Tanla Platforms Navigates Dynamic Market with AI-Driven Growth in Q2 FY26

Tanla Platforms, a prominent player in the CPaaS (Communications Platform as a Service) sector, has reported its financial results for the second quarter of Fiscal Year 2026, showcasing a period of sustained growth amidst evolving market dynamics. The company delivered its third consecutive quarter of revenue growth, with total revenue from operations reaching ₹1,078.5 crore. This represents a 3.6% increase quarter-on-quarter (QoQ) and a robust 7.8% rise year-on-year (YoY), underscoring the company's resilient performance.

Gross profit for Q2 FY26 stood at an impressive ₹286.8 crore, marking the highest in the past eight quarters. This significant achievement reflects a 10.0% QoQ growth and a 9.5% YoY increase, primarily driven by strong contributions from both its Digital Platforms and Enterprise Communications segments. The gross margin expanded by 155 basis points QoQ to 26.6%, indicating improved operational efficiencies and a favorable business mix. Profit After Tax (PAT) for the quarter was ₹125.0 crore, growing 5.6% QoQ, though it saw a 4.0% decline YoY. EBITDA also demonstrated healthy growth, reaching ₹177.5 crore, up 8.2% QoQ and 1.2% YoY, with the EBITDA margin expanding by 70 basis points sequentially to 16.5%.

Strategic Initiatives Drive Platform Growth

A key highlight of the quarter was the successful deployment of Tanla's AI-native platform, Wisely.ai, with Indosat. This strategic initiative is a SaaS-based model, with revenue generation directly linked to the number of subscribers protected from spam and scam. Management emphasized that the benefits from this deal are expected to continue and multiply in subsequent quarters, serving as a significant catalyst for global expansion. The company plans to replicate this success with other telcos worldwide, positioning Wisely.ai as a core offering for global markets while restricting the older Wisely ATP to India.

Tanla's commitment to AI is profound, with substantial investments made over the past year in developing its AI-native platform. The company views AI as crucial not only for enhancing its product offerings and solutions but also for optimizing internal processes. This dual focus on external innovation and internal efficiency underscores Tanla's ambition to be a leader in AI deployment within the CPaaS industry.

Segmental Performance and Market Leadership

The company operates through two synergistic business segments: Digital Platforms and Enterprise Communications. The Digital Platforms segment, considered the 'Innovation Engine,' saw its gross profit grow by 7.2% QoQ and 11.7% YoY, driven by Wisely.ai and the MaaP platform for RCS. The Enterprise Communications segment, focused on 'Scale with Enterprise,' also performed strongly, with gross profit increasing by 11.6% QoQ and 8.5% YoY, reflecting growth across all channels. Tanla maintains an undisputed market leadership position in India, holding approximately 35% of the CPaaS market share.

Customer cohorts analysis revealed positive trends, with 356 customers contributing over ₹1 crore in annual revenue. Newly acquired customers added ₹25.9 crore in Q2 FY26. The company also reported that customers contributing annualized revenue between ₹10 crore and ₹50 crore grew by 36% QoQ and 23% YoY, indicating increased wallet share and customer engagement.

Financial Health and Outlook

Tanla Platforms continues to maintain a strong balance sheet, characterized by being debt-free. Cash and cash equivalents stood at ₹881.4 crore at the end of Q2 FY26. The company's robust free cash flow generation, at 132% of PAT, highlights its financial discipline. Days Sales Outstanding (DSO) improved significantly to 77 days, a reduction of 15 days from the previous quarter, reflecting efficient working capital management.

Management has provided guidance for FY26, committing to an EBITDA of approximately ₹800 crore. However, they acknowledged a potential risk of missing this target by up to ₹50 crore, primarily due to the impact of regulations on the gaming industry and reduced incentives from Meta for WhatsApp business. Despite these headwinds, the company aims to achieve at least ₹750 crore in EBITDA and expects continued top-line growth and positive gross margin impact from its platform business in the coming quarters.

In conclusion, Tanla Platforms demonstrated a resilient performance in Q2 FY26, marked by consistent revenue growth, expanding gross margins, and strong cash generation. The strategic deployment of its AI-native Wisely.ai platform and its global expansion plans position the company for future growth, even as it navigates external challenges in specific market segments. The management's focus on innovation and operational efficiency, coupled with a healthy financial position, reinforces confidence in its long-term trajectory.