Tanla Platforms Limited has informed the Exchange about Investor Presentation

Tanla Platforms Limited T: +91-40-40099999 (Formerly known as Tanla Solutions Limited) info@tanla.com Tanla Technology Center www.tanla.com Hi-tech city Road, Madhapur, Hyderabad, India - 500081 CIN: L72200TG1995PLC021262 April 26, 2023 To, BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 Scrip Code: 532790 National Stock Exchange of India Ltd. “Exchange Plaza” Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051 Symbol: TANLA Dear Madam/Sir, Sub: Investor Updates for the quarter and year ended March 31, 2023. With reference to the above cited subject, we are enclosing herewith the Investor Updates for the quarter and year ended March 31, 2023. Request you to take the same on record and oblige. Thanking you Yours faithfully, For Tanla Platforms Limited Seshanuradha Chava General Counsel and Company Secretary ACS-15519 SESHANURADHA CHAVADigitally signed by SESHANURADHA CHAVA Date: 2023.04.26 15:05:23 +05'30'Investor UpdateQ4 & Full Year FY23April 26, 2023Hyderabad2Safe Harbor and Other InformationThe CPaaS business is evolving at a fast pace in India with very little information available in the public domain on the overall market. The financial community has always sought a response on the total market size, key drivers of the industry and the competitive landscape in this space. In order to provide more transparency and to help understand our business better, we are providing indicative data around the market size and our relative share (assuming the indicative data). This indicative data has been arrived at basis our detailed internal analysis. This is being done with an intent to provide an indicative picture of the industry and address queries about the CPaaS space. This must not be seen as a positioning statement of the company, and one should not rely on the company’s disclosure for their assessment of the market size.This presentation contains statements that include information concerning our possible or assumed strategy, future operations, financing plans, operating model, financial position, future revenues, projected costs, competitive position, industry environment, potential growth opportunities, potential market opportunities, plans and objectivesof management, as well as assumptions relating to the foregoing that involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward-looking in nature. Such statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, although not all forward‐looking statements contain these identifying words, you can identify forward-looking statements by terminology such as “expect,” “anti-cipate,” “should,” “believe,” “hope,” “target,” “project,” “plan,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,”“might,” “could,” “intend,” “shall,” and variations of these terms or the negative of these terms and similar expressions. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements, expressed or implied by the forward-looking statements. It is advisable not to place excessive reliance on any of the forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Additionally, these forward-looking statements, involve risk, uncertainties and assumptions based on information available to us as of 21/04/23, including those related to the continued impacts of COVID-19 on our business, future financial performance and global economic conditions. Many of these assumptions relate to matters that are beyond our control and changing rapidly, including, but not limited to, the timeframes for and severity of social distancing and other mitigation requirements, the timing of headwinds from COVID-19, the availability of vaccinations, the continued impact of COVID-19 on new or existing customers, business decisions and the length of our sales cycles, renewal timing or billings terms, particularly for customers in certain industries highly affected by COVID-19.If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from thoseexpressed or implied by such forward-looking statements. We assume no obligation and do not intend to update these forward-looking statements or to conform these statements to actual results or to changes in our expectations, except as required by law.This presentation contains statistical data, estimates and forecasts that are based on independent industry publications orother publicly available information wherever possible, as well as other information based on our internal sources. This information involves many assumptions and limitations, and you are cautioned not to place excessive weightage to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information, wherever referred.Certain statements that might or might not be forward-looking statements represent our management’s beliefs and assumptions only as of the date of this presentation. Accordingly, we make no representations as to the accuracy or completeness of that data nor do we undertake to update such data after the date of this presentation. By receiving this presentation you acknowledge that you will be solely responsible for your own assessment of the market and our market position and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of our business. Any logos or trademarks other than Tanla, Karix, Gamooga, Trubloq & Wisely included herein are the property of the owners thereof and are used for reference purposes only.© 2023 Tanla Platforms Limited. All Rights Reserved. 3FY23 Results: Snapshot₹33,543 Mn5% GrowthRevenue₹8,365 Mn8% De-GrowthGross Profit₹5,877 Mn17.5% MarginEBITDA₹907 MnFCF₹4,476 Mn13.3% MarginPAT₹33.05EPS₹7,116 MnCash© 2023 Tanla Platforms Limited. All Rights Reserved. Down by ₹2,106 Mn YoY due to buyback and dividend20% of PAT4Q4 FY23 Results: Snapshot₹8,335 Mn2% De-GrowthRevenue₹2,289 Mn6% De-GrowthGross Profit₹1,661 Mn20% MarginEBITDA₹1,472 MnFCF₹1,203 Mn14.4% MarginPAT₹8.88EPS₹7,116 MnCash© 2023 Tanla Platforms Limited. All Rights Reserved. Down by ₹564 Mn-QoQ due to buyback123% of PAT5Innovation6Platform Innovation: Evidence of successPlatform business delivered robust financial performance in Q4 FY23driven by significant momentumacross key platformsPlatform business gross profit grew by 20% in Q4 FY2320%+ YoY growth for 11 quarters in a row30-35 Innovations and improvements across the platforms in the last 6 monthsBest-in-class innovation center in Hyderabad to foster innovationGross profit(₹Mn)Contribution to overall GM27%Q4 FY23Q4 FY2234%650781© 2023 Tanla Platforms Limited. All Rights Reserved. W71. TRUBLOQ GM growthVolumeGap to competitionWorld’s first blockchain-enabled compliance platformInnovationImpactAll time lowest complaints on misuse of DLT assets3 Industry first offerings adopted by consortiumKey DetailsEvidence of our success83 Bn (Q4)Touching 1BN+ lives22% (Y-O-Y)© 2023 Tanla Platforms Limited. All Rights Reserved. Automated detection and complaint logging for UCC (i.e., spam and leakage) through honeypot deploymentConsent acquisition via multiple industry first channel offerings (e.g., QR code, POS, web) 82. Wisely Communicate:CustomersOutcomeOur innovationsImproved delivery % via real time smart routing across high performing routesEnhanced user experience (e.g., new settlement reports, role-based access control) and platform QoS (e.g., delivery, speed)123Volumes-200 Mn per month from a banking customer delivering 70% of critical UPI messages20MN+ users reached Customer Success : 10% increase in OTP consumption and 15% reduction in complaintProgress so far© 2023 Tanla Platforms Limited. All Rights Reserved. <2 days onboarding time 93. Wisely OTTVertical specificsolutions being built on OTT•Q4 volume of over 1.5 Bnacross existing customers on Wisely OTTDelivering a market beating proposition with advanced features and functionalities50+ Enterprises onboardedReadability and UX improvement through heads up notifications© 2023 Tanla Platforms Limited. All Rights Reserved. •40% QoQ volume growth on Wisely OTT104. Wisely NetworkILD leakage prevention for TelcosEnhanced leakage detection efficiency via AI/ML engines on firewallAI-ML-NLP backed Intelligent solutionsBlocked 5mn+message per month with <1% leakage© 2023 Tanla Platforms Limited. All Rights Reserved. On track to be ₹1 billion gross margin platform per annum115. Wisely EngageTarget audience identification via ‘Smart feature mart’ containing 3000+ intent-based featuresAdvanced campaign manager with industry-based insights (e.g., lending, gaming)90%+ TAT time reduction for model building and deployment via automated ML pipelines Simplification of campaign execution journey (e.g., base uploading & processing) through automation tool Re-imagining our vision for performance marketingInitiating POC with clients in Q1 to demonstrate customer success Progress so far© 2023 Tanla Platforms Limited. All Rights Reserved. 126. Wisely ATPAnti Phishing Technology PlatformATP launched in MWC Barcelona is a single Platform to protect users from phishing and fraudAI-ML-NLP backed Intelligent solutionsOn-going PoC with three leading banks © 2023 Tanla Platforms Limited. All Rights Reserved. In-principle sandbox signoff received in TRAIPartnering within the ecosystemThree in-house ML engines with 99.9%smishingidentification accuracy13Photo: Our ways of working –Unveiling soonBusiness14Expansion of customer relationships223 customers contributing >10 Mn annual revenue count up by 16% FY 2213936173317119192223FY 23>₹500Mn>₹100Mn-<₹500Mn>₹10Mn-<₹100Mn© 2023 Tanla Platforms Limited. All Rights Reserved. Count of customers 15Increased walletshare and product penetration Product penetration improved to 2.17 from 1.95 for our top 120 customers in a year FY224,6228,51017,9067,4705,83819,03931,03832,347FY23>₹500Mn>₹100Mn-<₹500Mn>₹10Mn-<₹100Mn© 2023 Tanla Platforms Limited. All Rights Reserved. Whatsappis the highest penetrated product across our customers after A2P₹500Mn+ customers revenue grew by 6%16Customer concentration Revenue from top 20 customers (₹ Million)19,401FY22FY2319,51715out of 20 customers of last year continue to be in Top 20, 18 remain in Top 30© 2023 Tanla Platforms Limited. All Rights Reserved. 61%58%17Customer additions 1.New customers include every unique contracting entity added during the yearRevenue from new customers (₹ Million)1,010FY22FY2349828%New customers added on WA© 2023 Tanla Platforms Limited. All Rights Reserved. Count of customers 27026918Customer Cohort Growth 1.Represents revenue from our active customers grouped by cohorts based on the year when each customer account cohort originated2.Cohorts of 16-17 also includes customers acquired during prior period3.Customer data complied also includes customers of Karix and Gamooga from pre acquisition period© 2023 Tanla Platforms Limited. All Rights Reserved. FY17FY18FY19FY21FY20FY22FY23FY17FY18FY19FY20FY21FY22FY2319%51%80%59%103%19%CAGR19Financials20Q4 FY22Q1 FY23Q2 FY23Q4 FY23Q3 FY238,5318,0018,5108,3358,696Y-o-Y growth(₹ Million)32%28%1%(2%)(2%)Enterprise business impacting revenue growth Revenue de-grew by 2% YOY in Q4 FY23, due to decline of Enterprise business of 4%© 2023 Tanla Platforms Limited. All Rights Reserved. Platform business grew 19% on YoY basis in Q4 FY2321(₹ Million)Platform and Enterprise revenue growth © 2023 Tanla Platforms Limited. All Rights Reserved. Platform Business Q4 FY22Q4 FY2319%4%YoY growthQoQ GrowthEnterprise Business Q4 FY22Q4 FY236878157,8447,520(4%)(5%)YoY growthQoQ Growth222,4341,8502,0562,2892,168Q4 FY22Q1 FY23Q2 FY23Q4 FY23Q3 FY23Margin%Q4 Gross Margins are at 27.5% back to historic levels on Gross marginsPlatform business gross profit grew by 20% at ₹781 Mn in Q4 FY23 driven by Wisely and Trubloq. Seq growth of 4% was led by TrubloqOn sequential basis Enterprise business gross profit grew by 6%, driven by operational efficienciesGross profit improvement (₹ Million)28.5%23.1%24.2%24.9%27.5%© 2023 Tanla Platforms Limited. All Rights Reserved. 23Enterprise businessOverall marginPlatform businessBC95%96%96%96%96%Q4FY22Q1FY23Q2 FY23Q3FY23Q4FY2323%16%17%20%18%Q4FY22Q1FY23Q2FY23Q3FY23Q4FY23AQ4 FY22Q1 FY23Q2 FY23Q3 FY23Q4 FY2329%23%24%27%25%27%35%35%35%34%Contribution by platformABDecrease in gross margin by 106 bps YoY, up 253 bps QoQ Platform business gross margin contribution to total at 34%QoQ enterprise business gross margin at 20% increased by 214 bpsCGross margin mix© 2023 Tanla Platforms Limited. All Rights Reserved. 241,8412,4341,6612,289EBITDAGross ProfitEBITDA to Gross Profit conversionIncrease in marketing spends (MWC) coupled with higher CSR spending and lower gross margin percentage has resulted in other indirect costs rising to 27% of gross profit as against 24% in Q4 FY22Q4 FY22Q4 FY23Efficiencymetrics(₹ Million)76%73%Employee cost at 13% of Gross profitin Q4 FY23, flat as compared to last year25Q4 FY22Q1 FY23Q2 FY23Q4 FY23Q3 FY231,7391,2141,2951,5151,391Q4 FY22Q1 FY23Q2 FY23Q4 FY23Q3 FY231,8411,3071,3951,6611,513EBITEBITDAEBITDA margin at 20% in Q4 FY23, up 253 bps QoQDepreciation at ₹146Mn in Q4 FY23, as against ₹102 Mn in Q4 FY22. Incremental depreciation due to capitalization of Innovation Center in Q4 FY23Operating income(₹ Million)© 2023 Tanla Platforms Limited. All Rights Reserved. 26444718(867)(416)Q4 FY22Q1 FY23Q2 FY23Q4 FY23Q3 FY23Improved Free Cash flow profile(₹ Million)Improved DSO (5 days) resulted in stronger cash flowsTax payouts remain consistent. Investments in innovation center and infrastructure will continue in Q1 FY24© 2023 Tanla Platforms Limited. All Rights Reserved. 1,47227Opening CCE (April1 2022)1Operating cash flowInterest & other incomeIssue of sharesCapital investmentsDividend paidLease liabilities -netClosing CCE (March 31 2023) 9,2222,4672640(1,560)(2,124)(1,086)7,116(₹ million)Distribution of cash to shareholders and utilized for investments© 2023 Tanla Platforms Limited. All Rights Reserved. Buyback1.CCE includes fixed deposits held having maturity greater than 12 months (68)28In Million, unless otherwise statedCurrent accounts-INRCurrent accounts-USDFixed DepositsRestricted cash13-27Others99-3,428207--600-36-153-29-2-48-188--559---1,188-27192-320-4171,7474,691261Total403,734600189312365591,2155127,116TotalCash and Cash equivalent break up© 2023 Tanla Platforms Limited. All Rights Reserved. -295,4804,691Fixed Deposits Current account -USDCurrent account -INRRestricted cash1,4801,747470417250261Increase in restricted cash due to issuance of Bank Guarantees for new contracts and participation in RFPSignificant cash utilized towards buyback including distribution tax and other expenses.(₹2,124 Mn)Q3 FY23Q4 FY23(₹ Million)Cash utilization towards return to shareholders © 2023 Tanla Platforms Limited. All Rights Reserved. Cash balance in current account is high due to last day collections30Q4 FY22Q1 FY23Q2 FY22Q4 FY23Q3 FY2310.367.408.148.888.58Q4 FY22Q1 FY23Q2 FY23Q4 FY23Q3 FY231,4061,0041,1041,2031,165EPSPATProfit tax after margin at 14%, decreased by 206 bps YoY due to drop in EBITDA and higher depreciation Net income and EPS (₹ Million)© 2023 Tanla Platforms Limited. All Rights Reserved. Earnings per share at ₹ 8.88 in Q4 FY23. On sequential basis EPS growth driven by combination of PAT growth and lower equity shares due to buyback3161%excluding CCE as against 141% last yearQ4 FY22Q1 FY23Q2 FY23Q4 FY23Q3 FY2347%32%33%34%31%ROCE-Return on capital employed; CCE-Cash & cash equivalentsReturn on capital employed © 2023 Tanla Platforms Limited. All Rights Reserved. 32FY23FY2232,06033,543Y-o-Y growth(₹ Million)Platform business grew by 20%, driven by Trubloqand Wisely Full year RevenueRevenue grew by 5% YoY© 2023 Tanla Platforms Limited. All Rights Reserved. 5%Enterprise business grew by 3%, led by Whatsapp33Full year Gross profit© 2023 Tanla Platforms Limited. All Rights Reserved. FY22FY239,0808,365(8%)Gross profit margin at 25%, decreased by 339 bpsGross profit de-grew by 8% YoYPlatform business gross profit grew by 23%, driven by Trubloq and WiselyEnterprise business gross profit de-grew by 19%Y-o-Y growth(₹ Million)347,0019,0805,8778,365EBITDAGross ProfitEBITDA to Gross Profit conversionEBITDA margin at 18% in FY23, decreased by 432 bps. Increased spends on CSR by ₹24 Mn for FY23 FY22FY23Efficiencymetrics for full year(₹ Million)77%70%Operating expense increased due to incremental spends on salaries (₹ 70 Mn), impact of currency fluctuation (₹ 86 Mn), marketing and travelling (₹ 90 Mn) coupled with decrease in gross profit 35© 2023 Tanla Platforms Limited. All Rights Reserved. ₹15,175 MnStrong Equity and Reserves₹7,116 MnCash & cash equivalents 61%ROCE (excluding cash & cash equivalentsDebt FreeStrong balance sheet36Corporate37•Announced support for TCFD –Task Force on Climate Related Financial Disclosures. Post signing up for the initiative have commenced work on the core elements which include Governance, Strategy, Risk Management and Metrics & TargetsSteps towards creating a greener & cleaner tomorrowGiving back to the society and developing our employeesIntegrating ESG in our businessEnvironmentalSocialGovernance•Human Rights Due Diligence with multiple stake-holders survey. This is the first step followed with assessment and mitigation strategy•Established Speak-Up as a Single Window Redressal Mechanism for both internal and external violations of policies like Code of Conduct, Code of Ethics, Supplier Code of Conduct and all other such policies violations•TheSkill Development& Training Centre in Khammam completed training for 300 candidates in the trades of Warehouse Picker, DEO & CRM (non voice). Interviews and placements are in progress. And, in Hyderabad, 100 candidates are undergoing training at NAC –National Academy of Construction –for JCB Operator, Land Surveyor, Electrician and other construction industry related skills.•Donated ₹1.5 Million to Heal A Child Foundation that supports hospitalization expenses for underprivileged children in HyderabadESG update Q4 FY23© 2023 Tanla Platforms Limited. All Rights Reserved. 38Appendix39In₹Million, unless otherwise statedRevenue from operationsCost of servicesGross profitOperating expensesEBITDADepreciation & amortizationEBITFinance costOther incomeProfit before taxesTax expense (including deferred tax)Profit after taxEarning per share (₹) Weighted average number of shares outstandingQ4 FY23Q4 FY22∆ %8,3358,531(2)(6,046)(6,097)(1)2,2892,434(6)(628)(593)61,6611,841(10)(146)(102)441,5151,739(13)(4)(3)41484651,5591,782(13)(356) (376)(5)1,2031,406(14)8.8810.36(14)134.4135.7-Q3 FY238,696(6,528)2,168(655)1,513(122)1,391(2)611,450(285)1,1658.58135.6© 2023 Tanla Platforms Limited. All Rights Reserved. Profit & Loss Q4 FY2340In₹Million, unless otherwise statedRevenue from operationsCost of servicesGross profitOperating expensesEBITDADepreciation & amortizationEBITFinance costOther incomeProfit before taxesTax expense (including deferred tax)Profit after taxEarning per share (₹)Weighted average number of shares outstandingFY23FY22∆ %33,54332,0605(25,178)(22,980)108,3659,080(8)(2,488)(2,079)205,8777,001(16)(462)(408)135,4156,593(18)(14)(13)3264161645,6656,741(16)(1,189) (1,348)(12)4,4765,393(17)33.0539.77(17)134.4135.7-© 2023 Tanla Platforms Limited. All Rights Reserved. Profit & Loss FY2341Mar 31, 2023In ₹Mn, unless otherwise statedMar 31,2022In ₹ Mn, unless otherwise statedASSETSNon-current assetsProperty, plant and equipment1,659 429Platforms874484Customer Relationships133257Brands24 Technology013Non-Compete2530Intangible assets underdevelopment566402Goodwill1,3461,346 Right-of-use-lease assets797484Capital work in progress78134Financial assets149711Deferred tax assets (net)363395Other non-current assets785310Total non-current assets6,7774,999Trade receivables5,7005,603Cash and bank balances7,1168,623Other Financial assets4,2033,951Other current assets330640Total current assets17,34818,817TOTAL ASSETS24,12623,816Equity share capital134136 Other equity15,04113,404Total equity15,17513,540Financial liabilitiesLease liabilities732446 Other financial liabilities84Provisions1871Other non-current liabilities65Total Non-current Liabilities764526Current liabilitiesTrade payables5,3866,785Lease liabilities9489Other financial liabilities2,4432,443Other current liabilities203272Short term provisions1311Liabilities for current tax (net)48150 Total Current liabilities8,1879,750EQUITY AND LIABILITIESTOTAL EQUITY AND LIABILITIES24,12623,816Mar 31, 2023Mar 31,2022Balance Sheet Mar 31, 2023Previous period/year figures have been regrouped/reclassified where necessary, to confirm to current period/year classification42Condensed Cash flow Q4 FY23Q3 FY23In ₹ Million, unless otherwise stated1,6831,605Cash flow before changes in working capital765(1,792)Changes in working capital2,448(187)Cash generated from operations (379)(421)Taxes2,069(608)Cash flow from operating activities(597)(259)Net investments in tangible and intangible assets6199Interest and other income (536)(160)Cash flow from investing activities00Issue of Shares(2,124)-Buyback of shares--Dividend paid27(75)Interest paid on lease liabilities (2,097)(75)Cash flow from financing activities(564)(843)Cash flow for the period7,6808,523Cash and cash equivalents at the beginning of periodCash and cash equivalents closing balance 7,1167,680© 2023 Tanla Platforms Limited. All Rights Reserved. 43Condensed Cash flow FY23FY22In ₹ Million, unless otherwise stated© 2023 Tanla Platforms Limited. All Rights Reserved. 6,2497,249Cash flow before changes in working capital(2,352)(1,220)Changes in working capital3,8996,029Cash generated from operations (1,432)(1,165)Taxes2,4674,864Cash flow from operating activities(1,560)(616)Net investments in tangible and intangible assets264107Interest and other income (696)(1,109)Cash flow from investing activities011Issue of Shares(2,124)(818)Buyback of shares(1,086)(135)Dividend paid(68)(32)Interest paid on lease liabilities (3,278)(975)Cash flow from financing activities(1,507)2,780Cash flow for the period9,2225,841Cash and cash equivalents at the beginning of periodFixed deposit with maturity greater than one year(600)8,622600(600)Movement in cash balanceCash and cash equivalents at the beginning of period8,623600Cash and cash equivalents at the closing of period7,1169,22244In ₹ Million, unless otherwise statedOperating cash flowCapital expenditureFree cash flowFree cash flow in percent of total revenueFree cash flow as % of PATQ4 FY23Q4 FY22∆ %Q3 FY232,069716189(608)(597)(272)119(259)1,472444232(867)18%5%--123%32%--© 2023 Tanla Platforms Limited. All Rights Reserved. Free cash flowThank you