Aeries Technology, Inc. (AERT) is a global leader in professional services and technology consulting, specializing in the establishment and management of dedicated delivery centers known as Global Capability Centers (GCCs) for portfolio companies of private equity firms and mid-market enterprises. With over a decade of experience, Aeries has carved out a unique position in the market, leveraging its expertise to drive operational efficiency, innovation, and strategic growth for its clients.
Business Overview and History
Aeries Technology was founded in 2010 with the vision of transforming the traditional outsourcing and offshoring models. The company was originally incorporated in the Cayman Islands and has since expanded its operations to India, Mexico, Singapore, and the United States. Aeries' purpose-built business model aims to create a more flexible and cost-effective talent pool for deployment on clients' operations, while fostering innovation through strategic alignment at senior levels and visibility across the organization.
Throughout the 2010s, Aeries experienced steady growth, expanding its client base across various industries including e-commerce, telecom, security, healthcare, and engineering. The company's commitment to digital transformation and innovation helped establish its reputation as a trusted partner for private equity firms and mid-market enterprises seeking to drive operational efficiency and strategic growth.
A significant milestone in Aeries' history occurred in 2023 when the company completed a business combination with Worldwide Webb Acquisition Corp., a special purpose acquisition company (SPAC). This transaction allowed Aeries to become a publicly traded company, listed on the Nasdaq stock exchange under the ticker symbol AERT. The business combination also provided Aeries with additional capital to support its continued growth and expansion efforts.
Despite its success, Aeries has faced challenges. In 2024, the company received a non-renewal notice from a significant customer, resulting in an annual revenue loss of approximately $11.9 million. Aeries has worked to mitigate the impact of this loss through various cost optimization measures and by pursuing new business opportunities. The company has also had to navigate the complex regulatory and tax environments of the multiple countries in which it operates.
Financial Performance and Outlook
Financials
Aeries Technology's financial performance has been characterized by steady growth and a focus on profitability. For the fiscal year ended March 31, 2024, the company reported revenues of $72.5 million, representing a 37% year-over-year increase. This top-line growth was driven by the expansion of existing client engagements and the addition of new clients, primarily within the private equity-backed and mid-market segments in North America.
The company's gross profit margin for the fiscal year 2024 stood at 29.8%, showcasing its ability to deliver high-quality services while maintaining disciplined cost management. Aeries' net income for the same period reached $15.7 million, reflecting the company's strong operational execution and strategic capital allocation.
For the nine months ended December 31, 2024, Aeries reported revenue of $51.2 million, a 3% decrease compared to the same period in the prior year. The company's gross profit for this period was $11.6 million, with a gross profit margin of 23%. However, Aeries experienced a net loss of $15.6 million for the nine months ended December 31, 2024, primarily due to a significant increase in selling, general, and administrative expenses, which grew by 203% to $37.3 million.
In the most recent quarter (Q3 2025), Aeries reported revenue of $17.6 million, down 6.8% year-over-year. However, the company's North American revenue, which represents over 93% of total revenue, grew by 13.1% year-over-year to $16.4 million. Net income for the quarter was $2.1 million, compared to a net loss of $16.3 million in Q3 2024. The company's gross profit for Q3 2025 was $4.0 million, resulting in a gross margin of 23.0%.
Liquidity
As of December 31, 2024, Aeries had $2.4 million in cash and cash equivalents and $1.5 million in total long-term debt. The company's debt-to-equity ratio stood at 24.48, while its current ratio and quick ratio were both 0.70. Aeries amended its revolving credit facility in May 2023, increasing the total borrowing capacity to $3.7 million. As of December 31, 2024, the funded drawdown amount was $3.1 million.
The company's financial position has been impacted by a working capital deficit of $10.4 million and obligations related to forward purchase agreements (FPAs) entered into as part of the business combination in November 2023. Aeries is actively pursuing various measures, including raising additional funds, restructuring liabilities, and reducing non-core expenses, to address these challenges and improve its liquidity and financial condition.
Looking ahead, Aeries has provided guidance for the fiscal year 2025, targeting revenues between $71 million and $73 million and core adjusted EBITDA between $6 million and $7 million. The company has also introduced its fiscal year 2026 outlook, projecting revenues between $74 million and $80 million and adjusted EBITDA between $6 million and $8 million. It's worth noting that the fiscal 2026 reporting and guidance will not include core adjusted EBITDA, as the company anticipates that all expected credit losses from prior non-core markets will have been fully addressed in the current fiscal year.
These forward-looking projections underscore Aeries' confidence in its ability to sustain profitable growth, driven by its renewed focus on high-value, long-term engagements with its core North American clientele and its ongoing efforts to optimize its cost structure and enhance operational efficiency.
Innovative Offerings and Technological Capabilities
At the heart of Aeries' value proposition is its commitment to digital transformation and the strategic deployment of cutting-edge technologies. The company's GCC model is designed to leverage AI, process improvements, and cost-effective talent acquisition to deliver significant cost savings and operational efficiencies for its clients.
Aeries' AI practice has gained significant traction, with the company offering a complementary AI assessment service to help clients identify optimal areas for automation and process optimization. Recent client success stories include a 90% accuracy improvement in churn prediction for a telecom client and a 40% reduction in human intervention for an IT support automation solution in the healthcare sector.
These AI-driven initiatives not only differentiate Aeries in the marketplace but also create tangible value for its clients, positioning the company as a trusted partner in their digital transformation journeys.
Challenges and Risks
Despite Aeries' strong performance and growth prospects, the company faces several challenges and risks that warrant consideration.
One key risk is the potential for early termination or non-renewal of long-term client contracts. Although Aeries' contracts typically include auto-renewal provisions and termination fees, the loss of a significant client could have a material impact on the company's financial results. To mitigate this risk, Aeries focuses on maintaining strong client relationships, diversifying its client base, and delivering exceptional service quality to encourage contract renewals.
Another area of concern is the company's exposure to macroeconomic conditions, including inflationary pressures, currency fluctuations, and potential economic downturns. These factors can affect Aeries' cost structure and client demand, potentially impacting its financial performance. The company's ability to navigate these challenges will be crucial in maintaining its competitive edge and achieving its growth objectives.
Furthermore, Aeries has identified material weaknesses in its internal control over financial reporting, related to improper segregation of duties, inadequate processes for recording significant events and transactions, and deficiencies in its information and communication policies. While the company is actively implementing remediation plans, the successful resolution of these issues will be essential to ensure the reliability of its financial reporting and maintain investor confidence.
Conclusion
Aeries Technology (AERT) has established itself as a leading global provider of GCC solutions, leveraging its expertise and innovative approach to drive operational efficiency and digital transformation for its clients. With a renewed focus on its core North American market, a robust cost optimization strategy, and a strong pipeline of AI-driven initiatives, the company appears poised to capitalize on the growing demand for its services and deliver sustainable, profitable growth.
As of December 31, 2024, Aeries had more than 30 clients spanning various industry segments, including e-commerce, telecom, security, healthcare, and engineering. The company's primary markets are North America, Asia Pacific, and the Middle East, with a focus on the private equity ecosystem and mid-market enterprises. Aeries' core service offering involves advisory services and operations management services to help clients build and manage GCCs in suitable and cost-effective locations based on their business needs.
The company's engagement models are designed to provide a mix of deep vertical specialty, functional expertise, and digital systems and solutions to scale, optimize and transform a client's business operations. Aeries has been focused on realigning its business model to concentrate on high-value, long-term engagement with its core North American clientele, which represents over 93% of its revenue. By exiting non-core segments such as the Middle East, the company has sharpened its focus on transformation-led partnerships.
However, Aeries must navigate the challenges of client retention, macroeconomic uncertainty, and internal control weaknesses to fully realize its potential. By addressing these issues proactively and continuing to execute its strategic vision, Aeries has the opportunity to solidify its position as a trusted partner and pioneer in the global capability center services industry.