Fractal Analytics achieved a significant milestone in Q2 FY2027, surpassing $100 million in revenue for the first time. The company reported a 20% year-over-year revenue growth and a 139% increase in net income. Key verticals like Healthcare & Life Sciences and BFSI showed robust performance, contributing to the strong financial results. The company also highlighted progress in its product offerings and strategic growth initiatives.
Fractal Analytics Achieves $100 Million Revenue Milestone
In a notable financial performance for the second quarter of fiscal year 2027 (Q2 FY2027), Fractal Analytics announced it has crossed the $100 million revenue threshold for the first time. The company reported a strong 20% year-over-year revenue growth, reaching INR 957 crore, and a substantial 139% increase in net income to INR 79 crore. Adjusted EBITDA also saw a healthy rise of 30%, with the margin reaching 16.2%.
Industry Vertical Performance
The growth was propelled by strong performance across key industry verticals. The Consumer Packaged Goods and Retail (CPGR) sector grew by 11% year-over-year, while Healthcare and Life Sciences (HLS) continued its leadership with an exceptional 79% growth. The Technology, Media & Telecom (TMT) sector showed sequential improvement, growing by 6%, and Banking, Financial Services and Insurance (BFSI) expanded by 30% year-over-year.
Geographic and Client Growth
Geographically, the Americas led revenue growth with 22%, followed closely by Europe with 20% growth, and APAC with 7% growth. The company reported a Net Promoter Score of 76, indicating high client satisfaction. Net Revenue Retention stood at 115% in Q2, with an additional five points of growth from new clients. Fractal Analytics now boasts 58 clients with over $1 million in annual revenue, with 20 of them exceeding $5 million.
Product Development and Future Outlook
On the product front, revenue reached INR 38 crore, representing 4% of overall revenue, with the product portfolio now at a run rate of over INR 150 crore annually, up 39% year-over-year. Remaining Performance Obligations (RPO) for products exceeded INR 200 crore. The company expressed optimism about the future, highlighting investments in AI talent and platforms like Cogentiq, which is gaining traction globally. Fractal Alpha, including Asper.ai and Analytics Vidhya, grew 40% year-over-year.
Profitability and Strategic Initiatives
Despite a slight decrease in gross margin to 44% due to investments in AI talent, adjusted EBITDA grew by 30%. Net income margin increased to 8.3% (10.7% excluding associate losses). The company emphasized its focus on improving profitability, aiming for a 22% EBITDA level while maximizing revenue growth. Strategic initiatives include strengthening partnerships and building a dedicated large deals team to capture more complex enterprise AI opportunities.
Source: BSE
