/** Persistent FY26: Steady growth meets an AI platform pivot */

Persistent FY26: 24 straight quarters of growth, with an AI platform play getting louder

Persistent Systems closed Q4 FY26 with revenue of $436.0 million, up 16.2% year on year and 3.2% sequentially. Profitability improved as well, with an EBIT margin of 16.3% and a PAT margin of 13.1% in the quarter.

For the full year, the company reported FY26 revenue of $1,654.4 million, up 17.4% year on year. In rupee terms, revenue was ₹147,484.5 million, up 23.5% year on year. FY26 EBIT margin was 15.6% and PAT margin was 12.6%. Management noted FY26 margins include a one-time impact from new labour codes of about 0.6% on EBIT and 0.5% on PAT.

Beyond the headline numbers, the key operational message was consistency. Q4 FY26 marked the 24th consecutive quarter of sequential revenue growth, a track record the company repeatedly emphasized as evidence of execution discipline.

Growth drivers: BFSI leads, but the mix stays balanced

Persistent reports three industry segments. In Q4 FY26, BFSI was the fastest-growing segment on a year-on-year basis, followed by Healthcare and Life Sciences and then Software, Hi-Tech and Emerging Industries.

The revenue mix for FY26 was:

• Software, Hi-Tech and Emerging Industries: 39.8%
• BFSI: 34.6%
• Healthcare and Life Sciences: 25.6%

Geographically, the business remains North America-heavy. In Q4 FY26, North America contributed 81.4% of revenue, while Europe was 8.1%, India 8.3%, and the rest of the world 2.2%. Management also stated that around 80% of revenue comes from the US, and flagged that bookings seasonality is typically higher in the December quarter due to customer fiscal-year cycles.

Financial summary

Deal flow: FY26 bookings stay healthy, with seasonal moderation in Q4

Persistent disclosed trailing twelve months (TTM) TCV of $2,405.3 million and TTM ACV of$1,780.1 million for FY26. For Q4 FY26, the company reported TCV of $600.8 million and new TCV bookings of$408.9 million.

Management explained that the sequential moderation in bookings in Q4 is consistent with historical seasonality, given that peak renewals tend to occur in the December quarter for a business with heavy US exposure.

The AI narrative: from framework to platforms and operating model

The strategic centerpiece of the FY26 communication was the company’s AI-led, platform-driven direction, described as Re(AI)imagining enterprise transformation. Management framed the approach around three pillars:

1. Engineering hyper-productivity
2. Business hyper-productivity
3. Enterprise data readiness for AI

Alongside these, the company discussed foundational readiness via managed AI services, including infrastructure, responsible AI, and workforce transformation. The deck also introduced a 3C framework for execution: coordination, context, and core.

While much of this is positioning, management also shared specific examples to illustrate how the platforms are being used. In engineering hyper-productivity, Persistent described leveraging its SASVA platform to transform software delivery for a public safety system used by law enforcement, emphasizing context ingestion from engineering systems and secure modernization without operational disruption.

In enterprise data readiness, the company described a modernization engagement for a US bank, where it modernized over 3,500 reports using iAURA Migrate accelerators, with more than 50% automation.

In healthcare and life sciences, management described work involving a disease-specific knowledge graph and domain LLMs on Google Cloud, and also highlighted a solution built with NVIDIA’s BioNeMo toolkit for molecular simulation and virtual screening workflows.

To drive internal readiness, the company hosted a Persistent AI Huddle with 1,700-plus participants in April 2026. Management also said it plans to host an AI Investor Day in early June 2026 in Pune, showcasing AI partnerships and customer case studies, and including a hands-on hackathon.

Margin and cash flow: quarter volatility, but full-year conversion improved

Q4 FY26 EBIT margin was 16.3%. The CFO’s margin bridge highlighted headwinds such as increased consulting and advisory expenses related to corporate development initiatives, and higher subcontracting, software licenses and travel related to annual planning exercises. Tailwinds included the absence of a one-time wage code impact that affected Q3.

On cash conversion, the CFO reported that operating cash flow to PAT was 77% in Q4 FY26, down from 91% in the previous quarter. Management attributed the decline primarily to a higher proportion of unbilled revenue in the quarter, and to timing items including delays in tax refunds and annual insurance payments. For the full year, management reported operating cash flow to PAT of 93.6% (the investor deck also shows 94.7%).

What to watch: concentration and North America dependence remain key risk markers

Two structural features remain important for investors tracking Persistent.

First, client concentration is high. The fact sheet shows the top 10 clients contributed 42.1% of revenue in Q4 FY26, and the top 50 contributed 69.7%.

Second, geographic concentration is heavy. North America was about 81% of revenue in Q4 FY26 and about 81% for FY26. This is a familiar trait for Indian IT services firms, but it matters when macro uncertainty rises.

Management also discussed geopolitical risk in the concall, noting that prolonged conflict could keep oil prices high and impact inflation. The company described itself as cautiously optimistic, with confidence that AI capability investments can support market share gains.

Takeaways

Persistent exited FY26 with strong top-line momentum, improving margins, and a clear message that AI is becoming central to its delivery model and differentiation. The company reinforced its long-term ambition of reaching a $2 billion run-rate by FY27, clarified as an exit run-rate, while maintaining a margin aspiration of 16% to 17% and prioritizing growth investments.

The near-term questions are less about whether the company can grow and more about how the AI platform narrative converts into scalable, repeatable revenue and margin outcomes, without introducing volatility in cash conversion or dependence on a small set of large clients.