Software Contributes 14% to Ather’s Q3 Revenue; Tarun Mehta Says there's More Room

Software and non-vehicle revenue accounted for 14% of Ather Energy’s total income in the third quarter of FY26, underlining the growing role of software in the electric two-wheeler maker’s business model as margins improved sharply.

Speaking during the company’s Q3 FY26 earnings call, Tarun Mehta, Executive Director and CEO of Ather Energy, said non-vehicle revenue has meaningful scope to compound further, aided by strong customer adoption of paid software features and a still-young installed base.

During the quarter, Ather’s AtherStack Pro software package recorded a 91% attach rate, remaining stable even as volumes scaled during the festive season. Software forms the largest share of Ather’s non-vehicle revenue bucket, which also includes charging, accessories, spares, and service.

Mehta said non-vehicle revenue carries superior unit economics compared to vehicle sales, resulting in a disproportionately higher contribution to gross margins as volumes grow.

“Given that most non-vehicle revenues carry superior unit economics, their contribution to gross margins is much higher,” he said.

Usage Data Underpins Confidence

Beyond financial contribution, Ather shared detailed usage data to highlight customer engagement with its software features. Around 40% of users engage with safety features such as live location sharing or theft alerts at least once a month, while more than 50% use onboard navigation weekly, with close to 50,000 riders using navigation daily.

Ride-assist features showed even deeper stickiness. More than two-thirds of Ather’s active fleet uses AutoHold daily, while 23% of users engage with Magic Twist every day, Mehta said, adding that such features become difficult for customers to give up once adopted.

Ather recently expanded the availability of its Infinite Cruise feature beyond its top-end models, enabled by over-the-air updates, reinforcing the company’s ability to monetise software across its installed base.

More Levers Ahead

While software already accounts for a significant share of revenue, Mehta said service revenue remains at an early stage due to the relatively young fleet on the road, indicating further upside over time. Upcoming software features such as pothole alerts, voice commands, and parking-related tools are expected to enhance the overall value proposition of AtherStack Pro.

As Ather approaches break-even at the operating level, the company’s management signalled that software-led revenue will play an increasingly important role in sustaining margins and profitability as vehicle volumes continue to grow.