IRIS - IRIS Business

📊 NSE: IRIS 🏢 Computers - Software - Medium / Small 📅 Last Updated: 12/14/2025 8:26

💰 Financial Performance

Revenue Growth by Segment

The company reported a 23% YoY revenue growth in FY2025, supported by a 4-year CAGR of 22%. Within segments, IRIS CARBON (RegTech) saw its Annual Recurring Revenue (ARR) grow by 14% in H1 FY2026 compared to March 2025. The SupTech segment provided a significant revenue boost, while the TaxTech business was divested for INR 151.2 Cr to refocus on core segments.

Geographic Revenue Split

IRIS has a global footprint spanning 55+ countries and 30+ regulators. Key regions include India (GST, RBI, SEBI, MCA), USA (SEC mandates), Qatar (General Tax Authority), South Africa (CIPC, SARB), and Southeast Asia (Thailand, Malaysia, Philippines, Singapore). Specific percentage splits per region were not disclosed.

Profitability Margins

Operating margins for Q2 FY2026 were reported at 8%, representing a sharp downtick from previous periods. This decline is attributed to aggressive investments in sales, marketing, and product development for the SaaS business, where the company aims to spend significantly to build ARR, noting a global benchmark of $1.5 to $2 in S&M for every $1 of net new ARR.

EBITDA Margin

Core profitability is currently impacted by the transition to a SaaS model; while specific EBITDA % for the full year was not explicitly stated, the company reported a 'healthy' increase in cash accrual generation and expects profitability to lift once SaaS scale crosses threshold levels.

Capital Expenditure

The company maintains a comfortable capital structure with a gearing of 0.1 times as of March 31, 2025. It raised INR 20 Cr through preference shares and warrants in July 2024 and holds INR 95 Cr in fixed deposits (non-current assets) to fund organic growth and potential prudent inorganic opportunities.

Credit Rating & Borrowing

Ratings were upgraded by ICRA to [ICRA]BBB (Stable) and [ICRA]A3+ on July 1, 2025. This upgrade reflects improved financial risk profiles, low reliance on debt, and adequate liquidity following the TaxTech divestment.

⚙️ Operational Drivers

Raw Materials

As a SaaS/RegTech provider, the primary 'raw materials' are Human Capital (Software Engineering and Domain Expertise) representing the bulk of operational costs, and Cloud Infrastructure (SaaS architecture).

Import Sources

Not applicable for a software company; however, the company utilizes global cloud infrastructure and employs 503 permanent employees as of March 31, 2025, primarily based in India to serve 50+ global markets.

Key Suppliers

Not disclosed, but typically includes cloud service providers (e.g., AWS, Microsoft Azure) and specialized data standard bodies for XBRL/iXBRL compliance.

Capacity Expansion

Current capacity is defined by its 503-member workforce and cloud-native infrastructure. Expansion is focused on 'ramping up sales, marketing, and product development' to capture a share of the projected $7 billion RegTech market.

Raw Material Costs

Employee benefit expenses and software development costs are the primary drivers. The company is increasing S&M spend to drive ARR, targeting a 16-17% market growth rate.

Manufacturing Efficiency

Efficiency is measured by SaaS metrics; the company is transitioning IRIS IDEAL from a license/implementation model to a subscription model to reduce revenue 'lumpiness'.

Logistics & Distribution

Distribution is digital; however, sales and marketing investments are being scaled substantially to move to the 'next level' of global market penetration.

📈 Strategic Growth

Expected Growth Rate

16-17%

Growth Strategy

Growth will be achieved by scaling the SaaS-based IRIS CARBON platform for ESG and financial reporting, expanding into 'non-mandate' areas of the enterprise reporting supply chain, and leveraging the divestment proceeds (INR 151.2 Cr) to fund organic expansion and potential inorganic acquisitions.

Products & Services

IRIS CARBON (Disclosure Management), IRIS IDEAL (Automated Bank Reporting), IRIS iFile (SupTech platform for regulators), and IRIS Peridot (Data-as-a-Service for MSME credit).

Brand Portfolio

IRIS CARBON, IRIS IDEAL, IRIS Peridot, IRIS iFile.

New Products/Services

Expansion into ESG reporting (BRSR, CSRD, IFRS S1/S2) is expected to be a major growth driver as sustainability disclosures become mandatory globally.

Market Expansion

Targeting the global RegTech market, which is projected to reach $7 billion over the next 5-6 years. The company recently rebranded to 'IRIS RegTech Solutions Limited' to align with this focus.

Market Share & Ranking

Not disclosed, but the company is a leading global provider of XBRL-based reporting software with a presence in 50+ countries.

Strategic Alliances

IRIS CARBON has entered into a partnership with Board International to enhance its disclosure management offerings.

🌍 External Factors

Industry Trends

The industry is seeing a convergence of RegTech advancement, ESG reporting mandates, and SaaS adoption. The Indian SaaS market alone is projected to reach $50 billion ARR by 2030, a 4x increase from 2023.

Competitive Landscape

Competes with global RegTech and disclosure management providers; IRIS differentiates through its 'dual-play' of serving both regulators (SupTech) and the regulated (RegTech).

Competitive Moat

Moat is built on deep domain expertise in XBRL/iXBRL, established relationships with 30+ global regulators (high switching costs), and a cloud-first taxonomy-compliant architecture that is difficult for new entrants to replicate quickly.

Macro Economic Sensitivity

Highly sensitive to global regulatory shifts; as regulators intensify focus on transparency and systemic stability, demand for IRIS's SupTech and RegTech solutions increases.

Consumer Behavior

Enterprises are shifting from manual compliance to automated, real-time, and cloud-based reporting to meet increasing transparency demands.

Geopolitical Risks

Operates across diverse regulatory regimes (USA, Qatar, South Africa, SE Asia); changes in international trade relations or data residency laws could impact service delivery.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by global data standards and financial reporting mandates set by bodies like the SEC, ESMA, and various central banks.

Environmental Compliance

The company is positioning itself to benefit from ESG regulations like India's BRSR and the EU's CSRD, which require structured, machine-readable sustainability reporting.

Taxation Policy Impact

The company recently divested its TaxTech business (GST ASP) to Sovos for INR 151.2 Cr, indicating a strategic exit from tax-filing services to focus on broader regulatory technology.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timing of 'threshold' crossing for SaaS profitability, as high S&M investments (up to $2 per $1 of new ARR) currently suppress operating margins (8% in Q2 FY26).

Geographic Concentration Risk

While global, the company has significant exposure to the Indian market and specific international mandates like the US SEC.

Third Party Dependencies

Dependent on the continued global adoption of XBRL/iXBRL standards and the maintenance of mandates by regulatory bodies.

Technology Obsolescence Risk

Mitigated by continuous investment in 'product enhancement' and a 'cloud-first' architecture to keep up with fast-changing digital reporting requirements.