Good afternoon, ladies and gentlemen. Thank you for attending Quarterly Investor Forum for hSenid Business Solutions. As usual, I would like to welcome all of you. We are sitting same way like we did before. The investor presentation has been shared with you. We will spend this time to do a very quick overview. Nilendra will go through that. Then we will actually spend more of the time answering Q&A and whatever that you would like to clarify. With that, I'll pass it to Nilendra to kick off. Then both Nilendra and Sampath will be answering your questions and doing clarifications of anything that you would like to hear.
Thanks, Dinesh. Hello, everyone. Thank you once again for joining the Q1 FY 2027 investor call of hSenid Business Solutions PLC. We appreciate your continued engagement as we execute our strategy to become the most preferred HR tech solution provider in emerging markets. The quarterly earnings presentation was uploaded to the IR website shortly after the release of the quarterly financial statements. Before I get into the quarter's highlights, I'd like to briefly note a change we've made to our investor presentation this quarter. Historically, our presentations have included a wide range of financial and operating metrics. This quarter, we've streamlined our metric disclosure to align with global SaaS companies and also to focus on the indicators we believe are most meaningful to long-term investors and use the space this created to give you more insights into our product strategy, competitive strengths, customer success stories, and long-term priorities.
Also, starting this quarter, we will provide reconciliations for every non-IFRS metric that we reference in our IR materials. With that, let me walk you through our performance for the first quarter of FY 2027. We recorded a revenue of LKR 603 million for the three months ended June 30th, 2026. This is up 28% year-on-year and 15% quarter-on-quarter, with recurring revenue at 75% of total revenues. Exit ARR reached $ 5.7 million at the end of the quarter, up 26% year-on-year and 5% quarter-on-quarter, reflecting continued growth in our recurring revenue base. Normalized EBITDA for the quarter was LKR 100 million, with the normalized EBITDA margin improving to 17% compared to 2% in the first quarter of the previous financial year.
Net profit for the quarter, as per our financial statements, was LKR 51 million, representing a net profit margin of 8%. Free cash flow was LKR 44 million for the quarter, primarily driven by slower collections in April and May in Sri Lanka. We are focused on improving collections throughout the rest of the quarters of the financial year. As we move through FY 2027, our priorities remain focused on accelerating cloud and Lexi adoption, strengthening our go-to-market execution across focus markets, expanding our product innovation roadmap, and maintaining operational discipline as we scale. With that, our opening remarks come to an end. We will now move into the Q&A section. As usual, you can either click on Raise Your Hand button so that we can give you the opportunity to ask a question.
If not, send in your questions through the Q&A functionality of this platform, and we are more than happy to address that. Let me start off with, I think, some of the questions we've already received on the Q&A. Could you explain what is meant by the orchestration stage for hBS products? When do you expect the product portfolio to reach this stage? Maybe I can take that question from a product strategy point of view. On our slides, we've spoken about the orchestration stage. Essentially, if I just zoom out, we look at the product in the AI era of having four different layers. The bottommost layer is the system of record. That's where all employee data regarding the various aspects of an employee's life cycle within a company is stored. On top of that, you have a system of workflows that operate.
The third layer is a system of intelligence. That's where Lexi AI comes in, where we gather useful, actionable insights based on the data so that objective analysis can be given to decision-makers regarding talent before making any decision. The fourth and final layer is the system of orchestration. Here what we're trying to do is just go one additional step beyond simply providing insights and intelligence to action or execute certain things. This could be connecting with a third-party system, which can be an ERP, CRM, pushing or pulling data to and from it, and using that together with the HR context that lives within the HR software to provide even more organizational wide insights and execution. We have started our journey in terms of the orchestration layer.
In the coming several quarters you will see as we make release cycles, we will keep talking about the capabilities that we are unveiling. To put it simple, it's going beyond intelligence, which is what we have now launched, to have this intelligence together with other systems, talk to each other, push, pull data, and execute actions on behalf of the organization. Let me move on to the other question. Compared with the Philippines, Indonesia received relatively limited coverage in the annual report. Could you provide an update on the progress and outlook in the Indonesian market? Sampath, I'll turn that over to you.
In Southeast Asia markets, as we discussed, Indonesia and Philippines are focus markets. Our journey started Philippine. That is why there's a visibility on information we provide frequently. Philippines is in the growth stage at the moment. Indonesia, we started for full operation maybe 12- 18 months back. We have placed a team in Indonesia. Primarily, we start with partner development work as well as product localization work. More or less product localizations majority work we have done up to now.
Of course, things are continuing in the product localization work for maybe few more quarters as well, considering the country size and the complexity of the statutory layer. We have onboarded a certain set of partners. Now we are in the process of acquiring new customers. It is in the growth stage, so we can provide more information when things are really happening in the Indonesia market, but things are happening at the moment.
I will move on to the next question. The quarter shows a genuine operational improvement in margins and a return to profitability supported by revenue growth. Why did group operating cash flow turn negative despite LKR 66 million in PBT? I will read through the other two sub-questions and answer those three together. What is the quality and collectibility of the LKR 121 million increase in trade and other receivables? How sustainable is the profitability turnaround given the heavy contribution from Forex gains? To answer one by one, the group operating cash flow turned negative, I mentioned in the readout, because of, we believe the festival-heavy April, May months affecting the number of days available for cash collections. Of course, we see that reverting to normal collection levels now as we speak. We believe it was merely a timing issue.
The second sub-question, the quality and collectibility of the LKR 121 million increase in receivables. We have a very high degree of confidence in terms of the collectibility. These are usual ordinary course of business billings. In fact, just an additional piece of information there is that we follow a very objective, simplified ECL method-based provisioning policy. Provisioning also happens in a very objective manner. To answer that specific question, we do not see any risks in the additional trade and receivables or the invoicing that has been booked. On the sustainability of the profitability, yes, FX gains helped, but I think the key number to focus on is the normalized EBITDA margin. You have seen that number continuously improve as this turnaround or quality of revenue, recurring revenue increased beyond the kind of $5 .7 million mark where we broke even.
To answer the question, yes, the profitability is sustainable because of the higher quality of recurring revenue in the overall revenue number. Of course, yes, FX gains can add volatility to this as we go on, but the profitability per se is sustainable. I will move on to the next question. Could you provide an update on the pipeline for securing new customer deals beyond the ongoing on-premise to cloud migration? Once the migration cycle is largely complete, do you believe the company will continue to generate a healthy flow of new business? Sampath, I will turn that over to you.
Yeah. The migration work happens in Sri Lankan market mostly. That migration happens during last two years or so, more or less, that cycle is complete now. We start the GTM engineering work, demand generation activities, as we discuss within this investor call, like many times. There is a funnel-building activities happening, especially in the Southeast Asia region and the Africa region, and of course, Sri Lanka as well. We have a healthy funnel in all the regions we operate to cover the sales gap. I feel like we are in line with the whatever funnel size and the funnels to achieve the planned sales numbers. Of course, it is a little slow during the Q1, but that is usual pattern in Q1. Q2 and Q3, we expect that to go further. We are in a healthy situation at the moment.
I will move on to the next question. What led to the slower cash collection in the said months? I think we have addressed that. What does normalized DSO, days of sales outstanding, looks like? Also, has those been collected now? How much of those have been impaired? I partly answered the last part of that question. We follow a Simplified ECL model for impairment. There is no subjective picking on particular invoices to provide or not. It is a very mathematical equation-driven provisioning policy. In terms of DSO, we ended the quarter at a days of sales outstanding of 99 days, to be precise. If you look at that number from two years ago, it was as high as 160. Directionally, from 160 over almost eight to nine quarters, it has come down to 99.
If you extrapolate this from a planning point of view, we are looking at bringing it. We expect to bring it below 90 by the end of the financial year. Also to answer one of the sub-questions there, like I mentioned before, yes, the initial delays that we saw in the month of April and May due to the festival season in Sri Lanka has now kind of corrected, and we see collection levels reverting back to mean. Therefore, like I said before, it is only a timing difference. Moving on, the company's standalone profit exceeded the group's profit in the first quarter. Could you explain the key reasons for this difference?
The key reason that the company's profit is larger than the group's profit is because most of the market development activities are still happening at the subsidiaries, which are essentially where bulk of the, I would say, customer acquisition cost is parked. As you see our recurring revenue grow, we expect to have the subsidiaries return to profitability as well. But the fact that the front-loaded CAC is parked at the subsidiaries is what is driving this observation. There was no mention of the new deals either in the interim report or the investor presentation. Does this indicate that no new deals were secured during the quarter, or were there notable wins that were simply not disclosed? Again, I mentioned about a change in the format and, in line with most of our peers, SaaS companies listed globally, we wanted to keep our disclosures to that level.
However, since this question was asked, I can give an indication. Broadly speaking, there was about $330,000 worth of new deal closures booked in Q1. But again, like we said, we want to benchmark ourselves with all SaaS players out there, give more forward-looking information on the product strategy, on markets, how we win, what are our strengths, so that you could better assess our future potential. In that spirit, we've changed the level of disclosure.
We got the spread of sales itself from all the regional operators as well.
Correct. Moving on. Annual recurring revenue, ARR, growth moderated during the last quarter. Is it fair to conclude that the quarter's revenue growth was primarily supported by the on-premise business rather than the cloud ARR growth? I would say that's incorrect. Continuously, our on-premise business continues to shrink. I think you've seen all the numbers over the years. Partly that's driven by the migrations happening in Sri Lanka, and some in Africa also. But bulk of the new growth is coming from cloud. Even in Q1, out of the total bookings, basically upwards of 70% new deals came in from cloud. So there is no change in the mix there. Cloud continues to be the dominant driver of growth. Moving on. Could you elaborate on the LKR 46.8 million reported as other income? Was this a one-off gain?
Additionally, what is the nature of the LKR 17.8 million exchange loss reported in the interim financial statements? I'll take the first part. Initially, LKR 46.8 million essentially is the gain we make on all our dollar cash balances and dollar receivables predominantly. And obviously with the dollar appreciating and the rupee depreciating, this number was booked. However, you have to also keep in mind that part of this becomes recurring because our billing for Q2 then happens at this higher rate. So whatever the margin expansion that came from the currency appreciations, USD appreciation, LKR depreciation, stays with us as we keep billing at that depreciated rate. Moving on to the second part, the LKR 17.8 million exchange loss reported in the interim financial statements basically comes from the cash reserves we have in some of our subsidiaries, in this case particularly Philippines.
The collections there, some of it are in Philippine pesos. In line with the Sri Lankan rupee, the Philippine peso also took a hit in relation to the dollar, and this is what you are seeing as a OCI item, other comprehensive income or below-the-line item, coming in as an exchange loss, translation loss. Overall, how would you assess the company's performance during the last quarter, excluding Forex gains or losses? Has the business reached operational profitability? Yes, very much indeed. The normalized EBITDA figure that we mentioned at the start of the call and even on the IR deck, where in the annexures, we have given full reconciliation starting this quarter so that any analyst out there can fully reconcile the non-IFRS measures that we talk about on the call. We will be doing this as a best practice starting this quarter.
If you look at the normalized EBITDA, like I mentioned, it is LKR 100 million. Even if you take the D&A, we are recording a normalized EBIT in the range of about LKR 30 million- 40 million. Essentially, even if you deduct D&A, this is the core operating profitability of the business. I think that is why in response to one of the previous questions, I mentioned that this profitability is sustainable and obviously growing as we build on high-margin recurring revenues. On new deals, you have disclosed gross new deal closures in USD in the past, but the figure was not there in Q1. I think I have answered the question. How the pipeline and your expectations look for the rest of the year?
I think I explained that friction also at early discussion. Pipeline is growing because our GTM engineering activities are moving. That generates a decent demand at the moment. It is growing because we need three times the funnel size to close the annual target, so we are getting there. We can move with that, I think, strongly for next two to three quarters, including current quarter.
How is the sales and marketing costs going to look like in the future as a percentage of revenue? As a percentage of revenue, okay, let us look at it firstly from an absolute figure. We do not see major increases other than some incremental expenditure we might put into events, certain digital marketing and field marketing expenses. As a percentage of revenue, you will see the number initially being quite stable and maybe slightly coming down as well as we go into the latter part of the year. This is because obviously revenue growth, ARR growth, has been trending around the 25%-30% range. Of course, sales and marketing expenses do not grow at the same rate. Obviously from a percentage point of view, you will see that percentage coming down.
How we look at, and this is something I've been mentioning in several of our previous calls, how we look at the efficiency or the effectiveness of the sales and marketing spend is not purely as a percentage of revenue, but rather sales and marketing fully burdened costs divided by the net new ARR that we generate. So right now, based on the numbers we are showing in that relevant slide, we are about 98%, so roughly speaking 100%. That's where we try to be in terms of. I think the number is 103%. That's where we try to be in terms of making sure we grow sustainably.
As you can see, the private SaaS companies, these are self-reported survey numbers, and public SaaS, those numbers are publicly disclosed, are much more inefficient, spending close to 1.7x- 2.2x of annual net new ARR in terms of customer acquisition costs. So again, our number might go up slightly, but we want to stay well within the 120, 130 kind of GTM efficiency levels, which would mean that we are essentially being very capital efficient on our sales and marketing spend. Can I know what are your expectations beyond incorporating AI into the HRMS applications? Anything about entering into accounting-based applications?
I think overall, we're not getting into accounting-based applications, but of course, there are opportunities to expand in the same domain. We look at HR domain, how to add more value to our customers. So there are certain development happening on that sense, but we will limit our scope to HR domain at the moment.
If I may add something to that, the HR tech domain and space itself has a very large TAM. I think we've been talking about the total addressable market across the markets we focus continuously in our decks. When your TAM is that large, trying to prematurely diversify into different product categories is essentially spreading your resources and attention too thin. So right now, what we are focused is just keep our heads down, execute, get the customer acquisition wheel turning faster, and grow within our strong expertise, which is in HR and payroll. There's a question on the reasons for forex gains, losses. I think I've explained this. I'll move on to the next question. What would be the trailing 12 months P or forward P at the end of FY 2027? Any expectations? Frankly, we can't commit on any P-related expectations.
This is for the market to kind of determine. What we can tell you is, I think these are three points that we've been highlighting throughout our investor engagement. Point number one, we have created presence, brand presence, and are acquiring customers in markets that are very broad and deep across all these emerging markets that we are present in. So the TAM is huge. Point number two, unlike many traditional companies, a software company or a SaaS company has a product that is infinitely reproducible. So our scale-up journey is going to be very different to a brick-and-mortar company. Point number three, our unit economics are in a very healthy footing right now. I think we've spoken about this multiple times. 70%-80% of net new ARR typically flows down to PBT levels. I will stop at that.
These three vectors, these three drivers are very strong determinants of premium valuations. I'll stop there. It'll be up to the market to determine what that could be. How the new deals will impact from current situation, crisis situation in Middle East, Africa, and all those economies where GDP is declining. Sampath, do you want to-
Yeah. I think markets we operate are very clear. Southeast Asia, South Asian, Middle East, and Africa, only affected region at the moment largely is the Middle East region. So there's no major impact to our business because there's no considerable number generating from the Middle East region during last few quarters. So there's a slowdown in activities, but we are working hard to work on some of these deals. We are already working in the African, East African belt and Southeast Asia region. There's no major impact to the market we are working on at the moment. So things are moving. Even though here and there's a noise, but things are moving.
Thanks for the call and congrats on a good set of numbers. You have mentioned that the TAM for hBS is $10 billion. Given that hBS's exit ARR stands at $5.7 million, what would you estimate as the size of immediate serviceable TAM for hBS, and what is your penetration within that? Again, going into serviceable TAM, actually, you need to go by the market, so I'll not go through that theoretical exercise. Maybe just give you kind of a sneak peek. Say if you take Indonesia, for example. Indonesia has a population in excess of about 250 million people. Private sector workforce of about 100 million. Now, if you really look at the ICP industries, the industries that we are strong in, you exclude MSME, micro, small, and medium enterprises, typically organizations below 100, 200 headcount. You still have about a good 4%, 5% of addressable market for us.
In a country where roughly you have about 100 million private sector workforce, that is about four million headcount. If you simply assume a $50 ARPU, average revenue per user per annum, and multiply by the four million, you are talking of a $200 million kind of serviceable TAM in that country. In our $10 million ARR journey, all we need is to get 2%-3% of that serviceable TAM. You can work the math across the other countries we operate. Most of the private sector labor force kind of data is available on the public domain. The opportunity is very attractive, and all we need is some 5% market share in some of these focus markets, and that will get us easily beyond our $10 million initial goal. I will stop at that and let you do the workings. I will move on to the next question.
If we are going to model hBS, what can we use as a driver for top line? I would say, again, this is only a suggestion, and I will let all of you critique that and take whatever that may suit best. I would go with average revenue per user into headcount as a simplest driver, because ultimately, what matters to us is how much of headcount are we acquiring, because all these are per user or a pay-term business per employee per month revenue business model. I would use those two as the predominant drivers, and of course, build the other ancillary revenues around that. That is the professional services, the tracking devices, and the managed services. What is the revenue mix this quarter in terms of percentages? Again, that was part of our past data. Let me get that to you to give you a rough idea.
Okay, we have it. We have it even as part of the disclosures of this IR. Was wrong in saying that it is not. Roughly cloud being 68%, as you can see on screen, on-prem 14%, tracking devices 8%, managed services, payroll outsourcing 7%, and rest of it, 4%. It is available on slide 12, which is on the screen, and this presentation is uploaded on the IR deck.
Given this appears to have reached a high level of market penetration in Sri Lanka and considering the country's relatively low labor force participation rate, which naturally limits domestic scalability, the next phase of growth is likely to come from international markets. How do you see your performance management platform evolving beyond traditional lagging indicators such as quarterly reviews and feedback modules? What role will AI play in enabling real-time performance intelligence, predictive insights, and continuous employee evaluation? Sampath, do you want to take this?
Yeah. I agree with you, Nilendra. What is happening at the moment, there's a big discussion happening how these models change over time. I would say it's in the early stage at the moment. Companies are, because end of the day, you need volumes of data if you want to predict this performance and make the employee performance visible at any given point. Right now, what companies are trying to do is get the real-time data to validate the employee performance and make sure company performance is in line with employee ongoing performance levels. Over a period of time, this will change to get real-time visibility to employee performance with the overall organization performance.
AI can play a lead role here because AI will deal with the data layer and make sure employee performance is visible all the time to supervisors and management. Models are changing. Of course, the frequency becoming immaterial, performance appraisal frequency. That's where we are heading. Product also will head towards that.
There's a question on the revenue split between Sri Lanka, APAC, and MEA for first quarter. Roughly speaking, little under 60%. I don't have the exact numbers in front of me, but roughly speaking, little under 60% would come from the home market, with the balance two regions having the split for the balance component. Yeah, to give you exact numbers, the home market would be about 59%, all of APAC about 24%, and balance in MEA 16%. I'll move on to the next question. Last three years, your EBITDA has grown by 20%. Do you see the same levels of growth, or what's your forecast? Again, the best way to forecast EBITDA for a company like ours is not a year-on-year growth, but rather taking a flow-through assumption on the incremental recurring revenue that is generated. You can see our recurring revenue growth rates over the last three years.
If you look at it's been around a CAGR of about 30%-35%. Last quarter came in at 26%, so you can take your own view about the recurring revenue growth, and then applying a flow-through rate of that, you should be able to arrive at EBITDA levels. But to answer the specific question, I would say 20% is probably on the lower side of the expectations. Because of the high flow-through rate growth in a business like ours, where operating leverage is high and net new ARR has a high flow-through rate, your EBITDA growth rates have the potential to be much higher. Moving on to the next question. We are primarily a human capital management software company, right? Are we in a position to know what type of market share, compared to others, locally we are holding? What is the growth rate?
I think overall, when you look at the Sri Lankan market, if you look at the top 100 LMD companies, we enjoy 70% from that. So that shows the market share being enterprise HCM company. Sri Lanka, number of opportunities, as we repeatedly discuss, it will be low going forward. But of course, that is why we are opening up few new markets in other countries. So the sales will happen mostly from these regions. But Sri Lanka also will continue to give us business continuously. If you look at the records last few years, it is happening in the same fashion. There are no migration, major migration happening from on-premise to cloud, but there are new cloud businesses happening in Sri Lanka as well.
If I just also take a couple of minutes to add on the question about HCM, human capital management software. If you go 10, 20 years behind, you see the evolution started from HRIS, human resource information system, which is predominantly a system of record, to HRMS, where the scope increased from human resource being an information system to a human resource management system. And now, the word HCM came up about a couple of years ago, human capital management software. In fact, as a company, the future we see is that of a HCOS, and that is a category we believe we can champion, which is a human capital operating system. What's different from a human capital management system to a HRIS or HRMS is there was a wider scope of HR value chain covered, from talent to engagement, to rewards, to recognition, all that.
When we go from HCM to where we are planning to head, which is an HCOS, human capital OS positioning, what we are trying to bring in is the intelligence layer and the orchestration layer. So no longer should your system be where you store records and manipulate or work on these records, but rather this should be the system that you go and talk to, have a conversation before taking any critical talent decision. For example, we say when we position Lexi AI, what we tell prospects is that if you want to pick the top three performing people in your company, and deploy them to a new subsidiary or new business venture that you're opening, you should be going and asking PeoplesHR.
You should be asking Lexi AI to give an objective assessment based on all the biodata of employees that they have on the system, based on the performance reviews, based on the supervisor comments, development goals, rankings. The system can give you a very objective analysis of who are the top performers. And that is the intelligence layer. And going beyond that is the orchestration layer where you can connect to other systems and execute things on behalf of the humans itself. So that's where we foresee the system heading. Moving on to the next question, as government organizations across Sri Lanka accelerate their digitalization initiatives, are there any business or investment opportunities that could emerge from this trend? Sampath?
Yeah, we look at good opportunities available in this digitalization exercise, and we will work on some of the selective projects on ongoing basis. We will look at the profitability, the potential business opportunity, and based on that, we will work on some of the projects. But especially, we will limit to our scope of HCM as well.
There is a question about the ARPU now if priced in USD. Again, for sensitivity reasons, I will not speak about exact ARPU levels, but of course, give you the understanding that typically we find South Asia and the African region operating at similar ARPU levels, whereas Southeast Asia operating at maybe 3x- 4x of what we see in the other markets. And this is why we are doing what we are doing in terms of growing some of those markets aggressively. And I think it is a function of per capita GDP and affordability of some of these businesses, how big they have become as well. That is reflecting in ARPU levels. As far as I know, the tracking device segment faced challenges last quarter due to a shortage of semiconductor chips. Has that issue now been resolved, Sampath?
More or less, the issue is solved, but of course, there is a price increase on the product side. We are managing that. Problem is now solved, and now we can bring the items and sell. We had a good Q1 as well in terms of device selling, and we will continue that momentum to Q2 and Q3 as well, hopefully.
Okay, there is a question on the headcounts now. If you look at our public disclosures, you will see that the total headcount is above one million. But of course, you need to be aware that roughly half of this is on the cloud and the balance half on-prem. Some of that on-prem over a period of time will migrate, but there is a fair bit of on-prem that will stay on-prem, mainly because these are large governments or state-owned entities which have certain-
Semi-government entities.
Yeah, certain data residency and certain restrictions against cloud movement. That's a rough idea of where we are from a headcount point of view. Moving on, the Lexi Agent, is it a top-up service to the existing cloud service, or how does it work? What is the incremental revenue? From a monetization point of view, we've now set up the pricing, packaging, and we are monitoring basically AI monetization rates. We are at the early stages, but we should be able to report as we move into the next several quarters. Just to kind of give you a brief understanding, Lexi itself has three capabilities. One is what we call the Lexi Smart Navigator. This is something that floats around on top of the product, which essentially flattens the product, takes away the need for you to go through individual menus, submenus, click through different pages.
This can give you instant access to pages, data, and any quick actions. For example, today I approve leaves on our system, PeoplesHR internally, by just typing in leave approvals to the Lexi Smart Navigator, it gives me all the pending approvals that I have. I just approve and put in a comment on the quick action segment without even having to go into the absence module or the workflow module. The second capability is itself the Lexi Super Agent. This is where things are done, actions are done. Simple actions where you want to approve something, you want to apply a leave. Any approval, any request that has to go through a workflow, you can ask the Lexi Super Agent to do it for you. Again, takes away the need to navigate through the product. Then comes Lexi Insights, which we believe is the intelligence layer.
This we position essentially as a leadership seat or a CXO seat, we call it. The reason is it has access to all the data about all the employees, different aspects that are captured on the system, and can build a context graph of a very rich, valuable, holistic kind of insight about your workforce and give you the necessary inputs when you're taking critical decisions. Like the example I mentioned before, I'm opening up a new subsidiary or a new business venture.
Who are the top three guys who have performed well with business development skills that I should put into this venture? Lexi will tell you based on the employee context graph that it has built. These capabilities, I believe, are transformational, and hopefully as we monitor and measure the AI attach rates, we should be able to talk about it. There's a question, how does the company dividend policy look in the near term? Dinesh, do you want to comment on that?
Yeah. We will be actually monitoring how the performance. I think one reason that our primary focus is to grow the way that we have been growing and also to see where we want to invest. I think we all know that we did a large dividend payout about two years back. That's mainly because we felt at that point that there was no opportunities for us to do. Going forward, we will look at where are we doing, because from market development to growing the business is our primary focus right now because this is a time we all feel that market share is important, and being able to capitalize on that, I think, is something that we will do. But said that, we will keep an eye to see how our free cash flow and stuff like that, and then we'll make a decision on that.
Moving on to the other question, what is your current market share in Sri Lanka? I think Sampath touched on that. Different ways to look at it. If you look at the LMD 100, probably 70% of those accounts are customers with PeoplesHR. Sri Lanka for us is a good market where we have customers that have kind of long history with us, a lot of rich data, and that's why particularly Lexi AI becomes important because there's a lot that you can do in terms of monetizing this data and helping customers get more out of the data that they have, in terms of improving their businesses, in terms of improving the quality of decisions that they're taking on a day-to-day basis that will have serious impact on how they go about their growth.
We are driving Lexi AI as an expansion revenue kind of pivot, especially in the Sri Lankan market, given our rich market share. I think there is a question on the major competitors. I would stop short of mentioning names. I think a cursory Google search would give you many names of Sri Lankan vendors, overseas vendors who are selling here. I do admit that the market is very kind of granular, and the balance share of the market would be among dozens, if not more players. I will stop short of mentioning any competitor names.
Maybe what we can say is that our key differentiator is our ability to be able to do very complex systems that are not repeatable with some of the vendors that we compete with because of the historical reasons and the depth that we have gained over the years.
I think we have come to the end of all the questions that have been sent in on the Q&A. If there are no further questions, I believe we can wrap up.
Thank you for your time as well. Also, if you need anything, as we always say, you can always reach out to us, and our investor relations team will be very happy to accommodate you and clarify anything if you need any further details. With that, thank you so much for being today. Bye-bye.
Thanks. Thanks, everyone.
Thank you very much. Thank you.