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Aeries Technology, Inc. (AERT)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY2026 was Aeries’ strongest first quarter ever, delivering positive operating cash flow ($1.37M), positive EBITDA ($2.31M), positive operating income ($0.8M), and net income of $1.68M, a $17.0M YoY swing from a loss in Q1 FY2025 .
  • Revenue was $15.33M, down 8.0% YoY (vs. $16.67M), reflecting focus on core AI-powered GCC services and cost discipline; Adjusted EBITDA improved to $1.03M (6.7% margin) from $0.40M (2.4%) a year ago .
  • Management reaffirmed FY2026 guidance: Revenue $74–$80M and Adjusted EBITDA $6–$8M, citing momentum with PE-backed clients and scalable AI-led GCC delivery .
  • Key stock reaction catalysts: sustained profitability signals (cash flow, operating profit), large YoY cost reset (SG&A down >85%), and guidance reaffirmation; a near-term watch item is sequential revenue decline vs Q4 FY2025 as the company exits non-core and normalizes the base .

What Went Well and What Went Wrong

  • What Went Well

    • “Financial trifecta”: EBITDA $2.3M, net income $1.7M, and operating cash flow $1.4M, underscoring improved core earnings power and cash generation .
    • Material cost reset: SG&A reduced by “more than 85% YoY,” enabling a leaner cost base and scalability; operating profit improved by $17.2M YoY to $0.8M .
    • Structural repositioning: exit of non-core ops, integrated nearshore (Mexico) and offshore (India) delivery, and AI-led GCC platforms (OneGCC Automation, AeriesOne) driving client ROI and margin protection .

  • What Went Wrong

    • Revenue declined 8% YoY to $15.33M in Q1 FY2026 (vs. $16.67M a year ago), reflecting transition and focus; sequentially, revenue was below Q4 FY2025 ($19.05M*) . [$19.05M*]
    • Continued reliance on non-GAAP to capture underlying trends: Adjusted EBITDA $1.03M excludes fair value changes and other items, requiring careful interpretation of quality of earnings .
    • No segment/geographic breakout disclosed for Q1; limited visibility on mix drivers beyond qualitative emphasis on PE-backed clients and AI-GCC services .

Financial Results

MetricQ3 FY2025 (Dec 31, 2024)Q4 FY2025 (Mar 31, 2025)Q1 FY2026 (Jun 30, 2025)
Revenue ($USD Millions)$17.61 $19.05*$15.33
Gross Profit ($USD Millions)$4.00 —$3.78
Operating Income ($USD Millions)$(5.20) —$0.82
EBITDA ($USD Millions)$1.10 —$2.31
Adjusted EBITDA ($USD Millions)$(2.04) —$1.03
Net Income ($USD Millions)$2.05 —$1.68
EPS ($)——$0.03
Adjusted EBITDA Margin (%)(11.6)% —6.7%
  • Values with asterisks (*) are from S&P Global. Values retrieved from S&P Global.

Vs Estimates (S&P Global)

MetricPeriodConsensusActualSurprise
RevenueQ1 FY2026n/a$15.33M n/a
EPSQ1 FY2026n/a$0.03 n/a

Segment breakdown

  • Not disclosed for Q1 FY2026 in the press release/8-K .

KPIs and Cash/Costs (YoY comparison)

KPIQ1 FY2025Q1 FY2026
SG&A Expense ($USD Millions)$20.43 $2.96
Operating Profit ($USD Millions)$(16.42) $0.82
Cash from Operations ($USD Millions)$(1.72) $1.37
Cash & Equivalents (end of period) ($USD Millions)$4.20 $2.14

Non-GAAP adjustments (Q1 FY2026):

  • EBITDA $2.31M and Adjusted EBITDA $1.03M; adjustments include excluding change in fair value of derivative liabilities (−$1.278M), with no stock-based comp this quarter, leading to lower Adjusted EBITDA than EBITDA .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2026$74–$80M $74–$80M Maintained
Adjusted EBITDAFY2026$6–$8M $6–$8M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 FY2025; Q-1: Q4 FY2025)Current Period (Q1 FY2026)Trend
AI/GCC deliveryQ3: Emphasis on GCCs; North America 93%+ of mix; early AI automation progress; cost optimization underway . Q4: Launched AI-centered GCC framework; 300+ member GCC for flagship healthcare client; modular agents active .Highlights “OneGCC Automation” and “AeriesOne” enabling faster ROI and scalable AI; AI partner network accelerating delivery .Improving
Private equity partnershipsQ3: Strengthening focus on PE-backed companies; reiterated FY25/26 outlook . Q4: Deepening PE relationships; hiring Chief Growth & Strategy Officer .“Go-to partner” for PE value creation; several clients moved from pilots to scaled, multi-year engagements .Accelerating
Cost structure and SG&AQ3: SG&A reductions to benefit upcoming quarters . Q4: One-time items largely behind; stock comp to be “significantly lower” .SG&A down >85% YoY; structural changes produce sustainable profitability .Improving
Cash flow & balance sheetQ3: Cash $2.4M; long-term debt $1.5M; reiterated FY guidance . Q4: Year-end cash $2.8M; long-term debt $1.1M .Operating cash flow positive $1.37M; quarter-end cash $2.14M .Improving
Geographic/segment mixQ3: North America 93%+; APAC down due to exit of non-core . Q4: North America revenue +15% YoY to $65.5M for FY25 .Q1 press release emphasizes core AI-GCC services; no detailed mix disclosed .Stable (limited disclosure)
Governance/leadershipQ3: New CFO & CIO; leadership changes . Q4: Added Chief Growth & Strategy Officer .Formed independent advisory board to shape AI strategy and PE expansion .Improving
Macro/supply chain/regulatoryQ4: Broad macro commentary around demand trends .Forward-looking risk section cites macro, FX, internal controls remediation, and geopolitical risks .Stable

Management Commentary

  • CEO Ajay Khare (prepared remarks): “We reported positive EBITDA of $2.3 million, net income of $1.7 million and positive cash from operations of $1.4 million… the outcome of strategic clarity, rigorous execution and relentless focus on… AI powered global capability centers.”
  • CEO Ajay Khare (press release): “Cash flow positivity and delivering our strongest start to a fiscal year is a major milestone… This discipline has helped to drive profitability and reinforced our ability to deliver measurable results for clients.”
  • CFO Daniel Webb: “Q1 FY2026 is a snapshot of our core earnings power… revenue $15.3 million… operating profit $0.8 million… adjusted EBITDA $1.0 million… net profit $1.7 million… operating cash flow $1.4 million… We are reaffirming our fiscal year 2026 guidance: Revenue $74–$80 million; Adjusted EBITDA $6–$8 million.”

Q&A Highlights

  • The Q1 FY2026 call included prepared remarks only; no Q&A segment was provided in the transcript. Guidance was reaffirmed and drivers reiterated (PE scale-ups, AI-led GCC delivery, lean cost base) .

Estimates Context

  • S&P Global consensus was unavailable for Q1 FY2026 EPS and revenue (no active consensus or estimate counts returned). Only actuals are recorded in the S&P feed for recent quarters, limiting beat/miss analysis this quarter. Values retrieved from S&P Global.
  • We therefore anchor to company-reported actuals: Revenue $15.33M and EPS $0.03 for Q1 FY2026 .

Key Takeaways for Investors

  • Profitability inflection appears durable: positive EBITDA, net income, and operating cash flow in Q1, with SG&A reset and operating profit turning positive YoY by $17.2M—supporting sustained earnings leverage as volumes grow .
  • Guidance intact: FY2026 revenue $74–$80M and Adjusted EBITDA $6–$8M reaffirmed; management cites expanding PE-scale engagements and AI-led GCC differentiation as growth engines .
  • Cost discipline is a strategic asset: >85% YoY SG&A reduction provides operating flexibility and margin protection; non-core exits reduce volatility and complexity .
  • Watch the top line trajectory: sequential revenue declined vs. Q4 FY2025 as the company normalizes its base—monitor new client ramps and expansion within PE portfolios for reacceleration. $19.05M* → $15.33M. Values retrieved from S&P Global.
  • Non-GAAP transparency improving: Adjusted EBITDA now the primary non-GAAP metric; Q1 adjustments mainly exclude derivative fair value (−$1.278M), aiding comparability to underlying operations .
  • Execution focus: Integration of Mexico/India delivery and AI platforms (OneGCC Automation, AeriesOne) should support speed-to-value and margins, a differentiator in PE-backed transformations .
  • Near-term trading implications: Positive cash flow/profitability and reaffirmed guidance are supportive; lack of consensus estimates caps headline “beat/miss” momentum—investors should track bookings, client scale-ups, and subsequent-quarter revenue inflection .

Notes:

  • $19.05M marked with an asterisk (*) is from S&P Global. Values retrieved from S&P Global.