Sonata Software, a well-known mid-tier IT services provider headquartered in Bengaluru, has made generating AI revenue a primary goal. During the company’s Q4 FY25 earnings call, CEO Samir Dhir said that 20% of total revenue should come from AI-led services in the next three years. To make money from AI, Sonata has trained 97% of its staff in generative AI and is actively looking for opportunities within its $65 million AI pipeline.
Can Sonata Maintain Growth Amid Global Market Volatility?
In Q4 of FY25, Sonata Software’s revenue increased by 19.4% year over year to ₹2,617.2 crore. However, a volatile global market and postponed client decisions were the main causes of the 2.56% drop in net profit.
Sonata’s quarterly revenue dropped 4% sequentially to ₹702.3 crore. However, the international IT services division reported a 5.6% year-on-year increase in revenue, reaching ₹2,829.7 crore. In dollar terms, Q4 revenue declined 6.6% sequentially to $81.3 million. Nevertheless, the company’s FY25 revenue increased 3.7% year over year to $335.5 million.
Sonata continued to expand its clientele despite these ups and downs, gaining 14 new customers in Q4. Its domestic business saw a 23.4% YoY surge in revenue, totaling ₹7,340.6 crore, although Q4 experienced a 9.1% drop. The company’s strong gross contribution for the year reflected its strong performance across diverse sectors.
How AI Revenue Boosts Sonata’s Competitive Edge?
Sonata Software has effectively positioned itself as a key player in the AI revenue space. Its AI-led services are now a core component of every deal, particularly in sectors like technology, media, and telecom (TMT). “We’re being recognized increasingly as an AI-first company,” said CEO Samir Dhir. He emphasizes how AI revenue has become a differentiating factor in securing large contracts. AI-driven solutions are playing an essential role in client engagements, particularly in customer support.
CFO Jagannathan Chakravarthi further emphasized that the company’s AI pipeline has grown from $60 million to $65 million in Q2FY25. Sonata has closed nine smaller-to-medium-sized AI-driven deals this quarter, but big AI-based deals are still in their infancy. As customers become more familiar with AI’s benefits, the company expects this trend to continue, boosting its AI revenue.
AI Revenue to Power Sonata’s Future Success
Sonata is actively investing in AI solutions to meet growing customer demand. The company’s AI investments are still influencing how it will grow in the future. To support AI projects, the company is concentrating on lateral hiring and intends to hire 650 new campus recruits in FY26.
Sonata observes encouraging momentum in industries like healthcare, BFSI, and TMT that are exhibiting signs of recovery, even though decisions are impacted by global economic uncertainties. As the market continues to adopt AI-driven solutions, the AI pipeline is expected to further support the company’s revenue streams. Despite not offering specific guidance for FY26, the company’s $1.5 billion revenue target is still intact.
Is Sonata Poised for AI Revenue Domination?
Sonata Software’s commitment to AI revenue is a key differentiator among mid-tier IT firms. An AI-trained workforce, a rapidly expanding AI pipeline, and significant investments in AI technologies are all helping the company position itself for long-term success. Given its ongoing focus on AI-led services, AI revenue will play a significant role in the company’s future strategy.
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