Table of Contents
Last quarter, Tanla closed with unproven platform bets, negative cash flow, and little market traction. This quarter, it posted sequential and YoY growth, record gross profit, and strong cash conversion while signalling a ₹50 Cr (~$6 M) EBITDA miss for FY26. The company displayed disciplined but incomplete execution, with impressive but uneven results.
The Good
Revenue rose 3.6% QoQ and 7.8% YoY to ₹10,785 Mn (~$121 M). Gross profit climbed 10% QoQ to ₹2,868 Mn (~$32 M), with margin expanding to 26.6%. EBITDA reached ₹1,775 Mn (~$20 M) at a 16.5% margin. Free cash flow of ₹1,645 Mn (~$19 M) equaled 132% of PAT, ending the quarter with ₹8,814 Mn (~$106 M) in cash.
Wisely.ai, Tanla’s AI-native platform, went live with Indosat in Indonesia, its first commercial launch, and now protects over 100 million users. The model is subscription based, tied to subscribers protected, and designed for replication across carriers.
Platform revenue rose 7.1% QoQ (~$12 M) while enterprise grew 3.3% (~$118 M). SMS pricing stabilized, OTT quality improved, and the ₹100–₹500 Mn ($1.2-$6M) customer cohort grew 36% QoQ. This mirrors a broader North American trend where midmarket customers are driving growth.
Days sales outstanding (DSO) improved to seventy-seven days from ninety-one days last quarter.
Tanla declared a ₹6 (~$0.07) interim dividend and completed a ₹1,794 Mn (~$21.6 M) buyback at ₹875 (~$10.50) per share, the second consecutive quarter of capital return despite modest revenue growth.
The Interesting
Gross margin rose 155 bps QoQ to 26.6%, helped by a near-100% platform margin and stable pricing in enterprise. Only 9% of revenue came from platforms, but at 99% gross margin, that alone lifted the group average by more than a point.
The Wisely.ai pattern is forming, but it’s early. Each new deployment can expand margin without equivalent cost, but scaling that model globally will test both pricing discipline and cost transparency.
WhatsApp, RCS, and Truecaller remain the core of Tanla’s omnichannel narrative, and the shift away from SMS flagged last quarter is accelerating.
Yet this new mix introduces a different form of dependency. Meta’s withdrawal of WhatsApp incentives this quarter directly hit margins, highlighting how much profitability now fluctuates on the policies of platform partners rather than customer behavior.
A year ago, Tanla was working through the ILD mess—a margin problem partly of its own making. It has since moved past that, but in doing so has entered a more complex game.
The company is no longer at the mercy of local carriers. But, it’s now exposed to the strategic priorities of global platforms like Meta and Google, who have far less hesitation about disintermediating their partners.
The Unknown
The gaming-sector collapse and loss of WhatsApp incentives are real headwinds that impact revenue and margins. On the call however, analysts were left parsing the tone rather than trajectory.
Some margins look too perfect. The 98.6% platform gross margin feels like paper-napkin math. Either Tanla’s carrier-hosted model genuinely incurs minimal delivery cost, or shared infrastructure sits under enterprise.
In SaaS, 98% usually signals early product-market fit at best, incomplete accounting at worst. If Wisely.ai is truly an AI platform, it will eventually face the transactional cost of inference, the base unit of AI.
Every AI operation consumes compute, and compute costs money. If those costs aren’t yet visible in COGS, usage may still be low or the cost allocation incomplete. The platform margin story therefore feels more like newborn growth than youthful efficiency.
Execution is a work in progress. Wisely.ai’s Indosat success now needs replication; the platform road map is credible, but its global rhythm is untested.
Finally
The platform business has enviable optics, but its cost structure and AI economics remain opaque. Cash flow rebounded, and product validation is real, yet questions about scalability and transparency persist. Tanla proved its plan is working but hasn’t yet shown predictability. The company has cash, direction, and a growing platform story, but it still has to prove that those numbers can hold at scale. It’s not a bad quarter. It’s an honest one—proof that growth alone doesn’t equal maturity.
And yes, it needs to fix its chaotic earnings Q&A. I’d expect more from a company that claims 35% of the Indian market.
Finally finally, to all those who celebrate, happy Diwali.