Tanla Platforms (TANLA) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue was ₹10,007 Mn (INR 1,011 crores), down 0.8% YoY, with muted growth due to a slowdown in international business and structural shifts in the CPaaS market.

• OTT channels like WhatsApp and RCS gained traction, with OTT revenue exceeding ₹2,000 Mn and now representing over 20% of total revenue.

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

• Net profit for the quarter was ₹1,302 Mn, with EPS at ₹9.70.

• The company operates as a single segment CPaaS provider, with the ValueFirst acquisition impacting consolidated results.

Financial highlights

• WhatsApp revenue reached ₹2,000 Mn for the quarter, with significant volume growth but flat sequential revenue due to a one-third price cut.

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

• Free cash flow was ₹520 Mn, representing 40% of PAT, and cash balance stood at ₹7,053 Mn after dividend payouts.

• Trade receivables increased to ₹10,044.8 Mn from ₹8,423.9 Mn at Mar 31, 2024, due to a shift from international to domestic business and delayed collections.

• No revenue from the VI Firecore deal in Q1 and Q2; last revenue recognized in Q4 of the previous year.

Outlook and guidance

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

• Full quarter benefit from the Axis Bank ATP deal expected in Q3.

• Continued investment in R&D, AI/ML, and go-to-market for OTT and platform businesses.

• Results for the period ended Sep 30, 2024, are not directly comparable to the prior year due to the ValueFirst acquisition.