IRIS Business Services (540735) Q2 24/25 earnings summary

Executive summary

• Achieved 33% year-over-year total income growth for H1 FY25, with EBITDA up 78% and net profit up 195%, reflecting strong operational efficiency and margin expansion.

• Segment nomenclature updated to SupTech, RegTech, TaxTech, and DataTech for global comparability and strategic alignment.

• Africa, especially the South African Reserve Bank contract, contributed over 36% of total revenue.

• Significant investments made in sales, marketing, and product innovation, including AI adoption and international expansion.

• Un-audited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, were approved and published following board and audit committee review.

Financial highlights

• H1 FY25 total income was ₹5,971 lakhs, up 33% year-over-year; Q2 FY25 income was ₹3,154 lakhs, up 30% year-over-year.

• H1 FY25 EBITDA was ₹1,000 lakhs, up 78% year-over-year; net profit was ₹678 lakhs, up 195% year-over-year.

• Consolidated revenue from operations for Q2 FY25 was ₹3,084.74 lakhs, up from ₹2,396.96 lakhs in Q2 FY24; half-year revenue was ₹5,849.51 lakhs, up from ₹4,459.90 lakhs year-over-year.

• Total expenses grew 27% in H1, less than revenue growth, reflecting operating leverage.

• Cash and cash equivalents (consolidated) as of September 30, 2024, stood at ₹2,000.37 lakhs, up from ₹1,393.42 lakhs as of March 31, 2024.

Outlook and guidance

• Revenue from the South African contract expected to remain stable or increase slightly in the next year, though growth rates may moderate due to a higher base.

• Strong Q3 pipeline in RegTech, especially in DM and ESG offerings, supported by regulatory mandates.

• Malaysia Phase 2 launch in TaxTech expected to bring additional customers in early next year.

• Exploring a pivot to SaaS and pay-per-use models for regulators, aiming for recurring revenue streams.

• Pipeline includes opportunities in Nigeria, Mauritius, and other African countries, with ongoing tenders and potential for new contracts.