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.