Newgen Software Technologies Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ruchi Mukhija - ICICI Securities Limited - Analyst : Congratulations on a good set of numbers. I have two questions. Firstly, if you look at the APAC has been a 50%-plus growth for second consecutive quarter, especially also there is the recent growth for second consecutive quarter. Which appears to be supported by a large project a ramp up. So is this a ramp up complete or likely to continue in the near future?

Question: Ruchi Mukhija - ICICI Securities Limited - Analyst : Understood. Secondly, annuity based revenue this quarter registered 14% YoY growth which is softer and has fallen below 20% mark after 10 quarters. So could you explain the reason and how to think about the trajectory going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2024 / 10:30AM, NEWG.NS - Q2 2025 Newgen Software Technologies Ltd Earnings Call

Question: Ruchi Mukhija - ICICI Securities Limited - Analyst : Okay. Thank you and all the best.

Question: Aditi Patel - ICICI Securities Limited - Analyst : Thank you for the opportunity. So, I have a question on order book. How is the order book grown in FY25? And can you give some color on deal pipeline?

Question: Aditi Patel - ICICI Securities Limited - Analyst : Okay, sir. This insurance vertical growth, will you be seeing that across your traditional and developed market and have you launched any new products in pipeline with respect to insurance?

Question: Aditi Patel - ICICI Securities Limited - Analyst : Okay. Got and can you talk about your progress on winning large plants in US and how many new logo additions have been in US in this quarter?

Question: Aditi Patel - ICICI Securities Limited - Analyst : Okay. And so we have seen a strong traction in banking in India and EMEA, with this quarter the banking revenue, if you see YoY growth is slightly lower than the company average growth. Should this traction in banking sustain in the medium term? Can you get some commentary on that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2024 / 10:30AM, NEWG.NS - Q2 2025 Newgen Software Technologies Ltd Earnings Call

Question: Aditi Patel - ICICI Securities Limited - Analyst : Okay. Got it. And I had one last question on what has been the response for the LumYn Gen AI product which was launched last quarter. And in general on AI and Gen AI like is there what has been the response of your client?

Question: Aditi Patel - ICICI Securities Limited - Analyst : Okay. Thank you.

Question: Pranay Roop Chatterjee - Berman Capital Group - Analyst : Hi. Thank you for allowing me to speak Good evening. Am I audible?

Question: Pranay Roop Chatterjee - Berman Capital Group - Analyst : Sir. This is the first time I'm interacting with your business. So if you could just help me and my first question is basically trying to understand your business. I've gone through all the public filings. But if you could just in simple words, so for someone who doesn't belong to the sector. Help me understand, what is the type of client you're trying to serve and what is the exact problem you're serving for them. Right? And I've seen your R&D is also high on your various statements. So what is the IP that differentiates the business if you just help me understand the simple words?

Question: Pranay Roop Chatterjee - Berman Capital Group - Analyst : That does justice. So then continuing from that, would you say you're in a space where which is highly cooperative and you'll have to fight for a contract with multiple clients or is this a space where you are on specific solutions that you're developing for specific clients? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2024 / 10:30AM, NEWG.NS - Q2 2025 Newgen Software Technologies Ltd Earnings Call And hence, the focus is essentially just on business development that is signing new clients. And then you build specific solutions like how is this market that you're operating look like?

Question: Pranay Roop Chatterjee - Berman Capital Group - Analyst : Perfect, sir. So my last question is what does a typical contract that you signed entail. Right? So let's take the largest segment, which is your BFSI space and a typical contract which is like something that we do more often than not. How large a contract are we talking about, that is usually target in terms of range? What is the contract life and what is the recurring portion in the contract? Like which streams are recurring? And do you see over time or do you focus on increasing the recurring portion in your revenues? Is that even possible?

Question: Pranay Roop Chatterjee - Berman Capital Group - Analyst : Yes. So that answers my question very well. Thanks a lot for being patient and great set of numbers. All the best, thank you.

Question: Mihir Manohar - Leon Asset Management - Analyst : Yeah, thanks for giving the opportunity and congratulations on a good set of numbers. Sir, as you wanted to understand the new living side and if you could throw some color as to which area is this particular offering exactly trying to solve is a trade finances, working capital. I don't know if you can just throw some color. What is the use case and application over here that would be helpful. And second question was on the restructured strategy. I mean, you mentioned that the restructured strategy of tapping larger accounts is playing out well. So if you know, you can throw some color around the internal KPI that we are tracking to get more confidence on this thing.

Question: Mihir Manohar - Leon Asset Management - Analyst : Sure. That's it from my side. Thank you.

Question: Mohit Motwani - Tara Capital Partners India Pvt. Ltd. - Analyst : Hi, thank you for the opportunity. I'm totally new to the business. I have two questions from my end. One is on your US mature market -- on the mature market side, you said the US is relatively showing some weakness. So I just wanted to understand if this weakness has been experienced on the industry wide across all other of your peers as well or is it because of the tough macros? And that is the first question? And then secondly, some of the IT service companies have spoken about some green shoots and recovery around the BFSI space. Now, is it that the spending on software products comes on the lower packing order for these banking companies in this US markets or how does it work there? If you can you shed some color on around this? Thank you.

Question: Mohit Motwani - Tara Capital Partners India Pvt. Ltd. - Analyst : Sure, thank you. And one more last question. So today your revenues are largely linked to banking side of things. Do you expect that this mix will change in the coming years and your insurance and other verticals will gain up in proportion to the overall revenues in the coming years?

Question: Mohit Motwani - Tara Capital Partners India Pvt. Ltd. - Analyst : Sure. Thank you for answering my questions. Thank you.

Question: Rahul Jain - Dolat Capital Market Pvt. Ltd. - Analyst : Yeah, hi, thanks for the opportunity. Just trying to understand that, what are the initiatives we are taking to ensure that our pipeline continue to enhance, given that we grow by 25% ballpark and the size of it also, in terms of scaling up the deal sizes, what are the initiatives we are taking because it becomes a slightly larger organization than what we were a couple of years ago? We need to increase the size of the deal to ensure that with a similar win, we end up growing much larger entity. So any initiatives on these fronts that you could talk about? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2024 / 10:30AM, NEWG.NS - Q2 2025 Newgen Software Technologies Ltd Earnings Call

Question: Mohit Motwani - Tara Capital Partners India Pvt. Ltd. - Analyst : Yeah, one interesting question you mentioned is that, mining the same account by scaling up more offerings within the same customer base. So have you seen several such influences where people might have started with a smaller deal? But then we have sold our loan origination or trade supply or bigger products compared to the process offering that we initially used to sell a couple of years back? I'm sure there are good case study, but are there meaningful upsell that would have happened, anything that you could share on that front?

Question: Mohit Motwani - Tara Capital Partners India Pvt. Ltd. - Analyst : Yeah, Jeet, I completely understand what you said and we appreciate that. What I was specifically referring to some of your larger offering that have become more recent, for example, like trade supply or loan origination bigger, I mean to say cases where the deals were much bigger relative to your historical (multiple speakers) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 15, 2024 / 10:30AM, NEWG.NS - Q2 2025 Newgen Software Technologies Ltd Earnings Call

Question: Mohit Motwani - Tara Capital Partners India Pvt. Ltd. - Analyst : Right. And there are more windows even after going live because that is what would be the key metrics whether they -- are they moving from one module to more something like that?

Question: Mohit Motwani - Tara Capital Partners India Pvt. Ltd. - Analyst : I appreciate it. Thanks. That's it from myself.

Question: Chirag Kachhadiya - Ashika Institutional Equities - Analyst : Congratulation on a good set of numbers. I have a couple of questions. So exactly guiding that we have an intention to reach around a half billion dollar kind of revenue in the next couple of years. Is that still intact? And by what year we aspire to be there on the miles from which we spoken earlier? And second, the number of local addition, which we are providing every quarter in the presentation, how many of them are active and doing business on a regular basis at aggregate level, whichever logo we have disclosed so far in the presentation? And third, what average engagement size are we looking whenever we empanel any logo with us? And even from the current empanelled logos and from potential one? Yeah, that's all from my side. Thanks.

Question: Chirag Kachhadiya - Ashika Institutional Equities - Analyst : Yes, for sure, answers all of my questions. Just one follow up if I can. So going forward the health care practice, what percentage are we looking do you have in overall pie, is similar to the portion that we have at BFSI right now or is the second order will remain on health care side? Rather the BFSI segment?

Question: Chirag Kachhadiya - Ashika Institutional Equities - Analyst : Okay. Thank you so much. All the very best. Thank you very much.