Fractal Analytics reported a strong financial performance in Q2 FY27, with consolidated net income increasing 139% year-on-year (YoY) to ₹79.2 crore, compared with ₹33.2 crore in the corresponding quarter of the previous financial year.
The company’s revenue from operations grew 20% YoY to ₹956.5 crore, compared with ₹798.5 crore in Q2 FY26.
According to the company’s investor presentation dated November 3, 2026, Fractal Q2 FY27 marked the company’s first-ever quarter with revenue exceeding $100 million.
The company also reported improvements in adjusted EBITDA, operating EBIT and earnings per share during the quarter.
Fractal Q2 FY27: Revenue and Profitability Performance
Fractal Analytics reported revenue from operations of ₹9,565 million in Q2 FY27, registering 20% YoY growth. Revenue growth stood at 10% on a constant currency (CC) basis.
The company’s gross profit increased 14% YoY to ₹4,205 million from ₹3,690 million in Q2 FY26. However, gross profit margin declined by 225 basis points to 44%, compared with 46.2% in the corresponding quarter last year.
Fractal Q2 FY27 adjusted EBITDA increased 30% YoY to ₹1,549 million, against ₹1,195 million in Q2 FY26. The adjusted EBITDA margin improved by 123 basis points to 16.2%, compared with 15% in the year-ago quarter.
The company attributed the improvement in adjusted EBITDA margin to operating leverage, while the short-term impact on gross margin was driven by investments in AI engineering talent.
Operating EBIT increased 62% YoY to ₹1,029 million in Q2 FY27, compared with ₹634 million in Q2 FY26. The operating EBIT margin improved by 281 basis points to 10.8%, against 7.9% in the corresponding quarter of the previous financial year.
Net income increased 139% YoY to ₹792 million, compared with ₹332 million in Q2 FY26. The net income margin improved to 8.3% from 4.2%, representing an expansion of 413 basis points.
Excluding the share of loss of associates, Fractal’s net income stood at ₹1,024 million, with a margin of 10.7% in Q2 FY27.
Fractal Q2 FY27: Earnings Per Share Increases 119%
Fractal Analytics reported basic earnings per share (EPS) of ₹4.71 in Q2 FY27, registering 119% YoY growth compared with ₹2.15 in Q2 FY26.
Diluted EPS increased 132% YoY to ₹4.48 during the quarter.
Basic EPS excluding associates stood at ₹6.06, while diluted EPS excluding associates was ₹5.76.
The company also reported revenue per billable full-time employee (FTE) of ₹7.5 million, registering 2% YoY growth based on trailing twelve-month data.
Fractal Q2 FY27: AI Revenue and Client Retention
Fractal Analytics continued to report growth in its existing client relationships during Q2 FY27.
The company’s Fractal.ai segment recorded a net revenue retention (NRR) of 115% in Q2 FY27.
The NRR metric measures the company’s ability to retain and expand revenue from existing clients through upselling, cross-selling and other changes in client spending.
The company also reported a Net Promoter Score (NPS) of 76 for its Fractal.ai segment during the quarter, reflecting client satisfaction and willingness to recommend its services.
Fractal continued to expand its relationships with large clients.
The number of clients contributing more than $1 million in annual revenue increased to 58 in the trailing twelve months ended September 2026, compared with 52 in the corresponding period last year.
The number of clients contributing more than $5 million increased to 20 from 17, while clients contributing more than $10 million increased to eight from seven.
Similarly, the number of clients contributing more than $20 million in annual revenue increased to six from four.
Fractal Q2 FY27: Industry-Wise Revenue Performance
Fractal Analytics reported revenue growth across most industries during Q2 FY27, with healthcare and life sciences recording the highest growth among its major business verticals.
Consumer packaged goods and retail (CPGR) accounted for 34.7% of the company’s revenue during the quarter, while healthcare and life sciences (HLS) contributed 25.1%.
Technology, media and telecom (TMT) accounted for 17.9% of revenue, while banking, financial services and insurance (BFSI) contributed 13.6%. Other industries, comprising largely energy, travel and industrials, accounted for 8.7%.
In terms of YoY growth:
- Consumer packaged goods and retail revenue increased 11%.
- Healthcare and life sciences revenue grew 79%.
- Technology, media and telecom revenue declined 18%.
- Banking, financial services and insurance revenue increased 30%.
- Other industries recorded growth of 47%.
Overall, Fractal’s revenue increased 20% YoY during the quarter.
Fractal Q2 FY27: Geographic Revenue Distribution
The Americas continued to be Fractal’s largest geographical market, accounting for 67.3% of revenue in Q2 FY27.
Europe contributed 21.5% of revenue, while Asia-Pacific (APAC) and other markets accounted for 11.2%.
Revenue from the Americas increased 22% YoY, while Europe recorded growth of 20%. Revenue from APAC and other markets increased 7%.
The geographical revenue distribution is based on client billing locations.
Fractal Products Report 39% Revenue Growth
Fractal’s products business continued to expand during Q2 FY27, reporting revenue from operations of ₹383 million, an increase of 39% YoY.
The company said its products business had achieved an annual run rate of more than ₹150 crore.
During the quarter, the company added eight clients to its products business. The segment contributed 4% of Fractal Group’s revenue.
The company’s product portfolio includes Cogentiq, an agentic AI platform that helps enterprises build and deploy AI agents to automate workflows, improve decision-making and drive business outcomes.
The platform also includes an agentic AI solution for revenue growth management (RGM), which helps consumer goods companies improve revenue and profitability through pricing, promotion and demand-related decisions.
Fractal also offers an enterprise AI and data science training platform designed to help companies build workforce capabilities through customised learning programmes and hands-on training.
The company’s remaining performance obligation (RPO) stood at more than ₹200 crore. RPO represents the total value of contracted future revenue that has not yet been recognised because the contracted goods or services have not been delivered.
Fractal Strengthens AI Partnerships With Anthropic, OpenAI and Google Cloud
Fractal continued to strengthen its partnerships with leading technology companies to accelerate enterprise AI adoption.
The company is an Anthropic Preferred Services Partner under the Claude Partner Network and an OpenAI Advanced Partner.
It also holds Premier Partner status with Google Cloud, Premier Tier Services Partner status with AWS and Solutions Partner status with Microsoft.
Fractal reported 44 joint engagements on a trailing twelve-month basis as of September 2026.
The company also highlighted approximately 2,000 certifications across seven partner programmes as of September 30, 2026.
During Q2 FY27, the company highlighted several collaborative deal wins, including:
- A major US retailer engagement involving AI-led testing and experimentation capabilities.
- A major US healthcare provider engagement focused on AI-powered FHIR claims modernisation.
- A global insurer engagement involving a production enterprise data platform for policy and premium data.
- An Australian natural gas producer engagement focused on agentic business transformation.
- A global consumer goods company engagement focused on maximising cloud value through FinOps.
- A US healthcare services and distribution company engagement involving contract concierge analytics.
Fractal Highlights AI Implementation Across Industries
The company’s investor presentation also highlighted three case studies demonstrating the application of AI in enterprise operations.
AI insight-to-concept platform for a global MedTech company
Fractal developed an AI insight-to-concept platform for a global MedTech company to accelerate the process of converting consumer research into product concepts.
Previously, the process of turning consumer research into a product concept suitable for testing took between two and six months.
The AI-powered platform helped reduce the process to approximately 30 minutes. It generated more than 170 product concepts and was used by over 400 users.
The project highlighted projected savings of €6 million.
AI policy review for a global insurance broker
In another case study, Fractal demonstrated an AI-powered policy review solution for a global insurance broker.
The earlier process of checking every renewed insurance policy against the previous year’s policy took approximately 60 days when handled by an external vendor.
The AI-powered solution reduced the review time to approximately 20 minutes per policy at a cost of around $3 per review, compared with the previous cost of $20-$30.
The solution also generated change reports and audit trails for every renewal.
AI promotion planning for a global coffee company
Fractal also highlighted an AI-based promotion planning solution developed for a global coffee company.
The company’s earlier promotional budget was distributed across weekly discounts that generated limited profits.
The AI-powered solution helped optimise promotional calendars by evaluating promotion elasticity, cannibalisation and channel-specific performance.
The project indicated a potential $4 million increase in gross profit from the same promotional budget, while maintaining or increasing sales volumes.
Fractal Q2 FY27: Cash Flow and Balance Sheet Position
Fractal Analytics reported cash and cash equivalents of ₹17,277 million as of September 2026.
This included ₹6,078 million in IPO proceeds, net of offer expenses. The company’s cash position included investments in mutual funds and fixed deposits.
Cash flow from operations stood at ₹793 million during Q2 FY27, while the trailing twelve-month cash flow from operations was ₹4,067 million.
The company’s days sales outstanding (DSO) stood at 76 days in Q2 FY27, compared with 71 days in Q2 FY26.
Fractal reported that its cash flow from operations represented 62% of adjusted EBITDA on a trailing twelve-month basis.
The company also reported zero long-term debt, following the complete repayment of its long-term debt using IPO proceeds in April 2026.
According to the company, its balance sheet position provides the flexibility to fund early-stage investments, accelerate deal timelines and pursue larger strategic acquisitions.
Fractal Q2 FY27: AI Research and Development Investments
Fractal continued to invest in artificial intelligence research and development to strengthen its enterprise AI capabilities.
AI R&D investments accounted for 6.3% of revenue in Q2 FY27. Research and development operating expenses stood at 4.1% of revenue.
The company reported that it was investing in AI engineering talent, which had a short-term impact on its gross margin during the quarter.
For H1 FY27, AI R&D investments accounted for 6.5% of revenue, while R&D operating expenses represented 4.3% of revenue.
Fractal Q2 FY27: H1 FY27 Financial Performance
For the first six months of FY27, Fractal Analytics reported revenue from operations of ₹18,690 million, registering 20% YoY growth compared with ₹15,590 million in H1 FY26.
Gross profit increased 17% YoY to ₹8,375 million from ₹7,144 million. However, gross profit margin declined 101 basis points to 44.8%, compared with 45.8% in H1 FY26.
Adjusted EBITDA increased 32% YoY to ₹3,086 million from ₹2,332 million. Adjusted EBITDA margin expanded 155 basis points to 16.5%, compared with 15% in the corresponding period last year.
Operating EBIT increased 51% YoY to ₹2,060 million from ₹1,361 million. Its margin improved by 229 basis points to 11%, compared with 8.7% in H1 FY26.
Net income increased 114% YoY to ₹1,515 million, compared with ₹709 million in H1 FY26. Net income margin expanded 356 basis points to 8.1%, compared with 4.5% in the corresponding period last year.
Excluding the share of loss of associates, net income stood at ₹1,981 million, with a margin of 10.6%.
Basic EPS increased 98% YoY to ₹9.03, while diluted EPS grew 110% to ₹8.57.
Revenue per billable FTE stood at ₹7.5 million, registering 2% YoY growth.
Fractal H1 FY27: Industry and Geographic Performance
Fractal reported revenue growth across most of its major industry verticals during H1 FY27.
Consumer packaged goods and retail accounted for 36.5% of revenue, followed by healthcare and life sciences at 24.1%.
Technology, media and telecom contributed 17.8%, while banking, financial services and insurance accounted for 13.2%. Other industries contributed 8.4%.
The year-on-year growth across industries was as follows:
- Consumer packaged goods and retail: 14%.
- Healthcare and life sciences: 75%.
- Technology, media and telecom: Decline of 20%.
- Banking, financial services and insurance: 32%.
- Other industries: 52%.
Geographically, the Americas accounted for 67.3% of revenue, followed by Europe at 21.4% and APAC and other markets at 11.3%.
Revenue from the Americas increased 23% YoY, while Europe recorded 22% growth. APAC and other markets reported growth of 2%.
Fractal’s Growth Strategy and Future Priorities
Fractal’s growth strategy focuses on helping large enterprises transform their businesses through AI, expanding its AI product portfolio and strengthening relationships with leading technology companies.
The company has identified clients with annual revenue exceeding $10 billion, market capitalisation above $20 billion or more than 30 million end consumers as its Must Win Clients (MWCs).
Its strategy includes helping CXOs reimagine business workflows and processes with AI, assisting CIOs and Chief AI Officers in building enterprise context and knowledge layers, and supporting workforce redesign and upskilling.
Fractal is also focusing on building AI foundations and agentic systems as default solution architectures.
The company plans to accelerate client success through Cogentiq and other reusable assets, commercialise functional and industry-specific AI products, and demonstrate advanced AI capabilities through PiEvolve, Vaidya and the IndiaAI Mission.
It also intends to strengthen partnerships with frontier AI companies, hyperscalers, cloud and data platforms, and enterprise software providers.
Fractal’s Acquisition Strategy and Capital Allocation
Fractal plans to complement its organic growth and expand its capabilities through acquisitions.
Its acquisition strategy focuses on expanding AI and engineering expertise, increasing industry-specific capabilities, adding new technologies and identifying potential growth synergies.
The company has outlined acquisition principles covering origination, integration, process optimisation and client centricity.
Fractal’s cash and cash equivalents of ₹17,277 million, zero long-term debt and cash flow conversion of 62% of adjusted EBITDA provide financial flexibility to fund future growth initiatives, according to the investor presentation.
