Pine Labs Limited — Q2 FY26 earnings call

Call held 3 Dec 2025

Management summary

Pine Labs delivered a strong Q2 FY26, characterized by significant operating leverage and a successful transition toward a software-led, asset-light business model. The company achieved record net revenues and its second consecutive profitable quarter, driven by high-margin value-added services (VAS) and international expansion. Management highlighted a disciplined approach to costs, with employee and ESOP expenses declining as a percentage of revenue while scaling transaction volumes.

Highlights

  • Net Revenue reached a record ₹650 crores, representing 18% YoY growth.

  • Contribution Margin expanded to 77%, with absolute contribution growing 21% YoY.

  • Adjusted EBITDA grew 64% YoY to ₹122 crores, with margins expanding 500bps to 19%.

  • Achieved second consecutive quarter of positive PAT at ₹6 crores, vs a loss of ₹32 crores YoY.

  • Gross Transaction Value (GTV) processed approached an annualized run rate of $50 billion.

  • Revenue mix shifted significantly; 71% of revenue now comes from SaaS and tech-based services, with POS rentals down to 29%.

  • Online payment aggregator business (Plural) saw 75% YoY growth in GTV.

  • Issuing business volumes grew 25% YoY to ₹16,000 crores, with international issuing up 35%.

Key financials

  1. Net Revenue ₹650 Cr +18%YoY
  2. Adjusted EBITDA ₹122 Cr +64%YoY
  3. Contribution Margin 77%
  4. PAT ₹6 Cr 0%QoQ
  5. Adjusted EBITDA Margin 19%
  6. GTV $50 Bn

What they filed

Q1 FY27: revenue up 19.6%, net profit up 300.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue552 602 599 616 650 +18%744 +24%701 +17%737 +20%
EBITDA32 77 57 45 75 +134%132 +71%106 +86%95 +111%
Net profit-32 -57 -29 5 6 +119%42 +174%59 +303%20 +300%
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

  • In-store (POS) & Online
    29% Revenue Contribution1.9 Mn DCP Touchpoints19% DCP Growth
  • VAS & Affordability
    37% Volume Growth₹63,000 Cr GTV
  • Issuing & Acquiring
    ₹16,000 Cr Volume25% Volume Growth31% India Growth
  • Fintech Infrastructure (DPI)
    275 Mn Transactions80% Transaction Growth

Guidance & targets

Profitability

  • Incremental Adjusted EBITDA Flow-through Profitability · Next few quarters · High confidence 50-57%
    For every incremental contribution mark of about INR 100, we are going to see almost about INR 50 to INR 57... getting translated into adjusted EBITDA.

    — Sameer Kamath, CFO

  • Incremental PBT Flow-through Profitability · Next few quarters · Medium confidence ₹45-55
    from the incremental contribution margin of INR 100, we can expect in a range of Rs.45 to INR 55 translating as a flow through to PBT.

    — Sameer Kamath, CFO

Headcount

  • Tech/Product Headcount Headcount · Near term · High confidence 1000
    I do not know why it would require more than 1000 people on the engineering and technology and product side. So, short answer on that one is the answer is no [to headcount increases].

    — Amrish Rau, CEO

Other

  • ESOP cost as % of top line Other · FY26 · Medium confidence 4-6%
    I think more or less, we should be in the range of about 4% to 6% of top line and trending slightly downward as we go into the amortization of the existing ESOP.

    — Sameer Kamath, CFO

Risks & concerns

  • Competitive Price Wars

    medium

    Analysts raised concerns about aggressive competitors going public and triggering price wars; CEO expressed comfort in current platform strength.

    Analyst downplayed

  • Seasonality Impact

    low

    Q1 and Q2 are historically softer due to the monsoon season, making H1 performance look weaker than the full year potential.

    Management acknowledged

  • Regulatory/GST Changes

    low

    Management noted a temporary 15-day slowdown in September following the GST rate change announcement before volumes recovered.

    Management acknowledged

Areas of evasion (2)

  • Valuation history/drop
  • Specific per-logo revenue for the issuing business

Q&A highlights

1 direct, 1 evasive
VAS and Affordability GTV Composition Direct
In terms of GTV, I would say somewhere around one third of the volumes would be coming out of affordability, two third of that will come out of the rest of the services.

Clarifies that Pine Labs is not taking balance sheet risk (lending) but is a pure technology enabler for banks.

Asked by Peran Engineer

Seasonality and Margin Compression Partial
I would say the seasonality in the payments and fintech business in general are just bucketed into two parts. Q1 and Q2 would be weaker and the stronger one would be a Q3 and Q4.

Explains why sequential margin growth was flat despite revenue growth, setting expectations for a stronger H2.

Asked by Prakhar Sharma

IPO Valuation Drop Evasive
Sir, I have answered this question five times. Whatever value is on the terminal that is my value. I cannot do anything.

Management refused to engage on the specific reasons for the valuation decline from private rounds to IPO.

Asked by Navneet Singh

2 min read 5 chapters

Detailed narrative

Strategic Pivot to Software-Led Revenue

Pine Labs has successfully shifted its revenue mix away from low-margin hardware sales toward high-margin SaaS and tech-based services. Subscription and rental revenues from POS terminals now account for only 29% of total revenue, down from nearly 50% two years ago. This transition is reflected in the high contribution margin of 77% and the fact that 71% of revenues are now decoupled from physical hardware deployments.

Operating Leverage and Path to Profitability

The company demonstrated significant operating leverage this quarter, with Adjusted EBITDA growing 64% YoY compared to 18% revenue growth. Management provided a clear framework for future profitability, stating that 50-57% of every incremental rupee of contribution margin will flow through to Adjusted EBITDA. This efficiency is driven by stagnant tech headcounts and a reduction in employee costs as a percentage of revenue from 50% to 37% over two years.

Rapid Scaling of Online and Issuing Segments

The 'Plural' online payment gateway business is a major growth engine, recording 75% YoY GTV growth through partnerships with major e-commerce players like Myntra and Swiggy. Similarly, the Issuing business (Qwikcilver) saw volumes reach ₹16,000 crores, with international markets like Australia and the UAE growing at 35%. Management highlighted that 18 global airlines now use their wallet technology, proving the scalability of their 'programmable currency' platform.

Technological Innovation: Tap to Pay Online

A key highlight of the call was the demonstration of a patented 'Tap to Pay Online' technology. This allows consumers to complete online transactions by simply tapping their physical card against their own NFC-enabled smartphone, eliminating the need for CVVs or OTPs. While still in the certification phase, management views this as a significant future GTM opportunity to reduce friction in global e-commerce.

Asset-Light International Expansion

Pine Labs is pursuing an asset-light strategy for its international business, particularly in the Middle East and Southeast Asia. For example, in Dubai, the company provides a tech stack for Emirates NBD with zero CAPEX deployment. This approach has allowed international revenues to grow by 30% YoY while contributing to the overall reduction in depreciation costs from 12% to 5% of revenue.

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