Newgen Software Technologies (NEWGEN) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue reached INR 3,611.58 million (₹36,115.75 lakhs), up 23% YoY, with strong growth across EMEA (21%), India (19%), APAC (53%), and US (17%).

• License revenues grew 52% YoY, with eight new logos added and major deals in insurance, financial services, and government sectors across India, US, Saudi Arabia, and APAC.

• Profit after tax for Q2 FY25 was INR 703 million (₹7,033.17 lakhs), up 47% YoY; H1 PAT up 51% YoY.

• Continued product innovation with new versions of OmniDocs, OmniExtract, Video KYC, NewgenONE Marvin APEX Edition, and recognition in Forrester's and Gartner's industry reports.

• Board approved grant of 5,30,100 ESOP options under the 2022 scheme.

Financial highlights

• H1 FY25 revenues at INR 6,759 million, up 24% YoY; Q2 EBITDA margin at 23%, up from 19.5% YoY.

• Annuity revenues at INR 205 crore, with annuity growth at 14% YoY, below 20% for the first time in 10 quarters.

• Basic EPS for Q2 FY25 at INR 5.03, up 46.7% YoY; PAT margin improved to 19.5%.

• Net trade receivables at INR 442 crore as of September 30, 2024; net DSO at 112 days.

• Consolidated total assets as of September 30, 2024 were ₹1,71,995.00 lakhs, with total equity of ₹1,29,876.90 lakhs.

Outlook and guidance

• Order book grew 22% in H1 FY25; deal pipeline remains strong, especially in insurance and government.

• Expect insurance and government to contribute more in coming quarters; banking remains largest but diversification is increasing.

• Anticipate recovery in annuity growth and US deal velocity in the next 1-2 quarters.

• Aspirational target to reach $500 million revenue in the next few years, with aggressive investments and strategy alignment.

• Continued investment in growth and talent, as reflected in ESOP grants and increased employee expenses.