Zaggle’s FY26 record year comes with a clear question: when does cash follow profit?

Zaggle Prepaid Ocean Services ended FY26 with its strongest reported performance so far. On a standalone basis, revenue from operations rose to INR 1,852.8 crore, up 42.2% year on year. Adjusted EBITDA (before ESOP) increased to INR 182.8 crore, up 46.8%, and profit after tax rose to INR 132.9 crore, up 51.9%. The fourth quarter extended the momentum, with standalone revenue of INR 592.7 crore, adjusted EBITDA of INR 55.1 crore, and PAT of INR 37.8 crore.

On a consolidated basis, management cited FY26 revenue from operations of INR 1,907.6 crore, adjusted EBITDA of INR 191.6 crore, and PAT of INR 138.8 crore. The management commentary repeatedly framed FY26 as a milestone year, but the earnings call also showed where investor attention is shifting. Beyond growth, the market is now asking Zaggle to improve cash conversion, explain working-capital intensity in its redemption-led models, and give more clarity on near-term margins as acquisitions get integrated.

Growth was broad, but revenue quality differs by stream

Zaggle’s model blends software with payment-linked monetisation. The presentation highlights that on a standalone gross basis in FY26, the Propel platform contributed INR 1,055.5 crore, program fees contributed INR 752.3 crore, and software fees contributed INR 44.9 crore. That implies Propel was 57% of gross revenue, program fees 41%, and software fees about 2%.

The quarter-level mix was similar. Management stated that in Q4 FY26, software fees were INR 13.1 crore, program fees were INR 221.8 crore, and Propel Points were INR 357.8 crore. In other words, the business is still largely driven by transaction-linked revenue, not subscription-led SaaS.

Zaggle also guided investors to focus on net reporting for Propel, because Ind AS requires Propel points to be reported gross, with point redemption or gift card costs shown separately. On a net basis, FY26 net revenue was shown at INR 842.7 crore, while Q4 FY26 net revenue was INR 246.4 crore. Importantly, management highlighted that adjusted EBITDA margin at a net revenue level improved to 21.7% in FY26 (from 19.9% in FY25) and to 22.4% in Q4.

Financial summary (Standalone)

Note: Values converted from INR million to INR crore.

Cash flow and working capital became the central discussion

Despite record earnings, the call made it clear that cash generation is the operational metric under scrutiny. Management said standalone operating cash flow was about minus INR 6 crore and the consolidated operating cash flow was about minus INR 52 crore, with an explicit goal to bring operating cash flow into positive territory over the coming quarters.

This matters because Zaggle’s reported revenue includes large gross flows in Propel Points. While gross reporting is an accounting requirement, the operating model still involves redemption-led structures that can absorb cash. When asked about margins in Propel, management acknowledged that margins had declined and linked it to an intentional shift away from cash-absorbing redemption models. The trade-off is visible: near-term margin compression in exchange for better cash discipline.

Balance sheet data shows why investors are pressing on this issue. Standalone trade receivables increased to INR 333.9 crore as of March 31, 2026, compared with INR 214.9 crore a year ago. Cash and cash equivalents rose to INR 97.0 crore, and bank balances (other than cash equivalents) were INR 438.2 crore, lower than INR 615.2 crore in the prior year. Short-term borrowings increased to INR 43.9 crore from INR 5.1 crore. Management explained the borrowings as short-term funding to deploy capital quickly to drive business growth.

M and A is reshaping the portfolio, but near-term EBITDA visibility is reduced

Zaggle used FY26 to expand its ecosystem through acquisitions and investments. The presentation lists completed transactions in GreenEdge (100% stake, completed December 2025), Rive Technology (100% stake, completed March 2026, rebranded as Zagg.Money), TaxSpanner (98.3% stake, completed September 2024), and Mobileware Technologies (38.34% stake, completed March 2025). On the call, management referred to Mobileware as 86400 and provided FY26 performance numbers.

For 86400, management said revenue grew from about INR 34 crore in FY25 to about INR 74 crore in FY26, with EBITDA rising from about INR 5.4 crore to about INR 18 crore and PAT rising from about INR 1.6 crore to about INR 11 crore. For GreenEdge, management said FY26 revenue grew to about INR 103.7 crore (and clarified an earlier growth percentage stated in error), with EBITDA around INR 11 crore and PAT around INR 8.1 crore. They guided GreenEdge FY27 revenue growth at 40% to 50%.

The most consequential development after year-end was the DICE transaction. Management announced signing definitive documents and shifting from an earlier share purchase structure to an asset purchase and IP purchase agreement. The asset purchase value cited was approximately INR 68 crore (excluding GST), compared with an earlier valuation of INR 123 crore. The change in structure is important because costs now sit directly on Zaggle’s standalone P and L rather than in a subsidiary structure.

That is why management deferred EBITDA guidance for FY27. They guided revenue growth, but said margin guidance would be shared after integration is completed over the next few months. Management also stated that DICE was loss-making in FY25 and likely FY26, which implies near-term margin pressure even if the long-term intent is cross-sell-led monetisation.

AI is moving from positioning to execution

The presentation and call both leaned heavily on an AI-first narrative. Management described a dual AI engine approach: one engine focused on internal engineering velocity and operating leverage, and the second focused on customer-facing automation.

On internal execution, the company stated it has embedded AI into the development lifecycle, aiming to accelerate build cycles, shift from headcount-intensive operations to AI-augmented workflows, and refactor legacy code for scalability.

On the product side, management spoke about zero-touch configuration and onboarding, hybrid agentic workflows with human-in-the-loop, and decision intelligence that turns operational and financial data into real-time signals. On the call, management also stated a goal to reduce feature launch times by up to 50%.

This AI push is also showing up in accounting and cost structure. Investors asked about rising capitalised development costs, and management responded that only new product development costs are capitalised, not maintenance. The company’s standalone balance sheet shows intangible assets increased to INR 88.6 crore and intangible assets under development to INR 66.6 crore as of March 31, 2026.

New engines: Zagg.Money, Z.tax, and international expansion

Zagg.Money reflects a new direction for Zaggle: consumer credit cards alongside UPI capabilities. Management stated that early traction has surpassed expectations, with an annualised run rate of 36,000 to 40,000 new card acquisitions within an eight-week window. Management also clarified that the company does not take balance sheet risk in this model and earns referral fees and share of interchange from banks.

TaxSpanner was addressed more candidly. Management said they were not satisfied with its performance last year and outlined steps to improve FY27 execution. These include appointing Avinash and Nilesh Dharpe to the board, rebranding TaxSpanner as Z.tax around Q2, and launching a Tax AI copilot integrated with the wider platform, covering individual filings as well as TDS and GST.

Internationally, the founder highlighted the creation of Zaggle Payments IFSC Ltd in GIFT City, intended as a platform for global cross-border payments and financial services ambitions. On expansion, management said the UAE remains a primary growth pillar but go-live is delayed due to regional volatility, and there is currently no on-ground presence. US expansion was earlier expected by June 2026 but has been pushed by a couple of quarters, with management now targeting FY27 year-end.

Guidance for FY27: growth visibility is high, margin visibility is not

Management provided explicit revenue guidance. For FY27, standalone revenue growth is guided at 25% to 30%, and consolidated revenue growth is guided at around 40%. The company linked the consolidated growth delta to multiple acquired engines, specifically mentioning GreenEdge, Zagg.Money, and expected improvement in TaxSpanner.

However, EBITDA guidance was deferred because the DICE acquisition structure changed to an asset purchase, bringing employee and integration costs into the standalone entity. Management said they would provide margin guidance once integration is complete.

Takeaways

Zaggle ended FY26 with strong growth across revenue, EBITDA, and PAT, and continues to add customers and users at scale. The strategic story is becoming more ambitious, with acquisitions, consumer credit cards, tax-tech integration, and planned international expansion. AI is central to the narrative, and management provided specific operational claims such as reducing feature launch time by up to 50%.

But the near-term investor debate is likely to revolve around cash. Management acknowledged negative operating cash flow and margin volatility in redemption-heavy models, and positioned FY27 as a year to improve cash conversion while continuing to grow. With revenue growth guidance in place but EBITDA guidance deferred, the next few quarters will be judged less on top-line momentum and more on whether profit begins to translate into durable operating cash flow.