Capillary Technologies Q1 FY27 Results: Operating Revenue Jumps 43%, Adjusted EBITDA Surges 132%

What Happened ?

Capillary Technologies reported a strong start to FY27 with robust growth across revenue and operating profitability. The performance was driven by healthy expansion within its existing enterprise customer base, higher new annual contract value (ACV) contributions, and the addition of SessionM following its acquisition in May 2026. The company also benefited from operational efficiencies and integration synergies, resulting in a sharp improvement in normalized profitability.

key details

Business & Operational Highlights:

• Operating Revenue increased 43% YoY to ₹2,566.4 million.
• Adjusted EBITDA rose 132% YoY to ₹440.2 million.
• Normalized PAT grew 3,320% YoY to ₹254.4 million.
• Growth was supported by:
  • Expansion within the existing customer base.
  • Higher new Annual Contract Value (ACV) contributions.
  • Integration of the SessionM acquisition completed in May 2026.
• Reported PAT remained negative due to exceptional and one-off items, while underlying profitability improved significantly after normalization. 

Strategic Significance:

• Successfully completed the acquisition and integration of SessionM, strengthening Capillary’s global loyalty technology platform.
• Continued expansion among large enterprise customers across international markets.
• Increased adoption of the company’s proprietary AI platform, aiRA, to:
  • Accelerate customer migrations.
  • Improve enterprise productivity.
  • Enhance operational efficiency across the organization.
• Management reiterated its focus on sustainable organic growth while integrating SessionM’s customers and workforce. 

Note:

• Capillary continues to strengthen its position as an AI-powered SaaS loyalty platform provider, serving 150 customers, including 25 Fortune 500 companies, across 53 countries with an integrated portfolio covering loyalty management, customer engagement, analytics, rewards, and customer data platforms. 

Risk Analysis

Summary:

• While operating performance improved substantially, reported profitability remains affected by exceptional accounting items.
• Future performance will depend on successful integration of acquired businesses and continued enterprise customer growth.

Key Risks:

• Execution risk associated with integrating SessionM.
• Sustaining high enterprise customer retention and expansion.
• Continued investment in AI capabilities may increase operating costs.
• Reported earnings may remain volatile due to acquisition-related adjustments and exceptional items.

Worst Case:

• If acquisition synergies are delayed or enterprise customer growth slows, revenue momentum and profitability improvements could moderate despite the company’s expanding AI platform.

Risk Level: Medium

Company Commentary

Management highlighted the following during the quarter:

• Aneesh Reddy Boddu, Founder, Managing Director & CEO, said the quarter was driven by higher Net Revenue Retention (NRR), continued addition of large enterprise clients, and the successful completion of the SessionM acquisition.
• Management highlighted that its proprietary AI platform, aiRA, is gaining strong traction and is being used to streamline customer migrations and improve enterprise-wide productivity.
• The company reaffirmed its commitment to sustainable organic growth, profitability, and seamless integration of SessionM’s team and customer base.