Route Mobile Limited reported its Q3 FY26 financial results, showcasing a strategic transformation toward higher-margin business segments despite facing revenue headwinds. The company's earnings conference call, held on February 10, 2026, revealed both challenges and opportunities as it navigates evolving market dynamics in the communications platform-as-a-service (CPaaS) sector.

Financial Performance Overview

The company's financial metrics for Q3 FY26 present a mixed picture, with revenue pressures offset by significant margin improvements:

The revenue decline of 6.5% year-on-year to ₹1,071 million was primarily attributed to reduced volumes in certain low-margin international long-distance (ILD) business segments. However, this decline was partially offset by growth in higher-margin domestic business in India and other key regions including UAE and Colombia.

Strategic Business Mix Transformation

Route Mobile's management emphasized that the revenue decline reflects a deliberate strategic shift rather than operational weakness. The company has been actively moving away from volume-driven, low-margin revenue streams toward value-driven, high-margin business segments. This transformation has yielded tangible results, with gross profit margin expanding significantly to 24.5%, representing a 340 basis point improvement over the previous year.

The margin expansion translated into absolute gross profit growth of 8.6% year-on-year and 9.8% quarter-on-quarter, demonstrating the effectiveness of the company's focus on quality over quantity of revenue. Management noted that this represents one of their highest quarterly margin performances, reflecting enhanced routing strategies and optimized customer mix.

Leadership Transition and Strategic Direction

A significant development announced during the call was the leadership transition within Route Mobile. Tushar Agnihotri has assumed the position of Chief Executive Officer, while Rajdipkumar Gupta continues as Managing Director, focusing on strategic direction and strengthening synergies with Proximus Global.

Tushar Agnihotri brings extensive CPaaS industry expertise, having successfully built Route Mobile's domestic market presence and expanded operations to Bangladesh, Sri Lanka, and Indonesia during his tenure.

Operational Highlights and Customer Deployments

Despite revenue challenges, Route Mobile achieved several strategic customer deployments during Q3 FY26:

• Retail Solutions: Deployed WhatsApp-based last-mile logistics solutions for two of the world's largest retail chains
• Education Sector: Launched automated admission process chatbot on WhatsApp for a leading Indian educational institution
• Transportation: Implemented comprehensive digital ticketing and customer notification system for a major state-owned waterways company in India
• Telecommunications: Advanced firewall deployment with Claro in Latin America to final testing and acceptance phase

These deployments demonstrate the versatility and enterprise-grade scalability of Route Mobile's omni-channel platform capabilities across diverse industry verticals.

New Products and Market Expansion

The company reported 14.5% year-on-year growth in revenue from new products for the nine months ended December 31, 2025. These products, including omni-channel communication solutions, RCS messaging capabilities, and WhatsApp Business API integration, command premium pricing compared to traditional SMS-based services.

Route Mobile continues to strengthen its partnership ecosystem, expanding customer pipeline in collaboration with Infosys and Tech Mahindra during Q3. The company is also positioning itself at the forefront of the emerging telecom API ecosystem through its engagement with the Konera initiative within Proximus Global.

Cost Structure and Profitability

While gross profit expansion was significant, the company experienced increased operating expenses due to product development initiatives, go-to-market activities, and salary increments. These investments, viewed as essential for long-term capability building, prevented the full flow-through of gross profit improvements to EBITDA levels.

Despite these investments, Route Mobile maintained steady profit after tax margins, demonstrating its ability to preserve bottom-line profitability while making necessary strategic investments. The company's focus on profitable, sustainable value creation remains evident in its disciplined approach to customer acquisition and retention.

Market Position and Future Outlook

Management confirmed Route Mobile's strong market position, maintaining over 50% market share in India's ILD business segment. The company emphasized its commitment to remaining a listed entity, with Proximus Global having no intention of delisting Route Mobile, ensuring continued commitment to minority shareholders.

Looking ahead, Route Mobile is focusing on two primary verticals: telecommunications and enterprise segments. The company's firewall business, along with map server and CPaaS-in-a-Box solutions for operators, represents significant growth opportunities with attractive margin profiles. The upcoming Claro deployment in March 2026 is expected to contribute to revenue growth in subsequent quarters.

Route Mobile Limited has made the audio recording of its earnings call available on the company website following the investor presentation held on February 10, 2026. The call discussed unaudited financial results for the quarter and nine months ended December 31, 2025, covering both standalone and consolidated financial results for Q3FY26 and 9M FY26.

Earnings Call Recording Details

In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Route Mobile has published the complete audio recording of the analyst and investor call. The recording is accessible on the company's official website and provides comprehensive discussion of the quarterly performance and strategic developments.

Q3FY26 Financial Performance

Route Mobile reported mixed financial results for Q3FY26, with revenue declining but profitability margins showing improvement. The company's quarterly performance reflects ongoing market challenges while demonstrating operational resilience.

Despite the revenue decline, Route Mobile achieved significant margin expansion in Q3FY26. The gross profit margin improved to 24.5% from 22.1% in the previous quarter, reflecting enhanced routing strategies and focus on higher-margin traffic retention from existing customers.

Nine-Month Performance Analysis

For the nine-month period ended December 31, 2025, Route Mobile demonstrated operational stability with selective improvements in key metrics.

The company processed 129.5 billion billable transactions during 9M FY26, maintaining its position as a leading global CPaaS platform with over 280 direct MNO connections and access to 900+ MNOs through its super network.

Business Developments and Strategic Initiatives

Route Mobile launched several innovative solutions during Q3FY26, strengthening its market position across diverse industry verticals. The educational technology segment saw deployment of a fully-fledged intelligent admissions chatbot for a leading multi-disciplinary university ranked first in India for employer reputation. In mobile commerce, the company launched WhatsApp-based trade-in customer journey for a leading global mobile phone company, enabling seamless handset evaluation and trading.

The company's new products revenue reached ₹2,671 mn for 9M FY26, representing 14.5% year-on-year growth, though Q3FY26 showed a 4% quarter-on-quarter decline due to reduced revenue from a key customer.

Financial Position and Global Operations

Route Mobile maintains a robust financial position with cash reserves of ₹12,877 mn as of December 31, 2025. The company achieved over 100% CFO/EBITDA conversion during 9M FY26, demonstrating strong cash generation capabilities. The board of directors has recommended an interim dividend of ₹3 per share, reflecting confidence in the company's financial stability.

Route Mobile operates across 20+ locations globally with 784 employees, serving over 2,700 active billable clients across diverse industry verticals. The company's global footprint spans multiple regions, with India contributing 47% of revenue by termination, while customer headquarters are distributed across Americas (39%), Asia (34%), and Europe (12%).