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    Newgen Software Technologies Limited

    NEWGEN
    Information Technology·16 Jul 2026
    Management Summary

    Newgen Software Technologies Limited reported a resilient Q1 FY27 with 11% YoY revenue growth to INR357 crores, driven by strong annuity and SaaS subscription revenues. Profitability remained healthy with a 15.7% EBITDA margin and 26% PAT growth. The company secured 10 new logos and saw robust growth in the USA, despite weaker implementation revenues due to project delays and margin pressure in the India market.

    Highlights

    6

    • Revenue from operations grew 11% YoY to INR357 crores, demonstrating continued resilience.

    • Annuity revenues showed strong growth of 14% YoY, reaching INR254 crores, enhancing revenue predictability.

    • SaaS and license subscription revenue surged 40% YoY to INR60 crores.

    • EBITDA margin improved to 15.7% (INR56 crores), and PAT grew 26% YoY to INR63 crores.

    • Secured 10 new logos, including significant deals in Kuwait (INR26.7 crores) and the Philippines (INR16.2 crores).

    • USA geography witnessed strong growth of 27% YoY, followed by APAC at 12% and EMEA at 10%.

    Concerns

    3

    • Implementation revenues were weaker in the quarter due to slowest project starts across markets, especially EMEA.

    • DSO remains a challenge, though management expects a positive trend of decline in coming quarters.

    • India market experienced a top-line stagnation and increased base costs (4-5%), leading to margin squeeze in the region.

    Key financials

    Single quarter

    09 metrics
    1. 01Revenue from Operations₹357 Cr+11%YoY
    2. 02Total Annuity Revenue₹254 Cr+14.0%YoY
    3. 03SaaS & License Subscription Revenue₹60 Cr+40%YoY
    4. 04EBITDA (Adjusted)₹56 Cr
    5. 05EBITDA Margin15.7%

    Segment breakdown

    • Banking and Financial Services₹225 Cr34.0%
    • Insurance and Health Care₹79 Cr11.9%
    • EMEA Geography₹114 Cr17.2%
    • India Geography₹96 Cr14.5%
    • USA Geography₹92 Cr13.9%
    • APAC Geography₹56 Cr8.5%
    Donut· Share of Revenue

    Order Book

    high confidence

    Execution

    license plus implementation within 1 year; implementation revenues within 12-18 months

    Composition

    Mix4 client types
    • Kuwait Insurance Platform₹ 26.7 crores36.6%
    • Philippines Retail Loan Origination₹ 16.2 crores22.2%
    • Annapurna Finance (India)₹ 15.6 crores21.4%
    • UK Enterprise ECM₹ 14.5 crores19.9%

    Share of order book by client type (derived from disclosed amounts)

    Pipeline

    deal pipeline tcv

    Healthy mix of large and midsized deals, growing like double digits.

    Cancellations / Deferrals

    • deferred:Delays in starting projects from last 1 or 2 quarters in EMEA led to weaker implementation revenue.
    • deferred:Some delays due to environmental factors of customers, specifically in India and some other parts, led to decline in Q1 implementation revenue.

    "The company added 10 new logos this quarter, with significant deal values, and expects implementation revenue to recover in Q2 and Q3 after Q1 delays. The overall pipeline is strong and growing."

    Source:
    Prepared remarks

    Guidance & targets

    3
    CategoryTargetPriority
    Margin
    EBITDA Margin
    23-25%
    		Medium
    R&D Spend
    R&D Spend as % of Revenue
    8-9%
    		High
    Implementation Revenue Recovery
    Q1 Implementation Revenue Recovery
    INR12 crores
    		Medium

    What to watch in Q2 FY27

    5

    EBITDA Margin Improvement

    next quarter (Q2 FY27)
    Current15.7% in Q1 FY27
    TargetMoving towards 23-25% for full FY27

    Why it matters

    To confirm the company's ability to expand margins beyond the Q1 low and achieve its full-year target.

    I think 15% for the full year, the EBITDA would expand. So Q1 is the lowest in terms of margin so we usually have 23% to 25% EBITDA margin for the entire year.

    Risks & concerns

    3
    RiskSeverity

    Weak implementation revenues due to project delays

    Implementation revenues were weaker in Q1 FY27 due to slowest project starts across markets, especially EMEA, and customer environmental factors in India. — Management acknowledged

    medium

    DSO (Days Sales Outstanding) challenge

    DSO is a recognized challenge, with certain payments delayed due to the macro environment, though a positive trend is expected. — Management acknowledged

    medium

    Margin squeeze in India geography

    India market experienced stagnant top-line growth and a 4-5% increase in base costs, leading to margin pressure in the region. — Management acknowledged

    medium

    Q&A highlights

    8

    “So answer to the first question is that the margin expansion is a function of optimization of the Al practices in our engineering that we have incorporated. And we are -- the efficiency gains are being passed on to for customer success for faster implementations and operational efficiencies that we are getting. So we hope that we will continue with these efficiency gains in coming quarters. To your second question. On the Al product side, the platforms have native AI capabilities, which you are aware of. We have also launched Al products in our vertical streams. So Al in trade, AI in insurance, Al in health care and Al in government.”

    Clarifies the source of margin improvement (AI-driven efficiency) and how AI products are integrated and monetized within existing offerings.

    asked by Shubhi Gupta

    3 min read7 chapters

    Detailed Narrative

    01

    Leadership Transition and Growth Strategy

    Newgen announced a significant leadership transition with Mr. Tarun Nandwani appointed as Chief Executive Officer effective August 1, 2026, succeeding Mr. Virender Jeet. A new role of Chief Growth Officer has been created, with Pramod appointed to lead growth strategy, product alignment, AI enablement, global market expansion, and ecosystem development. These changes reflect the company's commitment to leadership continuity and its confidence in future growth opportunities.

    02

    Q1 FY27 Financial Performance Overview

    The company started FY27 with a resilient performance, reporting INR357 crores in revenue from operations, an 11% year-on-year increase. Annuity revenues were a key highlight, growing 14% YoY to INR254 crores. SaaS and license subscription revenue showed robust growth of 40% YoY, reaching INR60 crores. Adjusted EBITDA stood at INR56 crores, translating to a 15.7% margin, while Profit After Tax (PAT) increased 26% YoY to INR63 crores, with a net margin of 17.6%.

    03

    Geographic and Vertical Performance

    Geographically, EMEA remained the largest contributor at INR114 crores, followed by India (INR96 crores), USA (INR92 crores), and APAC (INR56 crores). The USA market demonstrated strong growth of 27% YoY, with APAC growing 12% and EMEA 10%. In terms of verticals, Banking and Financial Services remained the largest, contributing INR225 crores with 5% growth, while Insurance and Health Care showed significant growth of 58%, contributing INR79 crores.

    04

    Product Innovation and AI Integration

    Newgen continued its investment in platform roadmap with a strong focus on AI-led capabilities, expanding enterprise agent orchestration and strengthening AI governance. AI products have been launched across vertical streams like trade, insurance, health care, and government, enabling features such as data classification, extraction, and outcome recommendations. These AI capabilities are baked into the platform for auditability and governance, aligning with the increasing demand for intelligent and adaptive operating environments.

    05

    Operational Efficiency and Profitability

    The company's profitability remained healthy, with margin expansion attributed to optimization of AI practices in engineering, leading to efficiency gains. These gains are passed on for faster implementations and operational efficiencies. R&D initiatives accounted for nearly 9% of revenues, and sales and marketing activities for approximately 26% of revenues, reflecting continued investment in growth and innovation.

    06

    Order Wins and Pipeline Health

    Newgen added 10 new logos during the quarter, including significant wins such as a INR26.7 crores project in Kuwait and a INR16.2 crores deployment in the Philippines. The total booking from these 10 deals saw a substantial increase, with many being multi-million dollar deals. The demand pipeline remains healthy across India and EMEA, with good traction in areas like NBFCs, digital transformation, and AI-led tools, indicating strong future growth prospects.

    07

    Challenges and Outlook

    Implementation revenues were weaker in Q1 due to delayed project starts, particularly in EMEA, and environmental factors affecting customers in India. Management is optimistic about recovering the Q1 implementation revenue loss of approximately INR12 crores in Q2 and Q3. The India market faced top-line stagnation and increased base costs (4-5%), impacting margins. However, the company expects a positive trend in DSO and aims to maintain double-digit revenue growth and 23-25% EBITDA margins for the full year.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.