Newgen Software Technologies Limited Q1 FY 25 Analyst Conference Call:
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Revenue growth: Newgen reported strong revenue growth of 25% Y-o-Y for Q1 FY 25. This growth was driven by good business growth across all regions, with EMEA, India, and APAC showing growth.
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Seasonality: Historically, Newgen’s business has been seasonal, with Q1 being the leanest quarter. However, the impact of seasonality is slowly reducing.
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New client additions: Newgen added 13 new logos in Q1, indicating strong customer acquisition.
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Upselling and cross-selling: Upselling and cross-selling to existing customers are significant contributors to revenue growth.
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Product innovation: Newgen launched a new product, Newgen LumYn, an AI-powered hyper-personalization platform designed for the banking sector.
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Profitability: Newgen delivered healthy growth in profits and expanded margins. Profit after tax was at INR48 crores for the quarter, witnessing a growth of 58% Y-o-Y.
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Global expansion: Newgen is focusing on increasing its global reach, especially in mature markets like the US and Europe. They partnered with Finastra to offer better banking solutions and expand their market base.
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Investments: Newgen is continuing to invest in R&D and sales and marketing initiatives to support future growth.
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Employee growth: Newgen has been hiring aggressively to support its growth plans. They hired around 500 campus recruits in Q1 and are also doing some lateral hiring.
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Product Offerings: Newgen is focusing on expanding its horizontal product offerings (NewgenONE, LumYn, Marvin) which cater to broader functionalities. They are also expanding their vertical offerings to include areas like Trade Finance, Supply Chain Finance, and Insurance.
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Sales Strategy: The GTM strategy is primarily verticalized, with sales teams focused on named accounts in Banking, Insurance, Financial Services, and Government. Horizontal product sales are driven through partnerships and inbound leads.
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Impact of New Products: The newly launched LumYn and Marvin are expected to contribute to the top line and bottom line in the long term (3-4 years) as the sales funnel matures. They are not expected to have a significant impact in the near future.
In addition, the company clarified that ESOPs are granted to a broad base of employees and the financial impact is not expected to be significant.
Overall, the transcript paints a positive picture of Newgen’s financial performance and future prospects. The company is experiencing strong revenue growth, expanding its margins, and investing in new products and global expansion.
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