Capillary Technologies Q1 FY27 Results: AI-Driven Growth, Strong Revenue Momentum, and Strategic Expansion

BY ADMIN • FILED 04 Aug 2026, 4:58 PM

Capillary Technologies Delivers Strong Q1 FY27 Performance

Capillary Technologies has announced an impressive start to FY27, reporting robust revenue growth, significant improvement in profitability, continued innovation in Artificial Intelligence (AI), and successful integration of strategic acquisitions. The company continues to strengthen its position as one of the world’s leading AI-powered customer loyalty and engagement platforms.

Company Overview

Capillary Technologies is a global SaaS company providing AI-powered cloud-based loyalty and customer engagement solutions to enterprise businesses worldwide.

Business Highlights

Operations across 53 countries
465+ global brands
25 Fortune 500 customers
Platform serving over 2.7 billion consumers
19 global offices
Approximately 750+ employees
Industry-leading 99.997% platform uptime

The company’s products are delivered through long-term subscription contracts, providing highly recurring revenue.

Industry Recognition

Capillary was recognized as a Leader in the Forrester Wave™ Loyalty Platforms Q4 2025 report.

Some notable achievements include:

Highest scores in Current Offering and Strategy
Perfect 5/5 score in 22 of 27 evaluation criteria
Strong recognition for AI capabilities
Excellent customer feedback
Leadership in loyalty program flexibility and AI-powered insights

This recognition validates Capillary’s growing leadership in the global loyalty technology market.

Complete Product Ecosystem

Capillary offers an integrated customer engagement platform consisting of multiple products.

Loyalty+

Helps enterprises build and manage customer loyalty programs.

Engage+

Provides personalized customer communication across channels.

Insights+

Offers advanced analytics and automated reports.

Rewards+

Delivers access to a large global rewards marketplace.

AI Platform (aiRA)

The AI assistant enables marketers to:

Analyze customer behavior
Generate insights
Build campaigns
Automate marketing decisions

The platform integrates customer data from POS systems, e-commerce, mobile apps, social media, search behavior, and third-party data into a unified customer view.

Growth Strategy

Capillary highlighted three major growth engines.

1. Net Revenue Retention (NRR)

Organic NRR reached 111%, indicating that existing customers continue expanding their spending through:

Increased platform usage
Product upgrades
Cross-selling
Geographic expansion
Addition of new business units

2. New Customer Wins

The company continues winning larger global enterprise deals.

Highlights include:

Strong Fortune 500 customer acquisition
75% YoY growth in New ACV (excluding one exceptional healthcare deal)

3. Strategic Acquisitions

Recent acquisitions include:

SessionM
Kognitiv

These acquisitions significantly strengthen Capillary’s presence in North America, Latin America, and Asia-Pacific while expanding industry coverage.

Profitability Drivers

Capillary outlined three important profitability levers.

Higher Margin Expansion

Additional revenue from existing customers generates better gross margins.

Operating Leverage

Nearly 60% of operating expenses are fixed or semi-fixed, allowing profits to grow faster than revenue.

Acquisition Synergies

Migrating acquired customers to Capillary’s platform increases gross margins significantly and improves long-term cash generation.

AI Strategy: System of Record → Intelligence → Action

Capillary introduced its AI framework built around three layers.

System of Record (SOR)

The core loyalty platform managing customer and transaction data.

System of Intelligence (SOI)

System of Action (SOA)

AI agents automatically create personalized campaigns, offers, notifications, and customer experiences.

This strategy enables marketers to move from data analysis to AI-driven execution within a single platform.

Meet aiRA

The company’s AI assistant supports the complete marketer lifecycle.

It helps businesses:

Understand customers
Analyze business performance
Make marketing decisions
Launch campaigns
Learn from campaign outcomes
Continuously optimize engagement

Capillary positions aiRA as an end-to-end marketing intelligence system rather than just another chatbot.

Experience+ Platform

Capillary has introduced Experience+, developed through the CustomerGlu technology acquisition.

Key capabilities include:

Gamified customer engagement
Interactive digital experiences
Reduced IT dependency
Real-time campaign creation
Faster customer engagement

This strengthens Capillary’s AI-first marketing platform strategy.

Q1 FY27 Financial Highlights

Revenue from Operations

₹2,566.4 million

Up 43% YoY

Adjusted EBITDA

₹440.2 million

Up 132% YoY

Reported PAT

Loss of ₹95.5 million

However, this includes:

₹333.9 million exceptional cyber fraud loss
₹16.1 million one-time deferred tax expense

Normalized PAT

Excluding exceptional items:

₹254.4 million
10% profit margin

These numbers indicate strong underlying profitability despite one-time charges.

SessionM Acquisition Update

Capillary completed the acquisition of SessionM on 1 May 2026.

Early progress includes:

Customer contracts tracking toward a planned US$32 million ARR
Platform migration progressing as planned
Break-even profitability expected within the first year
Efficient acquisition cost with attractive payback potential

Revenue Growth

Revenue increased by 43% YoY, driven by:

Organic customer expansion
Higher subscription revenue
Strong customer retention
Contributions from acquisitions

Adjusted EBITDA more than doubled as operating leverage improved significantly.

Annual Recurring Revenue (ARR)

ARR reached:

₹10,266 million

representing:

43% annual growth

The increase came from:

SessionM acquisition
Strong NRR
New enterprise customer wins

Subscription Revenue Strength

Subscription revenue now accounts for:

94.5% of total revenue

Subscription revenue grew:

50% YoY

This demonstrates the strength of Capillary’s recurring SaaS business model.

Cyber Fraud Incident

One of the most significant disclosures during the quarter involved a cyber fraud incident affecting Capillary’s Czech subsidiary.

Key facts:

Social engineering attack impersonating senior executives
Unauthorized transfers totaling ₹333.9 million
Funds sent to Hong Kong and Singapore accounts
Approximately ₹47 million frozen during recovery efforts
Criminal proceedings initiated
Independent forensic investigation by KPMG
Insurance claim under review

Management stated that this was treated as a one-time exceptional loss.

Customer Retention (NRR)

Capillary reported:

Organic NRR: 111%
Overall NRR: 113%
Inorganic NRR: 120%

These figures indicate strong expansion within the existing customer base while acquired customers continue migrating to the Capillary platform.

Employee Growth

Employee strength reached:

761 employees

Growth priorities include:

AI engineering
Research & Development
Enterprise sales
Migration specialists

Most of the increase resulted from the SessionM acquisition.

Financial Metrics

Despite the reported quarterly loss due to the exceptional expense:

ROCE improved
ROIC improved
CROIC strengthened
Capital employed remained stable

These metrics indicate improving operational efficiency once one-time items are excluded.

Customer Migration Progress

Capillary continues integrating customers from previous acquisitions.