Tracxn Technologies Ltd Q4 FY24 Earnings Conference Call Insights

Key highlights from Tracxn Technologies Ltd (TRACXN) Q4 FY24 Earnings Concall

• Financials
  • Q4 FY24 revenue from operations: INR 20.3 crores.
  • Q4 FY24 total income: INR 21.6 crores.
  • FY24 revenue from operations: INR 82.8 crores (6% YoY growth).
  • FY24 total income: INR 87 crores (7.2% YoY growth).
  • Q4 FY24 EBITDA: INR 0.7 crores (3.3% margin)
  • Q4 FY24 PAT: INR 1.4 crores (7% margin).
  • FY24 EBITDA: INR 4.6 crores (5.5% margin, 2.2% YoY expansion).
  • 43% of incremental revenue went to bottom line in FY24.
• Revenue Growth
  • 100% subscription-based revenue from platform.
  • Revenue recognized on accrual basis for services provided.
  • 6% YoY growth in revenue from operations in FY24.
  • 7% YoY growth in total income in FY24.
  • Capex for FY24 was Rs. 8,652 crore against a target of Rs. 10,857 crore.
  • Revenue CAGR of 28% from FY20 to FY23.
  • India and Americas contributed 34% and 32% of revenue, respectively.
  • 10-15% revenue growth in India and Americas in FY24.
  • Consistent growth in number of large accounts (>INR 20 lakh revenue).
• Expenses
  • Total expenses for FY24: INR 78.4 crores (3.5% YoY increase).
  • 88% of expenses were for team costs (in-house team).
  • 1% of expenses for cloud hosting and data processing.
• Private Markets Landscape
  • 2023 saw muted activity in private markets globally.
  • Global tech funding down 44% from previous year.
  • Indian funding down 70% from previous year.
  • Lowest number of new unicorns globally in 7 years.
  • M&A deal value and IB fees at 10-year low.
  • Early signs of recovery in early-stage funding.
• Business Metrics
  • Q4 FY24 saw highest number of new customer accounts added.
  • 88 new accounts added in Q4, higher than previous quarters.
  • 12% YoY increase in deferred revenue (INR 32.9 crores in Q4).
  • 5x growth in platform usage over last 2 years.
  • Investing heavily in growth initiatives across marketing, sales, and account expansion.
• Organic Traffic Growth
  • 16 million organic traffic across pages in FY24.
  • 5x growth in organic traffic over last 3 years.
  • Current run rate already at 19 million, higher than FY24.
  • Management expects conversions to improve as market conditions normalize.
• Tracxn Lite Launch
  • Product-led growth initiative for user awareness.
  • Provides access to platform with limited features.
  • Over 20,000 sign-ups in first 3 months.
  • Monthly active users crossed 8,000.
  • Helps in building acquisition pipeline.
  • Aids in building pipeline for potential upgrades to paid plans.
• Data Expansion
  • Expanding coverage of financials and cap table data.
  • In demand by private equity, investment banks.
  • Significantly increased data production throughput.
  • Expected to accelerate revenue from these segments.
• Impact of Market Conditions
  • Tough market conditions and funding environment impacted growth in FY24.
  • Late-stage deals significantly down, affecting players in private market data space.
  • Some regions like Europe more impacted than others.
• Account Expansion Efforts
  • Account expansion initiatives like curbing login sharing, proactive upgrades.
  • Efforts aimed at mining more revenue from existing accounts.
  • Large accounts continued to grow even in tough conditions in FY24.
• Employee Headcount
  • Employee costs account for 88-89% of total expenses.
  • Ended FY24 with 720 employees.
  • Key teams: 95 in product/testing, 370 in analysts/data ops, 200 in sales/marketing/success, 60 in support.
  • Plan to scale sales team for new customer segments like PE, universities.
  • Expect overall headcount increase under 10% due to automation efficiencies.
• Competition Landscape
  • Not a highly competitive market globally, only 5-6 major players.
  • Significant data differentiation across platforms.
  • Minimal pricing pressure as selling proposition based on differentiated datasets.
  • Competition not a major factor currently due to varied data offerings.
• Revenue Growth Outlook
  • Q4 FY24 saw good net account additions.
  • Revenue growth expected to follow volume growth momentum.
  • Q4 FY24 potentially the bottom for revenue growth.
• Cost Impact
  • Some increase in sales team headcount expected.
  • But lower than FY23 due to targeted hiring.
  • Short-term impact on revenue/EBITDA conversion expected.
• Cash Reserves Utilization
  • Cash reserves at INR 75-76 crores currently.
  • Management considering buybacks as capital allocation option.
  • Dividend payout not possible until accumulated losses are utilized.
  • Consistent quarterly cash generation of around INR 5 crores.