Newgen published the results of its Q1 Fiscal 2026 period. It has had a solid start to the year, with subscription revenues rising 19.5% year-over-year to Rs 1,210 million. Total revenues reached Rs 3,500 million, representing a 3.8% year-over-year increase. The lower-than-expected revenue increase was due to a softness in deal closures, according to Newgen.
It achieved profits after tax of Rs 497 million with a PAT margin of 15.5%. This was slightly up from the 15.1% it achieved a year ago. However, the market focused on the 5.6% drop in EBITDA to Rs 450 million (compared to Rs 477 million in Q1 2025).
Mr. Diwakar Nigam, Chairman & Managing Director, Newgen Software Technologies Ltd., commented, “In Q1, Newgen recorded revenues of Rs 321 crores. It reported a Profit after Tax of Rs 50 crores. The momentum and interest across our solutions in different markets is maintained, and we won 12 new logos during the quarter across geographies. Our subscription revenue growth is also getting back on track now and witnessed a 19% YoY growth.”
Mr. Virender Jeet, CEO, Newgen Software, added, “Our strategic focus remains on AI-led transformations with optimization efforts and building resilient client relationships. The AI-led use cases are driving deals across all verticals. Our products, like Marvin for task automation and Harper for client conversations, are designed to deliver cost-effective and efficient value while prioritizing transparency and governance.”
Despite the uptick in subscription revenues, the Newgen share price dropped from 1094.60 INR at the start of Thursday to close at 1025.50 INR. Overnight, the shares have continued to fall and have dropped a total of 9.26% over the past five days as of writing.
Breakdown
Newgen still relies heavily on the banking sector, with 67% of its revenues coming from that industry. Insurance and healthcare provided 11% and the government 6%. By region, Newgen is fairly balanced:
- EMEA 32% (down 1% YoY)
- APAC (Ex India) 16% (no change YoY)
- India 30% (up 1% YoY)
- USA 22% (no change YoY)
In terms of the segments that Newgen gains revenue from:
- Implementations and other services 19% (Down 3% YoY)
- Sale of Products 12% (down 2% YoY)
- SaaS 13% (up 2% YoY)
- ATS/aMC 24% (Up 3% YoY)
- Support 32% (no change YoY)
The good news is that subscription revenue is increasing, albeit slowly. Which means that the platform approach, with sustainable revenues, is working.
Key highlights
While Nigam noted the addition of 12 new logos, this is one down from the previous year. As the company slowly shifts toward subscription revenues, it will be interesting to see whether it starts to reveal retention and CSAT numbers. Jeet, however, did confirm that there were no cancellations in the last quarter.
New deals include a bank in EMEA for an Enterprise Workflow and Constant management system (USD 2.5 M). It is also working with a Saudi Arabian finance company to develop its end-to-end financing system (USD 1.6Mn).
Newgen is also developing a health claims and OCR system for an insurance and healthcare customer in the Philippines. As well as a personal loan origination system for a small Indian bank.
Newgen gained its 25th patent for ‘System and Method for Data Compression’, which addresses efficient data compression for large volumes of data files. It also continues to be recognised by the leading tech analysts with a place in the Gartner Market Guide for US Healthcare Provider Credentialing and Forrester’s Digital Process Automation Software Landscape, Q2 2025.
Enterprise Times: What does this mean
The market sensed weakness in the numbers, but the first quarter is often a weak period. However, Jeet remains positive for Q2, noting, “Next quarter, I think the current momentum and the previous momentum should drive slightly stronger implementation.” Jeet further believes that revenue growth is expected to return in H2 rather than Q2, due to current market conditions.
While these were not a strong set of results, they were not a poor result. With the drop in share price seeming to be a reaction. Newgen, according to Jeet, never gives guidance, just reports on historical results; however, the indication is that the company expects to see better growth later in the year. It is worth remembering that while the share price is down slightly (5.6%) from a year ago, it is up 1,023.13% over the last five years.
