IRIS Business Services posts 51% YoY profit surge in FY25 on SupTech-led growth

IRIS Business Services FY25 Results: How Did SupTech and RegTech Drive Record Profit Growth?

IRIS Business Services Limited closed the financial year 2024–25 with a notable surge in profitability and topline performance, driven by robust demand in its SupTech and RegTech verticals. The Navi Mumbai-based RegTech company reported a 51% year-on-year jump in net profit, touching ₹1,325 lakhs for the full year ended 31 March 2025, while total income grew by 25% to ₹12,851 lakhs. This outcome underscores a well-executed product-led growth strategy focused on regulatory compliance technology solutions for both government regulators and enterprise clients globally.

The company’s revenue mix also revealed meaningful diversification across geographic and vertical segments, with the SupTech business emerging as the primary growth engine. While Africa contributed the largest regional share at 35%, India followed closely at 30%, reflecting strong domestic and international traction.

The company’s management attributed the performance to sustained demand for regulatory reporting infrastructure, increasing traction for IRIS Carbon, and a pipeline increasingly influenced by AI-driven innovation and evolving global regulatory mandates.

How Did IRIS Perform in Q4 FY25 Compared to Previous Quarters and Last Year?

For the fourth quarter ended March 2025, IRIS posted revenue from operations of ₹3,464 lakhs, up 14% year-on-year and 6% sequentially. Total income stood at ₹3,547 lakhs, a 16% YoY increase. However, profitability declined on a quarterly basis, with Q4 PAT falling 20% QoQ to ₹288 lakhs and EPS declining 23% to ₹1.36. On a year-on-year basis, PAT declined 39%, reflecting higher expenses and potentially subdued margin contribution compared to the base quarter.

EBITDA for Q4FY25 was reported at ₹585 lakhs, showing modest QoQ growth of 3% but marking a 12% YoY decline. EBITDA margins also softened to 17%, down from 22% in Q4FY24, indicating possible cost headwinds or changes in revenue mix. Still, IRIS sustained its 17% EBITDA margin for the full year, an improvement of 133 basis points over FY24’s margin of 15%.

On the earnings call, Co-Founder and Director K. Balachandran noted that while Q4 margins were tighter due to cyclical factors and ramp-up costs in marketing initiatives, the annualised gains underscored durable operating leverage across business units.

What Segments Are Driving IRIS Business Services’ Revenue Growth in FY25?

The company’s segmental performance for FY25 reveals SupTech as the clear growth leader. Revenue from the SupTech segment reached ₹6,150 lakhs, accounting for 49% of total operational revenue and marking a robust 34% YoY growth. RegTech followed as the second-largest segment, contributing ₹4,278 lakhs, or 34% of revenue, with a more measured 12% annual growth.

The TaxTech vertical saw healthy expansion, up 20% YoY to ₹1,728 lakhs. Although DataTech posted a minor decline of 4%, it remains a marginal contributor at just 1% of revenue. The “Others” category, likely comprising advisory and custom services, grew by 24% to ₹346 lakhs.

According to Deepta Rangarajan, Co-Founder and Director, the company’s growth is increasingly anchored in its deep regulatory know-how and differentiated product positioning. She pointed out that IRIS’s connected reporting solutions continue to gain traction with enterprises and governments globally. Additionally, increased investments in IRIS Carbon are starting to yield conversion benefits, and the integration of AI capabilities is further strengthening the value proposition.

Which Markets Are Leading IRIS’s Global Growth Strategy?

In FY25, IRIS maintained its global growth momentum with Africa emerging as its largest revenue contributor at 35% of topline, driven by strong adoption of supervisory technology by government regulators. India ranked as the second-largest revenue contributor, accounting for 30% of total revenue, reinforcing the company’s local market strength amid ongoing digital governance reforms.

These regional growth patterns mirror IRIS’s strategic alignment with emerging market regulatory transformations, where demand for digitised supervisory and compliance frameworks is accelerating. The company has leveraged its modular platform architecture and domain expertise to secure mandates from over 30 regulators worldwide, including business registries, central banks, and securities commissions.

What Role Is IRIS Carbon Playing in Future Growth Plans?

A significant component of IRIS’s forward-looking strategy centers on IRIS Carbon, the company’s cloud-based disclosure management platform. Deepta Rangarajan highlighted that increased sales and marketing efforts in this product have begun to translate into commercial wins and client conversions, especially in markets with maturing ESG and financial disclosure norms.

With reporting mandates becoming more complex and AI integration gaining foothold, IRIS Carbon is expected to act as both a growth lever and a margin contributor in the medium term. The company continues to embed AI features into its product suite to enhance client productivity, regulatory compliance accuracy, and workflow automation.

How Has the Profitability Trajectory Evolved Over FY25?

Full-year EBITDA reached ₹2,154 lakhs, rising 36% YoY, while the EBITDA margin improved from 15% in FY24 to 17% in FY25, reflecting operating scale and better utilisation of fixed costs. The 51% jump in PAT to ₹1,325 lakhs translates into a PAT margin expansion of 178 basis points to 11% for FY25. Diluted EPS also climbed 44% to ₹6.43 from ₹4.46 in the previous year.

These profitability metrics underscore the company’s ability to scale operations with margin discipline, despite macro-level uncertainties and ongoing tech investments.

What Is the Stock Market Sentiment Around IRIS Business Services?

As of 15 May 2025, shares of IRIS Business Services Limited (NSE: IRIS, BSE: 540735) have witnessed renewed investor interest following the release of its FY25 results. The stock has gained over 20% on a year-to-date basis, with the recent uptick reflecting positive sentiment around the company’s consistent margin profile, diversified global revenue base, and growth outlook for IRIS Carbon.

Institutional investor flows have remained relatively stable, with domestic mutual funds and small-cap-focused portfolio managers showing increased traction over the past two quarters. The uptick in SupTech revenues, AI-driven product strategy, and strong India-Africa corridor performance have made IRIS a potential candidate for broader small-cap inclusion in ESG-focused funds.

Buy-side analysts tracking the RegTech space continue to maintain a “Buy” or “Accumulate” outlook on IRIS Business Services, citing its clear product differentiation and sticky enterprise-regulatory clientele. However, some caution remains over margin volatility on a quarterly basis, particularly as the company continues to scale up its marketing and product R&D investments.

What’s Next for IRIS in FY26 and Beyond?

Looking forward, IRIS is expected to deepen its market presence in emerging geographies and expand its AI-led product integrations. The company has articulated a growth thesis based on evolving compliance needs, international regulatory alignment (especially in ESG and structured financial reporting), and cross-border mandates.

The strategic pivot towards IRIS Carbon, combined with its SupTech leadership, positions IRIS Business Services to remain at the forefront of digital regulatory transformation. While macroeconomic headwinds and competitive intensity remain risks, the company’s FY25 results offer clear evidence of operational resilience, product relevance, and long-term monetisation potential.