Slide 1: Cover letter to stock exchanges
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 Date: July 20, 2023 To, BSE Limited National Stock Exchange of India Ltd. Phir
Slide 2: Investor Update Q1 FY24
Investor Update Q1 FY24 20th July 2023 CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission is strictly prohibited
Slide 3: Safe Harbor and Other Information
Safe Harbor and Other Information The 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 l
Slide 4: Q1 FY24 Results: Snapshot
Q1 FY24 Results: Snapshot Revenue Gross Profit EBITDA FCF ₹9,111 Mn ₹2,413 Mn ₹1,822 Mn ₹869 Mn 13.9% Growth 30.4% Growth 20.0% Margin 64% of PAT PAT EPS Cash ₹1,354 Mn ₹10.07 ₹8,039 Mn 14.9% Margin 36% Growth Increased by ₹923 Mn QoQ © 2023 Tanla Platforms Limited. All Rights Reserved. 3
Slide 5: We have had a remarkable journey over last 5 years
We have had a remarkable journey over last 5 years A. We lead We’re shaping the world of trusted digital experiences to empower consumers and enable companies with purpose We touch 1 Bn lives daily — Delivered OTP messages to enable 100 Cr + vaccinations — Facilitated outreach to ~9 Cr farm fami
Slide 6: We lead with purpose
A. We lead with purpose! Our purpose ESG at the heart of all our operations “Shaping the world We are environment We empower our Our platform of of trusted digital T= EC2 friendly customers, partners, platforms stand for experiences to employees & society governance and trust empower consumers • Ach
Slide 7: We continue to disrupt the market through tech led greenfield innovations
B. We continue to disrupt the market through tech led greenfield innovations Multiple cutting-edge technologies leveraged across our Our platforms of platforms pride! 1. Engage 2. Communicate 3: Protect 4: Experience Developed world’s largest AI enabled End to end secure 4 proprietary AI/ML Single A
Slide 8: Our customers love us in India and beyond
C. Our customers love us in India and beyond We are the player of choice in India… … and serve global giants in 4 regions 45% 9/10 top banks served NLD market share USA & Global Tech Europe giants 50%+ 7/10 top insurance of total revenues contributed by 50 of our top 100 customers, top financial SEA
Slide 9: We are a talent magnet
D. We are a talent magnet We continue to cultivate top-class talent leveraging Tanla Academy 200+ strong pool of Global Build thought Plug and play Innovative Exposure leadership modules hackathons world class talent across products Tie up with top Go and see set- Host interactive Showcase product b
Slide 10: Great Financial Track Record
All figures in ₹ Mn E. Great Financial 7,916 ~4x 33,546 Track Record Revenues 2018 Revenues 2023 We continue to deliver 652 ~9x 5,879 over the last 5 EBITDA 2018 EBITDA 2023 years 191 ~23x 4,476 PAT 2018 PAT 2023 99
Slide 11: Tanla is now at its next inflection point
Tanla is now at its next inflection point Trubloq Launch – Acquired Introduced Wisely ATP – World’s first Gamooga to expand World’s first AI/ML led Founded Big foray into blockchain enabled solution to identify SMS Big data and AI/ML Tanla - voice, SMS communication phishing in real time, prevent ca
Slide 12: Tanla focuses on two synergistic businesses
Today, Tanla focuses on two synergistic businesses - Digital Platforms & Enterprise Communications Undisputed market Predictable growth leadership 20%+ growth in gross profit for 12 consecutive quarters 45% SMS market share in India E2E omnichannel Deeply embedded presence NRR of 125% SMS, Voice, OT
Slide 13: Digital Platforms Highlights
Digital Platforms Highlights Enterprise Communications Highlights Business Outcomes Financial Outcomes Corporate 12
Slide 14: Digital platforms deeply embedded across the digital interaction value chain
Our digital platforms are deeply embedded across the digital interaction value chain (xx) Year of acquisition/launch Engage Communicate Protect Experience across customer lifecycle 1 Acquire Ensuring user privacy and spam End-to-end encrypted network Omnichannel interactions prevention along with ad
Slide 15: Wisely is our platform of platforms
Wisely is our platform of platforms across all 4 parts of the value chain addressing needs of multiple C-suite buying centers Primary buying center Secondary buying center 1: Engage 2: Communicate Intelligence led promo solutions for Blockchain based omni-channel CPaaS sharper customer targeting pla
Slide 16: These platforms represent a large and growing TAM opportunity
These platforms represent a large and growing TAM opportunity Total addressable market (CY’23 to 27, USD Bn) Engage Communicate Protect Experience 11-13 3.5-3.9 0.7-0.8 5-6 3.7-3.9 1.2-1.3 0.4 2-3 0.4-0.5 2.5-2.7 0.3 4.1-4.5 1.7-1.9 1.3-1.4 2023 (India) 2027 with new platforms (India) 2027 with new
Slide 17: Trubloq: Blockchain powered communication stack
Trubloq | Game changing innovation – Blockchain powered communication stack Tanla’s Solution Impact DLT system (Distributed Ledger User Impact Technology) to arrest Spam 1 bn+ users touched World’s first blockchain-enabled communication stack Business Impact 3 100% of UAE Usage of cognitive computin
Slide 18: Wisely ATP - first of its kind anti-smishing platform
Wisely ATP - first of it’s kind anti-smishing platform AI/ML led solution to identify SMS phishing in real time, prevent the message from being delivered, eliminate the root cause A. Real time Success Markers <20ms 1 Showcased to 5 regulators globally Regulatory B. Scalable acceptance 2 Success test
Slide 19: Rule of 60
We are a platform company operating at above Rule of 60 Characteristics Evidence Outcome High margin IP led platforms – profile 80%+ Gross Margin and 60%+ EBIT Address needs of multiple buying centres Rule of 60 Deeply embedded with customers 125% of NRR 29% YoY revenue growth Monetization at 100% o
Slide 20: We are creating an unparalleled working experience
We are creating an unparalleled working experience Elevating Tanla brand amongst prospective employees 100,000 sq. ft - State of the art innovation center for continuous innovations & improvements 19
Slide 21: Enterprise Communication Highlights
Digital Platforms Highlights Enterprise Communication Highlights Business Outcomes Financial Outcomes Corporate 20
Slide 22: Our market leadership in enterprise communication (1/2)
Our market leadership in enterprise communication (1/2) Undisputed market leadership High Customer Stickiness Unmatched scale with 35% CPaaS market share 50 of Top 100 accounts > 5 years ‐ 5% increase post ValueFirst acquisition ‐ Double digit growth in every customer cohort ‐ 45% share in SMS NLD m
Slide 23: Our market leadership in enterprise communication (2/2)
Our market leadership in enterprise communication (2/2) Tech. backed use cases Newer Channels AI/ML based solutions developed for Turbo charging our growth a leading bank ‐ ~3X YoY growth in Q1 from WhatsApp ‐ Impact: 2X increase in loyalty (offers availed) for the bank Serving enterprise curated ne
Slide 24: What does the ValueFirst acquisition from Twilio bring to Tanla
What does the Value First acquisition from Twilio bring to Tanla A B C Accelerate Unprecedented Complementary international market leadership customer segments expansion CPaaS market share: Karix: Augment strong momentum 30-35% Leader in large enterprises in KSA, UAE and (60% of revenue from I
Slide 25: Consolidation of India market leadership in CPaaS space
A. Consolidation of India market leadership in CPaaS space FY23 figures for Tanla CPaaS business excluding all International Business; Figures in INR Cr Market share consolidation by Market share consolidation by SMS value by value 30% to 35%+ 8%+ 45%+3 8% ~35%3 SMS1 40%+ Market share2 (NLD) 30% Tan
Slide 26: Complementary customer footprint
B. Complementary customer footprint – ValueFirst leader in mid market; Karix in large enterprise Centre of # of customers gravity % of revenue Revenue cohort from India customers for FY’23 ValueFirst Karix1 1 No. of customers 2 19 1 > ₹ 500 Mn - 22% 60% 1 ₹ 100 Mn to ₹ 500 Mn 16 41 2 - 29% 24% ₹ 10
Slide 27: Serving enterprise needs | Impact case studies
Serving enterprise needs | Impact case studies Customer Product Use Case & Impact A leading state E2E Booking journey created from discovery, owned metro rail profile creation, reservation, admin. adjacencies venture in India 172k unique passenger served in two months A leading private Voice based v
Slide 28: Business Outcomes
Digital Platforms Highlights Enterprise Communication Highlights Business Outcomes Financial Outcomes Corporate 27
Slide 29: Deepen the customer relationships through tailored solutions
Deepen the customer relationships - through tailored solutions & services 221 202 19 221 customers contributing > ₹ 10 Mn annual 16 revenue, count up by 10% YoY in Q1 41 39 147 161 Count of customers Q1 FY 23 Q1 FY 24 >₹500 Mn >₹100 Mn- < ₹500 Mn >₹10 Mn-<₹100 Mn 1.Customer segments are arrived at o
Slide 30: Once on board, customers expand with us
Once on board, customers expand with us 9,034 7,772 We have expanded our strategic client base 5,498 from 120 to 170. Product penetration for this larger client base is at 1.87 4,250 2,216 ₹500Mn+ customers revenue grew by 2,366 29% YoY in Q1 1,320 1,156 Q1 FY 23 Q1 FY 24 >₹500 Mn >₹100 Mn- < ₹500 M
Slide 31: Customer concentration
Customer concentration 15 59% 62% out of 20 customers of last year continue to be in Top 20, 18 remain in Top 30 Revenue from top 20 customers 4,702 5,621 (₹ Million) Q1 FY23 Q1 FY24 1.Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four) © 2023 Tanla
Slide 32: Winning new logos
Winning new logos 64 80 19% New customers added on WA Revenue from new customers (₹ Million) 31 102 Q1 FY23 Q1 FY24 Count of customers 1.New customers include every unique contracting entity added during the year © 2023 Tanla Platforms Limited. All Rights Reserved. 31
Slide 33: Financial Outcomes
Digital Platforms Highlights Enterprise Communications Highlights Business Outcomes Financial Outcomes Corporate 32
Slide 34: Strong sequential growth in seasonally weak quarter
Strong sequential growth in seasonally weak quarter 28% 14% 1% (2%) (2%) Revenue grew by 14% YoY in Q1, led by growth in both 9,111 Digital Platforms and Y-o-Y growth Enterprise communications 8,696 8,510 Enterprise communications growth driven by strong 8,335 performance in WhatsApp (₹ Million) and
Slide 35: Digital Platforms & Enterprise Communications revenue growth
Digital Platforms & Enterprise Communications revenue growth Digital Platforms Enterprise Communications 29% 8% 12% 9% YoY QoQ YoY QoQ growth Growth growth Growth 879 8,232 (₹ Million) 680 7,321 Q1 FY23 Q1 FY24 Q1 FY23 Q1 FY24 © 2023 Tanla Platforms Limited. All Rights Reserved. 34
Slide 36: Gross profit improvement
Gross profit improvement Gross profit grew by 30% on YoY basis. Gross margin % increased 27.5 by 335 bps in Q1 26.5 24.9 24.2 23.1 2,413 Margin% 2,289 Digital Platforms gross profit 2,168 grew by 30% YoY, driven by 2,056 Trubloq and Wisely- Network and 1,850 OTT (₹ Million) Enterprise communications
Slide 37: Gross margin profile
Gross margin profile B A Increase in gross 96% 96% 97% margin by 335 bps 96% 96% Platforms YoY, decrease by 99 A business bps QoQ Overall margin Q1 Q2 Q3 Q4 Q1 FY23 FY23 FY23 FY23 FY24 27% B Digital Platforms 23% 24% 25% 26% gross margin contribution to total at 35% Q1 Q2 Q3 Q4 Q1 C FY23 FY23 FY23 F
Slide 38: Efficiency metrics
Efficiency metrics 71% 76% EBITDA to Gross profit conversion improved by 490 bps at 76% in Q1, on back of increase in absolute 2,413 gross profit 1,822 (₹ Million) 1,850 Overall indirect increased by ₹ 47 Mn 1,307 YoY basis,due to salary increments and incremental spends towards Innovation and Brand
Slide 39: EBIT profile
EBIT profile Digital Platforms Enterprise Communications 69% 13% EBIT% EBIT% 851 1,562 (₹ Million) 609 1,049 EBIT Gross Profit EBIT Gross Profit © 2023 Tanla Platforms Limited. All Rights Reserved. 38
Slide 40: Operating income
Operating income EBITDA EBITDA margin at 20% in Q1, up 1,822 367 bps YoY 1,661 1,395 1,513 1,307 Depreciation at ₹164 Mn in Q1 (₹ Million) FY24, as against ₹93 Mn in Q1 FY23 Incremental depreciation due to capitalization of Innovation Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Center in Q4 FY23 EBIT 1,
Slide 41: Continue generating free cash flow
Continue generating free cash flow 1,472 DSO up by 5 days to 67 in Q1 Direct and Indirect tax payouts 869 (₹ Million) remain consistent 718 (416) (867) Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 © 2023 Tanla Platforms Limited. All Rights Reserved. 40
Slide 42: Net income and EPS
Net income and EPS PAT Profit after tax grew by 35% YoY, 1,354 1,165 1,203 due to expansion in EBITDA and 1,004 1,104 partially offset by higher depreciation (₹ Million) Effective tax rate for Q1 at 20% Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 EPS grew by 36%YoY, led by profit expansion and benefitte
Slide 43: Return on capital employed
Return on capital employed 72% 38% 33% 34% 32% 31% excluding CCE as against 89% last year Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 ROCE- Return on capital employed; CCE- Cash & cash equivalents © 2023 Tanla Platforms Limited. All Rights Reserved. 42
Slide 44: Strong balance sheet
Strong balance sheet ₹16,549 Mn ₹8,039 Mn 72% Strong Equity and Reserves Cash & cash equivalents ROCE (excluding cash & cash equivalents Debt Free © 2023 Tanla Platforms Limited. All Rights Reserved. 43
Slide 45: Corporate
Digital Platforms Highlights Enterprise Communications Highlights Business Outcomes Financial Outcomes Corporate 44
Slide 46: ESG update Q1 FY24
ESG update Q1 FY24 The ESG outlook evolved from an ‘initiative-based’ to ‘framework-based’ function, where we looked at DJSI Corporate Sustainability Assessment (CSA) as a key anchor to drive and strengthen strategic priorities within ESG. We formulated a dedicated ESG policy to holistically embed s
Slide 47: Appendix
Appendix 46
Slide 48: Profit & Loss Q1 FY24
In ₹ Million, unless otherwise stated Q1 FY24 Q1 FY23 ∆% Q4 FY23 Revenue from operations 9,111 8,001 14 8,335 Cost of services (6,698) (6,151) 9 (6,046) Profit & Loss Gross profit 2,413 1,850 30 2,289 Q1 FY24 Operating expenses (591) (543) 9 (628) EBITDA 1,822 1,307 39 1,661 Depreciation & amortizat
Slide 49: Unaudited Balance Sheet June 30, 2023
Unaudited Balance Sheet June 30, 2023 In ₹ Million, unless June March In ₹ Million, unless June March otherwise stated 30, 2023 31,2023 otherwise stated 30, 2023 31,2023 ASSETS EQUITY AND LIABILITIES Non-current assets Equity share capital 134 134 Property, plant and equipment 1,624 1,659 Other equi
Slide 50: Condensed Cash flow
In ₹ Million, unless otherwise stated Q1 FY24 Q4 FY23 Cash flow before changes in working capital 1,879 1,683 Changes in working capital (285) 765 Cash generated from operations 1,594 2,448 Condensed Taxes (300) (379) Cash flow from operating activities 1,294 2,069 Cash flow Net investments in tangi
Slide 51: Free cash flow
In ₹ Million, unless Q1 Q1 Q4 otherwise stated FY24 FY23 ∆% FY23 Free Operating cash flow 1,294 965 34 2,069 cash flow Capital expenditure (425) (247) 72 (597) Free cash flow 869 718 21 1,472 Free cash flow in percent 10% 9% - 18% of total revenue Free cash flow as % of PAT 64% 71% - 123% © 2023 Tan