Whalesbook
RateGain Travel Technologies reported steady Q2 FY26 results driven by Martech and DaaS. The company's significant acquisition of US-based Sojern positions it as a leader in travel Martech. RateGain anticipates its FY26 revenue will surge by 55-60% over FY25, factoring in approximately five months of Sojern's contribution and expects improving margins for the acquired entity by end of FY26.
RateGain Travel Technologies demonstrated a stable performance in the second quarter of fiscal year 2026, with its Martech (Marketing Technology) and DaaS (Data as a Service) segments driving revenue growth of 6.4 percent year-on-year. The Martech business, bolstered by the acquisition of Adara in January 2023, and the DaaS segment, which saw increased orders from an Online Travel Agent (OTA), were key contributors. The distribution business experienced a quieter quarter.
Margin stability was observed, a positive trend for Software as a Service (SaaS) players, as RateGain effectively deployed Artificial Intelligence (AI) to minimize the need for additional manpower, thereby improving revenue per employee and allowing revenue growth to outpace employee addition.
The company maintained a healthy order book, which is expected to receive a further boost from its recent acquisition of Sojern, a US-based hospitality and travel marketing platform. This acquisition, valued at approximately $250 million (or about 1.45 times its projected $172 million CY2024 revenue), is funded through internal accruals and debt. Sojern, which is nearly 1.4 times RateGain's size, operates an AI-driven Martech platform that leverages real-time traveller insights for targeted marketing and guest experience optimisation. This move significantly enhances RateGain's capabilities in digital marketing for the travel sector, deepens its US market presence, and provides access to Sojern's extensive client base.
RateGain has issued guidance factoring in less than five months of Sojern's contribution, projecting a substantial 55-60 percent revenue increase for FY26 over FY25. Furthermore, Sojern's operating margin, currently around 14 percent, is anticipated to rise to 16.5-17.5 percent by Q4 FY26, driven by cost synergies. Consequently, RateGain expects a blended operating margin between 17 percent and 18 percent for FY26.
Impact
This acquisition and guidance are highly significant for RateGain shareholders, signaling strong growth prospects and market consolidation. The successful integration of Sojern is crucial for realizing the full potential of this strategic move, which has already been reflected in the stock's 54 percent rally over the past four months. For the Indian stock market, this represents a key development in the travel technology SaaS sector. Rating: 8/10.
Difficult Terms:
SAAS (Software as a Service): A business model where software is licensed on a subscription basis and is centrally hosted. Customers access it via the internet.
Martech (Marketing Technology): Technologies and software tools used by marketing teams to plan, execute, and measure marketing campaigns and activities.
DaaS (Data as a Service): A cloud-based service that allows users to access and use data without needing to manage the underlying infrastructure. It provides data on demand.
OTA (Online Travel Agent): A travel agency that operates solely online, facilitating the booking of travel services like flights, hotels, and car rentals through its website.
AI (Artificial Intelligence): The simulation of human intelligence in machines programmed to think and learn like humans.
Synergies: The interaction or cooperation of two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects.
