Tracxn Technologies Ltd (TRACXN) Q4 FY23 Earnings Concall Transcript

Tracxn Technologies Ltd (NSE:TRACXN) Q4 FY23 Earnings Concall dated May. 11, 2023.

Corporate Participants:

Neha Singh — Co-Founder, Chairperson and Managing Director

Siddharth Singh — Program Manager

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

Prashant Chandra — Chief Financial Officer

Analysts:

Unidentified Participant — — Analyst

Nitin Padmanabhan — Aditya Bhartia — Analyst

Pradyum Choudhary — Strategy and Business Hotstar — Analyst

Sameer Dosani — Investments at ICICI Prudential AMC — Analyst

Bhargav Buddhadev — Kotak Asset Management — Analyst

Ayush Vimal — Citi — Analyst

Rohit Balakishnan — PMS — Analyst

Presentation:

Operator

Yes. Good evening, ladies and gentlemen. Thanks for joining us today on the Fourth Quarter and Fiscal 2023 Earnings Call of Tracxn Technologies Ltd. On behalf of Systematic’s, I’d like to thank the management of Tracxn for giving us the opportunity to host this earnings call.

Today on the call, we have with us Ms. Neha Singh, Co-Founder, Chairperson and Managing Director; Abhishek Goyal, Co-Founder, Vice Chairman and Executive Director; and Prashant Chandra, Chief Financial Officer.

I would now like to hand over the call to Neha to give the opening remarks and present the PPT. And after that, we will open it up for Q&A. Please use the raise hand option to ask a question or you can also submit your questions in the Q&A box at the bottom of your screen. Thanks. And with that, over to you, Neha.

Neha Singh — Co-Founder, Chairperson and Managing Director

Thanks, Siddharth. Welcome, everyone. Thanks so much for joining us today for our earnings call for the fourth quarter and the financial year FY ’23. We are very excited to present our results. In terms of the format, we’d like to run through a small presentation, which will share some of the key highlights of the period. I’ll also give the commentary along, which would be helpful in the overall understanding. And then we’ll follow it up with a Q&A session. Request you to go through the standard disclaimer for this presentation.

A quick recap on our business. Tracxn is a data and software platform for the private markets globally. If you look at the public markets, it has created multiple large companies, many of which are highly cash rich, profitable companies. As private markets are becoming large and important, it will also create platforms like these, and we are building a global platform in this space.

Our customers include venture capital funds, private equity funds, investment banks as well as M&A teams, innovation teams of large Fortune 500 corporations. It’s a global platform, so nearly 70% of our revenue is international, and we have customers over 50 countries.

I would like to begin firstly by summarizing the financial performance of Q4 FY 2023.To set the context, we have one business, one legal entity. So you’ll not see terms like standalone or consolidated, all the numbers that I’ll talk about is for the business overall.

Revenue from operations for Q4 FY ’23 was INR20.3 crores, which is a 19% year-on-year increase. Total income was INR20.1 crores. Coming to profitability. EBITDA was INR0.7 crores, also to add, this EBITDA includes all the non-cash expense like the ESOP charge, etc. PAT for the same period was INR1.2 crores.

Moving on, EBITDA margin was INR3.4 crores and PAT margin was INR6.1 crores — sorry, 3.4% and PAT margin was 6.1%. To summarize the financials for the financial year FY ’23, revenue from operations was INR78.1 crores, which is a 23% year-on-year increase. Total income was INR81.2 crores, which is a 25% year-on-year increase.

In terms of profitability, EBITDA for FY ’23 was INR2.6 crores. PAT for FY ’23 was INR5.3 crores. The PAT that you see in the audited financials is higher of about INR33.1 crores, this is primarily due to the recognition of deferred tax assets of about INR23 crores and a write-back of IPO expenses, which was previously expensed and reimbursed to the company during this period of about INR4.5 crores.

Hence, you should exclude that, so the EBITDA and PAT numbers that you see in this slide as well as in all the subsequent sections have been adjusted for this deferred tax and IPO reimbursement. Also, please note that the bottom line numbers includes all the non-cash expenses as well, as mentioned earlier, including things like ESOP charge.

Moving on, the EBITDA margin for the year was 3.3%, PAT margin was 6.8%. The other interesting aspect of the business is that it also generates free cash flow, which has been increasing. In FY ’23, the business generated positive free cash flow of INR11.9 crores, which is an increase of 143% on a year-on-year basis. Cash and cash equivalents stood at INR60.3 crores, which is an increase of 32% on a year-on-year basis or an increase of INR14.5 crore on an absolute basis.

In the subsequent slides, I’ll be covering each of the metrices we talked about in the summary in more detail, starting with revenue. Revenue from operations is essentially revenue from platform subscriptions. 100% of this revenue is subscription based. There is no services or one-time implementation component. So this is fairly high-quality revenue.

Also, please note that this is accrued revenue. So though we do prepaid billing and collections, like most of the financial data platforms you may have seen, we only recognize revenue for the time duration falling within the reporting period for which the services was made available. As discussed earlier, revenue from operations in FY ’23 was INR78.1 crores, which is a 23% year-on-year in place. Total income was INR81.2 crores, which is a 25% year-on-year increase. We have also added the historical data for the last three financial years for your reference.

EBITDA for the financial year was INR2.6 crores. If you exclude the non-cash ESOP expense, this increases to INR8 crores. This INR2.6 crores EBITDA is an increment of INR4.5 crores on a year-on-year basis. That is from a negative INR1.9 crores to positive INR2.6 crores. In terms of margin, the EBITDA margin for FY ’23 was 3.3%. This is an expansion of 6.3% on a year-on-year basis. So this continues to be an interesting aspect that you see in our business, which is the margin expansion that happens.

On similar lines, start of the financial year was INR5.3 crores. If you exclude the non-cash ESOP expense, this increases to INR10.8 crores. This INR5.3 crores PAT is an increment of INR5.7 crores on a year-on-year basis. That is from a negative INR0.4 crores to positive INR5.3 crores. In terms of margin, the PAT margin for FY ’23, as mentioned earlier, is 6.8%, which is an expansion of 7.4% on a year-on-year basis.

One of the key reasons for this margin expansion is that significant part of the incremental revenue goes to the bottom line. To be specific, if you look at the revenue from operations for this year and compared it to last year, we added an incremental revenue of INR14.7 crores. Out of this 31% or INR4.5 crores went into incremental EBITDA. Again, this is not one-off. Even if you look at the last two years from FY ’20 to ’21, 84% of the incremental revenue from operations went into increased EBITDA and from FY ’21 to ’22, 77% of the incremental revenue from operations went into incremental EBITDA.

So to summarize, since the cost to serve incremental customer is limited, a significant portion of the incremental revenue goes into bottom line. The exact percentage of this may vary across the period, primarily based on the investments across various growth initiatives that is done during those periods.

Coming to expenses. Our total expense for FY ’23 was INR75.7 crores. This is a 16% increase over previous year. If you see if this is higher than what you would have seen in the previous year, primarily because of some of the growth initiatives that were done during this period. We believe that this will help us accelerate revenue growth in future by helping us expand our sales effort as well as penetration within certain customer segments. I’ll cover this in more detail in the subsequent slides.

On the right-hand side of the slide, we have given the expense pickup of this cost across the key components. The key components are the same as what you would have seen previously. Just to summarize, first, bulk of our expense is emp cost. So in FY ’23, 88% of the total expense was in this head, which has been in the similar range in the last two years as well, so in FY ’21 and ’22, this was 88% and 89%, respectively, of the total expense. Also to note, all our team is in-house, so there is no outsourced or contract workforce.

The second largest item is cloud hosting, which accounted for 3.3% of the total expense as we do a lot of data processing and analytics. This was followed by rental expense. The other interesting aspect is that we do not have a large paid marketing line item, because we don’t have large paid marketing spend, neither digital marketing or offline based, typically required for customer acquisition. The reason for this is that because we are a data company, we produce a lot of content and hence, are able to use a lot of that to generate organic traffic. So we are able to get leads fairly efficiently if this is also reflected in our expense.

Going deeper into expense. This time, we have also given the cost bridge of FY ’23 as compared to the previous year. The key drivers for this and what do we expect going forward. To summarize, the total expense for FY ’23 was INR75.7 crores, which is an increase of INR10.2 crore over previous financial year. The key components of this cost bridge are the following three. The first is the employee expense, which increased by INR8.4 crores over last financial year. This was primarily due to increase in headcount for various growth initiatives. Average headcount for FY ’23 was 23% higher than the previous financial year.

Second, we saw an increase of INR0.6 crores in the rental expense on account of employees returning to office. And lastly, the remainder INR1.2 crore of the cost bridge increase was due to other expenses comprising of compliance and governance-related cost post listing.

Going deeper into the first component of the cost bridge, employee costs for FY ’23 was INR67 crores, which was higher by INR8.4 crores from the previous year. The main driver for this, as mentioned, is the increased head count due to various growth initiatives undertaken this year.

On the right-hand side, we have given the average head count across the last year as well as the 4 quarters of the current financial year, of the last financial year, I’m sorry. So to see the average headcount increased from 684 in FY ’22 to touching the peak of nearly 900 in the last quarter of FY ’23. And this is the same trend that you see in the total employee expense across the 4 quarters as well.

To give a sense of what to expect going forward, most of the sizable step-up required has been done. So for the upcoming quarters, the headcount increase that is expected is much lesser than what we would have seen in the previous couple of quarters. Additionally, we are also seeing this headcount number getting optimized due to various automation and efficiency initiatives.

So in April of the current financial year, the average headcount decreased to 837 and the ending headcount was down to 822. So though the employee expense may not decrease to the same degree as the headcount, but you can expect the upcoming increase in this expense line item would be much lesser than what was seen in the previous couple of quarters.

Moving further to the two remaining items, components of the cost bridge. The second was rental expense, which increased from INR1.2 crores in FY ’22 to INR1.8 crores in FY ’23. You can see that the quarterly expense, the trend, which has been mentioned on the bottom, the increase has been primarily due to the capacity expansion on account of employees returning to office.

Going forward, the rental expense is expected to continue to be in the same range as in the exiting quarter as we don’t have any further immediate capacity expansion planned. The remaining INR1.2 crore increase was due to other items like compliance and governance related costs and other expenses.

So to summarize on what to expect in terms of the total expense increase — since most of the nonlinear step-up that was required has been done, both in terms of headcount as well as other expenses like rental, the expense increase in the upcoming quarter should likely be lesser. Hence, as we mentioned also in the last call that we expect bulk of the incremental revenue to continue going into bottom line within the next few quarters.

Moving to revenue growth. We have given more color this time around the growth drivers and other initiatives that we are doing. Starting with the revenue bridge, to help you understand the components of the revenue growth, we have split the revenue into revenue accrued from new and existing customers.

To add revenue from new customer is essentially revenue from customers that had accrual for the first time in that particular financial year. And revenue from existing customers, as the name suggests, is revenue from all other customers that was acquired previously.

So coming to the right-hand side top chart, revenue growth from the existing customers to one of the advantages of subscription businesses that ballpark of a given year’s revenue comes from customers that have been previously acquired without incremental sales effort. Additionally, a part of the growth also comes from the existing customers.

The growth from existing customers from us standardly happens due to expansion in terms of number of licenses or seeds. Typically, an account starts a smaller set of licenses, say two or three licenses and then grows over time. Even if you look at our average realized pricing, it is close to INR6.7 lakhs per account per year, while we have multiple customers paying us also more than INR40 lakhs annually, primarily based on user expansion.

So coming to numbers. In FY ’21, the total revenue from operations was INR43.8 crores. This set of existing customers contributed to a revenue of INR50.7 crores in the subsequent financial year of FY ’22, which is a growth of INR6.9 crores. On similar lines, in FY ’22, the total revenue from operations was INR63.5 crores. And this set of existing customers contributed a revenue of INR64.9 crores in the subsequent financial year of FY ’23, which is a growth of INR14 crores.

If you see the market conditions also during this period of FY ’23, this was marked by a decline of nearly 50% in terms of the global funding dollar deployed. And I’m sure you would have heard a lot about funding winter being talked about from the last couple of quarters. So those funds were sitting on an all-time high or nearly high levels of dry powder. They were going slow on new investments.

Moving to the chart on the right bottom, it shows revenue from new customers across the two last financial years. Interestingly, despite the market conditions, our new acquisition was at an all-time high higher in FY ’23 as compared to FY ’22. This is primarily due to two reasons. One is that the addressable market is large. So there’s a lot of latent demand which exists. Second, the other is that we have also been investing aggressively in our sales and marketing initiatives. We expect both these buckets of revenue to accelerate further as the markets improve in the next couple of quarters.

Coming to some revenue metrics. We have given two new sets of revenue metrics for revenue and client growth. On the left-hand side, we have shared the number of accounts, which gave us a revenue of more than INR20 lakh, INR30 lakh, INR40 lakh across the last three financial years. So if you see the number of clients grew consistently across all these three buckets across the last three financial years. It is also interesting to see that despite the market conditions during the last financial year, large accounts have continued to grow for us also indicating the fact that there’s not much pricing pressure that exists in the market and customers are willing to pay more if you deliver value. And also there’s continued headroom to grow the average realized pricing.

On the right-hand side, we have shared the split of revenue across the four geographical regions, which are India, rest of APAC, EMEA and Americas. In terms of revenue contribution, FY ’23, India and Americas contributed to nearly 30% each. EMEA contributed to 27% rest of APAC contributed to the remaining 10%. In terms of growth, India and Americas grew at nearly 30%. EMEA was the slowest as compared to other regions, growing at 8%. Also moving towards volume growth. The number of accounts ending quarter four were INR1,230, if you look at the incremental accounts added, it has been improving on a Q-on-Q basis, with Q4 being higher than the last two quarters.

I’d also take a couple of minutes to talk about some of the recent growth initiatives we have been aggressively working on. And I’m very excited to share the results that we’ve also been seeing from them. One of the very interesting growth initiative is scaling our organic traffic. So because we are a data company, we are able to use a lot of data that we own to launch a large set of public pages, which generate a lot of customer traffic. For instance, someone is searching for, say, fintech companies in Sweden or SaaS companies in California, they come across our pages, and we are able to generate leads through that. So if you look at our organic search traffic that we got across all our pages, so this was nearly $9 million in FY ’23. The current translate is even higher of about $15 million annually.

So three interesting things regarding that. One is that this is a large traffic funnel that we’ve been able to build. Second is that this has been growing rapidly in the last few quarters, right? For instance, if you take the current run rate, it is more than double of what it was just 18 months back. Third, we continue to work on this aggressively, and we expect it to increase even further.

The other interesting growth initiative is press mentions. As we have mentioned previously, whenever media talks about data on private markets, or start-ups, or emerging technology sectors, we want them to core data from Tracxn.

Our recent initiatives like launching reports with media data contribution, secular columns in some newspapers, etc, have resulted in a multiple implies invest mentions that we have received across various respected media outlets.

Advantage of press mention is that a lot of people discover our data for the first time through media and then come to our website and generate a very high intent Also, we believe that this goes a long way in building a brand as a data company. It also helps our sales conversion and helps our revenue growth.

Another interesting growth initiative that we had mentioned about earlier on the data side is that we are expanding coverage in financials and cap tables data sets on private companies on platforms. For context, today, we track financials for private companies across 15 countries and cap tables across 10 countries. These data sets are particularly in demand by certain customer segments like private equity and Investment Bank, among other segments.

For illustration and investors looking to scan on an upcoming space like single specialty hospital chains, or D2C, our internet first brand in a particular country. And in addition to the interesting companies and market landscape, we would also like to find the ones which are, say, more than INR50 crores of revenue scale.

Since we now have sufficient cash flows, we can invest in increasing the throughput of these data production engines. We believe that, this will help us accelerate revenue growth in the future, particularly in the customer segments of private equity and investment bank.

Moving to some other financial metrics. Interestingly, despite these investments in various growth initiatives, the company generated positive increasing free cash flow and also increased cash and cash equivalence both on a year-on-year as well as on a sequential Q-on-Q basis.

The company generated free cash flow of INR11.9 crores in FY 2023 which is a 143% increase or an increase of INR7 crores from last year. Cash and cash equivalents is INR60.3 crores, which is an increase of INR14.5 crores on a year-on-year basis. We’ve also added the data for free cash flow for the last few years, and you can see that this has been consistently increasing across the last two years as well.

In the subsequent slides, we have covered some of the other KPIs of the business. In the first slide, we cover the number of customer accounts, number of user accounts we closed March 2023 at 1,230 accounts and 3,420 users, which is a 13% and a 10% year-on-year increase, respectively.

Please note here that, there’s some difference between number of users and the number of paid licenses. For instance, if you do a cleanup of the old non-paying customers of paid accounts, it reduces the number of users, but does not have impact on the revenue, right? In fact, it also helps us in sort of up-selling to some of the accounts. Additionally, we also plan to add the data on number of licenses soon.

In terms of the other KPIs, contract price or invoicing amount for FY 2023 was nearly INR82 crores, which is an 18% year-on-year increase. The last graph talks about the number of entities profile, which is a proxy to the amount of data added on the platform. So today, we track more than 2.1 million profiles, including private companies, funds, etc, globally.

In terms of some other interesting characteristic of our business, so 68% of our revenue for FY 2023 was from outside India. It has been in a similar range of about 70% across the last three financial years. These customers span over 50 countries, the top 5 countries within this show a single spread to where you have large corporates as well as private market investors.

The top 5 countries for us by a number of customer accounts are India, US, Singapore, UK, Germany. Additionally, we also serve a very diverse and rich customer segment across the investment industry, including venture capital funds, private equity funds, investment banks, as well as corporates across M&A teams, innovation teams, etc, and others like government agencies, universities. This also gives us a very large addressable market to tap into.

I also wanted to take a minute to talk about some of our generative AI initiatives, and I’m sure you would have heard a lot about it recently. It has interesting applications for many businesses in general. Our aim is to be also pioneer in using generative AI as a technology company, both on the front end for the users as well as for the backend for our development and operations. So we listed down some of the projects we are working on currently, which spans across the user-facing ones like making it easier for users to query and get results. Or in other words, they should be able to access a lot of our data through chat interface, as well as on the backend, one — which is on the backend ones, which includes those for our production as well as for our operations.

This covers most of the key business updates from the recent period. In the subsequent slides, we have covered the business overview. I’ll skip going over these slides, but feel free to please check it off-line. Additionally, we have also given a detailed financial statements which people can also go through for more details. And that’s all the key items that I wanted to share.

I’ll pass it back to Siddharth for any Q&A that the group might have.

Questions and Answers:

Siddharth Singh — Program Manager

Yes. Thank you, Neha for the wonderful presentation. So requesting the audience, if anyone wants to ask a question, please use the raise hand option or you can also put it in the Q&A box right at the bottom of your screen. I think I have the first question from Nikhil Chandak. Nikhil, please unmute your line and go ahead.

Unidentified Participant — — Analyst

Hi. Can you hear me Siddharth, now?

Siddharth Singh — Program Manager

Yes, perfect, Nikhil. You can go ahead.

Unidentified Participant — — Analyst

Yes, perfect. Neha, so my question was on the last part, which you covered on the generative AI aspect. Now, I’m just trying to think, as AI develops more and more over the next few years, how big a threat is that AI for the Tracxn business as in instead of paying Tracxn and annual fee, somebody could be using free open source AI tools, say, two years, three years down the line. And that may really impact the revenue which you get from a customer because you may have a free AI tool to use open source tool to use after three years. So, how do you address this? And how big a threat do you think this is to the business at large?

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes. Sure. Thanks, Nikhil. So actually, we don’t see this as a threat. Actually, we see this as a great opportunity for us to be able to use it and leverage it for our business. To give you a small example, right? Today, we have — we are a company based out of India, but we track information about private companies across 50 different countries. We have customers in 50 different countries. For instance, we are able to help funds in Germany, find out German-based companies through the platform or funds in UK if I get local companies through the platform, we have been able to do this because of technology, right, because technology has allowed us to be able to do this.

Secondly, for instance, we track a lot of regulatory filings, which is a non-English language, which is in the local language, we are able to standardize it assimilated part set and make it very actionable, insightful for our users right? So this has all been possible because of technology. So we see it as a great enabler for us to be able to build like a continue to build a noble data platform. And I don’t think like the customer segment that we serve, just like in public markets, there is a very structured information in private markets and even more unstructured information that is available. So I think this will help us sort of build more of a powerful company. And I think that is why we’re also very excited about all these developments that is happening. Hope that answers the question, Nikhil.

Unidentified Participant — — Analyst

Yes. No, you have a fair point is just that the situation today and a few years down the line might be very different the way the technology is really evolving and which is why this question keeps coming again and again. Nevertheless, the other thing I wanted to check is, would you look to also expand on to the listed side. So the platform, obviously, is most specifically oriented to the unlisted companies across the world, but to increase the monetization or breadth of offerings, would you look to go on the listed side as well?

Neha Singh — Co-Founder, Chairperson and Managing Director

Right. So currently, we see a lot of opportunity in the unlisted space, both in terms of the customer segments like if you look at the customer segments, there is across the investment industry, CP, etc, the corporates, which is a large portion, which is using it for M&A or for the digital transformation needs.

So this segment — and on the other hand, if you look at the typical LP allocation today, for most LP asset classes, between 10% to 15% is to private assets. So we believe that this is in the public market, there have been large companies which have got created.

We feel that the private market is like a large opportunity it’s a very un-served need, right? So — and like even if you look at — even though the markets were probably down this financial year, we have still been able to grow some of the large accounts, right? So there is there is payability as well which exists in this market, right?

So currently, a lot of our modules focused around serving the private market and the corporate segments that we have customers in and as well as continue to expand geographically.

Thirdly, we have got some request that some of the data that, for instance, we track, for instance, we track your headcount data on a monthly basis or a lot of other things, which will also be relevant for listed players?

Or if you are a listed investor and if you want to look at large unlisted companies within that peer set, so we may have some of those modules, but I guess our core customer base, who uses it for a day in and day out would be the private market and the corporate as a universe. And we think that in this market itself, we can create like a large company.

Unidentified Participant — — Analyst

Perfect. Thank you so much. I’ll come back in the queue. Thank you.

Neha Singh — Co-Founder, Chairperson and Managing Director

Thanks, Nikhil.

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

Yeah. Thank you, Nikhil. Our next question is from Nitin Padmanabhan, Nitin, you can unmute yourself and ask your question.

Nitin Padmanabhan — Aditya Bhartia — Analyst

Yeah. Hi. Good evening, Neha, Abhishek. So I just was curious, so this year, our revenue-to-EBITDA conversion was much lower than at around 31%. And I presume a lot of this is driven by the higher employee cost. Do you think this sort of reverts to around the 60%, 65% range or one should sort of assume this to be lower. So that’s the first question.

The second is that, if I look at the current quarter, and I just look at the trend over the last three quarters, the trend in customer account growth seems to be quite nice. It seems to be on an improving profile.

But what you’ve seen in the current quarter is that the realization has sort of dropped. So just wondered your thoughts on, how are you looking at realizations on a going-forward basis? Is it — are you sort of sort of taking in lower realizations to get in more accounts? Or how should we think about it on a going forward basis? Thank you.

Neha Singh — Co-Founder, Chairperson and Managing Director

Thanks Nitin. So I’ll just take the first point, which is basically, what is the incremental revenue, so this year it has been 31%, as you are correct. And what do we expect going forward? So, one of the reasons, why we have also given like the detailed cost bridge and how — what are the key drivers for it and you can now also see that.

So — and we have also sort of mentioned that we expect that this should go back to more than the majority, like is more than 50% within a couple of quarters. And you can see some of the leading indicators of this from the cost bridge that we have actually shared.

So for instance, from — just as the headcount trend, right, so most of the step-up that we had — so there were a lot of growth initiatives that we were doing and some required a step-up. One is in terms of the headcount, which increased — so the average headcount increased by 23% this year versus last year. That was one.

And then there was some other step-up, which was done in rental as well as some of the other compliance in government cost. So, most of the step-up that we needed have been done. So that is why we expected the incremental step-up that is required is much lesser. So it should be more — it will go back to the liner sort of the increase.

And you are already seeing that in the headcount numbers, for instance, that is why we’ve also shared like the April 1, which is sort of the indicator that it’s already sort of becoming — it’s already getting rationalized.

So that is why you would expect that this number should go back to majority. When I say majority, it’s like more than 50% within the next couple of quarters, which is the incremental revenue going into bottom-line, right. So I hope that, answers the first question.

Now coming to the second question which is

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

So the

Neha Singh — Co-Founder, Chairperson and Managing Director

Fine. Sorry yeah.

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

Yeah. Sorry. So the decline in headcount that we have shown on a closing basis for April, where is this decline happening in terms of the kind of people, that was the only thing I was keen on, and would that have any impact on the growth initiatives or the incremental account growth that we’re seeing? Just your thoughts there.

Neha Singh — Co-Founder, Chairperson and Managing Director

Right, right. Yeah. So just to add to that, the headcount, which increase was primarily in addition to the other teams, so finally across two main teams. One is your sales team that we have talked about the sales team expansion and the other was in data operations, which because we had greater coverage of financials and capital, which is required for certain customer segments, which we believe — which will help us increase the penetration within the customer segment.

So basically, the growth was in these two different teams. And the headcount reduction was also actually in these two teams apart from some of the other ones, primarily because whenever you do bulk hiring, it is typically followed by an optimization phase because not everyone is able to become productive, so that is one.

And the second thing is that we also continue to do some automation and efficiency initiatives, which helps us to keep optimizing the number of headcount that is required per module, right? So that also gets optimized. So this headcount change does not have any impact on the revenue. In fact, we continue to, sort of, aggressively grow towards both increasing the top of the funnel, as well as increasing the sales, the conversion part, right? So this actually does not have any impact on that. I hope that answers the question?

Nitin Padmanabhan — Aditya Bhartia — Analyst

Yes, it does. But just one data point as well. So we have the numbers for, let’s say, in Q1 fiscal ’23 on how the split between these various employee groups if on an annual basis, if you could give that so that it’s for us to compare would be helpful.

Neha Singh — Co-Founder, Chairperson and Managing Director

Yeah. So I can give you numbers as on April end, which is the same, the 820 people that you see, the split across the departments that we’ve shown earlier, so the split with — the current split looks like this. So there are about 90 people in tech and product. There are about 230 people in sales, marketing, customer success. There are about 450 people in analysts and data operations, and about 50 in business — in other business functions, right? So hopefully, that gives you the same split as what we had given earlier.

Nitin Padmanabhan — Aditya Bhartia — Analyst

Sure. Yes, it does. Thank you.

Neha Singh — Co-Founder, Chairperson and Managing Director

And now coming to the second question, which is across the last quarters that you see, which is the customer increase that we have been seeing. So, yes, the incremental customer has been increasing. In terms of the average realized pricing, if you look at last year versus this year, we have increased it marginally. So last year, it was INR6.5 lakhs. Today — this year, it has been INR6.7 lakh, Q-on-Q there might be some difference, what is the trend basically probably to expect.

So in terms of the new customer acquisition, it will continue to be probably — we’ll start with like a small seat, like, one seat or three seats. So that will continue to grow smaller. On the other side, we’re also working a lot towards increasing the number of seats within the existing organization. But my sense is that I’m not sure about how much change you would probably see. My sense is that it will probably be — the ASP pipe to remain in the same range. And, obviously, we continue to aggressively grow on the addition of new customers. If you see the net account has been increasing or even the deferred revenue has increased. So there, we continue to invest.

Nitin Padmanabhan — Aditya Bhartia — Analyst

Sure. I was just curious because the bulk of the revenue is from existing customers and sequential annualized drop of 3.1% is what I was curious about. So the drop seems large, considering that the existing base is very large. And the new base is — the new customers are smaller, so why does it really fall in a single quarter to that extent and lead to a flattish revenue? I just was trying to understand the dynamic there.

Neha Singh — Co-Founder, Chairperson and Managing Director

Right. So maybe you can probably annual may be better, more indicators. So annually if you look at it, it is — it has increased marginally from INR6.5 lakhs to INR6.7 lakhs. Maybe that is more indicative than the quarterly.

Nitin Padmanabhan — Aditya Bhartia — Analyst

Sure. Fair enough. Thank you so much, Neha and all the very best.

Neha Singh — Co-Founder, Chairperson and Managing Director

Thank you, Nitin.

Operator

Thank you, Nitin. Our next question is from Pradyum Choudhary. Pradyum, you can go ahead.

Pradyum Choudhary — Strategy and Business Hotstar — Analyst

Yeah, hi. Can you hear me?

Operator

Yeah, yeah. Loud and clear.

Pradyum Choudhary — Strategy and Business Hotstar — Analyst

Yeah. So the first question is what I see is during Q4, there’s been a growth in customer accounts even on a quarter-on-quarter basis. However, the revenue has stayed flat. So, why is that so?

Neha Singh — Co-Founder, Chairperson and Managing Director

Right. So, that is one of the reasons also in Q4 specifically that we saw apart from the other ones, which is there is — there were some flux also there initially, like if you look at Q4, it also had the SVB crisis, though it did not impact us directly, but some of the customers’ portfolio company had exposure to some of them were busy. So, we saw some delay in sort of the renewal which was happening. So, if you look at it, some of the customers we got in a little later. So this is the same sort of the flux that we have seen when like COVID has just started, when there was some delay in sort of renewals or the customer onboarding that we had seen. So, I think that was probably one of the things. We also like — we also saw some momentum in March — at the end of March when probably things were sort of more this thing. That might be one of the reasons why you will see the customer — ending customers — so the ending customer account would have done slightly different than the incremental, thus the revenue increase.

Pradyum Choudhary — Strategy and Business Hotstar — Analyst

Understood. And second, in the beginning of the call, you mentioned that due to the markets being not so good. Some of the customers probably invested — they didn’t increase their investments towards platforms and stuff. So, somewhere, do you think it indicates slightly less essential nature of our platform. Because like if I were to look at the listed space and if a customer was using Bloomberg, so because the markets were bad, I do not see that customer getting — like not renewing Bloomberg, right? So, from that perspective, can you please answer that, yes?

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes. Sure. So actually, in terms of the — so in terms of the essential actually, if you look at our DAUs to MAUs is actually fairly high. So, it is not something that people use it on an annualized basis or something — this is something that people use on a daily basis. For instance, if you are a private market investor and you’re meeting like five companies in a day for every company you have to see what is the information about it, who — what is the competition landscape? Who else exists in that market? What are the large global peers within that? More information about like financials, capital, senior shareholding, historical valuation, etc. So, this is something that you do every day. And most of the people — most of our customers say that they have this tab always open.

So, it’s a fairly essential thing. It’s a very high DEA to MAU that is there. In terms of the — that impact in market activity, so if you look at just the number, the dollars employed that was like 50% lesser, so it’s just that the number of deals that people are doing, right? So, how much busy they are, number of deals that they are working on was much lesser this year because of a lot of things, which is also there. So what we have — what we hear from customers is that they are still sitting on a lot of dry powder, which is there. But — we are also waiting for like some valuation reset to happen or something to happen, and that’s why they’re probably doing that. So — and so — like one of the ways in which we had expanded a lot is basically based on the number of users, right? So, if people are a little active — little lesser active, people are a little prone to sort of expand, but I think that was — probably we expect it to be only sort of transient. And we expect — I think that should go back to higher levels soon. Hope that answers the question.

Pradyum Choudhary — Strategy and Business Hotstar — Analyst

Understood. Yes, yes. And lastly, I just wanted a couple of data points. One was, as you alluded to a higher DAU by MAU. So, if you can give us an idea of that? And secondly, the latest — like the latest quarter’s customer retention rate and the net dollar retention rate?

Neha Singh — Co-Founder, Chairperson and Managing Director

Got it. Okay. So on the DAU to MAU, our DAU to MAU is fairly high. So, nearly — approximately more than 40% of the users log in every day, right? DAU to MAU is more than 40%, weekly actives to monthly actives is more than 65%. So it’s fairly high sort of engagement on both levels. That’s on the first part. On the second part of customer retention — net dollar retention, so we have actually not gone into these retention. We plan to sort of give more metrices. As you’ve seen, we have probably expanded the set of retention that we have given. So, we probably plan to add this. We’ve given another set of retention, which is sort of helps to explain that dynamics, which is your revenue from existing and the new customer acquisition, which also people wanted to understand that how is the new sales, sort of, panning out versus the other one. So we have given that we probably plan to give sort of more metrics around this going forward.

Pradyum Choudhary — Strategy and Business Hotstar — Analyst

Understood. Thank you so much.

Operator

Yes. Thank you, Pradhuman. Our next question is from Samir Dosani. Samir, you may unmute yourself and ask your question.

Sameer Dosani — Investments at ICICI Prudential AMC — Analyst

Yes. Can you hear me?

Operator

Yes, loud and clear, Samir. Please go ahead.

Sameer Dosani — Investments at ICICI Prudential AMC — Analyst

Yes. So thanks for the opportunity. Is my understanding correct that you said a lot of these customers that we added were end towards the end of Q4 that is why revenue growth is not reflecting the kind of account growth we have seen? That’s correct?

Neha Singh — Co-Founder, Chairperson and Managing Director

That is, to some extent, correct. Yes. That probably you’re checking some of the depot trend, etc. Yes. But yes, go on please.

Sameer Dosani — Investments at ICICI Prudential AMC — Analyst

All right. And second is, when I look at Nara, right? So revenue growth from existing customers last year was 15%. This year, it’s only 2%. So — what should we understand from this? And what will the trajectory for, obviously, this year was a much tougher year for your customer base. What should we understand where this number settles in the next few years? Thanks.

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes. So we expected to be between those two. So it should — I think last year, 2020 — 2022 was a bit higher than usual because of a lot of activity. And obviously, this year was much lower. So steady state might be somewhere in between that in those two numbers.

Sameer Dosani — Investments at ICICI Prudential AMC — Analyst

Okay. And also, if you look at customer additions, customer account additions has been pretty — has been much better and has been on the growing trajectory from your pipeline, your conversation with your prospective clients, how should we understand this trajectory? Should we — should this number keep improving for the next few quarters as — how should we understand that number? Thanks.

Neha Singh — Co-Founder, Chairperson and Managing Director

Right. So on the customer addition, we definitely expect that, that should increase because of — like if you look at the new customer addition both in terms of — just in terms of also the revenue that we are doing because of a lot of GTM initiatives that we have done.

Today, we are reaching out to a lot more people, a lot more people are coming into our top of the funnel as leads, right? Like just if you look at the traffic that we get, that has increased nearly 2x in just the last 18 months, right? So we get a lot more needs today across all our pages. And our conversion sales conversion has probably despite scale the ad scale the set that conversion has probably remained the same rate. So we are able to sort of get more reach of the more customers.

So we — so both in terms of on the new acquisition sort of continuing to sort of increase and hopefully, the existing expansion also improves than what it was last year. We should see this number continue to increase.

Sameer Dosani — Investments at ICICI Prudential AMC — Analyst

So Q3, Q4 is not seasonally strong. There’s no logic aspects, right? So it’s just organic increase that we are seeing because of the market conditions improve plus our own actions.

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes, that’s correct.

Sameer Dosani — Investments at ICICI Prudential AMC — Analyst

Okay. And also, if you look at — and I think this question is somewhat answered. But if you look at customer user per account, right, it has called down from 2.9x to 2.75x are around that. So is this a factor that new customers are opting for lower users at the start or are you seeing existing customers also cut a number of log-ins, what is that the factor of if you can explain that side? Thanks.

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes. Sure. So the new customer count, so I think it would mostly be the former, which is essentially a lot of the new customers, when they start, they want to start small, they want to start with like a one seat or two seat one license or two license. And the other thing is that you hope to continue to start to grow our existing customers. So I think primarily, it might be that your mix of essentially, like you’re seeing lesser upgrades in your existing and then you are signing up new customers in your one or two seats.

Sameer Dosani — Investments at ICICI Prudential AMC — Analyst

Understood. Understood. Sir, settling back to that question of — that a lot of customers have been added towards the end of the quarter, so that means the user — the revenue per customer account, it’s just an aberration and maybe may recover next quarter or so. That’s how we think about that, right?

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes. There is nothing else that — no, no, no pricing at all, and there’s no pricing pressure that we actually see. So, nothing else apart from that, that we see different in that sense.

Sameer Dosani — Investments at ICICI Prudential AMC — Analyst

Sure, sure. Thanks for that and all the best.

Neha Singh — Co-Founder, Chairperson and Managing Director

Thanks, Sameer. You’re on mute I think so

Operator

Sorry about that. Thank you, Sameer. Our next question is from Miten Shah. Miten, you may unmute yourself and ask your question.

Unidentified Participant — — Analyst

Hi, Am I audible?

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

Perfect.

Unidentified Participant — — Analyst

Yes. Thanks for giving me the opportunity. And first of all, heartiest congratulations to team on giving a good set of numbers. So we hope we’ll see some TRACXN in the traction of share price tomorrow as shareholders Okay. Now coming to the questions. The first thing — I’m talking on behalf of my wife, who is actually the shareholder. So pardon me for that. So the first question, I would just like to know who exactly are players of TRACXN in this industry, whether from listed or unlisted.

Neha Singh — Co-Founder, Chairperson and Managing Director

Sure. So we are either vertical industry, which is different from horizontal in a sense that the number of players that we compete globally are only a handful. They are not like dozens, which you see in some of the other vertical segments like an HR MS CRM, which is there. For us, in the — because we are in the private market data business, globally, there are only about 5 or 6 players that exist in that space, which includes all the other ones that exist like account base or a CD inside sort of pitch book, etc, which are primarily there in the private market data space. Having said that, I think there is a fair amount of differentiation which sort of exists across a lot of the players, which are there today. I hope that answers your question.

Unidentified Participant — — Analyst

Sure. Thanks a lot. And is there any fair idea of what would be our market share amongst these peers and end — are we able to — yes.

Neha Singh — Co-Founder, Chairperson and Managing Director

Right. So currently — so interestingly, like nearly 50% of the customers that we acquire has started using — started using the platform for the first time when we get the stats from our sales team — so our current market penetration is single digit, right? And even I feel like today, we are at 1,200 accounts or typically organizations that we work with, the addressable universe is 100,000 or nearly 1 lakh more than 1 lakh organization. So we are a single-digit percentage of the market. Even if we grow to five times, you’ll still be single-digit percentage in the market, right? So — and most of the other players are also single-digit percentage of the market. So that is why I think right now, it’s a fairly sort of unserved market as well

Unidentified Participant — — Analyst

Fair enough. Just one more question, if you don’t mind. So on the year, a lot of recession sort of kicking in slowly in the U.S. And as we derive almost 30% revenues from the Americas. So have you seen any slowdown in getting fetching on customers or have — are there any retention in the existing customer?

Neha Singh — Co-Founder, Chairperson and Managing Director

Right, sir. No, so actually, recession for us in our market, I think private market probably started about three to four quarters back. In fact, let me had got a cushion on recession even like we done quarter back quarterly call. So that is also the — so I think in our market, probably started about three to four quarters back, this has it probably started in the public market end of 2021, which is where it also started in the private market because they are fairly linked right?

So right now, I think that has already happened. So what we see from the start is that we — at least if you look at the like the investment funding which is happening, — it looks like the bottom is already past us. And it looks like the quarter is becoming flat, the subsequent quarters are becoming flat or is looking to improve we probably have to wait 1 or 2 more quarters to actually see.

But interestingly, despite all this, America still grew at nearly 30% for us. right? And in addition to like India is between 30%, so that company should grow fast. Obviously, Europe was slower. But I think probably what we get sense from also the customer is probably the worst is sort of behind and we expect things to probably improve

Unidentified Participant — — Analyst

Perfect. Perfect. One more last question, if you don’t mind, if I may ask for Yes. We see an improvement in the free cash flow year-on-year. And — so is there — would — any thoughts that whether this be used for organic or inorganic product looking for any inorganic..And is there any dividend policy that the management has thought about?

Neha Singh — Co-Founder, Chairperson and Managing Director

Right, right. So that is obviously one interesting aspect of our business that it generates, like despite all the initiatives that we are doing, if the business continues to generate increasing free cash flow. And even if you look at our cash and cash equivalent, it is increased both on a year-on-year basis as well as on a sequential quarter-on-quarter basis, right? So this is one interesting aspect because of the business nature.

In terms of how do we plan to do that? So we haven’t sort of formalized the policy, but it will probably be across all these things, across inorganic, continue to invest inorganic and organic as well as either doing like a dividend or a buyback. So probably, it will be across these budgets. We haven’t finalized the plan. We’ll probably, remember, we do that. We’ll probably also announce more about it.

In terms of organic, inorganic, I think our current plan is to continue to show the marketing expansion for the first couple of quarters after the listing, which is one of the things that people really liked about our business. And obviously, we do plan to do inorganic expansion that might happen maybe like a couple of quarters down, because even if you look at financial data companies in the public space, they’ve been fairly acquisitive and if you look at all the large ones, they have been fairly acquisitive. So obviously, this is some lever that we do plan to do that, but maybe a couple of quarters down.

Unidentified Participant — — Analyst

Correct. But is the company eyeing up presently for any strategic occupation or otherwise?

Neha Singh — Co-Founder, Chairperson and Managing Director

No immediate plan.

Unidentified Participant — — Analyst

Yes. Fair enough. I mean, that answers all the queries. Thanks a lot for answering.

Operator

Thank you, Miten. We have a repeat question from Bhargav Buddhadev. Bhargav, you may go ahead. Kindly unmute yourself.

Bhargav Buddhadev — Kotak Asset Management — Analyst

Yes. Hi, Neha and Abhishek. Can you hear me?

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes. Hi, Bhargav. Yes.

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

Yes.

Bhargav Buddhadev — Kotak Asset Management — Analyst

Yes. So first of all the congratulations for the customer addition as it has improved sequentially. My first question is, if I read the slide 16, is it correct that the revenue from the existing customer has gone up by 30% in FY ’23?

Neha Singh — Co-Founder, Chairperson and Managing Director

FY ’23, so it has gone up by INR1.4 crores from existing customers. So the way to read it is like if you look at FY ’21, the revenue was INR48.3 crores. I’ll actually just go back to that slide. So the revenue was — yes, so the revenue was INR43.8 crores in FY ’21, which increased to INR50.7 crores, which is an increase of 6.9%. The same, if you look at the spend in FY ’21, it increased from 63.5 to 64.9, increase of INR1.4 crores. So I hope that answers the question.

Bhargav Buddhadev — Kotak Asset Management — Analyst

So how should we read this INR65 crores in ’23 was 50.7% in ’22, is that correct? Or is there’s something you see?

Neha Singh — Co-Founder, Chairperson and Managing Director

No. So the existing set actually changes, like if you look at in FY ’23, all the customers that were — that also came up in FY ’22 and prior to that became sort of existing customers, so that is why.

Bhargav Buddhadev — Kotak Asset Management — Analyst

Your existing customer definition is about a year and more.

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes. So, the new customer, essentially anyone that came in that financial year, which gave us the revenue for the first time in that financial year and existing customers everyone else. Everyone who was onboarded before that year — before that period, right?

Bhargav Buddhadev — Kotak Asset Management — Analyst

And this increase in existing customer addition is primarily led by user base addition or is it also realization-led?

Neha Singh — Co-Founder, Chairperson and Managing Director

It is primarily led by the user that we increased in the customers.

Bhargav Buddhadev — Kotak Asset Management — Analyst

Okay, okay. So there is no realization pressure, right, on the existing customer?

Neha Singh — Co-Founder, Chairperson and Managing Director

There is no pricing pressure that is there. Like even if you look at the large customer accounts, that we have — like if you look at the number of customers which are there in more than 20 lakh or the 30 lakh more than 40 lakh markets, have actually increased. So there’s a pricing pressure per se that sort of exists.

Bhargav Buddhadev — Kotak Asset Management — Analyst

And fair to say that going forward also, you are not seeing any price negotiation, which is indicative of any pricing pressure?

Neha Singh — Co-Founder, Chairperson and Managing Director

No. So there is no pricing pressure that we see from customers. We are, in fact, also looking to sell to a lot of large accounts, which is more users to begin with. So we are also doing a lot of those initiatives. So there is no — so this is not something that we hear from the customers a lot.

Bhargav Buddhadev — Kotak Asset Management — Analyst

Okay. And last question is, over the course of next two years, what is the growth which you see in your fixed cost, which is your employee and the fixed part and the other expenditure?

Neha Singh — Co-Founder, Chairperson and Managing Director

Right. So you can expect what it was probably — I think last year was a little bit of aberration in terms of the total expense and you can probably see the trajectory, which has been there earlier, which is more less than 10% is what you can expect on a steady state going forward?

Bhargav Buddhadev — Kotak Asset Management — Analyst

And on your cash on the balance sheet, you mentioned to the earlier participant’s question that you are not looking at any acquisition is buyback also under consideration, given that the stock price is also below the IPO price?

Neha Singh — Co-Founder, Chairperson and Managing Director

So I think both of these are — so in terms of acquisition, like immediately, there is no plan, we do plan to do an organic expansion. I think we’ll probably we’ll have to time out as to when we actually do that. Sir, secondly, coming to the buyback, I think we do — so I think we haven’t financed it, but obviously, this would be something which is of interest to us. But we haven’t sort of finalized around doing that immediately.

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

Okay. Okay. Thank you for your answers, and all the very best.

Neha Singh — Co-Founder, Chairperson and Managing Director

Thanks.

Operator

Thank you, Bhargav. Our next question is from Ayush Vimal. Would you request you to kindly unmute yourself?

Ayush Vimal — Citi — Analyst

Hi, Neha. Hi, Abhishek. Thanks for giving me the opportunity. I just have two qualitative questions on the business. The first is — over the last year, have you seen emerging use cases for this database going beyond the level of private market investors a to be more cyclical with the macroeconomic cycles. Have you seen corporations or banks or other organizations using this database more often? And if so, can you highlight what are the new emerging use cases that you see?

Neha Singh — Co-Founder, Chairperson and Managing Director

Sure. So I’ll take this. So in fact, our customer base, if you look at it. So actually, you find it interesting that today, corporates by revenue is actually equally large as compared to the private market segment. So when I say private market, it includes MCs, PEs, IDs, etc. When I say corporate, it includes the M&A teams, innovation, etc of the corporate, right? So today, actually, by revenue corporates actually equally large for us as compared to the private market, and we continue to actually have interesting sort of use cases within them, to give you a small couple of examples within corporate, the one which is there.

So today, we’ve also more than 70 Fortune 500 corporations. And a couple of the use cases are as follows. So one is the M&A team. So M&A team is fairly straightforward, anyone is looking to do M&A investments, they uses. The second is your innovation team or the digital transformation team. So for instance, anyone who’s looking to do vendor discovery, right? So you can — whenever you’re looking to do vendor discovery for any of the emerging spaces like a bank is looking to find out the KYC vendors or a company is looking to find emerging vendors within their industry.

They are able to use our platform to do that. So that’s another very large use case that we see. Plus, there is also other use cases for instance, sales and marketing. So anyone who’s looking to target the private market as a customer segment, they find our data very interesting. So we already have some customer segments with for that use case, and we can actually go more deeper also within that. So actually, within that also, there are fairly interesting use cases that we’re already seeing. And once we have our sizable customers, we also invest in building more modules and data that they need.

Ayush Vimal — Citi — Analyst

Fair enough. The second question I had was I observed the notice a decline in the number of employees in the month of April. Do you see this — and our data entry and entity profiling is a very, very manual process. Do you see this changing over the next few years to be a more automated process, which might involve lesser number of employees?

Neha Singh — Co-Founder, Chairperson and Managing Director

Right. So two parts. So one is the employee decline has been primarily in the same team wherein we had increase in the team. So it is still higher than what it was two years back. But whenever you do sort of a bulk hiring, it is also not everyone is able to become productive, etc. So that little bit of optimization happens.

Coming to the second point, which is on just the data operation scheme. So actually, we do a lot of automation at our end and across different data modules that is there. If you look at our breadth of data models, it’s a lot, right? Like for instance, like public market companies give you a fairly structured information about financials, private companies, they have filings, which is in PDFs or images across various languages, not just English, right? Like if we go to different countries, it’s available in earnings language, so we are able to extract that information.

For instance, we have financials in more than 15 countries, cap tables more than 10 countries, you try companies in all these countries, and there are other data points that you also track like even the press filings, transaction information that we track in a lot of non-English as well as English language countries.

So there is a lot of automation that we have to build, right? Just the fact that we have two million entities, we added 400,000 last year itself, right? So that just is an example of — you require a lot of automation for this. Having said that, there’ll always be a human in the loop duration that will be required. Like even if you look at the financial data company, very to now information is fairly structured in there. They also have like large data teams, which exist in private market, I think it’s even more unstructured.

So for us, I think we’ll continue to have the human in the loop for all our data modules, what we have seen is actually the amount of supervision that is required or the curation that is required for data module is those reduces over time, right? So that is the efficiency in automation that brings into, for instance, the number of people that was required to just capture the global transaction information, right, we capture global transactions, any funding around camping across all the countries. The number of people that will be required in that unit would have reduced what it was probably two years back. So that is the kind of efficiency that we keep working on. But at the same time, we constantly also launch new data models, etc. So yes, there is a lot of automation that you’ll continue to see, but I’ll always — I think we’ll always have a human in the loop also, which will exist.

Ayush Vimal — Citi — Analyst

Just one more question. Are we looking to expand the breadth of services that we provide, for instance, we can provide services like expert services or tailored services to specific lines for a fee and that might be very synergistic in that existing offering. So something like that on the cards?

Neha Singh — Co-Founder, Chairperson and Managing Director

Right, right. So we actually have a fairly rich product road map, and this is actually a result of the customer were of the request to the customer themselves have center. So for instance, we also have a service called MyAnalyst wherein we get about thousands of requests every quarter which is like people are looking at different sort of data points or different side of views or analysis that they want to help on and this has also becomes a funnel for modules that we have to launch. So we actually have fairly rich set of modules, and we know a lot of things, which people have requested us which we think that — which will help us in sort of like getting more deeper into the customer workflow and helping us increase the price point and the user penetration over time. So yes, so all these are part of the road map, which is there.

Ayush Vimal — Citi — Analyst

And just one final point. Do we have IT tracking on the platform, which prevents users from using sharing login IDs and using a single account?

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes, yes. So just like in your main clients, you are able to see that you’re logged in into sort of more locations. So similarly, at the back end because it’s a cloud hosted, we are able to track the IDs of the devices, which is there. We are able to get it at the back end. And this is also a way in which our team sort of helps to upgrade. So we allow a little bit of sharing for instance, someone is using a laptop or a mobile or an iPad, etc, we allow them a little bit panel usage and once it crosses a particular more location or different locations, then we actually — our team also reaches out to them, ask them if they want to buy more logins for the team members. So this is also something that we are able to track and also helps us upgrade

Ayush Vimal — Citi — Analyst

Thank you so much. That’s it for me.

Operator

Thank you, Ayush. Now we’ll take Pratyush question, she is on the chat window. So I will read it loud. This quarter, billing was only INR22.4 crores which was down 3% Q-o-Q and up only 13% Y-o-Y. Why have billings been weak?

Neha Singh — Co-Founder, Chairperson and Managing Director

Got it. So actually, billings, if you look at it, I think even if you look at last — even if you look at last year, it should probably have a similar one like — it also — like for instance, 80% of the revenue is from nearly existing customers, and there’s a little bit of factoring, which is there in terms of where you have some of the customer concentration. So I think that is a similar pattern that you would also see even last year. Secondly, if you look at some of the other things, for instance, like the other things like deferred revenue, etc have increased. So I think contract size might have some seasonality as you would have seen even last year. I hope that answers the question

Operator

Fine. Now we take Nitin’s question. So Nitin Padmanabhan, you may unmute yourself and ask your question.

Nitin Padmanabhan — Aditya Bhartia — Analyst

Yeah. Hi am I audible?

Operator

Perfect Nitin. Please go ahead.

Nitin Padmanabhan — Aditya Bhartia — Analyst

Yeah, hi. Thanks for the opportunity guys. So Neha, from what I understood, the disconnect between customer growth and revenue growth was driven by two factors. So one is new customers coming towards the end of the quarter. And second, renewal is also being delayed, which is possibly reflected in the lower revenue per customer. Is that understanding, right? And if it is right, does it mean that the revenue growth should outpace the customer growth in the following quarter. Is that a fair understanding?

Neha Singh — Co-Founder, Chairperson and Managing Director

So yes, the first one is a fair understanding, which is basically just the timing of where the customers have sort of signed up. So that would be correct. In terms of what to expect going forward, I think there, I think we may have to see it, because I guess we are also working towards a lot of new customer acquisition. And that typically happens at a lower ASP than the other one. So going forward, whether historically, if you actually see the revenue growth has been higher than the customer growth. So maybe to come back to that same level, but I think we’ll have to probably see

Nitin Padmanabhan — Aditya Bhartia — Analyst

Yes, because I see a similar kind of thing that happened even in the past. So I’m just trying to correlate what really happened. So — if you look at Q2 fiscal ’22, you had the same thing where in a quarter, the realized pricing went down by 5.8%, but the very next quarter grew up 10.4%. Is it because of the nature of renewals being delayed, is that a large sort of variable within that? Or — and can a similar thing happen? Or am I reading it strongly?

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

So mostly when you acquire a lot of new customers ASPs go down. And if you see some expansion among the existing customers, the ASPs go up. So my sense is that as market opens up and if we see some kind of — if we will start buying more seats then you will see ASP growing up. My sense is the ASP is not grown because people have not bought a lot more seats this and last few months.

Ayush Vimal — Citi — Analyst

Understood. And second, just your thoughts on EMEA, so EMEA has been sort of relatively weak for the year. So what are you seeing in that market? And what are your thoughts there?

Nitin Padmanabhan — Aditya Bhartia — Analyst

So I think we have done a lot of growth initiatives. Some of them had not resulted into good results in Europe. So we are now doing some specific region-specific initiatives so that we get some new lead generation there. So I think we are working actively on EMEA or Europe specifically, more aggressively now.

Operator

Thank you, Nitin. Our next question is from Rohit Balakishnan. Rohit, you may unmute yourself and ask your question.

Rohit Balakishnan — PMS — Analyst

Am I audible?

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

You’re slightly on the lower side, but it’s fine.

Rohit Balakishnan — PMS — Analyst

Okay. I — okay, I hope this is better. So this is like my first call so pardon my basic questions. Typically, I mean, do you have a sense that, I mean, your customers do they use products beyond — I mean, do they use TRACXN and let’s say also use the other products that you mentioned? Or is it like it’s either between you guys or out of competition. Can you just maybe give a sense on that?

Neha Singh — Co-Founder, Chairperson and Managing Director

Yes. So actually — so when we acquire customers, nearly 50% of the customers that we acquired actually use only one platform like started using us. And then there’s some obviously about 30% of the customers that we acquired are using more than one, so I would say bulk of the people are using probably one platform, and there are some people who use more than one. Having said that, currently, the differentiation that exist, so it’s not like-for-like. It’s not just the same data sort of it exists across the platform. So there’s a fair amount of differentiation which exists. Hope that answers your question.

Rohit Balakishnan — PMS — Analyst

Yes. And I don’t know if this is the right platform, but can you talk a bit about what are those differentiations?

Neha Singh — Co-Founder, Chairperson and Managing Director

So actually, if you look at our platform and quite things that we offer, for instance, our coverage in emerging technology that is much more deeper. If a large bank wants to figure out, okay, what is happening in fintech, what are the emerging areas, what is happening in — what are the eKYC solutions. If they want to go niche in a particular area, there’s no other platform that sort of exists that gives you that level of information. Similarly, today, you want to figure out all the companies and D2C brands coming up or — so there’s a lot of differentiation, which exist, one is at a whole sector-based coverage, which is very interesting, which private market investors really value. Second is some of the data points that we have in terms of the cap tables, etc, that we do, that is fairly unique. There a lot of other data points that also exists. Maybe we can just actually even take up the platform and then that should be made a parent of the kind of differentiation which exists.

Rohit Balakishnan — PMS — Analyst

Got it. Okay.

Neha Singh — Co-Founder, Chairperson and Managing Director

Hope that helps.

Rohit Balakishnan — PMS — Analyst

Yeah. Thank you. That’s pretty much. Thank you.

Neha Singh — Co-Founder, Chairperson and Managing Director

Thanks.

Prashant Chandra — Chief Financial Officer

Yeah. Thank you, Rohit. Neha, we have — I believe, it’s a last question, it’s on the chat window from Virendra Verma, I readout the question verbally. I’m new to the company business need to know how the data for companies is sourced globally. And what are the costs involved to get this data.

Neha Singh — Co-Founder, Chairperson and Managing Director

Sure. So in terms of — so essentially, we track private markets and anything that’s relevant to a private market investor corporate essentially, you track it on the platform. In terms of how we source the data that’s broadly divided into three buckets, one is your more publicly available data.

So just like you’re looking for any particular themes, like if you’re looking at GRC Software companies or you’re looking at Kitchen Automation companies, you’ll go to a search engine, you would search for a company to get a set of results.

So, one is our full publicly available data of our companies from their websites, etc. So we track more than 0.5 billion entity study on the market. So that’s one source of information.

The second source of information is the proprietary information that we build. So for instance, the whole understanding that this company is into Insurance stake or these companies into an Internet First Bank or this company is a Single Specialty Hospital chain that whole taxonomy.

So out of the 800 plus member, we have nearly 90 members have the

So that’s the second proprietary information that we build. The third is basically based on regulatory filings. So we capture — so just like public companies have to do a lot of filings, even private companies have to do a lot of filings across all the countries.

We own transactions on annual filings, etc. And we are able to track those, right in a variety of like English, non-English language in a variety of parts as well as a niche format that is their information. So that’s the third source of information that we have, which is a regulatory. So these probably comprises of three key sources of information.

Coming to the second part of the question is the cost. So we actually have the whole stats. We don’t license the data. So in the sense that our cost to source the data is fairly minimal, we spend a lot in processing the information, making that cable for the end-users. And that is also reflected in our P&L, right? So I hope that answers the question.

Rohit Balakishnan — PMS — Analyst

Yeah. Perfect.

Prashant Chandra — Chief Financial Officer

Yeah. Perfect.

Neha Singh — Co-Founder, Chairperson and Managing Director

Yeah. Thanks Prashant, and thanks, everyone, for joining us today. I hope, we were able to give you a good understanding of recent business update and — we have also been able to address some of your queries.

In case there are any follow-up queries, please feel free to reach out to us — any of us. I am at neha@tracxn.com or you can reach out to Abhishek and Prashant or you can write to our team at investor.relations@tracxn.com. Thanks again, and I hope you have a good rest of the day.

Prashant Chandra — Chief Financial Officer

Yeah. Thank you very much, Neha, and Abhishek all the best to you.

Abhishek Goyal — Co-Founder, Vice Chairman and Executive Director

Thank you. Thank you, everyone, for joining.

Prashant Chandra — Chief Financial Officer

Thank you. Thank you.

Neha Singh — Co-Founder, Chairperson and Managing Director

Thank you.