Latent View Analytics Ltd Q4 FY24 Earnings Conference Call Insights

Key highlights from Latent View Analytics Ltd (LATENTVIEW) Q4 FY24 Earnings Concall

• Operational Performance
  • 19% growth in challenging economic conditions.
  • 6% quarter-on-quarter growth, 21.7% year-on-year growth.
  • Uncertainty and sluggishness in winning large discretionary projects.
  • Added 6 new client accounts and kicked off smaller initiatives with existing clients.
• Strategic Partnerships
  • Partnership with NVIDIA on Generative AI solutions.
  • NVIDIA’s GPU technology and tech stack to enable GPU usage for business impact.
  • Encouraging early results, especially in real-time analytics on streaming data.
• Acquisitions
  • Acquisition of Decision Point in final stages of diligence.
  • Decision Point’s expertise in consumer packaged goods (CPG) and revenue growth management (RGM).
  • Synergies with Laterooms’ solutions in R&D, innovation, supply chain, and onshore availability.
  • Decision Point acquisition to be funded through IPO proceeds and internal accruals.
  • Expect CPG practice to reach 20% of revenue in 2 years.
  • Expected to grow at 25-30% given smaller base and high-growth areas.
• Generative AI
  • Good traction in Generative AI solutions and pilots.
  • LASER and AI Penpal solutions gaining traction.
  • Leveraging large language models and GPU technology.
• Myeloma Foundation
  • Selected as Partner of the Year by International Myeloma Foundation.
  • Building data platform to provide 360-degree view for doctors, caregivers, and patients.
  • Assisting in patients’ journey to recovery through data insights.
  • Pride in impacting lives meaningfully through this non-profit work.
• Financial Performance
  • 19% year-on-year revenue growth, despite challenging environment.
  • 6% quarterly growth, 21.6% year-on-year growth.
  • Revenue of INR 640 crores for the full year.
  • EBITDA of INR 40.4 crores, 9.8% quarter-on-quarter growth, 34.2% year-on-year growth.
  • EBITDA margins reached historical levels of over 25%.
• Geographic Expansion
  • S. contributed 95% of revenues.
  • Europe contributed 1.4%, but seeing good traction.
  • Aim for Europe and APAC to contribute 5-6% in next fiscal year.
• Future Outlook
  • Optimistic about relationships built in FY 2024 yielding results.
  • Strategy expected to play out positively in FY 2025.
  • Continued investment in people, with 133 campus hires in Q4.
  • Organic growth guidance around similar levels as FY24 (~20%).
  • Expecting 6-7% QoQ growth in Q1 FY25 as deals get finalized.
  • Growth momentum expected to pick up in H2 FY25 compared to H1.
  • Aspiration to achieve 8-10% sequential growth exit run rate by Q4 FY25.
  • Target to maintain 21-23% EBITDA margins in H1 FY25.
  • Q1 margins to be impacted by wage hikes and higher visa costs.
• Pipeline and Deals
  • Pipeline larger than start of FY24, but lacks large initiative opportunities.
  • Confirmed revenue and extensions already exceed FY24 revenue.
  • Two to three deals worth $0.5 million+ in pipeline, but facing elongation.
• Margins and Profitability
  • Expect to maintain 21-23% EBITDA margins in H1 FY25.
  • Target 25% EBITDA margins in H2 FY25 if growth reaches 6-8% QoQ.
  • Decision Point acquisition to be EBITDA accretive but impact limited initially.
• CPG Business Integration
  • Structure in place with Decision Point founder leading CPG practice.
  • Latentview’s delivery lead managing combined CPG delivery.
  • Overlapping sales teams incentivized to pursue joint opportunities.
  • Expectation of rapid acceleration in CPG practice growth.
• Inorganic Growth Strategy
  • Parallel process to continue evaluating inorganic opportunities.
  • Meeting prospective targets in data engineering, BFSI, retail verticals.
  • Opportunity window due to realistic valuations after macroeconomic challenges.
• Focus Areas
  • Data engineering capabilities, especially for hyperscalers.
  • BFSI and retail verticals.
  • Combination of data engineering for financial services firms ideal.
  • Continuously engaging with external partners for prospects.
  • CPG expected to contribute around 20% of revenues over next 24 months, up from 8% currently.
  • Significant investments being made in CPG, aided by Decision Point.
• Campus Hiring
  • Strong campus hiring of 450 offers, with 360 already onboarded.
  • Around 40% of new campus hires already deployed, rest in bootcamps/shadow mode.
  • Tempered next year’s campus hiring to 250 offers based on anticipated demand.
  • Campus hiring impacting near-term utilization and margins as per expectations.
• Market Analysis
  • Recent market intelligence exercise indicates $300 billion market size in 3 years at 18-20% CAGR.
  • Expects to achieve 25-30% organic CAGR over next 3-5 years if economic conditions improve.
  • Currently a small player in the overall data analytics market.
  • Significant headroom for growth given the large market size.
  • Acquisitions to provide step changes and aid in replicating/improving on growth rates.