Rategain Travel Technologies Limited — Q2 FY26 earnings call

Call held 11 Nov 2025

Management summary

RateGain Travel Technologies reported a strong Q2 FY26, achieving its highest ever quarterly revenue and significantly raising its full-year revenue guidance to 55%-60% YoY growth, primarily due to the strategic acquisition of Sojern. The company is ahead of its medium-term revenue doubling goal, now targeting an INR 2,700 crores run rate by FY26 end. While MarTech and organic DaaS segments showed healthy growth, the distribution business faced challenges from a large OTA sunset, expected to bottom out soon.

Highlights

  • Achieved highest ever quarterly revenue of INR 295.1 crores, representing a 6.4% year-on-year growth.

  • Reported operating margins of 18.2% and a PAT of INR 51 crores for Q2 FY26.

  • MarTech vertical grew 12% year-on-year in Q2, while organic DaaS business grew 17.5%.

  • Revised FY26 revenue guidance upwards to 55%-60% year-on-year growth over FY25, driven by the Sojern acquisition.

  • Projected full-year EBITDA margin of 16%-17%, with a consolidated exit run rate of 17%-18% by March 2026.

  • Ahead of the medium-term goal, now targeting a revenue run rate of INR 2,700 crores by the end of FY26, a year ahead of schedule.

  • Sojern acquisition positions RateGain to build the world's most comprehensive AI-First travel technology platform.

Key financials

  1. Revenue ₹295.1 Cr +6.4%YoY
  2. Operating Margins 18.2%
  3. PAT ₹51 Cr
  4. Net Worth ₹1,817 Cr
  5. Cash & Cash Equivalent ₹1,351.6 Cr

What they filed

Q1 FY27: revenue up 187.5%, net profit up 102.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue277 279 261 273 295 +6%540 +94%716 +174%785 +188%
EBITDA60 61 61 50 54 −10%87 +43%147 +141%172 +244%
Net profit52 57 55 47 51 −2%26 −54%70 +27%95 +102%
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

  • MarTech
    12% Q2 YoY Growth14% H1 Growth
  • DaaS
    10% Q2 Aggregate Growth17.5% Q2 Organic Growth
  • Distribution
    5% Transactional Volume YoY Growth

Guidance & targets

Revenue

  • FY26 Revenue Growth Revenue · FY26 · High confidence 55%-60%
    In terms of guidance for FY26, given the acquisition, we are increasing our revenue guidance for FY26 to now around 55%-60% year-on-year growth for the full year over FY25.

    — Bhanu Chopra, Founder and Managing Director

  • FY26 Organic Growth Revenue · FY26 · High confidence 6%-8%
    At the beginning of the year, we had given a 6% to 8% organic growth guidance for this year. At this point of time, we are not changing that and we think we will comfortably meet that guidance as well.

    — Rohan Mittal, Chief Financial Officer

Profitability

  • Full-year EBITDA Margin Profitability · FY26 · High confidence 16%-17%
    In terms of EBITDA, we would be looking at a full-year EBITDA margin of around 16%-17% considering Sojern's current EBITDA margin stands at 14%.

    — Bhanu Chopra, Founder and Managing Director

  • March 2026 EBITDA Exit Run Rate (Sojern) Profitability · March 2026 · High confidence 16.5%-17.5%
    The March 2026 EBITDA exit run rate will be anywhere between 16.5%-17.5% based on Phase-I of our integration and cost synergy.

    — Bhanu Chopra, Founder and Managing Director

  • March 2026 Consolidated EBITDA Run Rate Profitability · March 2026 · High confidence 17%-18%
    The consolidated EBITDA of RateGain and Sojern's run rate at this time will be 17%-18%, that is March 2026 on an exit basis.

    — Bhanu Chopra, Founder and Managing Director

Cash Flow

  • Full-year Cash Conversion Cash Flow · FY26 · Medium confidence 75%
    But for the entire year, our estimate is that we should look at a cash conversion of about 75%.

    — Rohan Mittal, Chief Financial Officer

Market context

  • Distribution Business Growth Revenue · FY27 · Medium confidence double-digit
    I would say FY27 we should expect a double-digit growth in our distribution business, but I will be able to give you a better sense on it probably in Q4.

    — Bhanu Chopra, Founder and Managing Director

Risks & concerns

  • Slowdown in distribution business due to large OTA sunset

    medium

    A large OTA, part of a bigger family, sunsetted, causing a significant dent in distribution transactional volumes, but management expects it to bottom out in Q3/Q4 FY26.

    Management acknowledged

  • Uncertainty regarding the return of a lost key MarTech client

    medium

    A key client contributing 4% of MarTech revenue was lost due to a 'political issue' post-acquisition, and while management is optimistic about their return, they cannot confirm the timeline.

    Management acknowledged

  • Declining Net Revenue Retention (NRR)

    low

    NRR has declined from 110 to 100, which management attributes to the increasing transactional nature of the MarTech business, while Gross Retention Rate (GRR) remains consistent at 10%.

    Analyst acknowledged

Areas of evasion (1)

  • Exact timeline for the return of the lost MarTech client

Q&A highlights

3 direct
Organic growth outlook and potential Sojern slowdown post-acquisition Direct
There is no slowdown of any sort that has been baked in. But yes, our market guidance's will be conservative... And it has to be kept in mind that our financial year Q3, Sojern follows a CY model, not FY. Our Q3 is the slowest quarter for Sojern.

Clarified that the increased revenue guidance is primarily inorganic, organic growth guidance remains 6-8%, and addressed concerns about Sojern's post-acquisition performance and seasonality.

Asked by Karan from PhillipCapital

EBITDA margins, depreciation, and finance costs post-Sojern acquisition Direct
There is a $125 million loan that we have taken. As on date, the interest cost is 6.5% on that... For depreciation and amortization, we will have to wait till Q3 numbers because the PPA exercise is just getting started now.

Provided specific details on the debt financing for Sojern and its interest cost, while indicating that full clarity on depreciation/amortization will come in the next quarter after PPA completion.

Asked by Karan from PhillipCapital

Trend of hotel chains shifting to in-house software for distribution and its impact on RateGain's distribution business Direct
I am very surprised that you say that, because most of the big chains used to have in-house CRSs and they have all now opted for third-party CRS where third-party distribution is typically connected via RateGain. So, we are actually not seeing that, we are actually seeing the opposite of that.

Directly contradicted the analyst's premise, asserting that RateGain sees the opposite trend, and explained the distribution segment's recent challenges were due to a large OTA sunset, not a shift to in-house solutions.

Asked by Shubham from Dexter Capital

2 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Performance Overview

RateGain reported its highest ever quarterly revenue of INR 295.1 crores in Q2 FY26, marking a 6.4% year-on-year growth. Operating margins stood at 18.2%, with a PAT of INR 51 crores. The company is significantly ahead of its medium-term vision, now projecting a revenue run rate of INR 2,700 crores by the end of FY26, a year earlier than the initial target of INR 2,000 crores by FY27. MarTech and organic DaaS verticals demonstrated healthy growth, with MarTech growing 12% YoY in Q2 and 14% in H1, and organic DaaS expanding by 17.5% in Q2.

Sojern Acquisition and Strategic Vision

The acquisition of Sojern, a global leader in AI-led marketing for travel and hospitality, is a 'transformational deal' for RateGain. This acquisition is central to building the world's most comprehensive AI-First travel technology platform, aiming to help customers acquire, retain, and engage guests. Management views the combined entity as a 'lethal combination' of the #1 and #2 players in AI-led marketing, creating a one-stop shop for hotels and leveraging complementary media spends.

Segmental Performance and Challenges

The MarTech segment continued its strong performance, driven by ADARA and Demand Booster. DaaS showed healthy aggregate growth of 10% in Q2, with organic DaaS growing 17.5%. However, the distribution business 'took a beating' due to the sunsetting of a large OTA, which significantly impacted transactional volumes. Management expects the distribution business to bottom out in Q3 or Q4 FY26 and anticipates double-digit growth in FY27, supported by new initiatives like the AI voice agent VIVA and Smart ARI.

Innovation and Go-to-Market Expansion

Innovation remains a core strategy, with the introduction of Model Context Protocol integration for the booking engine, an industry-first. UNO VIVA, an AI voice agent, has seen significant traction, helping hotels with reservations and upgrades. RateGain expanded its geographical footprint into five new markets and saw strong traction in LATAM (over 52% growth in Q2) and APAC/Middle East (nearly 100% growth in new sales YoY), validating GTM investments.

Financial Guidance for FY26 and Beyond

RateGain has increased its FY26 revenue guidance to 55%-60% year-on-year growth over FY25, primarily due to the Sojern acquisition. The full-year EBITDA margin is projected to be 16%-17%, with a consolidated EBITDA exit run rate of 17%-18% by March 2026, factoring in initial integration synergies. The organic growth guidance for FY26 remains at 6%-8%. The company expects a full-year cash conversion of approximately 75% and plans to issue FY27 guidance in the Q4 FY26 earnings call.

Customer Overlap and Integration Strategy

Management confirmed no overlap between Sojern's 13,000 property-focused customers and RateGain's existing 900-1,000 hotel and OTA clients, indicating significant cross-selling opportunities. The integration strategy focuses on creating a 'One Platform One Team' approach, combining the strengths of Myhotelshop (meta/social focus) and Sojern (display/programmatic focus) to offer a more compelling solution and achieve cost synergies, ultimately aiming for a 'cash generative and value-accretive' combined entity.

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