Black Box Q2 FY27 Earnings Call: Backlog Hits Record $1.04 Bn, Targets Upper End of Revenue Guidance (BBOX)

Record Revenue, PAT Up 31% YoY

• Rs.1,936 Cr Q2 FY27 revenue — highest-ever quarterly revenue, up 22% YoY and 13% QoQ; H1 FY27 revenue of Rs.3,655 Cr grew 23% YoY.
• Rs.175 Cr Q2 FY27 EBITDA — up 23% YoY and 10% QoQ at a 9% margin; H1 FY27 EBITDA of Rs.335 Cr (9.2% margin) grew 29% YoY.
• Rs.73 Cr Q2 FY27 PAT — up 31% YoY; H1 FY27 PAT of Rs.129 Cr grew 16% YoY, trailing revenue growth.
• Rs.115 Cr H1 FY27 operating cash flow — analyst Nandan Arekal (JM Financial) cited OCF-to-EBITDA of ~36% in both 1H FY27 and 1H FY26; CFO Deepak Bansal said large-project customers' 60-day terms extend first payments to 90-105 days, delaying cash conversion, with improvement expected by exiting Q4 FY 2026-2027 (no specific ratio given).

Backlog at Record $1.04 bn; H2 Bookings Must Accelerate

• ~$1.04 bn order backlog as of Sep 2026 — up 88% YoY from $555 mn in Sep 2025, a record per CEO Sanjeev Verma; Q2 FY27 bookings were $298 mn and H1 FY27 bookings $637 mn.
• H2 FY 2026-2027 bookings must be significantly higher — Verma targeted $1.3-1.5 bn of FY27 bookings vs ~$600 mn booked in H1, with H2 pipeline cited at $700-900 mn and organic H2 bookings "closer to $1 billion."
• ~18 months average backlog tenure — CFO Bansal expects it to rise to 20-22 months and reach 24 months within the next year (around FY 2027-2028); he said it will not reach 36 months, the maximum contract duration. Tenure is counted from execution start, not signing.
• Q2 bookings of ~$300 mn vs ~$200 mn revenue — per the CFO, bookings exceeded burn, lifting the order book by ~$100 mn; much of the backlog has already started execution, with some Q2 bookings still in mobilization.
• Project-led wins give 24-36 months revenue visibility — backlog includes a growing share of multi-year engagements.

Data Center Mix Rising Toward ~30% of FY27 Revenue

• Data centers contributed 20% of Q2 FY27 revenue — vs ~17% in FY26; management expects the contribution to rise to ~30% in FY27.
• $250 mn+ data center bookings in H1 FY27 — after ~$630 mn of data center bookings in Q1 FY27; management expects H2 FY27 data center booking to be "much better" to reach guidance closer to $1.5 bn of total bookings.
• $131 mn hyperscaler win (Q1 FY27) in mobilization — expected to move into the revenue cycle, with adjacent work to follow; management expects hyperscaler revenue to flow through in H2 FY27, improving cost absorption and operating leverage.
• Industry context cited by the CEO — the four largest hyperscalers are expected to "collectively invest approximately 725 to 750 billion in 2026", and the US is expected to add more than 100 gigawatt of capacity over the next few years; Gartner expects global IT spending to exceed $7 trillion for the first time in 2027, including ~$1.36 trillion in data center spending.
• US political shifts raised by analysts — Verma said the backlog up for execution is not slowing, many locations are seeing uptake and speed-up, and hyperscaler customers have raised capex at each earnings cycle; he cited Meta's move into compute (Meta is a large Black Box customer) and a Google–Blackstone partnership as evidence AI infrastructure is a structural shift, while noting he cannot speak for broader outcomes.

9% Now, 10% Targeted in Q4 FY27

• 10% EBITDA margin targeted in Q4 FY27 — up from ~9% currently; CFO Bansal said organic margins should be between 10% and 12% through FY28 to FY30, but the company will not forecast above 10% for FY 2026-2027 until it achieves that level.
• Hyperscale work is margin accretive to the 10% goal — gross margin of 20-25% (averaging ~22-23%) depending on work type; at scale gross margin may be slightly lower but G&A is better amortized. Material is largely out of scope on large data center orders (customer procures directly), with supplies at ~2-4% of value.
• Contract mix supports blended margins — fixed price, T&M (audit/assessment work, highly accretive) and cost plus (greenfield partnerships); enterprise partner material from Cisco and Juniper carries lower margin spread but a consistent blend.
• ~300 employees hired in the last two months — predominantly in the US for hyperscaler projects; another 700-800 expected over the next 6-9 months (Q1-Q2 FY 2027-2028), with ~700 hires targeted by end of FY 2026-2027 (~100/month over the next four months). H2 FY27 hiring will exceed H1.
• Not visa dependent — Verma said H1B, L and green-card regime changes will not impact growth or hiring plans for FY 2026-2027; the company plans ~3,000 professionals by FY30, primarily in the US.
• ~35 countries of presence — recently expanded in LATAM via acquisition, growing in Europe, with India as center of excellence and key focus.

Upper End of FY27 Revenue; 15-20%+ Organic Growth in FY28

• Targeting the upper end of FY27 revenue guidance — Verma said the company is targeting the higher end of the Rs.7,800-8,000 Cr FY 2026-2027 guidance and remains confident of achieving FY27 guidance, with improved momentum and operating leverage expected in H2 FY27.
• Exit backlog of $1.3-1.4 bn expected for FY 2027-2028 — which Verma said gives headroom for organic growth of 15-20% or more in FY 2027-2028; FY28 bookings are expected to be better than FY27, with hyperscaler demand at equal or more than current levels and enterprise uptick from airports, banking centers and healthcare.
• Combined organic + inorganic goal of $2 bn by fiscal 30 (FY 2029-2030) — Verma said accretive, capital-efficient acquisitions are being pursued to push growth toward 25-30%.
• Net margin convergence seen as a good assumption — analyst Bajrang Bafna (Sunidhi Securities) suggested ~10% operating margin converging to ~6-6.5% net margins over the next 2-3 years; Verma agreed, citing ~20-23% revenue growth over the next 2-2.5 years with broadly flat depreciation and interest; Bansal said 6-6.5% PAT margin "looks feasible," noting interest costs could rise modestly if debt funds inorganic deals.

$600-700 mn Acquisition Pipeline; H2 FY27 "Could Be Momentous"

• $600-700 mn acquisition goal reiterated — Verma said the company still expects to reach this target (targeting acquisitive assets of "6, 700 million dollar" over the next 3 years); an analyst noted one acquisition of ~Rs.500 Cr to date and ~$600-650 mn of remaining capacity.
• H2 FY 2026-2027 "could be momentous" for acquisitions — Verma said a deal could close in H2 FY27 though it cannot be named yet, and the company will not acquire for the sake of acquiring.
• Lower-margin acquired assets baked into guidance — assets at e.g. 6-7% margins are included in the 10% FY27 guidance, with the aim to lift them over time; Bansal said an FY29 acquisition made for lower margins and transformation opportunity could have some margin impact depending on size.
• Acquisitions could move margins either way — Bansal said organic margins would be well above 10%, while acquisition timing, size and further investment required will determine the consolidated outcome.