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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.
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