Amagi Media Labs Limited (AMAGI) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Amagi Media Labs Ltd. Q4 and FY26 Earnings Conference Call. This conference call may contain forward-clicking statements about the company which are based on the beliefs, opinions, and expectations of the company as and date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-down phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bhaskar Subramanian, the Managing Director and CEO for the opening remarks. Thank you, and over to you, Mr. Subramanian.

Good morning, folks, and thank you for joining us for the Amagi's Q4 and full-year FY26 earnings call. I'm Bhaskar, co-founder and CEO of Amagi. This is our first earnings call covering Q4 and the full-year results as a public company. We'll be walking through the investor presentation that's available on our investor relationship website. I'll spend the next few minutes on how the business is performed, what's driving the momentum, and where we are heading. Our CFO Vijay will then take you through the financials in detail and we'll open the floor for questions. If you go to slide number two, there are five key takeaways from the year that I want to point out. First is sustained growth. We saw expanding margins and return to fast profitability at scale. The second that we've seen is revenue quality is strengthening. Net retention, revenue retention has been anchored above 115%. It's incidentally 125 plus percent for the last three years running. And our million dollar customers grew sharply. Third, the enterprise adoption is deepening. Case in point, AccuWeather migrated end-to-end to our cloud, and we signed some new partnerships in Latin America with Adams and with an ad partner, Anoki. Fourth, AI is starting to commercialize. Newspouse, our first agentic product, is in trials with leading news networks and has its first paid customer as well. And fifth, we executed at the highest stages of global media. We did the FIFA World Cup, Super Bowl, Winter Olympics, the Grammys, the Oscars. And we won multiple NAB 2026 awards this year for our Agentec AI investments that we've been making. So that's a year in five lines. What I would like to do is to unpack them for you over the next few minutes. If you go to slide number three, you'll see the financial performance. Before Vijay walks you through the financials in detail, three points that I would like to cover here. It was a year in which the operating model we have built over many years started delivering strong results, and the validation is the AI transition we have anticipated for the industry starting to happen. Three things stand out from the numbers. First, revenue grew 30% to 1,506 crores, with a 23% constant currency growth. Q4 grew about 29%. To look at the second one, which is a more important point, is we return to PAC for profitability. This time at scale, right? PAC of 72 crores, a swing of almost 140 crores from last year, on a 343 crores of incremental revenue that we added. So the ratio is important to look at. The swing tells you that the business we are building today has a different unit economics and has an operating leverage inbuilt into the system. And three, if you look at the cash in the bank, it's about 1,664 crores, and out of which, 907 crores is what the IPO proceeds, plus a continued operating cash generation that we're doing. The headline is simple. Growth, profit, and cash are all moving the right direction together for us as a company. Let's move to slide number four. For those of you new to Amagi, this is what we do. We operate an end-to-end across the media value chain, what we call glass-to-glass operating environment. From the camera glass, when the content is created, through production, preparation, Distribution and monetization till it reaches the audience glass or the television set or a phone where they're watching content. We cover the end-to-end spectrum. We serve three fragmented ecosystem providers today, which is content providers or creators, distributors, and eventually advertisers who connect to the ecosystem and monetize the capability for all of us. And all of this on a single cloud-native platform. The more important question that we need to look at is media is not like other software, because everything is very mission critical in what we do today. I talked about some of the most marquee events that we run, and every workflow is real-time. The volumes are enormous. Billions of impressions, thousands of channels, 24-7, and we have zero tolerance for errors in this particular ecosystem. To run at this scale, we operate what we call a video fabric, the core underlying infrastructure and orchestration that makes this all work. Most of the industries only see applications, but where we are today, the fabric is the hardest problem. This is where Amagi's deepest engineering investments and technology investments have gone. That also makes the rest of the platform. Including AI, which we'll be talking later, is also possible because of the base core infrastructure that we've built. That's the foundation for everything else. If you come to slide number five, our business has segmented into three parts that we've always talked about. First is, I want to touch upon streaming unification, which is our largest part of the business, and it's been growing. It's grew 26% to 838 crores. And that's roughly more than half of our business, if you look at it. And that's the engine that connects the content providers to the fragmented, OTT, FAST, and the CTV landscape. The CTV stands for connected television landscape across the globe that we serve today. Monetization in marketplaces on the right-hand side that you see grew 36%. To 381 crores. And about a quarter of our business, literally. That's what it is today. This is where we connect the advertisers and the content together through a technology infrastructure. Again, this has been the fastest growing segment in our portfolio this year. The third, which is on the left-hand side that you see, is the cloud modernization, which grew by 32% to 286 crores. Again, a fifth of our revenue. This is where we help TV networks. Move off their legacy hardware into cloud-native infrastructure. So that's been a big focus for us as we move forward. You'll see a continued progression on that front. But in all of this, I would kind of point to three things. First is all three segments grew over 25%. And every segment is now worth more than 250 crores. So we have real scale across the portfolio and it's a very balanced portfolio. There's no single segment that carries the business today. But actually all the three together, firing together is what makes it attractive and interesting. Coming to slide number six, look at it, Magi sits at the center of a two-sided market environment. You've seen our glass-to-glass story here. And if you look at it, content owners on one side, the distribution platforms on the other. Every new channel or content that comes into our system lights up more distributors and becomes more value for the distribution side. Thanks. So every new distributor who's connected becomes valuable for the content owners. This is the core flywheel, the positive flywheel that's driving this business for us. And if you look at it, all the leading indicators that we always talk about is the number of hours of content processed or the channel deliveries that you see there or the number of distributors we deliver to. All of them and the cumulative ad impressions that we monetize for the year, if you look at it, everything has kind of grown pretty well. So the pattern is very clear. The volume of media flowing through Omagi's pipe is growing well ahead of revenue, which means as we layer more and more products on top of these pipes, including the AI-driven ones, we have multiple parts to monetize the volume that already carries. So I think we are quite excited about the progression that we've been able to make in this particular segment. If you come to slide number seven, you'll see these three structural tailwinds. We talked about streaming, we talked about cloud modernization, we talked about monotartition, and all of them, so look at it from a market tailwind standpoint. Cloud modernization, clearly, broadcasters are in the very early innings of moving off their on-prem, premise hardware, and get into cloud. We've seen that our serviceable addressable revenue is kind of starting to grow, and it grew almost 11% a year this year to $1.9 billion. Streaming continues its path as more and more people are starting to watch on OTT platforms worldwide. In the U.S. alone, we've seen 48% of U.S. viewing today in streaming, which is almost 4% points in last one year. And within that, if you look at it, Fast itself has scaled from a niche category just a few years ago into a dominant streaming consumption mode. In the U.S., now Fast is viewership is as high as Netflix. That's a fundamentally durable consumer shift from cable platforms that we're starting to see that. And every percentage point that you use here, that's an infrastructure that looks more like Amagi's and that's where I think the biggest value lies for us as a company. The monetization, CTV spend has been moving up almost 42.5 billion dollars and is growing at 10%. So clearly, we're seeing the shift to connected television platforms where people are consuming content and henceforth add dollars for following the viewership there as well. So each of these tailwinds are pretty meaningful, and what AI does is to expand this whole addressable opportunity beyond this whole traditional world. Because now, it allows us to AI addresses the operational workforce, and we'll talk about that in a moment. If you come to slide number eight, key things, this quarter has been exciting for us for a couple of things, right? One is AccuWeather. AccuWeather is a premium weather channel brand in the U.S., and we pretty much completed the end-to-end migration of their workflows to an Amagi cloud. This is a classic cloud modernization win, and I think it's an interesting customer who's scaling this for us. The second is we did some two strategic partnerships, Adams in Latin America and in Nokia, primarily to bring in the distribution of the monetization stack. We also signed two strategic partnerships, and post that, we also built some products. If you look at the product launches, for example, Newspouse, our first agentic product, signed our first paid customer. It's early, but it is the first data point that AI work has been talking about, it's starting to convert. And not just trials, we are starting to convert into revenues here. The Marky live event that I mentioned, we've been doing all the people, World Cup, Super Bowl, Grammys, Olympics, all ran on Amagi's infrastructure. And we picked up multiple awards that I talked about as well. So it's been very, very interesting year for us from a wins and events and recognition standpoint. If you come to slide number nine, I think this is a slide I would encourage you to literally look at in internalized, right? So as AI is reshaping the industries like every other industry, media industry is still getting reshaped, and we believe Amangi is positioned to really lead this shift. And if you look at the right-hand side of the slide, what you see here is that... Why is that position so defensible? If you look at it, it's because of the deep domain expertise that already exists. We run mission critical workbooks for our customers. When you run Super Bowl, you don't get a second take. That's the depth at which we actually provide from more than a decade. So that's what we do today. It took us almost 10 years to kind of build the sort of infrastructure we need to get there. Lots of proprietary data that we have, access to our customer content, the viewership telemetry, the money that flows through the whole pipes, all of that makes it a very data-intensive property that we have today, which is our second biggest mod. Third, if you look at it, is the network effect. Because we sit on both sides, we work with 400-plus content owners and 400-plus distribution platforms. That provides a very, very hard to displace that particular capability for the Apple. So in all of this, if you look at it in the middle of that slide that you see there, is the AI stack that Amagi is building. And it's a bottom step, core video infrastructure that I talked about, and the core model layer and AI, applied AI, the infrastructure that we're building as an end-to-end capability. AI doesn't disrupt this position. It actually compounds it for us as we move forward as a company. If you come to slide number 10, This is our view about how we see AI. This is the single most compelling growth opportunity in front of the company in the years ahead. I talked about infrastructure, the data gravity that we have, and the network effects that are actually driving our foundation. AI fits on all of this on top of it. And we're seeing it in two distinct directions that we're taking this whole strategy. First is on the cost side for our customers. Look at it, our customers in the media business, a lot of operational toil. They have to have, today, if you look at it, the business is run by a lot of human eyes and ears. Someone has to watch the channel, someone has to listen to things, someone has to review a piece of artwork before it goes live. So, video by nature needed a lot of humans to look and hear and do things. But that's changing a lot. For every dollar our customer is spending, we're seeing that that change in the human operations system, what I call the human toil, the manual work that has been done, will change. Our agentic products absorb that work into software, freeing our customers to teams to go about and compounding their work rather than focusing on all these toil and the tote jobs that we see today. That's a big opportunity, both for the industry and for Amagi to go change. The second, if you look at it as a revenue side, which I think is more exciting as well, because we can extend the audience for our customers. All our customers are premium content creators, be it in live sports, news, entertainment. They've already invested in producing this content. What AI does is to be able to enable them to take this content and extend it to new audiences, particularly if you look at Gen Z and Gen Alpha audiences, for example, who consume short form, vertical formats in mobile devices, for example, that we want to extend it to help them across geographies with automated language and localizations and extend it to completely new monetization opportunities in social platforms and multiple different formats. Here, if you look at it, the content is always premium, but what AI allows us to multiply the opportunities and for our customers. And this is not something of a theory. This is happening already. News pulse is the first proof point from Amagi on the stack. This is the first AI agentic product. We have paid customers for this. And the conversation with leading news networks are progressing in this whole direction. News Pulse enables our customers to now amplify their existing news content into the social platforms and reach the audience, for example. So clearly, that's in line with the team that we're really working with today, for example. And with the roadmap of a set of agentic products that's going to roll out across in the next coming months and years, I'm truly excited about a multi-year opportunity that's in front of us. I don't think any time in the history of the company, we've been more excited about the possibilities of the future. And with that excitement, I would like to hand it over to Vijay, our CFO, to walk through the financials in detail for all of us.

Thanks, Bhaskar. Good morning, everyone. I'll cover the full year financial picture, then double-click onto revenue, margins, and cash in subsequent slides. Just a housekeeping item, unless specified otherwise, all growth rates and percentage terms in my remarks will be year over year. So, with that said, starting with page 11, Bhaskar used a word called balance, and that can perfectly summarize the message on this page. F526 was a balance year of execution for us. We delivered strong revenue growth, expanded profitability, turned back positive, and improved our adjusted operating cash flow. Starting with revenue, FI26 revenue is 1506 crores, up 30% on a reported basis and 23% on a constant currency basis. In Q4, revenue was 397 crores, up 29% reported and 21% constant currency. I'll cover the building blocks of this growth in the next slide, but moving on to adjusted EBITDA, we delivered about 156 crores in FI26 versus 23 crores in FI25. That's more than a six-fold increase. In Q4, adjusted EBITDA was 40 crores up 161% year-over-year with a 10% margin. The third chart, like Bhaskar indicated earlier, is an important milestone for us. FY26 was our first full year of PAD profitability at scale. We delivered a PAD of 72 crores compared with a loss of 69 crores in FY25, which is a swing of about 140 crores. In Q4, PAD was 34 crores compared with a loss of 11 crores last year as well. So that's a meaningful swing. Finally, on cash, adjusted operating cash flow improved 60 crores versus 34 crores, up 80%. So, punchline on this slide is that across revenue, EBITDA, patent cash flow, FI26 reflects a stronger and more balanced profile for Omagi. Moving on to page 12. This slide kind of looks at the quality of our revenue growth, but before getting into each of the sort of parts of the slide, I want to contextualize how we look at revenue quality internally, and that comes in the form of three lenses, right? So we ask ourselves three questions. Are we retaining customers? Is the growth broad-based? And are we deepening our enterprise relationship? So retention, breadth, and depth become sort of key lenses for us to evaluate our revenue health. So that's what you see manifested on this page. So on the left, we'll start with retention. Net revenue retention is a very important metric for us because it captures how existing customers expand with us over time. For starters, this is similar to the same-store sales metric, which is typically used. It has remained pretty healthy in the last three consecutive years, 122% in FI24, 127% in FI25, and 126% in FI26. Anything north of 1.15% for context is considered best in class. Moving on to the center, where we speak about breadth, growth was kind of secular and broad-based across all three segments, like Baskar mentioned in his opening remarks. Streaming unification grew 26% to 838 crores. Monetization and marketplace grew 36% to 381 crores, and cloud modernization grew 32% to 286 crores. So the growth is not concentrated in one part of the platform. It kind of comes secularly across the platform. On the right, you see depth. Customers contributing more than a million dollars in annual revenue for us increased from 28 to 35 during the year, which translates to roughly a 25% growth. This tells us that we are deepening our role with large enterprise customers, and it also was kind of highlighted in the opening remarks and executive summary by Basker, right? So when you bring it all together, these three lenses, retention, breadth, and depth, give us confidence that growth is not just strong, but durable as well. Moving on to page 13, this slide talks about how revenue quality flows through to profitability. On the left, if you see adjusted EBITDA improved 800 basis points from 2% in FY25 to about 10% in FY26. In Q4, the margin doubled from 5% to 10%. This was fairly in line with the steady state level we discussed in the previous earnings call. The center chart shows where the operating leverage is coming from. Total cost as a percentage of revenue declined from about 118% in FY24 to 90% in FY26. So that's a 28 percentage point improvement over two years while maintaining revenue growth at about 30%, right? So that talks about the balance, again, which Bhaskar highlighted earlier. I want to just unpack where the leverage is coming from. So sales and marketing plus customer success reduced from 44% of revenue in 24 to about 24% in 26, contributing about 20 percentage points of leverage. And R&D also contributed about 10 points of leverage, basically, you know, reducing from 33% of revenue to 23% while we continue investing in product and AI. Direct costs remain broadly stable as they scale with revenue, while G&A increased from 10% to 12%, reflecting investments in systems, governance, and public company readiness that we've intentionally made over the last couple of years. On the right, you see the flow through at a PAC level as well. A PAC margin moved from negative 6% to positive 5% in FY26. Largely driven by a reduction in ESOP costs as a percentage of revenue from about 12% two years back to about 7% in FI26, which contributed to the sort of healthy flow through from EBITDA to PAD. So my main message in this slide is basically a model, like Vasquez said, is structurally designed to generate operating leverage because a lot of our growth comes from existing customers expanding. So we've seeded a lot of these costs, especially on sales and marketing and R&D where customers are growing on the same platform. So we don't end up having to make incremental investments to generate bulk of the growth. Which is why you see, you know, revenue can, sorry, margins sort of scaling through the growth and not from one-off cost actions. Let me turn to cash flow on page 14. The key message here is that improved profitability is beginning to translate into operating cash flow. On the left, we've covered adjusted EBITDA, so I don't want to get into too much detail on that one. But if you see in the center, adjusted operating cash flow, excluding one-time items relating to IPO and share buyback, went up from 34 to 60 crores, up 80% year over year. On the right, you see that free cash flow improved from 29 crores to 38 crores, up 29% as well. That will be intra-quarter movements in cash flow because of working capital timing, but on a full-year basis, we are seeing clear improvement in conversion from profitability to cash. As we scale, cash conversion will remain an important priority for us, right? So it comes down to sort of the three pillars, which is... Healthy revenue growth, expanding margins, and translating that profitability into cash. Moving on to page 15, we've summarized our FY27 focus areas and added some Q1 seasonality context just for perspective. On the left, the focus areas are pretty straightforward and nothing out of the ordinary and consistent, hopefully, with what you've heard from us. First is the durable revenue growth. We'll be focusing on not just growth, but also the health in the three vectors that we highlighted. Second is the operating leverage. We'll continue to balance growth investments and margin discipline, especially across product, AI, and sort of go to market. And third, on cash conversion, as profitability improves, we'll focus on converting earnings into operating cash flow and free cash flow as well. On the right-hand side, we've added some historical context to educate this audience on facing. Based on FY25 and FY26 average, Q1 represented about 22% of full-year revenue and about 11% of adjusted EBITDA. Just for context, revenue in the first half is roughly 45% of full-year revenue and second half is 55%. Similarly, at an EBITDA level, we are at about 37% for first half and 63%. So really growth and profitability scale through the year. This is not a unique dynamic for this year, but given this is our first full year as a public company, we wanted to make sure we give some proactive context on how this business grows from a timing standpoint, right? So, that kind of concludes the financial section. Before I hand it over to the operator, I want to thank all Amargans for the discipline and focus with which they executed through FY26 to deliver a set of robust and outstanding results. I'd also encourage you to read the shareholder letter which is posted on our investor relations website for detailed Q&A. But for now, to take any live questions, I'll hand it back to the operator.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on attached to your telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Nimit Tanma with DT. Please go ahead.

Hi, guys. Thank you. Two questions on News Pulse, one on the sales motion and one just trying to understand unit economics. So, of the Newspark paid customers signed this quarter and the broader pilot pipeline today, what's the spread between your, you know, cross-sell into the existing Amagi platform customers versus net new logos where Newspark is the landing product itself? And how many active sales cycles are currently being run, you know, by the editorial side buyers rather than your existing distribution and fast buyers? I'll, you know, if you guys want to answer this, I'll come back for a second.

Okay, so thank you for that question. So, News Pulse, as you know, is Amagi's first agentic AI platform. It's also possibly one of the first which is actually agentic in the market today. So what we do is we target news customers. And when I say news customers, they are largely both broadcast and fast. These are typically traditional news networks. These are large news network companies which are actually working worldwide. They are either running local stations or they are running national TV channels, news channels. That's the customer cohort that we go with. What we are seeing today is the broad-based interest across the spectrum of looking at this whole thing. Today we are running tens of POCs across. It's early that I might not be able to give you exact numbers of how it's kind of playing it out, but clearly these are all traditional news networks who are starting to really explore this as an next generation product. And obviously, the first port of call is our own current customers. We have multiple news customers that we've already are serving today, and they continue to be the first port of call for us from a buying perspective as well. So we would see a mix of both. I think first would be our own customers. We see this as a product expansion into the portfolio of what we are serving today, as well as the intent and we are already looking at. New customers who are coming in, where the first, the logo sale, the first sale for that particular logo is through News Pulse as well. But it's early today, in the next few quarters, we might be able to share more details on this front as well.

Okay, that's very helpful. And second, is this on the unit economics, you know? Is this per channel, per minute of output, per seat? And I'm just assuming, given the GPU inference and the intensity of continuous live processing feed, is this? Is it different from a steady state gross margin that you're used to in the other products? So, I mean, I'm only discussing this because of the excitement around you calling this product out. So, I just wanted to get some sense in that.

Yeah, it is slightly early for us to kind of give you a full indication on how the gross margin is going to play out across. Having said that, we have not seen any major impact at this point in time. Largely, the way that really working with customers today is on outcome-driven pricing models. And having said that, today, the way customers are starting to engage is a mix of fixed plus some sort of an outcome driven approach from a transaction standpoint. So that's the directional stuff that we've seen today. But I think that we'll be able to share a lot more in the next couple of quarters, then we'll have a lot more proof points about this whole thing. Today, I don't think we are really unreasonably worried about gross margins in any fashion whatsoever today. But I think that's something that we need to really see how it kind of plays out. But what you've seen, the early indications, I don't see an impact thus far.

Yeah, this is Vijay, just to add a couple of data points. It'll likely follow an S-curve, to your point, which is it'll be margin-appreciated at a relatively threshold scale. But the opportunity is compelling enough for us to see good gross margins eventually play out. So we are taking a medium to long-term view on this. And as things become more clear, to Bhaskar's point, we have additional proof points. We'll give you a more solidified top track on it. Right now, it's a pretty thin read.

Awesome. Thank you, guys.

Thanks.

Thank you. Next question comes from the line of Manish Addukia with Goldman Sachs. Please go in.

Hi, good morning. Thank you for taking my questions and congrats on a great set of numbers. My first question is maybe a follow-up on the gross margin where in the shareholder letter you articulated the factors driving gross margin lower. One, if you can quantify how much of the gross margin compression quarter-on-quarter this time was a result of the client re-invocation that you had called out in the previous quarter versus investments. And a second question to that is, should we think of this as a new base? Or as we, let's say, go into the June quarter, there's part of this gross margin compression that will, you know, reverse again in the quarter. That's my first question, please.

All right, thanks, Manish. So maybe I'll unpack that into two parts. One is what drove the gross margin sequential sort of reduction, and then how should we think about modeling this, like think about this in the medium to long term? Just there are really three factors that influence the gross margin sequential sort of dynamic that we spoke about. One is the customer pricing, but there were two other things. One is the AI cost, which is a relatively minor impact on gross margin. And the third one is what we said in the previous earnings call, which was, you know, we are exploring sort of lower cost alternatives, and there's a double bubble cost to incurring that. But basically running two parallel instances, a lot of our revenue has mission critical workflows, we can't completely sunset and move to another one. So this is part of that. So those are sort of the three vectors, AI was not a substantial contributor to the deceleration quarter on quarter. I wouldn't think about quarterly gross margin as an extrapolation factor for full year, right? If you look at our gross margin over the last three years, we've got lumpiness in quarters, but foliar is held steady at about 69% with minor improvements. And so I would apply the foliar lens versus thinking about it quarter of quarter as steady state.

Thank you. And if I can just ask a follow-on, Vijay, this gross margin compression part of which was because of the client re-negotiation. I mean, like, would we see more of that? I mean, like, because it was a pretty sharp drop quarter on quarter. So let's say as we go along next couple of years, could there be further such gross margin pressure or do you think there are enough and more offsetting rewards for gross margins to directionally continue to move higher?

Yeah, great question, Manish. I think the way, at least internally, when we are looking at our modeling, there is enough of a tailwind on the volume side to offset modest sort of compression on price. So we believe that it will net out as a net tailwind. And I think in the medium term, this is not something, this is more like a speed bump, not a recurring signal. So I would think about, you know, volume upside more than just modest half-cut on rate as a pressure item. The second thing to also look at is the lens of overall EBITDA, right? Because when you think about our business, a lot of it is making sure there's a lot of volume coming into the system. So we try to take a broader aperture of looking at our costs and delivering leverage at an EBITDA and PAD levels versus just going through the bits and pieces of each cost line. So you'll see that because a lot of leverage happens in sales and marketing and R&D, we always try to balance what is right from an investment perspective and physical responsibility perspective and not swing the pendulum one way or the other extremely.

Very clear. Thank you. My second question was on AI, and thank you for sharing the details about news pulse. But if I were to think about, let's say, the evolution of AI in the last few months, etc., given so much news flow surrounding it, have you, from your seat, seen anything elsewhere in the world which could, you know, potentially emerge as competition to what you provide to your clients? I completely appreciate how deeply integrated you are and how critical you are to your clients, but are there any signs of any alternatives emerging, whether from your competitors or from other model companies that could potentially have, you know, the ability to disrupt what you provide to your clients, any color that would be very helpful. Yeah, thanks for that question.

I think, again, AI is the largest opportunity for us as a company as we move forward, right? And that's the reason we're leaning in pretty heavily in terms of, in fact, even if you look at our R&D costs, large part of our R&D, they're actually moving into investments to build the next generation of products. Having said that, if you look at it from a market standpoint, a couple of things, as you indicated rightly, we are bang on inside the infrastructure of our customers, for example. So it's a platform strategy that's playing out, which I think is an important moat that we should all be aware of. That's a big, big moat fundamentally. What are we seeing in the market today? If you look at it, there's a lot of pocket of small, what I call single point solutions sort of companies coming around. But largely, what's happening with our customers, our customers feel that they don't want to go have a splattering of tens of products connected to their platform to get their workflows done. These are all enterprises. They would like to say, here, one unified platform to come together. So, summary, we are not seeing anybody specifically coming to what's the Magi's table today, as we see it today, right? And again, this might change, it's a dynamic market, but today we don't see anybody really credible in the whole system. Second is, if you look at it, there are very few companies even targeting a platform approach of glass to glass. And on top of it, having a strong AI strategy with the financial sort of health of what we have as a company and the advantage of both R&D, strong R&D advantages that we have and the cost advantages of what we do today. I think that there is no competition that we see today as we speak.

Thank you. Very clear. And maybe just last question to Vijay. Given that, you know, we are now, let's say, the full year is done. I mean, would you be able to talk about any aspirational guidance on what kind of revenue growth could we, you know, potentially target for F27 and what kind of margin expansion directionally can we expect, if not quantitatively, maybe qualitatively. That would be good. Thank you.

Yeah, Manisha, again, I just want to get back to what we said in the opening remarks, right? I think we will focus on durable growth, operating leverage, and cash conversion as sort of the three pillars that drive our planning and execution. So our aspiration would be to continue to kind of grow at a healthy clip. both on the top line and just balancing that with fiscal responsibility. It's hard to kind of give prescriptive guidance at this point, but our aspiration is to kind of continue on the trajectory that we've been in the last three years.

Thank you.

All the best. Thanks, Manish.

Thank you. Next question comes from the line of Yurekanen Supraman with Ambit Private Limited. Please go ahead.

Yeah, thank you for the opportunity. Two questions. So, number one is on the sales headcount. We are seeing that the headcount has, I mean, on the sales and customer service front declining, if I take a two, three year view. And the accounts are also growing. So just to understand this better, how should we think about the intensity or the degree of touch that the sales staff needs with respect to growing these accounts? Because you keep mentioning that the first port of call for you for revenue growth is your existing customer. So, at its scaled model, or at a model where you envisage that the company has become very efficient, how many accounts can be handled by one salesperson? This is just to understand the leverage that you can obtain, say, over a three-year, five-year perspective. That is my first question. The second one is on the monetized impressions. I see that the growth here has continued this year. In fact, there is some acceleration in terms of the monetized impressions of this year compared to prior years. Does this have anything to do with market conditions? Because logically, seems like the macros are getting tougher and it might be harder for. The ad-supported channels to keep harvesting, I mean, harvesting the ad revenue stream. So, is there any linkage that your revenue has or revenue growth or any driver has to the macros and advertising revenue earned by your customers?

Okay. Thanks for the question. I'll take the question number one first. We talked about sales efficiency improving. And that is a continuing journey as a company that you see it. And if you look at it, that's also the dynamics of the business. Look at our NRR, the net retention, for example, at 126% and above, it's clearly showing you that existing customers are actually adding more and more revenue to us today, for example, as a company. So that is in line with definitely, by definition, that drives sales efficiencies because you are, if you look at it from a new logo win standpoint, that's where you're actually applying the most of your sales forces to go after. Account management, at some point, is sublinear in scale. You're not going to have just because a customer of ours is spending a million dollars today and then they're going to do 10 million dollars more. It doesn't mean we need 10 more people to solve a particular problem. So clearly, that's very, very sublinear in terms of the needs for sales teams to grow. And also, if you look at it, thanks to AI and automation that we're starting to look at, you are seeing that more and more touch with the customer is going to be product-led and not through just by sales effort alone. So there's a mix of NRR, NRR, NRR, NRR, NRR, NRR, NRR. The overall tooling and the ability for us to kind of reach our customers and expand our customers through the product approach, what we call the product-led growth approach that we're seeing, and the continued expansion into markets. I think sales efficiency is in line with what we're seeing, and we'll continue to see the efficiencies and we will harvest those efficiencies going forward as well. Now, coming back to your second question, which is the monetized impression acceleration. And again, this is in line with how the market is growing. And again, if you look at it, viewership is eventually, there is only a single way, a directional call that's happening, is everybody's moving to streaming. More and more people consume content through streaming. There's more opportunities for Amagi and companies like ours to actually start to demonstrate more value to our customers. So that's the directional line that you're seeing from a monetized impression acceleration standpoint. So there's no other way to look at it. Are we going to be impacted by the overall advertising economy? Obviously, not directly, but as a derivative, absolutely yes, because our customers make money on advertising, and eventually that flows through to the way they would actually pay us as well. So macroeconomic environments today has not impacted as you see it today, but again, never say never with all this geopolitical climate that we don't control. But today we are in a fairly comfortable place, and I don't see any really, directionally, there's nothing that I see is going to impact today, as we see.

Just one more couple of proof points just on the second one. If you saw the impression growth, that was roughly 62% year over year, but revenue growth was still 36% year over year in the segment. So that's obviously, like Vasco said, two dynamics playing out. There might be some modest pressure on CPMs, but that's more than offset by the volume uptick, which is causing a net tailwind, right? So in the foreseeable future, we expect that to be sort of the trajectory unless we see some leading indicator that's suggesting materially otherwise.

Okay, this is very helpful. Just one follow-up to the first topic, which is the leverage that you have on SDNA. So as far as the sales staff is concerned, what would be an indicative take rate that you would have to provide to your sales staff? In the sense, is there also an element of, let's say, revenue sharing in the sales salary or sales wage bill?

There are no rev share models. So ours kind of follows a standard industry practice sort of commissions model with a blend of rewarding incremental growth and protecting your base. And that's a sliding scale based on whether you're a hunter or a farmer. So that's primarily how the model is anchored. We do have some specific one-off. SPFs that we run to drive adoption from a cross-sell standpoint on AI and other things, but those are sort of standard SOP items, so that's how we think about our commissions policy.

Okay, thank you. Thank you.

Thank you. Next question comes from the line of Om Prakash Kavadi with Evan DeSpark. Please comment.

Yeah, hi. Good morning, team. Good set of numbers. A couple of questions. One, just continuing on the previous participants' point, one more classification which I thought is required is while you say the possible compression in pricing will be taken care of by the instrumental volumes will come, is it a fair assumption to say that maybe in the very near term, there could be some timing gap where you see the pricing compression to be there much more than a possible increment. Is that a fair assumption or am I going wrong in that assumption?

I'll have follow-up questions on this, I think. So, I don't think that would, anything that, any metrics that we are tracking today don't suggest that. So, it's in line with the remark that I made earlier, Om. So, we see the volumes as a net sort of tailwind that will offset modest pressure on the CPM So, we've not seen anything beyond that, yet. Yeah.

So again, on the other part, strategically speaking, so where are we in the journey of moving towards a marketplace kind of a model? I think I am not sure if I have miswritten the letter to shareholders, but some clarity on that could be answered on the marketplace model.

Yeah, directionally, I think I have been talking about marketplace is a big growth area for us as a company. And given we have 400 plus content creators and 400 plus distributors already in the network, and connecting them through a business layer is the future of how we see a big opportunity in front of creating this whole marketplace. Having said that, we continue to work around that whole thing. I don't think we have anything which is really meaningful today to kind of discuss about it from a standpoint. Obviously, we are investing in that particular part of the business. We're seeing growth in that part of the business. We don't kind of separate that growth yet today. But I think we're seeing a lot of promise in that whole business. We'll continue to invest. We'll come back to you folks over the next few quarters to give it a lot more color and meaning as we kind of see a lot more trend lines on how it's kind of working out. As you know, last quarter, we had announced our deal with Vodafone in Germany that we started with, and we continue to see that we've done in Australia as well and in the US, but we continue to see this as a progression. We'll be happy to kind of share more details as we move forward in the next year.

Yeah, sure. One bookkeeping question. So, when I see the numbers in this quarter, I believe whatever seasonality which we have seen in the previous YOY quarters, that has not completely played out. So, is there any one-off in this quarter where the seasonality impact is not so much from a QOQ kind of an angle?

No, I think when we think about, like, our phasing, there might be only a one-point change on Prakash. So Q3, typically, again, our revenue follows a 45%, 55% trajectory, right? First half, second half. Of that 55%, almost, like, 28% to 29% is Q3, and 25% to 26% is Q4. We are broadly in that sort of zip code. So nothing material to kind of just call out that significantly altered the phrasing. As you can see, now year-over-year growth rates as well, that's held pretty strong in Q4. So that's probably a better proxy metric to use than looking at intra-quarter seasonality.

Thanks a lot, and good luck going forward.

Thank you. Thank you. Next question comes from the line of Rohan Nagpal with Helios Capital Management.

Thanks for taking my question. My question was on the way... Currency fluctuations flow through the PNN. So just wanted to get a sense of, I believe most of your revenue is non-INR. What do you get a sense of what is the proportion of your cost base that is INR denominated and what your hedging policy is? So, yeah.

Thank you. So, Rohan, thanks for that question. Again, for us, conceptually, a good chunk of our revenues, like you said, is USD. From a cost lens, the direct cost, which is roughly 30%, and about another sort of 20%, is sort of USD denominated for the sales teams. So, I don't know. 100 bucks, you're talking about 50 bucks of U.S. denominated sort of cost. So structurally, on paper, it's a net tailwind because you've got more USD revenue than cost. In terms of hedging policy, we do occasionally transactionally hedge, but we don't have like a hedging book. Given that today it's a net tailwind, and it's something we constantly monitor to see if we've got into a threshold scale or if the swing is in another direction to proactively start doing it. It's something we're thinking about this year, but nothing material to call out for this call.

Got it. Okay. Yeah, that's it.

Thank you. Next question comes from the line of Bharat Gulati with Dalal and Roacha. Please go ahead.

Yeah, thank you for the opportunity. Just wanted to understand in terms of new customer editions, that's been on a declining trend for the past three years roughly. So just wanted to get a sense of how do we look at new customer editions and what's actually led to the slowdown and would this trend continue to move in that way? And just also on that front, I wanted to understand how do we typically look at new customer editions given that we both work with content owners and distributors. So what kind of a benefit do we get when we onboard probably a new distributor or existing distributor sending new content owners towards us? Just trying to understand how does that play into the flywheel.

Got it. So I'll take a stab at it. And in case I miss any particular part of your multipart question, feel free to flag it back as a follow up. See, I think if you look at the last three years, our customer count has seen a net increase, right? So I think you're probably referencing the quarter to quarter dynamics here. Again, we like to look at most of our metrics, if not all on a full year basis. So I think if you look at the customer count in Q4, we actually added 27 customers, and we probably churned out 30 as a part of standard year-end housekeeping on payment defaults and some accounts, most of them which were less than sort of $1,000, where we had some sort of issues in payment, right? But if you look at our customer count over the last three years, it's been 396 in F524, roughly 463 in F525, and about 492 in F526. So the trajectory is positive. Quarter on quarter, there might be puts and takes on how we clean up. So that's one. Two is, if you look at our growth, when you think about, you know, I think that's probably a question behind the question is, when you think about full year growth, a good chunk of our growth comes from our existing base. That's evidenced in our NRR, right? So that 122%, 125% that you saw is primarily the marker that I would use to kind of underwrite growth. And our quality indicators also moved in the right direction, right? With million-dollar customers, which is the enterprise cohort that we want growing, growing from 28 to 35, we added seven to that cohort versus six last year. So we feel like, you know, overall, we feel happy about both the additions and the growth within the additions for our customers.

And directly, just to give you a bit of a market context as well, if you look at it, we're also seeing our overall product offering moving upstream to a lot more larger and larger customer goals. From an enterprise standpoint. So clearly, from a lot of small to mid-year, we are seeing a lot more pipeline growth if you look at it over the year. We are seeing it progressing towards more larger customers and enterprise customers. Obviously, it has two parts. One is the sales cycle part of it, but it's also the number of customers, the rate of growth of customers in a large enterprise will be lesser. But like what Vijay is pointing out, it will be more depth per customer and which will also be reflected on the overall ACV on a per customer account that you will see. I think, directly, that's what I think we should assume, given we're seeing cloud modernization acceleration starting to happen, and that's one of the themes that you will see it playing out over the years. Got that.

That's very clear. And just to understand in terms of acquisitions, you know, just trying to understand the cash balance that we have, what sort of acquisitions do we look at? And even I mentioned in the shareholder letter, you talk about it will be more capability driven in organic acquisitions. So just trying to understand, would that be more in the AI space to short circuit time to market for different products such as News Pulse where, you know, we want to garner market share on the faster side? I'm just trying to understand what would be the range, broad range in the cost of that acquisition. What would that be?

Again, I think, like, I think every, what I've been talking about, clearly, cash in the bank is a big strength for the company, and that we are actively having a cop dev directional activities that are happening. Continuously, we're scanning the landscape here, and we're not trying to take one decision versus another. I don't think directionally, as we have a thesis in place, which is the glass-to-glass thesis, we're looking at where are the gaps that we could actually look at from an acceleration standpoint instead of us. It's a buy-build partners or positions that we're actually going through. And obviously, with AI, there are new opportunities that are coming along. So, we are not kind of zeroing in on one versus another today. Obviously, looking at the same trend lines that we talked about earlier, no thesis change. Are there incremental revenue slash opportunities where the gaps in our glass-to-glass can actually be filled? Are there new innovations that we could actually be able to acquire instead of actually building internally? I think this is direction stuff. It's early. As we kind of move forward over the next financial year, you will see some progression on this front and we can actually We share some of the capabilities that we are actually starting to explore. Today, I don't think that's the macro view where we are fundamentally. Have we kind of agreed on the size of the deals? Not really. We're not going with a specific number in mind in terms of any sort of size of deals. Having said that, we've always been very conservative in terms of approaching things. We don't really go aggressive or be irrational in terms of our valuation focus slash doing things irrationally. So the company is very balanced in terms of how we do this. And that's the same measured approach that we apply. Although there is cash in the balance sheet, we're not under pressure to kind of go drive that in any rational fashion whatsoever.

Got that. That's really helpful. And just one last question for Vijay, sir. If I could get a sense of what would be the CCNRR for FY26, and if not an absolute number to put to that, then just to put it in the context of the delta that we see between the YOY, you know, CC growth and the actual numbers that we've reported. And just to, you know, put it in context to what historical NRR growth has been as compared to CC growth, because given that the FX tailwind this year was pretty significant.

Yeah, so I think our sort of dollar-based NRR would be around still north of 120 percent. And so, again, we've been in the 120 to 125% zip code consistently for a while now, like we said, and we didn't have tailwinds in the couple of base years that we spoke about. I think we are pretty comfortable with the NRR even adjusting for the currency fluctuation. Anything north of 120, as you know, is probably considered pretty best in class. So, I think we like the zip code that we are in.

God, that's really good. Thank you. That's it for me.

Thank you.

Thank you. Next question comes from the line of Sanjay Lada with Bastion Research. Please come back.

Yeah, hi. Thank you so much for the opportunity, sir. Sir, just wanted to understand, since our model relies on cost saving for the clients, so I wanted to know how much cost we have saved for our partner this year, is the number we track, how these numbers go through.

No, I don't think, look at it from a customer standpoint, and again, I want to go back to the way to look at this whole business, right? Look at it via the media operating system for our customers, driving their mission critical solutions. How they look at it is in a longer period of time in what we call STCO, right? So total cost of ownership drives this business for that. So, and it's very specific to the each part of segments of the business. If you look at cloud modernization, they've already talked about it. Typically, customers look at anywhere 30% and above. PCO savings is what drives this whole thesis of moving to the cloud and being able to bring their opportunities to home. I think that's the exact thesis. And if you look at any of our customers, including the likes of IQ Weather, which signed up this year, for example, I'm sure they don't share their numbers with us. But that's all the thesis, which has been kind of been the sales positioning. And I'm sure customers are resonating with that whole thing. So we may not know the exact numbers of cost saving per se with our customer base. But clearly, that's the pitch that's kind of seemed to be resonating and working for us. Having said that, if you look at it from the AI possibilities that I talked about, it's not only going to be cost efficiencies, but also revenue expansion for our customers. And that's also a big driver for us because our customers who invested billions of dollars creating content, can we really take them to the next tier in terms of taking the content and expanding, will be a big focus area for us as we kind of drive a lot more AI strategies for the company.

Thank you, sir. Another one would be since, you know, this year is clearly our breakthrough years in terms of EBITDA and tech positivity. So, going forward, does the operating leverage further kick in? So, the point being asking is the pad margin of 5%, can it go back to 8-10% and can it move further from here on or are we on an investment phase right now and it will take another year or two to further accelerate the operating leverage? How should one view the future going forward?

Yeah, so I think our aspiration would be to kind of continue the trajectory that we've had, and, you know, where opportunities like the AI sort of inflection point presents itself, we'll make ahead of the curve investments and be transparent about it, but we'll back it up with disciplined execution and ensure that there's scale and operating leverage, profitability, and cash flow, similar to what we outlined in our prepared remarks.

So, going forward, the current profitability, which we have, that 5-6% of the Padma, is that consistent, and is it the new normal we should move forward? Maybe the trajectory would be higher side, but not the, you know, downward trend. Is that the right thing to assume?

I think our current margin levels are not steady state, if that's the question you're asking. That is headroom and upside, and you've seen that. So I think that is obviously headroom and upside. So I wouldn't call this current level steady state.

So, my last question would be, as you highlighted, the U.S. is increasing. The same is happening in India as well and across the global market, you know. So, how does we are trying to present? Do we have a presence in India as well? Or, you know, India is not the market for us right now. The U.S. is the market which we think on a growth perspective. How should one view, you know, yourself into the India and U.S. market trend?

See, Magi is a global company, and the opportunity that actually is provided and presented to us is a global opportunity. So we don't see it as any sort of, obviously, geographic segmentation is a mix of history and the opportunities that actually presented to us earlier. So in that context, obviously, U.S. will continue to be a large enough market just because of the exposure, the size of the market, media market there is 150 plus billion dollars of market. Versus in India, it's much, much smaller. And that's the reflection in terms of contribution of revenue for us as we move forward as well. Having said that, India is a very exciting market for us, given it's a home market, number one. Number two, we already have customers in India. So it's not like we work with ZTV, we work with Viacom 18, we work with already with these customers. I'll be small in terms of where we are today. I truly believe there's a huge opportunity in front of us as India's Streaming opportunities starting to become bigger and bigger, and more importantly, cloud maturity and the ability for us to kind of start to leverage cloud in India from a costly question standpoint, I think there's a huge opportunity in front of us from a growth standpoint as well. But in a larger scheme of things, U.S. will continue to be the large percentage, just given the size of the market and the history of what we have been able to accomplish there.

Thank you so much, sir, for answering my question. Thank you. Thank you.

Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the contents over to the management for closing calls.

Folks, thank you very much for attending this call, and thank you for all your questions. I think it is a pivotal point in time for the company. It's been a great year that we've kind of wrapped up, becoming profitable and being a public company. This has been a huge opportunity for us. Thank you for really reposing trust in us. We continue to be very excited about the opportunity in the future, and thanks to AI and what's happening, and the ability as a platform, and building a truly global company out of India for all of the media business worldwide, I think this is a great opportunity. It's a once-in-a-lifetime for us as promoters and management teams here, and hopefully for you as investors as well. And thank you for exposing faith and the opportunity in front of us.

Thank you. On behalf of Amagi Media Labs Limited, that concludes this conference. Thank you for joining us. You may not disconnect.