Hsenid Business Solutions Plc · CSELK:HBS.N0000

Hsenid Business Solutions — Q2 FY2025 Earnings Presentation

20 slides from Hsenid Business Solutions's earnings presentation, November 2024

  1. Slide 1: Quarterly Investor Forum 2Q FY2025

    Quarterly Investor Forum 2Q FY2025

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements This presentation may contain forward-looking statements for which there are risks, uncertainties, and assumptions. Forward- looking statements may include any statements regarding strategies or plans for future operations; any statements concerning new features, enhanceme

  3. Slide 3: hSenidBiz | PeoplesHR at a Glance

    hSenidBiz | PeoplesHR at a Glance $10 Bn+ TAM $3.7 Mn Exit ARR $4.2 Mn CARR Market Opportunity APAC and Exit Annualized Recurring Revenue Contracted ARR (CARR) includes exit MEA as at end 2Q FY25 ARR, subscription backlog and ARR of new deal closures as at end 2Q FY25 1675+ Customers 31% ARR Growth

  4. Slide 4: PeoplesHR is poised to be the Most Preferred HR Tech Solution in Emerging Markets

    PeoplesHR is poised to be the Most Preferred HR Tech Solution in Emerging Markets ► Hire-to-retire HR Tech Platform which thrives in digitalizing complex business processes in Human Resource Management ► Robust CoreHR, Time & Attendance and Payroll Engine with strong focus on statutory compliance an

  5. Slide 5: Quarter at a Glance

    Quarter at a Glance Core Exit ARR ► Revenue of LKR 422 Mn (Q3 FY23 to Q2 FY25) USD Mn 3.7 ♦ YoY Growth of 5% in LKR terms; 13% in USD cc 3.5 3.5 ♦ Higher quality of revenue (72% recurring revenue 3.1 3.0 as % of total revenue) driven by growth in ARR and 3.0 2.7 decline in non-core revenues 2.5 2.3

  6. Slide 6: Key Business Updates

    Key Business Updates Product Development & Engineering ♦ Additional content capture options in Gen AI chatbot ♦ Optimization of attendance tracking functionality ♦ New feature additions in modernized employee profiles ♦ Bulk CV processing with data extraction powered by GPT ♦ Introduction of CI/CD p

  7. Slide 7: Key Business Updates

    Key Business Updates Sales Update ♦ Strengthened sales execution framework for improved effectiveness ♦ Increased emphasis on deal qualification and execution ♦ Initiation of repricing measures for low-margin clients ♦ Doubled demand generation efforts, building a stronger pipeline of deal opportuni

  8. Slide 8: New Deal Bookings

    New Deal Bookings New Deal Bookings USD Mn ► USD 299,520 new deal closures in Q2 3.5 ♦ 16% decline relative to 1Q FY25 3.0 ► Sri Lanka & SEA drove the majority of 2.5 new deal acquisitions in Q2 ♦ 48% originated from SEA while 2.0 34% originated from Sri Lanka 1.5 ► PHR Cloud accounted for ~96% of 1

  9. Slide 9: Revenue Composition

    Revenue Composition ► PHR Cloud remained the primary revenue driver at over 65% ► Sri Lanka remained the largest contributor to revenue with a slight drop in APAC contributions Product Breakdown Geographical Breakdown 1% 9% 6% 15% 14% 14% 14% 5% 17% 12% 26% 4% 5% 9% 9% 10% 16% 21% 30% 25% 23.6% 25%

  10. Slide 10: Business Segments

    Business Segments PHR Cloud and On-Premise PHR Cloud Revenue PHR On-Premise Revenue LKR Mn LKR Mn 450 3yr CAGR +1% 1200 3yr CAGR +48% 900 300 600 -35% YoY (-28% in USD cc) +24% YoY (+33% in USD cc) 150 300 0 0 FY22 FY23 FY24 Q2 Q1 Q2 FY22 FY23 FY24 Q2 Q1 Q2 FY24 FY25 FY25 FY24 FY25 FY25 ► PHR Cloud

  11. Slide 11: Business Segments

    Business Segments PHR Tracking Solutions and Outsourcing PHR Tracking Solutions Revenue PHR Outsourcing Revenue LKR Mn LKR Mn 3yr CAGR +30% 150 100 3yr CAGR +27% 75 100 +65% YoY (+77% in USD cc) 50 +41% YoY (+49% in USD cc) 50 25 0 0 FY22 FY23 FY24 Q2 Q1 Q2 FY22 FY23 FY24 Q2 Q1 Q2 FY24 FY25 FY25 FY2

  12. Slide 12: Core Recurring Revenue

    Core Recurring Revenue Annual Core Recurring Core Recurring Revenue Composition Revenue Composition LKR Mn 1000 28% 43% 39% 42% 3yr CAGR +29% 58% 52% 800 600 72% 57% 61% 58% 400 +34% YoY (+31% in USD cc) 42% 48% 200 FY22 FY23 FY24 2Q 1Q 2Q FY24 FY25 FY25 0 FY22 FY23 FY24 2Q 1Q 2Q Core - Recurring No

  13. Slide 13: Revenue Drill Down

    Revenue Drill Down 3Yr CAGR YoY growth All in LKR millions FY22 FY23 FY24 2Q FY24 1Q FY25 2Q FY25 (in LKR / USDcc) (in LKR / USD cc) PHR Cloud 372 678 893 222 236 275 Recurring revenue 261 502 670 167 196 245 +48% / +20% +24% / +33% Non – Recurring revenue 111 176 222 55 40 30 PHR On-premise 408 362

  14. Slide 14: Cost of Sales Drill Down

    Cost of Sales Drill Down YoY All in LKR millions FY22 FY23 FY24 3Yr CAGR 2Q FY24 1Q FY25 2Q FY25 growth On-site and third-party implementation costs† 59 94 150 +37% 45 24 27 -40% Infrastructure costs†† 53 170 162 +69% 37 40 38 +4% Cost of devices sold 54 64 49 +20% 9 12 20 +119% Mobile solutions rel

  15. Slide 15: Analysis Normalized EBITDA Margin

    Analysis Normalized EBITDA Margin Expenses as a % of Revenue Normalized EBITDA Margin† 30% 22% 28% 21% 12% 29% 32% 33% 9% 24% 12% 15% 55% 59% 57% 56% -9% 43% -11% -17% FY22 FY23 FY24 2Q 2Q FY22 FY23 FY24 2Q 2Q FY24 FY25 FY24 FY25 COGS†† Admin Expenses††† S&M Expenses†††† ► Initiated repricing low-ma

  16. Slide 16: Summarized Income Statements

    Summarized Income Statements In LKR millions FY22 FY23 FY24 2Q FY25 Revenue 1,091 1,464 1,645 422 Gross profit 617 644 665 184 Gross profit margin 57% 44% 40% 44% Normalized EBITDA 329 138 (148) (72) Normalized EBITDA margin 30% 9% -9% -17% FX gain/(loss) 287 71 (65) (23) Net interest income 27 188

  17. Slide 17: Cash Position and IPO Fund Utilization

    Cash Position and IPO Fund Utilization Cash Position IPO Fund Utilization LKR Mn LKR Mn 1600 700 1400 600 172 1200 500 1000 400 800 300 350 520 600 200 400 100 202 140 200 0 Market Development Product Development Total 0 Initiatives Initiatives FY22† FY23† FY24† 2Q FY25† Cash Position IPO Proceeds I

  18. Slide 18: Free Cash Flow Generation

    Free Cash Flow Generation 300 30% 200 20% 100 10% 0 0% -100 -10% -200 -20% -300 -30% -400 -40% -500 -50% -600 -60% FY21 FY22 FY23 FY24 2Q FY25 Operating Cash Flow Capex & Lease Payments Free Cash Flow to the Firm FCFF Margin† ► Limited cash collections from new customers due to low new deal closures

  19. Slide 19: Peer HCM and SaaS company benchmarking

    Peer HCM and SaaS company benchmarking (For the last reported quarter) HCM Peers SaaS Peers 31% 20% 25% ††† ††† ARR Growth 189% 146% 181% ††† ††† GTM Efficiency Ratio NRR 99% 103% 108% † ††† ††† (Net Revenue Retention) <1% 5% N/R ††† Revenue Churn Rate ♦ Analysis of HCM Peers includes ATOSS, Zalaris

  20. Slide 20: Investor Forum

    Investor Forum Join us for the Investor Forum Q&A Session 13th of November 2024 3.00 pm IST for Q2 FY2025 You can use the Q&A functionality in zoom to send in your questions; or alternatively Click on the "Raise your hand" button to be given an opportunity to unmute your microphone and pose your que

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