LatentView Analytics reported its 12th consecutive quarter of sequential growth for Q3 FY’26, with dollar revenue increasing by 5.7% (8% in rupee terms). The Financial Services (BFSI) segment showed exponential growth. Management detailed structural changes affecting payroll costs, including a INR 4.6 crore one-off restructuring impact, and outlined a three-pronged strategy to drive future growth through Conversational Analytics, Business Process Automation, and Governance, heavily leveraging AI.
Q3 FY’26 Financial Performance Summary
LatentView Analytics announced a strong performance for the quarter ending December 31, 2025, marking the 12th consecutive quarter of sequential growth. On a sequential basis, dollar revenue grew by approximately 5.7%, while rupee revenue saw an increase of close to 8%. Management noted that Q3 is traditionally strong due to customers utilizing remaining budgets and executing contracts stitched together earlier in the year.
Overall guidance remains on track, with expectations to deliver full-year revenue between $119 million to $120 million, representing growth of 19% to 20% for the fiscal year.
Segment Strength and Headwinds
Management expressed particular pleasure regarding the Financial Services (BFSI) practice, noting its exponential growth, with its share of total revenue increasing by almost 4% since the start of the fiscal year. The Technology vertical, the company’s largest, returned to a growth path this quarter, driven partly by year-end projects and price increases secured in the second-largest account.
The CPG and Retail segment was slightly muted compared to Q2 due to the non-recurrence of one-time projects and timing delays in starting major projects with a large beverage manufacturer. Management expects pipeline opportunities in this segment to start closing in Q4.
Cost Structure and Restructuring Impact
Payroll and benefits grew disproportionately to revenue at 11.1% sequentially. This was attributed to two main factors:
- Labor Code Compliance: A significant restructuring exercise undertaken in April 2025, where basic salary was capped at 50% of CTC, is being formalized to ensure compliance with the new Labor Code by March 31, 2026.
- Rationalization: A one-time cost of approximately USD 200,000 associated with letting go of about 40 employees across various functions to align roles with forward strategy.
Reported EBITDA for the quarter stood at 22.4%. Adjusted EBITDA (excluding restructuring costs) was about 23%, and further adjusted (adding back one-time labor code costs) reached 24.6%. The full-year projected EBITDA remains close to 24%.
SG&A spend decreased by almost 12% sequentially, partly due to seasonal lower travel spend in November and December. Management anticipates operating leverage to play out as SG&A is expected to remain in line with Q3 levels for Q4.
Strategic Focus: AI and Account Expansion
Rajan Sethuraman detailed the company’s strategy focusing on rebuilding the consulting practice with a specific domain focus and strengthening the Databricks strategy. The company reported 4 joint wins with Databricks this quarter, contributing close to $1.7 million in revenue out of an expected $16 million to $17 million in overall Databricks-linked revenue this fiscal year.
AI Centre of Excellence
The AI strategy focuses on three areas:
- Conversational Analytics: Leveraging existing solutions like AI Penpal, LASER, and BeagleGPT.
- Business Process Automation: Applying an agentic approach to traditional IT services.
- Governance and Observability: Focusing on evaluation and observability as data complexity increases.
The firm is actively identifying opportunities, noting over 10 opportunities in one top tech account called Velocity AI. Data engineering is expected to comprise about 25% of the work when the company hits its $200 million revenue target.
Account Deepening and Future Outlook
The Diamond Account strategy targets 25-plus accounts for significant growth. For example, in one top 6 account, the current work of $10 million has potential to exceed $150 million. For the next two years, management foresees Financial Services and Consumer Goods becoming larger revenue contributors, while Technology’s share may slightly decrease due to current headwinds.
Looking ahead to FY’27, management is working on projections, targeting a growth trajectory close to 30% to reach the $200 million goal.
Q&A Insights
Renewals and Pricing
Renewals for the next year appear healthy, with a strong degree of confidence, including securing a 5% price increase with one of the largest industrial accounts (a $3 million-plus contract) and a price increase in the number 2 tech account. However, one large tech account is facing a potential volume reduction of $5 million to $6 million due to internal consolidation, not competitive loss.
Margins and Taxation
The full-year anticipated EBITDA margin is 24%. Q4 margins are expected to be higher, closer to 25% (24.5% to 25%), benefiting from two specific tailwinds:
- The non-recurrence of the $200,000 severance pay.
- Substantially lower outlays towards visa sponsorship costs compared to previous Q4s.
The long-term annualized Effective Tax Rate (ETR) for modeling purposes should be between 26% to 27%.
Source: BSE
