ETMarkets Management Talk| North America, AI adoption and recurring revenues to fuel Newgen’s next leg of growth: Tarun Nadwani
In this edition of ETMarkets Management Talk, Tarun Nadwani, CEO of Newgen Software, discusses how AI-led enterprise transformation, a robust deal pipeline in North America, and the growing share of recurring revenues are expected to power the company’s next phase of growth.
He also shares insights on the strong momentum in SaaS adoption, the evolution of the NewgenONE platform, global expansion plans, and why enterprises are increasingly seeking unified AI platforms over standalone solutions. Edited Excerpts –
Q) Thank you for taking the time out. Please take us through the June quarter numbers.
A) We have started FY27 on a strong note. Delivering 11% year-on-year revenue growth in what has traditionally been our most seasonal quarter reflects the strength of our business, healthy execution, and the growing demand for AI-led enterprise transformation. We also maintained healthy profitability while continuing to invest in innovation and global expansion.
What is particularly encouraging is the shift in customer priorities. Enterprises are moving beyond automating individual processes and are looking to embed AI across core business operations to improve productivity, decision-making, customer experience, and operational resilience. They are increasingly looking for a unified platform that can orchestrate AI across workflows, enterprise content, communications, and business applications.
That is where NewgenONE is differentiated. Our intelligent enterprise platform brings together AI, process automation, enterprise content management, customer communications, business rules, and API-driven integration to help organizations modernize and scale with confidence.
We saw strong traction across both our horizontal offerings and industry solutions, particularly in lending, customer onboarding, trade finance, insurance, and enterprise content management. Combined with a healthy global pipeline, this gives us confidence in our growth outlook for the rest of FY27.
Q) Revenue grew 11% YoY while PAT increased 26%. What were the key factors behind the margin expansion, and is this level of profitability sustainable through FY27?
A) The improvement in profitability reflects the strength of our operating model and disciplined execution. As an IP-led platform company, we continue to benefit from a healthy mix of cloud, subscription, license, and support revenues, which provides operating leverage as the business scales.
Customers are increasingly adopting NewgenONE as their platform for enterprise-wide transformation. With AI embedded across the platform, organizations can intelligently orchestrate workflows, enterprise content, customer communications, and business decisions from a single unified architecture.
This enables them to modernize operations faster, improve productivity, and unlock greater value from their technology investments, while allowing us to build deeper, long-term customer relationships.
While Q1 margins are typically lower because of the seasonality of our business, our focus remains on delivering sustainable annual operating margins of over 20%.
We will continue to invest in AI innovation, product development, global expansion, and customer success because we believe enterprises will increasingly invest in platforms where AI is built into the fabric of business operations rather than added as a standalone capability.
Our objective is not to maximize short-term profitability, but to build an intelligent enterprise platform that delivers sustainable value for our customers and long-term growth for our shareholders.
Q) SaaS and subscription revenues grew 40% YoY, significantly ahead of overall revenue growth. How do you see the revenue mix evolving over the next three to five years?
A) The strong growth in SaaS and subscription revenues reflects a structural shift in enterprise buying preferences. Customers increasingly prefer cloud-native, subscription-based platforms that provide continuous innovation, faster access to new AI capabilities, and greater flexibility to scale.
Today, annuity revenues account for a significant share of our business, and we expect subscription revenues to continue growing faster than the overall business, particularly across mature markets such as North America and Europe.
More importantly, enterprises are consolidating their technology landscape. Instead of investing in multiple point solutions, they are looking for a unified platform that can bring together AI, workflows, enterprise content, customer communications, and integrations. That is where NewgenONE is well positioned.
Our strategy will continue to be balanced across cloud, subscription, license, and support revenues, giving customers the flexibility to adopt our platform in the way that best aligns with their business and regulatory requirements, while positioning us for sustained, predictable growth.
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Q) AI has become central to your messaging. Can you explain how AI is translating into incremental revenues rather than just product enhancements?
A) AI is creating value because enterprises are now looking beyond productivity gains and focusing on business transformation. They want AI that is embedded into core business processes, understands enterprise context, and delivers measurable outcomes while operating within a secure and governed environment.
This is where Newgen is differentiated. With NewgenONE, we are not simply adding AI features to our products. We are enabling organizations to orchestrate AI across workflows, enterprise content, customer communications, business rules, and core systems. This allows enterprises to automate complex processes, improve decision-making, accelerate customer journeys, and increase operational efficiency.
As a result, AI is driving larger transformation programs, accelerating platform modernization, and creating opportunities to expand within existing customer accounts as well as win new business. We are seeing strong demand across industries such as banking, insurance, government, healthcare, and shared services, where AI is becoming an integral part of enterprise operations.
We believe the long-term opportunity lies in helping organizations operationalize AI at scale. Enterprises will increasingly invest in platforms that can seamlessly integrate AI into their business architecture, and that is the opportunity NewgenONE is well positioned to address.
Q) You secured several large deals across Kuwait, the Philippines, the UK and India during the quarter. Is the overall deal pipeline stronger than it was a year ago?
A) Yes, we are seeing a stronger and more diversified pipeline than a year ago, both in terms of geographies and the nature of opportunities. Enterprises are increasingly undertaking organization-wide modernization initiatives where AI, automation, content, and customer engagement need to work together on a unified platform.
The demand is particularly strong across banking, insurance, government, healthcare, and shared services, where organizations are looking to improve operational efficiency, strengthen compliance, and deliver better customer experiences. AI is becoming a key driver of these transformation programs, but customers are looking for AI that is integrated into business processes rather than deployed as a standalone capability.
This aligns well with Newgen’s platform strategy. NewgenONE enables organizations to orchestrate AI across enterprise workflows, content, communications, and core systems, helping them modernize at scale while ensuring governance and security.
While deal cycles for large enterprise programs continue to be rigorous, the quality of our pipeline and the increasing strategic relevance of our platform give us confidence in our growth outlook for the coming quarters.
Q) America delivered the fastest growth at 27% YoY. What is driving this momentum, and do you expect the region to remain your fastest-growing geography?
A) The Americas continue to be a strategic growth market for us. The momentum is being driven by enterprises accelerating legacy modernization, cloud adoption, and AI-led transformation.
Organizations are looking beyond standalone AI use cases and investing in platforms that can embed intelligence into core business operations while ensuring governance, security, and scalability. We are also seeing a growing preference for subscription-led engagements, which aligns well with our platform strategy.
This is where NewgenONE is well positioned. With AI embedded across the platform, NewgenONE orchestrates workflows, enterprise content, customer communications, business rules, and integrations through a unified architecture. It enables enterprises to modernize mission-critical operations, improve decision-making, and deliver better customer experiences, without adding complexity to their technology landscape.
We continue to invest in expanding our presence, strengthening our partner ecosystem, and deepening relationships with large enterprises across the region. While we remain optimistic about opportunities across India, the Middle East, Europe, and APAC, we believe the Americas will continue to be a key growth engine, supported by a robust pipeline and increasing demand for intelligent enterprise platforms that can operationalize AI at scale.
Q) Despite global macro uncertainties, enterprise technology spending has remained resilient. What trends are you seeing from customers over the next 12–18 months?
A) The biggest shift we are seeing is that enterprises are moving from isolated AI experiments to enterprise-wide adoption. The focus is no longer on implementing AI for its own sake, but on delivering measurable business outcomes such as faster decision-making, improved customer experience, greater operational efficiency, and stronger compliance.
Customers are also looking to simplify their technology landscape. Rather than managing multiple point solutions, they want integrated platforms that can bring together AI, automation, enterprise content, customer communications, and business processes within a secure and governed environment.
This is particularly evident across regulated industries such as banking, insurance, government, and healthcare, where AI must operate with transparency, governance, and enterprise context.
We believe the next phase of enterprise transformation will be defined by how effectively organizations operationalize AI across their business. Platforms that can orchestrate intelligence across people, processes, content, and systems will create the greatest long-term value, and that is where NewgenONE is uniquely positioned.
Q) Newgen’s stock has been a strong price performer in the past quarter. What will be the next phase of value creation for shareholders?
A) Our focus has always been on creating long-term, sustainable value rather than optimizing for short-term market performance. We believe the next phase of value creation will be driven by three priorities: continued AI-led innovation, expansion of our global enterprise business, and increasing recurring revenues.
Enterprises are at the beginning of a significant technology transition, where AI is becoming integral to business operations. Newgen is well positioned to capitalize on this shift through NewgenONE, our intelligent enterprise platform that brings together AI, process automation, enterprise content, customer communications, and integration capabilities in a unified architecture.
This positions us to participate in larger transformation programs and deepen relationships with existing customers while expanding into new markets.
We will continue to invest in product innovation, industry-specific solutions, strategic partnerships, and global market expansion to strengthen our competitive position. Equally important, we remain committed to disciplined execution and building a business that delivers predictable, profitable growth.
The recent leadership transition represents continuity of strategy and execution. Our vision remains clear: to help enterprises become AI-enabled, intelligent, and future-ready, while creating sustainable long-term value for our customers, employees, and shareholders.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
