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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.
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