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: October 19, 2023 To, BSE Limited National Stock Exchange of India Ltd. P
Slide 2: Investor Update Q2 FY24
Investor Update Q2 FY24 19th October 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: Q2 FY24 Results: Snapshot
Q2 FY24 Results: Snapshot Revenue Gross Profit EBITDA FCF ₹10,086 Mn ₹2,762 Mn ₹1,968 Mn ₹1,310 Mn 18.5% Growth 34.3% Growth 19.5% Margin 92% of PAT PAT EPS Cash ₹1,425 Mn ₹10.60 ₹5,450 Mn 14.1% Margin 30.3% Growth Post M&A payoutt of ₹3,737Mn © 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 Detailed ahead in appendix 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
Slide 6: We lead with purpose!
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 • Achiev
Slide 7: Our customers love us in India and beyond
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 re
Slide 8: 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 13 consecutive quarters 45% SMS market share in India E2E omnichannel Deeply embedded presence NRR of 125% SMS, Voice, OT
Slide 9: Business Outcomes
Business Outcomes 8
Slide 10: Focused on expanding customer relationships
Focused on expanding customer relationships 315 208 17 315 customers contributing > ₹ 10 19 Mn annual revenue, count up by 51% 62 37 236 customers contributing > ₹ 10 Mn annual revenue, customer count up by 55% 152 236 Q2 FY23 Q2 FY24 >₹500 Mn >₹100 Mn- < ₹500 Mn >₹10 Mn -<₹100 Mn 1.Customer segment
Slide 11: Customer segments
Customer segments INR Mn 9,637 8,266 Product penetration at 1.91 in Q2 on a 4,476 larger customer base, driven by growing adoption of WhatsApp and 5,037 other newer channels. 3,294 1,902 1,868 1,327 Q2 FY23 Q2 FY24 >₹500 Mn >₹100 Mn- < ₹500 Mn >₹10 Mn-<₹100 Mn 1.Customer segments are arrived at on a
Slide 12: Customer concentration
Customer concentration 14 60 % 48% out of 20 customers of last year continue to be in Top 20, 16 remain in Top 30 Revenue from top 20 515 483 customers (₹ Million) Q2 FY23 Q2 FY24 1.Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four) © 2023 Tanla Pla
Slide 13: Winning new logos
Winning new logos 143 195 36% New customers added on WA Revenue from new customers (₹ Million) 13 36 Count of customers H1 FY23 H1 FY24 1.New customers include every unique contracting entity added during the year © 2023 Tanla Platforms Limited. All Rights Reserved. 12
Slide 14: Serving enterprise needs | Impact case studies
Serving enterprise needs | Impact case studies Customer Product Use Case & Impact Targeted campaigns focused on driving App install and offer discounts 200% jump in CTA vs other channels; 300% in conversion ratio Personalized reports with alerts to drive app adoption 15% increment in Daily active us
Slide 15: Financial Outcomes
Financial Outcomes 14
Slide 16: Revenue milestone of ₹10 Bn in a Quarter
Revenue milestone of ₹ 10 Bn in a Quarter 14% 19% 1% (2%) (2%) Revenue grew by 19% YoY 10,086 9,111 Y-o-Y growth 8,510 8,696 8,335 Organic revenue grew by 7% YoY (₹ Million) Digital platforms grew by 27% YoY Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 © 2023 Tanla Platforms Limited. All Rights Reserved.
Slide 17: Digital Platform & Enterprise Communications revenue growth
Digital Platform & Enterprise Communications revenue growth Digital Platform Enterprise Communications 27% 8% 18% 11% YoY QoQ YoY QoQ growth Growth growth Growth 953 9,133 7,759 (₹ Million) 751 Q2 FY23 Q2 FY24 Q2 FY23 Q2 FY24 © 2023 Tanla Platforms Limited. All Rights Reserved. 16
Slide 18: Steady Gross profit improvement
Steady Gross profit improvement 27.5 27.4 Gross profit grew by 34% on 26.5 YoY basis. Gross margin % 24.9 24.2 increased by 322 bps YoY Margin% Digital Platform gross profit grew by 29% YoY driven by 2,413 2,762 Trubloq and Wisely OTT 2,289 2,168 2,056 (₹ Million) Enterprise communications gross pro
Slide 19: Gross margin profile
Gross margin profile B 98% A Increase in gross 96% 96% 97% 96% margin by 322 Platform bps YoY, A business increased by 90 Overall margin Q2 Q3 Q4 Q1 Q2 bps QoQ FY23 FY23 FY23 FY24 FY24 26% 24% 25% 27% 27% B Digital Platform gross margin contribution to total at 34% Q2 Q3 Q4 Q1 Q2 C FY23 FY23 FY23 FY
Slide 20: Efficiency metrics
Efficiency metrics 68% 71% 2,762 EBITDA to Gross profit conversion improved by 340 bps at 71% in Q2, on the back 2,056 1,968 (₹ Million) of increase in absolute gross profit 1,395 Excluding VF, overall indirect cost increased on a sequential basis due to incremental spends on Sales and Marketing Q2
Slide 21: EBIT profile
EBIT profile Digital Platform Enterprise Communication 72.5% 11.5% EBIT% EBIT% 931 1,831 (₹ Million) 691 1,051 EBIT Gross Profit EBIT Gross Profit © 2023 Tanla Platforms Limited. All Rights Reserved. 20
Slide 22: Operating income
Operating income EBITDA 1,822 1,968 1,395 1,513 1,661 (₹ Million) EBITDA margin was at 19.5% in Q2, up 312 bps YoY Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Amortization on intangible due to VF acquisition was ₹28 Mn EBIT 1,742 1,658 1,515 1,295 1,391 (₹ Million) Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY2
Slide 23: Strong cash flow generation
Strong cash flow generation 1,472 DSO days up by 7 days to 75 in Q2. ValueFirst operates at 1,310 slightly higher DSO days 869 contributing to increase (₹ Million) Tax payouts remain consistent (416) (867) Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 © 2023 Tanla Platforms Limited. All Rights Reserved. 2
Slide 24: Net income and EPS
Net income and EPS PAT Profit after tax grew by 29% 1,425 1,165 1,203 1,354 YoY. PAT growth was impacted 1,104 due to lower interest income (₹ Million) (cash outflow of M&A payout) and higher depreciation on intangible assets arising out of acquisition Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 EPS 10.
Slide 25: Return on capital employed
Return on capital employed 54% 38% 38% 33% 34% 31% excluding CCE as against 74% last year Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 ROCE- Return on capital employed; CCE- Cash & cash equivalents © 2023 Tanla Platforms Limited. All Rights Reserved. 24
Slide 26: Strong balance sheet
Strong balance sheet ₹17,479 Mn ₹5,450 Mn 54% Strong Equity and Reserves Cash & cash equivalents ROCE (excluding cash & cash equivalents) Net Debt Free © 2023 Tanla Platforms Limited. All Rights Reserved. 25
Slide 27: Appendix- Detailed financials
Appendix- Detailed financials 26
Slide 28: Profit & Loss Q2 FY24
In ₹ Millions, unless otherwise stated Q2 FY24 Q2 FY23 ∆% Q1 FY24 Revenue from operations 10,086 8,510 19 9,111 Cost of services (7,324) (6,454) 13 (6,698) Profit & Loss Gross profit 2,762 2,056 34 2,413 Q2 FY24 Operating expenses (794) (661) 207 (591) EBITDA 1,968 1,395 41 1,822 Depreciation & amor
Slide 29: Unaudited Balance Sheet Sep 30, 2023
Unaudited Balance Sheet Sep 30, 2023 In ₹ Millions, unless Sep 30, Mar 31, In ₹ Millions, unless Sep 30, Mar 31, otherwise stated 2023 2023 otherwise stated 2023 2023 ASSETS EQUITY AND LIABILITIES Non-current assets Equity share capital 134 134 Property, plant and equipment 2,101 1,659 Other equity
Slide 30: Condensed Cash flow
In ₹ Millions, unless otherwise stated Q2 FY24 Q1 FY24 Cash flow before changes in working capital 2,055 1,879 Changes in working capital (161) (285) Cash generated from operations 1,894 1,594 Taxes (291) (300) Condensed Cash flow from operating activities 1,603 1,294 Cash flow Net investments in ta
Slide 31: Free cash flow
In ₹ Millions, unless Q2 Q2 Q1 otherwise stated FY24 FY23 ∆% FY24 Free cash flow Operating cash flow 1,601 41 3817 1,294 Capital expenditure (292) (457) (36) (425) Free cash flow 1,310 (416) 419 869 Free cash flow as % of 13% (5%) - 10% total revenue Free cash flow as % of PAT 93% (38%) - (64%) © 20
Slide 32: Appendix II – About us
Appendix II – About us 31
Slide 33: We continue to disrupt the market through tech led greenfield innovations
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 API
Slide 34: Great Financial Track Record
All figures in ₹ Mn 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 33 33
Slide 35: 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 36: Our digital platforms are 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 37: 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 38: 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 39: Wisely ATP - first of its kind anti-phishing platform
Wisely ATP - first of it’s kind anti-phishing 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 40: 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 41: 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 27% YoY revenue growth Monetization at 100% o
Slide 42: 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 43: 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 Q2 from WhatsApp ‐ Impact: 2X increase in loyalty (offers availed) for the bank Serving enterprise curated ne
Slide 44: What does the ValueFirst acquisition from Twilio bring to Tanla
What does the Value First acquisition from Twilio bring to Tanla 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 Indones
Slide 45: Consolidation of India market leadership in CPaaS space
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% Tanla