Ladies and gentlemen, good day and welcome to E2E Networks Limited Q4 and FY 2026 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Rashi Khatri from Go India Advisors. Thank you. Over to you, Rashi.
Thank you, and good afternoon, everyone, and welcome to the Q4 and FY 2026 earnings call of E2E Networks Limited. We have on the call Mr. Tarun Dua, Managing Director of E2E Networks, and Mr. Nitin Jain, CFO of E2E Networks. We must remind you that the discussion in today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company may face. I will now request Mr. Tarun to take us through the financials and business updates, subsequent to which we can open the floor for Q&A. Thank you, and over to you, sir.
Yeah. Hi, everyone. Hi to all our team members, all our investors, and we hope that you have had a good last financial year. I will do a brief coverage of all the progress we have made during the last quarter and last year, and then I will hand it over to Nitin to talk about the financial highlights of this quarter and the overall year. Then we will open the floor for questions. In this year, we have a lot of milestones as a company that as a team that we have achieved. We have been able to use our base platform for large-scale GPU clusters, and we have helped LLM teams operate training on large clusters over the base platform.
With this, we have demonstrated a full stack capability of operating both bare metal and container-based large-scale deployments for NVIDIA-powered GPU infrastructure at a bigger scale. We have not only demonstrated that we have the ability to operate the infrastructure, but also successfully monetize the infrastructure at a much larger scale than we had proven last year. This is a testament to the strengthening of our technology and talent, which has been used to build very deep in-house capability across the entire five layers of the stack. We have done major software improvements to improve the reliability, performance, and scalability of our GPU infrastructure in the last many quarters. Going forward, we feel that we have been saying this a lot, that the future is all AI. This is a decadal story.
Now, given how the markets all across the world are reacting to the AI infrastructure usage being increased very drastically. I think we have been validated in putting up speculative GPU infrastructure. Where the world is divided between haves and have-nots, we are the haves in terms of having access to speculative GPU capacity where capacity is running out everywhere. That allows us to continue our growth. With regards to where we see medium-term and long-term growing in terms of the world shifting to GPUs from the CPUs, from rule-driven software to AI-driven software. We continue to explore how we can build more infrastructure under our management. Where we have explored equity, where we have explored debt, now we are also exploring a variety of private credit asset-light models to bring in rapid expansion to our GPU capabilities.
We have consistently met the NSF benchmark for performance for inference or training or GPU deployments under our management. We expect our Cluster 1 , B200-1024, to go live somewhere in mid-May. In a couple of months, we are expecting to be able to deploy another cluster of 1024, which has already been planned. Then we are very strongly positioned to capture a significant offtake in the Blackwell generation of GPUs, apart from continuing to run very strong on the Hopper generation. Apart from this, we continue to build a plan around B300, GB300 and Vera Rubin deployments. We will continue to keep increasing the GPUs under our management and under our direct deployment, both through partnerships, through direct acquisitions, and by exploring various financing models that can help us procure more GPUs. We continue to focus on that.
We continue to focus on our end-to-end project management capabilities to deliver AI infrastructure to AI services and AI product companies, AI digital natives, enterprises in the BFSI and other sectors. We will continue to work towards that. Okay. I think that pretty much covers it. This has been a good year and a good quarter. Pretty much our strategy has been validated over the last many quarters. We significantly continue to add to our technology stack in terms of having these tech talent in-house to be able to do stuff. We gave a certain guidance in terms of where we would be by the end of this quarter, a couple of quarters back. I think we have more or less met and exceeded that target and we hope to continue to do better in the future.
Given that the market is growing very positively and it is a broad trend. There can be, again like we have mentioned in the past, that there are ups and downs, but ultimately this is a market where the GPU utilization is going up, the demand for tokens is through the roof. India being a country of more than 1 billion people on phones. Of course, even if they were not on the phone, there is an inherent ability to treat every possible piece of information that is going in and out of people, in and out of machines, in and out of enterprise systems, to be described in the form of tokens. Tokens can be representing voice, text, any other form of data, whether invisible spectrum, visible spectrum, audible voice, inaudible sound waves, ultrasound or whatever. Everything is tokenized data for AI.
India as a country generates a lot of data. We continue to believe very strongly in the long-term India story of AI factories being built here and India becoming the AI factory of the world. With that, I would like to hand over for more numbers-driven financial highlights talk to Nitin, and then we will open it up for question and answer. Nitin over to you.
Thank you, Tarun. Good evening, everyone. Thank you for joining us today. I will walk you through our financial performance for the first quarter and full year FY 2026. Q4 FY 2026 again witnessed a good quarter for E2E Networks. We have demonstrated our ability to scale AI infrastructure rapidly, achieve high utilization across GPU cluster, and convert capacity into strong revenue growth. Most importantly, we have been able to drive our EBITDA margin in Q4. Let me start with the quarterly highlights for the Q4. Revenue stood at INR 956 million, which is up 186% year-on-year and 37% quarter-on-quarter. EBITDA stood at INR 581 million with EBITDA margin expanding up to 60.7%. Profit before tax turned positive at INR 86 million compared to a loss of INR 75 million in Q3. Tax stands at INR 64 million.
This performance reflects INR 120 million swing in profitability sequentially, driven by operating leverage and a strong execution. EBITDA margin expanded by 413 basis points sequentially. At the same time, depreciation increased to INR 513 million in Q4, reflecting ongoing infrastructure investments. Despite this, we achieved positive EBIT and positive PBT. For the full year FY 2026, revenue stands at INR 2,456 million, which is up 50% year-on-year. EBITDA crossed INR 1,263 million, which is up 30.6%. However, we reported a tax loss of INR 156 million, which is driven entirely by the depreciation on our GPU infrastructure investment. Our core business remains strongly cash positive, operationally profitable at EBITDA level. As utilization continues to ramp up, revenue will progressively outpace depreciation, improving reported profitability.
To conclude, Q4 demonstrates our infrastructure investments are translating into revenue, and we are firmly on a path for growth. Thank you for the time. Now I would open the floor for the questions.
Thank you, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Bhavya Gandhi from Bajaj Alternate Investment Management Limited. Please go ahead.
Yeah. Hi. Thanks for the opportunity. First question is regarding the asset-light model that we are looking out for with L&T. Could you throw some light how will the asset-light partnership structure be? What sort of arrangement we have?
First of all, of course, we have an MOU with L&T to monetize the GPU infrastructure that they are building. That is still in exploratory stage. As the GPU gets deployed and we start our income monetization, as we know more and more, we will talk more and more about that. That being said, this is not an exclusive arrangement, so we will continue to operate at an arm's length with L&T, and we will continue to explore other partnerships of similar or different nature as well. There is a long gap between, say, pure debt versus pure equity. There are a number of structured possibilities in terms of figuring out how to finance the GPU in partnership with a lot of different types of partners with different objectives. We will continue to explore all those partnerships.
As and when we reach a conclusion on any particular partnership, we will obviously keep everyone informed.
Sure. Will it be margin accretive? Because the CapEx is going to be on your partner.
It is too early to say, Bhavya, how would the numbers look like. It is very early to say how those things would look like.
Okay.
Unless the structure is finalized. Obviously, we all work for a corporate, so we will not do anything which does not earn us the profit. That being said, how to put numbers to that is not something we can do today.
Got it, sir. On the MRR, would you like to guide for the next year? Because you have been doing this CapEx from your own pocket also this year.
Yes. We will continue to focus on growth, just the same as rest of the market is growing. We want to be very growth-focused. That being said, I think it would not do justice to do a MRR guidance for one year in the future. I think the future is changing very rapidly week on week. It is obviously impossible to give a week-on-week guidance on MRR. It would be better to watch it quarter on quarter than predicting four quarters in advance.
If you can just throw some light on the asset turn for the CapEx that we are doing, at least some sort of understanding we can get in terms of-
The CapEx.
I think we want to get the framing away from things like asset turns. Essentially, don't look at us as an asset monetization business. Look at us as a technology business. I think there was a recent conversation around the tokens becoming more valuable. Same set of tokens that were being generated by, say, open source AI or closed source AI, what used to produce, say, X amount of value, we are increasingly seeing that as the accuracy, efficiency, capabilities of AI increases, then the generated tokens also become more valuable for businesses who have figured out how to utilize those tokens in their business. Which means that setting up ourselves for looking at the value of our outcomes based on the size of our assets doesn't do justice to the business.
Ultimately, we want to get away from saying that, okay, this infrastructure produces only X amount of value. We will continue to explore options for how to produce more value from the same infrastructure by figuring out where the tokens are more valuable.
Got it. Fair enough. Okay, sir. That's it from my end. I'll get back into the queue. Thank you so much.
Thanks. Thanks, Bhavya.
Thank you. Our next question comes from the line of Keshav from Niveshaay. Please go ahead.
Yeah. Thanks for the opportunity and congrats. Yeah. Thanks for the opportunity and congrats on the great set of numbers. Sir, you procure the Blackwell.
Hi.
Yeah. Hi, sir. Am I audible?
Yes. Please go ahead.
Hello? Yeah. Sir, you procured the Blackwells way back in the early quarter, and data has been live. What is the reason behind the delay? Are we facing some kind of procurement issues or something from NVIDIA or?
Global supply chains have been impacted somewhat, so the delays are always for want of a horseshoe nail. We have been working very diligently towards making sure that everything is planned out and everything gets delivered on time. You can't control every single component, and sometimes some components can be the most critical ones from the point of view of getting the entire deployment done. We are targeting the first deployment to go live before mid of May. Keeping our fingers crossed over there.
Got it, sir. Sir, in this quarter, the GPU demand is very strong globally and people are seeing that all the GPUs are sold out, including the old ones. How are you seeing the trend in the domestic market? Are we also experiencing the same or is it a different situation in here?
Okay. I don't think I understood your question, but let me try to answer what I have understood. Obviously, it has turned somewhat into a much better market than it was a couple of quarters back, especially for people who have the GPU infrastructure in place. That being said, as an Indian company, we are very focused on India first. Wherever we get an opportunity to support Indian companies, we definitely like to do that. With that in mind, basically, we always prioritize India first, then we are also happy to support the global infrastructure needs today. I hope the answer is in the right direction towards what you were asking.
Yes. Sir, just definitely. I was just trying to ask, demand has been strong globally that the GPU quotes got sold out.
We are seeing demand both India as well as globally. It is strong both ways and we definitely try to prioritize India. Wherever the demand comes from, eventually, we are happy to fulfill it.
Got it. One last question from my side, that employee cost increased this quarter. If you could give some color on that, like what the key driver behind that price?
See, as we grow, we kind of start figuring out more and more interesting problems that need to be solved in this space. Obviously, our goal is to go towards what we call higher value tokens, and that obviously requires the application of quite a high level of talent. As we obviously grow, the base effect would still be there. On the other hand, we want to maintain a balance of not losing out on future opportunities because we didn't invest today on what was required 12 months later or 18 months later or two years later.
Got it. One last thing, like if you could also provide the GPU utilization levels, if possible, like for this quarter.
See, broadly, across our entire infrastructure, not just GPUs, I think we are looking at 80%+ utilization. Certainly, across the quarter, I would say only in the March month, we are looking at 80%+ kind of utilization. Certainly less than 85%. There is elasticity in terms of basically how we can increase the utilization further over this.
Got it. I will get back into this. Thank you very much.
Sure. Thanks. It is okay.
Thank you. Our next question comes from the line of Bharat Gulati from Dalal & Broacha. Please go ahead.
Yeah. Thank you for the opportunity.
Hi, sir. Just wanted to get a breakup of what is our MRR breakup currently. Can you give a split between IndiaAI Mission, enterprise, and also a split between what would the GPU contribution of that MRR be as compared to CPU?
See, I think broadly, the way things are progressing, in another couple of quarters, I think GPU contribution would be closer to 85%-90% over coming quarters. That being said, all these numbers are fairly dynamic. In the sense that they vary very rapidly from a week to another week. I wouldn't like to and the sample size today is fairly small. What's the split is something that we don't want to worry about today. As we grow the cluster sizes to a much larger number, then it would start making sense to talk about like, okay, Hoppers, we've got a couple of thousand of them. Then Blackwells, we've got a couple of thousand of them. That's the point at which it would start making sense to say, "Okay, what's happening on Hoppers?
What's happening on Blackwells?" Today, the entire universe of GPU, CPU, storage, all of that stuff that we have is fairly small to put a very strong split around those numbers today.
Fair enough. But could you just give a MRR split between the IndiaAI Mission and our enterprise or our SME clients? Just trying to get an idea of what kind of visibility do we have in that INR 374 million MRR. Also just to add on to that, before that, our MRR for the previous two months, if we average it, would come to like a INR 290 million MRR. Just trying to understand that spike that came in the last month. What was the reason for that spike, and also how sustainable is this?
It's broadly an increase in overall utilization. That has led to the increase in the spike in the March month. From the perspective of overall split, I think the IndiaAI kind of like. So basically, the overall government business, across this quarter has not exceeded more than, let's say, 35%-40%.
All right. Is there some particular reason for that? Because ideally, our IndiaAI Mission was supposed to start in the month of January. We are in March as of this quarter's reported numbers. So what kind of ramp-up are we seeing in that? And just any kind of timelines and what kind of revenues in terms of MRRs do we expect from that?
The way we have always looked at IndiaAI Mission is that we are trying to, obviously, like we said, that we are supporting India, we are supporting IndiaAI Mission, we are supporting Indian companies, and we definitely give a preference to all those workloads. That being said, whatever capacity is not off-taken, we are not trying to force anyone to off-take any capacity from us. So we are very happy to sell it to outside the scope of either the AI Mission or the government workloads. So we have enough customers across multiple segments to solely rely on one revenue driver growth. That being said, we continue to work very closely with the AI Mission for the coming generations of GPUs as well. And we are hopeful that we will continue to collaborate, continue to work together, continue to solve problems.
Just trying to understand that India Mission was almost all our Hopper and Hopper series GPUs were given to India Mission within 80% utilization. But India.
No, we have not scaled up to that extent. Majorly, whatever was the scale required by the allottees of IndiaAI Mission, we have provided that scale. But we have not insisted on them having to increase their scale without having the need for that. We are quite okay with that.
In terms of our revenue currently, what kind of clients are we currently catering to and what is the pipeline? You said mid-May we expect Blackwell to get deployed. Do we have any firm orders?
We are on a very small base. It is kind of like, okay, there are GPU customers everywhere in the world. There are GPU customers in India, there are GPU customers outside India. Every possible segment that you can think of, whether it is enterprise, whether it is BFSI, whether it is education, everyone needs GPUs. It is practically almost first-come, first-serve today. The nature and profile and putting a stack on, okay, this much of our business comes from here, this much of our business comes from there is very premature. I think we need to grow the base of GPUs to a couple of tens of thousands before these numbers start to make sense. Today at a very small base, none of these numbers would make sense. Kind of track and then say that, okay, what is the kind of number this quarter?
It will change next quarter.
Would it be fair to say that until we do not build a huge base of GPUs, our MRRs will be lumpy in nature? Is that what you are trying to iterate at?
No, I think the demand has secularly changed in the GPU world. From the era in which the lumpiness was there because our base was even smaller, I think we have come a long way over there. That being said, the lumpiness will continue to decrease as we continue to build more and more volume of GPUs under our management.
Out of the INR 374 million, what exactly would be long-term MRRs that at least we are seeing the visibility for the next 8-10 months or a year or so?
See, we are not very focused on. We have a balance of basically thinking about what needs to be six months, one year, month on month, which is preemptible. We are doing a whole series of them. It is a week-on-week effort to figure out that, okay, what is it a customer wants to sell hourly? What is it a customer wants to sell weekly preemptible? What is it a customer wants to sell monthly? What is it a customer wants to sell yearly? That being said, wherever larger customers are involved, we try to do at least a six-month to one-year visibility with our customers. And increasingly, for even larger customers, we are trying to look at even longer visibility to at least two years to even going up to three years.
But that being said, our view is that as tokens become more expensive to generate and they generate more value for people, it is better to not put all the eggs in the long-term basket. Have a judicious mix in very short-term contracts and medium-term contracts and some degree of long-term contracts.
Got it. Just one last thing, so in terms of the Blackwell that we expect to get deployed in May, can you give any idea in terms of who will be the customer? Will it be an enterprise IndiaAI Mission, an SME? When would that customer's revenue start to come? Will it come from May or will there be a lag?
We will announce that after closing that particular deal instead of saying anything speculative today.
No, fair enough, sir. Thank you. That's it from my side.
Thank you. Our next question comes from the line of Nishant Joshi from Equisense Advisors Private Limited. Please go ahead.
Yeah, hi.
Good evening. Sir, I have one question. As you said, company is building capital assets using—
I am sorry to interrupt you, Mr. Joshi, but your voice is not audible.
Sir, it's now audible now?
Yes, please proceed.
Sir, I want to say that as company is planning to build assets using debt as well as equity, and subsequently intend to go for the asset-light model also. Will this change our business model? Means instead of providing hardware, we would be providing more of service as we'll be offering our TI platforms. Will this lead to a change in our revenue model?
Think of this as an expansion of the number of business models without shutting down any of the existing business models. We will continue to own, continue to operate GPUs, we will continue to acquire new GPUs, we will continue to expand the partnerships to bring increasing number of GPUs under our management available through our TStack platform, which operates at multiple layers. Where it is the choice of the customers what layers they want to buy. Nothing is changing from the point of view that, okay, we are not going to do this or we are not going to do that. We are simply saying that we are going to do additional number of things to expand the universe of our thinking to do a lot more than what we are doing today.
So sir, it could be an ideally additional line of revenue you mean to say?
Absolutely.
O kay. That was my query, sir. Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants, we request you to kindly limit your question to two questions per participant. If you have a follow-up question, please rejoin the queue. Our next question comes from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Yeah. Am I audible, sir?
Yes, you are.
Okay. Thank you very much, sir, for this opportunity. I just wanted to understand now at a MRR of INR 310.4 crores, what is our capacity utilization, and on what capacity?
This is closer to overall capacity utilization of around 80% in the March quarter.
On a capacity base of 3,900?
Yeah. This is like CPU, GPU storage, all capacity put together. The utilization is closer to 80%.
Closer to 80%.
Yes.
I think we have around 2,050 lined up in the next, what, 6-12 months, right?
2,048 plus some spares that we are planning to deploy in this financial year. Starting from May, where the first lot of 100 is expected to go live.
By FY 2027 end, we would be targeting around 6,000 of capacity.
I wouldn't want to place a limiting number over there, but you could say that's the minimum number.
At least that. Okay. Understood.
Yes. That part is already visible. That part we've already spoken about. Yeah.
Understood. You mentioned around 80% - 85% utilization by March. I mean, you are talking about by March 2027 of this expanded capacity? I mean, how-
No. This is the previous one by March.
Okay. Previous March only. Understood. My second question is on your fixed assets. We have got around INR 1,500 crores out of fixed assets, right? Last two years, CapEx has been around close to that only. So this entire is a depreciable asset. I mean, would that be a fair assumption?
I would let Nitin put a perspective on that.
Yeah. The entire fixed block is the depreciable asset which constitutes of the new B200, which is currently displayed as CWIP.
Correct. What is the amortization schedule for this? Is it three to four years, maybe?
Six years.
Six years. Okay. Understood. What would be FY 2027 CapEx target?
Like we said, we are already planning to deploy 2,048 B200. That is already in place, as far as our known plans are concerned. That being said, we are not limiting ourselves to those plans. We continue to deploy capital under various business models judiciously to expand the GPU footprint fairly rapidly.
Any number you have? I think FY 2026 was close to—
A look-back is more important than putting a number in prediction.
Okay. Understood. That will be it from my side. I wish you all the best. Thank you.
Thank you.
Thank you. Our next question comes from the line of Varun Gandhi from Finavenue Growth Fund. Please go ahead.
Hi, Tarun.
Hi, Varun.
My question is on GPU rental prices. Are we seeing pressure on them? I ask this from two aspects. The first aspect is technologies advancing rapidly. We see the Rubin architecture has been disclosed by NVIDIA, which is much more cost-efficient for inference compared to even your Blackwell architecture. Number two is the competition that's been ramping up across domestic competitors. Are we witnessing any sort of pressure on GPU rentals right now, or do you foresee that in the near term?
See, I think broadly the trend today is that there are not enough GPUs in the world that people want to buy and deploy. That's the current trend. Now, whether this trend remains for how long, is hard to predict. But the broad secular trend has been there, that basically there are AI believers and there were AI non-believers. I think the proportion of non-believers is slowly dwindling. It's quite clear that basically, we are barely a speck in the suspense in terms of utilization of AI. We have looked at so many of our customers, so many of the organizations we work with, including our very own.
Where we say that, "Okay, is it the case that our AI utilization is to an extent that we want it today?" The answer for ourselves that we increasingly get is, "No, this is going to be more like 10x, 20x, 50x of where we are today in terms of how we are utilizing AI." AI is not coming out of the IT budget. AI is essentially coming out of your budget for the capabilities that you're building for the business. That being said, I don't think the demand environment in the foreseeable future is going to be changing negatively for long periods of time. I don't think that's going to be the case from the visibility we have today. We don't see that there is any negative pressure on the pricing today.
In fact, there are, I think, good set of tailwinds which are slowly inching up the prices rather than a decrease in pricing.
Got you. From a demand standpoint, we are not seeing any sort of negative, but from a technology advancement standpoint, let us say if the Rubin architecture comes in live in this year and it should. Would that pressure—
There is a lot of workloads that will go into production where they will continue to operate on the targeted architecture. Typically, it is like a funnel kind of a growth where the next layer of the funnel is bigger than the previous layer of the funnel. Which means that the demand for existing GPUs will continue to remain very strong. Demand for even the MPS series has remained strong, Hopper series has remained strong.
Tarun, I understand the demand has remained strong. But let us say two years ago, the GPU rental prices for Hopper H200, are they same today? Or they are 30%-40% lower than what they were quoting at two years ago?
I think taking the case of two years ago is slightly anomalous from the point of view that I think that was one particular year in which the GPU demand went from, say, one to ten. I think that capability-driven shortages, where the capability to print that many GPUs had to be built very rapidly. That created, I think, a local maxima of pricing. But broadly, we are seeing that there is stability in the pricing for GPUs over an extended period of time. Typically, we feel that it is possible to definitely use and utilize the GPUs over a seven to eight-year period. We do not think that the GPUs are a two-year story or a three-year story and then there is something available at a much lower cost and we are able to shift, and those shifting costs are very reasonable. That is not the case.
Your entire test-driven cycle for doing AI on a new chipset is like a whole other set of expenses that you don't want to do if your job is getting done by a GPU which is available at a very reasonable price.
Got you. My second question is, at the beginning of the call, you touched upon how you significantly improved your software architecture. Could you just give me a brief. If you could just highlight a brief example of how you've done that. You iterated that you're now trying to capture high-value tokens. Is there some sort of example that you could showcase?
This is broadly from the point of view is that the tokens themselves today are more valuable. It's just a point of choosing the right set of tokens that people are going to utilize. It's not like a strategy statement to go and capture one particular set of high-value tokens today. It's a broad holistic outlook that ultimately we have to go and figure out which are the high-value tokens. That being said, from a platform improvement perspective, we have been working on things which are required by people running training on larger clusters, people who are running inference, how to support them, people who want to build rapidly the pipelines reliably across larger number of GPUs, and understanding of what is it that AI data scientists do from a being-there-done-that perspective. We have made improvements in all those areas for productization of our feedback.
Right. Just as an extension to this question, see, we're very well-positioned to capture the sovereign AI tailwind, and my understanding is that BFSI companies would be a key client base over there. Is there any sort of strategic development that you could share where you're partnering with some sort of SaaS companies or other software companies and trying to offer a bundle of software plus compute? Is there something you could help us with?
Yes. As we do something, we will definitely share that with everyone over here. As things happen, we will do a look back and say that, "Okay, this is what we have done.
Okay. But there is nothing that you can share in terms of your thought process over here?
See, we continue to draw out an opportunity. Once we capitalize on, we will come and inform the market.
All right. Thank you so much.
Yeah, thank you.
Thank you. Ladies and gentlemen, a reminder to all the participants. In order to ensure that the management will be able to address all the questions from the participants, we request you to kindly limit your question to two questions per participant only. If you have a follow-up question, please rejoin the queue again. Our next question comes from the line of Abhishek from InCred Equities. Please go ahead.
Yeah. Hi, Abhishek.
Hi, sir. Thanks for the opportunity and congrats on a great set of numbers.
Thank you.
My first question is about the guidance commentary. If we summarize your comments on the demand, it appears to be really strong. We have a visibility of 2048 GPUs. Then we said that we don't want to get fixated on the guidance. Just trying to understand that the purpose here was not to get fixated on the numbers rather than any worries in your mind about the current macro. Is the understanding right?
Yeah. We are not worried about whatever numbers we give, whether we will be able to meet them or not. I think it's like, we don't want to give an underwhelming number without first exploring over week after week, over like 52 weeks, like what we are capable of doing. So it will become sort of like a limiter for us, ourselves, to say that, okay, we are only to meet this number. That's why we are not putting a number today.
Perfect. That's very helpful, sir. The second question is on the pricing. So contrary to the prior question, the recent articles are suggesting that the GPU spot rates for April have gone up substantially higher. So for an H100, the prices are up anywhere by 25%-30%. Can you just—
We are seeing that. We are looking at that. That being said, we try to capture some of that, but then that being said, we are also trying to support the Indian companies and India as a country. We want to have a balance between long-term and short-term. Short-term, of course, we want to make more money, and long-term, of course, we want to work with the kind of customers who will sustain and grow on our infrastructure over a long period of time.
Perfect. Sir, just last one data point from Dipit sir. The depreciation for the next quarter should be up by around INR 25 crores a quarter, right? Is that assumption right?
I will let Nitin answer the questions around the depreciation. Nitin, over to you.
Sorry, could you repeat again?
Sir, the depreciation for the next quarter should go up incrementally by INR 25 crores a quarter. Is the assumption right?
Why do you expect that?
Because of the B200 cluster.
B200 cluster would be that we are saying the timeline of mid-May. So that's where there would be an increase in the depreciation, but not to that significant effect that what you are telling us.
Okay, perfect, sir. That is very helpful. Thank you for taking my question and best wishes for the next year.
Thank you, Abhishek.
Thank you. Our next question comes from the line of Neil Munot from PICO Capital.
Hi, Neil. Sorry.
Hi. First, thank you for the opportunity. My first question is building on this participant's question. Is the capacity utilization-
I am sorry to interrupt you, Neil, but your voice is breaking.
Is it better now?
Yes, please proceed.
Yeah. The first question is basically building on participant's question. Is that the 80% utilization that you are talking about, I am assuming this is excluding the new B200s that are—
Yes, that is excluding the B200, obviously.
Yeah. When we talk about the 80% utilization, with respect to the remaining capacity available, have we kept these aside for POCs or demand is still ramping up in that sense?
No. The demand is still ramping up over there. It is like all sorts of different types of capacity. They all work in different combinations. An ideal utilization number could be, it depends on basically where do you enter. But that is not a limiting factor on the MRR from a very straight line perspective. For instance, like the same particular piece of hardware could under different circumstances, be billed at widely varying rates.
What is my assumption?
These are all averages, essentially. These are all important from the look-back perspective. This is our assumption on that. We are doing what is sort of like an 80% capability. Now, 80% could be 80% could be maybe 85%, 80% could be even 75%, maybe even 70%.
Okay, understood. Sir, with respect to the demand scenario in B200, have we closed any deal mission?
We have not closed any deals from the Blackwell capacity which is going up as yet. Obviously, once we close the deal, we will inform everyone over here.
Is the reason ramp up or is the reason that we are still closing POCs or in that sense?
There is a lot of interest in the Blackwell capacity that we are building. We are working towards with multiple customers to figure out what sort of problems they need us to solve for them, and what is it that they are looking at from us. We obviously want to work with the customers that are best placed to utilize what we have to offer.
And sir—
Neil, please rejoin the queue if you have a more question. Thank you.
Okay, I am sorry.
Thank you. Next question comes from the line of Hardik Gandhi from HPMG Shares and Securities. Please go ahead.
Hello. Hi, sir. Thank you for the update.
Hi, Hardik.
Congratulations on a set of good numbers.
Thank you.
Just wanted to push on a question asked by the previous participant. I think majority of the investor group just wants to know whether the revenue uptake is due to any lumpy nature, or are you seeing any sustainable growth in the long run? Because in the last December and March, we suddenly dropped the numbers. We stated that the startups were no longer wanting our ecosystem. We just want to know from a long-term perspective or at least from a—
Sure. Let me try to answer that question as best as possible. See, the lumpiness is a part of the nature of the business, the lumpiness will keep going down as we keep increasing our GPU base. That being said, we are currently seeing the kind of customers who are buying these GPUs have sustainable long-term workloads. These are not of the short-term nature for most parts. We do expect to have sustainability for these workloads over the medium term. I don't think there is going to be a massive amount of lumpiness in the near term. Medium term, of course, as the number of GPUs grows, I think the effect of lumpiness would be far more muted than it has shown up in the past, in the early days of us building the capacity.
Right. The second question from my side was to understand again on this part itself, what percentage of revenue are we allocating to long-term contracts so that our MRR.
It is of a dynamic nature. It is not possible to predict.
Yeah. We are not predicting. I am just saying that from a—
We are not setting any hard lines over there.
Yeah.
See, we are not setting any hard lines over there. There are, I think, far more number of variables to consider than it would be possible to describe over here that, what to pick up when, in terms of customer interest. I do not think I would be able to give a very fair, fixed answer to that question.
Sure.
We are definitely interested in having some percentage of long-term contracts. What that percentage will come out to be is something we need to look at it on a look-back basis when the size and scale of the GPU installation is sufficient. I think in the short term, there is no clear-cut answer to that.
Correct. Just a small data point, if you can. What percentage of revenue did come from customers outside India versus domestic for the last quarter?
I will let Nitin take a stab at this question.
The international revenue for the last quarter is roughly around 35% odd. 35%-37% is the international customer revenue.
Okay. Yeah. Thank you. That is really helpful. Appreciate that. Bye.
Thank you. Our next question comes from the line of Srinivas K Trust Investment Advisors Private Limited. Please go ahead.
Hi, Srinivas.
Hi, sir. Am I audible?
Yes. Loud and clear.
Yeah. Sir, what percentage of Q4 revenue came from inference workload versus training, and what would be the future split up of this mix, at least directionally, sir?
I think there is a lot of confusion about what percentage of inference revenue versus training revenue. I think these are not super hard lines. Sometimes the same set of GPUs are used by the customers for bursting up the inference workloads when the inference workloads are high. At a time when the inference workloads are low, they get converted to training. The workload management is far more flexible today to point to, okay, what percentage of inference, what percentage of training today. I think again at a much larger scale, these numbers would become clearer. Today, of course, it's hardly possible to super differentiate between, okay, who is using that one GPU, four GPU, eight GPU, 16 GPU cluster, either for training or for inference. That being said, majority of revenue is still closer to training than to inference.
Okay, sir. You said 6,000 GPUs by FY 2027 at least minimum. Right? What would the upside, sir, could you deploy 8,000 on upside, 8,000 - 10,000?
I do not want to put any numbers right now. Let's look at those numbers as a look back over coming period of time, rather than putting out a number today.
Okay. Thank you very much. Best of luck.
Yeah. Thank you, Srinivas.
Thank you. Our next question comes from the line of Rohan Nagpal from Helios Capital Management. Please go ahead.
Yeah, hi.
Thanks for the opportunity. Hi, thank you for the opportunity and congratulations on the results. My first question is: you said that there is a variety in terms of your current MRR being short-term, medium-term, slightly long-term. Could you provide some directional commentary on how much of that MRR is six months plus or one year plus?
I think one is we are still on a very small base of GPUs. We are not doing any hard split in terms of where we want to be or where we are today. It is fairly dynamic and rapidly changing, both with new capacity coming up online. All these numbers are subject to very rapid and very wide amounts of change. These do not add to any understanding for anyone today.
If there is a 20%-25% increase in the spot price, then capacity that is contracted out for six months or one year will not be in a position to take advantage of any increase in realization. Right? I think it would be somewhat beneficial for someone looking at it from the outside to get a sense of some amount of revenue uplift or exposure to increased realization.
That's a very granular set of understanding that you're taking on a very small size of the infrastructure-as-a-solution base compared to the global peers. I think we would like to avoid this conversation for today. As we grow in size, then we kind of talk more about that, okay, now these numbers actually mean something, and they are making sense to someone on The Street. Today, these numbers would not make much sense.
Okay, sure. Thanks. My second question was, you talked about higher-value tokens. Could you provide some color on which industries are sort of taking advantage of higher-value tokens from your vantage point?
Not really. I think it's more closer home than that in terms of, okay, what's a higher-value token? Asking a question like, okay, what is closer to a search query is a reasonably low-value token. Someone using the tokens to solve a problem that is paying the bills for a company is a completely different value conception for those tokens. Answering a basic transactional support query is a reasonably low-value token. Being able to answer a more complicated query or being able to confirm a more complicated transaction with a customer on call is a higher-value token. There are infinite number of variations of how people use AI.
The key is to find those customers who are utilizing the higher-value tokens, where they are not worried about, "Okay, what's my ultimate per-hour GPU price?" But, "What's the cost of my solving a particular problem and generating a higher ROI?" Again, we are not directly involved all the time in the identification of higher-value tokens and being able to strategize in a very static manner that, "Oh, we should go and sell to this customer. They'll probably pay higher for this particular GPU." It's a broad industry trend where we are seeing increasingly the demand coming from customers who are not price-sensitive because of their ability to generate or consume higher-value tokens through a combination of their own software or proprietary or open-source software that is available extant in the market today.
In that case, what is E2E's role in this high-value tokenization? That would just be an outcome of if the person who is renting a GPU or taking on GPU capacity is able to extract higher value, they'll be willing to pay more. Right? The price discovery should just take care of who is generating higher-value tokens. I wasn't too clear on how E2E is working towards high value.
How you are able to quickly get to that point of being able to generate and utilize those tokens for your business. It's fundamentally how to build on various parts of the software and hardware stack to make it available quicker. I think that's where the role is played by E2E.
Understood. Okay. That's it from my side. Thank you very much.
Okay. Thank you.
Thank you. Ladies and gentlemen, due to the time constraint, that was the last question for today. I would like to hand the conference over to the management for the closing remarks. Over to you, team.
Yeah. Thank you to all our investors, all our team members, all our customers, all our ecosystem partners for all the support you have all extended to E2E Networks over the last many years. It's been an overwhelming amount of love for us that we are seeing in the community and overall community. We wish you all a great day ahead. Thank you for patiently listening to our call. We would like to once more thank everyone and end this call.
Thank you.
Thank you, sir. Ladies and gentlemen, on behalf of E2E Networks Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.