of volume reduction. ... On a full year basis, we expect the margins to be closer to 24%, Aditi. ... All of this would mean that the EBITDA for the next quarter could be closer to about 25%, between 24.5% to 25% just for the quarter.

Offers clarity on renewal health, specific client-related revenue reduction, and provides a precise Q4 EBITDA margin guidance, indicating strong recovery.

Asked by Aditi Patil

Future vertical mix and steady-state margins/tax rates Direct
I would say that over the next couple of years, financial services and consumer goods will become larger shares of the revenue right that we'll be delivering. And tech will become slightly smaller because of some of the issues. ... On a full year basis, we expect the margins to be closer to 24%, Aditi. ... I would guide you guys to model an ETR of between 26% to 27% because those are, I would say, the maximum tax rate across all the dose sections that we currently operate in.

Gives a strategic outlook on the evolving vertical mix, with BFSI and CPG gaining share, and reiterates long-term margin and tax rate expectations.

Asked by Sushovon

LatentView's differentiation in the market Direct
One is, in general, our relationship tends to be a lot more on the business side rather than the CTO organization. ... The second is our front row seat in terms of working with the top tech companies, right, in the Bay Area and the Silicon Valley who are, in some sense, leading the race in terms of inventing the next new when it comes to AI and GenAI and agentic and all that.

Highlights the company's unique selling propositions: strong business-side relationships and early exposure to cutting-edge AI/GenAI developments through its location and client base.

Asked by Shubham Sehgal

Growth in data engineering and its contribution to overall work Direct
I mean, it's been on the ramp-up over the last several quarters. It's also accelerated by the Databricks partnership. ... I'm expecting when we get to that $200 million mark that we have been talking about, definitely 25% of the work that we are doing should be in the data engineering space.

Confirms the increasing importance and growth of data engineering, especially driven by Databricks, and quantifies its expected share of the total work towards the $200 million revenue target.

Asked by Surbhi

3 min read 7 chapters

Detailed narrative

Strong Sequential Growth and BFSI Performance

Latent View Analytics achieved its 12th consecutive quarter of sequential growth in Q3 FY26, with dollar revenue increasing by 5.7% and rupee revenue by 8% quarter-on-quarter. The BFSI practice demonstrated exponential growth, contributing to an almost 4% increase in its share of overall revenue since the fiscal year began. This strong performance in BFSI is attributed to penetrating existing client organizations and adding new statements of work.

EBITDA and EPS Expansion

The company reported a Q3 FY26 EBITDA of 22.4%, which adjusted to 23% after accounting for transaction-related costs. Further adjusting for one-time labor code restructuring costs, the EBITDA would be 24.6%. EPS saw a significant increase of 13% quarter-on-quarter, partly benefiting from ESOP exercise tax allowances in the US. SG&A expenses were managed effectively, showing a 12% reduction quarter-on-quarter.

Databricks Partnership Momentum

The Databricks partnership continues to be a key growth driver, with 4 joint wins secured in the quarter and over 30 leads identified. The conversion rate for these leads is strong, at 30-35%. Revenue from the joint approach this year is approximately $1.7 million, contributing to an overall Databricks-related revenue of $16-17 million expected for FY26. The company targets to reach $50 million in Databricks revenue within the next two years.

Vertical-Specific Headwinds and Outlook

While BFSI and Technology showed growth, the CPG and Retail segment experienced muted performance in Q3 due to a lack of follow-on work from Q2 projects and timing delays with a large beverage manufacturer. A significant headwind was identified in a large technology account, where client re-evaluation of vendor engagement is expected to result in an annualized revenue drop of $5-6 million, with clarity anticipated post March 31, 2026. Despite these, the company expects CPG vertical expansion in Q4.

Impact of New Labor Code and Restructuring

The company undertook a significant restructuring exercise in April 2025 to increase basic salaries to 50% of CTC, mitigating some impact from the new Labor Code. However, ongoing compliance restructuring is expected to result in an incremental cost of 10-15 basis points on earnings going forward. Additionally, a one-time restructuring cost of INR 4.6 crores (approximately USD 200,000) was incurred this quarter due to rationalization of roles.

Strategic Investments in AI and Client Relationships

Latent View is investing in its consulting practice, reorienting teams with specific domain focus, and deepening client relationships by adding client partners. The company also brought in a Chief Client Officer for consumer retail and marketplaces. A strong focus on AI strategy includes conversational analytics, business process automation, and governance, with initiatives like Velocity AI identifying over 10 opportunities in a top tech account and hackathons yielding agentic solutions.

Future Growth Targets and M&A Strategy

The company is on track to achieve FY26 revenue of $119-120 million, representing 19-20% growth, with an EBITDA margin of around 24%. Looking ahead, Latent View aims for $200 million in revenue by FY28. To bridge the $80 million gap to this target, the company plans a multi-pronged approach including organic growth and inorganic investments in agentic AI technology companies, traditional M&A, and potentially larger ticket deals, after being slow on M&A for the past 12-18 months.

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