Newgen Software Technologies Ltd.Subscription Surge Amid Caution

Newgen Software Technologies reported Q3 FY26 revenues of ₹400 crores, reflecting 5% year-on-year growth, while nine-month revenues reached ₹1,122 crores with 7% growth.

The company maintained a healthy adjusted net margin of 22.5% at ₹90 crores despite muted topline expansion. Subscription revenue emerged as the fastest-growing segment at ₹134 crores, up 29% year-on-year, while annuity revenues grew 20% to ₹250 crores, now comprising 62.5% of total revenue. License revenue faced headwinds from an exceptionally high base in prior year quarters and elongated enterprise deal cycles as customers re-evaluate technology strategies amid AI disruption.

The U.S. geography delivered strong 21% growth, and Australia reached a $5 million revenue run rate with potential to double in FY27. Management remains confident in license recovery supported by an active pipeline, with expected improvements beginning Q4. Operating cash flow generation remained robust at ₹154 crores for nine months. The company added 34 new customer logos while investing 9% in R&D and 23% in sales and marketing to capitalize on next-generation AI-led product opportunities.