Sonata Software Q1 FY26: Revenue up 13.3% QoQ

Key takeaways from the June 2025 quarter

Sonata Software reported its Q1 FY26 results for the quarter ended June 30, 2025, highlighting a rebound in consolidated revenue on a quarter-on-quarter basis. Consolidated revenue came in at ₹2,965.2 crore, up 13.3% QoQ and 17.3% YoY, as per the earnings summary shared with the release. Profitability metrics were mixed, with EBITDA (before other income and forex) at ₹159.6 crore, down 7.6% QoQ. Consolidated PAT for the quarter stood at ₹109.3 crore, up 1.7% QoQ and 3.5% YoY. The company also announced an interim dividend of ₹1.25 per share.

Stock reaction and the focus on profitability

In early trade after the results, Sonata Software shares fell over 3%, according to the market update shared alongside the results coverage. The decline was linked to weaker operating profitability metrics in the quarter. The quarterly table for the June 2025 period shows operating income at ₹133.57 crore, down 10.50% QoQ, while total operating expenses rose to ₹2,831.61 crore, up 14.73% QoQ. This combination placed attention on cost growth relative to revenue growth. The stock was also referenced at a last traded price of ₹317.30 in the provided data.

Q1 FY26 numbers: revenue up, EBITDA down

The reported Q1 FY26 consolidated revenue figure of ₹2,965.2 crore showed a clear sequential improvement. However, EBITDA (before other income and forex) declined to ₹159.6 crore, down 7.6% QoQ. PAT for Q1 FY26 stood at ₹109.3 crore, showing 1.7% QoQ growth. The quarter also included disclosure that cash and cash equivalents ended at ₹600 crore, compared with ₹707 crore at the end of Q4 FY25. The company also reported a negative net cash balance of ₹62.5 crore at the end of Q1 FY26.

Expense and operating line items from the quarterly table

The quarterly summary table (figures in ₹ crore, except per share data) shows total revenue at ₹2,965.18 crore for the quarter ended June 2025. Total operating expenses were reported at ₹2,831.61 crore for the same period. Depreciation and amortization were ₹26.08 crore. Other operating expenses totalled ₹178.93 crore, and selling, general and administrative expenses were shown at ₹418.04 crore. Diluted normalised EPS was reported at ₹3.94 for the quarter.

Business mix: domestic and international revenue in Q2 FY26

For the quarter ended September 30, 2025 (Q2 FY26 in the provided release), Sonata Software reported a sequential revenue decline. Consolidated revenue was ₹2,119.3 crore, down 28.5% QoQ, as stated in the detailed segment table. International IT Services revenue was ₹730.3 crore, up 4.3% QoQ, while Domestic Products and Services revenue was ₹1,391.3 crore, down 38.8% QoQ. For the half-year ended September 30, 2025, consolidated revenue was ₹5,084.5 crore, up 8.2% YoY.

Dividend actions and the quarterly payout policy

Sonata Software declared multiple dividends through FY26, as reflected in the dividend table and accompanying notes. The company declared interim dividends of ₹1.25 per share, including a second interim dividend and a third interim dividend. The company stated this was aligned with a commitment made during the earnings call to implement a quarterly interim dividend payout policy starting that year. Separately, the Board of Directors recommended a final dividend of ₹4.15 per equity share for the financial year ended March 31, 2026. The dividend yield in the provided data was 1.39%.

Updates beyond Q1: Q3 FY26 figures referenced

The provided notes also cite later-quarter performance metrics. Revenue for Q3 FY26 was stated at ₹3,080.6 crore, a growth of 45.4% QoQ. EBITDA (before other income and forex) for Q3 FY26 was stated at ₹200.2 crore, up 15.9% QoQ. PAT before exceptional item for Q3 FY26 was reported at ₹127.5 crore, up 6.1% QoQ and 21.4% YoY, while PAT post exceptional item was ₹104.4 crore. These figures were presented as later updates and indicate substantial quarter-to-quarter swings in the reported sequence.

Client metrics and concentration indicators

Operationally, Sonata Software reported adding 7 new clients in Q1 FY26. The company also disclosed that the top 10 clients accounted for 56% of revenue during Q1 FY26. Such concentration metrics are typically tracked by investors because they can influence revenue stability across quarters. In the same Q1 update set, international services revenue was also disclosed in USD terms at $11.8 million, up 0.6% QoQ and up 1.1% YoY. In constant currency terms, it was stated as a 0.9% QoQ decline.

Snapshot table: key figures mentioned in the updates

Why these results mattered to investors

Across the periods referenced, the central investor question was the balance between revenue momentum and profitability. Q1 FY26 showed strong revenue growth but weaker EBITDA on a sequential basis, alongside higher operating expenses in the quarterly table. The later Q2 FY26 segment data showed how quickly consolidated revenue can move quarter to quarter, with a sharp QoQ decline driven by Domestic Products and Services. Dividend communication also became a key part of the narrative due to the stated shift to a quarterly interim payout policy and the subsequent final dividend recommendation.

Conclusion

Sonata Software’s Q1 FY26 update combined a sharp sequential rise in revenue with softer profitability indicators, and it also marked the start of a more regular interim dividend cadence. Investors will likely continue to track segment-level swings, cost trends, and the company’s dividend record dates and board decisions as they are announced.