Aeries Technology, Inc. (AERT) FY2026 Earnings: Revenue $70M (-0.3%)
AERT — FY2026 Financial Report Analysis
Full Year · Fiscal year 2026 · Published by Pham Hop
Aeries Technology swung to a $4.5M operating profit on flat $70.0M revenue in FY2026 (year to March 2026) by stripping out SPAC-era overhead, with $6.8M operating cash flow but a going-concern warning and heavy client churn.
Revenue
$70M
-0.3% YoY
Net income
$2.6M
Diluted EPS
$0.05
Operating margin
6.5%
This period vs a year ago
Same period last year
This period
Revenue▼-0.3%
≈$70M
$70M
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
Overview
Aeries Technology (AERT) turned a $28.8 million operating loss into a $4.5 million operating profit in its fiscal year ended March 31, 2026 (FY2026), on revenue that did not grow at all: $70.0 million versus $70.2 million. Almost the entire swing came from overhead. Selling, general and administrative (SG&A) costs fell from $45.5 million to $12.8 million, mostly because FY2025 carried $12.7 million of stock-based pay, large receivable write-offs and bad-debt provisions, and deal-related professional fees from the company's 2023 listing through a SPAC (a "blank-check" shell company that merges with a private business to take it public).
What Aeries does: it sets up and runs Global Capability Centers (GCCs) for mid-sized, mostly private-equity-owned US companies. A GCC is an offshore or nearshore office, in Aeries' case in India and Mexico, staffed with engineers, IT, finance, HR and customer-service workers who do the client's own work at lower cost. Aeries hires the staff, puts them on its payroll, and handles premises, compliance and tax, so the client gets a dedicated team abroad without building the entity itself. The revenue is essentially billed labor, which is why the gross margin sits around 25%.
At a glance
$4.5 million operating profit vs. a $28.8 million loss: the turnaround came from cutting SG&A by $32.7 million, not from selling more; revenue was flat at $70.0 million.
$6.8 million of operating cash flow vs. $1.0 million used a year earlier: the profit is backed by cash, about twice reported net income.
Going-concern warning still in the filing: a $6.8 million working-capital deficit and a $4.3 million forward purchase agreement liability left over from the SPAC deal mean the auditors' and management's "substantial doubt" language remains.
FY2026 results
Metric
FY2026
FY2025
YoY Change
Revenue
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$70.0M
$70.2M
-0.3%
Gross margin
24.7%
23.8%
+0.9 pts
SG&A expenses
$12.8M
$45.5M
-71.9%
Operating income (loss)
$4.5M
$(28.8)M
n/m (loss to profit)
Operating margin
6.5%
(41.0)%
+47.4 pts
Net income (loss), consolidated
$3.5M
$(21.6)M
n/m
Net income (loss) to AERT shareholders
$2.6M
$(19.7)M
n/m
Diluted EPS (pre-consolidation)
$0.05
$(0.46)
n/m
Adjusted EBITDA (company measure)
$8.3M
$(4.7)M
n/m
Adjusted EBITDA margin
11.9%
(6.6)%
+18.5 pts
Operating cash flow
$6.8M
$(1.0)M
n/m
Top-5 clients' share of revenue
57%
57%
flat
Operating margin is the share of revenue left after running the business, before interest and tax. EPS is shown as reported in the 10-K, before the 1-for-8 share consolidation that took effect on June 11, 2026; on the post-consolidation share count the FY2026 figure is roughly $0.42.
Net income "to AERT shareholders" is lower than the consolidated figure because part of the operating subsidiary is still owned by pre-SPAC holders (noncontrolling interests), who were allocated $0.9 million of the profit.
Revenue: flat on the surface, heavy churn underneath
The flat top line hides a lot of movement. Per the MD&A, Aeries lost $20.2 million of revenue from "the ramp-down of existing client engagements and the completion or closure of certain consulting projects," and replaced it with $18.5 million from new clients and higher volumes at existing ones, plus $1.95 million of one-time buyout fees (payments a client makes when it ends a contract early). In other words, close to 29% of the prior year's revenue base walked away or wound down during the year.
Stripping out the buyout fees, recurring revenue was about $68.1 million, down roughly 3%.
By region:
Region
FY2026
FY2025
Change
North America
$62.9M
$65.5M
-4.0%
Asia Pacific and other
$7.1M
$4.7M
+51.5%
North America, which the company calls its core market, shrank. Growth came from the smaller Asia Pacific book, a region where the risk-factor section separately warns about collecting on receivables.
Margins: where the turnaround actually came from
Gross margin rose one point to 24.7%. Cost of revenue fell $0.76 million, driven by $0.98 million lower employee compensation and $0.85 million lower depreciation, consultant fees and insurance, partly offset by $1.07 million of higher rent and recruiting for new clients.
SG&A is the whole story. The MD&A itemizes the $32.7 million drop: $12.45 million less stock-based compensation, $7.62 million fewer receivable write-offs, $4.91 million lower professional fees, $4.26 million of higher credit-loss provisions in the prior year that did not recur, $1.69 million of software impairment in FY2025, $1.00 million lower employee benefits and $0.78 million lower rates, taxes and admin. Most of those FY2025 items were one-offs tied to the listing and a clean-up of bad receivables, so the comparison flatters FY2026.
SG&A came in at 18.3% of revenue, versus 64.8% the year before.
What the headline numbers hide
Cash conversion is good. Operating cash flow of $6.8 million was about 1.9 times consolidated net income of $3.5 million. After $1.1 million of equipment purchases, free cash flow was about $5.7 million. Cash rose from $2.8 million to $4.9 million even after $1.8 million of net short-term debt repayment.
One-off revenue helped. The $1.95 million of buyout fees equals about a quarter of the year's $8.3 million Adjusted EBITDA. Those fees exist only because clients left.
The adjusted-to-GAAP gap has narrowed a lot. Adjusted EBITDA adds back $0.3 million of stock pay (versus $12.7 million), $1.0 million of M&A costs (versus $7.0 million) and $0.7 million of severance, and removes a $0.2 million gain on the value of derivative liabilities. With add-backs this small, GAAP and adjusted results now tell broadly the same story. That was not true in FY2025.
SPAC instruments no longer drive the bottom line. In FY2025, revaluing the forward purchase agreement (FPA) and warrants added $5.3 million of non-cash income, plus a $0.6 million settlement gain. In FY2026 those lines netted to about +$0.2 million. (An FPA is a side deal struck at the SPAC merger: certain investors agreed not to cash out their shares in exchange for a later guaranteed payment from the company.) The FPA's cash cost still remains (see below).
Receivables: a mixed signal. Net receivables rose 16% to $12.7 million while revenue was flat. But the gross balance actually fell 3%, to $14.1 million. The net figure rose because the bad-debt allowance was cut from $3.6 million to $1.3 million, mostly by writing off $1.9 million of balances judged uncollectable. The allowance roll-forward also shows a $0.4 million release of provisions, which added to profit. Separately, $1.0 million of "other receivables" was written off below operating income.
The tax rate jumped. The effective tax rate was 36.4%, against a 4.7% tax benefit rate last year, because deferred tax benefits on losses in certain lower-tax jurisdictions were not recognized. That cost about $2 million of net income.
Buybacks while under a going-concern warning. Aeries spent $0.58 million repurchasing 1.71 million shares during the year and bought back another 2.58 million shares after year-end, even as it describes "substantial doubt" about its ability to continue and is paying the FPA holder monthly at 15% interest. The amounts are small, but capital allocation is worth watching.
Balance sheet and the going-concern warning
The 10-K keeps the going-concern language. At March 31, 2026, current liabilities of $30.7 million exceeded current assets of $23.9 million, a $6.8 million working-capital deficit. The main pressure points:
Obligation
Mar 31, 2026
Mar 31, 2025
Short-term borrowings (Kotak Mahindra revolver and others)
$4.4M
$6.5M
FPA put option liability
$4.3M
$5.0M
Long-term debt
$0.8M
$1.1M
Cash and equivalents
$4.9M
$2.8M
Under a January 2026 amendment with Sandia, the main remaining FPA holder, Aeries began making monthly cash payments in March 2026 on the outstanding amount, which accrues 15% annual interest. The other FPA holders sold their shares and have asked for cash. Management says it has enough cash for the next 12 months assuming the FPA liabilities don't require immediate cash settlement. It has an at-the-market equity program in place (no shares sold as of the 10-K date). Separately, Nasdaq notified the company on March 31, 2026 that it faced delisting for trading below the $1 minimum bid price. The 1-for-8 share consolidation on June 11, 2026 was the response.
Client concentration: the biggest operating risk
Aeries' five largest clients made up 57% of revenue, and three clients each exceeded 10% (16%, 12% and 11%). Two significant clients have given non-renewal notices:
one effective September 2025, costing about $4.0 million of annual revenue;
one received April 24, 2026 and effective June 30, 2026, costing about $5.7 million a year (with a roughly $2.7 million buyout payment).
Together that is about $9.7 million, or 14% of FY2026 revenue. The MD&A is candid about the structural reason: once Aeries has built and run a center, "it becomes more feasible and cost-efficient" for clients to take it in-house. Termination fees soften the exit but don't replace the revenue.
Takeaway: FY2026's swing to profit is real in cash terms, with $6.8 million of operating cash flow, but it came almost entirely from removing SPAC-era overhead and bad-debt charges, not from growth. Recurring revenue fell about 3%, and nearly 30% of the prior year's revenue base churned. The business model is to build offshore teams that clients can eventually take in-house, so the key question is whether new client wins can outrun that churn, while a going-concern warning and a 15%-interest FPA obligation limit room for error.
Outlook
Management guides FY2027 (April 2026 to March 2027) to $80-84 million of revenue (up 14-20%) and $10-12 million of Adjusted EBITDA. It reaffirmed that guidance with its June-quarter results on August 10, 2026. The first quarter of FY2027 reported revenue of $21.9 million (up 43%) and net income of $2.2 million. But the company notes that the $2.7 million buyout from the departing client was booked as revenue in that quarter. Without it, revenue was about $19.2 million, up roughly 25% on the prior year's $15.3 million, still a meaningful step up.
Our read: the guidance implies new business must more than replace the ~$9.7 million of annual revenue lost to the two non-renewals, and the first quarter suggests that's happening. Two things to watch next. First, whether quarterly revenue excluding buyout fees holds near $19-20 million once the departed client's revenue is fully gone after June 30. Second, whether cash generation is enough to pay down the FPA balance and short-term borrowings far enough to lift the going-concern language. Customer concentration means one more large non-renewal could undo much of the planned growth.