Tanla Platforms (TANLA) Q1 24/25 earnings summary

Executive summary

• Achieved 10% year-over-year revenue growth to INR 10,022 Mn in Q1 FY25, with sequential revenue flat due to a seasonally weak quarter and driven by Enterprise Communications.

• Gross profit increased 11.7% YoY to INR 2,694 Mn, with gross margin percentage improving both year-over-year and sequentially to 26.9%.

• PAT rose 4.3% YoY to INR 1,412 Mn; EPS at INR 10.50, up 4.3% YoY.

• Market disruptions in international messaging and exit from ILD deal impacted revenue and gross margin, but these were offset by growth in strategic areas.

• Board approved unaudited standalone and consolidated financial results for the quarter ended June 30, 2024.

Financial highlights

• Revenue grew 10% year-over-year to INR 10,022 Mn; consolidated revenue for Q1 FY25 was ₹100,220.49 lakhs.

• Gross margin improved to 26.9% in Q1 FY25, up 40 bps YoY and 17 bps sequentially.

• Exiting the ILD deal reduced revenue by INR 120 crore and gross margin by INR 30 crore.

• Vodafone revenue and gross margin dropped from INR 22 crore and INR 21 crore respectively in Q1 last year to zero in Q1 this year.

• Free cash flow was INR 744 Mn, representing 53% of PAT.

Outlook and guidance

• Q2 and Q3 expected to be seasonally stronger, especially for domestic business.

• RCS platform went live in July, with revenue expected to start in Q2 and scale meaningfully by year-end.

• No specific guidance provided for Wisely ATP or MaaP revenue, but both are expected to contribute in coming quarters.

• Management highlights continued market leadership with ~35% CPaaS market share in India and strong customer retention.

• Consolidated results for Q1 FY25 are not directly comparable to Q1 FY24 due to the ValueFirst acquisition completed in July 2023.