Amagi Media Labs Q2 FY27 Earnings Call: PAT Jumps 30x YoY, Reiterates 20%+ Constant Currency Growth

Amagi Media Labs Ltd held its Q2 FY27 earnings call on November 05, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Quarter with a Margin and PAT Inflection

• Revenue of Rs.476 crores, up 27% YoY — 33% excluding a one-time rev-rec timing benefit in the Q2 FY 2025-2026 base (constant currency +15% / +21% ex-base); the base drag on reported growth was ~614 bps vs ~600 bps estimated.
• Adjusted EBITDA more than doubled to Rs.89 crores — 18.7% margin, up 7.6 pts YoY; PAT of Rs.75 crores at a 14.9% margin (+14.3 pts) was ~30x the year-ago quarter and exceeds all of FY 2025-2026 full-year PAT.
• H1 FY 2026-2027 revenue of Rs.913 crores (+30% reported, +34% ex-base) — adjusted EBITDA of Rs.139 crores at 15.3% margin (+7 pts), already ~90% of FY 2025-2026 full-year adjusted EBITDA.
• Q2 margin was inflated by north of 200 bps — timing factors, delayed hiring and reserve releases put the underlying margin at ~16.5%; management expects FY 2026-2027 full-year margin to stay close to that range as it reinvests part of the operating leverage.
• Gross margin of 68.1% (Rs.324 crores) — down 1.6 pts YoY entirely on the base effect, up 0.8 pts QoQ, flat YoY ex-base; within the stable 67-69% band committed since IPO.
• Revenue up 1.7x over two years — from Rs.278 crores in Q2 FY25 to Rs.476 crores in Q2 FY 2026-2027, ~100% organic; mix stable at cloud modernization ~20%, streaming unification 55%, monetization & marketplace 25%.

Broad-Based Wins; Concentration Steady, Mid-Term Flagged as Critical

• 503 customers, 22 net adds in H1 FY 2026-2027 — trailing-12-month net retention of 125% as of Q2 FY 2026-2027, driven primarily from expansion; customers above $1 million rose to 15 at the midpoint of FY 2026-2027 from 11 a year earlier.
• Top-10 concentration at ~40% — 41% of revenue in Q2 FY 2026-2027; CFO Vijay said the bucket has hovered around 39-40% and he expects it to remain in that range (period unspecified), calling it a healthy balance for a B2B business.
• Top-10 spend potential of $50+ million a year — some top-10 customers already spend tens of millions of dollars annually (period unspecified); the CFO flagged the mid-tier (customers 11 to 100) as a critical growth area.
• Marquee Q2 wins — one of the largest US cable local news networks moved ~60 regional feeds across 30+ markets to Amagi; a leading Middle East entertainment network replaced on-prem playout across 15 channels; South Korea's KT Group expanded FAST and vertical video channels; Scripps (60+ local stations) expanded into Thunderstorm ad tech and AdsPlus; NDTV adopted Amagi's ad flow product.
• Flywheel metrics accelerated — content processed crossed 1 million hours (+43% YoY), channel deliveries ~10,800 (+29%), distribution reach up 24% to 477, ad impressions +65% to 16 billion; Amagi sits between 400+ brands and 470+ platforms, connecting 80+ advertisers via Amagi Connect and AdsPlus.
• Segment growth diverged on the base — cloud modernization +9% reported / ~+36% ex-base (the entire base effect skewed to this segment), streaming unification +35% (volume-led), monetization & marketplace +28% with monetized impressions +65%.

From Plan to Product — But the Alpha Read Is Still "Thin"

• 4 AI products launched in Q2 FY 2026-2027 — Amagi Studio (cloud live production), Fan Pulse (sports vertical content), an integrated localization platform (captions/subtitles/dubbing), and an agentic NOC on the Intella platform; NewsPulse went live in production at a major US network. Management cautioned that moving new products through the paying/scaling gates will take more than one quarter.
• Management sizes its TAM at $17 billion — across cloud modernization, streaming unification and the monetization marketplace; AI "could nearly double that over time" — stated as a directional view, not a forecast (period unspecified). Management also cited $2-4 of human toil for every $1 of customer technology spend as the cost-side AI opportunity.
• AI is "definitely not a headwind" — management called it a "pretty large tailwind" if it plays out as anticipated, citing two consecutive quarters of sequential gross margin improvement and no AI-related deflationary losses or downsells at the top of the funnel; the AI alpha to the base case is to be framed from Q3 FY 2026-2027 onward.
• Agentic media operations dogfooded internally — across 10,700+ channels, with a design partner (one of Amagi's top 10 customers) engaged to build a next-generation agentic NOC platform.
• Pricing for new products (NewsPulse, Fan Pulse) is early-stage — currently output-based (not yet outcome-based), moving directionally toward consumption-based pricing with a fixed minimum guarantee plus a variable, volume-linked component; CFO Vijay said it is too early to size incremental revenue, with "meaningful alphas" possible if adoption fructifies.
• Talent transformation underway — senior hires target specialized GTM overlay roles, customer success (hunting vs. farming), and a product & engineering AI skill-set refresh; CEO Baskar Subramanian noted AI-first leadership and next-level talent remain hard to source. The GTM and central investments are already largely lapped in the run rate.
• Recognition — IDC MarketScape named Amagi a leader in its 2026 worldwide assessment of AI-driven media; NewsPulse won TV Tech Best of Show at IBC and best use of agentic AI at the CSA Awards; the LA Play customer event drew 700+ attendees, 41% of them senior leaders.

Structural Flow-Through with One-Time Tailwinds to Strip Out

• Incremental flow-through of 47% — Rs.47 of every Rs.100 of incremental revenue reached adjusted EBITDA in Q2 FY 2026-2027; management said north of 40% is a decent number to pencil in for FY 2026-2027, with a good chunk of the flow-through structural and not significantly currency-influenced.
• Opex leverage was pronounced — indirect opex fell from 58.6% to 49.3% of revenue; ESOP down to 5.3% of revenue from 12% in Q2 FY 2025-2026 — ~200 bps of underlying leverage even excluding the IPO-grant base benefit; Q2 revenue +27% vs indirect costs +7%.
• Cash conversion elevated at ~151% of adjusted EBITDA in Q2 — collections-driven; H1 FY 2026-2027 conversion of 67% is above the 50-60% FY 2026-2027 aspiration. Working-capital absorption fell from Rs.145 crores to Rs.14 crores; operating cash flow swung from a Rs.98 crore outflow to a Rs.94 crore inflow; FCF of Rs.85 crores on capex of just Rs.9 crores.
• Q3 FY 2026-2027 margins expected to be elevated — management cited the structural US advertising peak backed by the midterm elections plus recurring cloud savings (~$228,000 of monthly run-rate savings generated in Q2 FY 2026-2027, part reinvested).
• Currency sensitivity is modest — Amagi is long US dollars; a ~10% swing in the dollar results in ~1.5 pts of EBITDA margin impact, which the CFO called small in the flow-through context.
• First priority for the Rs.1,774 crores cash balance is reinvestment — with M&A optionality where it adds capability; management will be "disciplined on fit and on price and patient in between." One-time items: Rs.103 crores pre-IPO ESOP/SAR buyback in H1 FY 2025-2026; ~Rs.25 crores IPO-related payments in H1 FY 2026-2027 (final lap).

20%+ CC Base Case Intact; Deals in Early Diligence

• 20%+ constant currency revenue growth base case reiterated — guidance originally given at listing and discussed for the medium term (FY28 and beyond); CFO Vijay said the "base layer remains unchanged" and management expects a very strong Q3 FY 2026-2027.
• Investments are limited by conviction, not financial profile — in response to Abhishek Bansal's question on whether growth could move beyond the 20% guidance (period unspecified) toward 25% (period unspecified), CEO Baskar Subramanian said the company is not artificially constraining growth and would come back to the street if a high-conviction case for higher investment emerges in coming quarters.
• New products are being seeded that could add the next $10 million, $50 million, or $100 million in revenue — per CFO Vijay, the "big bets" are already embedded in the run rate, but the alpha over the medium term is hard to predict (period unspecified).
• M&A areas of interest: video supply chain, video distribution, live sports production — CFO Vijay listed evaluation tenets of strategic fit, P&L attractiveness, management autonomy, synergies, integration feasibility and the right price; the corporate development function is "shopping" targets at exploratory to preliminary diligence stages, with nothing material to call out for Q2 FY 2026-2027.
• R&D running in the early-20s% of sales — management guided 20% of sales as a reasonable steady-state base case (period unspecified); no expenses are capitalized — the P&L is fully loaded.
• Board strengthening proposed — Dr. Bhaskar Ghosh (most recently Chief Strategy and Innovation Officer at Accenture) as an independent director and co-founder/CTO Sri Vidya Srinivasan as a director; both appointments subject to shareholder approval.

Clean H2 Compare, Blurring Verticals, Healthy CPMs

• H2 FY 2026-2027 cloud modernization compare is clean ("BAU to BAU") — the ~900 bps YoY H1 headwind reflected a customer's accounting timing benefit isolated to H1 of FY 2025-2026; the CFO does not expect a meaningful tailwind from a reversal, and the customer's steady-state run-rate/amortization component remains in the base. Gross margins normalize from Q3 FY 2026-2027 as the base effect laps.
• Vertical delineation will blur over time — CEO Baskar Subramanian said customers are building "one unified media operating environment" entering via either route ("left pocket, right pocket"); modernization decisions are driven by hardware amortization cycles, economics and reliability requirements. Amagi has begun internally tracking a consolidated metric, with external visibility expected in a couple of years.
• New products are not yet driving cloud modernization growth — the "bread and butter" is migrating customer workforces/production to the cloud; new-format products "haven't even manifested" in reported numbers yet, though the CEO cited early green shoots of customers moving to the cloud to accelerate AI workflows (pace of acceleration uncertain).
• Structural tailwinds favor cloud modernization — vertical shorts on TV and vertical formats across sports and news cannot be done in a data center; legacy broadcasters already on the platform show higher propensity to adopt social formats. Amagi is building a "full tool set" for short-form social and committed to continued investment (no timeline specified).
• CPMs expected to remain healthy over the mid-to-long term — management reiterated that 42.5% of all TV ads have moved to connected television (cited Q2 FY 2026-2024 basis per the call: Q2 FY 2026-2027); the CFO noted medium-term stabilization, not decline — the earlier price correction from supply overlap (Primes and Netflix chasing the same inventory) is behind us, with short-term CPMs stabilized, if not starting to rise.
• Gross margin architecture restructured — Amagi deliberately moved from insertion-based to impression-based economics to stop gross margin leakage; cloud costs now scale with revenue monetization, so gross margin should hold in a "stable zip code" with seasonal upside (e.g., elevated CPMs around the recent US midterm elections) while capping the downside.