Newgen Software Technologies Ltd Q4 2025 Earnings Call Transcript

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

Question: Adity Patel - ICICI Securities - Analyst : Thank you for the opportunity. This is a question, of course, if I look at the annuity revenue make, it's been trending down, even when I look at the annual number. Could you help us understand, now why, we are, trailing behind or why the annuity revenue mix, is trending down.

Question: Adity Patel - ICICI Securities - Analyst : Got it. Secondly, if, we look at the growth number this year we saw a successive growth moderation for FY25. So what we had 25% growth rate. Now we are ending Q4 with 15% YY top lines of growth. So, when you look, into the events, what do you see the year to, medium term, growth, that you can have.

Question: Adity Patel - ICICI Securities - Analyst : Thank you.

Question: Adity Patel - ICICI Securities - Analyst : Thank you for the opportunity. My first question is on EA market. What, specifically in Q4, what has led to your on your decline in E email? Was there any unexpected, ramp down?

Question: Adity Patel - ICICI Securities - Analyst : Okay.

Question: Adity Patel - ICICI Securities - Analyst : So do we expect these license deals to close in like Q1 or Q2 or 5 526?

Question: Adity Patel - ICICI Securities - Analyst : Okay, got it. And I have a follow up on the question which Rui asked. So if you see for the Q4, the support revenue has dipped, via. So if, I understand like the support or revenue run rate should continue like because, I mean, so can you just help us understand why the support revenue has dipped.

Question: Adity Patel - ICICI Securities - Analyst : And we. Okay, so like we haven't seen like a drop on YY basis and support revenue since FY 22, so, that is why I was, curious to know like does it mean that the client has not renewed our support. Not going to renew them further.

Question: Adity Patel - ICICI Securities - Analyst : Got it. And on the implementation revenue, so for Q4 we did see a strong growth both in QO and YOI. So does it mean that the deals which was stretched, for our, Indian PSU banking clients, the implementation that was stretched that is progressing well and so when should we expect major part of that to get completed. Yes, so.

Question: Adity Patel - ICICI Securities - Analyst : Okay, and, can you remind us, what is typically, what is the percentage of support and implementation revenue as compared to, sorry, support and AMC revenue as percentage of your license revenue.

Question: Adity Patel - ICICI Securities - Analyst : Okay, and, can you share the order book numbers as a kind of F 525 how much it has grown? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. PRELIMINARY MAY 02, 2025 / 10:30AM, NEWG.NS - Q4 2025 Newgen Software Technologies Ltd Earnings Call

Question: Adity Patel - ICICI Securities - Analyst : Okay.

Question: Adity Patel - ICICI Securities - Analyst : Okay, so can you share, like what has been the, like an executed order book number.

Question: Adity Patel - ICICI Securities - Analyst : Okay, sure, thank you and last one on so we have seen moderation in banking reven like we have seen a strong growth in banking for last few quarters and now we are seeing the growth moderating. So, is it because, like for our large clients in India and India. We have implemented our key solutions and the demand is now saturated. Like, can you, share growth outlook, going forward over here?

Question: Adity Patel - ICICI Securities - Analyst : Okay, so can you talk, in bit detail about the on-service part or like which, client segment or which solutions, comprises.

Question: Adity Patel - ICICI Securities - Analyst : Okay. Got.

Question: Pranav Mashruwala - Dolat Capital Market Private Ltd - Analyst : And Hello.

Question: Pranav Mashruwala - Dolat Capital Market Private Ltd - Analyst : Yeah, just, one on the broad. Revenue and, revenue outlook, considering the overall macro situation, any pockets of headwinds that we are particularly seeing in terms of delays, so we're seeing certain delays coming out in, our staff, and also in some of our licenses. So, any headlines that you'd like to call out for. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. PRELIMINARY MAY 02, 2025 / 10:30AM, NEWG.NS - Q4 2025 Newgen Software Technologies Ltd Earnings Call

Question: Pranav Mashruwala - Dolat Capital Market Private Ltd - Analyst : Yeah. Later.

Question: Pranav Mashruwala - Dolat Capital Market Private Ltd - Analyst : Also just doubling down again on the, growing the business, do we expectAS to, recoup some of the, slower growth, by 26, considering some of the deal pipeline and, that we've been building in, base, as well as marketing teams in the US. No.

Question: Pranav Mashruwala - Dolat Capital Market Private Ltd - Analyst : Okay, so just, also, one on the margin aspect, so we are clearly right now exiting you for on a high note, how would you see margins trending over for the next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. PRELIMINARY MAY 02, 2025 / 10:30AM, NEWG.NS - Q4 2025 Newgen Software Technologies Ltd Earnings Call

Question: Pranav Mashruwala - Dolat Capital Market Private Ltd - Analyst : Finally on the expected, tax rate for FY 26, so Q4 we exited with around 23% and Q3 we had about 13, so about that.

Question: Pranav Mashruwala - Dolat Capital Market Private Ltd - Analyst : And that's it. Thank you so much.

Question: Akshat Agarwal - Jeffreys - Analyst : Hi, good afternoon, sir. Thanks a lot for the opportunity. I have two questions. So if you follow up on, one of the other participants' questions, where you said that you could take about a couple of photos for the annuity revenue rate to come back to the levels of the teams levels. So if the first half is going to be in single digits and annuity forms the bulk of your revenue portion, is it fair to expect that you would be able to grow 20% in 5 26%? That's the first question. Secondly, when I look at the reading wise margins, in their margins have, gone down from mid 20 levels to 15% levels in 525 versus F 524. What is the key reason for this? Those are the two questions. Thanks for that.

Question: Akshat Agarwal - Jeffreys - Analyst : So much, only a.

Question: Adity Patel - ICICI Securities - Analyst : Hi, thank you for the opportunity. So a couple of questions, we've seen that quarter 4 is typically a stronger quarter in terms of, license revenue booking, but we don't see this, panning out in the current quarter, and I'm cognizant that quarter 3 was a good quarter in terms of these bookings, but then is there any other reason which is attributed to this disilidation?

Question: Adity Patel - ICICI Securities - Analyst : Mm, okay, and so a follow up to that, so you mentioned the implementation which got delayed, which is kind of impacted our revenues, are there any corrective measures, which need to be taken from our side probably to avoid the same in the future? Like if you could just help us understand what exactly has caused this delay.

Question: Adity Patel - ICICI Securities - Analyst : Sure, sir, thank you for that. And so in in the current quarter we saw a couple of large deals being closed in the US, so I just wanted to understand what are the, what is the strategy that we are using here and you know what is the potential opportunity that we're looking, in this geography maybe if you could give some timelines.

Question: Adity Patel - ICICI Securities - Analyst : Absolutely. And, oh, how about in India? So I mean India has traditionally been a growth driver for us. So what is the time that we are looking here, what is the kind of scope that we do see to further mind the existing clients that we already have.

Question: Adity Patel - ICICI Securities - Analyst : Understood. So lastly, just, I mean more of a very long term question, so Jenny I has been, one of the big tech disruptors, and then is it, is there a case where we probably see this could cannibalize new gen revenues probably on the content management or the BPA and like is there a possibility of that?

Question: Adity Patel - ICICI Securities - Analyst : Okay, understood, great. Thank you so much for patiently answering my questions.

Question: Baidik Sarkar - Unifi Capital Pvt Ltd - Analyst : Hi and good day overall. Well, there was a time in the previous years when you basicallyally called out that autoud book growth was higher than your revenue booking, right? Obviously that was more sentiment led given how strong 524 was. If I just backtrack to just the current portal, not. Perhaps Q3, but, the 1st month of April and Q4, how does that sentiment look on the ground today? I ask it in the context of, all prices in the Middle East, the US, lead lead issues and broadly pro probably a situation of, banking products like demand is India. So just keeping this in perspective, how would you define that sentiment, I think look today.

Question: Baidik Sarkar - Unifi Capital Pvt Ltd - Analyst : Sure, I understand. In terms of, the complicated 1,824 month projects that kind of have a long gestation period, which was the primary geographies that that saw that and and you know it was one of this year sorry.

Question: Baidik Sarkar - Unifi Capital Pvt Ltd - Analyst : Okay, so you know my question was that given that you specifically called out that H2 of this year will be a far stronger year in terms of the new booking, is it fair to expect some kind of a YOY margin compression, as far as H1 is concerned, given that, we have fixed costs to be taken care of and we can't pull back on H chain of commitments. I'm just trying to get and understand about, margin propensity in H1 this year.

Question: Baidik Sarkar - Unifi Capital Pvt Ltd - Analyst : Right, so between the H to SMS, you're still saying that there's no risk to, I mean we we ended the year 20% growth which is a healthy number with that number of between 22 to 25 is, will that be a sign expectation for at least a 26 in terms of top line?

Question: Baidik Sarkar - Unifi Capital Pvt Ltd - Analyst : And.

Question: Baidik Sarkar - Unifi Capital Pvt Ltd - Analyst : Very last, is will growth safe for 527 onwards, will that be driven by, our investments in new product use cases, or is it the deepening, of the market for existing products that we have, how should we read this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. PRELIMINARY MAY 02, 2025 / 10:30AM, NEWG.NS - Q4 2025 Newgen Software Technologies Ltd Earnings Call

Question: Baidik Sarkar - Unifi Capital Pvt Ltd - Analyst : Thanks and best wishes.

Question: Mihir Manohar - Carnelian Asset Management - Analyst : Yeah, hi, thanks for giving the opportunity. So you mentioned about the 10 deals, one in the US, so the 10 deals are for the full year or just for the quarter.

Question: Mihir Manohar - Carnelian Asset Management - Analyst : I sorry, I mean you have deals for the year or during the quarter. Okay.

Question: Mihir Manohar - Carnelian Asset Management - Analyst : Okay, understood. Out of these 10 deals, I mean, how many of these deals would be with larger tier one accounts, where, we can have a bigger revenue potential. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. PRELIMINARY MAY 02, 2025 / 10:30AM, NEWG.NS - Q4 2025 Newgen Software Technologies Ltd Earnings Call

Question: Mihir Manohar - Carnelian Asset Management - Analyst : Understood. Sure. And these are coming largely from insurance, I mean insurance and health insurance, right? Banking would be lesser as of now, or how is it?

Question: Mihir Manohar - Carnelian Asset Management - Analyst : These accounts. I understand. Sure. The second question was on this, ID, annuity kicking in for one of the, some of the delayed businesses in Indian Middle East. Now when annuity starts kicking in the second half, does the annuity percentage which you mentioned, 18 to 20 do that remain the same or that changes?

Question: Mihir Manohar - Carnelian Asset Management - Analyst : Understood, sure, and the third question was on the new product and this is like 2 2. 5 years back, we were looking at a $500 million dollar of a business. Naturally the progression has happened well over the last two years. Just wanted to get a sense and for us to have that $500 million kind of a number. Do you feel any specific products need to be developed product gaps need to be addressed, any development or any color around new products that would be really helpful.

Question: Mihir Manohar - Carnelian Asset Management - Analyst : Understood we'll be looking at the core banking part of the piece to enter, the corporate core banking is part of the piece.

Question: Mihir Manohar - Carnelian Asset Management - Analyst : Sure, just one last question from my side. What was the order booking group, for the year on a YY basis?

Question: Mihir Manohar - Carnelian Asset Management - Analyst : That's it from my side. Thank you very much.

Question: Chirag Kachhadiya - Ashika Equity - Analyst : Yeah, I have a question on autoook only like what is the current value of an executed order and as well as the new one which we received during the year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. PRELIMINARY MAY 02, 2025 / 10:30AM, NEWG.NS - Q4 2025 Newgen Software Technologies Ltd Earnings Call

Question: Chirag Kachhadiya - Ashika Equity - Analyst : Okay, and that and this un executed order book likely to come in execution in F 526 or it will ab for one in F 527 as well.

Question: Chirag Kachhadiya - Ashika Equity - Analyst : Thank you.

Question: Adity Patel - ICICI Securities - Analyst : Yeah, thank you for the follow up. So I have a question on, Singapore, sorry, the AAC market. So it has grown strongly, for us in F 525. What has which verticals and which countries have driven this growth and, how do we see growth outlook over your for F 526.

Question: Adity Patel - ICICI Securities - Analyst : Okay, got it and one question on the DSO days so DSO is increased by 7 days and F5 25 so what led to this increase and what is our target range? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. PRELIMINARY MAY 02, 2025 / 10:30AM, NEWG.NS - Q4 2025 Newgen Software Technologies Ltd Earnings Call

Question: Adity Patel - ICICI Securities - Analyst : Okay, so what should be our target range, for like 11, so last year it was 130 days.

Question: Adity Patel - ICICI Securities - Analyst : Okay, got it. Okay, thank you.