Aeries Technology Q3 FY2026 Earnings Call - Adjusted EBITDA Turnaround, FY2027 Guide $80M-$84M Backed by AI and GCC Ramps
Summary
Aeries delivered a clear financial inflection in Q3 FY2026: revenue held steady at $17.5 million, while Adjusted EBITDA swung to a $2.5 million profit and operating cash flow was positive for the third straight quarter. Management credits improved utilization, automation and scaled GCC delivery in India and Mexico for margin gains, and has raised full-year FY2026 Adjusted EBITDA guidance to $7 million-$8 million.
Leadership is selling a narrative of durable, contract-backed growth for fiscal 2027, forecasting $80 million-$84 million in revenue and $10 million-$12 million in Adjusted EBITDA. The caveat is timing. Several meaningful client programs are still in ramp-up, so the upside hinges on steady-state execution even as many contracts are already signed and several programs are in advanced stages.
Key Takeaways
- Revenue was stable at $17.5 million in Q3 FY2026, essentially flat versus $17.6 million a year earlier.
- Adjusted EBITDA turned positive at $2.5 million, a meaningful swing from an adjusted EBITDA loss of $2.0 million in Q3 FY2025.
- Adjusted EBITDA margin expanded to approximately 14.1%, gross margin improved to 19.1%.
- Operating cash flow was positive at $2.4 million, marking the third consecutive quarter of positive cash generation.
- Management raised FY2026 Adjusted EBITDA guidance to $7 million-$8 million, up from prior $6 million-$8 million.
- Fiscal 2027 outlook: revenue guide of $80 million-$84 million, with Adjusted EBITDA of $10 million-$12 million, based largely on signed, multi-year contracts.
- Management attributes margin and cash improvements to higher utilization, automation-driven productivity, and scaled GCC delivery in India and Mexico.
- AI-led transformation and automation adoption are cited as growth levers, with several AI implementations moving toward production.
- Nearshore presence in Mexico continues to scale, and GCC operations are contributing to delivery stability and cost efficiency.
- Several recently signed client programs are still in ramp-up and are expected to contribute meaningfully in FY2027 as they reach steady state, creating timing risk.
- Net income in the quarter was $1.2 million, lower than $2.0 million year-over-year, reflecting non-operating and below-EBITDA items despite operational improvement.
- Management highlights strong engagement with the Private Equity ecosystem as a source of multi-function, multi-year opportunities across portfolio companies.
- Operational signals include continued delivery performance in India and Mexico and a third Great Place to Work certification, which management points to as evidence of talent stability and retention.
- While many FY2027 contributors are signed or operational, execution risk remains as program ramps must convert to steady-state flows to realize the full guide.
- Analyst recognition and public announcements around GCC and automation are being used to reinforce credibility with clients and investors, but the pledge of material FY2027 contribution rests on successful ramp execution.
Full Transcript
Conference Moderator, Aeries Technology: Today, and welcome to Aeries Technology third quarter and fiscal year 2026 earnings call. Joining us today on the call are Aeries Chief Executive Officer Ajay Khare and Chief Financial Officer Daniel Webb. The call will review the results for the quarter ended December 31st, 2025, and outline strategic priorities that are shaping the next stage of our growth. Before we begin, please note that today’s discussion contains forward-looking statements, including Aeries’ expectations regarding future performance and market opportunities. Actual results may differ materially. Please refer to the SEC filings and the earnings press release for a full discussion of risks and uncertainties. Additionally, this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are available in our earnings release and on our website. With that, I’ll now turn the call over to Ajay.
Ajay Khare, Chief Executive Officer, Aeries Technology: Thank you. Good morning, and thank you for joining our third quarter fiscal 2026 earnings call. Quarter three financial year 2026, that is the quarter ended December 2025, was another strong quarter for Aeries. We delivered stable revenue, improving margins, and disciplined execution, with a significant improvement in Adjusted EBITDA compared to prior year quarters. Our results reflect continued stability across our client base and strong delivery performance in India and Mexico. The quarter also benefited from ongoing efficiency improvements, scaled GCC operations, and increasing adoption of our AI and automation capabilities across both new and existing clients. For the quarter, revenue was $17.5 million, Adjusted EBITDA was $2.5 million, and Adjusted EBITDA margin was approximately 14.1%, representing a meaningful turnaround from a negative Adjusted EBITDA in the prior year quarter.
These results are consistent with our expectations and reinforce the progress we have made in creating a more predictable and efficient operating model. We continue to show positive operating cash flow for the third consecutive quarter, which speaks to the strong trajectory we have built over the past year and the discipline we are applying in cost management. Our automation initiatives continue to improve throughput and productivity across clients. During the quarter, we also saw continued momentum across our AI-led transformation and GCC practices. We made several announcements on the significant strides we have made in automation, advancements in our AI implementations, and recognition of our GCC setup capabilities by analyst firms. These reinforce themes we have consistently discussed with our investors over the past several quarters: the dual strength of our GCC delivery model and our targeted AI execution.
Together, they build trust with our clients and support both revenue visibility and long-term margin expansion. We also continue to see strong engagement across the Private Equity ecosystem and multiple industry sectors. The pattern remains consistent with what we have shared past quarter. When we deliver measurable value to portfolio company or enterprise client, it strengthens our position across our broader portfolio network and creates additional opportunities. Several of the client deals we have signed this year are still in their ramp-up phase. As they move towards steady state, we expect a more meaningful contribution in financial year 2027. This growing base of multi-function and multi-year engagement gives us confidence in our forward visibility. Our nearshore presence in Mexico continues to scale as well, and recent engagements within the Private Equity ecosystem further strengthen our long-term positioning.
We continue to forge strategic relationships with our clients, and some of them have now matured into multi-year engagement across multiple business functions. These examples highlight the durability of our client relations and the recurring nature of our model. Operationally, we continue to streamline our delivery model and strengthen the capabilities needed for our next phase of growth. These improvements position us well as existing client engagement expand into scope and size, and as more programs move into steady state. Our ability to execute consistently at scale is also supported by the stability of our delivery teams, highlighted by our third Great Place to Work certification, which reflects strong and consistent talent retention and engagement across our core delivery locations. Looking ahead to fiscal 2027, which runs from April 2026 to March 2027, we believe we have strong visibility into our revenue and profitability profile.
A significant portion of next year’s revenue is anchored in multi-year contracts which have been signed already: GCC expansion and AI implementation transitioning into production. Based on this visibility, we expect fiscal 2027 revenue in the $80 million-$84 million range with Adjusted EBITDA of $10 million-$12 million. This outlook reflects the current scale of our contracted programs, the ramp-up of recently signed engagement, and operating leverage we are seeing in the business today. With that, I will hand over to Daniel for further details.
Daniel Webb, Chief Financial Officer, Aeries Technology: Thanks, Ajay. Q3 was a quarter where the underlying operating improvements in our business became more visible in our financial results. While revenue remained broadly stable year-over-year, our profitability and cash generation improved meaningfully, reflecting stronger utilization, automation-driven productivity, and continued cost discipline across the organization. Financial results for the third quarter fiscal year 2026 quarter ended December 30th, 2025: revenue $17.5 million compared to $17.6 million in the prior year period, net income $1.2 million versus $2.0 million in Q3 FY 2025, reflecting non-operating and below EBITDA items. Adjusted EBITDA $2.5 million compared to adjusted EBITDA loss of $2 million in Q3 of fiscal year 2025, marking a significant year-over-year improvement. Gross margin 19.1%, adjusted EBITDA margin 14.1%. Operating cash flow positive for the third consecutive quarter at $2.4 million.
This margin expansion reflects the operating leverage in our model as delivery utilization improved and automation scaled across active client programs. Incremental efficiency gains translated into profitability. Importantly, these improvements were achieved while maintaining service quality and execution discipline across both India and Mexico. We also delivered positive Operating Cash Flow for the third consecutive quarter, underscoring improved conversion of earnings into cash and greater stability in working capital. This consistent cash generation reinforces the durability of improvements we are making across our delivery and operating model. Based on our performance for the third quarter and execution momentum we’re seeing across the business, we’re increasing our current full year fiscal 2026 Adjusted EBITDA guidance to a range of $7 million-$8 million compared to our prior guidance of $6 million-$8 million. This reflects strong operating performance, improved delivery utilization, and continued benefits from automation-driven productivity initiatives.
Looking ahead, our visibility continues to strengthen. A significant portion of our fiscal 2027 outlook is supported by signed contracts with clients that are actively expanding with us. Several programs are still in their early phases, and as they progress towards steady state, we expect further contribution to both revenue and profits. As Ajay noted, our fiscal 2027 outlook covering the period from April 2026 through March 2027 is in the $80 million-$84 million range, with Adjusted EBITDA of $10 million-$12 million. This outlook is supported by signed contracts, active program ramp-ups, and improved margin profile we are demonstrating in fiscal 2026. Importantly, many of the programs contributing to fiscal 2027 are already operational or in advanced stages of ramp-up, which lessens execution risk and supports the durability of this outlook.
Our balance sheet remains healthy, and we are well positioned to continue executing our growth strategy while improving profitability and cash flow as the business scales. Thank you.
Conference Moderator, Aeries Technology: Thank you. This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation.
