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Key Conference Call Highlights

Segment Performance

* BFSI: This vertical is the standout performer, growing 24.3% YoY in Q4. It has an annualised run rate of USD 600 Mn and serves 4 out of the top 5 banks in the US and India. Demand is focussed on core modernisation, payments (e.g., FedNow), and digital assets.

* HLS: This segment grew 14.1% YoY in Q4. Key drivers include AI-driven drug discovery and clinical data unification.

* Software, Hi-Tech, and Emerging Verticals: This group expanded 11.2% YoY in Q4. The management noted a landmark USD 50 Mn+ TCV deal with a global industrial technology leader to shift from hardware-centric to softwareled platforms.

Geographical Performance

* North America: Growth was broad-based across international markets, though North America remains the primary revenue driver. Revenue grew 17.4% YoY in Q4 and 17.2% for the full year.

* Europe: For the full year, Europe was a high-growth geography at 26.7% YoY, despite a 12.3% YoY growth in Q4. The management plans to "double down" on this region despite some sequential "puts and takes".

* India: Grew 4.2% YoY in Q4 and 9.5% for the full year. The Q4 growth included an aberration where a tech customer's renewal was classified as India revenue because it was billed in INR.

* ROW: Grew 41.4% YoY in Q4 on a smaller base.

Margin Trajectory

* Margin Performance: Persistent achieved a structural improvement in profitability, with the Q4 EBIT margin reaching 16.3%, a 70 bps increase YoY. FY26 EBIT margin was 15.6%, up 90 bps from the previous year.

* Q4 Tailwinds & Headwinds: Margin benefited from the absence of one-time wage code cost (220 bps), operational efficiency (40 bps), and favorable currency (60 bps). These were partially offset by corporate development consulting (60 bps) and increased sub-contractor and travel cost (70 bps).

Outlook & Guidance

* Revenue Target: The company is steadily marching towards a USD 2 Bn annual run rate (approximately USD 500 Mn per quarter) by the exit of FY27E.

* Strategy: The company aspires to move margins into the 16% to 17% range but prioritises reinvesting in growth and AI capabilities over immediate expansion.

* Order Book: TCV for the year reached USD 1.8 Bn. Q4 TCV was USD 600.8 Mn.

* Future Growth: For FY27E, the management expects the pecking order of growth to be led by HLS and BFSI, followed by the Tech sector.

AI Initiatives

* Three Pillars: The strategy is built on engineering hyperproductivity (software lifecycle), business hyperproductivity (workflow automation) and enterprise data readiness (foundation for AI).

* Core Platforms: Key intellectual property includes SASVA (AI-led engineering), iAURA (data management/lineage) and GenAI Hub.

* Innovation: The company has filed over 120 patents related to AI and has trained over 1,700 leaders and architects through internal AI Huddles.

* Agentic AI: Persistent has developed a portfolio of over 500 AI agents. Notable projects include a biopharma molecular simulation system coinnovated with NVIDIA and a merchant risk solution with Databricks.

* Partnerships: Strategic alliances have been expanded with Anthropic, OpenAI, NVIDIA, Microsoft, Google and Snowflake.

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