Aeries Technology Boosts FY26 Outlook to $74M–$80M on GCC-Driven Growth

Earnings Call Highlights: Aeries Technology (AERT) Q4 2025

Management View

• CEO Ajay Khare stated, "For the fiscal year 2025, we projected core adjusted EBITDA to be between $6 million and $7 million. I am happy to report that we concluded the year with $7.4 million, surpassing our guidance." Khare noted that fiscal 2025 was a key year, focusing on refining the company's strategy by concentrating on its core business—assisting private equity-backed firms in establishing and expanding global capability centers (GCCs)—and intentionally exiting noncore regions, such as the Middle East consulting markets.
• The CEO emphasized, "Our concentration on private equity firms and portfolio companies located in North America has resulted in a strong and dedicated business model for us." He pointed out that North America now accounts for more than 93.3% of revenue, with a year-over-year increase in North American revenue of 15%, rising from $57 million to $65.5 million.
• Khare provided information on significant client successes and product advancements: "We started collaborating with a top international cybersecurity software and services company to create and expand global capability centers in both India and Mexico," and entered into a memorandum of understanding with a SaaS firm focused on sustainability and compliance to develop AI-powered GCCs.
• The CEO also stated, "The financial year 2025 saw the introduction of our new AI-focused global capability center model and strategy," incorporating intelligent automation and generative AI agents for client transformation initiatives.
• Daniel Webb, Chief Financial Officer, said, "In fiscal year 2025, we recorded total revenue of $70.2 million, down from $72.5 million in fiscal year 2024. This minor decrease was expected and resulted from our decision to leave the Middle East market. Without this effect, our North America revenue increased by 15% compared to the previous year, rising from $57 million to $65.5 million, which shows solid progress in our primary region."
• Webb added, "Our financials for fiscal 2025 include one-time events that we don't anticipate occurring in 2026. Most of our SG&A expenses in 2025 were due to one-time factors. The Middle East operations have now been completely written off. Our restructuring efforts are finalized."

Outlook

• Webb stated, "FY 2026 outlook. We are maintaining our forecast. Revenue is expected to range between $74 million and $80 million; adjusted EBITDA is projected to be between $6 million and $8 million." He cited confidence in these estimates due to an enhanced presence in the North American market, the development of the GCC model, and increasing demand for digital transformation services from companies backed by private equity.
• The management highlighted client engagement and the hiring of a Chief Growth Officer as evidence of ongoing progress and growth within the PE network.
• The company announced that beginning in fiscal year 2026, core adjusted EBITDA will no longer be presented as an individual metric, with adjusted EBITDA and GAAP measures taking precedence as the main financial indicators.

Financial Results

• Webb stated, "For the full fiscal year 2025, total revenue was $70.2 million; gross profit reached $16.7 million, with a margin of 23.8%. The operating loss amounted to negative $28.8 million; adjusted EBITDA was negative $4.7 million; core adjusted EBITDA was positive $7.4 million; and the net loss was negative $21.6 million."
• The chief financial officer stated, "The core adjusted EBITDA amounted to $7.4 million, representing a 365% rise from the $1.6 million recorded in the prior year, exceeding the forecast we had shared."
• Year-end cash amounted to $2.8 million, along with $1.1 million in long-term debt, which Webb noted offers "sufficient flexibility to back our continuous efforts."
• The Chief Financial Officer said, "Our reorganization has been finalized. Stock-based compensation is anticipated to be much reduced, and we expect 2026 to be our most successful year so far."

Q&A

• NOT_APPLICABLE: No Q&A session or analyst questions were included in the transcript.

Sentiment Analysis

• NOT_APPLICABLE: No analyst questions or comments were provided in the transcript, so analyst sentiment cannot be assessed.
• The leadership's tone in the prepared remarks reflected assurance and hope. Webb employed phrases like, "We are confident about this forecast and here's the reasoning. We're experiencing solid progress with clients. Current clients are strengthening their collaborations."
• In contrast to the prior quarter, the management's tone evolved from tentative and cautious to confidently positive, indicating the conclusion of restructuring efforts and a more defined emphasis on expansion.

Quarter-over-Quarter Comparison

• Advice for FY 2026 ($74 million to $80 million in sales; $6 million to $8 million adjusted EBITDA) is the same as the previous quarter's projection.
• The strategic emphasis was further refined on key North American markets and companies supported by private equity, continuing from the actions taken in Q3.
• Ongoing efforts related to cost control and restructuring, which were emphasized in Q3, were announced as finished in Q4. It is expected that stock-based compensation will decline in 2026.
• Core adjusted EBITDA improved, increasing from $1.6 million in the previous year to $7.4 million, while North America revenue grew by 15% compared to the same period last year.
• The management's outlook shifted from emphasizing transition and cost reduction in Q3 to showing assurance regarding growth and operational consistency in Q4.
• No comparison of analyst sentiment can be made because there were no Q&A sessions in either quarter.

Risks and Concerns

• Webb admitted that "The bulk of our SG&A expenses in 2025 came from one-time factors. The Middle East operations have now been completely written off. Our restructuring efforts are finalized."
• Management stated that the risks associated with noncore regions have been resolved, and future risks will be handled via a more streamlined cost model and an emphasis on North American markets.
• No specific worries from analysts were noted in the transcript.

Final Takeaway

With the conclusion of its restructuring and a concentrated strategy targeting private equity-backed clients in North America, Aeries Technology begins FY 2026 with increased confidence, anticipating revenue between $74 million and $80 million, along with adjusted EBITDA ranging from $6 million to $8 million. The company credits its progress to the effectiveness of its AI-driven GCC framework, stronger client connections, and an efficient operational structure, setting the stage for ongoing growth as previous issues in noncore regions have been completely addressed.

Read the complete Earnings Call Transcript

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