Newgen Software Technologies Limited (NSE: NEWGEN) Q4 2025 Earnings Call dated May. 02, 2025
Corporate Participants:
Deepthi — head od Investor Relation
Varadharajan — Director
Analysts:
Aditi Patel — Senior Relationship manager
Ruchi Burdhe Mukhija — from ICICI Securities
Prannav Mashruwala — Analyst
Akshit Agarwal — Analyst
Hinal Gara — Analyst
Badik Sarkar — Analyst
Mihir Manohar — Analyst
Chirag Kachadia — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q4 FY ’25 Earnings Conference Call of Newgen Software Technologies Limited hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms Adity Patel from ICICI Securities. Thank you, and over to you, Adity.
Aditi Patel — Senior Relationship manager
Thank you, Puja. Good evening, and welcome to the Q4 FY ’25 Earnings call of Neogen Software Technologies. It’s my pleasure to introduce the senior management team of Neogen. We have with us today Mr Nigam, Chairman and Managing Director; Mr Ts. Varadhrajan, Whole-Time Director; Mr Jeet, Chief Executive Officer; Mr Arun Gupta, Chief Financial Officer; Ms Deepti, Head, Investor Relations. I now hand over the call to Ms Deepti for further proceedings. Thank you, and over to you, Deepti.
Deepthi — head od Investor Relation
Thank you. Thank you,. Good afternoon, everyone. I’m Chuk, Head, Investor Relations Software Technologies Limited, and I welcome you all to the Q4 FY ’25 results of the company. Before we move on to the discussion, let me highlight that this call may contain certain forward-looking statements concerning future business prospects and profitability, which are subject to a number of risks and uncertainties. And the actual results could materially vary from the forward-looking statements. Past performance may not be indicative of future performance. The company does not undertake to make any announcements in case any of these forward-looking statements become materially incorrect or update any forward-looking statements made from time-to-time by or on behalf of the company.
For further details, please refer to the Investor Relations section of our website. I will now hand over to Mr for presentation of the results, which will be followed by a Q&A. Thank you.
Varadharajan — Director
Good afternoon, everyone, and thank you for joining us today. We are pleased to report our results for full-year and Q4 of FY ’25. FY ’25 was a year of healthy revenue growth and margin expansion for Nugen. We witnessed revenues of INR1,487 crores, leading to a growth of 20% Y-o-Y. The year unlocked new opportunities for us, identifying fresh and use for expansion. We witnessed strong growth in our license and implementation revenues. License revenues witnessed a growth of 41% Y-o-Y. This is expected to generate further downstream revenues moving forward. Implementation revenues grew by 25% Y-o-Y.
For the year, our annuity revenues were at INR834 crores, comprising of 56% of our revenues. Our business model is well-diversified across geographies with each geography meaningfully contributing to our growth. APAC Across knowledge industries, regulatory and regulatory authorities and so on. Another interesting use-case based on our AI agent Lumen includes an AI first early warning system for corporate, financial institutions and SMEs, which has been designed to proactively monitor and identify potential risks such as credit referred, fraud, liquidity issues or systemic threats in order to take preemptive action. These systems use machine-learning, data analytics and real-time monitoring to detect warning signs from various data sources across around 1,500 parameters at account and borrower level. In the insurance sector, we are working in the workspace for underwriting and client processes to enhance the decision-making and making it more straight-through by clearing anomalies and exceptions, underwriting cases, data-driven models for faster, more accurate and more consistent decisions. We anticipate further growth and innovation in AI-led journeys as we build upon these use cases and successes. We have provided to a vertical first go-to-market focusing on various journeys, clusters on the basis of their revenue potential, product maturity, investment in portability across geographies. Nugen’s transformative growth vision includes targeting banking at-scale across these regions and expanding in insurance and government segments. We are also strengthening our partnership with advisory firms and system integrators and independent software vendors. In Q4, Nugen has been named a leader in the forest — forester Wave Content platforms that is in Q1 2025. Nugen One Contextual Content Services received the highest possible scores in 10 criteria, including metadata, search, content migration, life-cycle management, intelligent data extraction, document generation and digital process automation. The report recognized that Nugen’s continues its solid innovation strategy with a focus on AI automation and app design capabilities. Our culture of innovation combined with deep domain expertise is what truly differentiates us. Out of our global — out of our global workforce of over 4,600 professionals, we have more than 600 people scanning — spanning product development, AI engineering, domain consulting. During the year, we have added senior leadership talent to strengthen go-to-market, delivery and innovation capability also. We are proud to be recognized as a great place to work. This certification is a certification is a testament to our unwavering dedication to fostering and empowering and dynamic work culture where our people thrive and deliver outstanding results. Coming to profits and margin, we delivered healthy growth in profits and expanded margins during the year. Profit-after-tax was at INR315 crores, which is 21% of revenues. We continue to prudently invest in R&D and sales and marketing activities. During the year, we have invested nearly 10% of our revenues in R&D initiatives and around 21% of revenues on the various sales and marketing activities. On the balance sheet front, we witnessed robust cash-flow generation with our net cash generated from operating activities for the year at INR215 crores. We have declared a dividend of INR5 per share. Looking at Q4 results, we crossed quarterly revenues of INR400 crores for the first time. We witnessed 15% Y-o-Y growth in the quarter to reach the revenue of — revenues of INR430 crores. Our profit-after-tax reached INR18 crores in this quarter. We are excited about the future and expect to continue to maintain the growth momentum with our unique solutions in the financial services, insurance, government sectors and innovation in AI-led journeys. These solutions and our result-based services help our customers with their revenue enhancement, optimization and efficiency improvement, our strategy is built around the full life-cycle of our users and that journey-led mindset is paying-off in stronger engagement, retention and growth. While we remain mindful of the broader market conditions, we are confident in our ability to continue delivering value to our customers and shareholders. That’s all. Thank you very much and we are now open for the question-and-answer.
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles the first question is from the line of Ruchi from ICICI Securities. Please go-ahead.
Questions and Answers:
Ruchi Burdhe Mukhija
Thank for the opportunity. I have two questions. First, if I look at the annuity revenue mix, it’s been trending down even when I look at the annual number. Could you help us understand now why we are claiming behind or why the annuity revenue mix is trending down
Varadharajan
Hey,, thanks. Thank you for your question. You’re absolutely right, what the growth on this year, especially this quarter has been predominantly on license and implementation. And as you understand, the annuity revenue is typically a downstream revenue. And in our last quarter, we had clearly mentioned that some of our larger deals have delayed annuities kicking-in. And we had given a projection that by Q3, Q4 of this year, we should be able to restore our healthy annuity growth rate. So it’s a temporary phenomenon.
We don’t see as a normal, but the business automatically compounds annuity. Not a question about that. But yes, in the short-term, since the license growth rates and the implementation growth rates are higher side, we don’t see the annuity growth rates proportionately. We do think that in next two quarters, we should be back on the track so that the growth rates can be restored on those annuity side of that
Ruchi Burdhe Mukhija
Got it. Secondly, yeah, if we look at the growth number, this year, we saw successive growth moderation for FY ’25. Q1, we had 25% growth rate. Now we are ending Q4 with 15% Y-o-Y top-line growth. So when you look into the deal wins, what do you see the near to medium-term growth that can have in?
Varadharajan
Yeah. So while you look at the 15% growth and this is a large quarter for us. And if you look at our deal win momentum, I think this has been one of the very good years for us. In fact, we have won 62 large logos this year and which is significantly much higher than in previous years. Not only that our — some of the challenges in US, they have been addressed in Q4 with almost 10 large deals in coming from US and APAC has grown. On India and Middle-East, which are probably large markets, I think we just recall that last year our growth rates were almost 40% in the Q4. So relatively, their growth this quarter was muted. But I’m going on in terms of looking at number of deals which we have won, the larger license growth of 41%, we do — we are confident that downstream revenues will start kicking-in. And the way the market currently is shaping and in-spite of uncertainty, since our revenues are pretty diversified,they are now equally — APAC is playing a very important role in the revenue, it has reached a significant number.
India and Middle-East continue to be large markets for us and US kicking-in. We are still positive to maintain a growth momentum going into next year.
Ruchi Burdhe Mukhija
Thank you.
Varadharajan
Thank you.
Operator
Thank you, Ruji. Thank you, Ruji. The next question is from the line of Adity from ICICI Securities. Please go-ahead.
Aditi Patel
Thank you for the opportunity. My first question is on EMEA market. What — specifically in Q4, what has led to year-on-year decline in EMEA. Was there any unexpected ramp-down?
Varadharajan
No,, not really. I think we — so I think this is the Q4 is a very large market. And I said last year, we had like a 40% growth and lot of them were license deals. This year, I think we missed some of the deals coming, which were about to come in Q4 and that is the number. Since on a quarterly basis and when you divide the whole annual number to quarterly and then you also divide by regions and a few deals make huge difference in performance. They are not the true reflection of the market is behaving. We have not lost any major deals. We have just been able to close less number of license which were anticipated to be closed. So that is it. So There is no — nothing bigger than that in that.
Aditi Patel
So do we expect these license deals to close-in like Q1 or Q2 FY ’26? We do hope that. We do hope
Varadharajan
That, but unless the deals come in, we are all waiting for it. But yeah, the market is still we are — we got — this is a strong market for us, especially on government and financial services. We expect the growth momentum to continue out there. And we have built some very, very large deals in last year. Some of them should surely come up in Q1, Q2.
Aditi Patel
Okay, got it. And I have a follow-up on the question which Ruji asked. So if we see for Q4, the support revenue has dipped Y-o-Y. So if I understand like the support revenue run-rate should continue like because I mean, so can you just help us understand why the support revenue has dipped?
Varadharajan
So it’s a marginal dip. I think it is a kind of a correction in certain accounts where some in terms of quarterly adjustments. We are still looking working with the customer to get those revenues back. But right now since they were held by the customer for a particular. So again, if you look at it on quarterly basis, a single deal or a single case makes the difference in the revenue. We don’t read too much into that.
Aditi Patel
And we haven’t seen like a drop on Y-o-Y basis in 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 or is not going to renew them further?
Varadharajan
See, sometimes the timing of the contract happens, sometimes there is an adjustment or sometimes there are also — see also there is an element of churn in the business anyway. But those churns are in the minor 1% or 2%. So they are not the effect. So there is no major change or major loss of client. So it is more about adjustments or more about in terms of the timing of the deal happening?
Aditi Patel
Okay. Yeah. Okay. Got it. And on the implementation revenue, so for Q4, we did see a strong growth both in Q-o-Q and Y-o-Y. So does it mean that the deals which were 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?
Varadharajan
Yes. So I think we had strong implementation revenues projected coming into Q4. We are still in the process of executing some of those two projects. I think most of them will be in the more final stages in Q3, Q4 of this year and that is where we are hoping to kick-in the more support revenues and the ATS revenues we should get.
Aditi Patel
Okay. Okay. And can you remind us of 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?
Varadharajan
Yeah. So there’s — so basically ATS AMCs have direct correlation, they are somewhere between 18% to 22% of our revenue when they kick-in. Support is depending on more about complexity of engagement. So clients could have disproportionate. So clients could have a support team of five or they could have a 50 support team. That’s more to do with the kind of work and where they are rolling out. So it does not have a direct correlation.
Aditi Patel
Okay, okay. And can you share the order book numbers as of end of FY ’25, how much it has grown?
Varadharajan
I think at the end of FY ’25, our order book stood at INR16 INR1,600 crores.
Aditi Patel
Okay.
Varadharajan
So I think since the order books don’t give the complete picture. I think the way we look at it is we look at order book and the unexecuted order book, which is going into the next year. I think we expect a more healthy growth on the unexecuted order book side going into next year, which results in more business in control, which is typically either renewals or unexecuted order book. So we are seeing a strong of more than 20% in the business and control part of our business.
Aditi Patel
Okay. So can you share like what has been the — like executed order book number?
Varadharajan
I think can share those numbers accurately. I don’t have right now on that, but she can share it for next three years.
Aditi Patel
Okay, sure. Thank you. And last one on — so we have seen a moderation in banking revenue — 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 of — like for our large clients in India and EMEA, we have implemented our key solutions and the demand is now saturated. Like can you share growth outlook going-forward over here?
Varadharajan
So you’re absolutely right. I think we have seen this year there is a higher jump-in insurance and government growth and banking growth is more at I think, 11% 14% of growth, if I’m correct, maybe 15% growth in banking rather than close to 20%. And you are right, I think last two years, there is a huge momentum around public sector spending on banking, especially also on the digital lending side, which we are trying to do in both India and Middle-East. Some part of that has been serviced, but still the unserviced part is very, very large. I think it’s still — since our growth rates last year were very-high and we are still in-process of executing some, we see slightly muted.
We don’t see that for next few years, still banking is going to be the predominant growth driver for the company. While insurance and government will start taking up some market-share where we can have accelerated growth, but for the company to grow, we still expect the banking to do extremely well. We have cases going-forward both in India and Middle-East this year and we don’t see a challenge that to maintain a growth momentum. I think this current years of 15% growth vis-a-vis 20% growth in banking, I would still treat as an anomaly rather than the — that is the trend going-forward.
Aditi Patel
Okay. So. So can you talk in bit detail about the unservice part, like which client segment or which solutions comprise this?,
Varadharajan
While even on the core product of lending, we have covered most of the public sector and maybe some Tier-1 banks. There is a huge set of markets still which is typically looking of you know, doing second-generation of transformation on those products. So private banks are available to us. And then there is a large list of what we call finance companies or NBFCs, which are over. Last year, we got around six of them. There are still in India roughly around 30 more, which is addressable market for us. Beyond that, we sold some of things like payments and trade-in some Tier-1 accounts.
So there is a huge probability of multiplying those businesses across all more — both in India as well as in Middle-East. So I would say continued momentum on lending plus more to do in payments and trade-in Tier-1 banks is going to provide a wider market for us and then supported by the deals which we can do in financial non what you call NBFCs.
Aditi Patel
Okay, got it. Thank you.
Operator
Thank you.
Varadharajan
Thank you.
Operator
The next question is from the line of Prannav from Dolat Capital. Please go-ahead
Prannav Mashruwala
Hello. Yeah, am I audible?
Varadharajan
Yeah.
Prannav Mashruwala
Just one on the broad revenue and revenue outlook considering the overall macro situation of any pockets of headwinds that we are particularly seeing in terms of delays. So we’ve seen certain delays with coming out in our SaaS and also in some of our licenses. So any headwinds that you’d like to call-out for FY ’26?
Varadharajan
Sorry, I think there’s a lot of disturbance. If you can go on
Prannav Mashruwala
Yeah.
Varadharajan
Thank you. So Pranav, I think as you were rightly saying, I think right now the whole — everything is pretty uncertain and we don’t know-how things are going to shape. Having said that, as I said, we are pretty diversified. There’s not a single market or a single client segment on which we are dependent. And some of our markets do seem to be less affected initially. I think our markets like India are less affected right now. We are also looking — working in APAC. And the third thing is the financial services companies where we are dealing with predominant and insurance. They probably have second-degree impact and third-degree impact. So we are in the beginning of year in our planning stage, we are clearly driving for growth this year. We don’t See any larger challenges, you know hitting our way. Having said that, I think we’ll be cautious. We’ll be assessing situation every quarter, but as of now in the beginning of the year, we are looking at our historical growth rates and trying to do better than that.
Prannav Mashruwala
Also, just doubling down again on the growing the SaaS business. So do we expect SaaS to you know, recoup some of the slower-growth in FY ’26 considering some of the deal pipeline and that we have been building in our base as well as our marketing deals in US.
Varadharajan
No, I don’t see that. I see some of the momentum which has come in US and also momentum in other geos like Australia and UK should push the SaaS revenue up. And we are hopeful that I think in next year, we should be doing a better number on SaaS. So SaaS is again it’s a kind of where we are providing software service on cloud. But beyond that our license deals are equivalent to SaaS deals.
So in, we are doing both combination of some Tier-1 accounts are looking at even license deals, but mostly are looking at SaaS. So any growth in US, Australia, UK and even some in other markets is trending towards SaaS. So I don’t see any challenge in SaaS business per se next year.
Prannav Mashruwala
Great. Sir, just also one on the margin aspect. So we are clearly right now exiting Q4 on a high note. How would you see margins trending over for the next year. See, I think we
Varadharajan
Have been always maintaining this. For our company, we always operate for higher-growth mode. So we initially upfront, we have cost loaded. And somewhere between 16% to 18% is what we load cost in the beginning of year as a part of the plan. So any growth which we hit in about 20%, our market margins should keep on expanding. And I think unless we are more aggressively able to invest in growth. But in any eventuality, we fall below 17% 18% of growth, we may have flat margins or contracted margins.So margin is a function of our business. We have at a gross level above 64% margins. So as long as we can maintain a healthy growth rate, the margins will keep on expanding finally on the expected tax-rate for FY ’26, so Q4 we exited EBITDA around 23% and Q3 we had about 16.5%. So color on down So this is the base now. I think it’s because of the SEs at full benefits and no partial benefits coming in. Now the current base of 23% is going to be the likely base, which will continue going-forward. And so last year, we had roughly around 17.5% or I think more close to 18% XLAR. This year we are operating at 23%. So this is the new base. I don’t think it can ever go back unless we have some change in government policies. So this is going to be the new norm on operating at 23% Xir and that’s it from my side
Prannav Mashruwala
Thank you so much.
Varadharajan
Thank you.
Operator
Thank you. The next question is from the line of Akshit Agarwal from Jefferies. Please go-ahead.
Akshit Agarwal
Hi, good afternoon, sir. Thanks a lot for the opportunity. I have two questions. Firstly, follow-up on one of your other participants’ question sir, where you said that you could take about a couple of quarters for the annuity revenue growth to come back to double-digit levels or mid-teens levels. So if the first-half is going to be in single-digits and annuity forms a bulk of your revenue portion, is it fair to expect that you’d be able to grow 20% in FY ’26? That’s the first question. Secondly, when I look at the region-wise margins, India margins have gone down from mid-20 levels to 15% levels in FY ’25 versus FY ’24. What will be the key reason for this? Those are the two questions. Thanks a lot.
Varadharajan
Nice talking to you again. So Akshat, what is — the issue is, while I’m saying annuity margins recovery is we are talking of where all our ATCs start kicking-in back and support revenue start coming in. While — while that is happening, we still are selling aggressively more licenses and more deals. So like in this quarter also in previous quarter, we have continued to sell more licenses and our license gross rates are 40%. I do hope that while the annuities takes some time to pick-up, our new deals and our what you call deals in existing accounts should be able to compensate for that and we should be able to maintain a healthy growth momentum on that.
On the region-wise margin, it’s the same function. I think India has not grown at the same pace we expected it to grow. It’s more like a growth rate of, I think, 14% 15% this year, while the cost in India has grown at 17% 18%. So there’s a margin contraction out there. But yeah, so I think it’s again at the beginning of the year, if we take a call, again this year, we will taking a call of growing our cost at, 16% 17%, but we are planning that India should be able to go back to the 20% or about 20% growth market. So I think these are momentary things, but I don’t think annuity holds us back for the larger growth. I think what-if you look at Q4 phenomena of about growing at 15% is a function of also very-high growth rates last year-on Q4, plus the annuity things not kicking-in terms of some of the larger deals.
I don’t think both of the problems are in Q1 and Q2. Q1 or Q2 are relatively smaller quarters for us. Large deals can compare, new license deals can compensate for a lot of growth rates and slowdown in the annuity side. And in meantime also, we are looking at multiple ways to enhance the support revenue stream and enhance the ATS support. We are looking at rate revisions. We are looking at again price renegotiation in certain cases, which should also give us few percentage points going into next one or two years.
Akshit Agarwal
Perfect. Thank you so much, always a pleasure.
Varadharajan
Thank you.
Operator
Thank you. The next question is from the line of Hinal Gara from UBS. Please go-ahead.
Hinal Gara
Hi, thank you for the opportunity. So a couple of questions. We have seen that quarter-four 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 three was a good quarter in terms of these bookings, but then is there any other reason which has attributed to this. You know, I think on a Q4 basis, it has been always a strong quarter for us as a percentage
Varadharajan
Of annual revenue. So this year also, if you look at our annual revenues and divide across quarters, Q4 is the largest quarter for us. So it has grown. The challenge has been that Q4 last year has grown at 40% and both on Y-on-Y and also sequentially to a very large number. When it comes to license sales, I think if you look at this year license sale Q4 to Q4, let me just let me look at this number. We have grown at 31% Y-on-Y on the license sale. So license sale momentum has kept up. The point we were discussing about some of the annuity streams have not caught up with that same thing, which is to do with our — in terms of our ability to execute large projects and make them live. So it’s a momentary challenge.
We think in couple of quarters, we should be able to that. Whatever, you can clearly see our deal momentums in Q4 are the highest. I think this is probably the highest. We have gone up to INR97 crores of license sale, which is our highest-ever license sale and even Q3 was very strong at INR93 crores somewhere
Hinal Gara
Okay. Okay. And so a follow-up to that. So you mentioned the implementation, which got delayed, which has 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?
Varadharajan
Yeah. So okay. So it’s a longer story. I think if you look at couple of years back, I think last one and a half year, we have entered into much larger deals, which is more traditionally and there are also deals which are more complex and more large in which the downstream revenues, which typically start accumulating after the project’s complete finish have started — got delayed. Typically projects used to be six, seven months, now they are one at a half year to two years.
So that’s — it was a part of great wins. And then this is the impact of that. What is happening right now in most of these projects in next two, 3/4, we are towards more closure of those projects. They are almost now closing at the same time. And the next-stage of large deals are also coming at a faster execution cycle because now we have done most of them. We are trying to compress the timelines. So this is a function, this is a one-time impact which came to our business and it was a bit of a surprise because we assume that annuity automatically compound, did not compound.
And we do hope that as soon as our projects get live, we should be able to restore most of that revenue coming from those clients.
Hinal Gara
Sure, sir. Thank you for that. And so in the current quarter, we saw a couple of large deals being closed in the US. So just wanted to understand what is the strategy that we are using here and what is the potential opportunity that we’re looking in this geography? Maybe if you could give some timelines?
Varadharajan
So the US, we have been investing very aggressly for a long — in a long-time. We created a strategy with One of the consulting firms to address three segments, banking, health insurance and the insurance market. We had hired beginning of last year, we hired complete teams to drive these markets. And now we are getting the early results of that. We have broken into cases this quarter in enterprise, we have broken into health insurance, we have broken into insurance and then also a large deal from bank. So almost all four areas have fired this quarter and resulted in deals. So in fact, this was the first-quarter we got 10 deals from US and some are very marquee. Now that we have got these wins, we expect now the growth rate and the momentum to continue building. But we’ll have to wait for a few quarters seeing how consistently we can go. We are hoping that next year, US should be our growth driver. And the market for us out there, the global area we are targeting. In banks, we are targeting roughly around 80 large banks. We have pivoted away from the largest set of thousand banks. Similarly, insurance, there are 120 companies and again in the health insurance, we are another 40 to 60 companies. This is a universe we are targeting and we’re trying to build much deeper relationships and build a multi-year contract with these kind of customers?
Hinal Gara
Does it absolutely. And how about in India? So I mean, India has traditionally been a growth driver for us. So what is the TAM that we are looking here, what is the kind of scope that we do see to further mine the existing clients that we already have?
Varadharajan
I think we don’t have really very detailed reports of the TAM, but I think we are one of the larger players in the market where we do expect our market-share is at least more than 20% in the whole of the space we operate. But the market itself in India is expanding and we are expanding it by getting into more-and-more areas. And the way we internally look at is that all our territories have large potentials. So I think we really would like that India INR1,000 crores in next two, three years. That’s our plan. So I don’t think the market opportunity size is a limit. It’s our own ability to execute and we are going after that in a very aggressive way over the whole market.
Hinal Gara
Understood. Understood. And sir, lastly, just you know, I mean, more of a very long-term question. So Gen AI has been one of the big tech disruptors and then is there a case where we probably see this could cannibalize newGen revenues probably on the content management or the BPA end? Like is there a possibility of that?
Varadharajan
I think this is a question for service companies, not for product companies. Technology is our enabler to sell. Gen AI has actually reinvented all the use cases across industry for kind of things which we sell. In fact, using AI for content ingestion is one of the most hot cases right now in the market by which the last quarter-out of around six deals we got in US, three to four are just around the AI capabilities of our product, which is typically a combination of AI. See, we are leading this right now. I can — I would confidently say I think we have one of the most content management and low-code AI-led products in the market with our Marven, with and Hyper.
Most of the cases we have won in last two quarters, AI has played a very important part of that. So the way you see the content management and Gen AI complement each other. So-far people used to retrieve content. Now they can discover more value out of that content. That’s why AI works on that content either through rag or vector embedding or many other technologies like that. So there is a renewed interest in the enterprise content management space globally right now, both on the ingestion and the management and knowledge management side of that.
We got two orders in Singapore government which are to do with kind of things we are talking about. We got one of the largest orders from the primary regulator in India, which is AI-led content management. And similarly, we got three to four orders in US around insurance companies which are around documentization, which is AI. So in fact, this is what we are excited about, not threatened about.
Hinal Gara
So great. Thank you so much for patiently answering my questions.
Operator
Thank you. The next question is from the line of Bedik Sarkar from Unifi Capital. Please go-ahead.,
Badik Sarkar
Hi, good morning and congrats on a good year overall. Well, there was a time in the previous years when you specifically called out that order book growth was higher than your revenue booking, right? And obviously, that was more sentiment led given how strong FY ’24 was. If I just backtrack to just the current quarter, not perhaps Q3, but the first month of April and Q4, how does that sentiment look on-the-ground today? I ask it in the context of oil prices in the Middle-East, the US, blood-led issues and broadly, probably a of banking product like demand in India. So just keeping it in perspective, how would you define the sentiment how things look today?
Varadharajan
Hi,. So I really don’t have an answer that. I can look at only our business and what I tell you, our Q4 order book was pretty strong. I think in fact, fact for — we had a Q1, Q2, Q3 was a weaker order book than the Q4 order book. It was predominantly — in fact, our maybe it grew by around 30% or something Y-on-Y-on-Q — Q4 order book. Q1 order book, I can only tell you after the end of Q1 because 70% of our business comes at the end-of-the quarter in last three weeks. That’s the nature of the license business. Yeah. See, everybody is cautious right now. Most of the customers we talk about, nobody has given an indication of holding back the projects, especially in the spaces we are, but they are cautious about.
So there may be a kind of an impact of wait-and-watch. But right now, I think for our sales planning and in terms of what we hear from the market, we have not seen too much of an impact. And I hope that it remains the same way for the year.
Badik Sarkar
Sure, I understand. In terms of the complicated, 18 24-month projects, that kind of launch gestation period, which were the primary geographies that saw that? And is it fair to assume that in H1 of this year? Sorry?
Varadharajan
So India and Middle-East are the primary geographies which are typically having those large gestation projects running for us. I think most of the Middle-East ones we are closed — we are very close to closing and some of the Indian ones will take couple of more quarters to do that. So these are the geographies where we have. Other geograph — geographies, we don’t have such a problem
Badik Sarkar
. Okay. So my question was that given that you specifically called out that H2 of this year will be a far stronger year in terms of revenue booking, is it fair to expect some kind of a Y-o-Y 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 SG&A commitments. I’m just trying to get an understand about margin propensity in H1 this year?
Varadharajan
No, I don’t think so. So see, when you’re saying Y-on-Y, it will not have a compression. I don’t think there’s any reason because our costs are flat and we are still growing at a good healthy growth momentum. See, the margin compression only happens and I think we look at margins typically at the annual side because on a quarterly, they can change because still there is a kind of a revenue distribution, which is not very even, while the cost distribution is fairly even on that.
We are slightly being cautious about looking at our investments along with the returns which come in quarters. So we should be able to manage this. And unless there is a huge surprise on-top line, which we are not seeing, I don’t see the challenge on margin.
Badik Sarkar
Right, right. So baking in the H2 estimates, you’re still saying that there is no-risk to — I mean we ended this year with about 20% growth, which is a healthy number. But that number of between 22% to 25% is — will that continue to be a expectation for at least for ’26 in terms of top-line.
Varadharajan
See, we — I don’t know exactly what we’ll end-up doing because we end-up always planning a lot and then delivering something. We’ve historically delivered about 20% or near 70% growth. In this year, we don’t think our plans don’t change much. We still expect to do that and we internally would end-up trying to do a much better number. But surely on when it comes to budgeting, we do plan for that much of growth and that expenses accordingly. But what will happen at the end we’ll all have to wait-and-watch so.
Badik Sarkar
Okay. And very lastly,, is — will growth say for FY ’27 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. And how should — how should — how should we read this?
Varadharajan
So I think we look at growth from two areas. One is about expanding our coverage in a vertical, so getting more deeper into banking, selling more solutions to banking, insurance. The second is also getting better penetration in mature market. These are the two areas we are looking at. So how much more revenue contribution can come from markets like US or Europe and then how many more new logos we end-up winning. And then also in the same logos, per account realization, how can we improve? You can see lot of — while we have churned out a lot of smaller accounts out of business, you will see revenue per account has constantly grown.
Accounts greater than 5c our revenue have constantly grown to much higher-speed. That is the churn we are driving and this is being driven from two things about going wider into each account and selling more to them and also getting a healthy number of new logos, which are sizably large.
Badik Sarkar
Thanks,, and all best wishes. Thank you.
Varadharajan
Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ask a question, you may press star and one. The Next question is from the line of Mihir Manohar from Carnalian Asset Management. Please go-ahead.
Mihir Manohar
Yeah, hi, thanks for giving the opportunity. Sorry, you mentioned about the 10 deals, one in US. So these 10 deals are for the full-year or other for the quarter.
Varadharajan
So these deals are generally for us in perpetuity because customers have long-term relationships, but really generally these are license plus implementation, which may have a cycle of nine, eight, nine months, 10 months and
Mihir Manohar
Sorry, I mean, I mean you have 10 deals were one during the year or during the quarter.
Varadharajan
Okay. Okay. The winning, the winning is for the quarter.
Mihir Manohar
Okay, understood. Out of these 10 deals, I mean how many of these deals would be with larger Tier-1 accounts wherever — where we can have a bigger revenue potential?
Varadharajan
See, all these 10 deals are sizable. See what we have already pivoted towards only large accounts. We don’t do small account deals anymore in US. So we are taking these are either Tier-1, Tier-2 insurance companies, banks or health insurance companies. So all of them are large accounts for us.
Mihir Manohar
Understood. Sure, sure. And these are coming largely from insurance — I mean insurance and health insurance side, right? Banking will be lesser as of now or how is it?
Varadharajan
So I think three from banking, I think three, four from insurance and couple from health insurance, I think that’s — Dipti can send you exact distribution about can’t understand.
Mihir Manohar
Sure, sir. The second question was on this, I mean annuity kicking-in for one of the — some of the delayed businesses in India and Middle-East. Now when annuity starts kicking-in second-half, does the annuity percentage which you mentioned 18% to ’22, that remains the same or that changes.
Varadharajan
No, that is the percentage payout of annuity for ADS on licenses. So that broadly remains same. It does not change. The only thing is what happens, it starts kicking-in, that means now it is due and we can recognize the revenue from that onwards.
Mihir Manohar
Understood. Sure. And the third question was on the new product. I mean, this is like two, 2.5 years back, we were looking at a $500 million of a business. Naturally, the progression has happened well over the last two years. Just wanted to get a sense for us to have that $500 million kind of a number, do you feel any specific products need to be developed, product gaps needs to be addressed? Any development or any color around new products that would be really helpful.
Varadharajan
So Mir, I think this is a work-in motion. So last year at the beginning, we defined a strategy about where we need to invest. We had to verticalize our insurance products across domains and then across geographies. I think 80% of that work has been already done. We expanded our banking portfolio like in Islamic banking and then also building banking integration. We expanded our insurance portfolio with integrations with companies like Guideware and all that. So a lot of that has been already in-place.
Beyond that in last two quarters, we have doubled up on in creating the AI roadmap for the old products because what we are seeing the AI is driving most of the use cases. So a lot of our investment while increasing our vertical products and making them more relevant for the market is one dimension. The other is creating the AI-led interfaces for our most of the content management, the low-code as well as the customer communication products. I think between these two, there is enough market and now we saw our ability to go and execute and sell.
Mihir Manohar
Understood, sure. We’ll be looking at the core banking part of the piece to enter the corporate core banking part of the piece?
Varadharajan
No, we have not. We have not considered that and we are not interested in that. I think we work-in the layer of innovation where most of the action is happening above banks, which is about journeys, processes, reinventing them. And core is where we end-up making sure that we sit on — integrate with the core and keep on expanding the functionality of the core. Core is a different business. It takes a lot of time to build credibility in the core and then build systems and core. We are not interested in core. The only thing what we are slightly interested in some in health space and insurance space, we are interested in-building policy administration services, which are kind of semi-core out there.
Those we are — we already have some products and then we are expanding — trying to expand out there. But in banking, we are not interested in.
Mihir Manohar
Sure. And just one last question from my side. What was the order booking growth for the year-on a Y-o-Y basis?
Varadharajan
I think our order booking was at 1664%, which was almost 10% or around compared to last year same time. Okay, understood, sir. That’s it from my side.
Mihir Manohar
Thank you very much.
Varadharajan
Thank you. Thank you.
Operator
Thank you. The next question is from the line of Chirag Kachadia from Ashika Institutional Equities. Please go-ahead.
Chirag Kachadia
I have a question on order book only, like what is current value of order and as well as the new one which we received during the year?
Varadharajan
Okay. I think we can — if you can write a mail, we can send you those details. Those numbers, I don’t have the unexpected exact sizes. But as I said, our unexecuted order book compared to last year’s same-period has a healthy growth. I expect more than 20% growth in that.
Chirag Kachadia
Okay. And that — and this unexecuted order book likely to come in execution in FY ’26 or it will for one in FY ’27 as well?
Varadharajan
We are talking generally on executed order books, which are relevant for this year.
Chirag Kachadia
Okay. Thank you.
Varadharajan
Thank you.
Operator
Thank you. Thank you. The next question is from the line of Adity Patel from ICICI Securities. Please go-ahead.
Aditi Patel
Yeah. Thank you for the follow-up. I have a question on Singapore — sorry, the APAC market. So it has grown strongly for us in FY ’25. What has — which verticals and which countries have driven this growth and how do we see growth outlook over year for FY ’23.
Varadharajan
Yeah, Adity. Thanks. So Adity, what you’re absolutely right, APAC has grown strongly and I think they’ve got — the business has gone in two areas. One is around government. We have consolidated our position in the Singapore government space. I think we have won some markique accounts out there and we expect that momentum to grow into next year. I think some of the strategic deals out there we have been able to close. I think the wider market is still banking insurance for us across all these markets. And in APAC, I think predominant market is around for us, Malaysia, Indonesia, Philippines, Singapore, and then we are also trying to do something in Vietnam and other areas.
But this is the market. So most of these deals which have come have come in banking and government space, which has given us that. Yeah, it has become a substantial part of our revenue, which is almost now reached around 15% of our revenue, which is a good thing. And we are quite hopeful that I think the APAC can maintain a growth momentum. Also, having said that, I think if you look at last year, APAC growth were much muted. And since they didn’t have high-growth, this year numbers almost jumped out almost 60% of their growth, which is — but I think there is a considerable improvement in what our entitlement to win in government in APAC, especially in Singapore, and that’s what we can ride-on next year. And some of the marquee banks which we acquired, we should be able to expand both in Malaysia, Philippines, Indonesia and some more countries.
Aditi Patel
Okay, got it. And one question on the DSO days. So DSO days increased by seven days in FY ’25. So what led to this increase? And what is our target range?
Varadharajan
So I think the culprit was EMEA out there. And so once some of very large payments got bit delayed out there, which I think some part of them has been already recovered in some, I think that has been predominantly. Rest, I think the larger deals that we have got into slightly our — the improvement in DSO for the last year was more flat, but on Q4 sense of some large payments got delayed, I think that’s why the DSO jumped out there. I think we should be able to do fine in next couple of quarters. We should be able to bring it back on-track.
Aditi Patel
Okay. So what should be our target range per day like one. So last year it was 130 days.
Varadharajan
See, our average, we look at — it will keep on coming down now that since it’s a smaller quarter because Q4 is very large, it always goes very-high on that. But on the — so we think an average for around 120 for a year and then we can improve it from there. So I think it will keep on becoming better for next Q2, Q3. But Q4 again becomes high because of a very large amount of our billing happens in Q4.
Aditi Patel
Okay. Got that. Okay. Thank you.
Operator
Thank you. Thank you. Thank you. This was the last question for today. I now hand the conference over to the management for closing comments.
Deepthi
Thank you so much everyone for joining in. For any further questions, you can connect with me or go to the website. Thank you.
Operator
Thank you. Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines