Sonata Software Reports 4.4% Revenue Growth in International Services and 16.7% Increase in Domestic Business Contribution

Sonata
Image Courtesy: Sonata Software

Sonata Software (NSE: SONATSOFTW, BSE: 532221) announced its unaudited financial results for the quarter ending December 31, 2024. In a statement, Samir Dhir, Managing Director & CEO, highlighted the 4.4% quarter-over-quarter (QoQ) growth in the company’s international business. Despite a slight decline in EBITDA due to one-time costs, Sonata secured two major deals, including a multi-million-dollar contract in Microsoft Fabric and Gen AI modernization. Mr Dhir expressed optimism about the company’s long-term vision and future growth prospects.

Sujit Mohanty, Managing Director & CEO of Sonata Information Technology, spoke about the strong performance in the domestic market, which saw substantial growth, particularly from new corporate clients and the defense sector. The company successfully renewed its large contracts for Software and Hyperscaler business and also expanded its Security Business with existing customers.

Sonata’s International IT Services posted revenues of ₹731.7 crore for Q3’25, reflecting a 3.4% QoQ growth. In USD terms, the revenue stood at $87 million, with a 2.8% increase compared to the previous quarter and a 3.9% growth year-on-year. However, EBITDA before other income and foreign exchange impact fell by 16.9% to ₹107.1 crore, and the company’s profit after tax (PAT) decreased by 8.4% to ₹56.9 crore. The company added 11 new customers during the quarter, and Days Sales Outstanding (DSO) increased slightly to 47 days from 45 days in Q2’25.

In the Domestic Products & Services segment, Sonata achieved a gross contribution of ₹81.9 crore, representing a 16.7% QoQ growth. EBITDA also saw a solid increase of 16.6%, reaching ₹56.4 crore, while PAT grew by 8.5% to ₹48.1 crore. The company achieved a return on capital employed (ROCE) of 48.5%, up from 45.2% in Q2’25, and a return on net worth (RONW) of 47.7%, compared to 44.6% in the prior quarter.

On a consolidated basis, Sonata reported an EBITDA of ₹163.6 crore for Q3’25, a 7.8% decrease from the previous quarter. PAT stood at ₹105 crore, reflecting a 1.4% decline QoQ. The company’s net cash and cash equivalents amounted to approximately ₹176 crore. Sonata’s business model remains focused on leveraging modernization engineering services, including cloud, data, Dynamics, and advanced technologies such as Generative AI and Microsoft Fabric. Sonata’s approach continues to provide clients with the agility and innovation needed to meet market demands.

Sonata Software’s international and domestic businesses serve key regions such as the US, UK, Europe, APAC, and ANZ. The company works with leaders across various industries, including telecom, media, retail, BFSI, and healthcare, offering a suite of services designed to drive modernization and digital transformation.

In today’s market, technology adoption reflects a unique duality. On one hand, businesses are intensely focused on cost containment, while on the other, they are highly motivated to modernize their digital storefronts to enhance customer engagement and drive B2B growth. This balance between financial prudence and digital transformation is shaping the competitive landscape, pushing companies to adopt innovative solutions that optimize efficiency without compromising modernization efforts.

As a leading Modernization Engineering company, we are committed to driving hypergrowth for our clients through our differentiated approach to modernization. Powered by our Lightning suite and 16-step Platformation™ playbook, we enable seamless digital transformation, ensuring agility and system-wide efficiency to accelerate time to market. Our expertise spans across Cloud, Data, Dynamics, Contact Centers, and emerging technologies such as Generative AI and MS Fabric, providing end-to-end modernization solutions.

Headquartered in Bengaluru, India, Sonata has a strong global footprint, serving clients across the US, UK, Europe, APAC, and ANZ. We are a trusted partner to industry leaders in BFSI (Banking, Financial Services, and Insurance), HLS (Healthcare and Life Sciences), TMT (Telecom, Media, and Technology), Retail & CPG, and Manufacturing. With a sharp focus on modernization and cutting-edge technology, we help businesses navigate digital transformation and unlock new growth opportunities.