Zaggle's Q2 FY26: Record Performance and Strategic Expansion

Zaggle Prepaid Ocean Services Limited, a prominent SaaS fintech player specializing in spend management products and solutions, has reported its unaudited financial results for the quarter and half year ended September 30, 2025. The company delivered its best-ever half-yearly and quarterly performance across key parameters, showcasing robust growth and operational efficiency. For Q2 FY26, Zaggle's revenue from operations surged to INR 430.98 crore, marking an impressive 42.4% year-on-year (YoY) increase. Adjusted EBITDA for the quarter grew by 48.1% YoY to INR 43.73 crore, while Profit After Tax (PAT) saw a significant jump of 79.1% YoY, reaching INR 33.24 crore. The half-yearly performance for H1 FY26 also reflected this strong momentum, with revenues at INR 762.47 crore (up 37.4% YoY) and PAT at INR 59.12 crore (up 67.6% YoY).

This stellar performance is attributed to strong growth across all revenue lines, including program fees, Propel Points, and SaaS fees. The company's strategic focus on building a robust ecosystem, coupled with continuous innovation and expanded partnerships, has been instrumental in achieving these milestones. Management noted that the substantial increase in incentive and cashback expenses aligns with the overall business growth. While employee and other operating expenses increased to support expanded operations, ESOP costs declined due to forfeiture of some shares. Cash PAT, which includes net profit, depreciation, and ESOP expenses, surged by an impressive 70% YoY to INR 40.44 crore in Q2 FY26, marking the highest ever.

Strategic Initiatives and Product Innovation

Zaggle has continued to strengthen its product portfolio and expand its market reach through strategic initiatives. During the Global Fintech Fest 2025, the company launched two new products: the Zaggle GlobalPay FOREX Card, a co-branded partnership with GlobalPay (formerly Wall Street FOREX), designed to streamline FOREX spending for businesses and global travelers, and the Zaggle × Mastercard Prepaid Card, in partnership with Mastercard and NSDL, aimed at simplifying channel partner payouts. These launches underscore Zaggle's commitment to delivering intelligent, secure, and customer-focused spend management solutions.

A significant strategic move was the company's entry into the retail co-branded credit card segment through a partnership with AU Small Finance Bank. This initiative is expected to be a completely new line of business, projected to generate INR 500-600 crore in revenue and INR 50-60 crore in EBITDA over the next four to five years, with operations commencing in FY '26-'27. Furthermore, Zaggle expanded its banking partner network by adding Standard Chartered Bank, AU Small Finance Bank, and Suryoday Small Finance Bank, bringing the total number of banking partners to 19. This expansion allows Zaggle to offer a wider array of payment methods, including Commercial credit cards, Prepaid cards, Retail cards, and UPI, fostering new synergies and driving growth across various business lines.

Acquisitions and Global Ambitions

Zaggle's inorganic growth strategy continues to yield positive results. Mobileware, now rebranded as 86400, generated INR 24 crore in revenue in Q2 FY26, with an EBITDA of INR 7 crore and PAT of INR 4.8 crore, significantly contributing to the company's performance. The acquisition of TaxSpanner has strengthened Zaggle's presence in the spend management space, leveraging its comprehensive tax services. The company has also signed transaction documents for Greenedge and is in advanced stages of closing acquisitions for Rio Money, Dice, and EffiaSoft, with Dice and EffiaSoft projected to add INR 20-22 crore and INR 28-30 crore in revenue, respectively.

Looking ahead, Zaggle is preparing for global expansion, focusing on the MENA and U.S. markets. This includes establishing an office in GIFT City to facilitate access to international markets for cross-border spend management solutions, with a MENA regional office planned in the coming weeks. This global ambition, combined with ongoing innovation and strategic partnerships, positions Zaggle for sustained growth and diversification.

Financial Health and Outlook

Despite the strong top-line growth, the company's operating cash flow before taxes was negative INR 19 crore for H1 FY26. Management attributed this partly to the festive season, which necessitates supporting corporate customers, impacting working capital. However, they are actively implementing measures to normalize this and expect to break even on OCF by the end of FY26, with positive OCF projected from FY27 onwards. The company's cash balances stood at INR 573 crore as of September 30, 2025, providing ample liquidity for future strategic investments and acquisitions.

Management has upgraded its revenue growth guidance to 40-45% and maintained its adjusted EBITDA guidance in the range of 10-11%, reflecting confidence in continued strong performance across all business segments. The company's disciplined approach to acquisitions, ensuring strategic fit and profitability, further reinforces its commitment to long-term value creation. Zaggle's Q2 FY26 results underscore its strategic clarity and sustained growth trajectory, driven by product innovation, expanded partnerships, and a clear vision for market leadership.