Slide 1: Focused on Micro in a Challenging Macro Environment
Focused on Micro in a Challenging Macro Environment Nitin Rakesh Manish Dugar CEO & Managing Director CFO © Mphasis 2023 Proprietary and confidential information I 1/20/2023 I 1 I
Slide 2: Safe Harbor
Safe Harbor Certain statements mentioned in this presentation concerning our future growth prospects are forward looking statements (the “Forward Statements”) and are based on reasonable expectations of the management, which involves a number of risks, and uncertainties that could cause actual resul
Slide 3: IT spending in strategic areas is here to stay
IT spending in strategic areas is here to stay… Cloud and Data are key growth drivers Budget impact: How are IT & IT services budgets likely to get impacted? How are your cloud-related budgets likely to get impacted? Increase by X% Stay the same Decrease by Y% Retail Banking P&C Insurance All in NA
Slide 4: Direct Continues to Fuel Growth
Direct Continues to Fuel Growth Q3 ’23 overall revenue grew 5.7% YoY Growth with larger scale in Direct Direct business grew 6.4% YoY Direct business (ex Digital Risk) grew 14.7% YoY YoY # → 16.9% 19.1% 36.2% 6.4% 436 440 431 429 414 402 385 384 CQGR +2.9% 363 CAGR +12.2% 342 CAGR # 334 327 318 320
Slide 5: Duality of FY '23
Duality of FY '23 Direct excluding DR (Qtr) Direct excluding DR (FYTD) Direct including DR (FYTD) YoY # → 13.8% 5.6% 48.6% 14.7% YoY → 15.7% 5.6% 39.3% 24.5% YoY # → 13.5% 16.3% 33.6% 17.3% 364 1,222 1,079 323 1,061 CAGR # CAGR # 884 CAGR # 790 218 631 205 597 679 181 600 519 Q3’19 Q3’20 Q3’21 Q3’22
Slide 6: Revenue Growth by Segment
Revenue Growth by Segment Revenue in USD Mn Direct Direct Direct Direct 440 429 ex DR 440 429 ex DR 440 429 YoY* 414 414 YoY* 414 YoY* YoY* YoY* 16.8% 6.2% 17.1% 18.8% APPS 259 297 298 Americas 333 362 351 Direct 384 413 402 14.7% 5.1% 5.1% -23.8% -23.8% BPO 103 90 77 DXC EMEA 47 43 43 11.0% 7.4% 8.
Slide 7: Segment Break Up
Segment Break Up 440 429 Direct Direct ex Direct 3-year 414 Revenue in USD Mn YoY * DR YoY * CAGR* 239 230 2.0% 17.6% 20.5% Banking & Financial Services 229 0.7% 0.7% 3.9% 37 35 Insurance 36 2.7% 2.7% 53.9% 57 56 TMT 55 56 56 9.4% 9.4% 13.3% Logistics & Transportation 52 Others 42 52 52 37.0% 37.0%
Slide 8: Constituents of Direct Growth; Sustaining Market Share Gains
Constituents of Direct Growth; Sustaining Market Share Gains Growth in Revenue (Direct ex Digital Risk (DR)) YoY* Overall Q3’23 YoY growth of 6.4% 364 363 ▪ Direct growth ex DR 14.7% YoY 323 Top 10 Growth led by Top 5 at 20.6% YoY Q3’22 Q2’23 Q3’23 Top 10 accounts grew 19.8% YoY Revenue in $Mn at av
Slide 9: Direct TCV Remains Robust
Direct TCV Remains Robust Direct TCV Wins Direct: Revenue vs TCV – Strong Correlation CAGR 1,800 401 401 Mn Direct Revenue (TTM in US$ Mn) 4% Others 335 8% Logistics 1,600 16% TMT Insurance 1,400 247 19% Healthcare 197 1,200 R² = 0.8542 Traditional 1,000 53% BFS New Gen 800 Split by Vertical 600 Q3’
Slide 10: Strong Pipeline Growth Driven by Cloud & Transformation Deals
Strong Pipeline Growth Driven by Cloud & Transformation Deals Industry Distribution Solution Archetype Distribution YoY QoQ +27% +6% 13% 9% 10% +86% New engines of Data 13% Non-BFSI growth kicking in 44% 16% 17% Modernization 17% 11% Non BFSI 30% 11% Value Stream Acceleration 9% 11% 10% 6% Security
Slide 11: Improving Client Mining and Large-deal Metrics: Direct
Improving Client Mining and Large-deal Metrics: Direct Client Pyramid Robust large deal wins (>$20M TCV) Client Additions 107 # of cumulative deal wins since Q1’18 Category YoY QoQ • 13 Large deals in the past 1 year compared to 8 in the previous period $200M + 1 - • 5 Large Deal wins in Q3’23 equal
Slide 12: Performance in Financial Metrics
Performance in Financial Metrics Revenue Growth Operating Profit Growth YoY* YoY + 5.7% 429 65 + 3.3 % 414 63 Q3’22 Q3’23 Q3’22 Q3’23 Gross Revenue in $Mn at average USD/INR rate for respective periods * Revenue growth in constant currency EBIT in $Mn at average USD/INR rate for respective periods E
Slide 13: In Summary
In Summary ▪ Q3 FY ‘23 impacted by decline in Mortgage Business; healthy double-digit growth in Direct ex-DR ▪ TCV well above trend and second highest-ever with five large deals ▪ Robust Tribes-led, cloud & transformation deal pipeline; all-time high - up 6% QoQ and 27% YoY ▪ Broad based across vert
Slide 14: Outlook for Q4 FY 2023
Outlook for Q4 FY 2023 ▪ Focused on Micro in an uncertain Macro ▪ Strong Q3 ’23 pipeline, and conversion trend led by cloud, transformation and consolidation ▪ Majority of top five customers at record ARR ▪ Core BFSI continues to grow from greater contribution of TCV wins ▪ Uncertain macro continues
Slide 15: Q&A
Q&A Link to financial data for the past three years: https://www.mphasis.com/home/corporate/investors.html © Mphasis Proprietary and confidential information I January 20, 2023 © Mphasis 2023 Proprietary and confidential information I 1/20/2023 I 15 I
Slide 16: Analyst Recognitions in Q3 FY 2023
Analyst Recognitions in Q3 FY 2023 GARTNER GARTNER GARTNER MAJOR CONTENDER Custom Software Development MARKET GUIDE MARKET GUIDE Services, Worldwide Digital Claims in Property and Casualty Market Guide for Life Policy Admin Market Guide for Life Policy (P&C) Insurance – Solutions PEAK Systems, EMEA