{"id":160721,"date":"2024-05-01T07:12:28","date_gmt":"2024-05-01T11:12:28","guid":{"rendered":"https:\/\/44.250.171.167\/?p=160721"},"modified":"2024-05-01T07:12:29","modified_gmt":"2024-05-01T11:12:29","slug":"newgen-software-technologies-limited-q4-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/newgen-software-technologies-limited-q4-fy24-earnings-conference-call-insights\/","title":{"rendered":"Newgen Software Technologies Limited Q4 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Newgen Software Technologies Limited (NEWGEN) Q4 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Revenue Growth<\/strong>\n<ul>\n<li>Revenue increased by 28% year-over-year to INR 1,244 crores.<\/li>\n<li>Witnessed strong growth in EMEA, 39% and India, 33% markets.<\/li>\n<li>Secured largest project worth INR 97 crores in APAC region.<\/li>\n<li>Increased number of customers with billing over INR 45 crores from 51 to 65.<\/li>\n<li>Average revenue per customer grew by 29%.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Product Innovation<\/strong>\n<ul>\n<li>Launched AI-enabled version of Newgen platform, Marvin.<\/li>\n<li>Released new versions of ECM and CCM platforms.<\/li>\n<li>Introduced next-generation trade finance solution, IDP Studio, with advanced machine learning.<\/li>\n<li>Incorporated new features like AI, cloud, microservices, and security enhancements.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Profitability<\/strong>\n<ul>\n<li>Profit after tax increased by 42% year-over-year to INR 252 crores.<\/li>\n<li>Invested 9% of revenue in R&amp;D initiatives.<\/li>\n<li>Spent 22% of revenue on sales and marketing activities.<\/li>\n<li>Robust cash flow generation with net operating cash flow of INR 281 crores.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Customer Relationships<\/strong>\n<ul>\n<li>Added 51 new logos during the year, 11 in Q4 alone.<\/li>\n<li>Annual revenues from existing banking customers comprised 60% of total revenue.<\/li>\n<li>Deeper engagement with clients, automating end-to-end processes.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Talent Management<\/strong>\n<ul>\n<li>Global workforce grew to 4,500 individuals.<\/li>\n<li>Focused on talent management and learning initiatives.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Order Book Growth<\/strong>\n<ul>\n<li>Order book expanded to around INR 1,560 crores from INR 1,300 crores previously.<\/li>\n<li>Growth in order book at 20% versus 30% in the previous year.<\/li>\n<li>Strong order book growth not seen as a constraint for meeting revenue targets.<\/li>\n<li>Other factors like new logo additions and average deal size also contribute to growth.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Revenue\/Margin Growth Outlook<\/strong>\n<ul>\n<li>Expect to maintain growth momentum and do better in the coming year.<\/li>\n<li>Traditional markets like India, Middle East, and financial services showing healthy pipeline.<\/li>\n<li>S. market still a work in progress, with efforts to target larger entities.<\/li>\n<li>Aspiration of achieving $500 million revenue by FY 2027 driven by core verticals and insurance expansion.<\/li>\n<li>Targeting growth ranges similar to previous years.<\/li>\n<li>Expect to maintain healthy net margins around 20-21%.<\/li>\n<li>EBITDA margins likely to expand, but net margins may be impacted by higher tax rates.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Insurance Vertical Expansion<\/strong>\n<ul>\n<li>Insurance vertical expected to be a substantial part of revenue in the next 2-3 years.<\/li>\n<li>Focused on life, general, and health insurance segments.<\/li>\n<li>Investing in building teams, capabilities, and products for larger deal sizes in insurance.<\/li>\n<li>Current insurance growth rates lower than banking, which was the primary driver at over 30% growth.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Seasonality Impact<\/strong>\n<ul>\n<li>Aim to reduce seasonality, but Q1 unlikely to be bigger than Q4.<\/li>\n<li>Expect Q1 growth rate to be slightly higher than average growth rate.<\/li>\n<li>Q1, Q2 growth rates historically higher, followed by relatively lower growth in subsequent quarters.<\/li>\n<\/ul>\n<\/li>\n<li><strong>M&amp;A Strategy<\/strong>\n<ul>\n<li>Looking for tactical acquisitions for speed-to-market and market access, predominantly in major markets.<\/li>\n<li>No specific targets identified yet, but the work is in progress.<\/li>\n<li>Expect to make acquisitions in the next 1-2 years to accelerate growth in mature markets.<\/li>\n<\/ul>\n<\/li>\n<li><strong>GSI-led Strategy<\/strong>\n<ul>\n<li>Working on enablement and product-to-product tie-ups with GSIs, but growth in the funnel has been slow.<\/li>\n<li>Targeting mature markets where GSI business has not been strong, impacting funnel growth.<\/li>\n<li>Exploring partnerships with top-tier consulting firms for early funnel building.<\/li>\n<li>Resetting the GSI strategy due to long deal cycles and varying deal sizes.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Pricing Environment<\/strong>\n<ul>\n<li>Global prices have peaked for IT products, manpower, and services.<\/li>\n<li>Evaluating pricing components across products and services.<\/li>\n<li>Working with customers to revise rates and implement pricing initiatives in the next few quarters.<\/li>\n<\/ul>\n<\/li>\n<li><strong>BPO and GenAI Impact<\/strong>\n<ul>\n<li>BPO segment has been a traditional partner for accounts payable and receivable processes.<\/li>\n<li>Potential for horizontal play exists, but traction has been limited in India and globally.<\/li>\n<li>Exploring GenAI use cases in BPO for automating routine tasks and improving operational efficiency.<\/li>\n<li>GenAI offerings in products like content summarization, rule building, and multilingual communication.<\/li>\n<\/ul>\n<\/li>\n<li><strong>US Sales Strategy Reset<\/strong>\n<ul>\n<li>Pivoting from smaller banks ($2B-$20B assets) to larger banks ($20B-$200B assets), around 100 accounts.<\/li>\n<li>Lifetime value of larger accounts is more meaningful for the company&#8217;s growth aspirations.<\/li>\n<li>Building dedicated sales team, tailoring product definitions, and partnering with consulting firms.<\/li>\n<li>Initial inroads made with a few larger bank accounts, but work in progress.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Newgen Software Technologies Limited (NEWGEN) Q4 FY24 Earnings Concall Revenue Growth Revenue increased by 28% year-over-year to INR 1,244 crores. Witnessed strong growth in EMEA, 39% and India, 33% markets. Secured largest project worth INR 97 crores in APAC region. Increased number of customers with billing over INR 45 crores from 51 [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,8],"tags":[10169,9124,8532],"class_list":["post-160721","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-technology-stocks","tag-earnings","tag-software-technology-services","tag-technology"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":157776,"url":"https:\/\/alphastreet.com\/india\/newgen-software-technologies-limited-q3-fy24-earnings-conference-call-insights\/","url_meta":{"origin":160721,"position":0},"title":"Newgen Software Technologies Limited Q3 FY24 Earnings Conference Call Insights","author":"Praveen","date":"January 17, 2024","format":false,"excerpt":"Key highlights from Newgen Software Technologies Limited (NEWGEN) Q3 FY24 Earnings Concall Financial Performance Revenue at INR 324 crores, up 27% year-over-year. Profit after tax at INR 68 crores, up 45%. Healthy growth across geographies like India, EMEA, APAC, Americas. Annuity revenues comprise 59% of total at INR 191 crores.\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":154984,"url":"https:\/\/alphastreet.com\/india\/newgen-software-technologies-limited-q2-fy24-earnings-conference-call-insights\/","url_meta":{"origin":160721,"position":1},"title":"Newgen Software Technologies Limited Q2 FY24 Earnings Conference Call Insights","author":"Praveen","date":"October 17, 2023","format":false,"excerpt":"Key highlights from Newgen Software Technologies Limited (NEWGEN) Q2 FY24 Earnings Concall Revenue Growth Across Geographies Newgen witnessed robust 30% YoY revenue growth to INR293 crores in Q2 FY24. Strong growth seen in India region with 38% YoY growth; significant orders from public and private banks. EMEA region grew 34%\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":128927,"url":"https:\/\/alphastreet.com\/india\/newgen-software-technologies-limited-q4-fy22-earnings-conference-call-insights\/","url_meta":{"origin":160721,"position":2},"title":"Newgen Software Technologies Limited Q4 FY22 Earnings Conference Call Insights","author":"Praveen","date":"May 5, 2022","format":false,"excerpt":"https:\/\/youtu.be\/KGCQVEOvYGQ Key highlights from Newgen Software Technologies Limited (NEWGEN) Q4 FY22 Earnings Concall Management Update: NEWGEN said that of the 530-odd customers, 38 customers witnessed billing of over INR5 crores in FY22 compared to 26 customers in FY21. Q&A Highlights: Sarang Sanil from RW Investment asked about the GSI percentage\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":138726,"url":"https:\/\/alphastreet.com\/india\/newgen-software-technologies-limited-q3-fy23-earnings-conference-call-insights\/","url_meta":{"origin":160721,"position":3},"title":"Newgen Software Technologies Limited Q3 FY23 Earnings Conference Call Insights","author":"Praveen","date":"January 18, 2023","format":false,"excerpt":"Key highlights from Newgen Software Technologies Limited (NEWGEN) Q3 FY23 Earnings Concall Management Update: [00:03:37] NEWGEN said it is seeing increased adoption of subscription based business model, with the company\u2019s overall subscription revenue growing 37% YoY. [00:09:44] The company said that FY23 is marked by the continuing impact of elevated\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":126436,"url":"https:\/\/alphastreet.com\/india\/newgen-software-technologies-limited-q3-fy22-earnings-conference-call-summary\/","url_meta":{"origin":160721,"position":4},"title":"Newgen Software Technologies Limited Q3 FY22 Earnings Conference Call Summary","author":"Praveen","date":"January 19, 2022","format":false,"excerpt":"https:\/\/www.youtube.com\/watch?v=lMWFAFWJzS0 Key highlights from Newgen Software Technologies Limited (NEWGEN) Q3 FY22 Earnings Concall Management Update: NEWGEN commented that it saw acceleration in business from existing customers and healthy operating margins. The company\u2019s subscription revenue continues to be the strongest component, seeing 20% growth YoY. Q&A Highlights: Analyst Dipesh Mehta asked\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":131560,"url":"https:\/\/alphastreet.com\/india\/newgen-software-technologies-limited-q1-fy23-earnings-conference-call-insights\/","url_meta":{"origin":160721,"position":5},"title":"Newgen Software Technologies Limited Q1 FY23 Earnings Conference Call Insights","author":"Praveen","date":"July 22, 2022","format":false,"excerpt":"https:\/\/youtu.be\/le4H1ngVL68 Key highlights from Newgen Software Technologies Limited (NEWGEN) Q1 FY23 Earnings Concall Management Update: NEWGEN said it is increasingly seeing growth in cloud subscription business which grew by 33%. Cloud and subscription revenue put together have now reached 38% of total revenue. This shift, the company said, is expected\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/160721","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/users\/1767"}],"replies":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/comments?post=160721"}],"version-history":[{"count":0,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/160721\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media\/154818"}],"wp:attachment":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media?parent=160721"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/categories?post=160721"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/tags?post=160721"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}