Capillary Technologies India Limited reported a 43% year-on-year surge in consolidated operating revenue to ₹2,566.4 million for the quarter ended June 30, 2026 (Q1FY27), driven by expansion within its existing customer base and the successful integration of SessionM, acquired from Mastercard in May 2026. Despite recording a consolidated net loss of ₹95.5 million due to an exceptional cyber fraud expense, the company’s normalised profit after tax (PAT) surged 3,320% to ₹254.4 million, reflecting strong operational leverage and margin expansion that outweighed the one-time impact.

The Board of Directors approved the unaudited financial results during a meeting held on August 4, 2026. The results were reviewed by the Audit Committee and subjected to a limited review by statutory auditors Walker Chandiok & Co LLP, in compliance with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. An investor presentation detailing these results was released under Regulation 30 of the same regulations.

Financial Performance Overview

Subscription revenue, which constitutes the majority of the business, grew 50% year-on-year to ₹2,424.9 million, accounting for 94.5% of total revenue. Other services, including installation, contributed ₹122.4 million, while campaign services added ₹19.2 million. Total operating expenses increased to ₹2,126.3 million from ₹1,609.2 million in the prior year period. Adjusted EBITDA expanded significantly to ₹440.2 million, up from ₹189.7 million, representing a margin of 17%. EBITDA stood at ₹460.1 million with an 18% margin, compared to ₹189.9 million and 11% margin in Q1FY26.

Impact of Cyber Fraud and Exceptional Items

The significant deterioration in the bottom line was primarily due to an exceptional loss of ₹333.9 million arising from unauthorized bank transfers from a step-down subsidiary in the Czech Republic. This cyber-enabled fraud contrasts sharply with the previous quarter (Q4FY26), which saw an exceptional income of ₹249.6 million from churn indemnity compensation. Excluding these exceptional items, a one-time deferred tax liability of ₹16.1 million, and IPO expenses, the normalised PAT reached ₹254.4 million, demonstrating a 10% margin compared to 10% in Q4FY26.

Management Commentary and Strategic Outlook

Aneesh Reddy Boddu, Founder, Managing Director & CEO, attributed the strong quarter to Net Retention Rate (NRR) expansion and the continued addition of large enterprise clients globally. He highlighted the successful closure of the SessionM acquisition and noted that the proprietary AI platform, aiRA, is gaining traction. The company is actively leveraging AI to streamline customer migrations and drive enterprise-wide productivity. Moving forward, Capillary remains committed to sustainable organic growth and profitability while prioritising the seamless integration of SessionM’s team and clientele.

What the Numbers Show

The divergence between the reported net loss and the robust normalised PAT highlights the non-recurring nature of the cyber fraud impact. With subscription revenue growing at 50% and adjusted EBITDA margins expanding from 11% to 17%, Capillary Technologies is demonstrating strong operational leverage. The return on invested capital (ROIC) improved to 7.3% in Q1 TTM FY27 from 4.8% in FY26, indicating efficient capital deployment. Investors should monitor the recovery proceedings from the cyber fraud, as any insurance payouts or fund recoveries could materially adjust the reported loss position.

Capillary Technologies has acquired the CustomerGlu software platform and associated intellectual property from Marax AI, Inc., marking a strategic expansion of its AI-powered loyalty and customer engagement suite. Announced on August 4, 2026, the transaction was executed through Capillary Pte Ltd via an asset purchase agreement. The acquisition aims to unite an interactive engagement layer with AI-led personalization, enabling enterprise brands to bypass heavy IT dependencies and launch interactive user interface experiences in near real-time.

The deal was disclosed in compliance with Regulation 30 and other applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The announcement was signed by Gireddy Bhargavi Reddy, Company Secretary and Compliance Officer, and filed with both the Bombay Stock Exchange and the National Stock Exchange of India. The press release is also available on the company’s investor relations website.

CustomerGlu, founded by Prateek Gupta, Raman Shrivastava, and Sumant Subrahmanya, originated at Marax AI by using artificial intelligence to predict buying behavior. The platform now leverages generative AI to trigger in-app gamified actions that drive retention at scale. Marax AI is backed by Techstars, Better Capital, Pentathlon Ventures, SmartStart, Ramakant Sharma, and Paradigm Shift Capital. The acquired technology allows marketers to deploy challenges and streaks directly into digital products without significant engineering bottlenecks.

Strategic Rationale

Siddhant Jain, Chief Customer Officer at Capillary Technologies, stated that the acquisition addresses core challenges regarding IT dependencies that hinder marketing agility. By integrating CustomerGlu, Capillary enables teams to launch and optimize digital experiences in real-time, reinforcing a marketer-first commitment. Prateek Gupta, Co-Founder and CEO at CustomerGlu, noted that the future of loyalty lies at the intersection of intelligence and experience, citing the evolution from recurrent neural network-based churn prediction to AI-driven actioning as a key driver for the partnership.

Company Profile

Founded in 2012, Capillary Technologies supports over 100 loyalty programs in more than 46 countries. Its software-as-a-service platform delivers loyalty experiences for more than 1.9 billion consumers globally. The acquisition follows an eight-month AI-led transformation spearheaded by CEO Prateek Gupta, which expanded the business into new markets and scaled operations using similar efficiency principles now embedded in the CustomerGlu SDK.