Aeries Technology (NASDAQ:AERT) Q1 2027 Earnings Call

0:00 Good morning, and welcome to Aeries Technology's earnings conference call for the quarter ended June thirtieth twenty twenty six q one fiscal 2027. Joining us today is Aeries chief executive officer, Ajay Khourre. The call will review the company's results for the quarter ended 06/30/2026, and discuss the strategic priorities shaping the next stage of its growth. 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.

0:42 Please refer to the company's filings with The U. S. Securities And Exchange Commission and today's earnings release for a full discussion of the risks and uncertainties associated with these statements. Additionally, today's call will include certain non GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are available in today's earnings release and on the company's website. With that, I will now turn the call over to Ajay Khare. Please go ahead. Thank you, Kevin. Good morning and thank you for joining our first quarter fiscal year twenty twenty seven earnings call. The quarter ended 06/30/2026 was a strong start to our fiscal twenty twenty seven and reflects the continued progress we have made in strengthening our operating model, improving profitability, and building a more scalable business.

1:42 The operating model we have built over the past year is now delivering results across the three dimensions that matter most, growth and profitability, positioning, and cash generation. These three themes define the quarter. First, we delivered strong financial performance. Revenue increased 43% year over year to $21,900,000 Income from operations increased to $3,400,000 from $800,000 in the prior year quarter. Net income increased 32% to 2,200,000 and operating cash flow increased to 4,800,000 from 1,400,000 in the prior year quarter.

2:30 These results demonstrate the operating leverage we have built into the business and our ability to translate growth into stronger profitability and cash generation. Second, we continued advancing how we position Aeries in the market. We help enterprises create value through AI transformation and manage operations. Clients increasingly engage us not only to operate business functions, but to help transform enterprise operations through AI, expanding both the scope of our engagement and the value we create. Third, we continued converting the performance into cash. We generated $4,800,000 of operating cash flow during the quarter, our sixth consecutive quarter of positive operating cash flow.

3:22 Our strong cash generation enabled us to strengthen the balance sheet, continue settling legacy obligations associated with our business combination transaction and related costs. We purchased more than 10% of our outstanding common share and complete previously announced one to eight share consolidation during the quarter. These results reflect the operating discipline we established throughout the fiscal twenty twenty six and demonstrate strong operating leverage, improved cash generation, and consistent execution across our operations in India and Mexico.

4:03 Strategic progress. During the quarter, client engagement continued to expand beyond managed operations to include AI transformation, enterprise operations, automation, and optimization initiatives. This reflect our continued evolution into AI transformation into client operations provider, expanding both the scope of client engagement and the value we deliver. Several engagements signed during fiscal twenty twenty six progressed into steady state operations during this quarter, contributing to the revenue growth and strengthening our long term client relationships across India and Mexico. AI and transformation. We believe AI transformation will become one of the most significant driver of enterprise value creation over the coming decade.

4:54 The market is moving from AI experimental experimentation to production, creating demand for partners that can help organizations move from strategy and pilots to enterprise wide deployment and ongoing operations. To address this opportunity, we recently launched AFAI, our agent AI solution offering, built around our forward deploy engineering model. Together with Aeries One, our AI native enterprise operations platform, we now provide an integrated capability, spending strategy, engineering deployment, and managed operations. This enables enterprises to access, build, deploy, and operate AI solution at scale while moving from AI experiment to patient to correction.

5:47 By combining AI innovation with managed operations, we help organizations create measurable business outcomes and long term value creation. That remains our objective, helping enterprises create value through AI transformation and many of operations. Moving back to financial highlights. For the quarter, revenue of 21,900,000 compared with 15,300,000 in the prior year quarter, an increase of 43%. The previously disclosed customer buyer contributed 2,900,000 to revenue and profitability during the quarter. Gross profit increased to 6,400,000 with gross margin improving to 29.2%.

6:36 SG and A expenses remained essentially flat at $3,000,000 despite strong revenue growth demonstrating the operating leverage in our business. Income from operations increased to $3,400,000 Net income of $2,200,000 representing an increase of 32% from 1.7 in the prior year quarter. Operating cash flow increased to $4,800,000 making our sixth consecutive quarter of positive operating cash flow. These results reinforce our confidence in the outlook for the remainder of fiscal twenty twenty seven. Outlook, looking ahead, we remain well positioned for the remainder of fiscal twenty twenty seven.

7:22 Our confidence in the business continues to be supported by multi year client engagements, expanding relationships with existing customers, and programs progressing into steady state operations. Accordingly, we are reaffirming our fiscal twenty twenty seven guidance of revenue between 80 to $84,000,000 and adjusted EBITDA between 10 to $12,000,000. Our priorities remain unchanged, disciplined execution, profitability growth, and continued margin improvements, strong cash generation, and expanding AI led client engagement through A X AI and Aeries One. We believe the operating discipline we have built over the past year, combined with our AI transformation strategy, positions Aeries well for long term growth and continued enterprise value creation.

8:20 Thank you for joining us today. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.