R Systems International: Q3 CY25 Performance Driven by AI and Strategic Wins

R Systems International Limited has delivered a robust performance in the third quarter of Calendar Year 2025, showcasing sustained growth momentum driven by strategic initiatives in AI and strong client engagements. The company reported a consolidated revenue of INR 498.62 crore for Q3 CY25, marking a significant 7.9% quarter-on-quarter growth in INR terms and 5.9% in USD terms. On a year-on-year basis, revenue grew by 12.3% in INR and 7.8% in USD, reflecting consistent operational strength despite broader market uncertainties.

The adjusted EBITDA for the quarter stood at INR 8.44 crore, translating to a healthy operating margin of 16.9%. This demonstrates the company's ability to maintain profitability while investing in new technologies and market expansion. The adjusted net profit after tax for Q3 CY25 was INR 4.34 crore. For the nine months ended September 2025, R Systems achieved a revenue of INR 140.31 crore, an 8.5% increase year-on-year, with adjusted EBITDA growing by 14.2% to INR 24.10 crore. This consistent growth underscores the effectiveness of their strategic pivots and execution.

Financial Highlights

Note: Adjusted PAT and EPS exclude share-based payment expense relating to restricted stock units and non-recurring items net of tax. All values in Crore, converted from Mn.

Strategic Thrusts and Market Positioning

R Systems' performance is significantly bolstered by its strategic focus on Artificial Intelligence and digital product engineering. The company's Optima AI suite, launched six quarters ago, has matured significantly, featuring over a dozen in-house AI agents and a library of more than 1,500 prompts. These tools are deployed across various software development lifecycle stages, from specification identification to testing, enabling clients to achieve faster time-to-market and reduced effort. This deepens R Systems' competitive edge in the tech services and platform engineering space.

Joint go-to-market partnerships with industry leaders like AWS, Azure, UiPath, Databricks, and Alianza have been instrumental in generating new demand and enhancing market reach. These alliances, coupled with focused initiatives targeting Global Capability Centers (GCCs), have contributed to growth, particularly in India. The company notes that GCCs are evolving into innovation hubs, creating new partnership opportunities for service providers like R Systems.

Geographically, North America remains the dominant revenue contributor at 73.4% in Q3 CY25. Europe and Southeast Asia contributed 8.6% and 13.8% respectively, while India's share grew slightly to 2.9% due to the focused GCC initiatives. The company's client concentration remains diversified, with the top 10 clients contributing between 25-26% of revenue, indicating a healthy spread.

Operational Excellence and Future Outlook

Operational discipline remains a cornerstone of R Systems' strategy. The utilization rate stood at a healthy 82.3%, providing flexibility to capture new opportunities without compromising efficiency. Days Sales Outstanding (DSO), including unbilled, remained stable at 76 days, reflecting effective billing and collection practices. The company's commitment to talent readiness for AI is also evident, having been recognized as a major contender in Everest Group's PEAK Matrix® Assessment 2025 for Software Product Engineering Services for Mid-market Enterprises. This recognition validates their deep expertise and ability to deliver next-generation digital products and experiences.

Management is optimistic about sustaining growth momentum, aiming for three to four quarters of continued growth. They are focused on growing their top client accounts, aspiring to elevate $2 million clients to$3 million-plus, and $3 million-plus clients to$5 million-plus. The recent acquisition of Novigo, expected to finalize shortly, is a strategic move to expand into the promising Middle East market, leveraging Novigo's established brand and partnerships in the region. Despite potential headwinds like furloughs in Q4, the robust deal pipeline and strategic initiatives position R Systems for continued progress.

Geographical Revenue Split (Q3 CY25)

In conclusion, R Systems International Limited's Q3 CY25 performance underscores its strategic clarity and disciplined execution. By proactively investing in AI capabilities, fostering strong partnerships, and pursuing targeted market expansion, the company is well-positioned to capitalize on the evolving digital landscape and deliver sustained value to its stakeholders. The focus on larger deal sizes and a healthy operational framework reinforces confidence in its future trajectory.