Persistent Sys

Persistent Systems delivered a robust Q4 FY26, with USD revenue growing 3.2% QoQ and 16.2% YoY to $436 million, marking its 24th consecutive quarter of sequential growth. For the full fiscal year, revenue reached $1.65 billion, up 17.4% YoY. EBIT margin expanded to 16.3% in Q4, a 190 basis point QoQ improvement, and stood at 15.6% for the full year, reflecting strong operational efficiencies and favorable currency movements.

The company reported a Total Contract Value (TCV) of $600.8 million for Q4 FY26, with new bookings contributing $428.9 million. The full-year TCV reached $2.4 billion. Persistent demonstrated strong client mining, with Top 5 customer revenue growing 20.7% YoY and Top 100 growing 19.5% YoY. The number of customers with annual revenues over $1 million increased from 191 to 201, indicating deepening client relationships.

The Banking, Financial Services, and Insurance (BFSI) vertical was a key growth driver, achieving 24.3% YoY growth in Q4 FY26 and 28.4% YoY for the full year. This growth is attributed to a deliberate focus on specialized sub-verticals, product engineering, data modernization, and cloud transformation. Persistent is increasingly being seen as a credible challenger to Tier-1 outsourcing firms, leveraging its engineering DNA and AI platforms.

Persistent is making steady progress on its AI journey, anchored on three pillars: engineering hyperproductivity, business hyperproductivity, and enterprise data readiness. The company recently concluded an AI huddle involving 1700+ team members and plans an AI Investor Day in early June to showcase capabilities and partnerships. Platforms like SASVA, iAURA, and GenAI Hub are central to delivering AI value, with over 120 patents filed to strengthen offerings.

A significant deal exceeding $50 million in TCV was secured with a Japan-headquartered global B2B industrial technology leader, focusing on shifting from hardware-centric to software-led platforms. This represents one of Persistent's largest SAP services deals. The company was recognized as the fastest-growing IT services brand globally and a leader in Everest Group's PEAK Matrix assessments for Private Equity Services and Software Product Engineering.

Headcount increased by 791 during Q4 FY26, bringing the total to 27,502. Utilization remained stable at 88%, while trailing 12-month attrition improved to 13% from 13.5% in the previous quarter, indicating effective talent retention. The company's Operational Cash Flow to PAT was 77% in Q4, impacted by higher unbilled revenue and other temporary factors, but is expected to normalize in the next quarter.

Management acknowledged geopolitical headwinds and their potential impact on inflation but expressed confidence in gaining market share through AI investments. While enterprise AI adoption is slower in regulated sectors like Healthcare and BFSI compared to tech, the company views the 'SaaS apocalypse' as an opportunity to partner with private equity firms and their portfolio companies. Persistent believes AI-driven productivity gains will ensure margins remain neutral or accretive despite potential tech sector compression.