Q4 2025 Aeries Technology Inc Earnings Call

Good morning, and welcome to the Ares technology full year 2025 earnings and business update call. Joining us today are <unk>, Chief Executive Officer, a J K and Chief Financial Officer, Daniel what.

Operator: Good morning and welcome to the ARIES Technology Full Year 2025 Earnings and Business Update Call.

Operator: Joining us today are ARIES Chief Executive Officer Ajay Khare and Chief Financial Officer Daniel Webb.

Operator: This call will review the results for the year ended March 31st, 2025, and discuss strategic priorities moving forward. Before we begin, please note that today's discussion contains forward-looking statements including Aeries' expectations regarding future performance and market opportunities. Actual results may differ materially.

This call will review the results for the year ended March 31st 2025, and discuss strategic priorities moving forward.

Before we begin please note that today's discussion contains forward looking statements, including areas expectations regarding future performance and market opportunities and actual results may differ materially. Please refer referred to the SEC filings in the earnings press release for a full discussion of risks and uncertainties.

Please refer to the SEC filings and the earnings press release for a full discussion of risks and uncertainties. Additionally, this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most comparable Gap measures are available in our earnings press release and on our website.

This call will include certain non-GAAP financial measures reconciliations of these measures to the most comparable.

GAAP measures are available in our earnings press release and on our website with that I'll now turn the call over to RJ.

Ajay Khare: With that, I'll now turn the call over to Ajay. Thank you, operator.

RJ: Thank you I'll take that.

Ajay Khare: Good morning, everyone, and thank you for joining us. I'm Ajay Khare, CEO of IVS Technology. Today, we will review our performance for fiscal year 2025 and walk through the initiatives that are shaping the next phase of growth for AERIES.

RJ: Good morning, everyone and thank you for joining us on Magic, how do you see your plate used technology to do.

You can leave your outperformance up it can be a 2025 and walk through the initiatives that are shaping the next people a little cloudy. These.

Ajay Khare: After that, I will hand it over to Daniel to take you through the detailed financial and forward out. For financial year 2025, we guided to 6 to 7 million in core adjusted EBITDA. I'm pleased to report that we ended the year having achieving 7.4 million, beating our guidance. The outperformance underscores the strength of our focus execution and results of our realignment of focus.

After that I will hand, it over to Daniel could take you through the detailed financial and forward outlook.

Daniel: For financial year, 2025, we guided to $6 million to $7 million in court and just had a good day.

Daniel: To report that we ended the year, having achieving $7 4 million, beating our guidance.

Daniel: The outperformance underscores the strength of our focused execution and just don't talk about our realignment.

Financial year 2025, well the pivotal you had plenty of these <unk>.

Ajay Khare: Financial year 2025 was a pivotal year for ADI. We made intentional decisions to sharpen our strategy and focus. That meant doubling down on our core business. that is helping private equity-backed companies build and scale global capability centers, GCCs, and stepping away from lower-value, non-core geographies. We exited the Middle East consulting markets, completed all the associated write-offs, and significantly tightened our cost structure. Those legacy issues are now fully behind. Our focus on private equity firms and portfolio companies with a presence in North America has created a resilient and focused business for us. We have built deep relationships with leading private equity firms and our value proposition, that is, transformation through innovation, speed, efficiency, and flexibility, has started to resonate strongly.

Daniel: And thanks, and then D C. That's to sharpen our strategy and focus.

That's meant doubling down on our core business.

Daniel: That is helping private equity backed companies building scale blooming capability Center D C C and stepping away from northern Virginia non core geographies.

Daniel: We exited the middle East consulting Butkus completed all the associated write offs and significantly tightened our cost structure.

Daniel: Those legacy issues are now fully behind us.

Daniel: Our focus on private equity fund and portfolio company with a presence in North America has created a resilient and focused business for us.

Speaker Change: Do you have built deep relationships with leading private equity firms.

Speaker Change: Value proposition that is transformation through innovation.

Ajay Khare: Efficiency and flexibility has started to resonate strongly we continue to see high client retention long tenures engagements and increased adoption of large scale digital transformation mission.

Ajay Khare: We continue to see high client retention, long tenure engagements, and increased adoption of large-scale digital transformation initiatives. North America now represents over 93.3% of our revenue base, and we see continued momentum through both new logos and deeper engagements with existing clients. We expect our momentum to accelerate now that we have hired a chief growth and strategy officer. We will continue to make key hires with the relationships in the PE industry to expand our pipeline and network. Excluding the discontinued Middle East operations, our North America revenue grew 15% year-over-year, from $57 million to now $65.5 million for financial year 2025.

North America now represents over 93% of our revenue base and we continue and we see continued momentum through both new logos and deeper engagements with existing clients. We expect that momentum to accelerate now that we have hired a chief growth and strategy officer.

We will continue to make key hires at the relationships in the industry to expand our pipeline network.

Excluding the discontinued middle East operation.

North America revenue grew 15% to weird weather, yet from $57 million does not $65 $5 million for financial year 2025.

Highlighting the strength of our core markets.

Ajay Khare: highlighting the strength of our core model.

At the heart of our deliveries out of D. C. C. Mortgage also known as global capability Center model.

Ajay Khare: At the heart of our delivery is our GCC models, also known as Global Capability Centres model. GCCs are no longer optional. They have become the preferred way for companies to gain scalable capabilities in technology, operations and transformation, which they can then leverage throughout their business. With over 13 years of GCC expertise, we are now seeing that experience convert into competitive advantage and real deal momentum. Recently, we began partnering with a leading global cybersecurity software and services provider to establish and scale global capability centers in both India and Mexico to enhance their existing India-based workforce while adding a near shore hub to support core business functions.

She sees that no longer oxlip, they have become the preferred vehicle companies to gain scalable capabilities and technology operations and transformation, which they can then liberty's towards good business with the word Katyn yourself D. C. C. Expertise, we are now seeing that experience and working to competitive advantage and real deal momentum.

Recently, we began partnering with a leading global cyber security software and services provider.

Tablets and skin global capability centers in both India and Mexico.

Hence they had existing India be spud course, while adding a near shore up to support core business function.

Ajay Khare: We are delivering purpose-built solutions that are allowing them to innovate efficiently and to pursue their digital transformation objectives. Consistent with our capabilities, we are working in partnership with this customer from setup to scale up, reflecting the full range of technology and operational capabilities that our teams possess. We look forward to a long partnership with this customer.

We are delivering purpose built solutions that are allowing them to innovate efficiently and to pursue their digital transformation objectives.

Consistent with that capabilities.

In partnership with this customer from set up to scale up the slack.

The full range of technology, and robotics capabilities that our teams predict.

We look forward to a long partnership with this customer.

Ajay Khare: We also signed a recent letter of intent with a leading global SaaS company in the sustainability and compliance space to establish AI-driven GCCs in India and Mexico. These centers will initially support core business functions with a roadmap to expand as the client scales. This engagement further demonstrates how our GCC model can align with long-term innovation and global growth strategies from day one.

Daniel: We also signed a recent letter of intent with a leading global SaaS company and the <unk>.

The inability in compliance piece to establish key age I think D C season in India and Mexico.

These centers will initially support core business function with a roadmap to expand as the claim skills.

Daniel: Engagement further demonstrate our D. C C models aligned with long term innovation and global growth strategy from day one.

Daniel: Building on our momentum financial year 2025, Mark the launch of a new AI centric global capability Center framework.

Ajay Khare: Building on our momentum, financial year 2025 marked the launch of our new AI-centered global capability center framework. and Aproo that integrates intelligent automation, generative AI agents, and data-driven DCM systems into GCCs that we build and operate. We are excited to bring this new generation of capabilities to our customers as they look to increase the speed of their value creation initiatives, which in turn helps them to successfully innovate, serve their customers, and do it in the most cost-effective and technically advanced way possible. We have already deployed this framework within a flagship healthcare portfolio company where we scaled a 300-plus member GCC within 15 months, which is starting to see meaningful business results.

And our approach.

Daniel: That integrates intelligent automation generic agents and data driven decisioning systems into G. She sees that we build and operate.

We're excited to bring this new generation of capabilities to our customers as they look to increase the speed of their value creation initiatives, which in turn helps them to successfully in a week. So they are customers and do it in the most cost effective and technically advanced way possible.

Daniel: We have already deployed the screen work within our flagship health care portfolio company that'd be scaled a 300 plus member D. C. C. Within 15 months were just starting to see meaningful business.

Ajay Khare: Our AI-centered GCC framework will serve as the operating system for the next-generation enterprises' transformations, and we will continue to build on early success by enhancing it further with more detailed, more domain-specific AI tools, predictive benchmarking, and enterprise-grade LLM integration.

Daniel: Yeah I Center do you see if they work with.

Daniel: The operating system for the next generation enterprises.

Transformation and we will continue to build at least access by enhancing its part of that with more details more domain specific ta students.

Daniel: Active benchmarking and enterprise grade.

Daniel: Sure.

Daniel Webb: With that, I will hand it over to Daniel to continue the discussion and walk you through the broader strategy and outcomes. Thanks, Ajay. Let me start with the consolidated financials. For FY 2025, we reported $70.2 million in total revenue compared to $72.5 million in FY 2024. The slight decline was anticipated and driven by our exit from the Middle East business. Excluding that impact, our North America revenue grew 15% year-over-year from $57 million to $65.5 million, demonstrating strong momentum in our core market. As Ajay mentioned, we had originally guided to $6 to $7 million in core adjustment EBITDA.

With that I'll list.

Daniel: I will hand, it over to Daniel to continue the discussion and walk you through the broader strategy and outlook.

Daniel: Thanks, Ajay, let me start with the consolidated financials for FY 2025, we reported $70 2 million in total revenue compared to $72 5 million in FY 'twenty train for the slight decline was anticipated and driven by our exit from the middle East business, excluding that impact our North America.

Daniel: Revenue grew 15% year over year from 57 million to $65 5 million demonstrating strong momentum in our core market.

Daniel: As I mentioned, we had originally guided to $6 million to $7 million in core adjusted EBITDA, We closed the year at 7.4 million exceeding our guidance and reaffirming the strength of our realigned business model our financials in fiscal 2025 reflects one time items that we don't expect to happen in 2026, the majority of our SG&A in 2020.

Daniel Webb: We closed the year at $7.4 million, exceeding our guidance and reaffirming the strength of our realigned business model. Our financials in fiscal 2025 reflect one-time items that we don't expect to happen in 2026. The majority of our SG&A in 2025 was from one-time items. The Middle East business has now been fully written off. Our restructuring is complete. Stock-based compensation is expected to be significantly lower.

Daniel: Five was from onetime items, the middle East business has now been fully written off our restructuring is complete stock based compensation is expected to be significantly lower we believe 2026 is on track to be our best year, yet let me now walk you through our full year financial performance full year FY 'twenty 25 total revenue.

Daniel Webb: We believe 2026 is on track to be our best year yet.

Daniel Webb: Let me now walk you through our full-year financial performance. Full-year FY 2025, total revenue $70.2 million. Gross profit $16.7 million, margin of 23.8%. Operating loss, negative $28.8 million. Adjusted EBITDA, negative $4.7 million. Core adjusted EBITDA, positive $7.4 million. Net loss, negative $21.6 million. These full-year results reflect the structural transition we've made, away from non-core and toward a more focused, scalable operating model. The core adjusted EBITDA reached $7.4 million, an increase of 365% over the $1.6 million reported in the previous year, and above the guidance we had provided. This outperformance marks a clear validation of that strategic shift.

Daniel: M 72 million gross profit $16 7 million a margin of 23, 8% operating loss negative 28, $28 8 million adjusted EBITDA negative $4 7 million core adjusted EBITDA positive seven 4 million net loss negative $21 6 million.

Daniel: These full year results reflect the structural transition we've made away from noncore and toward a more focused scalable operating model like our adjusted EBITDA reached $7 4 million, an increase of 365% over the $1 6 million reported in the previous year and above the guidance. We have provided this outperformance marks a clear validation of that.

Daniel: The strategic shift we ended the year with $2 8 million in cash and $1 1 million in long term debt, providing ample flexibility to support our ongoing initiatives as a final note. We previously shared the FY 'twenty 25 will be the last few report core adjusted EBITDA as a separate metric going forward, we will rely on adjusted EBITDA and.

Daniel Webb: We ended the year with $2.8 million in cash and $1.1 million in long-term debt, providing ample flexibility to support our ongoing initiatives.

Daniel Webb: As a final note, we previously shared that FY 2025 would be the last year to report core adjusted EBITDA as a separate metric. Going forward, we will rely on adjusted EBITDA and GAAP measures as more representative of our performance. Core Adjusted EBITDA was useful during our transition period, but with the non-core business behind us, it is no longer needed to explain underlying trends.

Daniel: GAAP measures is more representative of our performance core adjusted EBITDA was useful during a transition period, but with the noncore business behind us. It is no longer needed to explain underlying trends FY 'twenty 'twenty six outlook, we are reaffirming our guide reaffirming our guidance revenue of 74 point 74 million.

Daniel Webb: FY 2026 Outlook. We are reaffirming our guidance. Revenue, $74 million to $80 million. Adjusted EBITDA, $6 million to $8 million. These projections are based on our strength and focus on North American market, the maturation of our global capability center, GCC model, and the growing demand for digital transformation services among private equity backed companies.

Daniel: Dollars to $80 million adjusted EBITDA 6 million to 8 million. These projections are based on our strength and focus on North American market. The maturation of our global capability Center G. C C model.

And the growing demand for digital transformation services, among private equity backed companies.

Daniel Webb: We are confident in this outlook, and here's why. We're seeing strong traction with clients. Existing clients are deepening their partnerships. Our PE network is expanding, boosted by the addition of our Chief Growth Officer. Our cost structure is now lean and proven. AI-led transformation is gaining pace, and our modular agents are already active in client environments. with strong relationships, a validated delivery model, and growing interest from VE Portfolio Company.

Daniel: We are confident in this outlook and here's why we're seeing strong traction with clients.

Daniel: Existing clients are deepening their partnerships RPE network is expanding boosted by the addition of our chief growth Officer.

Daniel: Our cost structure is now lean and proven and led transformation is gaining pace and our modular agents are already active and client environments with strong relationships are validated delivery model and growing interest from P. E portfolio companies. We are excited to be entering FY, 'twenty 26, with clarity and confidence and moment.

Daniel Webb: We are excited to be entering FY 2026 with clarity, confidence, and momentum. Thank you for your continued support, and we look forward to delivering sustained value in the coming fiscal year.

Daniel:

Daniel: For your continued support and we look forward to delivering sustained value in the coming fiscal year.

Thank you ladies and gentlemen. This concludes today's conference call. You may disconnect. Your lines at this time. Thank you for your participation.

Operator: Thank you.

Operator: Ladies and gentlemen, this concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.