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    Rategain Travel

    RATEGAINGood
    Information Technology·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

    7

    • 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

    Single quarter

    05 metrics
    1. 01Revenue₹295.1 Cr+6.4%YoY
    2. 02Operating Margins18.2%
    3. 03PAT₹51 Cr
    4. 04Net Worth₹1,817 Cr
    5. 05Cash & Cash Equivalent₹1,351.6 Cr

    Segment breakdown

    MarTech
    12% Q2 YoY Growth14.0% H1 Growth
    DaaS
    10% Q2 Aggregate Growth17.5% Q2 Organic Growth
    Distribution
    5% Transactional Volume YoY Growth
    List

    Guidance & targets

    6
    CategoryTargetPriority
    Revenue
    FY26 Revenue Growth
    55%-60%
    		High
    Revenue
    FY26 Organic Growth
    6%-8%
    		High
    Profitability
    Full-year EBITDA Margin
    16%-17%
    		High
    Profitability
    March 2026 EBITDA Exit Run Rate (Sojern)
    16.5%-17.5%
    		High
    Profitability
    March 2026 Consolidated EBITDA Run Rate
    17%-18%
    		High
    Cash Flow
    Full-year Cash Conversion
    75%
    		Medium

    Risks & concerns

    4
    RiskSeverity

    Slowdown in distribution business due to large OTA sunset

    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

    medium

    Uncertainty regarding the return of a lost key MarTech client

    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

    medium

    Declining Net Revenue Retention (NRR)

    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

    low

    Areas of Evasion(1)

    • Exact timeline for the return of the lost MarTech client

    Q&A highlights

    3

    “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

    2 min read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    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.