Newgen Software Technologies Ltd (NSE:NEWGEN) Q3 2026 Earnings Call Highlights: Strong ...

This article first appeared on GuruFocus .

• Revenue:INR1,122 crores for the first nine months, 6% Y-o-Y growth; Q3 revenue of INR400 crores, 5% Y-o-Y growth.

• Annuity Revenue:INR250 crores in Q3, 20% Y-o-Y growth.

• Subscription Revenue:INR134 crores in Q3, 29% Y-o-Y growth.

• Net Profit:Adjusted profit after tax for Q3 at INR90 crores; net margins at 22.5%.

• Profit After Tax (9 months):INR222 crores before labor code impact; INR194 crores after impact.

• R&D Investment:9% of revenues in the nine-month period.

• Sales and Marketing Investment:23% of revenues in the nine-month period.

• Cash Flow from Operations:INR154 crores generated during the nine-month period.

• Net Trade Receivables:INR530 crores as of December 31, 2025; net DSO of 125 days.

• Warning! GuruFocus has detected 7 Warning Signs with NSE:SENORES.

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Release Date: January 20, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Newgen Software Technologies Ltd ( NSE:NEWGEN ) achieved a revenue of INR1,122 crores during the first nine months of FY26, reflecting a 6% year-over-year growth.

• The company onboarded 34 new logos in the nine-month period, indicating strong global enterprise trust and preference for its platform.

• Subscription revenue grew significantly, reaching INR134 crores with a 29% year-over-year increase, showcasing robust subscription-led growth.

• The US geography contributed significantly with a 21% year-over-year revenue growth, validating the company's geographic expansion strategy.

• Annuity revenues grew steadily, with a 20% year-over-year increase, enhancing revenue visibility and long-term customer stickiness.

Negative Points

• The growth in core markets like India and EMEA was soft, with larger enterprise deals facing elongated decision cycles.

• The company faced challenges in securing large license deals in India and the Middle East, impacting overall revenue growth.

• Despite strong order bookings, revenue conversion has been slower, particularly for subscription-led sales in regions like the US, UK, and Australia.

• The macroeconomic environment and AI-led uncertainty have led to deferred decision-making in large deals, affecting immediate revenue realization.

• The nine-month revenue growth was only 6%, indicating a slowdown compared to the strong performance in the previous two to three years.

Q & A Highlights

Q: This quarter, growth in our core markets was soft. As you look into your pipeline, how do we see the health of business in the core markets of India and EMEA? A: Virender Jeet, CEO: While we had strong deal momentum, larger deals in India and EMEA are facing elongated decision cycles. The pipeline is strong, but larger deals are slower to convert. We expect some recovery in the next quarter and better performance next year as market confidence improves.