Low code platform merely means that a customer can expand the software functionalities or build new applications using user friendly libraries (for example using drag and drop features to build a new process). That itself is not unique and most of the product companies call their platform as low code (like many have started calling them AI-enabled).
The main solution they offer is content management where you can digitize, review, govern and manage your content through its lifeycle. Most of the content in the organizations tend to be in unstructured format (pdf, word, ppt, jpeg, email etc) which accounts for roughly 90% of the total digital content that an organization creates. So that’s a big opportunity itself. Which is why I’m saying that they are currently in a good space. But that doesn’t mean their offering is differentiated or moated.
It’s a highly competitive space and range bound operating margins reflect that and you don’t see any operating leverage playing out in last 6-8 years although revenues have been steadily increasing.
Pls don’t think I’m criticizing Newgen or undermining their solutions. I’m just saying that one should take buzzwords like GenAI, lowcode, open architecture etc with a pinch of salt. As long as there is demand growth from end consumers all players in this space will do well including Newgen.
Disc- Also invested in the stock but not biased.
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