Newgen Software Technologies Ltd
NSE:NEWGEN
Newgen Software Technologies Ltd
Newgen Software Technologies Ltd., founded in 1992, has steadily carved out a niche in the bustling world of enterprise software solutions. Born in the era of digital transformation, the company astutely identified a pressing need among businesses: the need to optimize processes and manage content more effectively. This foresight laid the foundation for its suite of innovative products aimed at catering to complex, document-heavy business operations. Operating primarily in the domains of Business Process Management (BPM), Enterprise Content Management (ECM), and Customer Communication Management (CCM), Newgen offers platforms that businesses across various industries can customize to streamline their operations. By integrating these solutions, companies can automate workflows, enhance customer engagement, and drive efficiency—making cumbersome, manual processes a thing of the past.
The company's revenue model hinges on licensing these software platforms to organizations globally. By embedding itself as a critical part of clients' operational ecosystems, Newgen ensures steady income through licensing fees and ongoing maintenance contracts. Additionally, as businesses grow and their operational needs evolve, Newgen benefits from upselling complementary features or modules, expanding beyond the initial setup. Significant portions of its clientele fall within BFSI (Banking, Financial Services, and Insurance), followed by Government, Shared Services, and Healthcare, showcasing its versatility and ability to cater to highly regulated sectors. The continuous innovation in its product offerings, combined with an expansive global reach, provides Newgen Software Technologies a robust foundation to support and sustain its growth trajectory in an increasingly digital world.
Newgen Software Technologies Ltd., founded in 1992, has steadily carved out a niche in the bustling world of enterprise software solutions. Born in the era of digital transformation, the company astutely identified a pressing need among businesses: the need to optimize processes and manage content more effectively. This foresight laid the foundation for its suite of innovative products aimed at catering to complex, document-heavy business operations. Operating primarily in the domains of Business Process Management (BPM), Enterprise Content Management (ECM), and Customer Communication Management (CCM), Newgen offers platforms that businesses across various industries can customize to streamline their operations. By integrating these solutions, companies can automate workflows, enhance customer engagement, and drive efficiency—making cumbersome, manual processes a thing of the past.
The company's revenue model hinges on licensing these software platforms to organizations globally. By embedding itself as a critical part of clients' operational ecosystems, Newgen ensures steady income through licensing fees and ongoing maintenance contracts. Additionally, as businesses grow and their operational needs evolve, Newgen benefits from upselling complementary features or modules, expanding beyond the initial setup. Significant portions of its clientele fall within BFSI (Banking, Financial Services, and Insurance), followed by Government, Shared Services, and Healthcare, showcasing its versatility and ability to cater to highly regulated sectors. The continuous innovation in its product offerings, combined with an expansive global reach, provides Newgen Software Technologies a robust foundation to support and sustain its growth trajectory in an increasingly digital world.
Moderate Revenue Growth: Q3 FY '26 revenue was INR 400 crores, up 5% year-over-year, while 9-month revenue reached INR 1,122 crores, growing 6% YoY. Management noted this compares to a high base last year.
Subscription Momentum: Subscription revenue rose 29% YoY to INR 134 crores in Q3, and annuity revenue overall grew 20% YoY, driven by strong performance in the U.S., U.K., and Australia.
Regional Divergence: U.S. and APAC showed robust growth (U.S. up 21% YoY), while India and EMEA were weak, largely due to delays in large license deals and elongated decision cycles.
AI Uncertainty: Management cited AI-driven uncertainty as a reason for deferred large enterprise deals, especially in India and Middle East, though smaller AI-focused deals are seeing good traction.
Margin Resilience: Net margin for Q3 was 22.5%. Margins held up due to productivity improvements, stable headcount, and higher contribution from high-margin annuity and subscription revenues.
Cost and Profit Impact: Adjusted Q3 profit after tax was INR 90 crores (excluding a one-time INR 35 crore labor code impact). For 9 months, profit after tax was INR 194 crores after labor code impact.
Outlook: Management expects license revenue recovery and continued growth in subscription and annuity revenues. They remain confident in long-term growth, highlighting an active deal pipeline and expanding AI-led product offerings.
