Good evening to everyone and welcome to Q4 FY26 earnings call of LatentView Analytics Limited. The results and presentation have already been mailed to you, and you can view them on the website www.latentview.com.

In case anyone does not have the copy of press release and presentation, or you are not marked in the mail, please do write to us, and we will be happy to send you the same. To take us through the results today and to answer your questions, we have the CEO of the company, Rajan Sethuraman, to whom we will be referring as Rajan; and we have the CFO of the company, Rajan Venkatesan, to whom we will be referring as Raj.

This is just to avoid confusion while doing the transcript. We will start the call with a brief update on the business and financials, which will be then followed by the Q&A session.

As usual, I would like to remind you that anything that is mentioned on the call that reflects any outlook for the future, or which can be construed as forward-looking statement, must be viewed in conjunction with the risks and uncertainties that we face. This risk and uncertainties are included, but not limited, to what we have mentioned in the prospectus filed with the SEBI and subsequent annual report that you can find on our website.

Having said that, I will now hand over the floor to management. Over to you, sir.

Thanks, Asha, and thank you all for joining the call. I will take some time to cover four topics on which I thought I will provide some additional color in addition to the information that's been already made available to you as part of the press release and the investor presentation.

Then I will hand it over to Raj for further commentary on the financials. The first topic I wanted to talk about is the whole AI thrust for the organization as well as what you all have probably been hearing about in external media and within the IT services world.

We are seeing fairly strong traction for all the AI work that we have been doing. Internally, we have been looking at AI work as work that we do using traditional AI, generative, as well as the new agentic solutions that are being implemented.

We did an internal check on the work that's been done last year in relation to all these three: traditional, generative, and agentic. We're happy to share that about 28% of our revenues for last year involves one of these three where the AI aspect is clear and visible to the client, which means that they can experience the generative AI interactions or the agentic solutions directly in the implementation that we have done for them, which we feel is a fairly strong traction for the work that we have been able to do on that front.

We call this primary AI, where the AI solution is directly visible in the hands of the end customers that we are working with. In addition to that, there is a fairly good chunk of work where the AI is kind of under the hood, but it is still powering either the decision-making or the modeling or the workflow or the process aspect as the case might be.

That is to the tune of another 21% in the work that we did last year. Overall, almost half the work that we have been doing has involved AI in some shape and form, a good chunk of it being directly visible right in the hands of the end customers.

There is a fairly broad spectrum of work which we are doing within the agentic space itself, and I'll touch upon that in a few minutes. In terms of the tooling and the technology that's used, it's covering all the major names that you're familiar with, whether it's Codex from OpenAI or Claude Code and Claude CoWork from Anthropic, right, Gemini, Gemini Antigravity, right.

All of these are being put to good use in the work that we are doing. We are also doubling down significantly on the AI partnerships and the work that we're doing, and I'll come back to that in a minute.

Before that, just giving a bit more color on the nature of the work that is being done using generative and agentic in particular. There's work that we're seeing in the payments invoice reconciliation space where agentic flows are being implemented.

There is quite a bit of work that we're doing on market intelligence gathering and orchestration and making it available in the hands of decision-makers, running campaigns in an automated fashion using agentic frameworks that have been implemented, significant amount of work being done for marketplaces and platforms around fraud analysis, counterfeit detection, and quite a bit of work also again in the manufacturing space in relation to warranty claims handling. These are some examples where full agentic workflows and orchestration have been implemented, and that is actually starting to yield business impact that is directly visible to the client.

From our perspective, we are really doubling down on further strengthening our AI capabilities both on the GTM front, go-to-market front, as well as on the internal capability building. There is a Claude certification program that's currently underway where over 200 people have signed up, and almost 40 people have completed the certification [since the?]

launch. There's a great deal of enthusiasm for all actions related to that.

I was in the US the last 3 weeks, and I had the opportunity to meet a lot of clients and also our partners. One of them that we are starting to work with is Anthropic, and I had the opportunity to meet the person who leads the Anthropic partnership, and there is a good amount of traction on that conversation as well.

From a capability standpoint, we are going to be building further strength in terms of the agentic focus, especially senior architects that we'll be hiring. The entire model you are probably also hearing that it's kind of shifting to what is being termed within the industry as forward deployed engineers, where people with full-spectrum skills, in some sense it's a bit of full-stack engineers from the past, but with additional AI capabilities and domain understanding and customer interaction capabilities, right, all that rolled into one is what is being termed as the forward deployed engineers.

We are again looking at building capabilities around forward deployed engineers who are able to bring the data engineering, BI, data science, as well as AI skills together in designing and implementing the solutions, right, that make a difference in the client organization. One final point on the AI.

The announcements by OpenAI and Anthropic that they are going to be forming joint ventures to create services arms to extend their capabilities, not beyond just the models that they are building, to directly getting into enterprises, while there has been concern around that in terms of what it means for services companies, I think it's also a validation that a very strong services layer is required, and just the models by themselves cannot deliver value unless the services layer is available to take care of a lot of the orchestration, not just the business process and the decision-making and the embedding within the workflow, but more importantly topics around transparency, governance, evaluations, validation, provenance, ability to prove something, right, all of these things are important questions. This is what a strong services layer can help accomplish, so that AI solutions are not just some model that's sitting in an ivory tower, but it's actually seeing practical application with very defined business benefits.

I just wanted to give you that perspective from a traction standpoint. The second topic is our partnership with Databricks.

Again, a lot of traction on this trip to the US. I had opportunity to meet multiple people on the partnership ecosystem.

Our partnership in the consumer goods, manufacturing, and technology space continues to evolve and strengthen. I also had a chance to meet with the person who heads up the professional services partnership.

We have a small foothold there, and this conversation helped push that further in the right direction. We are also evaluating potential inorganic acquisition opportunities where these firms come with a much stronger professional services partnership with Databricks, and this is something that again validated with the Databricks leadership team on whether that will actually help propel us right into the next orbit.

This is something that we will double down on in the coming months and quarter. The Databricks summit is coming up in June, and we will have a very strong representation there with many of our leaders being in attendance.

We've also organized several exclusive dinner events with several of our clients and prospects, and I'm expecting more traction on the back of that. Finally, we are continuing to make investments both on the go-to-market front as well as on the backend capability, experts, architects, and so on, and this action will continue in the coming quarters.

This year, two strong pillars of growth will continue to be the AI traction and the partnership with Databricks, and we are expecting that these will yield strong results right not only in this year, but in the coming years as well. The third topic I wanted to briefly touch upon is the investment that we made in Healthyon.

You would have seen the press release that came out earlier in the last quarter. It's a small investment, but we are the first investor into Healthyon.

Healthyon, when we started looking at them and evaluating them, they came with an exceptionally strong business problem and a use case, but more importantly, a very, very well-thought-out technical architecture and an agentic framework that can solve the revenue cycle management problem within the healthcare space using largely, right, 80-90% of it being done using an agentic orchestration. Of course, there is a human-in-the-loop aspect to that as well.

The solution that they had conceptualized and designed was something that resonated with us a lot. They are currently in the process of building out the agentic suite and the technical solution.

They have also signed up two charter clients with whom they are working to build out these agents. As part of that, we will get access to the full suite of agents that they will be building, which we can then leverage and use in other conversations, both from a showcase perspective as well as using them as components in the solutions that we deliver.

Plus, the revenue cycle management solution that they are building will be available in a composite fashion if we intend to take it into other healthcare clients. I'm expecting that there'll be more traction in the coming months and quarters, and we'll keep you posted about it as we move forward.

Finally, the last topic I wanted to cover was the technology industry and some of the headwinds that we have talked about in the previous quarter. We did start this new fiscal with a bit of a gap down because of the headwinds that we witnessed in the last quarter, but I'm happy to report that there are several strong opportunities that we are pursuing, especially on the back of the AI push that we are seeing in these accounts.

In fact, in our largest account, as part of this trip I was able to participate in three fairly large deal conversations, and one of them is almost at the point of fructifying, which will be a $3 million-plus deal, right, in total, but the other two are also million, million-and-a-half in size. While they will not completely cover the gap down that we had, they do bring us back to a reasonable level of confidence, and we're expecting that if the momentum continues through the course of the year, we'll be able to claw back much of what was lost because of the headwinds in the last year.

One other thing is that with the vendor ops organization, and we are providing analytics supports to them, bringing us closer to the procurement organization and getting us more visibility with what is happening right in the rest of the organization. These are the four broad topics I wanted to cover.

Otherwise, as an organization we continue to double down on our client partners and hiring the right go-to-market people, making some internal tweaks as well so that we are fostering greater collaboration and cross-pollination across our entities. These are things that will pan out over the next few quarters, and we'll keep you posted right in terms of any specific mentions that are needed.

Overall, very happy about how we closed out last year, and I'm seeing a reasonable amount of optimism as we step into the new year. With that, I'll hand it over to Raj for further commentary on the financials.

Thank you, Rajan. Good evening, everyone, and welcome to the last investor call for the fiscal year FY25-26.

One of the, I would say, big positives for this year as we close the year for, was was going past the 1,000 crore mark, which is a fairly significant milestone for us. Even in dollar terms, compared to the year in which we IPO'd, we've roughly grown about 2.2x in about, the the 3-year timeframe, right?

It's a I would say, from a from from the sort of growth that we've delivered and consistently with with profitability, we've been fairly happy with the numbers that were achieved for for the last fiscal. This was also in line with the guidance that we had given earlier in the year where we had indicated that on a full-year basis we'll we'll we'll we'll deliver between 19% to 20% growth with an EBITDA of about 23% to 24%, right?

Pretty happy with the way the year has has turned out to be. In terms of, specifically what's happened in this quarter, of course, Rajan already touched upon the fact that we did start the year with some level of shrinkage in one of our large accounts, technology accounts, right, where there was a fair bit of consolidation that happened within this one large account as well as deprioritization of the some of the work that we were doing, right?

We are fairly happy to note that despite the shrinkage that happened in this large account, we were still able to grow in dollar terms by about 0.5% on a sequential basis compared to the previous quarter. This was, of course, driven largely by the strength that we witnessed in the BFSI as well as the the CPG retail practice, right?

We'll talk a little more about what what drove growth in these accounts, but BFSI continues to to sort of deliver fairly strong numbers. Even as we head into the next year, we expect this this practice to continue to to deliver strong growth.

For the last year, we're very happy to report that the BFSI practice grew in excess of about 80% compared to the year before, right? In in terms of the YoY growth, of course, for this particular quarter, in dollar terms, the revenue came in at about 17% higher than the previous year.

In rupee terms, of course, because of the INR depreciation, the year-on-year growth came in at about 24.3% compared to the the same quarter in the in the previous year. I'll talk a little bit about, what, sector-specifically, you will see that technology, the technology vertical for us historically, if you see, used to contribute in excess of almost 70%.

If we go back almost eight quarters, right, if we go back to Q1 of FY25, the the tech vertical used to contribute almost 70% of our revenues at that point in time, right? From there to now, you will see that the share of technology from the 70% has come down to about 55%, while technology has continued to grow.

What is happy to to note is some of the other verticals, which is primarily BFSI and CPG retail, their share of revenue has grown substantially, one obviously based on the organic growth that we've witnessed in BFSI, but two also the Decision Point acquisition, which has led to the increase in the overall CPG and retail business, right? We're also happy to note that share of revenues from the rest of the world, right, at at one point in time, maybe eight quarters back, US used to contribute 94% of our overall revenues, right, whereas the rest of the world, including Europe, was about 6%.

We are happy to note for the most recent quarter, our share of revenues from the rest of the world has increased to about 15% compared to, the 7% or 6% eight quarters back, right? Both from a geographical concentration standpoint as well as from a vertical concentration standpoint, we have seen some of the other verticals as well as geographies expand, and that is again heartening to note, okay?

I'll talk a little bit about the profitability itself for this particular quarter. You would have noted that our EBITDA for this quarter came in on a on and this I'm talking about adjusted EBITDA, the adjusted EBITDA came in at about 24.1%, right?

There was, of course, a benefit of forex, which was to the tune of about 1.1% on the overall EBITDA for this quarter. This particular quarter, we also had some benefits in in terms of certain costs that were there in the previous quarter which were which did not recur in the current quarter, right?

You will all recollect that the last quarter we had made corrections to our wages to comply with the labor code, and also there was a severance pay that was paid for some level of headcount rationalization that we had done in the last quarter. Those two items contributed almost 1.5% of of of cost in the previous in the previous quarter, which did not recur in the current quarter, right?

We did get some of those benefits. However, the the the positive impact of forex and and the the labor code-related restructuring was offset by higher spends on travel as well as SG&A, other items like visa, even though our our our our visa costs on a comparative basis compared to the previous year has come down, but then we did have a fair amount of visa costs for, for H-1B filings that we had to do, and those costs were incurred in in the end of Q4.

Both of those meant that our the the consolidated impact of of a higher travel plus visa costs was about 1.1% on our overall EBITDA. Of course, we continued to sort of spend on certain other aspects around, we still want to increase some of the leadership hiring, specifically as far as the AI COE is concerned, hiring client partners for some of our key accounts, as well as continuing to build our Databricks practice, right?

We had some level of higher SG&A spend in relation to some of these hires that that we had to make. Net-net, from the 23%, the items that I spoke about meant that for this particular quarter, we came in at about 24%.

On a full-year basis again, in line with what we had guided before, our business EBITDA for the full year came in at 23%, in alignment with what we had guided. This is also the last quarter in which the transaction-related retention cost expense that we were adjusting, for for the purpose of reporting EBITDA, that would be incurred.

Going forward, you will not see that line, right, because you will not have this this this cost going forward. Happy to report that as well.

Coming to the the PAT and the the EPS, you will, this quarter also had a small benefit coming through on account of deferred tax asset that was created in relation to unexercised ESOPs that were there in the US. Please note that this is only for the US, and this was an accounting charge in some sense, and there was not not charge, this was an accounting sort of asset that that we had to create, which resulted in the ETR dropping from the typical 25% to about 22% levels for this particular quarter.

Going forward, we will not see any such impact, and this I'm talking about the current ESOPs that have been issued to the to the employees, right? On the EPS line again, EPS for this quarter, while you did see a small degrowth compared to the the previous quarter, that is the degrowth is largely on account of lower, I would say, other income that that you would have seen compared to the the same quarter in the in the previous year.

You will see that for for Q4 of FY25, the EPS came in at about 2.59, against that we are at about 2.55. Please bear in mind, for the for the last year, there was almost a 4, 4.5 crore forex gain that we had recognized in relation to some intercompany loans and and advances that were given out.

Stripping that out, if you were to strip that out, the EPS for on a even on a comparative basis has grown by about 8%, right, compared to the previous year. With that, what I would like to also close my opening remarks is that, we are happy to note that that FY26 concluded on a fairly strong note.

While there has been some level of headwinds in the technology vertical, we're particularly impressed by the strength in the BFSI and the CPG practice. Our Databricks practice again continues to generate significant traction in terms of deal pipeline and and inbound sort of referrals.

We're also fairly excited about the transformation and the the winds of change that we're seeing on the AI side. Close to about 28% of our the projects that we had delivered in the in the last year had a significant AI component, and we believe that this number is only bound to increase even in the current year as we continue to to execute through this year, right?

With that, I will hand it back to Asha, and we can open up for Q&A.

Thank you for the opportunity. My first question is on the technology vertical.

The sequential drop in technology vertical appears to be higher than what we had called out in Q3. Correct me if I am wrong, we had called out around $5-6 million annual drop we are expecting in one of the top tech clients.

If we consider that, then the sequential drop in Q4 seems to be slightly higher. Is my understanding correct, and is there any other client-specific issue in the technology vertical?

Yeah. Rajan, I can take that.

Go ahead. Yeah.

Aditi, specifically in this particular account, while the initial estimate was the drop will be closer to about $5.5-6 million, that was the estimate that we had given out in the last quarter, in reality, some of the rationalization that happened subsequently as well, and continued to happen, meant that the total value of shrinkage was closer to about $6.5 to $7 million. That is the total value of shrinkage that happened in this particular account.

With this, the one thing that we want to confirm is all the renewals, all the rationalization are all done, right? It was not $5.5-6 million, it's closer to about $7 million, right?

To Rajan's point, I think we are in active discussions even with this particular account on several other threads at this point in time, which definitely gives us confidence that we will be able to recoup more than 50% to 60% of the revenue lost in this account in the next one to two quarters, right, in terms of the overall book of work that we execute with them. There are already some very advanced discussions that we're in with this particular client to recoup the revenue lost.

Okay. Got it.

Sir, and apart from this client, what is the traction we are seeing in other clients? Therefore, what kind of growth should we expect in technology vertical in FY27?

I can cover the traction, and Raj, you can comment on the percentage and the numbers.

Yeah.

The other two large accounts that we have in the tech space, in general with one of them, it's been fairly even keel, right, at this time. They have also gone through some leadership change, right, at their end at the very top.

The third one, they've been going through some consolidation and related exercises over the last couple of years, but at this point in time again the interactions that we have had so far indicate that we will actually begin in the next year. Other than these three top accounts, in general the sentiment in the tech space, given the amount of activity that is happening in relation to AI, seems to be more positive rather than negative at this time.

Of course, clients want to do a lot and they want to do a lot more on their own, but there is also the general feel that whatever initiatives were kept on the back burner, whatever was shelved earlier, can all be picked up, and there could be movement on many of them because the economics of getting initiatives done has improved significantly. You can do many of these things with much higher velocity with lower effort, and that is creating a revival of interest in exploring and doing a lot more things in comparison to budget-constrained approaches, right, that were there in earlier quarters.

In general, I feel more optimistic. The percentages and stuff we will obviously see as things pan out over the next one, two quarters, but at this point in time, that's the headline view.

This

is

helpful. My next question is on the BFSI vertical.

We had a very strong growth in this vertical for last few quarters, but in Q4, if we see the sequential growth, it was flattish. Was there any one-time revenue in Q3 which was not there in Q4, or what can explain this?

Aditi, even in relation to what we delivered for the last quarter, the share of BFSI revenue from 14% has gone to almost 16%, okay, in this particular quarter, right, on a sequential basis, there is a definite increase in this particular quarter in relation to the previous quarter.

Okay. I will just check my numbers on that.

Yeah. No, and happy to answer this offline, but at least for this quarter, there was fairly strong momentum even in BFSI.

Of course, as BFSI continues to scale, right, and the last year they ended the year with a book close to about $18 million in revenue, as the business continues to scale, you will see the incremental rate of growth dropping, right, because obviously they're on a higher base as well now. That is something that we will start to witness, but in absolute terms, the business has continued to grow.

Okay. Got it.

Thank you for answering. I will get back in the queue.

Thank you.

Thanks for giving me the opportunity. Rajan, you mentioned about the AI impact on the business.

You said that almost half of the work has some bit of AI is involved. If you can give some examples in terms of the nature of services which we are delivering, as well as the deal sizes, and if you can also comment how deal sizes are different from the traditional deals.

Our deal size of around $0.5 to $1 million or maybe $1 to $2 million, and how much of it is let's say the token cost, which could be a pass-through revenue, and how much is retained by LatentView? That's my first question.

The last question is easy to answer. Whatever revenue that we are reporting, this is all our revenue.

It's got nothing to do with token cost because the model that we use with pretty much all the clients that we are engaging with is that they take care of the infrastructure, tokens, whatever, right, LLM access and all that. Everything that we are talking about is our revenue.

I did give some examples when I did my opening remarks, right, around the agentic workflows and processes, right, that we are impacting around payments invoice reconciliations, market intelligence orchestration, campaign analytics, fraud, counterfeit analytics, warranty claims, and so on. It's fairly broad-based in the sense that any area where the process is known and the parameters are understood and guardrails can be established, there is good momentum.

Guardrails in the sense that now you want to make sure that there isn't hallucination, there is transparency, traceability, right, all of that stuff in terms of what is the decision that is being made and why is the decision made, right, and then you can clearly connect the dots, especially in a multi-agent orchestration framework when agents hand off from one to other. It's important to have that kind of recognition.

In those type of situations where there is a good understanding of the traceability parameters, there is enough traction. Of course, simpler ones, right, when I gave those numbers, it included the combination of all three: traditional, generative, and agentic.

A lot of the work that we are doing is having some AI component in some shape and form. Going back to your question on deal sizes, it is the full spectrum.

We are seeing examples where a particular use case or something simple is being done with a $250,000 spend, but we're also seeing examples where the initiatives are fairly larger. In fact, the three initiatives that I referred to within our largest account, all of them involve AI in some shape and form because with technology clients, it's pretty much a given.

You cannot do any work without the AI either under the hood or directly being implemented in the form of either a generative AI interface or an agentic orchestration of the workflow. The spectrum of work from a deal size also ranges all the way from $0.25 million to $2-3 million as well.

Okay. Thanks for the detailed color.

Second is on this OpenAI and Anthropic launching their services arm, it's very recent phenomena. Any anecdotal evidence of, let's say, enterprises maybe giving more work to these services arms of OpenAI and Anthropic and maybe rationalizing a third-party vendor, not LatentView, but anyone else you have seen in the industry?

Some observations there that could be helpful.

It's too early to comment on that. Obviously they just have announced these launches.

I think OpenAI acquired a company, if I remember, I think called Tomorrow or something, that is the name I saw. The others are in the process of setting up their JVs and hiring people.

Anthropic plus OpenAI probably had put out recruitment for 500-odd people, okay, of forward deployed engineers, right, that I mentioned earlier. They will be building out these teams, but obviously they will focus more on the areas where they see friction with respect to the model usage.

There is a fairly large amount of work that needs to be done, and I don't see by any stretch of imagination that an OpenAI or Anthropic will be able to do everything because the model is just one aspect of it. Everything that I talked about that needs to sit on top of that, right, that all needs to be done by some services company or the other.

Of course, these can range all the way from small boutique firms to the OpenAIs and Anthropic's service arms, right, doing it themselves. I'm sure that they're also announcing multiple partnerships.

Anthropic has received applications from some 40,000 partners, and they are working through the mechanics of what areas. These two firms are also taking very specific approaches.

Anthropic has been more enterprise-focused, OpenAI has been more consumer-focused, but I'm sure that there will be some amount of meeting point, right, that will happen over the next few quarters. In general, my feel is that services play will be a significant play in the scheme of things.

That is the point I wanted to make. That is not going away.

Of course, the nature of the work will change in terms of the forward deployed engineering model coming into play, but there is a tremendous amount of work that needs to be done on all the points that I mentioned, right, whether it is eval, observability, traceability, right, all of that stuff.

Okay. Got it.

Next is on FY26, in dollar terms, it is 20% growth, but if you can clarify what is the organic part in it? For FY27, how should we think about the overall growth for the company?

Sorry, Karan. Karan, sorry.

What was your question? Sorry, can you just repeat that again?

I was asking for FY26, if you can clarify the organic growth in dollar terms, that was one. For '27, how should we think about the growth for the overall business, the top line take?

The organic growth for the business would be 18%, Karan. I think 18.2% or 18.3%, because please recollect that only there was one quarter of Decision Point revenue, which was not consolidated last year.

We started consolidating Decision Point revenues from 1st of July last year, okay? We had three quarters of revenue, it is only one quarter that was missing.

The rest of the business, of course, delivered 18% growth, right? In terms of your growth guidance for the next year, and maybe Rajan, do you want to take that, or do you want me to take that question?

You can take it. I can add in the colors.

Go ahead.

Yeah. Karan, right now what we definitely can see, and beginning of the year, of course, when looking at planning for the next year, we actually want to split that answer into a couple of sort of data points, right?

Right now, the way we're looking at our current order book as well as pipeline, right, we have a reasonable level of confidence in terms of high-visibility pipeline and order book to deliver about 12% to 13% of growth, right? That is, of course, at the beginning of the year, right?

As we see in any year, typically whatever you have visibility for, you will end up adding more to the order book and pipeline through the rest of the year, right? That is where we obviously are making investments in the go-to-market side as well as capability building side.

All those investments are obviously targeted to deliver a growth rate which is very similar to what we delivered this year, okay? This is all organic that I'm talking about.

I'm not talking about including inorganic over here. Right now, the level of visibility that we have is to deliver a 12% to 13% growth, but with investments that are being currently made to deliver a similar growth to what we delivered, which is 18%

to 20%. The only data point I'll add is that in the previous years, compared to when we start the year to when we end the year, this high-visibility number that Raj talked about has typically gone up in the range of 8% to 10%.

It kind of adds up, okay? We are targeting a 20% kind of growth, and if things pan out well, then we should be able to get there.

Okay. Just one clarification

Sure. Thanks.

Thanks, gentlemen. My first question is on the overall outlook that you've just provided.

Partly you've answered my question, but I just wanted to get a sense, what are we building in terms of tech and non-tech verticals? Are we building the headwinds to continue for the tech vertical?

Because you mentioned that despite a strong conversations around with our top clients, we'll still see the revenues won't fulfill the decline that we've seen. That essentially means that the non-tech verticals will do the heavy lifting, correct me if I'm wrong.

I just want to understand the nature of the decline in the tech vertical. Is it because of absolute cancellation of projects or has there been a severe deflation in the amount of work we've done?

Basically what I mean is the volume of work that we've done has possibly increased, but the deflation around that has been higher than our volume growth. Has that been the case?

I'll take the second part of the question, and Raj, you can comment on the percentages

split

that Vimal questioned. The nature of the decline is twofold.

One is a consolidation where they have decided to work with one of several partners, right, this has led to some amount of the decline. The second part of it is taking the work in-house.

Specifically in this account, there was a new leader who came in to head up a big chunk of the work that we were doing. Their preferred model is to work with internal full-time employees as opposed to work with vendors.

That's what they are familiar with and comfortable with from their previous organizations, right? Therefore, the moment they came on board, they very clearly made their intent known to us, right, that this is the direction in which they're going to move.

There is no impact on account of work staying the same, but revenue falling or anything like that. The way the whole industry anyway is moving is that budgets are either staying the same or going up in general.

They're just getting more work done because of the increased productivity that is now possible through the use of AI, right, in all shape and form. If you take a baseline 2 years back and compare it to today, across the board, right, in all industries, all sectors, and more so in the technology sector, you will feel that for the same amount of budget, 30-40% more work is being done.

There has not been any shrinkage of budgets itself that we have seen, okay? Either been a reallocation to internal mechanisms or consolidation with other partners.

We haven't seen instances where clients have said that, "Do the same work for us, but we're going to pay you less." In general, they said that, "We are going to pay you the same amount, but more work can be done," okay, with the money that's available.

Raj, maybe you can give the color on the percentages.

Yeah. Vimal, in terms of percentage, your assessment is right that it will be the non-tech verticals which will have to do the heavy lifting this year, right?

Having said that, I think right now the visibility, or you would say the sort of confidence that we have is that tech will deliver anywhere between, and I'm giving you a range over here because right now we are working, on on certain pipeline opportunities depending on one, the size of these pipeline opportunities eventually and also the timing of when we close them, the revenue that we'll be able to book for the year may may sort of change, right? Tech vertical for this year should probably deliver between nice our sense is that it should be between 5% to 8%, right, of growth on a year-on-year basis, okay?

This is adjusting for, of course, the loss. They will still be able to recoup some of the losses.

Of course, also there are some new conversations that are going on with some new logos as well in in in the technology vertical. Adjusting for the losses that we've already witnessed, we should be able to deliver a YoY growth of about between 5% to 8%.

That's the confidence that we have. Consumer should should should should our sense is right now should grow anywhere between 18% to 22%, okay?

That's the sort of range that we're looking at. BFSI should obviously the growth rates for this year for the next year will will come down compared to the previous year, but our sense is they should at least grow at about 40% for the next year right now where we stand.

Understood, Raj. Raj, just on margins, we've had benefits around of course the USD.

We've also had some employee adjustments that we've done, plus we have had our utilization levels around 90%. I do understand the utilization going up because of employee adjustments, but to some extent I feel we've sort of stretched our levers in terms of margins.

In case there is any normalization as far as these levers are concerned, how should we think about margins going ahead? I don't see any levers that we can sort of leverage at this point in time.

Your point on utilization for this particular quarter going up from the 85% to almost 89% levels is very valid, Vimal. The only point that I would want to reiterate is one of the reasons why the utilization levels have significantly gone up in this quarter is owing to some one-off, when I say one-off, this was certain large initial project that we have won with certain consumer clients, okay, and they're actually cutting across two different quarters.

Some of these projects were won in February and March, okay, and they continue to be delivered through May and June as well, right? In order to deliver these projects, of course, we had to deploy all the people that we had on the bench, and therefore that's the reason why you have seen utilization levels going up.

Having said that, I think one of the things that we continue to work through is this large client consolidation that we spoke about. A lot of the work historically used to happen on-site, okay?

One of the things that we are actively pursuing with the client is as we open new threads with the client, we want to do a lot more work either offshore or nearshore, right? That is one lever where definitely from a margin standpoint, we will be able to make better margins on some of these projects.

Two, I think while on a full-year basis you may not have seen the impact, the favorable dollar to INR ratio right now as we see it should continue to positively impact us. If they continue to stay at these levels, for sure I think there will be a positive impact on margins for next year.

I think there is enough sufficient cushion, both in terms of the movement to doing more nearshore and offshore work for tech clients plus the favorable INR USD ratio right now.

The CPG vertical should see normalization next quarter, Raj? Because there was a one-off this quarter.

There will be some level of, I would say, normalization for the next quarter because some of these large projects that we executed, they will start sort of tapering off in the next quarter. Of course, there are some conversations in the pipeline for follow-on work, but you will see a little bit of tapering off for at least the next quarter for CPG.

Fair. Thank you so much.

I'll fall back in the queue.

Yeah. Thanks for taking my question.

Referring to earlier questions of Karan, you were indicating that 12-13% of revenue that we are anticipating is merely coming on the existing accounts or the qualified deal pipeline that we have, is that the right understanding?

Sorry, I couldn't hear you clearly. Can you repeat the question, please?

Sorry. Am I audible now?

There seems to be some disturbance at your end. It's coming garbled.

Is it fine now? Hello?

slightly better.

How is it now? Is it fine?

Go ahead. That's fine.

Yeah. I was referring to the earlier question of Karan.

You were indicating 12-13% of revenue that we are anticipating. That is majorly on the existing accounts or the qualified deal pipeline that we have that's what we are referring to, right, as per my understanding?

It's not just existing accounts. When we say we have visibility of 12% to 13%, it'll be a combination of growth we are expecting from existing accounts as well as the high-probability opportunities that we see in the pipeline with new stakeholder groups in existing accounts as well as completely new logos as well.

What Raj referred to is the ones where there is high probability and high degree of a confidence. The full pipeline will have many other opportunities that are at a lower level of probability, right, which we will want to progress.

In addition to that, we still have more than 10 months available, right, and we will keep adding new opportunities. The point I made was that, in general, in the past, compared to the high-visibility number that we talked about at the beginning of the year to where we will likely end up, we have seen a 8% to 10% kind of an addition, okay, if things go well.

That's what we are expecting for this year as well.

Understood. Thanks a lot.

I was just looking at the client additions that we had on our $5 million-plus band. If you can provide some color on the industry profile and the scope of engagement with this account?

Raj, can you take that? I think he's asking about the split of the accounts in different buckets.

Pritesh, what is the question? Split of which accounts in what bucket?

Sorry.

Sequentially, we've added a $5 million-plus band, we added one account in there. If you can provide some color on the industry profile and the scope of engagement with that particular account?

Just 1 second, this particular account is

the, 1 second, and the Tech account, $5 million-plus band?

This actually is a financial services account that we've added.

Okay. Understood.

Okay. Lastly, on the bookkeeping side, 2 years back, if I look at our DSO was around 65 in FY25, it was 73 a year back, and now it is 80 in FY26.

If you can provide some color why it is inching up and what should be the steady state going forward?

Yeah. Pritesh, just on this, one of the reasons why, like I told you, right, I would say two things: one, as the share of Decision Point's revenue to the overall company's revenue increases, you will see a small uptick.

I think we're already maxed out in terms of what that impact is, but Decision Point, because they do a lot of work with CPG companies, CPG companies in general tend to have credit terms ranging between 90 to 120 days, okay? For this particular quarter, specifically because of the uptick in CPG revenue, which is largely driven by Decision Point, you did see that DSO days go up.

Having said that, purely from a housekeeping or a bookkeeping standpoint, we're very well aware of the fact that the DSO was high at year-end, but we've realized a lot of those collectibles subsequent to the year-end as well, right? Some of those were billed out or were in unbilled revenue, which has been subsequently invoiced.

There has been a fair bit of progress as far as the even the collectibles are concerned.

Okay. Understood.

Fair. Lastly, on the margin side, given our appetite for investments, even if I look at last year, there was a lot of rupee depreciation benefit that come into our bucket, but we made a lot of investments there.

Even if I were to include Q3 one-offs that we had on adjusted basis, if I look at FY26 margins are, I would say, marginally lower than what we delivered in FY25. Can we expect FY27 to replicate the similar trend of yours, or you believe the investments are largely done and dusted?

I heard Rajan saying that we have some seniors onboarding process, and at the same time we are hiring forward deployed engineers there. Just wanted to understand the investment strategy that we have in FY27.

I would say, consistent with what Rajan already alluded to, there will be some senior-level hiring that we will continue to make specifically in the AI space, right, including a potential hiring of a Chief Technology Officer. Some of these investments will be made to obviously future-proof the organization.

We will continue to add people on the AI side across all industries as well because that is something that, from how we lead conversations with client, I think an AI-first narrative is absolutely important, and we need to hire people who've delivered some of these projects at scale, right, for large enterprises. We will continue to make investments in bringing some of these senior-level folks, Pritesh.

I don't think from an investment standpoint, all the investments that we had to do, it's not like we've done all of them. Specifically on the capability side, we will continue to invest.

Maybe on the go-to-market side, we don't need to do a lot more investments. I think there is a fair amount of, I would say, investment that is already there.

Here and there, it could be geography-specific investments, could be in Europe, right, specifically we may do one to two hires, but on the GTM side, we're largely done as far as the investments is concerned. Databricks again, we will continue to invest in this partnership channel for growth.

I would say the two big areas of where you will continue to make investments would be Databricks as well as the AI Center of Excellence.

How much is our revenue from Databricks currently this year, if I look at '27, '26 full year, absolute terms?

On a full-year basis, our revenue from the Databricks ecosystem put together is closer to about $17.5 million.

YoY growth, how much is that we delivered in USD terms?

The previous year, the similar number was close to about $12 million.

Understood. Thanks a lot for taking these questions here.

Thanks. Thank you.

Hi, guys. Three questions, I'll just put all the questions together.

Raj, first question would be the growth outlook shared in the call, would that be in USD terms or constant currency terms? If you could clarify that, that'll be great.

The next set of questions are on Databricks. One, to understand the outlook for Databricks for FY27, what's the kind of growth you guys are working with, and would it be fair to assume that Databricks-funded or cloud partner-funded projects will start coming in this year, and would it largely show up in CPG and industrials?

The last one would be the financial services business. Could you kind of cover it a little more in detail?

The sequential growth, YoY growth momentum seems to continue. Again, kind of how's the outlook for FY27, new logo additions, or is it all coming from these existing set of customers spending more?

These are the large three areas if you could please address, that'll be great. Thanks, guys.

Raj, you can take the first question. I will address the second and third.

Yeah. Srinath, to answer your question, the growth guidance that we put out at the beginning of the call is all in USD terms, right?

Not INR.

Perfect, thanks.

On Databricks, Srinath, the expectation is that the Databricks portfolio of work will continue to grow at about 60% plus. Last year, I think we went from 11 between $11 and $12 to about $17-plus, okay, this year.

We are expecting a [higher rate?] , in fact it should get accelerate more on the back of the points that I made at the beginning of the call.

There is good traction, there is a lot more engagement. We are talking to all the right people, the senior people.

They're bringing us into their QBRs. When they do their QBRs, they call all of their account executives and sales people, and we are able to showcase the solutions that we are building.

In general, there is good recognition. I talked about the professional services thrust as well, right, where they could bring in partners.

Even on that, professional services in Databricks context in the past has focused more on migration type of work because that's a fairly big chunk of where Databricks gets its revenue. They are now starting to say in the recent conversations that industry solutions and building on top of the migrated data will be an important component as well, and that's where they see somebody like us bringing in more differentiation than the typical migration-only partners that they have worked with in the past.

In general, I'm expecting that the trajectory of 60% kind of growth should continue. On the financial services, it's going to be a combination of growth with existing accounts.

The large account that Raj has talked about, and then there was also a follow-up question, right, getting into the $5 million-plus band, we're expecting that there will be momentum with that account going into this year. Even as we have started this year, I think we have signed up two other accounts, and I had meetings with two more in the wealth management, asset management space as part of this trip.

I'm expecting that there will be traction in all the spaces: payments, asset, wealth management, and also the credit and credit card as another space. Insurance is something that we are looking to get in, but the sectors where we are already present, I'm seeing good conversations in all of them.

Thanks, Raj. Thanks, Rajan.

Have a nice weekend.

Thank you.

Hi. Thanks for taking my question.

Just a couple quick questions from my end. The first one, I think you said that you'd be able to recover 50% to 60% of the book that was eroded in your top customer by the end of Is that on a run-rate basis, or do you expect to recoup 50-60% of that for revenue that you book this year?

Then the second question was, I missed a bit on Anthropic. Have you signed up with Anthropic as a partner on their professional services front or as a customer?

Raj, do you want to take the first one? I can answer the second question.

Yeah. The first question is obviously what I meant was we're looking to sign deals which will ensure the value of the deals itself, right, will ensure that we are back to at least we'll recoup 50% to 60% of the total contract, annual contract value with these clients, right?

Now depending on the timing of when we sign some of these deals, they could sort of have an impact on the revenue for the full year. Right now, as we speak, for this particular client, the current projection is that we will be at least at 90 to, sorry, 95% of the revenue that we delivered to this client for the last year.

That is the target that we set out for this client on a full-year basis.

It's kind of absolute revenue terms, right, just to confirm the point.

That's right, yeah. That's right, yeah.

Not just ARR, yeah. This is discussions with Anthropic as a partner, not as a client at this time.

I don't know if any requests or anything that is there on that side. The good thing, though, is that we are talking to fairly senior people, and in fact the person with whom we are engaging, he used to be at Databricks before.

We had actually started helping him directly, right, on his analytics requirements. There is a possibility that we might be able to extend, but right now it's all limited to the partnership with Anthropic.

Understood. Okay.

That's it from my end. Thank you.

Thanks.

Yes. Thank you for the follow-up question.

My question was on margins. I think at the start of the year, we were expecting Q4 margins to be slightly higher, maybe 24.5% plus adjusted EBITDA margin.

Were there any unexpected cost headwinds in Q4? Given that we will be investing in AI and Databricks and other capability building, do you expect the margins could be below FY26 levels in FY27?

Aditi, yeah, this quarter, like I said, right, there were a few items on the, even when I did the EBITDA walk last quarter to this quarter, there were some professional charges that were incurred in relation to some senior-level hiring that we're looking to do, right, on the Databricks side as well as the AI COE side. There were some hiring costs that or consultants that we had to engage to bring on some of these senior-level hires.

That was incurred in this particular quarter, which did have a, I would say, a marginal impact on EBITDA for this quarter. Adjusted for that, obviously, we could have been closer to the 24.5% that you spoke about.

Now in terms of what we would like to guide for the next year, Aditi, see, like I said, I think this year will be a year where specifically on the AI COE as well as the Databricks side, we feel the need to bring in fairly strong leadership to drive conversations with clients. In fact, like I alluded to before, there are some senior-level hiring that will be done on both these fronts, which will mean that at the beginning of the year right now, what we would like to guide, right, and of course this is not adjusted for currency, there will be some benefit of currency.

When we did the planning, of course, all this planning was done based off a USD to INR conversion ratio of 92, right? Right now where we are, we're talking about 95, 96, or even higher levels for the rest of the year, but then we've done the planning at 92-odd levels.

What we've planned for is an EBITDA between 21% to 22% for the revenue growth that we will deliver, primarily on account of some of these upfront investments that we're making in the leadership hires on the AI COE side as well as the Databricks side.

Gross margins further with increasing share of AI project revenue and increasing share of offshore and nearshore revenue?

Sorry, Aditi? On gross margin front,

I wanted to understand the gross margin profile of the AI projects, AI revenue versus traditional revenue. Then also you mentioned of some of the work moving to offshore and nearshore.

Is there scope for improving gross margins further because of these two factors?

The gross margin, you would have seen that we've started reporting the gross margins from this in the investor presentation also. We've actually reported gross margins for the first time in line with what the feedback that we heard from you folks, right?

We've started publishing gross margins. For the full year if you see, right, 1 second, give me a second.

For the full year, we reported a book close to about 50.8% of gross margins for the last year, right? When you compare this with the gross margins that we're seeing on the AI-led projects, we're seeing gross margins in the range of 55% to 58% across.

It's a fairly broad spectrum, but depending on the size of the projects as well as the nature of the projects, we're seeing that the gross margins on those projects are definitely higher at about 55% to 58%. We do see levers to improve gross margin by doing more nearshoring as well as offshoring work, Aditi, but when the planning that we've done and the guidance that I gave out is without factoring any significant change in the current levers, right?

We're assuming the current sort of model to continue, right? To the extent we're able to execute better, we should see some upside in margins on gross margins from these fronts.

Okay. Got it.

This is helpful. All the best for FY27.

Thank you.

Yeah. Thanks for the follow-up.

Just want to understand, from the pricing perspective, how much of our work is time and material versus fixed price, and how is the trend of these two line items? Is T&M decreasing as in last few years?

Second part of this question is that how much deflation are we seeing in the T&M line item because of AI productivity benefit?

Raj, you can go ahead. I will add in some colors though at the end.

Yeah. In terms of our overall share of fixed bid to T&M base, within T&M again, we're including the way we internally review or classify contracts is pure staff aug or T&M contracts.

Then there is a concept of managed services, which essentially again, while the pricing is head count-based or capacity-based, and there is a fixed monthly sort of a revenue that comes to LatentView, it is still to some extent based off a head count number. Then of course you have the fixed bid or, we don't do a lot of outcome-based pricing today, but fixed bid you have, right?

Today the ratio of fixed bid to T&M for us will be closer to about 80 to 20. So 20 from fixed bid, fixed-scope type of work, and then T&M would be about 80%.

Within that 80%, almost 65% to 68% of that would be in a managed services contract where it's not like what I mean to say it's not based off timesheets that someone is entering or in the client's systems, right? These are essentially people where we are contracting for a certain level of capacity and the client pays us a monthly fixed amount for those resources.

There is no linkage to, one, the time that is clocked or, two, the sort of deliverables that we have to deliver as part of the projects, right? That's how we internally view it.

What was your second question, Karan?

I was just asking what is the deflation in the T&M projects because of AI productivity benefits? Here

I can take that, Raj, actually. I will add color to the first question also before I take up the second one.

Karan, the plan, though, is to shift a bit more to both milestone- and deliverable-based as well as outcome-based. That 20% that Raj referred to, we want to bump it up, okay?

I'll tell you the reason. The reason is that productivity gains that you can get by building an agentic foundry or a suite of agents that can be deployed, right, in along with people who do the work, or even productivity benefits by building a full-fledged solution, right, non-linearity, or even the pace at which we can do work, these can be accrued to us only if we contract differently.

If you continue to contract either in a managed services model or in a T&M model, then the benefit of having a suite of agents that are doing a bit of the our own people being more productive, they will all only accrue to the client. Internally, we have launched an initiative where we are incentivizing our project teams, right, in areas that are well understood where the process is known and we are able to build good, bounded agentic solutions, that we encourage the client to contract with us in alternate models, right, as opposed to just a managed services or a T&M model.

We'll keep you posted on the results of how that is panning out. Internally, our teams have been incentivized to move a bit more, right, to that model.

The second part of the question, there is no deflation on rates. The way it works is that clients continue to engage our people.

In fact, in many instances, they will be willing to pay a bit more. That's where Raj was referring earlier to an earlier question, you are saying that gross margins could be higher if you are doing agentic or AI work.

The expectation, of course, is that though they're paying more for the people, they will expect a lot more work to be done by them, okay, within the timeframe. Therefore, in terms of margin, there is no deflation, okay?

There are no rate reductions or margin deflation that is happening. It's just that people will be more productive, more initiatives will get done, okay, with the same set of people and same capacity.

Got it. Thanks for the color, and all the best for FY27.

Thank you.

Thank you. Not too much to add.

I think we covered quite a bit of the stuff. This will be an important year.

It'll be a inflection point year, right, in many ways. Whether we are talking about the whole AI agentic shift that is happening, partnerships with the likes of an Anthropic and so on, or or whether we are talking about Databricks and the work that we are doing even with, say, GCP and Microsoft and so on, right?

There is a lot more action that we expect to see, right, on on those fronts. Of course, everybody is trying to understand how the entire agentic shift will pay out play out.

My own read on the matter is that there is going to be a need for a lot more complex design, engineering of the agentic frameworks, which brings in all of the governance and transparency aspects that I have talked about. We need good people who are able to marry the not just the technical understanding, right, of how to use a Claude Code or a Codex or how to create agentic orchestration, but people who can marry that with the business process, the underlying risk and the transparency and the governance governance requirements, and then bring it all together.

In some sense, this will be a an year where this whole forward deployed engineering concept, right, that brings together many of those things will start seeing a significant play. We are gearing up for that in all ways, on the capability, expertise, certification, hiring front, as well as how we evangelize evangelizes how we talk about this, okay, to our clients and show them what needs to be put in place so that they can get the benefits of it.

We're expecting traction on all of those fronts. Obviously, we'll keep you all posted, right, on on a quarterly basis on how this unfolds.

Thanks for your wishes, and hopefully we will continue to execute on the initiatives that we have set in motion.