• Achieved 24th consecutive quarter of sequential growth with Q4 FY26 revenue of $436M (16.2% YoY, 3.2% QoQ)
• BFSI vertical demonstrated robust 28.4% YoY growth for full year FY26 with annualized run rate of $600M, now representing a significant portion of business
• Total Contract Value (TCV) bookings for Q4 at $600.8M with Annual Contract Value (ACV) of $445.1M, including $272.7M from new bookings
• Client base expansion with customers in $100M+ bucket increasing from 10 to 12 YoY, $10M+ from 21 to 29, and $5M+ from 55 to 62
• Filed over 120 AI-related patents and conducted comprehensive AI Huddle training for 1,700+ team members including business leaders and technical architects
• Board recommended final dividend of Rs 18 per share, bringing total FY26 dividend to Rs 40 vs Rs 35 in FY25
• Strengthened leadership with two new Executive Vice Presidents: Ruchi Kullhari for Enterprise Strategy and Hari Odayankar for Private Equity and Professional Services
• Achieved carbon neutrality two years ahead of target and ranked #1 among companies targeting carbon neutrality by 2030

Persistent Systems delivered strong Q4 FY26 results with 16.2% YoY revenue growth to $436M and EBIT margin expansion to 16.3%. The company is aggressively investing in AI capabilities through platforms like SaaSWA, Iora, and GenAI Hub, with strong momentum in BFSI (28.4% FY26 growth) and expanding relationships with marquee clients. Management remains confident about the $2B revenue run rate target by Q4 FY27 exit despite macro uncertainties.

Persistent delivered strong financial performance for Q4 FY26 with revenue of $436M (16.2% YoY growth, 3.2% QoQ). In rupee terms, revenue was INR 14,559.4 crores (25.1% YoY growth). EBIT margin expanded to 16.3% (170 bps YoY expansion), resulting in EBIT of INR 6,501.6 crores (30.5% YoY growth). PAT came in at INR 5,292.6 crores with 13.1% PAT margin (33.7% YoY growth). EPS was Rs 33.8 per share vs Rs 28.2 in Q3 (31.9% YoY growth). For full year FY26, revenue was $1,654.4M (17.4% YoY) or INR 147,484.5 crores (23.5% YoY). EBIT margin for the year was 15.6% (90 bps YoY expansion) with EBIT of INR 23,034.7 crores (31.5% YoY growth). Return on capital employed (excluding cash) improved to 45.2% vs 43.8% in Q3. Cash and investments stood at INR 27,622.1 crores. OCF to PAT was 77% for Q4 (down from 91% in Q3 due to timing of receivables and tax refunds) but strong at 93.6% for full year vs 82.6% in FY25. Billed DSO improved to 53 days (down 4 days QoQ) while unbilled DSO increased to 27 days (up 3 days QoQ).

Management displayed strong confidence with an 8/10 sentiment score, emphasizing their AI-led transformation strategy and platform investments as key differentiators. CEO Sandeep Kalra repeatedly highlighted the company's focus on 'engineering hyperproductivity, business hyperproductivity, and enterprise data readiness' through proprietary platforms SaaSWA, Iora, and GenAI Hub. The tone was particularly bullish on AI adoption acceleration, with management planning an AI Investor Day in early June to showcase capabilities. CFO Vineet Peddesai emphasized disciplined margin management while maintaining growth investments, with aspirational margin targets of 16-17% while prioritizing growth. Management stressed they are 'cautiously optimistic' about macro headwinds but confident in their ability to gain market share through differentiated AI offerings. The leadership repeatedly emphasized partnerships with hyperscalers (NVIDIA, Anthropic, OpenAI, Google, Microsoft, Databricks, Snowflake) as strategic advantages. The $2B revenue run rate target by Q4 FY27 exit was reaffirmed with 'plus minus a quarter at worst' qualification, showing strong conviction despite acknowledging potential macro uncertainties from geopolitical situations.

Management acknowledged several headwinds including Middle East geopolitical tensions potentially impacting oil prices and inflation if prolonged, though noting minimal direct exposure to the region. The tariff uncertainty and weak US macro environment were mentioned as ongoing concerns for FY27. Consulting and advisory expenses related to corporate development initiatives impacted margins by 60 bps in Q4, while increased subcon costs, software licenses, and travel expenses cumulatively impacted margins by 70 bps. Europe region showed sequential decline for two consecutive quarters (down 1.8% QoQ in Q4), though management attributed this to customer-specific issues. The slower-than-expected conversion from POC/pilot to enterprise-wide AI adoption in regulated industries (BFSI, healthcare) was noted as a challenge. Top 5 customer accounts showed slight sequential softness due to ongoing offshoring and cost optimization commitments to clients. Attrition remained elevated at 13% though slightly improved from 13.5% in Q3. The operational cash flow to PAT declined to 77% in Q4 from 91% in Q3 due to higher unbilled revenue proportion, delayed tax refunds, and annual insurance premium payments, though management expects normalization. The company faces potential cannibalization risks in the tech vertical from SDLC compression due to AI-driven productivity improvements, though management expressed confidence in offsetting this through market share gains and new business.

Revenue Outlook: Targeting $2B revenue run rate by Q4 FY27 exit (i.e., quarterly run rate of ~$500M), 'plus minus a quarter at worst'. Expects 'decent growth' in FY27 despite macro uncertainties.

Margin Outlook: Aspirational margin target of 16-17% EBIT margin, but prioritizing growth and capability investments over margin expansion. Effective tax rate expected to remain around 22-23%.

Key Targets:

• $2B revenue run rate by Q4 FY27 exit
• 16-17% EBIT margin aspiration (not guidance)
• Continued investment in AI platforms and capabilities
• Market share gains through AI differentiation

The Q&A session revealed analysts primarily focused on three themes: (1) demand sustainability amid macro uncertainties and impact on FY27 growth trajectory, (2) vertical-specific dynamics particularly around BFSI strength vs potential tech/healthcare headwinds, and (3) margin trajectory given increased investments in AI capabilities. Multiple analysts probed on the $2B revenue target feasibility and whether management would maintain or revise it - Sandeep firmly reaffirmed the Q4 FY27 exit run rate target with only minor qualification ('plus minus a quarter at worst'). Concerns were raised about sequential softness in top 5 accounts, Europe region decline, and OCF deterioration, which management attributed to normal business dynamics (offshoring transitions, seasonality, timing) rather than fundamental issues. There was significant focus on AI cannibalization risk in SDLC and whether this would pressure revenues, to which management responded confidently about net new opportunities and market share gains. The PE channel opportunity and Salesforce partnership came up as specific growth vectors analysts wanted to understand better. Management maintained a confident, measured tone throughout, acknowledging macro headwinds but emphasizing differentiated AI platforms, strong client relationships, and execution track record as offsetting factors. Vineet's emphasis on 'growth first, margins second' while maintaining 16-17% aspiration suggested willingness to invest aggressively in capabilities even if it moderates near-term margin expansion. Overall, analysts appeared satisfied with the growth consistency and AI strategy but remain watchful of macro sensitivity given 80% US revenue exposure.