Revenue
Margin
Demand
Guidance
Tone
Metrics raised 1
- FY27 EBITDA margin guidance raised (no specific number provided; prior not disclosed)
Event Participants
Executives
2
Bhanu Chopra, Ankit Aggarwal
Analysts
5
Ashutosh Parashar, Deepak, Miten Shah, Nitin Padmanabhan, Pranay Roop Chatterjee
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Revenue | ₹785 crores | Highest-ever quarterly revenue, up 187.6% YoY and 9.7% sequentially; annualized run rate at ₹3,140 crores |
| Organic Revenue Growth | 17.5% YoY | Combined entity organic growth; management sees exit FY27 at higher end of 15–20% range |
| Segment Growth – DaaS | +22.7% YoY | Healthy performance across air, OTA and car segments; large airline deals anticipated |
| Segment Growth – Distribution | +3.1% YoY | Modest; new launches (Agentic ARI, RateIQ) expected to drive meaningful contribution in coming quarters |
| Segment Growth – Martech | +341% YoY | Includes Sojern consolidation; organic Martech growth at 18.2%; now >81% of total revenue |
| Adjusted EBITDA | ₹193.4 crores (24.6% margin) | Up 289.3% YoY; record margin; excludes ₹21.9 crores deferred Sojern consideration (guided ₹20–22 crores/quarter, until Q3 FY29) |
| Reported EBITDA | ₹171.5 crores (21.9% margin) | Reported basis; add-back drives gap vs adjusted |
| Adjusted PAT | ₹116.8 crores (14.9% margin) | Up 148.8% YoY; reported PAT at ₹94.9 crores (12.1%) |
| Free Cash Flow | ₹135.2 crores | Conversion at 78.8% — highest ever; on track for 75%+ full-year conversion |
| Net Debt | ₹615.4 crores | Debt repaid: USD 47.5 million to date (38% of original loan); outstanding USD 77.5 million; net debt-free target by FY28 |
| Cash & Net Worth | Cash ₹255.6 crores; Net worth ₹2,114.2 crores | Other income lower YoY (₹3.1 crores vs ₹20.7 crores) due to capital deployed for acquisition |
| Amortization / Finance Cost | ₹33.8 crores / ₹16.5 crores | Amortization up from ₹6.8 crores YoY on Sojern acquisition intangibles; finance cost reflects acquisition debt |
| Deferred Consideration | ₹80–90 crores/annum | Runs to Q3 FY29, contingent on Sojern revenue/EBITDA targets |
| One-off items | FIFA uplift $2.5M; Middle East down ~$1.5M | Net |
Geographic & Segment Commentary
- Martech (81%+ of revenue): Grew 341% YoY with Sojern consolidation; organic growth 18.2%. Managed across properties, destinations, and corporate. New property additions strong with Sojern commission accelerator; destination business gains pricing power with distant second/third competitors. Unified one-platform stack driving outcome-based fees.
- DaaS: Grew 22.7% YoY with steady OTA/hotel performance; large airline deals anticipated for potential bump; revAI (car) traction building with sizable order book. Quarterly run rate hovering at ₹96–98 crores.
- Distribution: Grew 3.1% YoY, impacted by sunset of an OTA sub-brand. RateIQ (Agentic AI optimization) showing 10–100% booking uplifts for demand-supply pairings, in discussions with ~a dozen customers. Direct stack rollout across APMEA hotels with ~200% pipeline growth; management expects double-digit growth by year-end.
Company-Specific & Strategic Commentary
- AI-First Platform: AI runs across every product line; management cites "level of experimentation never higher in 20 years." AI compresses R&D-to-market time; focus on speed to market and monetization, not capability building.
- Sojern Integration – Phase 2: Cost synergies complete; revenue and go-to-market synergies are now the focus. Teams unified in APAC for property segment; Europe and U.S. property teams yet to be unified — expected to accelerate deal velocity.
- Pricing Power: Reduced need to discount in negotiations, particularly in destination space where RateGain holds commanding position; pricing strategy uses bundling (e.g., measurement products as value-add) rather than pure price increases; large India property deal negotiated with higher outcome-based fees.
- Data Scale & Thought Leadership: Ecosystem spans 320+ data partners; addressable travel audience up ~14.5% YoY. Company featured in Skift, CNBC, and CNBC Asia on World Cup demand — positioning as "definitive voice" on travel demand.
- Debt Reduction: USD 16 million additional debt repayment made post-quarter-end; 38% of acquisition debt retired; on track for net debt-free by FY28.
- M&A Outlook: Management on the lookout but judicious; no deals expected in FY27 — likely an event in 2027.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue (FY27) | Revised guidance ~₹3,100 crores | "A number we should definitely beat" per management; driven by Q3/Q4 momentum and integration synergies |
| Organic Growth (exit FY27) | Higher end of 15–20% range | Visibility from pipeline; acceleration expected from unified teams, cross-sell across 14,000+ customers |
| EBITDA Margin | Guidance revised upward (no specific number) | Record 24.6% adjusted margin in Q1; margin trajectory supported by retained pricing power and cost synergies |
| FCF Conversion (FY27) | 75% or better | Q1 at 78.8%; conversion typically improves through the year |
| Net Debt | Net debt-free by FY28 | 38% of acquisition debt repaid; USD 77.5 million outstanding |
| Gross Margin | ~70% near term | Could improve with bundling/pricing initiatives; management to provide clearer view in 2 quarters |
| Deferred Consideration | ₹80–90 crores/year | Pays over 3 years until Q3 FY29, contingent on Sojern revenue/EBITDA targets |
Risks & Constraints
| Risk | Context |
|---|---|
| Middle East Revenue Decline | Revenue from region fell from ~$970K/month pre-disruption to ~$425K/month; management treats as recovery opportunity but no timeline for stabilization; net ~$1.5M quarterly drag |
| FIFA World Cup Normalization | $2.5M revenue uplift in Q1 not expected to repeat at same scale in Q2; no impact on recurring revenue trajectory |
| Integration Execution (Property Segment) | Europe and U.S. property teams not yet unified; acceleration of deal velocity contingent on completing this integration |
| Gross Margin Pressure | MarTech mix keeps gross margins at ~70% vs historical ~75%; management not committing to improvement until pricing/bundling initiatives prove out |
| Forex / Currency Exposure | Q1 organic growth of 17.5% in INR; management cites currency tailwinds as supportive but flow-through depends on USD/INR trajectory |
Q&A Highlights
Pricing Power & Deal Velocity
- Question: Any examples of pricing power from the combined entity? Will deal velocity improve with people integration complete? (Nitin Padmanabhan, Investec)
- Answer: Need to discount is significantly lower; in destination space, RateGain holds pricing position with distant competitors (one even approached us for buyout). Bundling measurement products as value-add rather than raising prices outright. Large India property deal signed with higher outcome-based fees. Deal velocity will accelerate — APAC property team unified, Europe/U.S. property teams still to be unified. Pricing power is a combination of removed competition, unified data, and one-platform bundling. (Bhanu Chopra, Ankit Aggarwal)
Organic Growth Trajectory & Guidance
- Question: Is organic growth of 17.5% in INR? Can exit FY27 approach 20% organic on a run-rate basis, and is INR 3,100 crores guidance a number you'll beat? (Pranay Roop Chatterjee, Berman Capital)
- Answer: 17.5% is INR. Expect higher end of 15–20% range by exit. Most integration work is behind; revenue synergies and cross-selling will play out over Q3/Q4. FIFA uplift called out for transparency but is small vs recurring revenue. INR 3,100 crores revenue guidance is "a number we should definitely beat." (Bhanu Chopra)
Margin Attribution — Sojern Contribution
- Question: With Sojern consolidated and margins at 24.6% vs historical ~17%, is it fair to say Sojern is running at ~30% EBITDA margin? (Pranay Roop Chatterjee, Berman Capital)
- Answer: Difficult to attribute margins to either Adara or Sojern as both sides contribute synergies; platforms and teams are unified — one team, one platform for customers. Synergies come from both entities, including adopting Sojern platforms and retiring Adara infrastructure. Attribution would require significant rework; combined margins are the relevant metric. (Ankit Aggarwal, Bhanu Chopra)
Contract Wins & DaaS/Distribution Growth
- Question: Is the ₹141 crore new contract win figure combined (including Sojern)? Why is DaaS/distribution growth modest (₹96–98 crore and ₹50 crore quarterly run rates)? (Deepak, Sundaram Mutual Fund)
- Answer: Contract wins metric represents largely new logos only — does not capture upsizing of existing customers like Hilton; metric underrepresents actual momentum, company working on better KPI reporting. DaaS will sustain double-digit growth; large airline deals can create significant bump; revAI has strong order book ready to monetize. RateIQ showing 10–100% booking uplifts, in talks with ~dozen customers. Direct stack rollout in APMEA has ~200% pipeline growth; distribution should hit double-digit by year-end. MarTech organic growth ex-Sojern: ~18.2% — but explicit split is difficult due to unified operations. (Bhanu Chopra)
Product Launches, Pricing & M&A
- Question: Are new products outcome-based priced? Is ~70% gross margin the new norm? Will M&A resume after debt repayment? (Ashutosh Parashar, Mirabilis)
- Answer: Pricing mix is a combination of outcome-based, subscription, and transactional; A/B testing pricing methodologies. AI has dramatically accelerated product development — R&D investment now produces far more; bottleneck is go-to-market speed, not capability. Gross margins ~70% near term; improvement possible with bundling/pricing power, but management won't commit until clearer in 2 quarters. M&A unlikely this year; possible event in 2027 given judicious approach. (Bhanu Chopra)
Competition & Revenue Mix
- Question: Is Airbnb a threat? What is the 6.5% "others" revenue bucket? (Miten Shah, Individual Investor)
- Answer: Airbnb is a large RateGain customer (connectivity and DaaS solutions); not a competitor. "Others" represents non-travel brands — e.g., credit card companies (Visa, Mastercard) using travel intent data for top-of-funnel audience campaigns during events like FIFA World Cup. (Bhanu Chopra)
Key Takeaway
Rategain delivered its highest-ever quarterly revenue of ₹785 crores, up 187.6% YoY, with adjusted EBITDA margin at a record 24.6% and FCF conversion at 78.8%. Organic growth for the combined entity stood at 17.5% YoY, with Martech (81% of revenue) growing organically at 18.2% while DaaS grew 22.7%. Management explicitly guided to beating the revised FY27 revenue guidance of ₹3,100 crores and expects organic growth to exit at the higher end of the 15–20% range. The Sojern integration's first phase (cost synergies) is complete; the second phase (revenue synergies) is showing early traction through reduced discounting, bundled outcome-based deals, and cross-sell across 14,000+ customers. Financial discipline remains strong — 38% of acquisition debt repaid, net debt-free target by FY28 intact. Key watch items: Middle East revenue has halved to ~$425K/month with no recovery timeline, FIFA upside won't repeat in Q2, and Europe/U.S. property team unification is required to accelerate deal velocity. Management is optimistic on Q3/Q4 momentum driven by RateIQ, revAI, and direct stack (200% pipeline growth in APMEA), with M&A considered a 2027 event.