Good afternoon and a very warm welcome to all of you, and thank you very much for your continued interest in Nucleus Software. I will request Parag to give you a perspective.

Good afternoon, everyone, and thank you so much for joining this call. While we talk about our financial performance, but I also wanted to share a couple of important updates.

We've been talking about our AI strategy, and there have been some questions also. I wanted to inform that the groundwork undertaken over the past few quarters is beginning to translate into tangible progress now.

Our Enterprise AI foundation is now in place. Alongside this, we are also undertaking an organization-wide learning and upskilling initiative to equip our associates with the capabilities that are required in adopting this AI framework.

Secondly, recently, we launched our FinnOne Neo GA, the full-blown release 9.0, which, among other things, also brings embedded AI capabilities across the lending lifecycle. That's that thing I wanted to talk about.

Another important thing, of course, we've already shared it in our press release, but wish to welcome Mr. Bhavik Goddiwala as Chief Customer Success Officer.

He brings nearly 3 decades of experience across banking technology, digital transformation, core banking, transaction banking domains, and he will be looking after leading the initiative of customer success organization. Finally, we recently completed 5 years of our journey with one important partner in Sri Lanka, which is Hatton National Bank.

They are our FinnAxia customers. We completed a 5 years journey with them, and we just did a small celebration with them in Colombo.

These are the few updates we wanted to give, and over for the financial updates.

Now request Mr. Tapan to present the financial numbers.

Over to you, Mr. Tapan.

Hello. Good afternoon.

Am I audible?

Yes,

Our consolidated revenue for the quarter is at ₹210.4 crore, de-growth of 6.4% quarter-on-quarter and 3.4% year-on-year. Product revenue during the quarter is ₹176.6 crore at 83.9% as against 84.1% during previous quarter.

India region constitutes 56% of revenue, followed by 12% from Middle East, 11% from South Asia, 5% from Europe, and rest others. During previous quarter, India constituted 58% of revenue, followed by 13% from Middle East, 11% from South Asia, 4% from Europe, and rest others.

Revenue from top 5 clients contributed 28.1% of revenue in the quarter as against 29.3% during previous quarter. Cost of delivery, including cost of product development for the quarter, is ₹160.4 crore, an increase of 1.9% quarter-on-quarter and 5.1% year-on-year.

It constitutes 76.2% of revenue against 70% quarter-on-quarter and 70.1% year-on-year. Marketing and sales expenses for the quarter is 10% of revenue against 7.1% quarter-on-quarter and 6% Y-o-Y.

General and administrative expenses for the quarter is 10.1% of revenue against 7.5% quarter-on-quarter and 8.3% year-on-year. EBITDA for the quarter is at ₹7.6 crore as against ₹34.6 crore quarter-on-quarter and ₹33.7 crore year-on-year.

Margins during the quarter is 3.6% as compared to 15.4% quarter-on-quarter and 15.5% year-on-year. Other income during the quarter is ₹17.8 crore, growth of 19.5% quarter-on-quarter and de-growth of 0.7% year-on-year.

Income on investment and deposit is ₹18.9 crore, and forex loss is ₹1.1 crore. This growth is driven by mark-to-market gains on debt mutual funds resulting from falling interest rate in Q1.

Forward covers as on 30th June 2026 are USD 2 million at an average rate of INR 94.69 to USD. Profit after tax during the quarter is ₹23.9 crore, de-growth of 30.9% quarter-on-quarter and 32.2% year-on-year.

The order book position as on 30th June 2026 is ₹1,244 crore, out of which 88%, that is ₹1,096 crore, is from products. On 31st March 2026, the order book position was ₹1,044 crore, out of which 86%, that is ₹899 crore, is from products.

Total cash and cash equivalents as on 30th June are at ₹977.9 crore as against ₹972.4 crore on 31st March 2026. Receivable is at ₹174.7 crore as on 30th June 2026 as against ₹121.1 crore on 31st March 2026.

DSO increased to 63 days as compared to 42 days during previous quarter. Total headcount as on 30th June 2026 is 2059, 20- sorry, 2059, as compared to 2028 as on 31st March 2026.

Attrition during the quarter is 3% as compared to 2% during previous quarter. During the quarter, pursuant to a revision in remuneration structure, the company recognized a reduction in its gratuity liability of ₹6.99 crore and compensated absence liability of ₹2.83 crore.

The resultant impact has been disclosed as an exceptional item in the financial statements. To reward exceptional talent, the company during the quarter has granted restricted stock units to eligible employees under the Nucleus Software RSU Scheme 2026.

Now I hand it over to Swati.

Thank you, Tapan. With this, we are now open for Q&A session.

I will pass over to you, Mr. Akash.

Over to you.

sir. Hi.

Am I audible?

Yeah. Vishnu, in the last call, we mentioned that we had lost one of the top NBFC as a client, and obviously, they have been in our top 5 customers.

Because they had invested in a company who is a competitor to Nucleus, hence, they shifted to that invested company. Is it possible to let us know that isn't this a risk for top 5 customers-

Can you please be a bit louder? Your last part is not clear.

We got the context, but what exact is the question?

My question is, is it possible to let us know that isn't this a risk for every of our top customers that they can invest in a company who would be a competitor to Nucleus and give their business to the competitor?

Theoretically speaking, it's a risk, but how many clients would want to do that is a question. Theoretically yes, that has happened once, but practicality of it is because company would also want to do business with many other customers.

No, sir, because the client which has left is one of the major NBFC in the country.

Sir, your voice is not very clear. If you could be a bit louder, it will be helpful.

Am I audible now?

Please be more loud.

You are, but yeah, please go ahead.

Okay. I'm saying that that client was one of the major NBFCs in the country.

Just wanted to know what are you thinking on those part?

We're thinking only about whatever we can do best. Our investments in our product and R&D and AI.

We can do what we can do better, and we are confident of our positioning in the market, with getting traction. It is a one-off case, that's all.

Okay. Sir,

my second question is, since last 2, 3 years, we are focused on to strengthen the sales and marketing team, but we are not seeing that conversion into business. One factor could be the loss of customers, or what could be the other reasons, what are the gaps we are not able to fulfill?

I'll let CFO answer that part.

With respect to the question you are asking in terms of not reflecting in the business, just to share, last quarter, we have logged our biggest order book of ₹600+ crore in a quarter. That is a reflection of the work sales, marketing team is putting together along with really supported by our delivery function and other support functions.

Continuing on that trend, this quarter also, we have logged order book in excess of ₹300 crore. I think that is a reflection of the great work the team is doing in terms of tendering and building on the foundation which has been laid during all these years in India.

Okay. Just a question about customization.

If a small NBFC client, obviously, a customer of Nucleus, comes to Nucleus for some customization, will you'll be open to it, or you'll have some criteria for customization of the software for different level of customers? Anurag.

Hold.

I think when we talk about customization, we generally encourage configuration at design. Fundamentally, we look forward into opportunities how we can make those business elements implemented through configuration.

Having said that, when it comes to the regulatory part, then certainly we have provisioned the way of delivery to our customer. Customizations are minimal, and to an extent of some integration changes which come sometimes for a table, and that has been managed through the power of [extended?]

.

Okay. Yeah.

My last question is, so as you say, you are trying to engage more customers in the Japanese market, but you are already present there since last 20, 25 years. In the previous conference call, you are mentioning that you are trying to grab the more-

Yeah. Thank you.

Good afternoon. Just wanted to check out if you can just give us some thought what are the other expenses that have increased so much in this quarter as compared to previous quarters, if break-up can be given?

Detailed break-up, I'll not be able to share, but it is largely on account of personal cost. This being the first quarter, salary revision has been factored into this.

That will also reflect in subsequent quarters. In addition to that, we have also given RSUs that has also impacted in a certain way our opex.

Employee expenses have grown by 3.8% quarter-on-quarter, whereas your other expenses have grown by 18% quarter-on-quarter. I just want to know the other expenses.

Have you incurred more on sales and administration or what is it that has caused this bigger jump when your revenues have actually de-grown? No,

it is a little bit our marketing expenses which has increased. Since we are investing heavily in global markets, in terms of that, some expenses has increased on that side.

Little impact in terms of admin is because of increase in some diesel and power expenses because of this war situation, the diesel prices fluctuated a lot, and that has also impacted a bit.

That's it from me. Thank you.

Yeah.

Hi, good afternoon. Can you hear me?

Yes.

Yeah. Thank you.

First question is just some color on the order book. It seems that in this June quarter and in the March quarter put together, we would have won close to ₹900 to ₹1,000 crore of orders.

What I wanted to understand is that is the execution cycle of these orders meaningfully longer than, let's say, what our historical experience has been or would it be in line with our past track record?

More or less, it would be in line of our existing track record. While yes, efforts are being made to speed it up, bring in more efficiencies, but largely, it will remain as of our existing.

Noted.

Actually, just a follow-up on this. We attended the AGM on Monday, and I think there was a comment about some AMC-related aspect also being part of the order book, and hence, the execution cycle could be longer.

I'm trying to clarify my understanding here. Despite the sharp jump that we've seen in the order book thanks to the marketing efforts that we put in, the execution cycle doesn't necessarily become longer due to some AMC aspect in it, right?

The thing is with respect to AMC, the order book includes AMC contracts also, and these contracts are long-term contracts. That is how it cannot be exactly compared to implementation of a particular order, which will entail a shorter period rather than AMC.

That would be the case for our orders in the past as well?

That would have been the case for past as well. Yes.

Okay. Second question I had was on the marketing cost.

Thank you.

What are the logo deletions in these 3 months?

Sorry?

How many logos? Yeah.

You all have not performed in India. Why is the revenue so down and so is the segment result in India as far as India is concerned?

How many logos have left?

None of the logos have left, and in fact, we have added 3 new logos.

If none of the logos have left, then how come the India performance is so down?

It depends on some one-time event which has occurred in the last quarter with respect to one of our biggest customer where we have got some part of the revenue as a special FPI recently delivered for them.

Right now employee expenses are about 74.5% of has almost 75%, are we going to fix- Sir,

Okay.

in the list,

Okay.

Thank you for the opportunity. I think the main question I have is our sales and marketing expenses, which have gone up a lot, have finally shown results in our order book, but there seems to be some sort of mismatch between that converting into P&L.

Could you just explain to us what is the reason why our order book has literally doubled from last year, but our revenues are down 3% Y-o-Y still?

Our order book is a composition of certain contracts which are a little long-range, maybe extending up to 5 years also, and there are certain orders which meet 55 days or shorter period of time also. That is why you might not be seeing exactly culminating into a shorter revenue cycle.

In addition to that, sales and marketing expenses, which you talked about, is yielding definitely the result in terms of a healthy order book. While yes, there are certain markets in which we are setting our foot, and in those markets, there will be certain expenditure which will yield result in maybe subsequent quarters.

Because the order book should start getting consumed at some point, right, and start reflecting in the revenue? When you go from ₹600 crore to ₹1,200 crore order book, revenues should start going up, but they are not.

I would need clarity on that. Yeah.

The implementation cycle also is slightly longer. It's not a quarterly phenomenon.

It takes some time to implement the order, and it also depends on customer to customer, depending upon the kind of complexity which we have to deliver. Also, it depends on the volume which we have in terms of migrating their legacy systems to ours.

That is why typically this implementation cycle varies from customer to customer.

Sir, how many customers are in this increased order book of ₹600 crore that you've got over the last 12 months? How many additional customers will that represent?

If you talk about in last 15 months, we have added almost 10 new logos.

Okay. Thank you.

I'll come back in the queue. Thanks.

Thank you for this. Just a request.

One question won't even allow you to ask a follow-up. Yeah.

See, just one observation from '23 to '25, our observations were that we were a deeply discounted pricing structure and we would want to correct that. We did correct, which helped us to get to margins of 25% to 27%.

We did comment that it is our aspirations being a product-centric company, our margins should be in that range, which was consistent with industry dynamics. Over the past 2 years, we really surrendered and couldn't retain any of these benefits.

Just wanted to understand this journey. If I just extend this journey, it seems that we again in the next few years will again become a deeply discounted module, waiting for another round of price correction.

Just trying to understand where have we seen that kind of maturity which other product companies have seen? That's question number one.

Your observation is, I think, I would agree partially only because what we had to do in the past, of course, there was the benefit for some time. Yes, I think we've mentioned, or you would have noticed, that past couple of years, the new orders, new logos were not there, which kind of impacted us.

Now, whole second half of last year and this quarter is where our order book has got back again. It's become strong again, which will, of course, result in revenue as the projects start getting executed.

I'm not able to relate the past to present, but this is what the situation, what we did a few years back was something which was needed. That did give us a leeway for a couple of years.

Now, it has a new orders that will give us growth.

Yeah. No, I get that.

My real question is you don't see product company like this. Most of the time, product companies are able to extract efficiencies and productivity and are able to retain it.

Nucleus somehow has not been able to do so. Where are we different or what are our challenges which are not similar to other product companies?

I'm talking about successful product companies because many don't survive, but the ones who do and achieve a reasonable rate demonstrate some maturity in operating metrics. Vishnu ji, it will be just understanding beyond what is it really that we behave unlike a product-centric company, our financials rather.

Can't talk about other product companies you've been comparing us with, but one thing which I can tell you is when our order books were low, we did not stop investments in product. Our product investments did not stop because we've been maintaining that we always have a long-term view.

Past couple of years when we were not getting new logos, we did not stop investments, and that could be reflecting what you are observing right now. Now that new logos and new orders are coming in, we should now again see an uptick.

That's how I would respond. Yeah.

Absolutely. Parag has very correctly highlighted that that is what has happened.

Our commitment to our customers, existing and with the prospective also, is firm in terms of delivering the latest functionality and latest technologies, irrespective of how in the short term, we are able to serve it our stakeholders, that is represented by you. For us, customers are continue to be our highest priority.

In that prioritization, yes, shareholders would get appreciation, which is what has happened in this quarter also.

All right. I'll come back in the queue.

Thank you.

Hello.

Hi. This is Rahul from Reliance Capital.

Basically, first of all, congratulations on very strong order signing in last couple of quarters. It would be great if you could explain us is most of this in a subscription model, and does the big part of those order are related to the subscription value which would accrue over 5 to 7 years?

That is part one of the question. Part 2 of the same question is that if this model is moving towards subscription more and more, do we see the implementation as a percentage of the order value reducing?

In general, if you could talk about how you expect this order book traction to translate into revenue traction? Will it be back-ended during the year or it would be more even beyond that?

Any color on this would be great.

Rahul, Ashok this side. While we don't give any future guidance on that, I'll not be specific on numbers.

Directionally, if I talk about, I'll not call it as a subscription model, but it is based on certain amount which grows by certain percentage every year, and that may last up to 5 years. We normally get into these contracts for 5 years.

With respect to all the new logos, obviously, there will be implementation and licensing cost that definitely will get from the customer once the implementation starts. That is where significant part of the revenue will get accrued.

Certain part in the form of AMC will get accrued over a period of 5 years.

All right. Got it.

Are you trying to also say that this jump might have also come up because of some AMC renewal on a longer chart, or you are saying generic comment? I'm assuming it comes from the new logo wins.

Not exactly it is directly coming from the new logos. Yes, a significant portion is coming from a new logos, but a reasonable part is coming from existing customer also, AMC getting renewed at a significantly better price.

Sure. Thank you.

That's it from my side. Thanks for the color.

Thank you for the opportunity. I was just looking at the marketing and sales expenses and the SG&A expenses.

Both have increased to about ₹21 crore. Now, of course, we are seeing the order book already reflecting the efforts made on this front, but is there some lumpiness in these costs or are they expected to go down going forward?

Just wanted to get some color on the sharp rise in the SG&A and marketing costs on a quarter-on-quarter basis.

As far as SG&A is concerned, I think this would be the level by and large we will be maintaining. The effectiveness would come over next few quarters, but the level would be at these levels.

In addition to that, we will keep looking for investing in those events or in those markets which are strategic priorities to us, and which can yield results in coming future. That calibration will go on, but yes, largely, expenses should be-

There's no large one-off that we need to keep in mind that the quarter per se?

Nothing.

Okay. Thank you.

Employee benefit expenses as a percentage of sales is around 75% right now. Is it going to come down or is it going to remain the same?

It should come down because it is as a percentage of revenue. If you see, we have largely been hovering around the ₹210 crore, ₹15 crore.

That is the number we are looking at. As the revenue increases, there will definitely be a decline in percentage terms.

While yes, we will continue investing in our talent and hiring AI-native talent, and that may impact a little bit, but not much.

Do you have any margin control initiatives because even if you increase the revenue, expenses are eating up all the profits and nothing is left for the shareholders?

Yes, we are working on that. I feel you will see the effect of those efforts in subsequent quarters.

While we can't quantify it, but yes, on ground, we are looking at this. In fact, we are focusing on high-margin deals as well as we chart our course of growth in other geographies than India.

Okay. I will join the queue.

Thank you.

Just wanted to understand our pricing philosophy or pricing structure over the past. Again, I would focus on the long term.

How has our pricing changed in the last let's say 3, 5 years? What do we do differently in pricing?

Because one of the challenges again for us was pricing. How have we worked on it?

Yes, pricing always remains a challenge in the wake of competition. We have chosen to retain and be a premium player because the kind of product we offer in the market is extremely, extremely, I would say, strong and solid product.

In terms of effectiveness, in terms of features, in terms of various aspects of the product, we believe in our product. Yes, there is stiff competition in the market.

While we don't talk about the competition, but yes, that is also a little bit affecting in terms of our efforts to take the price. We are maintaining that price segment.

We want to continue in that segment. As situation improves, obviously, we'll take that up now.

Okay. In terms of geography, since we have been for some time looking beyond India, which geography seem to be very promising for us in the medium term, medium to long term?

I feel Middle East and Southeast Asia are our big bet, and definitely, we have got our footing in US markets also. We see growing in these markets a little differentially than other markets.

Got it. One small question.

In terms of productivity benefits, do you see us getting any productivity benefits from AI?

Not right now, but yes, we are expecting those benefits to flow in as we strengthen our AI usage inside the organization. Quite common.

Just

to add, this is Abhishek. There is a visibility that, but we have not actually started measuring in terms of what tangible benefits or in terms of numbers.

We are holding it for this quarter, but we are on the right path.

All right. Thank you so much.

Thank you for the follow-up. Just on the order book over the last 12 months, the increase that you've seen, can you give us some color on is it largely FinnOne Neo or is there some FinnAxia in there as well and the geographies the order is composed of?

Largely, it is FinnOne Neo.

The geographies?

Geography, I think mostly India and Middle East, Southeast,

Latin America.

The US order that we talked about, India, Middle East, it's a mix. Then

just on I guess the North American market, I think our GM Financial has been a customer of ours for a long time. I think that's everywhere outside of the North American market.

If you can just talk about why has it been that a customer who's used our products everywhere else in the world not converted their US business to Nucleus? Is that an opportunity for us going forward?

Two parts. One is that is the way the customer business structure.

They have a North America region and they have rest of the world. Our contracts have been with outside North America.

Yes, future, there is a possibility. Can't rule that out.

The other order we talked about, the order that we got in the last year, based on that, we would expect to build upon that as well outside region also.

Was this also another sort of a vehicle financier or was it a bank? The client that we have

recently- In this segment, we picked up a very good segment in the auto finance area. It is that customer.

Okay. Thank you so much.

Thank you, Akash. Now, we would like to thank all the investors for joining us today on this call.

I would now pass it over to Vishnu sir for his closing comments.

Once again, I'd like to take this opportunity to thank you for your continued interest in Nucleus Software, and would like to reassure you of our [commitment?] to build a long-term institution.

Thank you.