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Newgen reported revenue of ₹356.7 crore, down 21% QoQ

ICICIdirect Research 17 Jul 2026 DISCLAIMER

News: Newgen reported revenue of ₹356.7 crore, down 21% QoQ/ up 11.2% YoY. Product/ License revenue (16% of mix) grew by 48.3% YoY to ₹57 crore and Implementation revenues (13% of mix) de-grew by 24% YoY to ₹46.4 crore. On the other hand, Subscription revenues (ATS/AMC +SaaS) reported 23% YoY revenue growth wherein SaaS revenue grew by 45.5% YoY while ATS/AMC grew by 11.2% YoY. Annuity revenues (ATS/AMC+ SaaS+ Support) reported growth of 14.5% YoY to ₹253 crore. Segment wise on a YoY basis, Insurance & Healthcare (22% of the mix), Government/ PSU (6% of the mix) and Banking (63% of the mix) grew by 52.9%, 11.2% and 4.6% while Others (9% of the mix) de-grew by 9%. Geography wise on a YoY basis, the growth was driven by US (25% of the mix), APAC (16% of the mix) India (27% of the mix) and EMEA (32% of the mix) growing 27%, 12.1%, 9.9% and 0.3% respectively. Reported EBITDA margin stood at 15.7%, down ~1610 bps QoQ/ up ~160 bps YoY. Reported PAT came at ₹62.8 crore, down 30.9% QoQ/ up 26.3% YoY. The company added 10 new logos in the quarter.

View: Newgen delivered a mixed quarter with healthy double-digit revenue growth on a QoQ as well as YoY basis, supported by strong traction in annuity and SaaS revenues, although implementation revenues remained weak due to delayed project starts and customer payments, particularly in EMEA. Management indicated that demand pipelines across India and Europe remain healthy, bookings are growing at double digits with strong pipeline for both large and mid sized deals. Moreover, implementation revenues are expected to recover from Q2 as per the management.The company also announced leadership changes aimed at strengthening its next phase of growth and scaling its AI-led platform strategy. Continued investments in AI-led product capabilities, increasing adoption of subscription-based offerings and operational efficiencies are expected to support stronger growth and EBITDA margin expansion over the rest of FY27, with management reiterating its target of 23–25% EBITDA margin for the full year while maintining R&D spend at ~8-9% of revenues and sales and marketing at ~ 26% of revenues.

Impact: Positive

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