Route Mobile Ltd Q3 FY22 Earnings Conference Call Insights

Key highlights from Route Mobile Ltd (ROUTE) Q3 FY22 Earnings Concall

Management Update:

• ROUTE said that it posted its best quarterly revenue to-date, a YoY revenue growth of 46% and QoQ basis revenue growth of 29.2%. In volume terms, ROUTE processed over 16.29 billion transactions, the highest quarterly billable volumes processed by the company till date.

Q&A Highlights:

• Pranav Kshatriya from Edelweiss asked about the value proposition of payment services business. Rajdip Gupta CEO said the payment services API is for the omnichannel platform with conversational commerce as a part of the offering, which can be used over any conversational commerce chatbot like WhatApp, RCS or Telegram. The company added that the revenue model will be a take rate of the GMV.

• Pranav Kshatriya from Edelweiss also asked about the new services where the company has seen a decent growth, especially email. Gautam Badalia CSO said that on email, for the nine-months the company has done about 5.23 crores. And currently ROUTE is investing into making this platform kind of a self-serve platform. The 5.23 crores pertains to enterprise revenue from the email services.

• Amir Lahat enquired about the acquisition of the two business of Masivian and Interteleco and what’s the gross margin and EBITDA margin of the business. Rajdip Gupta CEO answered that for Masivian the gross margin is in the 40s at this point in time with a room to improve further. For, Interteleco the GM will be in and around the portfolio gross margin of 20%.

• Amir Lahat also asked about the annual run rate for the                Masivian business and also the organic growth in the numbers. Rajdip Gupta CEO replied that Masivian business, on a revenue basis, should do about $1.8-2 million. On the organic growth, Gautam Badalia CSO said that it’s more of a volume increase, as few customers got on-boarded on ILD routes. The volumes increased by 13% on the organic front YoY.

•  Mohan Kumar of ANJ Investments asks about margins that Masivian resulted in a decline in margins on a QoQ basis and when the margin expansion is expected to be completed. Rajdip Gupta said that Masivian has led to average realizations tapering off because of the realization there of about 9-10 paise INR. Other than that Masivian is doing high and healthy margins and expects to grow that business at the same level going forward.

• Hiren Dasani of Goldman Sachs asked about the new product revenues growing strongly and the reasons for it. Rajdip Gupta CEO said that it has been due to good traction building around email. And Masivian doing a lot of new product solution for enterprises, which has helped in the growth. Also the company added that it has started billing its clients for RCS, which until 2Q FY22 was a freebie.

• Hiren Dasani of Goldman Sachs  also asked about the core business growing organically 22% QoQ, and what’s driving that. Rajdip Gupta CEO answered that there are some clients ramping up significantly. One of the top 2, to 3 clients has ramped up and the company is seeing significant momentum. There are also some new clients that ROUTE has won and some of them should be operational from February. ROUTE added that 90% of its revenue is recurring.