Quick Heal Technologies Limited — Q2 FY26 earnings call

Call held 16 Oct 2025

Management summary

Quick Heal Technologies reported a strong Q2 FY26 with significant revenue and EBITDA growth, driven by both Consumer and Enterprise segments. The company is focusing on strategic investments in R&D, leveraging AI, and expanding its Enterprise offerings, particularly in the mid-market and government sectors, while navigating challenges in the Consumer segment and collection issues. Management highlighted industry recognition and a clear roadmap for future growth, aiming for a total addressable market of INR 4,000 crores in 2-3 years.

Highlights

  • Revenue for Q2 FY26 stood at INR 83.5 crores, marking a 14.38% YoY growth from INR 73 crores in Q2 FY25 and a 46.49% QoQ growth from INR 57 crores in Q1 FY26.

  • EBITDA significantly improved to INR 9.2 crores in Q2 FY26, compared to a negative INR 9.7 crores in Q1 FY26 and INR 3 crores in Q2 FY25, with EBITDA margin reaching 11%.

  • The company reported a PAT of INR 8 crores for Q2 FY26, and remains debt-free with investments and cash balance of INR 191 crores as of September 30, 2025.

  • Onboarded its first customer for the data privacy solution and received industry recognition, including Seqrite being named Cybersecurity Service Provider of the Year and Quick Heal winning the Leading Cybersecurity Solution Brand of the Year 2025.

  • R&D investments were optimized through AI and automation tools, contributing to cost savings, while sales and marketing investments continued to strengthen the sales team.

Concerns

  • The company acknowledged ongoing challenges with collections, leading to an increase in receivables by INR 15 crores this quarter, though management expressed confidence in resolving the situation.

  • The Consumer business segment continues to face structural headwinds and is in a degrowing trend, although Quick Heal is managing to hold its market share with the lowest decline among competitors.

Key financials

  1. Revenue ₹83.5 Cr +14.4%YoY
  2. EBITDA ₹9.2 Cr +206.7%YoY
  3. EBITDA Margin 11%
  4. PAT ₹8 Cr
  5. Investments and Cash Balance ₹191 Cr
  6. Deferred Revenue ₹17 Cr

What they filed

Q1 FY27: revenue down 21.4%, net profit up 4.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue73 71 65 57 84 +14%72 +1%49 −25%45 −21%
EBITDA3 -4 -8 -10 9 +201%0 +112%-29 −246%-18 −81%
Net profit4 0 -3 -6 8 +91%7 +5909%-20 −514%-5 +4%
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.

Order book

low confidence

Pipeline

deal pipeline tcv

Heavy business pipeline

Management noted a heavy business pipeline, indicating future growth potential.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Debt disclosed
    Our balance sheet remains strong and debt-free, giving us the flexibility to invest in R&D and market expansion.
  • Liquidity Cash ₹191 Cr
    Our investments and cash balance stands at INR 191 crores as on 30th September 2025.

Guidance & targets

Market Share

  • Total Addressable Market (SOM) Market Share · over the 2 to 3 years · High confidence INR 4,000 crores
    all put together, over the 2 to 3 years, our SOM be around INR 4,000 crores as a total market, and we want to grab as much as possible. And we've been in the right position being Make in India.

    — Ankit Maheshwari

  • Consumer Segment Share of TAM Market Share · over the 2 to 3 years · High confidence 20%
    out of this INR 4,000 crores, you can assume that about 20% is Consumer and rest INR 3,200 crores is the Enterprise business.

    — Ankit Maheshwari

  • Enterprise Segment Share of TAM Market Share · over the 2 to 3 years · High confidence 80%

    — Ankit Maheshwari

Revenue

  • International Share of Enterprise Revenue Revenue · current · High confidence 20%
    in my Enterprise revenue, 20% is coming from International.

    — Kailash Katkar

What to watch in Q3 FY26

CEO Appointment

soon
Current In process, interviews happening
Target Appointment announced

Why it matters

A new CEO could bring strategic shifts and renewed focus, impacting future performance and investor confidence.

So, CEO selection is in process. Once he is appointed, you people will automatically get to know because we need to immediately inform to the stock exchange. So, a lot of interviews are happening, and it will get closed soon.

Risks & concerns

  • Structural decline in Consumer business

    high

    The Consumer business segment is experiencing a definite degrowing trend, which is a global phenomenon, requiring continuous effort to maintain market share.

    Management acknowledged

  • Delay in DPDP law implementation

    medium

    The DPDP law is still delayed and not yet completely implemented on the ground, causing organizations to wait before fully adopting related solutions.

    Management acknowledged

  • Collection issues and rising receivables

    medium

    Collection issues from partners, though partly resolved, still pose challenges, leading to an increase in receivables by INR 15 crores this quarter.

    Management acknowledged

  • Geopolitical situations impacting foreign business

    low

    While geopolitical situations are generating interest in Indian cybersecurity products, there is no immediate revenue impact from this trend currently.

    Management acknowledged

Q&A highlights

3 direct
Government support for Indian cybersecurity products Partial
Yes, Ashish, definitely, there is a scope out there and we are also working in that direction. Only thing, things are moving slow on the government front. We have been showcasing what we have. And in fact, a lot of government departments are already using our solutions.

Highlights potential tailwinds from government initiatives for Indian products, but also acknowledges the slow pace of implementation and public recognition.

Asked by Ashish Soni

R&D and marketing spend effectiveness and growth aspirations Partial
So, Ashish, we don't give any guidance on the revenue. But in terms of R&D, in my speech also, I said that there is a decline in R&D expenses. So, for the last couple of quarters, we were having negative EBITDA. To address that, we have done some delayed hiring. But in addition to that, more importantly, we are actually using Al and automation tools to optimize our cost.

Addresses investor concerns about past R&D spend not translating to immediate revenue, and outlines cost optimization efforts through AI and automation.

Asked by Ashish Soni

Impact of geopolitical situations on foreign business Partial
See, of course, threats, we are, in fact, quite actively Seqrite Labs is monitoring the threats and also coming out with detailed reports and sharing it with the right authorities. At the same time, on the product front and on the market front, what we are seeing there is quite good interest has been generated because of the geopolitical situation, even in India as well as in regional areas like UAE and all, wherein people are interested to at least have a look at our products, understand our offerings.

Confirms geopolitical events are creating interest in Indian cybersecurity solutions, particularly in regional markets, though no immediate revenue impact was quantified.

Asked by Ashish Soni

Repeat customer rates for Enterprise and Consumer segments Direct
So, we generally don't disclose it. But since you've asked it, it is in the range of 80% plus for our enterprise customers. For more Enterprise customers, it is close to plus, minus 80%. For Consumer, it is close 30%, 35%.

Provides specific, previously undisclosed, key retention metrics for both business segments, indicating strong customer loyalty in Enterprise.

Asked by Deepak Ajmera

Stagnant revenue since 2016 and future outlook Partial
As we say, we don't give any guidance, but the intent of we making so many investments in the last couple of years is to take our journey in Enterprise to the next level. We all know there are headwinds in the Consumer business. So, we are trying to hold our foot in the consumer business at the current level. So, that's the overall thought.

Acknowledges past revenue performance and reiterates the strategic shift towards Enterprise to drive future growth, while managing headwinds in the Consumer segment.

Asked by Deepak Ajmera

Focus on mid-market vs. Tier 1 IT services companies for Enterprise solutions Direct
Our enterprise solutions, we are more prominently focused on mid-market and SMB. So, SMB is our strength right now, and our maturity has gone to the level where we are now entering the mid-market as well. Mid-market when I say, it's like organizations who have more than 1,000 endpoints, less than 5,000 endpoints, so somewhere that. So, IT services or these GSIs are not our target. We are not focused there.

Clarifies the specific target market within Enterprise, indicating a focused strategy on underserved mid-market and SMBs rather than direct competition with large MNCs for Tier 1 clients.

Asked by Karan Gupta

Structural decline of the B2C (Consumer) segment versus current quarter performance Direct
See, one is that we have to accept that Consumer business is definitely degrowing. And it's not the situation only in India, it's the global trend that we are seeing. And that has been there since almost a couple of years. But at the same time, the effort that we guys are putting on trying to make sure whatever market share we have and the holding we have, we should be taking advantage of that and making sure that we are still managing the whole market.

Confirms the long-term structural challenge in the Consumer segment despite short-term tailwinds, highlighting the need for strategic shifts and market share retention efforts.

Asked by Shubham Zope

Disclosure of segment-wise operating margins Partial
So, we don't operate in 2 different segments. We are saying that both the businesses are currently seen together. And the size of the business used to be very small, Enterprise business. As we grow in the level, we will try to share and give more information around the operating margins for both businesses separately. But at this point of time, we are tracking it as one, so currently, this quarter, we had margins of about 11% EBITDA margin, but it varies in that range.

Indicates a future possibility of more granular financial reporting as the Enterprise segment scales, which would improve investor visibility and segment performance evaluation.

Asked by Bhavin Vakil

3 min read 6 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Quick Heal Technologies reported a strong Q2 FY26 with revenue reaching INR 83.5 crores, a 14.38% increase year-on-year from INR 73 crores in Q2 FY25, and a 46.49% sequential growth from INR 57 crores in Q1 FY26. EBITDA saw a significant turnaround, moving to a positive INR 9.2 crores from a negative INR 9.7 crores in the previous quarter, with the EBITDA margin improving to 11%. The company also posted a PAT of INR 8 crores for the quarter, maintaining a debt-free balance sheet with INR 191 crores in investments and cash as of September 30, 2025.

Strategic Focus on Enterprise Segment

The company continues its strategic pivot towards the Enterprise segment, which historically contributed 20% of revenue four years ago and now accounts for 41% of current revenue. Management highlighted that their flagship EDR and XDR products contribute over 90% of Enterprise revenue, with newer products like STI and SMAP gaining traction. The focus remains on mid-market and SMBs (organizations with 1,000 to 5,000 endpoints), which are underserved by larger MNCs, rather than directly targeting Tier 1 IT services companies.

Data Privacy and Government Business Growth

Quick Heal is actively pursuing opportunities arising from India's new data protection requirements, having onboarded its first customer for the data privacy solution and seeing good interest in ongoing Proof of Concepts (POCs). The government business segment demonstrated robust growth this quarter, driven by increasing cybersecurity budgets and a preference for 'Make in India' solutions. The company is actively demonstrating its capabilities to various government departments, anticipating good entry into this vertical despite long decision cycles for large-ticket items.

R&D Optimization and Innovation

R&D investments are being optimized through the leveraging of AI and automation tools, contributing to cost savings and a decline in R&D expenses compared to previous quarters. The company currently spends approximately INR 30-35 crores on R&D per quarter, all of which is expensed. Management emphasized that continuous innovation is critical in cybersecurity due to evolving threats, ensuring that R&D remains a key investment area, growing with revenue but at a lesser percentage.

Consumer Segment Challenges and Market Share

While the Consumer business experienced seasonal tailwinds this quarter, management acknowledged its structural degrowing trend, which is a global phenomenon. Despite this, Quick Heal has managed to maintain its market share, experiencing the lowest decline among competitors. The company is implementing schemes and partner incentives to convert more users to paid versions, aiming to hold its position as a market leader in the segment while focusing on Enterprise for future growth.

Market Outlook and Future Growth Drivers

Quick Heal projects its total addressable market (SOM) to reach approximately INR 4,000 crores over the next 2-3 years, with Consumer contributing about 20% (INR 800 crores) and Enterprise 80% (INR 3,200 crores). International revenue currently accounts for 20% of the Enterprise segment. The company is expanding its geographical reach and strengthening its sales team to capitalize on growth opportunities in Southeast Asia and the Middle East, alongside domestic mid-market and government sectors.

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