E2E Networks (NSE:E2E) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good evening, and welcome to the E2E Networks Limited Q2 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Ms. Vanessa Fernandez from Investor Relations team at AdFactors PR. Thank you, and over to you, Vanessa. Thank you, Myra. Good evening, everyone. On behalf of E2E Networks Limited, I would like to welcome you all to the earnings conference call for the second quarter of FY twenty twenty seven. Today on the call, we have the task from the management, mister Tarun Duva, managing director of E2E Networks, and mister Nitin Jain, chief financial officer of E2E Networks.

0:51 We will begin the call with brief opening remarks from the management followed by a q and a session. All participant lines will be in listen only mode during the management's remarks, and the floor will be open for questions thereafter. Please note that certain statements made during this call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties that could cause actual results or projections to differ materially from those statements. E2E Networks will hold no responsibility for any actions taken based on such statements and undertakes no obligation to publicly update these forward looking statements. I now hand over the call to mister for his opening remarks. Over to you, Tarun. Hi, everyone. Thanks for joining us today in our second quarter earnings call for FY twenty seven.

1:42 This has been another strong quarter for E2E Networks, where we have continued executing similar to the previous quarter. And this is still, like, daily low of AI for us as as far as we can see. And I would like to kind of, like, give a brief update on... In the previous quarter. So, like, we signed, like, a nearly thousand crore deal with, like, a sovereign AI company for the Blackbaud system, which last up to, like, June 2029. So this is something that includes the long term revenue visibility and validate equally the ability to transition the deployed capacity from a ASU model to a longer term commitment.

2:38 So so apart from this, like, basically, like, this quarter, we have really focused on increasing the talent density within E2E in all areas of execution. So we have, like, a new chief revenue officer. We have also added, like, a team to the founder's office. We also have, like, a field CTO to kind of, like, help our customers understand our solutions better. And all of this brings, like, a lot of net new experience from the industry in, like, various aspects of the industry.

3:30 So, essentially, like, that's the management and leadership team. They are, like, a prime for the next phase of growth. Apart from the inside talent within E2E, like, we have also concerned our strategic advisory team. So, Krishna, we we would like to welcome mister Nunuai Roy as a strategic adviser. So Roy has been, like, a part of the tech ecosystem of India for a very, very long time. And, essentially, like, he brings, like, a lot of deep rooted knowledge of how AI is being applied into the new ecosystem that is getting built.

4:18 And his experience and perspective, like, would be really valuable in helping us identify, like, very many opportunities, and this will help shape our long term growth strategy as well. Now we continue to invest very rapidly into our sovereign AI platform, both on the side of E2E on the side of Jarvis. And, like, what I believe is that, like, the platform is the key to our future growth. So we're essentially, like, that allows us to operate as a full stack layer where we kind of, like, manage all parts of the power in AI multiple layers for our customers.

5:05 And that allows them to use our GPU platform with confidence for not just training, but also inference and the upcoming identical flow. And this, of course, requires, like, some part of our GPUs to be used by our own teams rather than, like, being completely pulled out to end customers. And that... This is something that allows us to kind of, like, go forward in the future with BoldNet. So now finally about, like, the future growth, like, we have always maintained that, like, we will continue to be both aggressive as well as prudential in terms of our CapEx deployment.

5:53 Now we do not, like, give a speculative CapEx guidance, And what we prefer to kind of, like, inform everyone of this, then we have, like, sufficiently occupied and solidified our deployment plan. So that's when we talk about, like... Yeah. That's, like, this will be potential CapEx deployment upgrade that we are working on. So, like, once it's occupied, that's when we talk about it. Now I would like to hand over the conversation to our CFO, mister Nathan. He can talk about, like, the... Some of the recent financial related update for the last quarter.

6:45 Over to you, Nathan. Thank you, Tarun. Good evening, everyone, and thank you for joining us today. I would walk you through our financial performance for the second quarter and first half of FY twenty twenty seven. Q two FY twenty twenty seven has been another strong quarter for E2E Networks. Revenue for the quarter stands at the $22.03 8,000,000, which is up by 411% year on year and 43% quarter on quarter. EBITDA stood at $1,715,000,000, up 45% quarter on quarter with margin expanding to 76.6%. EBITDA margin expanded by one forty one basis points compared to q one FY twenty seven. Profit before tax clogged at $971,000,000 compared to $586,000,000 in q one in... An increase of 66%.

7:38 PAT stood at $727,000,000 compared to $439,000,000 in q one with PAT margin improving to 32.5% from 28%. Diluted EPS stands at 3.48 compared to 2.1 in q one. The performance is driven by contribution from the Blackwell GPU, better utilization, and higher revenue utilization across the GPU. H one FY twenty seven, revenue is $38.00 5,000,000, which is up by 376% year on year. EBITDA stands as $28.09 4,000,000 at 76%, which is 2.3 times for the full year FY '26 EBITDA. PBT stands at $1,558,000,000 compared to a loss of $252,000,000 in h one twenty FY twenty six. And that stands at $7.07 6,000,000 compared to loss of $163,000,000 in h one FY.

8:34 Now I would hand it over back to the moderator for the question and answer session. Thank you. We will now begin the question and answer session. You wish to remove yourself from the question queue, may press star and 2. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants are requesting to kindly restrict your questions to one main question and a follow-up to maintain equal opportunity. We have the first question from the line of. The question... Please go ahead with your question. Yeah. Right. Right. Yeah. Uh-huh.

9:20 So congratulations on a great quarter. Like like, suggestions, like, when are we expected to live... Basically go live with our next b 200 that were planned originally, and then we can expect the revenue to be started from that? Yes. So the next month of b 200, which we have already now, it is expected to go live this quarter. So, hopefully, soon. And, like, when it goes live, obviously, we'll keep everybody informed. Oh, can you hear us, Keshav? As in response, we move on to the next question. We have the next question from the line of Bharat Gulati from.

10:16 Please go ahead. Yeah. Hi. Hi, sir. Hi. Hi, sir. Thank you for the opportunity. Just a question on the thousand per hour contract. In the current 75 per hour MRR, how much would be the contribution of that thousand per hour contract? And you mentioned that the entire... That the b 200 has been multi year contracted for the order. So is this the existing b 200, or is it going to be both the batches of b 200? This is the existing b 200, which was converted from pay as you go to, like, a multiyear contract. Now exact contribution would vary based on the usage, but, like, obviously, it's easy to calculate, like, close enough by looking at the thousand crore number in the time period.

11:05 So has the entire... I mean, is the MRR completely based in from the thousand crores contract right now, or is there some incremental MRR still to come? See, like, I don't know what... How to answer that question. Like, basically, like, you are asking question about, like, a future that I cannot predict. Got that. Got that, sir. Okay. And just on the gross margin, sir, we've been calling out that 85% gross margins is where we'll be, but we significantly beaten that this quarter. So how sustainable is this 88% margin? And just on the operating costs also, I understand you've made some investment in people, but where do we see absolute operating costs moving going forward? You know, it's 18 crores for this quarter. So if you can just throw some light on I'm not sure about, like, the 85% number. Like, basically, like... See, overall, like, we are looking at this as a 70% to...

12:09 Like, 70% plus kind of, like, an EBITDA margin. So, essentially, that's what we feel is the medium term and the long term. Oh, got it. Got it, sir. And just if I can squeeze in one last question. In terms of guidance, any exit guidance in terms of MRR you want to give for this year? We we don't we don't give any guidance. We we always say that we look back at what we have done rather than giving a future guidance. Got it, sir. Got it. Thank you. That's it from my side. Thank you, mister. Thanks,. We have the next question from the line of Keshav from. Please go ahead. Yeah. Am I audible Yes. We can hear you, Keshav.

12:55 Yeah. So, like, when should we expect the increase in GPU pricing to show up in the revenue? I mean, from the past six months, we have seen globally that the GPUs prices have been increased. So, like, when should we expect that to be reflected in the MRI? I mean, when the contract was renewed. See, as a company, obviously, we have multiple goals, which have to draw a balance between, like, basically, like, quarter on quarter performance and also our long term. Now from the point of view of long term, like, we want to obviously have, like, a very good relationship with all of our customers and... Which also means that, like, we honor our commitment to our customers whether contracted or whether verbal.

13:45 So in terms of, like, what they expect from us. And second part is that, like, we are heavily investing into our platform. Now on our platform, of course, like, the increase in talent density both on the engineering and nonengineering side help. And apart from that, like, obviously, a big part of, like, build out of our platform Also requires that, like, we be able to use our own GPUs for our own product development and not just be, like, a plain seller of all the capacity that we have. So, obviously, we want to heavily invest into r and d or helping in build out of our platform.

14:32 And any kind of r and d effort today, obviously, involves, like, necessarily using GPUs. So so that's also an investment into the future. Now that being said, like, again, like, we don't want to ever give, like, a future guidance even if it is whether it is far into the future or whether it is for the next quarter. But as we kind of, like, go forward, like, obviously, for uncontracted capacity or short term contracted capacity, we obviously expect the earnings to grow from the same assets that we have. Got it. And one just last question for this. Like, do... Are you seeing the, you know, intense demand to be growing on platform and, you know, maybe it started contributing to E2E revenue.

15:26 Sorry. I didn't hear you. Talking about Yeah. What's the contribution of, like, inference? Inference. Inference. Yeah. See, we look at the whole set of services as a overall goal rather than, like, looking functionally at, like, over revenue is coming from inference or training or storage or CPU running it in. So we would continue to look at, like, the overall picture as opposed to kind of, like, breaking down things into numbers. Because quarter on quarter, all the numbers are subject to, like, potentially, message changes. So any percentage report, like, we want to make sure that, like, that is something which is actually trackable and which is not, like, very similar point in time.

16:19 That doesn't, like, really help in terms of building an improved analysis around E2E. Got it. Thank you. I'll come back with you. Yeah. Thanks. Thank you. We have the next question from the line of Harshal from Silver... Seven Rivers Holding. Please go ahead. Yeah. Hi. Hi, Harshal. Please please go ahead. Hi. Hi, Tarunji. Sir, my first question is on the second tranche of B200. Since going through the balance sheet and couldn't spot any advances that we might have paid. So is is there any delay out there? And want to understand what would be the rate at which these would be deployed? I believe the deployment is already committed. So would it be at similar rate at which we have deployed the thousand crore first tranche of b 100, or would it be higher or lower if you can, you know, give some indication here?

17:13 See, certainly, our goal would be to make somewhat higher amount of money. But like I said, that, like, the the long term strategy of the company is not dependent on, like, oh, can we make, like, a few cents more or few percentage points more from same set of GPUs. The long term strategy is to kind of, like, make money by building more technology. And then the resulting growth is, like, a result of our advances in technology and customer adoption of our technology. So, like, we start looking at it from the other side where we say that, like, the... As a growth is a result of kind of, like, growth of success of our technology rather than the other way.

18:06 I I I hope I am able to point you in the right direction over here. Yeah. Yeah. To an extent. Like, essentially, what I'm saying is that, like, let's not simply look at, like, the number of... In terms of, like, looking at GPUs as, like, a car, like, I said, like, oh, can you make, like, somewhat more rental from the GPU? Like, essentially, GPUs are a means to an end. Essentially, the idea over here is to get, like, one, of course, the domestic market to an optimal technology and second, of course, to get our technology or offer, like, at a global scale. So the idea is not to kind of, like, run after short term high hourly numbers on the GPU. The number, like, would be a result of, like, when our technology gets more adoption and not the other way around.

19:06 Sure. Sure. And, sir, in q two, how much revenue came from India AI mission? And are we are we expecting any renewals from from those contracts to be happening at at better spot rates in... Going going forward? See, we continue to engage with India AI mission where, like, essentially, the goal is to kind of, like, build relationship with various kinds of customers who will potentially continue to work with us beyond the limit of India emission as well. And regarding, like, numbers in the previous quarter related to India emission, I guess, like, Nathan can give, like, a better approximate answer about, like, what sort of revenue we earned from any AI emission related services.

20:00 Yeah. So for the quarter, the revenue from the customer is roughly around 13 to 15%. Okay. And last question for FY '28 and FY '29... Just a follow-up just a follow-up to previous one. So for FY '28 and FY '29, how does the allotment visibility look for maybe next slot of b three hundreds or? See, hard to predict the future. Right? Basically, like, we will take the future as it comes. Sure. I mean, can we can we take 2,000 GPUs per annum as a base case for next next three years? See, we never, like, make any forward looking predictions. To essentially, like, wait for us to kind of, like, acquire our plans and then inform, like, everyone at the same time that, like, what's the plan going forward with regard to the increased effects and deployment, etcetera.

21:08 Sure. Sure. Thank you. Thank you. We have the next question from the line of Bajaj Gandhi from Bajaj Alternative Investments. Please go ahead. Yeah. Hi. Hi. Hi, Tarunji. Am I audible? Hi. Hi. Yes. We are audible, sir. Yeah. Yeah. Yeah. First question is regarding what sort of debt levels you are comfortable with and anything on the 1,500 crore and everything resolution for the fundraise that you've taken? And the second question is regarding what is the international revenue mix, and what is the contracted revenue as a percentage of overall revenue? Yeah. Those are the two questions. I think, like, from a capital deployment perspective, like, obviously, we'll keep everyone informed in case, like, there is any future equity raise.

22:02 So regarding debt, like, basically, like, I think it's also a function of, like, our own ability to repay the debt more than anything else. So there is no mental limit of, like, what can be the debt. Of course, there are, like, always covenants from lenders with regard to, like, what you can do at a given point of time or not. Now there was another question related to... Can you repeat the third question that you have? Like, the Sure. Within the If you can... Yeah. Yeah. Perfect. But what levels you'll be comfortable as a business Something that we we are very comfortable with debt as long as we have the ability to repay.

22:50 So Mhmm. We have, like, a upper limit defined for our schools that, okay, like, we can't go beyond this on that or anything like that. So Right. As long as the current cash flow support, if we are comfortable with that. Right. I was asking you about the international revenue mix and how much is the contracted revenue in the overall revenue by... Yeah. And then let Nithin answer the numbers related question. Yeah. There is one more question regarding the asset light model. If you tell, you are evaluating and if you can highlight, what is your view on that before we go to Nithin. Yeah. Basically, like, this is a AI... Like, this is, like, there is, massive amount of AI build out.

23:38 Now in an AI build out play, like, essentially, we are not able to, like, any any kind of, like, capital deployment that can essentially help us advance our technology adoption forward. Sure. Sure. Sure. Okay. And if you can if you can answer the balance question. Yeah. So in terms of the international revenue, which range from roughly around 20 to 25% of the revenue for the quarter is coming from the international customer. And contracted revenue as a percentage of the overall revenue? I think mix of long term versus a short term. Currently, our size is small to sharing a point in time information, and these numbers would change dramatically.

24:26 And this is not also applied to the international numbers. Like, all percentage numbers we are looking at in the previous quarter, like, for quarter on quarter numbers, like, essentially, are not, like, like, really trackable metrics. Like, they are subject to, like, mild things is what I would like to do. Got it. But just as a 100... If 100 is the total revenue, what could be the contracted revenue that you'll be targeting just to get a flavor of annuity revenue? There is no specific target in our mind. I think, like, it's it's a it's a more of a technical question which needs to be answered in multiple steps, which we kind of, like, keep changing. So, like, there are, like... There's so many considerations over there. Right?

25:14 So where you can't, like, really say that, yeah, like, whether whether, like, you will target, like, a particular percentage of the contractor revenue. So that... That's not a fixed number in our mind today. Got it. Thank you so much, and wish you all the best for the future. Yeah. Thank you. Yeah. Thank you, mister Gandhi. We have the next question from the line of Tushar Dunde from Sangvi Family Office. Please go ahead. Hello. Hi, team. Congratulations on a good execution. Two questions. I guess, question was answered partially. That was on the pricing. The other half of the second question, first question was on the utilization. What sort of utilization levels we are in, and what sort of utilizations we plan to target?

26:00 That's first. And second one was on the TIR platform that we have. I wanted to understand how is the customer engagement we are having in the TIR platform, and what sort of competitive intensity are we seeing in this particular space? Like, are the global cloud operators having similar offerings and we compete with the... Them? Or or we have a a good product offering which which is easily adaptable to the customer. Okay. So that's a lot of questions. So I only remember the last one. So from your platform perspective, I I I would like to think that, like, basically, like, whatever we are building over here in India is, like, world class and can be globally adopted.

26:48 That would, like... I would like to think. Now the proof of the starting rising is rising eating. So, basically, like, the platform, obviously, the success of the platform shows up over a period of time, like, over the medium term. So very, very hard to kind of, like, say that, oh, this is, like, better than x y or z today. It's a it's a moving target. Right? So as the field of AI advances very rapidly, like, we need to build up our own pace of, like, keeping up with the latest latest technology and keep implementing, like, whatever is the latest thinking in terms of, like, how our customers are going to use AI. And I think that is what leads to the eventual platform as a product success.

27:40 So I think, like, the jury for that should be held till, like, I think, like, the medium term. That's what I would like to think. Again, from a utilization standpoint, like, I think it's a point in time number. Shouldn't really matter. Like, what really matters is that, like, at an aggregate level, what we... Realization on the entire set of assets rather than, like, slicing and dicing and looking at, like, okay, this has been produced x, this has been produced y, and so on. So, like, the total of revenue within, like, an overall platform can widely vary between one customer to another customer.

28:30 So some customer will pay for it. Some customer will value y more. They would pay for y. So, essentially, like, what I believe is that, like, utilization, while it is a good metric to track assets which can produce very consistent set of average revenue. In case of your technology product, I think the variation is too high to say that, like, utilization is the right metric. So so somewhere, we feel that, like, the better metric over there is the overall realization across the entire fleet rather than looking at, like, the utilization metrics in terms of either the hour... GPU hours to clients across the fleet or what number of GPUs were, like, idle and so on. Like, I mean, sure, we are using, like, our GPUs for, like, a lot of what is not immediate revenue requirement, but that was required for, like, building of our product.

29:37 I I I hope I am able to get this across. Yes. Yes. Yes. Thank you. We have our next question from the line of Hitesh from Research. Please go ahead. Hello? Yes, it is. Please go ahead. You for the opportunity. Sir, I have two questions. So sir, how do you see E2E evolving in next eighteen months in terms of product offering and service offering? And second question is, are you seeing any demand from global system integrators who are looking after our products for inference because their clients must be demanding for enterprise AI transformation. They must be... Must be demanding the GPU services. Right?

30:28 Okay. So one way to answer that question is that, like, look, we are very small. So we do see, like, all sorts of customers, but, like, today, it's not really possible to slice and dice the set of customers we have. Because, again, this is, like, very, very point in time or whatever is small based of the GPUs that we have. So, like, are we talking to the size? I'm pretty sure that, like, that's, like, a part of, like, our overall sales coverage where, like, they would be the most of our team, obviously, speaking to the size. So what can we say about E2E in over eighteen months? I think that's a long period of time. So, basically, like, I think, like, the strategy is flexible in terms of that, like, keep building technology that people want to adopt and keep pushing the envelope in terms of, like, efficiency of our technologies, which lowers the overall cost of ownership for our end customers.

31:35 And kind of, like, keep building things that people value. So that's the overall strategy over there. And keep having, like, a great team that can kind of, like, implement the strategy. So that... It's as simple as that. And may I have just just a follow-up? Sir, recently, you have launched couple of enterprise products like Blaze, Endpoint, and Jarvis tag also. So are you seeing any traction? I wouldn't say launched as much as, like, basically, like, like, top release. Like, obviously, the official launch might be, like, a few weeks or so away.

32:25 So so, yeah, like, basically, like, that's the general direction we are taking, but, like, we are kind of, like, building, like, a lot of cool things that our customers can adopt and help us learn about, like, what they want to do with their tech that we are building. And as we start seeing potential adoption that can show up in the volume, we'll start talking more about it. Okay, sir. Thank you. Thank you. We have the next question from line of Neil Manat from Pico Capital. Please go ahead. Yeah. Hi. Hi, Neil. Yes, sir. Hello. Yeah. Please go ahead. Yeah. Am I audible?

33:10 Yes. Yes. You're audible. Please go ahead. Yes. Hi, sir. So my first question is with respect to the current Indian competitive landscape. I mean, we've got one player that has scaled up to 90,000 GPUs, and we've got another very recent entrant that has got, I think, 8,000 watt p 300. So, I mean... And this is related to our statements with respect to our platform. So, I mean, how do we differentiate from these players when they have already scaled up to these levels? I mean, when do we see a similar kind of scaling up since we keep pressing about our platform in that sense? Sure, Nilvi. So let's take a step back.

33:57 So I think, like, the overall total total addressable market for AI infrastructure alone at a global level, right, we are literally talking about, like like, over, like, the medium term, like, maybe anywhere close to, like, a trillion dollars of AI infrastructure addressable market. Now AI is today, like, a truly global business. So the GPUs are chasing wherever there is power and wherever there is, like, availability of, like, ready to release, like, what you call land power shell. So, essentially, what we are looking at today is, like, a global marketplace. In a global marketplace, like, I think, like, millions of GPUs are getting deployed, like, every year.

34:51 So when we talk about the entire set of GPUs being deployed in India, like, it doesn't change the fundamental equation for us in terms of what we are doing. So there is no, what you call, like, direct competition between, like, basically, like, any two, three, four, five players, which could be there in, one particular market segment. Essentially, we are looking at, like, a very large TAM of global market where everyone who is a player in this market needs to find their own niche. They need to find their own set of customers where they learn from those customers and then double down on their learning to build technology that can be used by customers similar to the customers they have or maybe even expand into, like, newer customer business or industry.

35:44 So, essentially, in a long term AI super cycle build out, like, all of us will need to figure out, like, what we want to do. Now we have a reasonably mapped out agile strategy around building technology and getting the adoption and learning from our customers and working with them to kind of, like, give them what they need. And we hope to be able to continue to do that. Like, so there are... There is only, like, limited set of people solving problems in AI, like, even globally. And, of course, more and more people are coming in and solving more and more problems. But it still leaves, like, a significant set of problems to be solved by us, like, which can be adopted by our customers.

36:33 And I suppose that, like, that will give us the ability to continue to grow, like, year after year or at least for the medium to long term. So so that's that's that's what we think about, like, basically, the competitive intensity in this space. Like, so we are in the midst of one of the largest build out. Like, there are more than, like, one fifty or 200 or two fifty odd players in the world who are pursuing this market. I think there is enough for everyone. Sir, I'll just rephrase my question here. I mean, in in a similar context, when we are serving Indian customers and when Indian players serving Indian customers, if price is same and they are running ahead of us in terms of addressing demand, I mean, how then then our platform differentiates from their platform?

37:32 See, like I said, like, we don't look at this as, like, a Indian TAM alone. We are looking at, like, us as a global player operating in a global market. So, essentially, there are enough and more customers for everyone in the market today. So I think, like, this may be a question for, like, far into the future that, okay, like, there is not enough demand. How are you pairing? How are you going to kind of, like, try and beat your competitor. So, like, I think, like, for next couple of years, like, probably this is not even a good solution. Like, so, like, everyone is trying to figure out AI. Everyone is trying to build technology of AI.

38:18 Everyone wants their technology to be adopted by others. So, like, we are one amongst, like, many, many, many players in AI who are trying to push the envelope. So... And the market is large enough. Like, any any particular glitch you take in a trillion dollar market is, a niche which is worth, like, maybe 10 or 20 or maybe $50,000,000,000. So I think, like, we feel very, very comfortable in this market. Like, it's a dark blue ocean. There is no red ocean today that, like, we need to worry about competition today. So we are, just a follow-up on the... Sorry to interrupt you, mister. Yeah. Sorry. Go Sir, just a follow-up on the previous participant's question. With respect to, sir, are we exploring off balance sheet funding for any of our GPU CapEx?

39:11 See, essentially, we are... We we continue to operate in in an ecosystem that exists today. And in this ecosystem, like, everything exists. And, like, we have it, like, never say never. So we are super happy to explore any and everything with regard to, like, what we are doing on tech, what we are doing in terms of, like, funding for the reviews, what we are doing in terms of distribution. So, like, we are open to everything to kind of, like, keep pushing our strategy of, like, getting the technology adoption over a period of time. Okay. And if I can just squeeze in one more question. Sorry to interrupt, Sunil. We have other members also in line. The question will kindly come up with a follow-up question in the queue.

40:04 We have the next question from the line of Prateek from. Please go ahead. Hi, sir. Hi. Hi, Prateek. Yes. Yeah. Hi. Hi. Sir, I just wanted to check. See, we have two platforms. Right? Public platforms, the and Java Slab. Right. Is there... So at the back end, are the engineering capabilities shared or or there is duplication over there? And the second is, obviously, you know, you will move from developer workloads to production workloads, etcetera. So how does the handover happen between Jarvis to Tir? Or or at the front end, is there separate go to market strategies? How does that work? See, both are opinionated platforms on solving problems for their own set of customers.

40:49 There is obviously going to be overlap in terms of some of the tech that gets built on both the platform. And there is going to be, like, some overlap in terms of customers as well. But, eventually, it would be insufficiently different from each other in terms of, like, where they want to kind of, like, take the final technology product and the final technology journey. I wouldn't even say, like, it's somewhere that journey is stopping. So, essentially, it's the journey to undertake by both the team. And, like, both have... So there is enough and more to build in, like, a massive $1,000,000,000,000 dollar TAM market. So I think, like, there is no upper limit to the amount of technology you can pay.

41:41 Understood. And how do you ensure that both don't compete at the front end in terms of pricing? Right? I just answered this question. This is, like, a multimillion GPUs per year kind of a marketplace. Right? I think there there is enough and more for, like, everyone not to step on each other's tools. Okay.. Thanks. Thanks. This is the only question I had. Thanks, sir. Thank you. Thank you. We have the next question from the line of from Union. Please go ahead. Yeah. Hi. Hi,. Hi, sir. Hi,. Thanks for this opportunity, and congrats on a good good set of results. Sir, you have... You are not committed on utilization, but the thousand crore contact that we got for our v 200, does that completely exhaust our capacity of the current v 200, or do we still have some idle capacity on that end? And secondly, sir, how is the current supply chain scenario on the GPU procurement, and how are GPUs compared to the peers in that scenario?

42:50 Thank you. See, like, again, like, I'll start with the last question. Right? So there is no clear comparison. Right? So we have our own tech journey to undertake. So we are not focused on, like, basically, like, peers in that sense. Now from a very specific question in terms of, like, whether the current flexible capacity is 100 utilized, the flagship flexible capacity is fully utilized in the particular contract that was mentioned. And, yeah, was there a third question? Sorry. No problem. It is. Sir, on this, are we still facing some backlog in the orders from NVIDIA? See, it's it's a it's a organic cycle.

43:40 Basically, like, you plan ahead, like, and you project your... Basically, like, very agilely, you kind of, like, react to the market and predict for the near future, like, what you want to deploy. And as those plans certifying, like, obviously, like, we would keep everyone informed. So, like, I don't see, like, any fundamental supply chain challenges that are for us, like, in the near or medium term. Sir, last question. There is a a new GPU launched by AMD. So is our system compatible to use that GPU in the future? Is it okay for a situation like that? Software point of view, like, obviously, the software that we are building, we would like it to be compatible with anything that is out there. But more specifically, for that to happen, like, obviously, we'll have to engage with, like, any and every chipmaker, which usually we do. So in the sense that, like, there are a lot of people building chips these days, and we obviously like to keep our eyes and ears open to what is happening and engage technically technically to understand, like, everything that is out there.

45:03 And, obviously, if there is, like, support requirement from our customers or our software to support something, then, like, we are obviously very, very willing and able to build that. Perfect. That answers my question. Thank you, sir, and all the best. Yeah. Thank you. Thank you. We have the next question from the line of from Carbara Investments. Please go ahead. Yeah. Hi. Hi,. Yeah. Miss, can you hear us? Hello? Hello? Yes. Yeah. We can hear you. Please go ahead. Yeah. First of all, congratulations, please, for the exceptional results. Question was on the growth story.

45:50 So on the deployment part, you had mentioned 1,024 plus b 200 plan GPUs. Right? Right. So, like, can you know the timeline and the funding that you have for the plan? This quarter, we expect the deployment to go Sorry? This this quarter, we expect the requirement to go through for the thousand twenty four of twenty twenty. Okay. And any visibility on b 300 or? Like, so we will obviously, like, kind of, like, keep everyone informed as our plan for... Where our plan would be 355. Okay. Okay. Okay. Thank you. Yeah.

46:37 Thank you. We have the next question from the line of from Touro Wealth Managers. Please go ahead. Yeah. Hi. Hi, Tarun. Good evening, and congratulations on a good set of numbers. I have just two questions. Since we keep mentioning our long term strategy to sell GPU as a part of technology platform rather than just raw compute, I just want to understand how does probably our economics change when probably the transition happens with the customer, maybe a live customer? Like, how does the realization change? How does the gross margin change? Probably the ROCs on the GPU CapEx change? See, I think that's a question that would get answered over a period of time. So I don't think there is, like, a answer to that today. But, like, essentially, if you look at, like, any kind of technology play, like, so when you build layers of technology and you get the adoption from the customers, then, obviously, long term value gets unlocked for those customers who adopt that technology by reducing their own TPO or building new capabilities for them that allows them to move faster.

47:51 And that essentially results in, like, surpluses, like, up and down the ecosystem. So, like, hard to put, like, the numbers to that today. But, like, that's where the adoption of tech is, like, a medium to long term strategy. So so that's that's where we are today. Understood. Understood. So is it fair to understand as we speak, currently, probably most of our revenues is primarily the GPU raw compute, like, what we are giving it to our customers? Majority of our GPUs, like, today run on top of our platform. So, like, there is very, very little bare metal that we can do today.

48:37 Understood. Understood. Thank you so much. I'll come back in the queue. Sure. Here's the next question on the line of Varun Gandhi from Fin Avenue Growth. Please go ahead. Yeah. Hi. Hi, Varun. Hi, Tarun. Good to catch up again. Tarun, I noticed you guys attended a lot of conferences, a lot of trade shows this quarter and these two quarters particularly. Anything fruitful that you could share? Any client feedback? Any conversation that helps you improve your product, helps you gain some sense of... You know, from a technology standpoint, how competitive are you? Anything that you could share? Okay. So, see, essentially, like, it's a...

49:26 I don't know. Like, there are many ones. Basically, So, I think, like, even while we were, like, in the heart of Silicon Valley attending the biggest AI conference of this by NVIDIA. I think, like, a couple of blocks away, like, the conversation was not about AI at all. So now moving from, like, any one place with one set one set of people working on tech versus another set of people working on completely different, say, sector. Like, there is a lot of what you call gap in terms of, like, how people perceive and look at the how they are going to deploy and how they are going to use the technology.

50:18 So I think, like, the magic happens when you are able to bridge the gap between, say, the thinking of a customer in a particular sector with how you can apply the technology that you know. So technology does not, like, really solve the problem. It's the people who have to solve the problem. So technology is not like, okay. We're going to run a training. Now does training fall, like, a real world problem? Probably no. For someone in the fintech or a finance sector or insurance sector or a molecular research sector, like, you have to build the gap in terms of, like, what AI can do as a technology and how do you build the gap between the objectives of the customer who wants to deploy that technology and kind of, like, do stuff.

51:14 So that's where I think, like, you bridge the gap with the help of industry solutions where you say that, like, look, we know this part very well and you know this part very well. How can we collaborate together and co design a solution that works for you. And that also helps us learn something about a particular domain and, like, how technology can be applied to that particular domain. And I think it's the constant process of being engaged in the ecosystem where both the hands on technologists and decision makers frequent. So that's the overall idea behind, like, being So, Tarun, has has any of it flown has any of it flown into the business?

52:02 Yes. It's a Or it's a evolving. It's a it's a decision process. So, like, any any point in time learning are, like, exactly what they are, like, point in time learning. And as and when we apply those learning, like, obviously, try and publish those case studies. So... But that's a look back rather than saying that, oh, we are predicting that. This is what is going to work. So I think that's a longer journey than you could predict, like, but just by talking to people. So, yes, of course, there are very many experts who know better than us in terms of, like, how they see how they perceive the future. But then I think, like, somewhere in a very large world, in a very large time, you have to be having the humility of, like, saying that, like, we don't know, like, what is going to work. But be as I have enough to say that, like, yeah, like, let... Make it work together, like, whatever is going to work.

53:03 Got you. My second question is related to l and t. So they recently acquired 10,000 b three hundreds, and I understand you cannot comment on L and T and their business strategy. But then we, as partners, could use their idle capacity if they have or or or, you know, spin up some sort of partnership whereby you use your platform and the capacity provided by... The GP capacity provided by L and T. Any any sense, any ideation, anything there? We have a completely unplanned relationship with the. We are, like, we are a valued partner. Like, we are being worked together with them on... For certain many of the customers. That being said, that similar type of relationship we are building with many other partners as well.

53:55 So, essentially, we are always open to all possibilities of working with all our partners. Now these things happen when they happen. And, like, when they happen, we'll obviously keep everyone informed. But, like, in the ecosystem, like, there are very many players and, like, basically, like, all possibilities of working together with all the players continue to remain open. So it's safe to conclude that you guys are open to such an arrangement. And if if possible, you might open to work with, like, everyone in the ecosystem. Understood. That answers my question. Thank you very much. Right. Right. Thank you. Ladies and gentlemen, we will now be taking the last question in the interest of time.

54:45 I now invite our next speaker, Kaushal Sharma from Equinox Capital. Please go ahead. Yeah. Hi. Hi. Sir. Very good audible? Yes. You're audible. Please go ahead. Yes. Congratulation on good set of numbers. Just want to understand your procurement mechanism of the GPUs. Like, how many months or a period do we require to place any advance order for the GPUs to get it went live? And, sir, if we do we require to pay any advance against that? And if yes, so what percentage of CapEx is it? All these answers are, like, subject to change based on market conditions. So so, like like, we find that, like, this this order to deployment cycle can vary between three to six months, typically.

55:31 And, like, whether an advance needs to be paid depends on, like, the vendor. So whether they have a requirement of, like, selecting the advance at that point of time. So probably depends on their order book in some way. So, like, everything is, like, kind of, like, subject to massive changes, like, week on week or month on month about all the questions that you have asked. Currently, sir, there is just too much shortage of the GPUs and new new GPUs are coming. So don't you think that we need to pay any advances of current scenario demand and supply? Like, I am not sure how to answer that. Okay, sir. Got it. Thank you very much for answering question.

56:22 Thank you. We have the next question from the line of Bharat Kulati from Dalal and Broja. Please go ahead. Hi. Hi, Bharat. Hi. Thank you for the Thank you for the follow-up. Really appreciate it. Just on the margins again, Rajesh. I understand that you spoke about maintaining 70% plus EBITDA, But in terms of what our revenues are right now and what gross margins we've done for the... This this quarter, in the medium term, is this gross margin sustainable of 88%? And if you can just help us understand what has helped us achieve that 88% gross margin in this quarter also. I see it's the... It's... All of these numbers are, like, moving target. So, essentially, like like, these are, like, not, like, really quarter on quarter target that, like, basically, like, you can...

57:14 So I'm I'm pretty sure that, like, with the... If in a particular quarter, we do, like, a lot of CapEx at an in opportune time, like, so how these numbers change at that point of time or, like, if you build some of best period was of... And it's not yet. I guess, like, so many sectors are there. So But, Arun, sir, would it be fair that our full utilization, this gross margin is more than what we have been saying that, like, look, this is, like, a 70% plus kind of a EBITDA kind of a business. So I don't see any change in that overall target for the bill. Understood. And, sir, just on the next Blackwell that we are planning to install, do we already have any contracts set for that, or are we planning to get into a long term contract for that as we run for this batch? Just trying to understand how do we plan to that. We have not decided anything around the next lot of the 200.

58:16 Understood. Thank you. Really appreciate taking the question again. Yeah. Thanks. Thanks,. Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. We understand that several questions may have remained unanswered, and we encourage participants to reach out to the company through its investor communication channels, including email for any further queries. I now hand the conference over to mister Tarun Dua for his closing comments. Okay. First of all, again, I would like to thank everyone who patiently listened... Joined our call and patiently listened to us talk about, like, how we think. And we do welcome all investor queries to either to our investor relations team at E2E or you could reach out to us via the email ID e two e networks dot com.

59:09 And we are super happy to engage with all of you to try and build a better understanding of, like, how we feel and how we think about this business. And we hope that you have a great festival season, the valley season coming up ahead. And once again, thank you, all of you, joining us here today. Good night, all. Thank you. On behalf of E2E Networks Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.