Tanla Platforms (TANLA) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue was ₹10,072.28 lakhs (₹1,011 crores), with flat sequential growth and a 0.8% YoY decline, impacted by international business slowdown and CPaaS market shifts.

• OTT channels, especially WhatsApp and RCS, gained traction, with OTT revenue exceeding ₹2,000 Mn and rising from 10% to 20.3% of total revenue.

• Net profit for the quarter was ₹13,021.15 lakhs, with EPS at ₹9.70.

• The company remains the largest global RCS partner for Google, was named Meta's Growth Partner of the Year, and a Visionary in the 2024 Gartner Magic Quadrant for CPaaS.

• Strategic focus on innovation, regulatory compliance, and international expansion, with ongoing investments in AI/ML and platform development.

Financial highlights

• WhatsApp channel revenue reached ₹2,000 Mn, but sequential growth was flat due to a one-third price cut in WhatsApp utility messaging.

• Gross margin was 26.2%, down 122 bps YoY, with EBITDA margin at 17.5% and PAT margin at 13.0%.

• Employee expenses increased from ₹440 Mn to ₹540 Mn, impacting margins.

• Trade receivables rose to ₹10,044.8 Mn from ₹8,423.9 Mn at Mar 31, 2024, mainly due to a shift from international to domestic business.

• Cash and cash equivalents at Sep 30, 2024, stood at ₹7,053 Mn, down from ₹8,067.59 Mn post dividend payout.

Outlook and guidance

• Management refrained from explicit forward-looking statements but expressed confidence in OTT channels, platforms, and international expansion.

• Full quarter benefit from the Axis Bank ATP deal is expected in Q3, after partial revenue in Q2.

• Results for the period are not directly comparable to the prior year due to the ValueFirst acquisition.