Aeries Technology, Inc (AERT) Q3 2026 Earnings Call Prepared Remarks Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call indicates stable revenue, improved EBITDA, and positive cash flow. The company has increased its EBITDA guidance, showing confidence in operational improvements and automation benefits. Multiyear contracts provide revenue visibility, though there are risks with early-stage client deals and economic uncertainties. The positive sentiment is supported by margin expansion and efficiency gains. Despite minor revenue decline, the overall outlook is optimistic with a focus on growth and profitability, likely leading to a positive stock price movement.
Key Financial Performance
Revenue $17.5 million, compared to $17.6 million in the prior year period, showing a slight decrease. The revenue remained broadly stable year-over-year due to consistent client base stability and delivery performance.
Net Income $1.2 million, compared to $2.0 million in Q3 FY '25, reflecting a decrease due to non-operating and below EBITDA items.
Adjusted EBITDA $2.5 million, compared to an adjusted EBITDA loss of $2 million in Q3 FY '25, marking a significant year-over-year improvement due to stronger utilization, automation-driven productivity, and cost discipline.
Gross Margin 19.1%, reflecting margin expansion driven by improved delivery utilization and automation scaling across active client programs.
Adjusted EBITDA Margin 14.1%, representing a meaningful turnaround from a negative adjusted EBITDA margin in the prior year quarter, attributed to efficiency gains and operating leverage.
Operating Cash Flow Positive at $2.4 million for the third consecutive quarter, underscoring improved conversion of earnings into cash and greater stability in working capital.
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Operating Highlights
AI and automation capabilities: Increased adoption across both new and existing clients, contributing to improved throughput and productivity.
API implementations: Advancements made in API implementations, enhancing operational capabilities.
Nearshore presence in Mexico: Continued scaling of operations in Mexico, strengthening long-term positioning.
Private equity ecosystem engagement: Strong engagement across private equity ecosystem and multiple industry sectors, creating additional opportunities.
Revenue and profitability: Revenue stable at $17.5 million; adjusted EBITDA improved to $2.5 million from a loss of $2 million in the prior year.
Cash flow: Positive operating cash flow for the third consecutive quarter at $2.4 million.
Efficiency improvements: Automation initiatives improved throughput and productivity, contributing to margin expansion.
Multiyear contracts: Significant portion of fiscal 2027 revenue anchored in multiyear contracts, providing strong revenue visibility.
Growth strategy: Focus on scaling operations and improving profitability and cash flow as the business grows.
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Risk or Challenges
Client Deals in Early Stages: Several client deals signed this year are still in their early phases, which may delay meaningful financial contributions until fiscal year 2027.
Execution Risk in Program Ramp-ups: Many programs contributing to fiscal 2027 are operational or in advanced ramp-up stages, but there is still some execution risk associated with these transitions.
Dependence on Multiyear Contracts: A significant portion of fiscal 2027 revenue is anchored in multiyear contracts, which could pose risks if clients fail to meet their obligations or if market conditions change.
Economic and Market Uncertainty: Forward-looking statements indicate potential risks from economic uncertainties and market conditions that could materially impact results.
Automation and AI Implementation: While automation and AI initiatives are improving productivity, there is a risk of over-reliance on these technologies, which may not deliver expected results consistently.
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Guidance & Outlook
Fiscal 2027 Revenue and Adjusted EBITDA Outlook: The company expects fiscal 2027 revenue in the range of $80 million to $84 million, with adjusted EBITDA projected between $10 million and $12 million. This outlook is based on the current scale of contract programs, ramp-up of recently signed engagements, and operating leverage.
Fiscal 2026 Adjusted EBITDA Guidance Update: The company has increased its full-year fiscal 2026 adjusted EBITDA guidance to a range of $7 million to $8 million, up from the prior guidance of $6 million to $8 million. This reflects strong operating performance, improved delivery utilization, and benefits from automation-driven productivity initiatives.
Revenue Visibility and Multiyear Contracts: A significant portion of fiscal 2027 revenue is anchored in multiyear contracts that have already been signed. Many programs are operational or in advanced stages of ramp-up, reducing execution risk and supporting revenue visibility.
Client Engagement and Program Contributions: Several client deals signed in fiscal 2026 are in early phases. As these programs progress to steady state, they are expected to contribute meaningfully to revenue and profits in fiscal 2027.
Operational Improvements and Margin Expansion: The company is achieving margin expansion through improved delivery utilization, automation-driven productivity, and cost discipline. These improvements are expected to continue supporting profitability and cash flow generation.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Review of Unclear Management Responses
A:
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CFO Chief
India Mexico
automation productivity
base
cash generation
client engagement
client program
contract program
contribution
delivery model
delivery utilization
durability
engagement equity
equity ecosystem
implementation
improvement
leverage
margin expansion
model delivery
momentum
outlook contract
period
phase state
portfolio
portion
profile
profitability cash
program ramp
quarter
scale
stability
utilization automation
visibility
AERT Transcript
Aeries Technology, Inc (AERT) Q3 2026 Earnings Call Prepared Remarks Transcript
Positive2-9
The earnings call indicates stable revenue, improved EBITDA, and positive cash flow. The company has increased its EBITDA guidance, showing confidence in operational improvements and automation benefits. Multiyear contracts provide revenue visibility, though there are risks with early-stage client deals and economic uncertainties. The positive sentiment is supported by margin expansion and efficiency gains. Despite minor revenue decline, the overall outlook is optimistic with a focus on growth and profitability, likely leading to a positive stock price movement.
Aeries Technology, Inc (AERT) Q2 2026 Earnings Call Prepared Remarks Transcript
Positive11-10
The earnings report shows improved financial performance with a 3% revenue increase and a shift to profitability. The company highlights strong operational efficiency and positive client engagement trends. While there are risks related to market conditions and scalability, the guidance for adjusted EBITDA and strategic investments in innovation and delivery infrastructure indicate a positive outlook. Despite some uncertainties, the overall sentiment is positive, reflecting growth and improved financial health.
Aeries Technology, Inc (NASDAQ:AERT) Q3 2025 Earnings Call Transcript
Positive2-20
The earnings call reveals a strategic focus on profitable growth and cost optimization, with a positive outlook for cash flow and financial performance. Despite some risks in exiting non-core segments and aggressive cost-cutting, the company's AI-driven transformation and share buyback program are promising. The Q&A session confirmed strong revenue growth and positive future guidance, leading to a positive sentiment for stock price movement.
AERT Report
Frequently Asked Questions
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