Sonata Software has secured a significant $73.00 million contract for AI-led digital modernization with a leading US Technology, Media, and Telecom (TMT) company. This strategic five-year engagement marks a major milestone for the Bengaluru-based IT services provider, showcasing its growing prominence in the global tech landscape.

Deal Highlights

Scope of Work

The engagement encompasses a wide range of critical areas, including:

• Platform engineering
• Cloud transformation (Amazon Cloud)
• Enterprise systems (Salesforce, Workday)
• Cybersecurity
• Data services
• Modern application development

Sonata Software will establish a dedicated AI-enabled Modernization Engineering Center in India to support this transformative project. The center will leverage automation and scalable engineering practices to drive innovation, global scale, and operational excellence for the client.

Strategic Significance

Samir Dhir, Managing Director and CEO of Sonata Software, commented on the deal: "This is the second-largest deal in Sonata's history—and a proud milestone for Team Sonata. It reflects our unique positioning as a right-sized partner for enterprises seeking deep modernization capabilities and AI-first transformation."

The contract win is expected to empower the client to achieve:

• Enhanced operational efficiency
• Faster innovation cycles
• Improved agility to scale across geographies

Company Overview

Sonata Software, with annual revenue of $1.00 billion, positions itself as a leading Modernization company. The firm's approach, known as Platformation.AI, aims to create efficient and agile digital businesses for future intelligent ecosystems.

The company offers a comprehensive suite of Modernization Engineering Services, including:

• Data modernization
• Cloud transformation
• Dynamics implementation
• Automation solutions
• Cybersecurity services
• Emerging technologies (Generative AI, Microsoft Fabric)

Sonata Software's global presence spans key regions including North America, UK, Europe, APAC, and ANZ. The company serves Fortune 500 clients across various sectors such as Banking, Financial Services and Insurance (BFSI), Healthcare and Life Sciences (HLS), Telecom, Media, and Technology (TMT), and Retail, Manufacturing and Distribution (RMD).

Q4 Revenue Warning

Despite the significant contract win, Sonata Software has issued a cautionary note regarding its Q4 international business revenue. The company expects lower-than-anticipated figures due to reduced estimates from its largest client. This development highlights the potential volatility in the IT services sector and the impact of client-specific factors on overall financial performance.

This latest deal reinforces Sonata Software's growing reputation in the IT services industry and its capability to deliver large-scale, AI-driven digital transformation projects for global clients. However, the Q4 revenue warning serves as a reminder of the challenges and uncertainties that persist in the competitive technology services landscape.

Sonata Software Limited has issued a cautionary update regarding its revenue projections for the fourth quarter of the fiscal year 2024-25. The company anticipates a decrease in revenue from its largest client, which is expected to impact its international business segment.

Revenue Forecast Adjustment

In a filing to the stock exchanges on April 16, 2025, Sonata Software revealed that revenue estimates for Q4 2024-25 from its largest client are likely to be lower than previously anticipated. This downward revision is expected to result in reduced revenue from the company's international business for the quarter compared to earlier projections shared during an analyst and investor call held on February 6, 2025.

Impact on International Business

The company's international business segment, which typically contributes significantly to its overall revenue, is expected to feel the impact of this development. While specific figures were not disclosed, the announcement suggests a notable deviation from the company's earlier financial outlook.

Management Statement

Jagannathan C N, Chief Financial Officer of Sonata Software, signed off on the regulatory filing, emphasizing the company's commitment to transparency by promptly informing stakeholders of this material change in revenue expectations.

Market Implications

This announcement may have implications for Sonata Software's financial performance in the short term and could potentially affect investor sentiment. Shareholders and market analysts will likely be keen to understand the extent of the revenue shortfall and its broader implications for the company's growth trajectory.

Looking Ahead

As the fourth quarter of 2024-25 progresses, investors and industry observers will be watching closely for any additional updates from Sonata Software regarding its financial performance and strategies to mitigate the impact of reduced revenue from its largest client.

Sonata Software Limited, headquartered in Bengaluru, India, is known for providing IT consulting and software services globally. The company's proactive disclosure aligns with regulatory requirements and underscores its commitment to keeping investors informed of significant developments affecting its business operations.