Summary
R Systems International Limited - Q4 CY 2025 Earnings Call Summary Wednesday, February 11, 2026 11:00 AM IST
Event Participants
Executives 3 Kumar Gaurav (VP-Finance), Nand Sardana (CFO), Nitesh Bansal (MD & CEO)
Analysts 5 Anmol Garg (DAM Capital), Deepak Malhotra (CapGrow Capital), Nikhil (Kizuna Wealth), Sandeep Shah (Equirus Securities), Sonal (Prescient Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Q4) | ₹555.1 crores | +23.6% YoY, +11.3% QoQ; driven by strong volume growth and organic expansion. |
| Revenue (CY25) | ₹1,958.2 crores | +12.4% YoY; reflects strengthening revenue quality and disciplined execution. |
| Adjusted EBITDA (Q4) | ₹101.7 crores | +27.0% YoY; Margin expanded to 18.3% (+140 bps QoQ) despite lower billing days. |
| Adjusted EBITDA (CY25) | ₹342.7 crores | +17.8% YoY; Margin at 17.5% (+80 bps YoY) aided by rupee depreciation and scale. |
| Adjusted PAT (CY25) | ₹193.6 crores | +24.6% YoY; Margin at 9.9% (+96 bps YoY) due to better operating leverage. |
| Utilization | 80.6% | -290 bps YoY; Conscious reduction from ~84% to allow for AI platform investments. |
| DSO (Billed) | 56 days | Stable YoY; Billed plus unbilled DSO remains consistent at 74 days. |
| Cash & Bank | ₹272.6 crores | Healthy liquidity position despite recent acquisitions and increased capex. |
| Employee Count | 4,000+ | Headcount increased organically and via Novigo acquisition (deal closed mid-Nov 2025). |
Geographic & Segment Commentary
- Americas: Continues to be the dominant geography contributing 73% of total revenue. Strategic focus remains on product engineering for mid-market SaaS and ISV firms.
- APAC: Contributes 17% of revenue, with key recent wins including a food distributor in Singapore and mining operations in the Middle East.
- Europe: Accounts for 9% of revenue; growth is driven by cloud-native readiness and security transformation projects for Tier-1 telecom providers.
- Middle East & Africa: New segment added via the Novigo acquisition, currently contributing 1% but expected to scale through enterprise data and agentic AI projects.
Company-Specific & Strategic Commentary
- AI & OptimaAI Platform: Management tracks that 40% of internal work uses OptimaAI, with AI-led projects now contributing 28-30% of total revenue. Strategy is shifting from experimentation to production-scale AI implementations.
- Novigo Acquisition: Integration finalized mid-November 2025; expected to add ~₹264 crores in annual revenue and improve consolidated EBITDA margins by 90-100 bps.
- Private Equity (PE) Ecosystem: Revenue from PE portfolio companies (including Blackstone and 12 others) now accounts for nearly 20% of total revenue.
- Strategic Re-positioning: Moving beyond traditional ISVs to target four AI segments: Pre-ChatGPT SaaS vendors, Vertical SaaS, AI-native startups, and Large Enterprises tackling technical debt.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | ~17.0% to 18.0% (CY26) | Supported by Novigo integration and high-margin AI work, offset by ongoing AI capability investments. |
| Revenue Growth | High Momentum (CY26) | Driven by 12-month trailing ACV of $76.5M and shift toward “productive” AI projects. |
| Capex | Normalization (CY26) | Expecting a return to maintenance levels after one-time expansion in Pune and Chennai facilities in CY25. |
Risks & Constraints
| Risk | Context |
|---|---|
| Tool Fatigue | Management noted customers are experiencing fatigue with AI tools that don’t deliver outcomes, necessitating a shift toward service-led implementations. |
| Labor Costs | Q4 PAT was impacted by one-time past service costs of ₹24.9 crores following the notification of the new Labour Code. |
| Technical Disruption | Emerging AI-centric software vendors pose a risk to traditional development cycles; R Systems is mitigating this by pivoting to premium AI integration and “Human-in-the-loop” services. |
| Client Concentration | Top 10 clients concentration increased to 25.2% (from 22.7%), making the company more sensitive to the spending patterns of its largest accounts. |
Q&A Highlights
AI Productivity & Pricing
- Question: How does AI impact man-hours for a typical project? (Sonal)
- Answer: Across the lifecycle, AI provides 30-35% productivity gains (up to 45% in testing). The company aims to retain this value through premium billing or fixed-price models rather than passing all gains to clients. (Nitesh Bansal)
Order Book & ACV
- Question: What is the breakdown of the $76.5M ACV? (Anmol Garg)
- Answer: This figure strictly excludes renewals. It represents net new logos or new deals within existing clients (NN + EN), reflecting a robust forward pipeline. (Nitesh Bansal)
Novigo Integration & Synergies
- Question: What is the margin impact of Novigo? (Anmol Garg)
- Answer: Novigo operates at higher margins than the R Systems average. The combined entity should see a 90 bps to 1% uplift in EBITDA margins. (Nitesh Bansal)
PE Portfolio Strategy
- Question: How much does the Blackstone ecosystem contribute? (Deepak Malhotra)
- Answer: While Blackstone provides access, the company must win deals via standard sales cycles. Crucially, R Systems has used this experience to scale its “PE PortCo” business to ~20% of total revenue across multiple PE firms. (Nitesh Bansal)
Key Takeaway
R Systems delivered a strong Q4 CY2025, reaching a milestone of ₹101.7 crores in quarterly EBITDA and achieving an 18.3% margin. The company successfully integrated the Novigo acquisition mid-quarter, which bolsters its enterprise digital transformation and Middle East presence. Strategically, the firm has pivoted toward an “AI-forward” delivery model, with its OptimaAI platform now influencing nearly 30% of revenue and driving significant internal productivity gains (30-35%). While the transition from seat-based to outcome-based pricing remains in early stages, the company’s focus on high-discretionary product engineering and its growing 20% revenue share from PE portfolio companies provide a stable growth foundation. Management expects CY2026 to be the year of “productive AI,” where experimentation converts into large-scale implementation. R Systems remains well-positioned to maintain 17%+ EBITDA margins while continuing aggressive investments in AI talent and infrastructure.
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