/** blogpostTitle: Sagility Q4 FY26: Strong growth, steady margins, cautious FY27 guide blogpostSlug: sagility-q4 blogpostCoverImageUrl: null blogpostCoverImageDescription: Ultra realistic corporate finance scene showing a clean desk with a laptop displaying two simple line charts and one donut chart: a rising revenue trend from FY23 to FY26, a steady EBITDA margin line around mid-20s, and a revenue mix donut chart split roughly 90% payer and 10% provider. Include a small cash flow card showing OCF and FCF bars for FY25 and FY26 with FY26 lower conversion. Neutral lighting, no logos, no readable text. blogpostShortTitle: Sagility FY26 results and FY27 outlook */

Sagility Q4 FY26: Strong growth, steady margins, cautious FY27 guide

Sagility closed FY26 with a strong Q4 and a clear message on where demand is coming from. US healthcare payers are under pressure from medical utilisation and regulatory changes, and management believes this is pushing clients to look for cost takeout and operational transformation partners.

For Q4 FY26, revenue was INR 2,024.3 crore, up 29.1% YoY in INR terms and 22.2% in constant currency. Adjusted EBITDA was INR 503.6 crore with a 24.9% margin, and adjusted PAT was INR 306.9 crore with a 15.2% margin.

For FY26, revenue reached INR 7,192.9 crore, up 29.1% YoY in INR terms and 23.6% in constant currency. Adjusted EBITDA was INR 1,820.0 crore, implying a 25.3% margin. Adjusted PAT rose to INR 1,130.6 crore, with margin expanding to 15.7%.

What drove FY26 performance

Management attributed the year’s momentum to two forces. First, expansion within existing clients, including what it described as whitespace mining. Second, new client additions, with 17 new client additions during FY26. In Q4 alone, the company disclosed USD 30.7 million of potential steady state ACV from new business and expansions.

Seasonality also played a bigger role than the previous year. Management stated seasonal revenues accounted for 6% of FY26 revenue versus 3% in FY25, supported by AEP and open enrolment volumes.

Sagility’s revenue mix remains heavily payer-led. In FY26, payers contributed 89.7% of revenue while providers contributed 10.3%. Management said the lower provider share reflects the BroadPath acquisition, which is predominantly payer-focused.

Financial snapshot

Cash flow, leverage, and balance sheet signals

Cash generation looked mixed across timeframes. In Q4, operating cash flow was INR 532.7 crore and management highlighted 104.6% OCF conversion. For FY26, operating cash flow was INR 1,203.0 crore and free cash flow was INR 1,010.8 crore, with OCF conversion at 64.7% and FCF conversion at 54.4%.

Management attributed the lower FY26 cash conversion to higher non-cash unrealised forex gains in reported EBITDA, lower non-cash expenses, and higher tax payouts. It also noted that FY25 had benefited from tax refunds in India.

Leverage has reduced sharply. Net debt was INR 196.2 crore in FY26 versus INR 1,043.3 crore in FY25. Net debt to adjusted EBITDA declined to 0.09 in FY26. The company reiterated that debt is expected to be fully repaid by FY27.

AI, brand evolution, and the shift to managed services

Sagility is positioning itself as a tech and AI-led healthcare operations partner. The presentation highlighted AI orchestration through SmarTec and the Synchrony suite. Management also described a brand evolution intended to reflect this positioning, with an emphasis on measurable outcomes, compliance and clinical safety guardrails.

On the earnings call, management acknowledged the investor concern that AI can reduce revenue through productivity gains. It stated AI may compress some revenues, but believes it can win share by supporting transformation and taking accountability for outcomes.

Management also indicated that the nature of deal conversations is shifting. It spoke about more outcome-focused managed service deals that may take longer to close because they involve multi-year cost takeout commitments and wider end-to-end scope.

FY27 guidance and what to track

Management guided to low double-digit revenue growth in constant currency for FY27. It also guided to adjusted EBITDA margin of 24% to 25%, adding that if FX remains in current ranges, margins are more likely to track towards the upper end.

It also provided a quantification of AI-related revenue compression expectations, stating it expects technology and AI compression to be around 2% in FY27 versus 1% to 1.5% historically.

The near-term investor checklist is clear. First, whether the company can sustain double-digit constant currency growth as deal cycles shift to larger transformative contracts. Second, whether margins remain within the guided band as wage hikes, onshore delivery mix, and tech investments play out. Third, whether client concentration continues to decline from still-high levels.

Sagility ended FY26 with strong execution, rapid deleveraging, and clear disclosures on growth drivers and seasonality. FY27 guidance is more cautious, but management has left room to update as visibility improves.