SONATSOFTWNSE29 July 2023

Sonata Software Limited has informed the Exchange about Investor Presentation

Sonata Software Limited

29th July, 2023

National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Mumbai Kind Attn: Manager, Listing Department Stock Code – SONATSOFTW

BSE Limited P.J. Towers, Dalal Street, Mumbai Kind Attn: Manager, Listing Department Stock Code - 532221

Dear Sir/Madam,

SUB: INVESTORS’ PRESENTATION - REVISED

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing revised Investors’ Presentation for the quarter ended 30th June, 2023.

The above said presentation is also made available on the Company’s website www.sonata-software.com.

Please take the same on record.

Thanking you,

Yours faithfully, For Sonata Software Limited

Mangal Kulkarni Company Secretary, Compliance Officer and Head Legal

Encl.: As above

Sonata Software Limited - SSL Registered Office: 208, T V Industrial Estate, 2nd Floor, S K Ahire Marg, Worli, Mumbai – 400 030 Corporate Office: APS Trust Building, Bull Temple Road, N. R. Colony, Bangalore - 560 004, India Tel: +91 80 6778 1996 | Fax: +91 80 2661 0972 | CIN: L72200MH1994PLC082110

Website: www.sonata-software.com email: info@sonata-software.com

Investor Presentation

Q1 FY’24

Sonata at a glance

We are a Modernization and a Digital Engineering company powered by our unique PLATFORMATION™ framework.

The Company

35 YEARS IT Solutions Provider

$950+M Revenue 15.3% CAGR across 10 years

Listed (SONATSOFTW) Market Cap $ 1.7B

6500+ Employees Across US, EU, Asia & ANZ Powered by Unified Engineer Program (UEP)

Delivering Outcome-based Modernization Services

Cloud

Managed Services

Data

Dynamics

Automation

Digital Contact Center

Digital Transformation Using PlatformationTM

Serving our Global clients with right Talent mix (Global & Local Talent)

Canada Offices: Toronto Richmond

Europe Netherlands Denmark Germany

Eastern Europe

APAC China Japan Singapore Malaysia Korea Philippines Thailand Vietnam

UK (London) & Ireland (Dublin)

Indonesia and Phillipines

North America Development Center: Redmond

Offices: Atlanta, GA Fremont, CA Bridgewater, NJ East Brunswick, NJ Florida Dallas Minneapolis Warren, PA Minnesota

Costa Rica

Mexico

Middle East & Africa Qatar

Development Centers & Sales Offices - 27

Partners - 4

Global Delivery centers recent/InProgress - 6

India Development Centers: Bangalore (3) Hyderabad (2) Chennai

Offices: Bangalore Chennai Delhi Hyderabad Kolkata Pune Mumbai

Australia Brisbane Sydney Melbourne

Key Verticals, Partners, IPs

Industries

TMT

Ecosystem: Partnerships Tech + Domain

Retail, Travel & Mfg.

BFSI

Healthcare and Life Sciences

Emerging

Innovative IPs

LISA Chatbot (Conversational AI)

Workbox.io (Archival)

Lightning Build

Sustainability Target: Carbon Neutrality by 2030

Single Use Plastic Free certified by FY 24

Aim for 100% Tier 1 suppliers on ESG compliance and training by FY 24

UNGC Signatory by FY2024

SbTi Commitment by FY4

Our Objective and Goal

Objective:

Be the fastest-growing Modernization Engineering company, powered by its unique PlatformationTM framework

Goal: Revenue of $ 1.5B by FY 26 end @ EBITDA of early 20’s

Our Performance Vision For Sonata

Revenue Growth (In $M)

SCALE – Key Drivers

~$1.5B

+$580M

$0.92B

Microsoft sell-to; Dynamics

Harvest

Sustain SITL momentum

Retail, Manufacturing, Travel and TMT

Invest

Sales, Large deals, BFSI, Healthcare Life Sciences and technical capabilities

FY23

3-4 Years

Diversify

Clients: Build multiple large accounts.

Brand: Global brand in Modernization

In Q1 we crossed $300M annual run rate for the International Business

Intl. Services $M

SITL GC INR Crs

53.4

55.7

49.4

56.8

57.8

60.5

77.3

65.8

56.7

58.1

61.8

50.8

53.6

45.1

47.4

39.9

60 50

40 30 20

10 0

Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24

Big moves are being enabled by firm incremental steps

Large Deals

M&A - Quant

BFSI & HLS launched

5 Geo

NA, UK, Nordics, India, Australia

Modernization Focused GTMs

Partners ecosystem

RMD/TMT Radiation

10 Mega Accounts

RMD – Retail, Manufacturing & Distribution TMT – Tech, Media & Telecom BFSI – Banking, Financial Services & Insurance HLS – Healthcare and Life Sciences

What’s working well for us…

Large deals Wins 7 large deals in flight

Quant accelerated synergy growth.

Modernization – Cloud & Data pipeline is 40%

New invest verticals growing (HLS, BFSI). Partnerships (MS, AWS)

SITL – steady GC growth

Large Deal Win#1 - ERP transformation by implementing MS Dynamics 365

Client Overview

The Client provides advanced and high-quality belting solutions for 20 different industries including global logistics, food production, fitness equipment, household appliances and energy production.

Industry Manufacturing

Areas in Scope

This cover ERP transformation by implementing MS Dynamics 365 across all the lines of business in 49 legal entities

Client Overview

Revenue $1.4 B

Finance

Supply Chain Management

Production

Locations >40

Integration with 30+ distinct systems

Application Support

Large Deals Win #2 - Build and Maintain Digital Hub to enhance customer experience and improve operational efficiency

Client Overview

The client, Europe’s largest multinational leisure, travel, and tourism company, operates over 150 aircraft, 16 cruise ships, and 381 hotels.

Areas in Scope

Industry Industry Travel Travel

Build and Maintain digital hub for client to enhance customer experience and improve operational efficiency.

Client Client Overview Overview

Revenue $18.5 B

Cloud and Data Modernisation

Application Modernisation

Strategy definition and implementation of transformation programs

LOB 6

E2E Delivery of business as usual

Innovation through Sonata’s Solution and Innovation hubs

…Aligned with our Partners to drive our Joint GTM Strategy

Cloud Apps Modernization

Data & Analytics

Microsoft Business Apps

Service Experience Transformation

Hyper Automation

Managed Services

MSFT Market Place Partners

Microsoft Relationship – Jointly driving Customer Success

Sonata is now a Microsoft Cloud Solutions Partner

30+ Years Microsoft Partnership

400+ Clients Across The Globe USA, Europe, Asia, India, Australia, Middle East

$650+ Million Per Annum Revenue To Microsoft

Partner for RPA Migration 100

Partner for Microsoft Fabric

2500+ Team On Microsoft Technologies

Microsoft Cloud Solution Partner - Azure Expert MSP Competencies. 10 Advanced Specialization in Dynamics 365, Data Analytics, Teams, CAF, M365, Azure

Joint Execution Microsoft Fasttrack, Global Delivery, Microsoft Consulting Services

Catalyst Led Sales Process Industry Point Of View, Business Value Assessment, Envisioning Workshops, Design Thinking

Industry Clouds Go To Market Healthcare, Retail, Sustainability, Manufacturing

Industry Digital Transformation Retail, CPG, Manufacturing, Telecom, Healthcare, Hi-tech, BFSI

Launch Partner for Microsoft Fabric

Winner “Technology Partner of the Year - BizApps” - 2021

Winner “Microsoft US Eagle Award” For new D365 customers

GTM with MS for D365 Modernization, SFDC Migration, RPA Migration, Fabric, Gen AI & Contact Center Migrations

What are the key bets we are making for the future?

Microsoft Fabric: Overcoming Data Silos and Dark Data

AI & Gen AI

Modernization

Verticalization

Focused GTM

Large Deals

10 Mega accounts

Continued focus

Sonata is the only Indian SI launch partner for MS Fabric

Sonata Advantage

1) Early Mover with Microsoft.

Implemented the solution within Sonata for trial/testing.

3) Strong relationships with CVP, Data @ Microsoft

Prelaunch product right now. Formal launch in Nov’ 2023

40+ customers in 6-7 weeks

300 Engineers

Sonata’s Responsible-first AI offering for Enterprise scale – Harmoni.AI

17 Use Cases built

Harmoni.AI Platform for Responsible AI

Active Conversations at 16 accounts

Offerings and methodology published

Harmoni.AI

Core team built; training created

All functions identifying & implementing Gen AI

‘Responsible by design’ approach. Initial use cases:

• Process (regulatory, clinical trials) • Contact Center – cross-sell and upsell • Productivity of engineer, support teams

Reaching ~ $ 60B TAM Gen AI is expected to achieve ~ 30% share of overall AI market by 2025

Success Stories (1/2)… Leveraging cutting edge LLMs

Client Overview

Industry Technology

Revenue > $190 B

Fortune 25

Employees > 220,000

The Pressure Points

Solutions

Results

• Accelerate the ability to bring new

products and features to the market

• High quality - Right first time in a complex engineering ecosystem

• EPICS (Engineering Pipeline Infrastructure and Cloud Services) BOT helps Client Dataverse Engineering teams to get info on several technical topics like how to access or provision VMs.

•

Integrate BOT with Azure OpenAI.

• A centralized index of around 14000 wiki articles is being created using Azure Cognitive Search

Success Stories (2/2)… Unique Customer Identification using AI/ML

Client Overview

Industry Fintech

Revenue $5.5 B

Fortune 500

Presence +180

The Pressure Points

Solutions

Results

•

Limited ability to recognise customers – fragmented data across channels

• Developed modern using AI/ML - to

create One consistent customer profile and customer identification process f

• 50% reduction in customer

complaints

Risk and Compliance decisioning not optimized due to lack of single customer view

• Developed master platform - stores and manages all customer records, profile data, and IDs across the enterprise

• 75% decrease in transaction time that required KYC and AML checks

Increasing cost of verification due to volume of transaction and duplication

• Integrating business and transactional systems with Master Party to create a customer 360 view across the enterprise

• 100% Infrastructure availability and on AWS cloud platform

• Identified and merged close to 15% (around 200 million) of customer profiles

Key Recognitions!

Key Partnerships unlocked !

People – Strength Of Sonata

Financial Management

High Revenue growth with Industry Leading margins

Strong Cash Position & Balance Sheet

Superlative returns for Shareholders

Sound Capital Allocation

Focus on high revenue rate realization and high margins business

Very strong positive cash generation and cash position

Industry leading ROCE and ROE & Bonus share issue

Sound capital allocation

EPS : ₹33*# / Share

Liquidity of ~ ₹800+Crs

ROCE > ~35%#

Dividend : ₹15.75* / share

#Trailing 12 months

*Bonus issue 1:3, record date - Sep 10, 2022

Consistent Growth over last 10 years

Consolidated Revenue & profitability ($Mn)

Revenue

EBITDA*

PAT

926

745

570

528

436

354

381

254

270

288

FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23

CAGR 15%

CAGR 18%

Predictable and resilient growth trajectory

*Before OI and FX

30.0%

25.0%

21.1% QoQ

20.0%

22.1% YoY

12.6%

15.0%

5.7% QoQ

10.0%

-1.4% YoY

5.0%

0.0%

Financial Performance of International Services – Q1 FY24 Industry leading QoQ growth in Revenue and EBIDTA; Process improvements result in Collection rigour

$20.0

$90.0

$80.0

$70.0

$60.0

$50.0

$40.0

$30.0

$20.0

$10.0

$56.8

$65.8

$77.3

17.5% QoQ

36.1% YoY

1.2

Constant Currency

17.4% QoQ 36.4% YoY

Q1 FY23

Q4 FY23

Q1 FY24

Revenue

Book to Bill

39.2%

38.3%

36.1%

33.6%

38.2%

37.6%

34.4%

34.9% without Acq. Loan

34.3%

32.5%

31.5%

FY 20

FY 21

FY 22

ROCE

Q1 24

* *

FY 23

RONW

n M $15.0 $ n

T A $10.0 P &

A D $5.0 T I B E

O S D

24.4%

20.7%

17.4%

14.0%

21.1%

$16.3

$13.9

$13.6

$9.9

$9.2

$9.7

Q1 FY23

Q4 FY23

Q1 FY24

EBITDA excl OI & Fx

PAT

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

* Trailing 12 months

n n M M $ $ n n

i i

e e u u n n e e v v e e R R

l a t i p a C n o n r u t e R

International Business: Revenue Drivers Profile of Customer improving, with higher share from our focussed market -US

s r e m o t s u C n o

i l l i

M $ f o

o N

n o i t a r t n e c n o C t n e i l

5 2

Q1 23

Q4 23

Q1 24

1-3 Mn

3-5 Mn

5+ Mn

72%

62%

66%

54%

69%

58%

d e d d a s r e m o t s u C w e N

y h p a r g o e G y b e u n e v e R

Q1 23

Q4 23

Q1 24

Q4 23 is for 21 days while Q1 24 is for full quarter of Quant Revenue

Top 10 Customer

Top 20 Customer

Q2 23

Q3 23

Q4 23

Q1 24

22%

21%

57%

28%

20%

52%

20%

16%

64%

Q1 23

Q4 23

Q1 24

USA

Europe

Rest of World

International Business: Operational Performance Performance has been based on significant scale up of Team Sonata

82.0%

82.7%

86.4%

6,500

6,000

5,500

5,000

4,500

6,055

323

104

6,267

361

109

4% QoQ

37% YoY

4,569

267

5,628

5,797

Q1 23

Q4 23

Q1 24

3,500

4,000

4,470

Utilization

Q1 23

Q4 23

Q1 24

Delivery

S&M G&A

Total

Headcount by Function

International Business: Revenue by Verticals Mix Invest verticals: Healthcare & BFSI have grown according to our strategy

FY 23

Q1 FY 24

Healthcare 11%

TMT 33%

BFSI 8%

Emerging 9%

Revenue Share

Healthcare 14%

TMT 26%

BFSI 18%

Emerging 6%

Revenue Share

Retail and Manufacturing 39%

Retail and Manufacturing 37%

International Business: Revenue by Top GTMs Significant growth in Cloud and Data as revenue increase by more than 50%

FY 23

Q1 FY 24

Others 2%

Emerging Tech 13%

Others 6%

Emerging Tech 10%

Cloud 36%

Revenue Share

Cloud 38%

Revenue Share

Dynamics 37%

Data 12%

Dynamics 26%

Data 20%

Domestic Business: Delivering consistently strong Growth with Industry leading ROCE

EBITDA 28.2% YoY

3.6% YoY

1,343

1,350

Cloud ~78.8% Annuity ~75.9%

1,392

Q1 23

Q4 23

Q1 24

399

372

374

) s r c R N

I (

e u n e v e R

t n u o C d a e H

) s r c R N

I (

A D T I B E &

n o i t u b i r t n o C s s o r G

E C O R

GC 21.8% YoY

Q1 23

Q4 23

Q1 24

EBITDA

47.2%

44.6%

35.5%

32.2%

28.2%

1.00

0.90

0.80

0.70

0.60

0.50

0.40

0.30

s s o r G ÷

l a t i p a C g n i k r o w

t e N

n o i t u b i r t n o C

O S D

0.92

0.80

0.78

Q1 23

Q4 23

Q1 24

Q1 23

Q4 23

Q1 24

FY 20

FY 21

FY 22

FY 23

Q1 FY 24

Q1 23

Q2 23

Q3 23

Q4 23

Q1 24

SONATA SOFTWARE The fastest growing firm in IT Services in the next 3-4 years

← All Transcripts SONATSOFTW Stock Page →

Sonata Software Limited has informed the Exchange about Investor Presentation

Market Movers