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- 16 Oct 2024
- ICICI Securities
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NEWGEN: STRONG PERFORMANCE DRIVEN BY LICENSE REVENUES
News: The company reported 23.2% YoY/ 15% QoQ revenue growth to ₹361.2 crore, driven by solid performance across all key geographies - EMEA (+21%YoY), India (+19% YoY), APAC (+53% YoY) and US (+17% YoY). Strong deal closures contributed to this growth. Subscription revenues (ATS/AMC +SaaS) reported 19.2% YoY revenue growth wherein SaaS revenue grew by 23.2% YoY while ATS/AMC grew by 17.3% YoY. Annuity revenues (ATS/AMC+ SaaS+ Support) reported healthy growth of 21.1% YoY to ₹216.7 crore. License revenue reported a strong growth of 30.4% YoY to ₹65 crore. The company added 8 new logos during the quarter. EBITDA increased 45% YoY to ₹83 crore while EBITDA margins were up ~350 bps YoY to 23%. The company reported PAT of ₹70.3 crore, up 47.2% YoY.
Views: The company reported a strong broad based growth across verticals and geographies in Q2. This growth was aided by strong licensing business (+52% YoY) along with healthy deal closures, further steering its H1 growth. The deal momentum is expected to be better in H2 for the US market. BFS saw an increased traction in the Insurance and Government vertical in the quarter, including a deal of ₹25 crore from a large insurance company in India, to be executed over 18 months. The company aims to scale the government and insurance business to 40% of its revenue mix. On the GenAI front, the company has launched NewgenOne Marvin - APEX edition, to streamline complex workflows, enhance customer engagement via secure AI integration. Furthermore, it is investing aggressively to achieve the aspirational $500mn dollar revenue in the next 3-4 years.
Impact: Positive