Newgen Software Q2 FY26: Revenue up 11%, PAT ₹82cr

Q2 FY26 results: growth returns after a muted Q1

Newgen Software Technologies Ltd reported a stronger second quarter in FY26, with management stating that growth momentum was restored in Q2 after a softer first quarter. Consolidated revenue from operations rose to ₹401 crore, up 11% year-on-year (YoY) from ₹361 crore in Q2 FY25. Profit after tax (PAT) increased to ₹82 crore, up 16% YoY compared with ₹70 crore a year ago. The company also pointed to broad-based demand across regions, alongside a rising share of subscription-led business.

CEO Virender Jeet described the quarter as reflecting the company’s continued focus on product innovation and customer success. He also indicated that decision-making cycles for larger programs had lengthened earlier, affecting the pipeline, and that the company expects improvement over the next few quarters. The quarter was also positioned as one where Newgen pushed deeper into key verticals such as banking and insurance while investing in AI-led capabilities.

Key financial metrics: revenue, profit, and subscription traction

A key highlight in the quarter was subscription revenue growth. Subscription revenue rose 20% YoY to ₹126 crore. Management commentary linked this to product-led demand and execution across geographies, even as some large deal closures remained challenging in select markets.

The company also referenced sequential improvement, with one report noting revenue at ₹4.0 billion (₹400 crore) in Q2 versus ₹3.2 billion (₹320 crore) in the preceding quarter, a 25% quarter-on-quarter increase. Consolidated net profit was cited at ₹817 million (₹81.7 crore) versus ₹497 million (₹49.7 crore) in the previous quarter, a 64% sequential rise. These figures are directionally consistent with the quarter’s PAT reported at ₹82 crore.

Geography check: India and EMEA growth, and where momentum improved

Management commentary highlighted mixed regional performance in the quarter. India region grew 7%, while EMEA grew 3%. The company said it is working to expand wider in India and the Middle East market, and also flagged an expected advantage from “Make in India” initiatives in the domestic market.

Virender Jeet also noted that the company did better in the US and APAC in the quarter, with these regions including some UK and Australia revenue. In terms of vertical drivers, banking remained a large part of the business, with growth also coming from government.

Deal wins across geographies: UK and Ghana among notable contracts

Newgen pointed to multiple contract wins across regions during the quarter. The company secured a GBP 3 million project in the UK and a $1.6 million deal in Ghana, reflecting the focus on expanding its global footprint. Separately, the company’s Q1 FY26 disclosures also referenced deals such as a USD 2.5 million contract with a bank and a USD 1.6 million deal with a finance company in Saudi Arabia.

Chairman and Managing Director Diwakar Nigam said Q2 saw the addition of 15 new logos across geographies and “large deals breakthrough in mature markets,” which the company expects will help it scale further in those geographies. The company’s commentary also linked improved sales and marketing efforts to deal wins and acquisitions that supported the recovery in momentum.

AI-first product push and the productivity target management is tracking

Newgen reiterated its intent to accelerate an AI-first approach across products and solutions. Virender Jeet said the company is continuously investing in AI-led capabilities and highlighted early deployments that are intended to improve productivity, design intelligence, and automation.

In a broader discussion on AI’s impact, management cited expectations of 20% to 30% productivity gains once tools are fully deployed, while acknowledging it may take time to reach that level. The company also set an internal target that, over the next two to three years, for the same revenue it should be able to lower service delivery, execution, and product cost by 20% to 30%, with some of the benefits potentially translating to clients.

Banking and insurance: deepening presence and moving into PAS

The company continued to emphasise banking and insurance as strategic verticals. Virender Jeet said Newgen is deepening its presence in the banking vertical and working on building customer journeys in private enterprises. In insurance, he said the company is moving beyond customer journeys into Policy Administration System (PAS), which is expected to support larger deal acquisitions and widen presence.

In a separate statement attributed to the CEO, the company said: “Our leadership in Insurance is deepening steadily, with our Policy Administration System (PAS) offering helping us secure a strong foothold in this high-value vertical.” The same statement also flagged global traction for AI-driven solutions through early deployments.

Margins and reinvestment: growth-led expansion versus spending plans

Management also discussed how margins may track as revenue scales. Virender Jeet said Newgen is not yet at its desired levels of top line and that margin expansion is expected as the business grows. At the same time, he said the company intends to keep reinvesting, particularly in sales and market expansion.

He also noted that industry conditions have helped on costs, with lower people movement, which has supported cost management. However, the company’s stance remains investment-led, with spending on sales, marketing, and product development linked to growth plans.

Guidance history and longer-term aspirations remain in focus

The article text referenced management’s past guidance and aspirations across multiple years. In FY24, the company’s “Actual Performance” was described as 28% YoY revenue growth to ₹12,438 million (₹1,243.8 crore), with PAT margin of 20.2% (₹2,516 million, or ₹251.6 crore) and EBITDA margin of 23.2% (₹2,883 million, or ₹288.3 crore). For FY25, Newgen reported full-year revenue of ₹1,487 crore, a 20% YoY increase.

The longer-term aspiration cited in management commentary is a target of $100 million in revenue within the next 3-4 years, also referenced as “by FY27” in another concall summary. Separately, a reference point in the text described Newgen as currently generating $150 million in revenue.

Market impact: what changed this quarter and what investors track next

The Q2 print reinforced the role of subscription revenue as an important growth lever, with the 20% YoY rise to ₹126 crore. Investors also tend to track whether larger deal closures improve, given management’s comments that decision-making for larger programs has been slower and that this affected the pipeline earlier.

The company said it expects improved deal flow in coming quarters, with focus on AI-led products and expansion in banking and insurance. Management also expects renewed interest in automation solutions in the US, linked to a credit revival in America. In India, the company flagged PSU banks as major growth drivers, with private banks joining to upgrade systems.

Key numbers at a glance

Deal highlights mentioned during FY26

Conclusion: steady execution, AI investments, and deal flow in focus

Newgen’s Q2 FY26 showed a return to stronger growth, led by ₹401 crore revenue, ₹82 crore PAT, and a 20% YoY rise in subscription revenue to ₹126 crore. The quarter also stood out for cross-geo deal wins and continued investment in AI-led products.

The next set of updates investors are likely to watch include how quickly larger deal decision cycles normalise, whether subscription growth sustains, and how the company scales banking, insurance, and PAS-led opportunities across India and international markets.