Fractal Revenue Tops $100 Million as Second-Quarter Growth Reaches 20% Year on Year
Key Facts
Fractal Analytics said on November 3, 2026, that consolidated operating revenue reached 9,565 million rupees in the second quarter of fiscal 2027, which ended on September 30, crossing the $100 million threshold in a single quarter for the first time. Revenue increased 20% year on year, or 10% on a constant-currency basis, the company said in its results statement. Net income rose 139% to 792 million rupees during the period. Adjusted EBITDA margin also expanded 123 basis points year on year to 16%. The results put revenue growth and profitability at the forefront of the company’s performance, with a clear gap between growth measured in reported and constant currencies.
The company reported EBITDA of 1,029 million rupees, up 71% year on year, according to its results disclosure. On an adjusted basis, the figure was 1,600 million rupees, up 30% from the year-earlier quarter. The figures distinguish between two different measures of earnings, while the adjusted EBITDA margin shows profitability relative to revenue: it was 16% after rising 123 basis points. By contrast, gross margin fell 225 basis points year on year to 44%. The company attributed the short-term pressure to investment in hiring AI engineering talent, with research and development spending at 6.3% of revenue in the quarter.
The strongest sector growth came from healthcare and life sciences, where revenue rose 79% year on year, according to Fractal’s statement. Banking, financial services and insurance grew 30% in the same quarter. Consumer packaged goods and retail, the company’s largest sector, posted annual growth of 11%. In technology, media and telecom, revenue increased 6% from the previous quarter, in what the company described as a strong sequential recovery. The sector comparison shows that quarterly growth was uneven: gains in healthcare and financial services exceeded the performance of the largest sector, while technology, media and telecom growth was sequential rather than annual.
Fractal’s products, including its Cogentiq agentic AI platform, recorded an annualized revenue run rate above 1,500 million rupees, up 39% from a year earlier. This figure is separate from total quarterly revenue, as it measures products’ annualized revenue run rate rather than revenue generated in the quarter alone. Net revenue retention was 115% in the second quarter, a measure that includes expansion and contraction in existing customers’ spending. The net promoter score was 76 during the period. The company presented these metrics alongside product growth, linking expansion in its AI business with the performance of its existing customer base.
The financial comparison showed operating revenue of 7,985 million rupees in the second quarter of fiscal 2026, against 9,565 million rupees in the corresponding period of fiscal 2027. For the previous full fiscal year, the group reported revenue of 32,997 million rupees in fiscal 2026, up 19.3% from the prior year, while adjusted EBITDA margin was 17.6%. These annual results provide context for comparison with the current quarter, in which adjusted margin was 16% after expanding year on year. Operating cash flow was 793 million rupees during the quarter. Cash and cash equivalents totaled 17,277 million rupees on September 30, 2026.
Commenting on the development of AI, co-founder and group CEO Srikanth Velamakanni said models “are getting more capable every week and cheaper every quarter.” He added that over the next few quarters, companies would cross a threshold at which leaving their most important decisions unchanged would become risky. The remarks come as the company reported 39% growth in the annualized revenue run rate of its products, to more than 1,500 million rupees. The company’s investor results call is scheduled for November 4, 2026, from 8:00 to 9:00 a.m. India time, to discuss its second-quarter results.