Workmates Core2Cloud (WORKMATES) Q2 FY27 Profit Jumps 32% as Recurring Revenue Hits 87%
The cloud services provider posted a 27.5% rise in H1 FY27 revenue, with profit growth outpacing sales as its business model shifts decisively toward recurring contracts.
Workmates Core2Cloud reported a 32.4% jump in H1 FY27 profit, driven by a 43% surge in recurring revenue. Management raised its full-year revenue outlook, though cash flow turned negative as receivables grew.
For a cloud services firm like Workmates Core2Cloud, the shift from one-off projects to predictable, repeating income is the ultimate test of stability. Its latest half-year shows that transition accelerating, with recurring revenue now forming the overwhelming core of its business, driving profit growth ahead of sales.
The numbers tell a story of top-line strength and improving profitability. Consolidated revenue for H1 FY27 (April-September 2026) grew 27.5% year-on-year to ₹95.21 crore. Profit after tax rose even faster, climbing 32.4% to ₹12.03 crore. This pushed the net profit margin to 12.6%, a 60 basis point improvement from the same period last year.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentSep 2026 (H1 FY27) | PreviousMar 2026 (H2 FY26) |
|---|---|---|
| Revenue (₹ Cr) | 95.0 | 69.0 |
| Profit (₹ Cr) | 12.0 | 7.0 |
| Net Profit Margin (%) | 12.6 | 10.1 |
The Recurring Engine Revs Up
The standout driver was a 43.4% surge in recurring revenue to ₹82.97 crore, according to a Multibagg.ai report. Its share of total revenue jumped to 87% from 77% a year ago. This annuity-like growth, primarily from expansion within existing clients, provided a stable base that allowed profit to outpace revenue.
Operating leverage played a key role, as controlled employee costs and the absence of finance costs after becoming debt-free helped margins. However, the Stockwatch.live analysis noted that cost of cloud services grew slightly faster than revenue, preventing broader margin expansion.
A Raised Outlook and a Cash Flow Catch
Buoyed by this performance, management raised its FY27 revenue outlook to ₹202 crore from ₹190.56 crore, as reported by Multibagg.ai. The new target assumes ₹107 crore in second-half revenue, with ₹95.4 crore already contracted from recurring streams.
Yet, the growth came with a working capital trade-off. Operating cash flow turned negative ₹4.70 crore as trade receivables swelled to ₹39.50 crore. Management has identified improving collections as a priority for the coming half.
The Pipeline for What's Next
Visibility for the remainder of the year appears strong. The company holds a weighted pipeline of ₹110 crore for H2 FY27, as per Multibagg.ai, including cloud migration and cybersecurity opportunities. Two orders announced after the half-year close—an ₹11.5 crore migration deal and a multi-million dollar AWS contract—will contribute to this future conversion.
Key Points
- Recurring revenue soared 43.4% year-on-year and now constitutes 87% of total revenue, providing a stable foundation for growth.
- Profit growth of 32.4% outpaced revenue growth of 27.5%, reflecting operating leverage from a debt-free balance sheet and controlled costs.
- Management raised its FY27 revenue outlook to ₹202 crore, with nearly 90% of the second-half target underpinned by contracted recurring revenue.
- Strong top-line growth was accompanied by a negative operating cash flow of ₹4.70 crore, highlighting a focus area in collections for the coming months.
Hexa Perspective
The quarter solidifies Workmates' transition toward a high-recurrence model, which should dampen earnings volatility. The raised guidance is credible, anchored by contracted revenue, but its delivery hinges on converting a visible pipeline while managing receivables.
The margin story is nuanced. Profitability improved, but pressure from cloud service costs—a pass-through expense—limits upside. The company's premium valuation, at a P/E of 34.8 against an industry average of 19.0, prices in its growth trajectory and assumes successful execution on both conversion and collections in the second half.
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