Capillary Technologies India Limited — Q3 FY26

Capillary Technologies India Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=hVe4xlUDXes Published: 3 months ago

0:01 1 second Good evening everyone. We welcome you all to Capital Capillary Technologies India Limited earnings call to discuss 0:08 8 seconds the Q3 FI26 financial results. Please note that a copy of the disclosure is available on the investor section of the website as well as the stock exchange. 0:19 19 seconds Please also note that anything said on this call which reflects the outlook for the future or which could be construed as a forward-looking statement must be 0:26 26 seconds reviewed in conjunction with the risk that the company faces. Now I shall hand over the call to Mr. Rishi Junjunwala 0:34 34 seconds from Capital to take this forward. Over to you Rishi. 0:38 38 seconds Thanks a lot Kab. Uh hello and good evening everyone. On behalf of uh IFL Capital, I welcome you all uh for the 0:46 46 seconds maiden earning earnings call of capillary technologies. To give you some in-depth understanding of the company and answer all your queries regarding 0:54 54 seconds the results, we have with us uh from the management side, Mr. Anishi Bodhu, founder, man, managing director and CEO. 1:01 1 minute, 1 second Uh Mr. Anan Chave, executive director, CFO and COO and Mr. Sunil Jen, head of 1:09 1 minute, 9 seconds uh corporate development. With that I would hand over the call to Anish to take take you guys through the presentation. Thank you and over to you Anish. 1:17 1 minute, 17 seconds Uh thanks Rushi. Uh thanks everyone for joining us uh uh us today uh for our 1:24 1 minute, 24 seconds first uh earnings call and thanks for the support during the uh you know the uh IPO and the months since uh then uh I 1:33 1 minute, 33 seconds thought it'd be good to start today with uh uh a quick introduction on the business uh for some of the newer folks 1:40 1 minute, 40 seconds who are joining uh on call. Um as capillary we play in the loyalty and uh 1:46 1 minute, 46 seconds uh customer engagement uh space. Uh we global leaders uh at what we uh at what we do. So what is uh loyalty? Loyalty is 1:55 1 minute, 55 seconds typically any kind of a long-term customer retention type mechanic. So for example, Indigo is a customer of ours. 2:03 2 minutes, 3 seconds Uh if you've flown Indigo recently, you know, they ask you if you've signed up for BlueChip uh and they welcome Blue Chip members on the on the flight before 2:12 2 minutes, 12 seconds it takes off. Uh you earn Blue Chips and then you can redeem them uh for your next flight and things like that, right? 2:18 2 minutes, 18 seconds So any kind of a a long-term retention mechanic where there is a earn and then there's a burn, there's all kinds of tiers and rewards and things like that. 2:27 2 minutes, 27 seconds Uh that's typically loyalty. And uh what we have is a platform that helps uh large enterprises uh uh globally run 2:35 2 minutes, 35 seconds their uh loyalty programs. It's a fully cloudnative uh solution. Lot of AI uh in 2:42 2 minutes, 42 seconds the stack there. Uh the way we monetize uh uh is it's long-term uh subscription contracts usually 3, five, seven years 2:51 2 minutes, 51 seconds uh uh annual subscriptions that uh customers uh uh uh you know sign up for and typically linked to number of uh 3:00 3 minutes customers on the platform or you know number of members in the loyalty program or number of uh loyalty transactions 3:06 3 minutes, 6 seconds that are uh coming to us. Right? So um uh we're fairly well regarded by all analysts in the space whether it's a 3:14 3 minutes, 14 seconds Forester, a Gartner uh or you know Everest or uh any of them. uh you know 3:22 3 minutes, 22 seconds uh uh some clients that uh uh might uh uh for good recall are Alipa Group, 3:29 3 minutes, 29 seconds Abbert, AS6 uh Metro uh cash and carry uh some of these are global labbert and 3:36 3 minutes, 36 seconds metro are across uh 15 countries metro is uh across Europe uh right so uh in 3:43 3 minutes, 43 seconds terms of presence of the company uh we today work with about uh 410 brands about 115 uh odd customers uh 20 of them 3:53 3 minutes, 53 seconds are Fortune 500 uh uh customers uh lots of scale on the platform about 1.8 8 billion uh consumer profiles on the 4:01 4 minutes, 1 second platform for uh the the customers that work for us. Very very high uh uh uptime 59s. Uh it's very enterprise uh class. 4:12 4 minutes, 12 seconds Um customers across about 47 countries. 4:15 4 minutes, 15 seconds Uh we totally about 700 folks uh across 16 uh global offices. Um 4:25 4 minutes, 25 seconds yeah. Uh moving ahead, I I thought it'd be good to spend some time on uh this is the latest uh Forester wave that came 4:33 4 minutes, 33 seconds out uh in December of uh 2025. Uh as you know, Forester is the leading analyst on the marketing uh technology uh uh side. 4:43 4 minutes, 43 seconds As you can see, as capillary, we are positioned right at the top. We are the highest rated uh amongst the top uh 14 4:50 4 minutes, 50 seconds 15 vendors both on the strength of our current offering as well as the strength of strategy on what we want to build and 4:58 4 minutes, 58 seconds uh um and and some of that. Now again uh the way uh Forester does this evaluation is they typically go to their CMOS uh 5:07 5 minutes, 7 seconds every every 18 months figure what are the criteria that CMOs are looking for uh on the uh on the loyalty management side. This time they had 27 criteria. 5:17 5 minutes, 17 seconds Last time they had 28. Uh and uh in those 27 they typically give you a score of 1, three or five. Three is if you're 5:26 5 minutes, 26 seconds at par, five is if you're uh better than market and if some customer is willing to say that you know you're actually better than market and one is if you're 5:34 5 minutes, 34 seconds subpar. So if you look at the ratings this time uh for 22 out of the 27 criteria we had a uh a five on five. Um 5:42 5 minutes, 42 seconds what they also talk about uh in the in the uh deeper brief there's almost uh a page about us it's a very detailed 5:51 5 minutes, 51 seconds report in that sense they talk about our AI first uh approach they talk about our uh our IRA and uh some of that stuff 5:58 5 minutes, 58 seconds being way ahead of uh what the rest of the market uh is at. uh you know uh they 6:05 6 minutes, 5 seconds talk about uh of course the 59 uh um uptime very high uh security and privacy 6:13 6 minutes, 13 seconds uh pieces the enterprisegrade uh uh text stack that we have and finally I think in terms of uh customer reviews and uh 6:21 6 minutes, 21 seconds and stuff the the 515 score and 22 criteria as we spoke uh is also reflected in the in the in in what 6:29 6 minutes, 29 seconds Forester has put out there. Now why is this important? Uh so typically uh if you're a fortune 2000 CMO in in US or 6:38 6 minutes, 38 seconds Europe you typically tend to have a forester or a Gartner subscription and before you want to do anything you typically go look at the report or call 6:47 6 minutes, 47 seconds an analyst and you know uh tell them that look we think of reviving our uh you know uh getting to a new platform or 6:56 6 minutes, 56 seconds changing something on loyalty who should we talk to? So this gives you a direct access uh into some of these very large uh uh uh large enterprise conversations. 7:05 7 minutes, 5 seconds Right. So uh moving forward um uh just a minute on the the products and and what 7:15 7 minutes, 15 seconds we do uh we basically help uh uh brands uh stay connected with their uh 7:21 7 minutes, 21 seconds customers have a long-term uh loyalty and retention uh mechanic. In short, we help them stay consumer ready and you 7:29 7 minutes, 29 seconds know as the consumer uh goes through their journeys. Um so our our main product uh is the loyalty stack. Uh a 7:38 7 minutes, 38 seconds good majority of our revenues come from uh loyalty stack. This is where we best of breed uh right as you saw in the 7:45 7 minutes, 45 seconds forester wave. Um the rest of the the products engage in sights and rewards are more extensions 7:52 7 minutes, 52 seconds uh of the loyalty stack. Typically customers buy a loyalty product and then they buy these as uh additional products adds to our retention rate adds to our 8:01 8 minutes, 1 second stickiness. Uh and finally we have uh AI uh uh product which runs across all our 8:09 8 minutes, 9 seconds products. It's uh we call it IRA uh short for AI powered uh research assistant uh helps you do a bunch of 8:16 8 minutes, 16 seconds things. I'll I'll cover a little bit more about that in a in a slide uh ahead. uh what we tend to do is our product also acts as like the single 8:24 8 minutes, 24 seconds source of truth uh for a lot of the customer data right so we we end up integrating with all the various parts 8:32 8 minutes, 32 seconds of wherever there's a customer touch point could be a poss could be an e-commerce uh could be uh mobile apps uh 8:39 8 minutes, 39 seconds a lot of kiosks if you're a QSR type play etc um wherever there's customer data could be customer NPS and and get 8:47 8 minutes, 47 seconds all of that data in one place right so Um uh that's one part of the use case although we don't monetize the CDP as much. It's just the base part platform 8:57 8 minutes, 57 seconds on which the whole product is based. Uh uh that's on product. Uh moving forward 9:04 9 minutes, 4 seconds you know uh we we spoke about this part in our uh RHP and DRP filing. I I just wanted to very quickly touch on what 9:12 9 minutes, 12 seconds drives growth and what drives profitability. Uh for us there's really three axis of growth uh for the 9:18 9 minutes, 18 seconds business. uh the first uh and uh the most profitable one is uh net retention rate. So which is how much are our 9:26 9 minutes, 26 seconds existing customers expanding uh on the platform. So um if you take uh uh uh uh 9:35 9 minutes, 35 seconds the recent results uh our NR for the entire business has been 111%. 9:40 9 minutes, 40 seconds Uh if you look at again the split of this 111 115 uh just the organic customers which is customers who are on 9:47 9 minutes, 47 seconds the cap capillary platform and not on uh platforms where we've acquired uh and we're migrating them over that uh that set us today at 115% organic expansion. 10:00 10 minutes Uh again how does that uh organic expansion come really three levers. Uh the first is uh platform overages. If 10:08 10 minutes, 8 seconds you use more than uh what you've been put in the contract for, you pay as additionally per transaction or per per 10:15 10 minutes, 15 seconds member. There's an inflationary clause uh where every year you pay us a few percentage points more uh on the base 10:23 10 minutes, 23 seconds fee itself. Uh that's the first uh NRR uh expansion piece. The second is typically customers start with a certain 10:31 10 minutes, 31 seconds version of uh the loyalty platform and keep upgrading as they need more or uh you know they end up buying uh the 10:39 10 minutes, 39 seconds engage stack or the insight stack or IRA or or something right so that's the second third is as you saw a lot of our customers are large conglomerates or 10:48 10 minutes, 48 seconds large uh multinationals and they tend to like take us from one country to the next or if they working with x number of 10:57 10 minutes, 57 seconds brands they add one more brand uh uh and that adds to that's the category third 11:03 11 minutes, 3 seconds third of our expansion. Um this uh we've seen good organic uh uh NR on the 11:11 11 minutes, 11 seconds inorganic NR what typically happens is as we migrate customers from uh what we have bought the platform we've bought onto our platform uh we tend to give 11:19 11 minutes, 19 seconds them a discount or some of them decide not to migrate. So that's the 96% NR but what this also leads to is as they 11:28 11 minutes, 28 seconds migrate it improves margins right so which is the intent of uh uh of doing this. Um the second axis of growth for 11:35 11 minutes, 35 seconds us is new customer wins. Uh so through the first nine months we've added 12 uh customers. We've added three in the last 11:44 11 minutes, 44 seconds quarter. Uh so if you look at new order book uh in that sense we've uh added 66 crores of uh new order book over the 9 11:52 11 minutes, 52 seconds month uh period uh that compares to about 53 uh in the same period uh last year. So there's a good growth on the uh 12:01 12 minutes, 1 second new order book side uh as well. The third axis of growth is the um M&A machine. Uh again to remind everyone uh 12:11 12 minutes, 11 seconds we buy competitors out. So uh basically why do we do this? A lot of the very large enterprises already have some kind 12:18 12 minutes, 18 seconds of a uh a provider or a platform that uh they use and uh and it's a very sticky product because like I showed you 12:27 12 minutes, 27 seconds earlier there are many integrations we are very uh like there's on an average there's about nine integrations in a customer and hence even if they want to 12:34 12 minutes, 34 seconds move to a better better product there's sometimes this question of is it worth changing all those integrations. So what we've done is we say let's go buy some 12:43 12 minutes, 43 seconds of these competitors at a you know half to one and a half times revenue uh and migrate those customers over ourselves. 12:50 12 minutes, 50 seconds So we take the uh uh uh take the task of migrating them over and that's been a very good growth engine. We did our 12:57 12 minutes, 57 seconds fourth acquisition this year in in uh cognitive uh back in May. uh we also have a couple of other letters of intent 13:06 13 minutes, 6 seconds uh on the M&A side that uh we are in the market uh right now right so that's the third axis of growth uh moving to 13:14 13 minutes, 14 seconds profitability again three big levers for profitability for us the first is uh NRR linked uh margin expansion so uh as our 13:24 13 minutes, 24 seconds existing customers grow their cost doesn't grow as much right so the gross margins really uh so if you look at even 13:31 13 minutes, 31 seconds this uh uh uh through the first 9 months we've had about a 1 and a half% increase 13:37 13 minutes, 37 seconds in in gross margins um uh uh in the in the business. The second axis of growth 13:43 13 minutes, 43 seconds for us is uh uh about 60% of our costs are not linked to revenue. Right? So this is technology cost, sales and 13:52 13 minutes, 52 seconds marketing, you know, corporate costs which sit below the uh gross margin. Now and these don't grow at the pace of uh 14:00 14 minutes revenue, right? So, so for example, if you take the first 9 months, our revenues grew at 22%. But our uh non-cogs cost grew only at 11, right? 14:10 14 minutes, 10 seconds So, there's leverage in that business that you so as we keep scaling, you know, um the this part the 60% of our cost will not grow at the same pace as 14:18 14 minutes, 18 seconds our uh revenue does, right? So, uh the third uh axis of growth for us is like I said, migrating customers that we've 14:26 14 minutes, 26 seconds bought through uh the M&A over to our platform. Why do we do this? really two reasons. First is most of these customers that we uh most of these 14:35 14 minutes, 35 seconds companies that we buy typically tend to be low margin services heavy companies at typically at 30% type gross margin 14:43 14 minutes, 43 seconds while the cap platform is more at 69 70% gross margin. So you directly see a good gross margin bump when you migrate. The 14:51 14 minutes, 51 seconds second is the below uh below gross margin costs uh because it's a common tech platform etc. Also uh as you sunset 14:59 14 minutes, 59 seconds those platforms you tend to uh see some uh leverage come out there like for example the last quarter we uh got done 15:08 15 minutes, 8 seconds with uh the Riley Riley which was one of the companies that we bought in 2023 had two platforms so one of those platforms 15:15 15 minutes, 15 seconds is fully fully sunset now right so uh right so that's the uh typically this additional cash that gets generated from 15:24 15 minutes, 24 seconds improved gross margins and uh not Having the technology team or some of that means that it generates extra cash which 15:32 15 minutes, 32 seconds enable us to pay off this half to one one and a half times revenue that we pay for these acquisitions in a four to five 15:38 15 minutes, 38 seconds uh year uh period thereby also making a very high ROC uh buys in that sense. Uh 15:45 15 minutes, 45 seconds moving forward uh just spending a couple of uh uh minutes on the um innovation piece. Uh 15:55 15 minutes, 55 seconds there's really uh five key uh uh you know layers to our uh uh product innovation piece. The first is AI you 16:04 16 minutes, 4 seconds know um and we'll talk a little bit more about it on the next slide uh as well. 16:08 16 minutes, 8 seconds uh I think we've one of the most advanced uh AI uh users on the platform. 16:14 16 minutes, 14 seconds Lot of uh uh agentic as well as you know uh machine learning type use cases for forecasting etc etc that are u there in 16:23 16 minutes, 23 seconds the platform. Uh what we've also done very nicely moving to the second one is we've said why do we why do you need UIs 16:30 16 minutes, 30 seconds in a in a in a platform right so uh we'll show you some of that so a lot of the IRA stuff is actually very conversational so instead of going 16:38 16 minutes, 38 seconds learning our platform uh you know a lot of no code uh workflows just type in simple English analytics questions or 16:47 16 minutes, 47 seconds run this campaign for me and the platform will go do it uh right so that's the second part uh the third is more and more uh we seeing that you know 16:56 16 minutes, 56 seconds especially the newer generation of uh consumers want to go beyond uh uh you know points and uh uh coupons and things 17:04 17 minutes, 4 seconds like that. So much more experience-based badges, you know, uh, streaks, milestones, things like that, which is 17:12 17 minutes, 12 seconds more gamificationled stuff. That's a a good part of why we win a lot of new customers from old agencies, clunky tech 17:21 17 minutes, 21 seconds stacks which are unable to keep up with uh some of this. Finally, like we spoke, uh you know, um a lot of focus on making 17:29 17 minutes, 29 seconds migrations, integrations easy because that's the big pain point in uh most customers when they want to move on a 17:37 17 minutes, 37 seconds platform. What we've also done is spend a lot of time on verticals, right? So, uh so it's easy for you to onboard the next airline or easy for you to onboard 17:46 17 minutes, 46 seconds the next hotel or onboard the next healthcare uh player. Uh finally uh we we work with very very large enterprises 17:54 17 minutes, 54 seconds two of the fortune 10 uh 20 of the fortune 500 and for them you know like enterprise uh class uh governance or uh you know privacy etc are very uh core. 18:08 18 minutes, 8 seconds So we we spend quite a bit of uh uh you know effort on on making sure we're as good as the best software platforms uh 18:15 18 minutes, 15 seconds available uh globally on on on these topics. Right. So uh with that uh you know uh moving to 18:23 18 minutes, 23 seconds the AI pieces um uh I'd strongly encourage you to get onto our website look at some of the demos of uh IRA. Uh 18:30 18 minutes, 30 seconds what we basically done is you know there's the workflow uh pieces and the uh I would say the um intelligence 18:38 18 minutes, 38 seconds pieces that are really getting um you know getting turbocharged with what AI is doing. Uh and that's what we've done 18:46 18 minutes, 46 seconds here. We basically said you know instead of having an analyst uh or a where you use an analytics company and outsource 18:53 18 minutes, 53 seconds all your analytics to there uh the first part of it is saying you ask a question and we will tell you that this the software itself will tell you the 19:00 19 minutes intelligence. So we kind of going beyond the usual system of record um or the transaction system that we used to be 19:08 19 minutes, 8 seconds and trying to get some of these analytics type use cases onto us. 19:12 19 minutes, 12 seconds Similarly on the um you know the campaign uh uh running campaigns running promotions as you know engage is not a 19:20 19 minutes, 20 seconds very large part of our revenue but this is kind of our wedge into marketing automation uh saying look all the data is already here you know you could just 19:28 19 minutes, 28 seconds in plain English ask it you to run a promotion or ask you to run a uh campaign similarly a lot of customer support use cases where instead of um 19:36 19 minutes, 36 seconds you know there's an API it you get send us a question and it automatically replies you don't need an agent as a human agent to sit and solve some 19:45 19 minutes, 45 seconds of these. Right. So that's on the AI side. With that anat over to you uh on the on the numbers. 19:52 19 minutes, 52 seconds Hello everyone. Good evening. So here is a quick view of uh of our Q3 u Q3 and uh 20:00 20 minutes 9 months uh 9 months results. So, so for Q3 uh company did revenue of uh of about 20:08 20 minutes, 8 seconds 184 kores uh which is at a 16% year-on-year growth versus uh versus Q3 FI25. 20:17 20 minutes, 17 seconds Um the revenue for for the 9 months uh period for FI26 is at about 543 kores which is at about 20:25 20 minutes, 25 seconds 22% year-on-year growth versus the same time last year. In terms of u adjusted I 20:33 20 minutes, 33 seconds beta uh Q3 we we saw 30 Kores of adjusted I beta which is about 24% 20:39 20 minutes, 39 seconds year-on-year growth and um and the same u same number for for 9 months period is 20:46 20 minutes, 46 seconds 71 kores at at about 53% growth. uh in terms of PAD we the PAT is at about 8 8 20:53 20 minutes, 53 seconds crores uh which is about 4% of revenue and for the 9 months period the PAT stands at about 9 kores which is which is 2%. 21:06 21 minutes, 6 seconds U okay. Um in terms of the uh key revenue metrics uh the the way to look look at 21:14 21 minutes, 14 seconds our business uh the very first metric to look at is u is net retention revenue 21:20 21 minutes, 20 seconds and u for the 9 months uh sorry for the trailing 12 months period for December 21:27 21 minutes, 27 seconds 25 the NR has been 111. If you break this down into organic and inorganic business, uh the organic business NR is 21:36 21 minutes, 36 seconds at 115 and at this number Capillary would be in the top 10 percentile of uh of the global SAS companies. Uh it's a 21:45 21 minutes, 45 seconds very healthy healthy place to be in. Uh for the inorganic business as Anish was talking, we see some contraction as we 21:52 21 minutes, 52 seconds migrate customers over to capillary platform. So we saw an RR of about 96 96% on the inorganic business. Another 22:01 22 minutes, 1 second KPI to look at is annual recurring revenues. Given we sign long-term recurring contracts with the customers, 22:09 22 minutes, 9 seconds uh the the trajectory for the business becomes very visible by by ARR. 22:15 22 minutes, 15 seconds So for the 9 months FI26, the AR has grown grown by 21% over over March 2025. 22:24 22 minutes, 24 seconds Moving ahead u on the profitability metric for 22:31 22 minutes, 31 seconds for the Q3 FI26 we saw adjusted AITA of 30 Kores which is about 16.4%. 22:38 22 minutes, 38 seconds And for the same time last year the the AITA adjusted AIA was 24 crores at about 15.3%. 22:46 22 minutes, 46 seconds U for PAT um for Q3 FI26 we saw PAD of 8 kores which is about 4.3%. 22:54 22 minutes, 54 seconds Uh compared to same time last year it is uh it is a decline uh from 11.44 four 23:01 23 minutes, 1 second four kores. Uh to explain explain this decline uh this year u in Q3 we had uh 23:09 23 minutes, 9 seconds two one-time cost. Um as you would be aware there has been a change in the direct labor codes uh which has resulted 23:16 23 minutes, 16 seconds in a higher one-time graduity expense that uh the impact of that we have taken in Q3 that's about 1.6 6 cr and we had 23:26 23 minutes, 26 seconds IPO expenses of about 2 kores. If we if we normalize our pad for these two uh two one-time expenses, the pad for Q3 23:35 23 minutes, 35 seconds FI26 is uh is flat to Q3 FI25. 23:41 23 minutes, 41 seconds Um the same metric for uh for 9 months period. Uh the adjusted AIA stands at 23:47 23 minutes, 47 seconds about 71 K at about 13%. Uh compared to 46 cr which is which is at about 10.5%. 23:56 23 minutes, 56 seconds And pack this stands at about 9 cr at about 1.7% for the 9 months period. U compared to compared to uh negligible 24:05 24 minutes, 5 seconds number for uh for last year uh at about.3%. Yeah. 24:12 24 minutes, 12 seconds Um this is a slide uh which explains uh the the bridge from uh adjusted aa to 24:19 24 minutes, 19 seconds PAT. Uh the business for Q3 FI26 delivered adjusted a bit of 30 crores 24:26 24 minutes, 26 seconds while PAT is at uh at about 7.99 or roughly 8 crores. Now, now the big part of uh part of this difference actually 24:35 24 minutes, 35 seconds comes from depreciation and amotization which is about 19 kores and u and if you 24:42 24 minutes, 42 seconds compare uh these numbers from same time last year u you would see that u same time last year we had uh we had tax 24:51 24 minutes, 51 seconds credits and now that uh that India standalone business is also profitable we have started seeing tax expense 24:58 24 minutes, 58 seconds compared to tax credits in the past. Um u for from comparison from Q3 FI25 the 25:06 25 minutes, 6 seconds finance cost uh as well as uh the finance income has uh has reduced uh and 25:13 25 minutes, 13 seconds ESOP cost has seen a marginal increase of about uh about one and a half crores right this is over 25:22 25 minutes, 22 seconds over a over 88 kores of uh salary expenses is about 1 one and a half%. Um 25:30 25 minutes, 30 seconds so marginal increase over there uh the depreciation and amotization has increased from about 13 crores a quarter 25:37 25 minutes, 37 seconds to about 19 crores and this is largely on back of uh the acquisition that we did earlier this year. We we got a 25:45 25 minutes, 45 seconds company called cognitive in May this year which has led to increase in that depreciation and amotization. 25:52 25 minutes, 52 seconds The the other uh factor to look at is uh is our closing cash balance 25:59 25 minutes, 59 seconds for the quarter has been 463 kores and if you look at our 9 months operating cash flow it stands at about uh 101 K. 26:08 26 minutes, 8 seconds Now the business generates uh generates lot more cash. So a a good factor to look at over here would be 9 months 26:16 26 minutes, 16 seconds operating cash flow um as compared to the 9 months adjusted a beta of about 71 kores. So that ratio stands at about 142%. 26:26 26 minutes, 26 seconds Now this number is uh is higher in certain quarters and lower in certain quarters. Um but capillary as a business 26:34 26 minutes, 34 seconds generates more cash and typically 105 to 110 is what we see on a sustainable basis. uh a number of 142 cr is uh is an 26:44 26 minutes, 44 seconds anomaly which which has happened on bank of uh higher collections. 26:52 26 minutes, 52 seconds With that uh uh we we come to the end of the presentation. Uh happy to open it for uh for Q&A. 27:04 27 minutes, 4 seconds Whoever wishes to ask question, please use the raise hand uh button on your 27:10 27 minutes, 10 seconds zoom. So first question is from the line of Rishi Junjunwala from Capital. Rishi please go ahead. 27:19 27 minutes, 19 seconds Yes. Uh thanks Kav. Um uh first three questions from my side. 27:24 27 minutes, 24 seconds Firstly u you know Anish what will be helpful is to um u you know just get some color around uh uh you know the 27:33 27 minutes, 33 seconds noise that we are seeing or uh you know hearing on the last one week on AI right I mean and there's a plug-in release from anthropic there's a lot of concern 27:41 27 minutes, 41 seconds around software and SAS firms globally and how those businesses can be disrupted so it would be great to just 27:48 27 minutes, 48 seconds uh uh you know get your perspective on how do we see that in the overall scheme of things and whether in any way or form 27:57 27 minutes, 57 seconds our offerings can potentially get either impacted or augmented by some of the developments that are happening there. 28:06 28 minutes, 6 seconds Right. Right. Yeah. I think it's been a fairly interesting week uh in terms of uh AI and and and all of that. Uh I think slightly nuanced uh answer here. 28:17 28 minutes, 17 seconds Uh if you ask me, I think all enterprise software is not equal, right? So I would I would break uh enterprise software 28:26 28 minutes, 26 seconds into really three big buckets. So one is like a system of record or a transaction system, right? So something like a core 28:32 28 minutes, 32 seconds ERP or a core loyalty platform or a core POSOS, right? Uh uh a billing system, things like that where they're actually 28:41 28 minutes, 41 seconds like systems of record where you know I think the uh not much of like you can move from one system of record to the next but you still need a system of 28:49 28 minutes, 49 seconds record, right? So uh and and then you have another uh enterprise software system which is like a workflow, right? 28:56 28 minutes, 56 seconds Which is uh you're getting customer tickets, you're answering them. So it's like a workflow uh type thing which is let's say let's call it a system of 29:04 29 minutes, 4 seconds engagement or a system of workflow or system of engagement. And third is a system of intelligence right which is like all kinds of analytic softwares or 29:12 29 minutes, 12 seconds things like you know a snowflake data uh data bricks etc where where the primary use case is to say look uh I will I will do my analytics on top 29:20 29 minutes, 20 seconds of it I'll do my intelligence on top of it and and what's happening with AI is really I think the second bucket which is the system of engagement and the 29:28 29 minutes, 28 seconds system of uh intelligence are definitely seeing the most amount of are seeing 29:33 29 minutes, 33 seconds radical change right um Now uh and and as you can see in a system of workflow 29:40 29 minutes, 40 seconds humans are getting replaced with agents in a similarly in a system of uh intelligence again you know if there's 29:48 29 minutes, 48 seconds someone working on on data and pulling it out and uh doing some analytics etc that's again getting replaced by uh by 29:55 29 minutes, 55 seconds agents right so in our case we tend to be more a system of record and a system of uh I mean we're a transaction system 30:03 30 minutes, 3 seconds uh in that sense right so we sit a little bit Okay. Uh but it provides us an opportunity to enter into these two 30:10 30 minutes, 10 seconds other spaces which is the system of uh engagement and the system of uh uh of u intelligence which is where we are kind 30:19 30 minutes, 19 seconds of focusing our IDA stuff on saying look instead of uh a customer going to uh usually having an analytics agency or 30:27 30 minutes, 27 seconds having analysts pulling out reports why can't uh IRA do it or instead of having someone to run your campaigns for you 30:35 30 minutes, 35 seconds just plain simple English why can't uh IRA run it right so that's that's the approach we've taken so I I feel we are 30:41 30 minutes, 41 seconds fairly uh um isolated from what's happening uh there in fact some of our more recent events in the US which have 30:50 30 minutes, 50 seconds been from agencies customers who used to use a agency like I don't want to name any agencies but uh and moving over to 30:58 30 minutes, 58 seconds us have been because our uh our AI stuff ensures that they don't need as many delivery people they don't need as many 31:06 31 minutes, 6 seconds uh uh you know analytics uh uh folks right and most of these agencies built for analytics people and and delivery 31:13 31 minutes, 13 seconds people which is uh uh which is the advantage. The second thing on us is look I think also the the change on the 31:19 31 minutes, 19 seconds AI side is happening faster in the SMB in the uh small and medium business space than in the enterprise space. uh 31:27 31 minutes, 27 seconds because in enterprises there's inherently a lot of integrations, a lot of complexity, a lot of corner cases uh 31:34 31 minutes, 34 seconds which are not easy to replace right so again as you know 97% of our revenues come from very large uh enterprise 31:42 31 minutes, 42 seconds customers we kind of um uh um I'd say uh in a in a better position uh there uh 31:51 31 minutes, 51 seconds and finally where we seeing most amount of most amount of disruption on the AI side is if you have a seat based 31:58 31 minutes, 58 seconds pricing, right? That uh you have a call center and there are 50 call center agents and my pricing is or you have 32:05 32 minutes, 5 seconds sales guys and my pricing is uh like $65 per per uh salesperson, right? Like uh a 32:13 32 minutes, 13 seconds CRMish type uh use case. In our case, our pricing as I said is linked to number of transactions or number of customers or number of members, right? 32:22 32 minutes, 22 seconds slightly more outcome linked. And that's uh that again insulates us from insulates us from any of these seedbased 32:31 32 minutes, 31 seconds uh pricing shocks that you're now seeing in in in a lot of these uh seedbased uh 32:37 32 minutes, 37 seconds uh pricing types uh uh software uh players, right? Uh also we believe that you know unlike what came up with 32:45 32 minutes, 45 seconds anthropic and uh the the claude work uh the claude coworker uh where it was a very broad use case around legal or a 32:53 32 minutes, 53 seconds very broad use case around accounting or investment analysis uh loyalty is very niche right so I think there's also a 33:01 33 minutes, 1 second lot of very proprietary uh data that ends up getting generated in a loyalty stack so I I I feel we are fairly 33:07 33 minutes, 7 seconds insulated um uh from you know uh in that sense as well. Uh uh I I I hope I I hope 33:16 33 minutes, 16 seconds I answered your uh question on that Rishi. 33:18 33 minutes, 18 seconds Yes, thanks Anish. Uh the second question is on uh you know again uh another concern or noise around what is happening in US healthcare payer space. 33:28 33 minutes, 28 seconds Um you know there have been uh announcement around lack of increase in rates. Um some pair companies are facing a lot of pressure in terms of 33:36 33 minutes, 36 seconds profitability and that is reflected in the stock prices. given that uh you know you also cater to uh one of uh uh you 33:44 33 minutes, 44 seconds know one of the large uh you know US healthcare pair and that's one of the you know top five clients for you uh can 33:51 33 minutes, 51 seconds you give some color in terms of uh you know if if that impacts you at all and how do we think about growth in that 33:58 33 minutes, 58 seconds account as well as top five uh in the coming year right so uh I think that's a great question uh so um so first of all we 34:08 34 minutes, 8 seconds don't have any exposure to the Medicare and the Medicaid uh books of business. 34:14 34 minutes, 14 seconds Right? So what we do is more for the uh the direct payer which is the employer or uh you know the um uh or uh for a 34:24 34 minutes, 24 seconds insurance uh type use case right so so uh and hence we have not seen the impact of what's happening on the Medicare 34:31 34 minutes, 31 seconds Medicaid side. Um in fact we we had some major go lives. Healthcare is usually a one one uh 1st of Jan cycle right most insuranceances switch on on on that day. 34:42 34 minutes, 42 seconds So um so we've had some major go lives happen on the uh on the 1st of Jan this year which means that our um our our 34:51 34 minutes, 51 seconds member base or or our member base for the specific customers actually gone up by uh roughly 50%. Right? So there's a 34:58 34 minutes, 58 seconds good bump up uh on on number of members and the revenue uh that we'll we'll 35:05 35 minutes, 5 seconds we'll see in uh uh cy uh cy through through cy uh 26. Uh we we uh similarly 35:13 35 minutes, 13 seconds I think you know our NR motions are in a pretty good place. So uh hopefully you will see uh good NR playing out on the 35:20 35 minutes, 20 seconds organic platform side even through uh even through uh the the coming years. 35:28 35 minutes, 28 seconds Got it. Thank you. And maybe one question for Anand. Right. So while we have seen EBIT margin expansion year on 35:35 35 minutes, 35 seconds year, um there is there seems to be uh you know uh a sharper increase in our DNA expense and as a result EBIT margins 35:43 35 minutes, 43 seconds have not necessarily expanded at the same pace. uh can you elaborate how much of that is driven by uh you know 35:50 35 minutes, 50 seconds amotizable intangibles coming from acquisition versus tech and other costs that we generally capitalize 35:59 35 minutes, 59 seconds I think that's a that's a great question our DNA for as in if I compare this from Q3 last year versus Q3 this year has 36:08 36 minutes, 8 seconds gone from about 13 kores to about 19 kores majority of this increase is actually coming in from the u uh from 36:16 36 minutes, 16 seconds the acquisition that we did uh in May this year uh we acquired company called cognitive uh and that's uh uh those 36:24 36 minutes, 24 seconds acquisitions basically then uh then lead to higher uh DNA and given given the acquisitive nature of the business uh 36:32 36 minutes, 32 seconds that's uh uh that's what we we continue to see in the business uh the majority of it is coming from uh from cognitive 36:42 36 minutes, 42 seconds got it thank you Thank you. Whoever wishes to ask a 36:49 36 minutes, 49 seconds question, they can use the raise hand button on their Zoom app. So the next question is from the line of Sri Nasu K. 36:58 36 minutes, 58 seconds Sri Nasu. You can unmute yourself and ask your question and also tell us your organization name. 37:10 37 minutes, 10 seconds Oh, am I audible sir? Yes, please go ahead. 37:14 37 minutes, 14 seconds Uh, thanks for the opportunity and uh, congratulations for the great set of numbers. Uh, my first question is you 37:24 37 minutes, 24 seconds you mentioned that uh, most customers start with the loyalty stack and then gradually adapt to rewards insights and 37:32 37 minutes, 32 seconds a type. Look, could you tell us how a typical a 5year customer journey how it starts and how actually you're converting them into NR uh you know how 37:42 37 minutes, 42 seconds it is changing with current AI developments, right? Uh that's a that's a a great 37:48 37 minutes, 48 seconds question uh again. So uh typically uh so most of our customers are these very large uh fortune 2000 type companies. So 37:57 37 minutes, 57 seconds they tend to run an RFP, right? So there's a a full uh at least a six-month RFP process where they go to someone 38:05 38 minutes, 5 seconds like a Gartner or a Forester or um or to one of these loyalty consulting firms or a Deoid or someone like that and 38:13 38 minutes, 13 seconds basically go and uh get a list of who should they invite for the RFP. Uh then it's a very detailed uh RFP, RFI, you 38:22 38 minutes, 22 seconds know, lots of demos. There's a good negotiation that happens at the end. uh sometimes there's a P and you then sign 38:30 38 minutes, 30 seconds someone up right so you then decide on a vendor uh right so it's a fairly detailed uh evaluation process that you 38:37 38 minutes, 37 seconds go through where uh you know while the forester um uh uh wave acts as a you know saying what are the features they 38:45 38 minutes, 45 seconds should test you on uh people have their own requirements so there's a very deep uh now typically once the once you sign 38:52 38 minutes, 52 seconds someone up uh you know it takes anything between I'd say three to uh six, seven months to go live. Uh and that's 39:01 39 minutes, 1 second actually very fast in a in a loyalty context. Usually people take like two years uh with some of our competitors. 39:08 39 minutes, 8 seconds Uh and and uh and like guy mentioned our pricing is typically linked to number of users uh number of members on the 39:16 39 minutes, 16 seconds platform or number of uh transactions that hit us. Right? So uh so when you go live you typically launch the program uh 39:24 39 minutes, 24 seconds and so the number of members that uh are on the platform keep increasing every year right or the number of transactions that keep coming to us keep growing at 39:32 39 minutes, 32 seconds about 3 or 5% uh every year right so that's the first set of NR increase that you see between year 1 and year two that 39:40 39 minutes, 40 seconds uh uh then what typically happens is customers launch a program then they say look we want to do badges we want to do 39:47 39 minutes, 47 seconds rewards we want to do like a journey for our customers, you know, or we want to use the engage stack or or some of that, 39:54 39 minutes, 54 seconds right? So, that's the second access, right? So, usually uh again, this would typically happen an ear down uh or uh uh 40:03 40 minutes, 3 seconds and uh and you know, we had some good examples in the uh uh in the uh uh DRHP, RHP about customers who have grown significantly uh with us over the years. 40:15 40 minutes, 15 seconds So if you look at our numbers, we've over the last uh many years demonstrated 40:19 40 minutes, 19 seconds a 115% to 121% type uh uh NRR uh 40:27 40 minutes, 27 seconds delivery on the on the system right so with AI what's happening is it's getting us into like we've never done like uh 40:35 40 minutes, 35 seconds analytics analytics insights is more a dashboarding tool uh there uh that we have but you know we've never done like 40:43 40 minutes, 43 seconds analysis on a specific problem that you have, right? So with IRA, I think we're able to get into that. We've seen some 40:50 40 minutes, 50 seconds of our very large customers really love uh what they're able to do with IRA. Uh so we we quite excited about that. 40:57 40 minutes, 57 seconds Similarly, uh you know, in quite a few cases uh our customers have like a third party uses our software to run their campaigns and things like that, right? 41:07 41 minutes, 7 seconds So we seeing some use cases there where you know you might not need as many people to run campaigns and you know like you'll hear a lot that people use 41:15 41 minutes, 15 seconds SAP for a large enterprise right uh so you delivery people using the similarly we have people using our software so 41:22 41 minutes, 22 seconds some of that is also um an opportunity for us really tapping into this salary time for uh workflow and intelligence in 41:31 41 minutes, 31 seconds some senses hopefully that'll play into the NR over the next few years I I I hope I could answer that for 41:38 41 minutes, 38 seconds Yeah, thanks for answering that. Uh my next question is uh uh your forester web reports uh says highest on both current 41:47 41 minutes, 47 seconds offerings as well as uh strategy. So is it actually uh translating to win deals against global majors? 41:57 41 minutes, 57 seconds Uh I I I I think this year we've had a like I said our new order book has g gone up from 53 crores to uh like 66 42:06 42 minutes, 6 seconds crores in the same period uh uh of the 9 months. So unlike a lot of the other folks where you're hearing about you 42:14 42 minutes, 14 seconds know grow like new business slowing down we are not seeing that as much. So there's definitely a positive impact of 42:21 42 minutes, 21 seconds uh of uh leads and some of these conversations that uh uh that we see and traditionally you know Forester is a is 42:29 42 minutes, 29 seconds a a really uh top-of-the-class uh analyst and a lot of the very large uh 42:35 42 minutes, 35 seconds fortune 50 100 500 customers take them very very seriously right so it'll definitely help 42:43 42 minutes, 43 seconds thank you and uh my last question is uh uh in your initial remarks uh uh when you talked about your AI capabilities 42:52 42 minutes, 52 seconds uh you said your IRA uh let clients ask questions you know even it can handle support 43:00 43 minutes so that effectively actually taking over a lot of what agencies used to do right so can you shareh how much of your current install base is actively using 43:10 43 minutes, 10 seconds this AI kind of workflows and do you intend to monetize this separately or is it actually planning to upsell to the 43:17 43 minutes, 17 seconds existing customers No, we will obviously monetize this uh actively but we'll stay in the loyalty space only right I mean the idea is not 43:25 43 minutes, 25 seconds to monetize any of this uh outside uh today uh you know as you can understand AI is fast developing so a lot of these 43:34 43 minutes, 34 seconds uh uh are you know and we've taken the approach with Ira to say we will first give the first 3 months as a you know as 43:42 43 minutes, 42 seconds a as a free pilot uh so customers start using it start seeing the value and at the end of 3 months since you then start 43:48 43 minutes, 48 seconds charging them uh for it. So he's now actually in conversations with the few of our first few PC's to actually uh 43:56 43 minutes, 56 seconds start billing them for you know an annual license linked to number of uh you know usage and things like that. Uh 44:03 44 minutes, 3 seconds it's still it's still uh early days uh I would say but we at least have out of our 115 customers today we at least have 44:11 44 minutes, 11 seconds 10 or 15 who are in a P or a post PC type uh place with uh with IRA now 44:22 44 minutes, 22 seconds perfect uh should we move to the next uh yeah uh thanks for answering that uh uh best of luck for uh Q4 and next couple 44:31 44 minutes, 31 seconds of years Thank you. Thanks. 44:38 44 minutes, 38 seconds So, whoever wants to ask the next question, please raise your hands. The next question is from the line of Hal 44:46 44 minutes, 46 seconds Sani. Please tell us your organization name and go ahead. Sir, am I audible? 44:56 44 minutes, 56 seconds Yeah, we can hear you. Yeah. 44:57 44 minutes, 57 seconds Yeah. I am from pioner invest corp and my question is I would like to understand the categories loyalty uh 45:05 45 minutes, 5 seconds platform business model so specifically are this revenue being monetized from 45:11 45 minutes, 11 seconds subscription or GM model uh it's a subscription uh model uh hal 45:20 45 minutes, 20 seconds uh so typically customers sign up with us for three five more years sometimes and it's an annual uh it's an annual 45:29 45 minutes, 29 seconds recurring subscription fee that you pay us. So it's uh typically there's a minimum amount that you'll at least pay us linked to a u let's say x million 45:38 45 minutes, 38 seconds transactions or x million members on the program. And as you get beyond that number let's say it's 5 million members 45:45 45 minutes, 45 seconds which is uh which we charging you half a million for just making these numbers up. Once you get beyond that 5 million 45:52 45 minutes, 52 seconds members, you again pay us additionally per uh per member. Right? So it's it's not a GMV model at all. We don't uh we 46:00 46 minutes don't have any parts of the business which is a a GMV like uh uh so and it is it reflects in our gross margins as well. Our gross margins are around the 46:09 46 minutes, 9 seconds 69 70% uh now. So it is a high gross margin uh software uh business in that sense. 46:20 46 minutes, 20 seconds All right. Thank you so much. All the best. Thank you. 46:28 46 minutes, 28 seconds To ask any question, please press on the raise hand symbol on your app. The next question is from Nikil Chri. 46:37 46 minutes, 37 seconds Please tell us your organization name and go ahead. 46:51 46 minutes, 51 seconds Hello. Yeah, please go ahead. Yeah. Am I audible? Yes. 46:56 46 minutes, 56 seconds Yeah. Thank you so much uh for giving me the opportunity. So, I actually had a follow on to the probably the first 47:03 47 minutes, 3 seconds participant's uh question where you answered that we are actually a system of record. So I just wanted to understand if what if an enterprise 47:12 47 minutes, 12 seconds actually adopts a maybe an claude style agents inside their CRM or uh data uh 47:20 47 minutes, 20 seconds with actually the direct access to the customer history which we actually have. 47:26 47 minutes, 26 seconds So what actually must retain with actually us so as to remain the system of record like I'm just trying to 47:33 47 minutes, 33 seconds understand how are we a system of record because I used to always understand system or of record actually uh is usually where probably there is a uh 47:42 47 minutes, 42 seconds like say payroll or probably maybe a accounting uh a transaction where probably an audit is uh essential. So 47:51 47 minutes, 51 seconds just wanted to understand um how are we a system of record here right? So, so Nickel uh the entire 47:58 47 minutes, 58 seconds ledger for all the earn and burn right how many points you've earned, how many points you've uh redeemed, how many have expired, how many promotion points, 48:07 48 minutes, 7 seconds bonus points. Just making an example that entire ledger like a bank ends up sitting on our side. So uh and that's 48:15 48 minutes, 15 seconds typically how you would look at a uh and not only this even for the customer data like I said for a lot of our customers 48:22 48 minutes, 22 seconds we end up integrating into their various uh customer touch points and even the customer profile like we spoke about 48:30 48 minutes, 30 seconds those 1.8 billion consumer uh profiles other than probably one out of the 115 uh in everyone else that customer 48:39 48 minutes, 39 seconds profile also is kind of built on us and sits with us right so uh so that uh so 48:45 48 minutes, 45 seconds that's the uh like that's typically how you would look at a a system of record 48:51 48 minutes, 51 seconds like right so uh that's yeah did I answer that for you yeah so I'm just trying to visualize because all this is actually new for us 49:00 49 minutes also we are also trying to comprehend so because I while you came with an IPO I understood that probably you are a very 49:08 49 minutes, 8 seconds uh like difficult with the switching cost in our business is very high so I'm just trying to connect with probably the 49:16 49 minutes, 16 seconds current uh scheme of things how will it impact us and that is why actually I had also the similar question so yeah probably so basically you mean to say 49:25 49 minutes, 25 seconds that the we have an explicit ownership of the loyalty points ledger or probably the maybe the qualification logic or 49:32 49 minutes, 32 seconds something like that like uh if I so actually the the logic the logic is uh defined on our platform we calculate 49:39 49 minutes, 39 seconds how many points rewards cash back whatever you're getting the redemption also sits on our platform the expiry also sits on our platform so all of that 49:48 49 minutes, 48 seconds the calculation and the uh you know the uh actual storing of all that data uh in 49:55 49 minutes, 55 seconds fact a lot of our uh customers ordered the ordered the system every x years, right? So, it's again like you said, there is a full audit angle uh to it. 50:05 50 minutes, 5 seconds There is a uh all of that like it's think of it like any bank ledger, right? 50:10 50 minutes, 10 seconds So, yeah. And it's like actual currency, right? So, there's like uh a lot of our programs have like thousand crores of currency sitting in our platform, right? 50:19 50 minutes, 19 seconds So, uh and so it's like currency. So, it's almost looked like looked at like a uh like a active bank ledger in that 50:26 50 minutes, 26 seconds sense. So, Got it. Got it. Now this makes uh it more clear. Uh thank you so much and uh wish you all the best. 50:34 50 minutes, 34 seconds Thanks Nikk. Thanks. 50:39 50 minutes, 39 seconds Whoever wishes to ask the question please raise your hands. So the next question is from the line of Rohan Npal. 50:47 50 minutes, 47 seconds Please tell us your organization name and go ahead. 50:53 50 minutes, 53 seconds Uh thanks for taking my question. Uh the first question I I uh want to ask was um 51:00 51 minutes so uh since 60% of your cost is uh fixed uh not later revenue um how should one 51:06 51 minutes, 6 seconds think about the scaling of that cost over time um like maybe near-term and medium-term like how do you see that moving? 51:16 51 minutes, 16 seconds Uh do you want to take that? I think it's uh yeah yeah yeah u so Rohan u as you pointed out about 51:24 51 minutes, 24 seconds 60% of the cost is non cox uh which is largely uh towards tech and product and 51:30 51 minutes, 30 seconds uh uh sales and marketing. uh now this is this is the cost which which increases more uh more uh near inflation 51:39 51 minutes, 39 seconds rate and and if we if we if we decide to do any new product development now this is where we see a lot of economies of a 51:47 51 minutes, 47 seconds scale as as the business grows this cost is growing at a much lower rate and as we do acquisitions this cost doesn't get 51:56 51 minutes, 56 seconds impact impacted at all and this is where the economies of a scale has been coming and if you see over the last few 52:03 52 minutes, 3 seconds the the abitars have moved from say in FI23 from about minus4% to about 12% in FI25 52:11 52 minutes, 11 seconds and has continued to improve thereafter. Did I did I answer your question? 52:19 52 minutes, 19 seconds Fair enough. But I mean uh how do you see that moving uh from here on? Are there any significant investments in 52:26 52 minutes, 26 seconds product or infra that you have uh planned or do you expect these to sort of move in line with inflation? Is there 52:34 52 minutes, 34 seconds anything that uh one should be sort of uh particularly one should keep in mind as they model cost growth uh over the near to medium term? 52:45 52 minutes, 45 seconds So as Anish has spoke about some of the product investments that we've been doing on uh on AI stuff uh that has been 52:52 52 minutes, 52 seconds delivering uh delivering good results and that's been helping improve productivity as well improve productivity within capillary as well as 53:00 53 minutes for our customers and it is also helping us improve our win rates versus competition given a lot of our competition is more uh more agency 53:09 53 minutes, 9 seconds driven right so that's an investment that we would continue to make Um the other uh other is uh investment that 53:16 53 minutes, 16 seconds we've been doing uh towards the product for uh migration of customers migration from a legacy platform onto capillary 53:24 53 minutes, 24 seconds platform. So making that lot more smooth and uh painless for for our customers and that's something that we have uh we 53:32 53 minutes, 32 seconds have tried with uh some of our earlier acquisitions and uh and have been uh continuing to invest on. So those 53:39 53 minutes, 39 seconds investments would continue. Um at this point in time u we we don't have new products planned but as as and when we 53:47 53 minutes, 47 seconds plan new products we would uh would keep uh keep the folks updated. Okay. 53:53 53 minutes, 53 seconds I think from a Yeah. Go on. No sorry go on. Go on. Go on. 53:58 53 minutes, 58 seconds Yeah. I I think from a like you said I think inflation plus a few more points for uh you know team growth. I think 54:07 54 minutes, 7 seconds that that should be a good way to think of this. 54:11 54 minutes, 11 seconds Okay, understood. And uh team growth uh should be like um like uh how how do you 54:19 54 minutes, 19 seconds think about that? I'm just trying to understand where we are in the um in the product and business cycle so to speak. 54:26 54 minutes, 26 seconds Are we in like investment phase? Are we like kind of uh sweating assets that are already in place? Just try to get a sense of that. 54:35 54 minutes, 35 seconds So let me uh so if you look at our last few years our technology um and corp and our technology cost used to be 28% our 54:44 54 minutes, 44 seconds revenue it uh came down to about 18% for last year and it's on a similar trend now uh there's definitely a lot more 54:52 54 minutes, 52 seconds leverage left I I definitely don't want to guide to any any number on what uh but you will see some of these improve 55:00 55 minutes right you like an said you will see further improvement on um uh uh on like 55:08 55 minutes, 8 seconds uh the below COGS items contribution to uh like as a percent revenue will keep will keep going down. 55:15 55 minutes, 15 seconds Okay, fair enough. Um and then uh my second question was uh around uh IRA. Uh so how do you see 55:23 55 minutes, 23 seconds IRA um in terms of its potential to monetize um 55:30 55 minutes, 30 seconds within each user? like have you is have you thought about um monetization or is it is it too early in the uh life of the product to uh go there? 55:42 55 minutes, 42 seconds You know actually in in my head um like again we we put this as part of the RHP and all that stuff as well. Our biggest 55:49 55 minutes, 49 seconds competitors are agencies right? So uh if you look at the rest of the names on the forester wave I think most of them are agencies right of 55:57 55 minutes, 57 seconds course for Salesforce is not but if you look at the majority of the names there and and a large part of IRA for us is really saying if you needed 30 people at 56:06 56 minutes, 6 seconds an agency to run loyalty program you will need five on capabilary right so so the first large part of IRA for me is even more than just monetizing and just 56:15 56 minutes, 15 seconds the NRR part is just improving win rates right it's just uh uh it's a massive differentiator no agency will do it 56:23 56 minutes, 23 seconds because it hits them harder uh than you know for us we anyway don't monetize that right so uh I mean we we don't have 56:31 56 minutes, 31 seconds heads doing a lot of this stuff right so um so uh for me at least when we think of the product it's uh we believe that 56:39 56 minutes, 39 seconds IRA is a is a force multiplier on improving our vending at least in the US uh right now um now 56:49 56 minutes, 49 seconds that's the first big use case of IRA The second is of course look uh I think some of these areas are slightly newer for us 56:57 56 minutes, 57 seconds the whole uh system of intelligence replacing that with uh so we've started experimenting with pricing like I said 57:05 57 minutes, 5 seconds it's it's still early days hopefully in a couple of quarters we'll know what's the what's the right uh right way to 57:11 57 minutes, 11 seconds price this uh uh price Ira the analytics use case or the delivery use case of 57:18 57 minutes, 18 seconds campaigns things like that Okay. Um, so, okay. So, uh, I I just want to check my understanding of this. 57:26 57 minutes, 26 seconds So, right now it's more of a, uh, helps us get a get a foot in the door proposition as opposed to a helps us, 57:34 57 minutes, 34 seconds uh, nudge IR uh, sorry, NRR higher. Is that fair? 57:40 57 minutes, 40 seconds So, I think it's already proven its value in the first part, which is, uh, helping us win more, right? So I won't say foot in the door 57:48 57 minutes, 48 seconds because you're already in the RFP and that's when people love the uh love what they see. Uh I think the second one like I said we've had a bunch of PC's we are 57:57 57 minutes, 57 seconds in early negotiations on converting some of them. Uh so that's the part where there is promise but it's not I mean we 58:04 58 minutes, 4 seconds will need a quarter or two to actually get to telling you how much of NR can come from this. 58:09 58 minutes, 9 seconds Okay. And when you think about the last thing from my end, uh when you think about this, uh what would success for you look like in terms of getting a sort of NR bump uh from IRA? 58:22 58 minutes, 22 seconds Uh do you have anything like that in mind or uh again too early? 58:30 58 minutes, 30 seconds I would say probably a good question to answer in a couple of uh quarters, you know. So uh um yeah because it's a 58:38 58 minutes, 38 seconds it's a it's slightly an adjacent time which we are dipping into. So even our view has been uh let's which is why like 58:46 58 minutes, 46 seconds I told you we've said first give it free for three months right let's see usage let's see what kind of stuff is happening right so uh and we seeing a 58:54 58 minutes, 54 seconds lot of usage which means people are finding value uh but a little early little early right so 59:01 59 minutes, 1 second okay that's it from thank you so much anybody who wishes to ask a question can 59:10 59 minutes, 10 seconds raise their hands so So we have a question from uh Sumuk. Uh Sumuk you can uh go ahead please. 59:31 59 minutes, 31 seconds Uh Sumok you need to unmute yourself and go ahead. 59:45 59 minutes, 45 seconds Hey, sorry. Uh uh can you guys hear me now? Yeah, please go ahead. 59:50 59 minutes, 50 seconds Uh so uh sir, you mentioned about uh agencies and they are your competitors. 59:55 59 minutes, 55 seconds So can you please explain how are they different from what you guys do? Uh because I'm new to this industry so wanted some understanding on that. 1:00:04 1 hour, 4 seconds Yeah, let me just take you to the forester. 1:00:07 1 hour, 7 seconds Uh perfect. Uh so if you look at the top three uh here uh there's us then there's a company called Kobe there's a company 1:00:14 1 hour, 14 seconds called epsilon I'd encourage you to once just look at the Kobe and the epsilon side. So these are typically like marketing agencies 1:00:22 1 hour, 22 seconds uh like you know they do creative they do uh ads they do all that kind of stuff and they also tend to have a 1:00:31 1 hour, 31 seconds a tech platform but the primary model tends to be that we will charge you for you know x number of people to run this 1:00:38 1 hour, 38 seconds program for you right uh while ours is more a you're buying a software uh you know and you use it yourselves right 1:00:46 1 hour, 46 seconds that kind of a a structure in in in in uh uh in so typically uh we we've now 1:00:54 1 hour, 54 seconds migrated customers from some of these agencies over to us and they tend to be very very like each program is run by 30 1:01:01 1 hour, 1 minute, 1 second people right so very very people uh heavy while you can do a lot of that stuff with uh with software right so 1:01:10 1 hour, 1 minute, 10 seconds that's the that's the piece that I was saying that and if you look at the look at the US majority of the loyalty space is owned by agencies 1:01:19 1 hour, 1 minute, 19 seconds So, uh, moving to software and some of that is relatively newer, uh, as a as a concept in the US. 1:01:27 1 hour, 1 minute, 27 seconds Okay. Uh, did I did I answer that question? 1:01:31 1 hour, 1 minute, 31 seconds Uh, yes sir. Uh, that and also sir, so let's say there is an organization FMCG organization. So if 1:01:40 1 hour, 1 minute, 40 seconds they have to start thinking about running a loyalty program now and then they come to you. So what are the problem points that you're going to 1:01:47 1 hour, 1 minute, 47 seconds solve for them? Is it like uh you're going to nudge the customers to come in and you know using your analytics or 1:01:57 1 hour, 1 minute, 57 seconds points or whatever to increase the transaction value for this FMCG company or you are just a guy who maintains the 1:02:05 1 hour, 2 minutes, 5 seconds ledger and takes care of the transaction at the back end. So all the like basically if I look at the FMCG website right I can see how many points or how 1:02:13 1 hour, 2 minutes, 13 seconds many reward points I have but your software at the back end and it only does the ledger part of it or is there any analytics and performance basically 1:02:22 1 hour, 2 minutes, 22 seconds nudging the customer to increase transaction or that kind of stuff right so uh let's take the example of uh 1:02:30 1 hour, 2 minutes, 30 seconds Albert who is one of our customers who's also on the or any any FMCG uh for that matter uh typically 1:02:38 1 hour, 2 minutes, 38 seconds For a lot of these FMCG companies, it's not just the program. The front-end interface, right, which is could be the mobile app or it could be the website 1:02:46 1 hour, 2 minutes, 46 seconds are also extensions that come from the capillary platform. Uh right. So uh like um you know so uh in these cases it 1:02:55 1 hour, 2 minutes, 55 seconds would be uh it would be basically helping them come up with a tech platform which then the front end uh 1:03:03 1 hour, 3 minutes, 3 seconds interface etc like a mobile app where you will have where the customers can first download it scan a QR code or scan 1:03:10 1 hour, 3 minutes, 10 seconds a a receipt uh earn points or earn rewards etc. Similarly, what we'll also do for a lot of these is uh you would 1:03:18 1 hour, 3 minutes, 18 seconds have some kind of redemption mechanism like uh you know where they could redeem those points for a movie ticket or they 1:03:26 1 hour, 3 minutes, 26 seconds could redeem those points for in some cases we run these programs for painters where uh you know you could pay your phone bill with it things like that 1:03:34 1 hour, 3 minutes, 34 seconds right so the uh so the entire stack ends up uh coming from there now what we allow a lot of the uh uh FMCG or these 1:03:44 1 hour, 3 minutes, 44 seconds kind of companies to do is also retarget those customers saying look uh you like whatever buy I don't know 10 10 1:03:53 1 hour, 3 minutes, 53 seconds t of paint uh this month and here's a additional reward that unlocks for you right so there's some amount of 1:03:59 1 hour, 3 minutes, 59 seconds targeting some amount of uh uh stuff that you can do on the platform right so in a FMC use case it's it's also the 1:04:07 1 hour, 4 minutes, 7 seconds front end uh which is uh so yeah that's in that vertical typically you don't have a a customer uh It's not like you 1:04:16 1 hour, 4 minutes, 16 seconds don't have a retail store or you don't have a e-commerce website, right? So, which is where some of these interfaces also end up coming from uh our platform. 1:04:24 1 hour, 4 minutes, 24 seconds Yeah. 1:04:25 1 hour, 4 minutes, 25 seconds Okay. So, is it like a standalone app outside the main FMCG app exclusively for rewards and redeeming points etc. 1:04:34 1 hour, 4 minutes, 34 seconds Uh you know, in a lot of use cases, it's the only use case that the FMCG has, right? So uh like the Albert apps are 1:04:43 1 hour, 4 minutes, 43 seconds all essentially run on the capillary platform across these 15 countries including in India. So yeah like 1:04:51 1 hour, 4 minutes, 51 seconds there'll be an app for PDF sure things like that right. Uh if you want more there's some case studies on our website you can uh take a look. 1:05:01 1 hour, 5 minutes, 1 second Thank you sir that's helpful and all the best for your coming. Thank you. 1:05:07 1 hour, 5 minutes, 7 seconds Thank you. We'll take that as the last question. Now I'll hand over to Anish for his closing remarks. Anish, please go ahead. 1:05:17 1 hour, 5 minutes, 17 seconds Uh, thanks everyone for uh joining us today uh and uh having placing your confidence 1:05:25 1 hour, 5 minutes, 25 seconds in us. Uh uh I'm hoping we can live up to it over the next few quarters. Uh and 1:05:31 1 hour, 5 minutes, 31 seconds uh uh thanks again. Uh have a great weekend.