1. Opening Hook
After years of selling text messages, Route Mobile seems to have found a new message for itself — less “Send All,” more “Profit First.” The company’s Q2 FY26 call had all the drama of a startup realizing it’s middle-aged: a pivot from volume to value, a breakup with promotional SMS, and a love affair with APIs and WhatsApp.CEO Rajdip Gupta called it “disciplined execution.” We call it “finally reading Twilio’s playbook.” Stick around — there’s talk of telco firewalls, AI flirtations, and even Microsoft popping up as a new friend.
2. At a Glance
- Revenue ₹1,119 crore:Up 6.5% QoQ — finally a pulse, not just pings.
- Gross Margin 22.1%:100 bps better; pricing discipline beats free texting.
- EBITDA ₹133 crore:Up 16% QoQ — someone found the profit switch.
- EBITDA Margin 11.9%:Back in double digits — no filters needed.
- PAT dented by write-offs:Vendor advances gone rogue — Route learned accounting the hard way.
- Cash balance ₹1,000+ crore:Still single, still not spending — CFO clutching his wallet tighter than WhatsApp’s encryption.
3. Management’s Key Commentary
“We chose profitable growth over volume.”(Translation: SMS spamming doesn’t pay like it used to.)
“Our partnerships are opening new geographies.”(Translation: We finally stopped calling it ‘synergy’ and started billing for it.)😏
“Network API is the structural opportunity for the industry.”(Every tech firm says this right before discovering how complex APIs really are.)
“One-time exceptional items impacted PAT.”(In plain English: we lent money to people we shouldn’t have.)
“Proximus partnership is delivering synergies.”(And thankfully, not charging us a ‘synergy fee.’)
“New products grew 13% sequentially.”(Turns out WhatsApp and RCS can actually pay the bills.)
“BPO expansion planned — adding 1,000 new seats.”(Because if SMS slows, call centers might save the conversation.)
4. Numbers Decoded
| Metric (₹ mn) | Q2 FY26 | Q1 FY26 | YoY Change | Commentary |
|---|---|---|---|---|
| Revenue from Ops | 11,194 | 10,512 | +0.5% YoY, +6.5% QoQ | Growth finally unmuted. |
| Gross Profit | 2,471 | 2,250 | +5.2% YoY | Margins on the mend — less cheap SMS. |
| Gross Margin % | 22.1% | 21.4% | +70 bps QoQ | Profit over promo volume. |
| Adjusted EBITDA | 1,333 | 1,150 | +0.7% YoY, +15.5% QoQ | A solid “route” to recovery. |
| EBITDA Margin % | 11.9% | 11.0% | +90 bps QoQ | CFO finally smiled. |
| PBT (before exceptionals) | 1,379 | 770 | +80% QoQ | Accounting therapy worked. |
| Cash & Cash Equivalents | 10,000+ | 10,000+ | Steady | War chest still unused — maybe saving for AI. |
Quick take:Topline crawls, margins sprint, and cash hoards sit still.
5. Analyst Questions
Q:How big is SMS risk if people stop using it?A:“85% of our traffic is transactional.”(Translation: Banks and OTPs still love us.)
Q:Any write-offs left?A:“We’ve taken the prudent view.”(Corporate-speak for ‘we cleaned the mess, mostly.’)
Q:Why did ARPU fall?A:“Mix shift toward domestic.”(Cheap messages, not cheap excuses.)
Q:What’s the WhatsApp opportunity?A:“Could be 25–30% of revenue in 3 years.”(Or 3%, if enterprises stay stingy.)
Q:Any competition from Airtel’s CPaaS?A:“We treat them as just another competitor.”(That’s confidence… or coping.)
6. Guidance & Outlook
Management stopped short of giving a number, but every hint screamed cautious optimism. H2 FY26 will ride seasonal traffic — Christmas, e-commerce, and spam that “isn’t promotional.”New products (WhatsApp, RCS, email) already up 13% QoQ; Telco firewalls and
