Rategain Travel Technologies Ltd (NSE:RATEGAIN) Q4 FY23 Earnings Concall dated May. 19, 2023.
Corporate Participants:
Bhanu Chopra — Chairman and Managing Director
Tanmaya Das — Chief Financial Officer
Analysts:
Manan Poladia — MKB Securities — Analyst
Karan Uppal — PhillipCapital India — Analyst
Rohan Nagpal — Helios India Limited — Analyst
Unidentified Participant — — Analyst
Nilesh Jethani — Bank of India Mutual Funds — Analyst
Rahul Jain — Dolat Capital — Analyst
Pratyush Agarwal — White Oak Capital Management — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Rategain Travel Technologies Q4 and FY 2023 Earnings Conference Call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 the conference call, please signal an operator by [Operator Instructions]. Please note that this conference is being recorded.
I now hand the conference over to Mr. Bhanu Chopra, Chairman and Managing Director of Rategain. Thank you and over to you, sir.
Bhanu Chopra — Chairman and Managing Director
Thank you very much and very good afternoon to everyone, and thank you very much for joining the earnings call for Rategain Travel Technologies Limited for the fourth quarter and full-year ending March 31st, 2023. It’s great to connect with all of you again and we’ll be excited to share some key highlights from our past quarter and past fiscal year.
Joining me on the call are Mr. Tanmaya Das, our CFO; Mr. Divik Anand, our Head of Investor Relations; and Mr. Thomas Joshua, Company Secretary of Rategain. We announced our fourth quarter results for the fiscal year 2023 earlier today and I hope you’ve had a chance to go through our financial results, the press release, and investor presentation that are available on the stock exchanges and also on our company website.
It has been a spectacular year for us on many fronts. It has been a record year in terms of revenue for the company with well-rounded robust growth across all segments. Our revenue for FY ’23 stood at INR165 crores, the growth of 34%. Margin improvement has been strong, as we reported a 17.6 EBITDA margin in Q4 and 15% for the full-year, this is ahead of the guidance given at the time of the IPO of 200 to 300 basis-point expansion from the 8.3% margin we reported last year. We had our best quarter ever in terms of new contract wins, and for the year as a whole with a record-high 43 customers added over the course of the year.
We completed the acquisition of Adara, our fourth acquisition in the past five years to build the world’s most comprehensive travel intent and pricing data platform to help the travel industry, improve their marketing ROI. I’m happy to report that the initial integration has gone off very smoothly with the Adara team pumped up with another great quarter of new business closings for them. The growth potential associated with Adara team is significant and our low-hanging fruit is to bring back Adara to its pre-COVID glory days of being a $100 million company. Adara in addition has also been a significant milestone and in addition to our leadership team, it’s stellar team members from Silicon Valley with great pedigree. This has also been a significant event in terms of building leadership and [Indecipherable] capacity. We have a very strong pipeline of INR381 crores as we move into the next year with a host of conversations underway with our customers as we look to capture the opportunity and deepen relationships with them with our wide product offering. We continue to invest into the future growth of our business by using AI, as the challenges that our customers face continue to evolve rapidly because of both internal and external practices.
We continue to work towards our vision of providing revenue maximization opportunities that helps our customers to acquired guests engage and retain them and have a wallet share expansion with them. Building towards this vision, we launch our go-to concierge service this past year, our equivalent of ChatGPT, which is called UVGI [Phonetic] to hotel partners, we have an easier communication media with us. We continue to work on some other significant opportunities which we will be launching later this year under RG Labs. We are also exploring the use of generative of AI to drive operational efficiencies within the organization. We’ve also added customer queries to extract data more efficiently and also specifically enhanced certain products around brand engagement.
We generated three times the free cash flows as opposed to the previous year with the free cash flow for the year being at INR52 crores. It clearly has been a great year for us and I would like to commend and congratulate the entire Rategain team who has been the driving force behind it and I’m confident in their ability to continue to do so in this current fiscal as well. This past year is also a validation of the three shown by our long relationship with industry leaders that continue to trust us, as we help them unlock new revenue.
We posted another quarter of healthy growth across all three verticals with strong performance on the margin front with an operating margin of 17.6% on the back of operating leverage and some cost optimization measure taken to drive healthy performance across business have started to pay for that with early signs of stabilization in those business lines. Our business lines DaaS and distribution, which are also our high-margin businesses continue to witness good traction with good volume with existing clients, steady travel demand, and continued monetization of new logos added in the past quarter.
Our Martech segment continues to find flavor with healthy client additions in the quarter gone by and continued focus of customers on direct guest engagement. On a run-rate basis, our annual recurring revenue is now around 100 million. Another significant feat, as you continue to scale up. While the global technology environment continues to be challenging, it continues to be one of the few global SaaS company growing sustainably and profitably and exceeding the Rule of 40 benchmark comfortably.
Growing global travel recovery continues to remain strong and we have also seen healthy booking volumes on our connectivity platform for the summer with the opening of Asia-Pac. The global travel helped by skipped hold steady at 97% with all key geographies, improving over 2022. Despite inflationary fears looming booking trends remain favorable. We continue to maintain a cautiously optimistic outlook that travel growth will continue to remain steady. The business and technology world has been buzzing with the use and implications of generative AI. We believe that we are now entering a new era of technological disruption, which will end up transforming the way consumers and travelers engage with brands and products.
The travel industry is getting ready to embrace this new AI revolution and move away from legacy technology and Rategain being one of the pioneers of AI and cloud technologies is emerging as a trusted partner to help our customers leverage AI with transport into their existing revenue management, distribution and brand engagement to drive better outcomes. Rategain has been at the forefront of using AI, for the last decade and a half, using it for driving operational efficiency in our product and engineering teams, as well as using it to enhance outcomes for our customers.
Across our DaaS distribution and Martech business unit, we’ve been using AI to give actionable, instantly from millions of rates to automatically recommending demand partners on our connectivity platforms as well as tracking real-time travel from probably leading brand. These are just a few ways we’re driving innovation using AI and are continuing to invest in finding new cases to solve.
A key differentiator and travel for the success of generative AI would be the quality of data. It has to access for trading its model. Rategain has a huge advantage over peers as we have amazed huge data lake with billions of price points that give us an advantageous position. Rategain is now using generative AI to solve for multiple use cases. Number one, improve our GBM by utilizing generated AI tools. Number two, optimizing conversion and the traveler journey by generating hyper-personalized content and solving issues of car [Indecipherable] indicators an incomplete picture. Number three, using generative AI to act as an automated QA tool for carbon creation. Number four, provide self-training on different products using the ChatGPT platform. We continue to make calibrated dividend investments in growing our sales team in certain geographies, we’ve added more sales folks at all geographies, including US, Latin America, Middle East and APAC. These investments will have about six months lag, but should show up in accelerating our sales numbers two quarters down.
From a marketing perspective, we continue to accelerate our digital spend as well as participation at events worldwide. All of this goes towards contributing to the strong pipeline of INR380 crores and growth potential for our company.
With that, I will now briefly touch upon the performance across our three business units starting with Distribution segment. This division accounted for 34.4% of our total revenue. We witnessed healthy volumes growth in the past quarter, the demand across OTA GDS channel along with growth across the mid-sized hotel chain segment. Expedia’s recognition of Rategain as an elite connectivity partner as a validation of the reliability of service we’re providing to our partners as we help them grow the businesses on the Expedia marketplace.
Our Martech business continues to grow at a healthy pace contributing to 37% of our total revenues for FY ’23. We continue to make inroads into the APAC and Middle East region and our brand engagement business witnessed good traction in the North America region. We’ve on-boarded multiple properties with a comprehensive paid digital media. Our end-to-end digital marketing further strengthened by the relevant audiences. So, Martech really make our value proposition to our hotel partners even more compelling helping drive higher ROI for them. The DaaS business unit grew at a strong pace on the back of increased volume demand and expansion within our existing enterprise customers. Healthy traction across OTAs car rentals and airline segment with the new logo in addition, including onboarding the world’s largest vacation ownership business to help optimize their pricing strategy.
DaaS contributed to 28.6% of the revenue for FY ’23. Our M&A strategy continues to be one of the key pillars of our growth strategy here at Rategain. With the completion of the recent acquisition and integration on track, we continue to focus on building on the pipeline and have various engagements underway as we look to further strengthen our value proposition to our customers. We believe that the current environment is having companies hold out. However, as the increasing interest rates and pressures catch up, it will create great opportunities for M&A and we are all geared up to capitalize on such opportunities.
On the people front, we saw a healthy improvement in our attrition rate quarter-over-quarter to 21.3% and we continue to adopt best practices for any engaging and conducive book environment focused on employee welfare and growth. We continue to launch various initiatives including our newly-launched learning portal and restarting the Trailblazer Club, which recognizes top performance across the company. All of these with a focus to build a sustainable HR focused on improving employee experience of our diverse workforce and making Rategain the employer of choice.
In terms of awards and recognition, we were awarded the SaaS Startup of the Year by SaaS BOOMi amongst 10,000 startup companies in India. SaaS BOOMi as you know is an equivalent of NASCAR for SaaS company. This is a great recognition of Rategain as putting Indian SaaS on global map. This award is equivalent to winning the best movie at Oscars and a validation of the efforts that our teams putting towards building a sustainable SaaS-based business model.
I will now to ask our CFO, Mr. Tanmaya Das can take you through the performance of Q4 and the fiscal year 2023.
Tanmaya Das — Chief Financial Officer
Thank you. and a very warm welcome to everyone on this call. I’m proud to report that the company has posted another strong quarter with robust revenue growth and margin expansion, along with a very successful integration of Adara, our newly-acquired entity. It really has been a standout year for the company in terms of performance across all key areas contributing to record revenue with commendable margin improvement. This is the validation of the underlying business fundamentals and the value we continue to provide for our customers and stakeholders.
We witnessed healthy growth across all our three verticals and improvement across all key metrics contributing to a stellar year is a true reflection of the efforts of the entire team. It is worthwhile to note that we consolidated Adara financials for one and a half months in this quarter as the entity was around mid-January 2023.
For the year as a whole, the company reported revenue of INR565.1 crores with a year-over-year growth of 54.3%, we had growth from all three because DaaS growing at 34%, distribution at 37% and Martech at 74% for the year. EBITDA grew by 177% to 84.64% for the year at 15% as against last year 8.2%. We saw strong operating leverage the company as operating cost increased by 43% as against revenue growth of 54%. The EBITDA achievement is significantly ahead of the guidance given at the start of the year, which was around 12.5%, we’re trying to note that the 15% EBITDA was after consolidating Adara, the newly-acquired entity and amount spent on completing the transaction on legal and professional expenses.
Our new acquisition Adara, which was loss-making before the acquisition registered a 10.5% EBITDA for the quarter due to the successful integration, which was completed in record time in 75 days. Our PAT grew significantly large year to significantly INR68.6 crore from INR8.4 crore almost eight times, resulting in similar improvement in EPS, which increased from $0.8 to INR6.82 per share.
In terms of headline numbers for Q4, which is historically a strong quarter for us, the company has registered a 70% year-over-year growth and 32% sequential revenue growth with Q4 FY 2022 revenue at INR182.9 crores. Our EBITDA stood at INR32.2 crores, which more than doubled from last year and grew 40% sequentially. Operating margins were 17.6% this quarter with 14.2% in the same quarter last year and improving over the previous quarter as well. Proud to mention that the margin did not dip sequentially despite the integration of Adara and the one-time cost incurred into the transaction.
In terms of PAT, it almost tripled from INR11.6 crore in Q4 FY 2022 to INR33.8 crore in the quarter gone by sequentially towards outgrowing by INR13.2 crores. However, we are benefited by one-time positive impact due to creation of a deferred tax asset in our US entities worth INR12.2 crores in the US due to the higher amortization cost in position, brought forward losses and lower profits in last year, we are not required to create deferred tax assets. However, this year as pockets of soda to comply with accounting standards, we have to recognize the deferred tax asset. Without this one-time positive impact, the PAT should have been INR21.6 crore for the quarter.
The company continues to have strong customer relationships that are helping in building scalable, predictable, and sustainable revenue streams, gross revenue retention, and net revenue retention were at 93.1% and 110.4% respectively for the year. One of the key metrics that we track is revenue per employee, which saw a 68% increase over last year at 1.16 crores and this was aided by high revenue per employee from Adara as well as organic growth without much addition to headcount.
Our annual recurring revenue stands at INR774.3, and pipeline continues strong and stands at INR381 crores. We continue to have a strong balance sheet, where our network saw an increase of 15% as compared to last year and stood at INR709.7 crore. Our GAAP and cash equivalent balance for the quarter stood at INR341.3 crore. Our cash from operations generated during the year increased three times from INR16.8 crore last year to INR51.2 crores this year.
In terms of guidance for the financial year 2024, we expect to grow around 55% to 58% and end up around INR875 to INR890 crore revenue in FY ’24. On the margins front, we expect to see a 200 basis-point expansion year-over-year to 17%. Our Q1 is a soft quarter both in terms of revenue. and EBITDA due to the seasonality of the business and also the annual pay review impact starts kicking in, in Q1, our EBITDA margin in Q1 will be around 13.5% and gradually increase to 20% in Q4, delivering an average 17% EBITDA for the year. We expect to deliver a PAT of around 12% and EPS around $10 per share next year.
With that, I would like to conclude my update and we’re happy to open the floor for the questions. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions]. Our first question is from the line of Manan Poladia from MKB Securities. Please go ahead.
Manan Poladia — MKB Securities — Analyst
Hello sir. Am I audible?
Operator
You are, please go ahead.
Manan Poladia — MKB Securities — Analyst
First of all congratulations on posting a great side. My first question is, sir, what would be the revenue for Rategain consol ex-Adara for the previous quarter, which is said you integrated Adara for two and a half months worth, what is the top line?
Bhanu Chopra — Chairman and Managing Director
Yeah, Adara revenue for two and a half months is around INR41 crore. So Adara registered one project,
Manan Poladia — MKB Securities — Analyst
141 crore. Yeah. Understood, sir. Also, sir, you said, you mentioned that Adara was loss-making last year, correct?
Bhanu Chopra — Chairman and Managing Director
Yeah.
Manan Poladia — MKB Securities — Analyst
Okay. And what are we targeting like with our turnaround and integration for the next full year, what sort of profit, the target on the Adara acquisition?
Bhanu Chopra — Chairman and Managing Director
Well, it is to continue to grow the business what we guided last time around, which is around 15% growth and 15% EBITDA margin.
Manan Poladia — MKB Securities — Analyst
Okay. Understood, sir. Thank you so much.
Operator
Thank you. Our next question is from the line of Karan Uppal from PhillipCapital India. Please go ahead.
Karan Uppal — PhillipCapital India — Analyst
Yeah, thanks for the opportunity and congratulations on very strong numbers yet again. And of course, especially on margin. So the margin improvement continues to be really strong since last four quarters. So could you help me with the organic margins of the business, the core margin of Adara and what led to such sharp increase?
Bhanu Chopra — Chairman and Managing Director
So no organic margin if I exclude Adara, we would register around 15.8% without Adara, with Adara it’s 15% because Adara registered around 10.5% EBITDA margin. Yes, there has been, so the reason for expansion in margin like last year we were around 8.3%, we improved to 15.4% on account of the high level of operating leverage we have in the business because we have a 75% gross margin business. So the majority of the 75% gross margin flows to EBITDA once the revenue organically grows and most of our costs like headcount, tech core operations etc are not directly related to revenue growth. So that’s why the margin expansion is possible.
Karan Uppal — PhillipCapital India — Analyst
Okay. And any outlook you can give segment-wise, DaaS solution and Martech, what sort of growth are you looking in FY ’24? And just a bookkeeping question in terms of the tax rate, what should we assume in terms of a similar tax rate for the company?
Bhanu Chopra — Chairman and Managing Director
On the tax rate, effective tax rate was around 16% to 17%, which is a good benchmark for Indian global companies, Indian-headquartered global companies, I think 17% effective tax rate is good. We are around that only and we expect to be in that range going forward for the next couple of years.
In terms of growth guidance, obviously, we have got Adara also, but from an organic perspective we expect DaaS to grow around 30% because we are seeing a great traction in terms of our existing account, expanding their volume requirements, we expect distribution to grow around 13% and Martech to grow around 30%, but with Adara, I think we should be able to expand, grow around 55% to 60%, 36% next year.
Karan Uppal — PhillipCapital India — Analyst
Okay. And in terms of DaaS particularly in last couple of quarters, we have seen good addition of the airline customers. We are seeing press releases of Air India and then some airlines from Delhi [Phonetic] as well as other geographies. So, what is happening in terms of overall contribution of airlines in the DaaS segment?
Bhanu Chopra — Chairman and Managing Director
Yeah, I think airlines is a new relatively new segment for us, we are in this business for last two-three years only. There are around 300 plus airlines who can buy this solution from us and we currently have like 40-odd airlines in [Indecipherable]. There is only one competitor that we’re competing with. And so we are seeing a very good traction in terms of new logo addition in airlines, like if you see all the Indian logos are added at this point of time and in different geographies also, we continue to add new logos. We’re also seeing volume uptick by the large airlines, for example, Singapore Airlines, and all the account size are also increasing quarter-over-quarter because if there is more travel they require more data, right, so it’s all related. So from both new logo addition perspective and existing account expansion perspective, it looks pretty well. It really grew well this year. So we expect similar kind of growth next year as well.
Operator
Thank you, Mr. Karan Uppal, may we request that you return to the question queue for follow-up questions as there are several participants waiting for their turn. Ladies and gentlemen, in order to ensure that the management is able to answer questions from all participants in the conference, please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. Thank you. Our next question is from the line of Rohan Nagpal from Helios Capital India. Please go ahead.
Rohan Nagpal — Helios India Limited — Analyst
Hi. Thanks for the opportunity. One of the things that came out a few — a couple of weeks ago was that Expedia and booking turned out record numbers as far as room nights booked. I think that sequential growth on quarter-on-quarter was about best regards we growth numbers, but about 20%. So that being said, Rategain’s distribution number since flattish has grown from about INR54 crores around last quarter to about INR55 crores this quarter. So slight disconnect, especially since a decent chunk for distribution that comes from transactions? Can you just give some insight into that? Hello. Am I audible?
Operator
Yes, you’re audible.
Bhanu Chopra — Chairman and Managing Director
Will you able to hear all my questions. Yeah. I heard your question Tanmaya, do you want to take that?
Tanmaya Das — Chief Financial Officer
Yeah, sure. So the booking, in terms of the way our business is organized. So the planning — so basically Q3 and — Q3 is our biggest quarter for Distribution segment because all the planning of the bookings happen in Q3 and Q3 and Q4 are more or less similar in terms of historically from a seasonality perspective. Look booking.com and Expedia, yeah, I agree, they have reported record number of bookings, but all bookings are not through our systems we are limited to certain supply and demand-side bearings.
So from a historical perspective, my Q3 and Q4 are always net-to-net where as you will see a lot of growth from Q1 to Q2 and Q2 to Q3. So that’s how historically, it does happen, the other, I think that’s it. Bhanu, do you have anything, any other thoughts?
Bhanu Chopra — Chairman and Managing Director
Yeah, in terms of the overall growth. I think that a number of bookings that we did in terms of new business have been in Q3 to Q4 and some of the larger deals that we signed on have not really caused meaning in our order book, but they been monetized and some of that relies on our partner is the ability to enable some of those sparing as well. So a large monetization of our business would have happened really effective Q3 of this year of that order book and that’s when we should see a big bump-up in revenue as well.
Rohan Nagpal — Helios India Limited — Analyst
Sure, but overall if you see in our annual growth of Distribution business is around 37%, so it’s a little bit cyclical for us when we compare year-over-year, so 37% growth is kind of in line with the bigger ones, right, but I mean, if the bulk is, most of it — most of the room nights booked in the world through Expedia or booking and they have recorded 30% sequential increases, it’s natural to expect at least some of that to flow-through, right. So, is it just that, I mean, it seems a little odd but these guys are channeling 30% extra, 30% drop-in volumes and new reflecting almost like 20% growth in distribution revenue sequentially.
Bhanu Chopra — Chairman and Managing Director
That’s true, I think Booking and Expedia if you talk about like most of the bigger hotels on the supply side, they are kind of directly connected to Expedia and Booking. We connect Expedia and Booking to some of the suppliers which are not that big and also we connect the supplier side to other OTAs like [Indecipherable] and [Indecipherable] etc. So we are looking and had a great year, or do we have these bearings that we want to connect to the bearings for the supply-side and demand-side once and those bearings are live then we probably will be more secret how the OTAs are reporting to the numbers. So there is still some way to go to completely relate the OTA growth to our growth.
Rohan Nagpal — Helios India Limited — Analyst
Okay. And but tell me this, if you’re telling me that Expedia and Booking are directly connected to the enterprise customers then how are you — from where are you unlocking this growth that will get you in sync with those numbers moving forward, like, how are you going to, are you breaking pairings or like how are you going to demonstrate revenue growth here?
Bhanu Chopra — Chairman and Managing Director
There are a couple of avenues for growth, one is, so our Distribution business is, of course, bearing instead of the big OTAs, but we also do a [Indecipherable] mid-tier and OTAs that are sort of regional players. So and with the big enterprises that sort of big greenfield as new and emerging OTAs appear. We are sort of course behind those types of connectivity and a lot of our growth has come from that.
The second area of focus for us has been to expand sort of horizontally in terms of moving up the value chain and not just connecting these hotel chains, so we are also becoming their complete distribution system, whether it connecting to GDSs, that is more of the offline channels than our travel agents book or the direct channel which is hotel’s website. So part of our efforts has gone into building this overall portfolio, a realistic platform for distribution, where we can own the entire distribution for some of these mid-market chains, so we are seeing some very-very good or at least in traction, where we are piloting, this integrated tech stack with some of the big markets and I do think that it can be a game-changer in terms of our distribution business but we will release the because it some time as we are pretty [Indecipherable] and getting traction, and we have resolved sort of some of the teething issues as we go, but I do expect this to really accelerate next year. So it’s not an FY ’24 story, but more of a FY ’25 and ’26 story.
Operator
Thank you. Mr. Rohan Nagpal, may we request you to rejoin the question queue for follow-up questions. Thank you. Our next question is from the line of Aditya Jhawar, Individual Investor. Please go ahead.
Unidentified Participant — — Analyst
Hi. So.
Operator
We request you to use the handset.
Unidentified Participant — — Analyst
Yeah, using handset, is it clear now?
Operator
Disturbance or a static from your line.
Unidentified Participant — — Analyst
Now. Hello?
Operator
Yes. Please go ahead with your question. Once you’re done with your question, I would request you to build your line.
Unidentified Participant — — Analyst
Sure. Sure. Sure. So I’m asking on the Adara acquisition. So currently, we are doing INR40 crores of revenue from the investment and the potential investors about IRR capacity, maybe next year that [Technical Issues] the revenue in Adara and market factor.
Bhanu Chopra — Chairman and Managing Director
So I think, I understood the question would be, what is the growth prospects and margin profile for Adara. So as I indicated earlier on the call that is something that we guided last time around also we are aiming growth rate number of 15% growth and 15% margin and we are only almost like 45 days into the first quarter and I’m happy to report that, I think we showed internally though we’ve set those targets, but I’m quite optimistic that as we learn more and unlock more opportunities that those numbers could get accelerated, but that’s what we are guiding the market.
Unidentified Participant — — Analyst
So it will be roughly around INR300-odd crores in the next year, INR350 crores from Agada, somewhere around 15%.
Bhanu Chopra — Chairman and Managing Director
So, it’s basically 27 million as of March 31st, and if you do the 15% or 27 million that’s roughly about 31 million, 32 million. So, converting it into assets, so it’s more like 250 to 260 crores, and then a 15% margin on that.
Unidentified Participant — — Analyst
Okay. And the second question is regarding the exciting growth we are doing growth rate of ’22. What kind of in Adara as well as your growth rate like can you show details regarding this? Just wanted to understand what kind of work, couple of years.
Bhanu Chopra — Chairman and Managing Director
Yeah, so in terms of expected investment, we, I would monetize them in two categories, right, so, one is, some of our material products. We continue to invest and launch newer features in each of our product lines based on what the customer needs are and then the second bucket, which always gets me excited is our RG Labs, which is all the new product initiatives that we launch. Recently, revAI, Demand-AI, Content.AI, Engage-AI, and then within [Indecipherable] techstack, that we are working on that I talked about our holistic distribution platform. So these investments we made really with resolve, that is two years ago. So we are not launching anything more because we already have our hands full and our focus is now really on accelerating the go-to-market in some of these new products because they’re already live and continuing to accelerate the future development so that greenfield opportunities that we are creating in some of the markets we are able to see. And as I noted in my comments as well, we have been, we made a good degree of investments in this quarter in hiring sales folks across different geographies but as you can imagine, there’s always a lag. We’ve been making those investments and seeing some fruit of them. So, I do imagine two quarters down we will begin to see some fruits of these investments that we’ve made into sales and marketing as well.
Operator
Thank you. Mr. Aditya Jhawar, may we request you to rejoin the question queue for follow-up questions. Thank you. Our next question is from the line of Ashwini Agarwal, Individual Investor. Please go ahead. So, Ashwini Agarwal, your line has been unmuted, please go ahead.
Unidentified Participant — — Analyst
Hello. Yes, I am audible?
Operator
Yes, you’re audible. Please go ahead.
Unidentified Participant — — Analyst
Yes. Firstly, congratulations for a great set of numbers. I just wanted to know the response for the latest products, which we built and engaged AI. What kind of customers have interest in the product? Are they mostly like bigger hotel chains or hotel chains in single-digits, what kind of — what interest in the product?
Bhanu Chopra — Chairman and Managing Director
So anytime we launch a new product, we are very, very careful about piloting that product in a certain key market. So as of now, we are focusing the product, largely in Middle East and Asia-PAC and we’ve had a combination of both independent properties sign-up as well large international chains that are very-very active in the region subscribe to one or two hotels to test out the product and the initial feedback that we have from the hotels is quite encouraging because this product is really to help engage with the guests at the property but also use it as a channel to cross-sell and upsell different things at the property to the guests. So your spa, your restaurants, etc or room upgrades and what we are seeing in the initial adoption, is that people are able to get more than like 10x ROI in terms of just the cross-sell, upsell that they’ve been able to do with the platform.
We are however experiencing challenges in terms of integrating with the local systems that they use at the property. So we’re working hard on solving for some of those challenges, so that we can scale this product.
Unidentified Participant — — Analyst
Okay, thank you.
Operator
Thank you. Our next question is from the line of Niten Shah, Individual Investor. Please go ahead. Mr. Niten Shah, your line has been unmuted please go ahead with your question.
Unidentified Participant — — Analyst
Am I audible?
Operator
There is a lot of background noise.
Unidentified Participant — — Analyst
Yeah, I mean, I hope your question, sorry, [Technical Issues].
Bhanu Chopra — Chairman and Managing Director
You are not clear because of the background noise.
Unidentified Participant — — Analyst
[Technical Issues]. Hello?
Operator
Mr. Niten Shah has left the queue, we will move on to the next participant — the next participant. The next question is from the line of Mr. Nilesh Jay Daniel from Bank of India Mutual Fund. Please go ahead.
Nilesh Jethani — Bank of India Mutual Funds — Analyst
Yeah, hi, Bhanu and team, congrats for the great set of numbers, and thanks for giving me the opportunity to ask the question. First question was on the Adara, also, and by the previous participant, I wanted to understand before acquisition somewhere a few years back, I believe Adara was doing revenue of around $100 million. Is that understanding, right? And if it is, wanted to understand when do you see that number to be equal to maybe one, two, three, five-Year period, what is the purpose of that.
Bhanu Chopra — Chairman and Managing Director
So that understanding is absolutely correct. It was 100 million, and as I had indicated on previous calls the company actually could never recover from COVID and as a result of which the revenues were subdued but in terms of the platform that it is built, and has seen, generate 100 million in revenue. So, in fact, I see that as the biggest opportunity for Rategain as well and really see it as a low-hanging fruit, bring it back to $100 million and I do see it going back to that number. Your question on how long will it take. Well, our endeavor is to get there as soon as possible but I want to set ourselves up for success and I want to build the right set of expectations. So I believe whatever indications we are giving you are conservative and as we sort of get the integration in play, which is. and learn more, we will be able to accelerate these growth numbers to get back to that $100 million.
Nilesh Jethani — Bank of India Mutual Funds — Analyst
Okay, but I think a number on it, two-year, five-year, what kind of a period called regrouping that $100 million again.
Bhanu Chopra — Chairman and Managing Director
So again like I said, the endeavor is to get there as soon as possible, but we still feel like we are learning more, and given the company is running in a very-very disciplined manner and you are seeing margin expansion happen. We are taking a relook at our numbers, then recalibrating investments on a quarter-on-quarter basis. So in fact the way I look at our business right now is although we have an annual budget heading towards, there isn’t really an annual budget although data, so to speak because we are looking to accelerate whenever we see the opportunity and recalibrate investments. So it’s hard for me to give you a number, but internally that’s the goal that we’ve set ourselves that we want to, we will regroup. So that unmet as soon as possible and I think over the next two-three quarters, I’d be able to give you a much more meaningful timeline. Got it. That’s really helpful. Second question was on the margin piece. The big broad expectation of INR250 crore, INR260 crore kind of revenue from Adara in FY’24 and today the overall business clocking a revenue of around. [Technical Issues]. Hello.
Operator
Sir, the line for the participant is dropped. May, I request the management we move to the next question.
Bhanu Chopra — Chairman and Managing Director
Okay.
Operator
The next question is from the line of Mr. Rahul Jain from Dolat Capital. Please go ahead.
Rahul Jain — Dolat Capital — Analyst
Hello, can you hear me?
Operator
Yes, sir, please go ahead.
Rahul Jain — Dolat Capital — Analyst
Yeah, hi, so first of all congratulations on strong numbers. Just wanted to clarify the EBITDA margin outlook for FY ’24 and also if you could breakup the revenue of Adara in the Distribution and Martech segment?
Bhanu Chopra — Chairman and Managing Director
Sure. So talking about FY ’24, the margin is 17%, sorry, you said you want margin breakup between Adara and ex-Adara?
Rahul Jain — Dolat Capital — Analyst
No, no. So, the first was related to your outlook, which you have shared for FY ’24 margin expectation.
Bhanu Chopra — Chairman and Managing Director
Yes, so we did 15% this year consolidated and everything. I think we expect to deliver 17% which is 200 basis point improvement next year.
Rahul Jain — Dolat Capital — Analyst
Sure. And secondly, on the Agada breakup into Distribution and Martech for the quarter.
Bhanu Chopra — Chairman and Managing Director
It is actually Adara breakup between DaaS and Martech. So it’s almost currently it’s a 50:50 breakup. 49:51, 49 to DaaS, and 51 to Martech.
Rahul Jain — Dolat Capital — Analyst
Right. And yeah, my second question is your Martech guidance for ’24 is, I guess what I heard is 20%, which is good, but this looks a bit slower compared to the comment that we hear from ad tech majors as a straight test is talking about tripling of budget from travel players. So any thoughts on what you are witnessing in your conversations with clients or is it like some part of your portfolio within Martech has not seen that kind of momentum post you acquiring them?
Bhanu Chopra — Chairman and Managing Director
Yeah, so in Martech, we have got two segments, one is brand engagement and brand monetary, and other is paid digital media. So the paid digital media side, we are seeing good traction both in our imaging solution as well as the data. So that from paid digital media solution, we will be expecting around 30% growth but from a brand engagement and monitoring as we have been indicating to the market that we have experienced some discounts on waivers that we had given during COVID and those contracts are not profitable, so there is voluntary churn of some accounts that is happening. And for that aspect, we’ll see a subdued growth in that area, which will lower the growth percentage in Martech, right, so paid digital media perspective, I think the traction is pretty good.
Rahul Jain — Dolat Capital — Analyst
Right. Right. So, any mix that we have for FY ’24 for these two sub-segments?
Bhanu Chopra — Chairman and Managing Director
Mix in the sense, I think the paid digital media is much bigger, larger than the brand engagement and monitoring, I think paid digital media will be around INR140 crore whereas brand engagement and monitoring is around INR60 odd crore but as we are expecting a 30% growth there and the brand engagement is more flattish, yeah.
Rahul Jain — Dolat Capital — Analyst
Right. Right. Thanks for the color. And just lastly from my side any update on the MAX platform how we are seeing, where we are on the tax side, where we are looking from a go-to-market side any from that?
Bhanu Chopra — Chairman and Managing Director
Yeah, Rahul, so as I mentioned, we have launched the first release of the platform is already out in the market. We’ve got a couple of with our customers and the traction is quite good. And what excites me also is the fact that how we have moved our distribution platform, to the full DirectX platform, so the ticket size has gone up quite substantially, almost 3x. So it gives me the confidence that as we find more customers, the deal sizes will be significantly higher. So it’s work in progress, it’s — and it’s something that I mentioned earlier as well. I think this year is going to be a lot about learning on both go-to-market as well as how do we defy and have now any of the bidding issues that we have on the product but we have real substantial scale and meaningful movement of the needle, which really happened in FY ’25 ’26.
Rahul Jain — Dolat Capital — Analyst
Right. Thanks for the color. Just last bit, if I could ask on this? The LLR generate side, you said we have this concierge, I think that we have started a virtual concierge and what is the initial acceptance in the market and what kind of overall monetization, we could see around our initiatives on this on the [Indecipherable]? Yeah, so that’s the EngageAI products, Rahul and as I was mentioning to the other participant as well. The initial days, we are we’ve just launched in the Middle East, we have a few clients. In terms of monetization, for a hybrid model, there is a minimum fee of depending on the size of the hotel, anywhere between $3,000 to $5,000 and also because it’s channel to cross-sell and upsell, there is a revenue share for whatever additional ancillary revenues brings. So, I would say that the potential is as each unit, it can be anywhere between $5,000 to $20,000 depending on the size of the hotel but it’s early days. I do have to submit that a lot of the investments we’ve made into building new products and this endeavour’s target has died with COVID. I think I underestimated the challenge and how long it will really take for them to bring these products to fortify and really have an impact on revenues. And as you can see, given the data acquisition had a great year that we had, our revenue base has also increased quite significantly. We are now a $100 million company. For any of the new products, we really for me to talk about and for it to create a meaningful impact, we need to be generating 10s of millions of dollars, so I have to say that some of these investments will take time but I am confident that these can be multi for us but it will be, the investments will take time and the focus now is also to really accelerate on the new products that we built over launching anymore products, the focus is to accelerate the investments and development of these products, so that they can create a meaningful impact to our overall revenue. Sure, sure. Thanks for the color and best of luck for the year.
Bhanu Chopra — Chairman and Managing Director
Thanks. Thank you.
Operator
Thank you. Our next question is from the line of Pratyush Agarwal from White Oak. Please go ahead.
Pratyush Agarwal — White Oak Capital Management — Analyst
Okay, hi, Bhanu and Tanmaya.
Bhanu Chopra — Chairman and Managing Director
Yes.
Pratyush Agarwal — White Oak Capital Management — Analyst
Congrats on a good set of numbers. So, I have one question sort of related to say especially on the booking side and some of the traction that we’ve seen overall. How much this year has been a function of some of these international even say not executing when having problems with debt and so on and I mean what is our revenue overlap and have we seen traction because of this particular reason not growth and bookings.
Bhanu Chopra — Chairman and Managing Director
Yeah. So it’s a great point. You’re absolutely right. They were actually now. So they were almost 15% of the staff and they are having very-very large issues on execution, especially when it comes to distribution. So our RedMAX platform will enable us to capitalize on this window of opportunity that’s been created. However, our product, as I mentioned, is still slight new, but this is a few $100 million opportunity and paper is one of the current incumbents that is struggling not innovating. So although we launched the product, like I said earlier, we’ll take us sometime before we can really capitalize on this opportunity. So all efforts are because this window is where others are struggling to last forever. So we are doing everything that we can to capitalize on this opportunity, but I don’t see any, currently any meaningful impact that is yielding because they’re suffering. Other than other than the fact that we have a bunch of resumes that are flowing to us given the company is in problem.
Pratyush Agarwal — White Oak Capital Management — Analyst
Sure, that’s helpful. And finally on the disco piece, right. So on the distribution pipe. So within disco from what I understand the OTA GDS content. And let’s say, others, so within that hub all these individual segments rebounded to their — above their pre-COVID sort of levels or is there still a rebound left in any of these segments within this square.
Bhanu Chopra — Chairman and Managing Director
Yeah, so, I would say for the most part, it has come back. And if your question is, are more transactions that the kind of volume growth that we saw coming out of COVID because of less travel. I feel like that’s sort of now normalized but I still feel that the demand is quite robust and strong and we will continue to see acceleration and that’s largely because of the change of people’s attitude and behavior towards travel and having experiences. So a bunch of consumer surveys that have been run continue to suggest that people will not buy cars and clothes but will not sacrifice anymore on having these experiences, which entails travel. So and that’s very-very reflective on our numbers, but why we foresee that we will just organically grow because of the growth in volume, I know it will not be as significant as we saw it in the last year or the coming out of COVID, but I do see that the growth may not be to volume growth as much, but I do see a lot of new customer wins and pairing that we have like I was saying earlier that we already have in our order book that we are monetizing and some of these are very-very large bearing that will have a significant impact on our revenues on the upside in Q3 and Q4 of this year.
Pratyush Agarwal — White Oak Capital Management — Analyst
And just sort of the follow-up on what you mentioned, right, so within disco, hyco, mix of disco content gone up and is that the reason for margin increase, right, because compared to the GDS part the content could be significantly higher-margin and higher fees, right, in that sense, is that a contributor there.
Bhanu Chopra — Chairman and Managing Director
Yeah, so our — yeah, our content revenue is in fact pretty much everything in Enterprise Connectivity, which earlier was referred to as disco is seeing expansion on margins because as Tanmaya also pointed out, this is the beauty of the SaaS model. Once you do the connectivity and it generates more volumes and given the high margin profile that we have everything sort of close on to the EBITDA. I mean, just to give you another reference point, most of our mature products actually generate north of 30% margin and why we 15% is all these investments that we’re making into new products because we don’t capitalize that expense line.
So and as we continue to scale, I just see that margin profile continuing to expand but given our growth aspirations, we take some of that and reinvest into the business by looking ahead and launching additional products. So even for distribution, you can get a like a huge kick we have focused on real estate distribution platforms that I referred to as the RedMAX platform. Again, a game-changer for us because the opportunity is a few $100 million there.
Operator
Thank you. We move to the next question. Our next question is from the line of Rohan Nagpal from Helios Capital India. Please go ahead.
Rohan Nagpal — Helios India Limited — Analyst
Hi, thanks for the follow-up. So you said your Eurodollar revenues is roughly evenly. So that means yours — so that means organic revenue, organic revenue for your Martech business loans on the order of INR45 crores is a sequential decline. So could you just comment on that is, are there a lot of headwinds in brand management or like what exactly is going on over there.
Bhanu Chopra — Chairman and Managing Director
Okay, I’ll let Tanmaya me respond to part of the question. I’ll respond to part of your question. So, I didn’t follow the numbers that you mentioned, but the way to think about our Martech is really two-fold, even Adara falls into this — these two buckets that I’m going to talk about. So, one is product engagement and monitoring and the other is really performance marketing, right. So, helping our customers maximize the ROI on the digital side is that they do.
So the brand engagement and monitoring, which is more people and service-oriented, we actually struggling there given, even coming out of COVID, we had discounted in, given the fiscal discipline that we have that we had, that we had to churn out some of those customers because it wasn’t profitable. We’re still figuring out how to sort of move forward with that business and product such that we can scale and that the part of the business that is not growing.
The performance marketing, which is the paid digital media solution, that is experiencing very-very healthy growth, so even in — I mean, we are targeting three-year data, we are targeting 30%, but on the Adara side, we are targeting 15% growth.
Operator
Thank you. Due to time constraint that was the last question of our question-and-answer session. I would now hand the conference over to Mr. Bhanu Chopra for closing comments.
Bhanu Chopra — Chairman and Managing Director
Yeah, thank you everyone for participating on the call today and giving us your time. We had a very-very stellar year and I’m very confident going into the next year, given all the investments that we are making into the sales and marketing, the innovative product lines that we have lined-up and the team that we’ve added through Agada, it is a great combination to continue this, the stellar results in the upcoming fiscal as well. Thank you.
Operator
[Operator Closing Remarks].