being recorded for the quarter of the fiscal year 2022-2023, ending 30th June 2022. The investor presentation and the press release has been sent to all of you, and it's also available on our website. Our leadership team is present on the call to discuss the result. We have with us today Mr. Arun Jain, Chairman and Managing Director. Mr. Prabal Basu Roy, Advisor to the Chairman and Director on the Corporate Board. Mr. Manish Makkan, CEO of iGTB. Mr. Rajesh Saxena, CEO of iGCB. Mr. T.V. Sinha, CEO of iRTM. Mr. Venkateswarlu Saranu, CFO. Mr. Andrew England, full-time Director. Besides, some other senior members of the Intellect management team are present on the call. Mr. Arun Jain will brief you on the result, and this will be followed by Q&A. This will be replied by the senior members of the management team.
Once the Q&A starts, you can ask the question by clicking on the Raise Your Hand, and we will admit you so everyone will be able to listen to you. I would like to remind you that anything which we say which refers to our outlook for the future is a forward-looking statement. This must be read in conjunction with the risks the company faces. With this, I request Arun to give his briefing. Over to you, Arun.
Good evening, everyone. Thank you for joining into this platform for investors where we are interacting with you on quarterly basis. As in 90 days, we're regularly participating in building the institution called Intellect. Let me take you through the entire journey, what changed in this quarter. Some of you would have been the new participant over here, so for whom I would like to share somewhat is quick overview of the company. As you know, company has a depth and edge are the two keywords in our journey, which build next generation open finance composable solution. That's where the story is there, which is very, very important story to work on. We won six awards, number one in retail banking, number one in transaction banking, insurtech lending with a base of product breadth and regional leader. This itself is a starting point.
Safe Harbor statements are to ensure that this is the presentation. Maybe, Praveen Malik, you want to read it or it's okay to go ahead and skip it.
You can go ahead, Arun.
Okay. In this quarter, we looked at it, and we spent a lot of time in our design for digital, which was our byline. When we are talking to the customer and helping them in digital transformation, and employees and everyone, the common thread came out that we helping to live their dream in their journey, helping them to make more profit, helping them to be having more customer satisfaction. Then we become sincere purpose. We picked up our old Live Your Dream, as a byline from design for digital. Our purpose as an organization and during the technology day, we said we provide large enterprise-grade, composable and contextual solutions, driving higher business growth, reducing cost and risk on sustainable basis. This is the purpose of organization.
The difference Intellect versus any fintech is we are in large enterprise grade, very high volume, make it composable, contextual, driving high business growth for our customers and reducing cost and risk using AI machine learning on sustainable basis. We are ranked number one in six categories, 45 years of experience, 97 countries served, 10 products. Instead of 12 products, we moved the two products to the platforms. Six platforms are becoming more rich and four technologies. Very good board of directors. Good strategic advisory board from all over the world. Good bankers from Europe, from Americas, from India and Middle East. This is our evolution from technology stack. When we added data model, we created products. Since data model and products are based on OpenAPI and microservices, we bundled into cloud and created a platforms.
We start being third-party participant and plus fintech, it becomes marketplace. This is our core vocabulary we are sharing here. I'll be taking you the platform and product because if you need to know more about our tech, you should go to December seventh, our technology day presentation, which is available in the website to understand the whole technology story of the company and how quarter and quarter we are moving from December seventh from product to platform. Looking at quarter one financial highlights. This quarter we grown healthily, 33% of the growth against 20%, which we believe and calibrated. In dollar terms also, it's a 27% growth to $70 million. In just last four quarters. Our EBITDA has moved 17% in spite of the cost and full cost post-COVID has come into system.
It's in line with our journey because our travel cost itself has moved back close to INR 12- INR 13 crore and just the travel cost increase besides the talent cost increase. PAT has been reduced because of some of the taxes which have gone up. As we advised last time, it's a surtax regime we are getting into. It's around 26% of the tax which is being put on our PBT. The advantage for us is we still have a MAT credit where tax outflow, cash outflow may not be there. That will be cash outflow will be maybe 10%, not 26%. Gross margin stands at 55.6%. EBITDA stands at 41.6%, and collection is INR 473 crore.
My DSOs are 114 versus 125, so good collection this time. In this quarter, we could able to collect a lot of money from the Indian government also, which was a concern last time for the investors. GeM, we collected close to INR 100 crore. If I look at the revenue distribution platform, I'm calling this we used to call SaaS cloud revenue. We rebranded as a platform revenue. I'll share what it does it mean on the platform and in my qualitative comments. As of now, platform revenue moved up by 47%. Very healthy revenue. License is minus 3%. 10% is AMC growth. 18% is license links revenue growth. And annual recurring revenue growth moved up by 28%. 10 wins and five platform wins. 11 new digital transformation completed. Now, we started giving.
This was a request made that last 12 quarters makes a lot of difference, and then we look at it last 12 months, not 12 quarters. Last 12 months, LTM revenues. We plotted LTM revenue for you to highlight that quarterly revenue for Intellect will be up and down in various buckets. When you are looking LTM revenue, that will give you the trend of movement. LTM revenue moved by 29% over the last four quarters. We are close is 29% against 20%. At a dollar level, it's at 26%. We moved to $267 million from $212 million. Gross margin stood growth at 31%. EBITDA grew at 26% on LTM basis. PAT grew at 17%.
Gross margin on LTM basis is 57.3%, and EBITDA is 24.3%. On LTM, my platform revenues grew at heftily 90%, INR 220 crore-INR 400 crore, almost doubling our platform revenue on a sustained basis. License is almost flat. We are able to sustain the license. It's not got cannibalized with the platform. We are able to sustain. That was a concern investor raised earlier. AMC grew by 11%. License link revenue crossed INR 1,100 crore, which is very powerful. By our investment of close to INR 300 crore, we are able to generate license link revenue of INR 1,100 crore. Our CapEx to sales ratio is now 15% on investments.
Annual recurring revenue is INR 756 crore, which has grown by 44%, which has got a cloud plus AMC coming together. In the last four quarters, 35 wins, 18 platform wins. Go-lives which determine our referencing, which determine how many are there?
54 left.
54 digital transformation deals for the customer. The sales pipeline is going very healthy now. I think we are now in a position to choose the deals which we want to take it up. We are across $805 million. That's the capacity which we have to handle as of now. If we need to increase the capacity now for sales and key sales. Number of deals, which is, which we call destiny deals, is growing year on year, and that's how the build-up is happening. We were running around $45 million-$60 million budget. Now, that time the number of destiny deals used to be 30, 35. Now it's 64, and that's what the capacity of the deal is getting created. Average deal size is also increasing.
Now average deal size is coming to $6.2 million per average deal value compared to $5.6 million last year. On both dimensions, the quality of the deal and number of deals, both are increasing over here. That indicates the number of deals more than INR 50 crore or more than $10 million have moved by almost 60% from nine such deals has been pipelined, which is moving to 15 such deals. This is a currency mix, GBP and euro. This quarter, we suffered because of higher 23% exposure of our revenues comes from the GBP and euro, and those currencies have fallen by 15%. 15%-18%, these currencies have fallen. We suffered a loss of $1.5 million because of the currency drop. We have...
Because of digital transformation, 11 global financial institutions have transformed their digital journey on Intellect product stack. These are the five platform deals which we have won during the quarter. In which we need to highlight a private sector bank in Africa has taken Digital Core, so Digital Core, which is our second product. We have top three products, if you remember liquidity, iGTB and Quantum. Then next set of product is Digital Core, lending and payments. If you look at first two deal win, represents the acceleration in the core banking and lending. If you look at first three deals are in that area, and the fourth deal is in the area of SEEC and AI machine learning platform. Again, lending platform.
Two deals lending, two deals core, which is showing the momentum moving this lending and core is moving to leadership quadrant. We have now the third quadrant product was wealth, treasury and trade, out of which now wealth is emerging. Which is moving from third bucket to second bucket. After signing SBI two quarters back, now we got a second big deal. One of the top five private bank has signed up with us for their wealth, and we have a good pipeline within India for the wealth. Quantum is carrying the momentum by winning two large deals in the quarter. One is from large bank of Saudi Central Bank. Another central bank in Africa, which is driving the significant change in Africa.
Quantum deals are becoming more pool deals and we are getting a significant mind share of the market. Important deal is in Canadian bank market and North American market. Both of the this deals are interesting deals which we I want to highlight that are North America. I'll take the market story. Canadian and American market is moving positively in the right direction. The interesting digital transformation we have done. One of the first element where we do top five bank in UAE went CBX Retail. This was space which bank base used to lead and we are able to do a kind of a contextual experience by bringing lifestyle banking together using AI data analytics, agile architecture, code agnostic. This is helping the bank to acquire customer at 3 x faster pace than any other bank.
Similarly, we have second bank in Middle East which has gone live with CBX Retail and iTurmeric to define how the branch banking and digital system will work. The third element is North America. This customer has gone live with liquidity. Now, one of the top three banks in India is now live with Wealth Qube. On and so forth. We have one of the large bank in of Spain. We went live in Argentina and Mexico, so that is a small entry into South America. This will get us some knowledge in South America for next two, three years, not immediately. Till then we have a footprint in South America. Similarly, a large financial institution announced iGCB mobile solution. The state-owned commercial bank in Sri Lanka went live with Capital Alpha. These are the 11 transformation deal.
These are the results you must have seen. I will skip this slide. Let me run to the qualitative commentary. Because this is a presentation when we are looking at it between last two years at the time of COVID and post-COVID. It's now almost two years post-COVID, this presentation is happening, where we are making a significant shift. Last two years, we were working on a calibrated manner and some more changes are. December, we made a presentation on technology day too. We started looking $15 million as a investment buckets. We are looking for each investment bucket. When we were in July 2020, we were $45 million in the revenue. Then we looked at it, how do we move to $60 million in revenue?
It took us five quarters to reach $60 million revenue. From then, we started in second quarter when I was speaking to you. We said that we started investing for $75 million. Now we have a visibility of $75 million. We have already crossed $70 million in this quarter, and next two quarters, definitely $75 million is visible to us. Now, at this point in time, we may have to move the investment of next $15 million bucket of $90 million quarterly run rate. That's a preparation for the next year for the sustainable growth. We mentioned in May 2022, there are three additional costs which are going to be there for this quarterly result. First was reinstatement of travel costs post-COVID, tax rate of around 26%, and the additional cost for platform and R&D in line.
The third cost was additional cost for platforms when we are moving to platform, and R&D cost goes up during the early stages of platform build-up. When I come to platform, I'll explain what the platform means and how is our revenue model of platform works. I mentioned about sales pipeline earlier. In Technology Day too, we said we have four platforms we launched. When we launched on that day, we looked at Xponent underwriting platform in the U.S. We looked at it, Cash Cloud, DTV platform. We looked at it, iCredit 360, and we looked at it. IDC Global Banking open finance banking platform with Green APIs. Then we launched our platform called iColumbus.ai in first quarter. In second quarter, we launched Magic Invoice as a platform. They'll become six platforms.
Let me take you through what do you mean by platform and what do you mean by product. There are two categories of platforms which Intellect has ability to launch. First we have platforms are subscription-based platforms. When we give a platform, we give it in a cloud, the complete infrastructure, complete technology, complete accountability of running the platform, where bank lease out the technology platform from us on a fixed sum which can vary from $40,000 per month to $100,000 per month. It can go up to $200,000 per month. This platform leasing will be between $40,000 to $200,000 per month is a kind of a platform, which is subscription platform.
If you have three categories of businesses, if we say B one, B two, B three. B one business is my license business. B two business is my platform business, which is on annual subscription model. There's a B three business, which is also a platform where we offer the platform like GeM, and we charge on the transaction basis of percentage of the business basis. That's based on the volume of the customer, pay-per-use kind of a platform, which is a B three business. B one, B two, B three are the three possible revenue lines which we call license-linked revenue. All three, B one plus B two plus B three become license-linked revenue. While B one is not recurring in nature, only AMC is recurring after that.
B2 plus B3 plus AMC become my recurring revenues. These are two points we need to explain what is license-linked revenue and what is annual recurring revenue when I mentioned in the beginning. The annual recurring revenues are AMC plus B2, which is an annual subscription license plus transaction license. B2 plus B3 plus AMC is my three revenue stream pool into call annual, which is around INR 700-741 crore here during this quarter. License-linked revenue of INR 1,100 crore we did is, which is direct license plus B2 plus B3 combined together form my license-linked revenue, which is INR 1,100 crore. Now, after successful of GeM platform, we are fully in a stage where it's growing quarter on quarter, and last year it grew much faster.
It will not grow at the same pace as last year it grew, because that's the time when government sale moved from INR 30,000 crore to INR 1 lakh crore in a single quarter, so in a single year. This will grow now 50%, 60% levels. Now we have picked up Xponent platform, which is based on AI. That is now gaining traction. The revenue is not starting to build it up. In a platform business, I need to put up a constant team. When you set up a platform, it means you're setting up a constant investment. A typical platform investment for building a platform may be close to $5 million per year. That's a typical model. In U.S., typical platform, when you look at the investment, lot of fintech companies are coming with a platform.
Each platform costs between $5-$10 million per year on a constant basis on the platform. That's what, when we are building GeM, we are spending that kind of a money on the platform. That is an axis which is flat axis if you look at the graph. Initial period when you get only two customer or three customer, your cost remains $5 million, while your revenue will be $1 million, $1.5 million, it will grow step by step. To match, it takes three to four years to match the revenue between investment and what the annual subscription revenue start coming in. Typically five to seven customers at $1 million each will be good to suffice the subscription-based platform investment.
Once we sign five to seven customers, the platform could be breakeven. 7-20 customers, my incremental investments in the platform are not more than 20%. It varies between 10%-20%. My RP or revenue per person who is deployed on the platform business moves up substantially multiple times in the platform story. Platform story is a recurring revenue which has got a next 10-year life cycle value which is revolved around the platform. That is the SaaS platform story versus license product story. Product story. The next question comes to your mind is platform cannibalizing license revenue? For looking at it, we found that there are certain markets which are suitable, certain products and certain markets are suitable for platform, and certain markets are suitable for license, and certain kind of customers are suitable for license.
Tier 1 customers are suitable for license, while Tier 2, Tier 3 customers are for platforms. Similarly, certain markets behavior is they want to buy license. If you intersect this, the platform will be country-specific and MA-focused customer specific. When I'm looking qualitatively at the markets I visited, spent some time in U.S. market. This was a concern as an investor you are highlighting. When is the U.S. market traction will be start moving in? Now this year we have visibility that U.S. will move 50% growth in the U.S. market. U.S. market, we have two platforms. One is Xponent, which is underwriting platform. We are working with close to 22 prospects in the U.S. market led by IC. And similarly, we have iGCB platform, which we are having a close to 24 prospects. We are working with iGCB on the second platform.
The U.S. market, our strategy of platform is now started getting that traction and that is giving us a confidence that in U.S. market, which was going slow in first five years of our journey, where we kept on making a lot of investments in AI, machine learning, data. Now it started paying off because the product that we have is one of the unique product in the market. And that platform gives Magic Submission, data and underwriting platform all integrated and which can be implemented in less than three months' time or onboard the customer in three months' time using the AI machine learning cloud technology. That's. Similarly, Canadian market, we invested the full kit investment in Canadian market and that has started delivering results.
Canada market has got all the Intellect suite product starting including Trelli, even core banking products in Canadian market. Canada is becoming a wholesome market for Intellect. In Europe, if I come to Europe, we discussed about Europe last time, what is selling in Europe. Europe now looking. The new investments are coming in Europe now. First of all, the good news is that they are now looking for modernizing their old systems. A lot of legacy, which is 40-year-old legacy. They are looking to upgrade that, and they are upgrading with a very strong architectural mindset. The difference in Europe and other part of the world is Europe, like German focus or French focus or UK focus, are focused on architecture. Because we are focused, Intellect products are designed for open finance, composable and contextual platform.
We have an ability for microservices to be composed across core lending and credit card. These two combination, one domain combination of core lending and credit card, and on other side, we have data, AI, machine learning, cloud microservices, cloud compliance. The number of prospects are increasing every day. Rajesh can take you through the journey, but his hands are full. His capacities are totally full there. He needs to add the capacity very quickly in that area. Especially after we got a reference, one of the reference client going live in Germany with the open finance platform, first of its kind, which has gone live. While my competitor may say that they have an open finance, but they may not have a reference site for going live. This funnel is moving better.
In UAE, seven out of nine banks are our customers. Now we are expanding. Saudi market is growing very well. We have five customers in Saudi. This year our focus will be on Europe side, Germany, setting up our new operation in Germany and France. In Middle East, Saudi will be our expansion. Africa market is growing on the back of Quantum. Quantum is bringing leads from various unique countries. Sometimes they are very fascinating countries. Some of them, I sometimes don't even know the name of those countries before getting RFP. It means it's coming by the pool of the Quantum. They are approaching us rather than we are going to those markets because we don't have those connections like Mauritania or Madagascar, we didn't have any connection. It came from that side.
There's very good news that when products start getting the in-pool effect. Similarly, all the product lines are operating in African market. APAC, we did a good job in last five years. We have nine banks in Vietnam as customers, nine banks in Philippines are our customers, seven banks in Malaysia, four in Indonesia. This is a time when we need to start looking for deepening our relationship, so we shifted our office in Vietnam as a center. That's how we can do the business impact from the implementations we are doing in Vietnam market and how do we deepen the account kind of a model in APAC. In India, obviously, as you all know, our presence, we manage the national critical infrastructure, whether it's the RBI, whether it's the GeM or LIC or AMFI.
Nine of the top ten private banks are using our technologies. Sri Lanka we have some presence, not getting impacted with the turmoil in Sri Lanka. Bangladesh, we have a Sonali Bank partnership. Now we are looking more entry into Bangladesh. This is about market analysis. Where last time somebody wanted to have a what is the market footprint, so instead of answering question individually, I try to put all the slides for all the markets in this time as a qualitative. The other thing which is happening on the product side, our data platform, AI machine learning platform. Now we have start getting it in a monetization phase of it. Last three years it took to build this platform. First platform which is there is Doc2API, where we have a contextual using CDR Graph Technology.
We are able to add lot of value in document reading. Our accuracy across pages, if you have ten pages of document and you have to contextualize between first page and seventh page, our technologies can do it, which many other AI technologies are page-by-page technologies. It can read any context from any document PDF document. Now we are using that technology to go to market. We use this technology from our Magic Submission for underwriting platform. We are using the same platform for Magic Invoice, and we are using the same technology for iColumbus.ai for LCs and guarantees document over there. Doc2API is underlying platform, so it is a one-time investment, but we are building in multiple use cases for looking at. Our data platform now, we started spending some time on the go-to market of data platform.
Our MQS search, multi-question search, is very unique search, combined with big data and MongoDB and contextual AI algorithm. Now we are building for next quarter launch for complex risk requirement of large banks and insurance company in area of underwriting and risk. The third platform, third technologies what we are working was integrated banking platforms, you know, TBCs, is creating a demand in the market, especially in Europe. Quantum, as I mentioned, it's a consistent winner. Xponent, the platform is gaining momentum, I mentioned. Digital transaction banking is our core cash cow for us with Microsoft Azure partnership. Now we have started doing prospecting, named prospecting. With the increased interest rate scenario, liquidity management system is now getting lot of RFP now.
Risk Qube is moving from L3 buckets, most of the products, P1, P2, P3 buckets. It's moving from P3 bucket to P2 bucket, and IDC is moving from P2 bucket to P1 bucket. That's how this transition is happening. Rest of the slide is you can go through how the analyst ratings are there, which is each analyst is covering our products. Intellect is one of the top three players in core banking between Thought Machine, Temenos and Intellect. Many RFPs we are getting qualified in that area. We need to increase the capacity for direct sales and partnerships. These are the two things which is our core agenda now. Thank you very much.
Thanks. Thank you, Arun.
Thank you.
Now the platform is open for the questions. Please click on Raise Your Hand. Please click on Raise Your Hand to ask your question. The first question is coming from Mr. Mohit Jain of Anand Rathi Securities. Mohit, you can ask your question. Please unmute him.
Okay. Sir, one was this, Q2 drop in SaaS revenues. What happened there? If you could give a service split on if it is pure SaaS license or is it SaaS license plus SaaS implementation?
What is the drop? There's no drop in sales, no?
Sir, in dollar terms, it appears there is a drop on a sequential basis.
Quarter four to quarter one. Okay.
Q 4 to Q 1.
Q 4 to Q 1. Uh, in general-
While giving GM, there should not be any seasonal fluctuations.
No, no. That's why I classify two platforms. One is a transaction-based platform. There will be fluctuation.
Transaction
a transaction-based platform. While the annual subscription-based platform, there will not be dip. transaction-based platform-
We are looking at this 1,160.
Yeah.
This is total, is it?
Last quarter, how much was it?
One one nine. One one nine.
119. Yeah, yeah. There was a dip.
119. That is right. That is correct.
Yeah, yeah. That was marginal dip in GM revenue, no? GM is quarter four, we have a higher volume.
Okay, so that was one. Now, second was on your margin outlook. Now, what you have spoken about is there could be a 3 percentage point drop rate in R&D and other things.
Mm-hmm.
While if you look at it from a YoY perspective, there is already a three percentage point drop. What we are referring to is from Q1 margins, we may decline or is it the comment is more related to Q1 2023 versus Q1 2022?
Q1 2023 versus 2022. We are reinvesting our margin for platform and new journey. Our margins will be in the bracket of 20%-25% bracket, not 25%-30% bracket, which we were earlier targeting.
22-25. Sir, that's a steep drop actually, from 25-30.
Yeah. 25 to 30 to 20 to 25, no? About a high % we are reinvesting. We are investing margin investment we are doing, we are not raising any capital for the platform journey.
Mm.
So for-
That was second. Third, I think you used to give us this capitalized amount which is missing in this quarter's presentation.
Capitalized amount is mentioned.
INR 35 crore.
INR 35 crore is mentioned in it. It's not there in presentation. Maybe we'll just look at INR 35 crore is the capitalized.
INR 35 crores for the quarters?
Yeah.
Your capitalized amount has also gone up by the same quantum in that proportion.
That's it. All the three investments I mentioned, the platform has a R&D investment. Capitalized investment. We capitalize only. If we have six platforms, our investments are close to between $25-$30 million, plus, product investment. Total investment, we are only capitalizing less than $20 million investments. The total capitalization investment, when we are saying from the beginning, is around $20 million.
INR 20 million.
It will be around INR 140 crore for capitalization this year. This was mentioned in the earlier call also, but the exact number was not given because at that time we didn't have the budget approved. Now the budget approval of the capitalization is through. Around INR 140 crore, which is around, at current currency rate, it will be close to $18 million-$19 million.
Sir, this amount is largely in INR. Is that correct? Or will it fluctuate depending on the exchange rate?
Exchange rate also, no. There are people in international. Product managers are sitting in U.K. or in U.S..
Okay. Next was on the ARR. While I heard your comment, I was not sure what is included in ARR, which you have disclosed. If you could just help me understand that part.
ARR, which is annual recurring revenue, consists of platform. We say B2 platform, which is an annual subscription revenue, B3, which is a transaction subscription, plus AMC.
Platform subscription plus platform transaction plus AMC.
That's right. Thank you so very-
Implementation fees are not included in this.
That's right.
You multiply that with four to give us a picture on the annual basis.
That's right.
Perfect, sir.
We are giving LTM. We are giving LTM now. We are not even giving forecast number. We're not multiplying it via reverse. Now we are giving a more accurate picture of LTM because now LTM is available.
The number that you have given, on slide 11 is LTM number, not annualized, not quarterly annualized.
Not a quarterly annualized.
AP.
Because that time last year we were giving annualized, and there was a question raised by one of the investor that, "Why won't you give LTM? That will give you the better picture.
Right. Sir, finally, U.S. is looking up. From the currency breakdown, it appears developed markets are finally coming through. You have given this growth target, et cetera. Any percentage split, like how small or large are we in the U.S. currently from where you expect this 50% growth?
Not right now.
Approximation will do, sir.
It is small right now, and I think it will grow better. The U.S. is catching up and company entering into U.S. Last time we said last year we were looking for Europe. The story over here is calibration. Curated, calibrated growth, country by country, product by product. Now we're getting. Last time you had, Mohit, a question on U.S., what is happening on U.S., and I didn't have a response.
The last many quarters I had that question, but yeah, good to see finally you guys are moving there.
If I didn't have an answer, I didn't want to tell you something wrong or anything of that nature. I told you we didn't have a timeline, we are working on it.
Right.
Now, once the results are there, now the visibility is clear, I can speak to you.
No, no, perfect, sir. FY 23, hopefully we'll see more growth in U.S.
Yes.
Our growth margin, which is a linked question, but when we improve our growth rates in the U.S., should we expect growth margins to improve during the year?
Not this year. 2024, you will see a significant improvement. This year, I think platform investments are higher.
Okay.
We have to invest upfront on the cloud, we have to invest upfront on POCs. Those investment goes up in a cloud platform business.
Sir, I was referring to growth adjusted for R&D, excluding R&D investments.
Some improvement will be there in gross, but still, POC investments, sometimes it goes into delivery investment. If you book the POC all into sales and marketing, then there will be gross margin improvement. I'll just say.
No, no. The current problem is fine, sir. We are used to having this kind of
Okay.
All right, sir. Thank you very much, and all the best.
Thanks, Mohit. Next, we have Mr. Vivek Charoria. Please unmute him. Vivek, please ask the question.
Hi, sir. Thank you for the opportunity. This quarter we saw a sharp jump in the pre-EBITDA cost from INR 390 crore to INR 425 crore. Do you think a bulk of the jump is behind us, or should we expect a similar quantum escalation as we move from $70 million to, say, $80-$85 million? How much would the cost go up for every, say, 10% growth in revenue?
As growth, the numbers, cost numbers go in lumps, $15 million brackets. Our cost with the opportunity available, our cost will go up in Q2. It's not the end of the cost increase which you are seeing. It will be Q2 also will be the higher increase. The new fresh intake is also there. Headcount also we are planning for the $90 million number. This quarter will have an increase. Q3, Q4 will be more salary increase, flatter increase. Yes, travel increase will not happen in this next quarter. Travel increase of pre-COVID level now comes to the almost 80% level in Q1. 20% differential will happen in Q2. These are two places the Q2 costs will increase. New headcount costs in Q2 will go up.
this new headcount cost, is it in preparation for the INR 90 million? What I'm trying to understand is
Yes.
I'm guessing.
That's it.
We'll be in the investment phase for another quarter or two.
Yes.
Would that prepare us for INR 90 million run rate or, I mean, every quarter we-
Yes. INR 90 million run rate.
Okay. Say by Q3 our cost structure should be aligned to INR 90 million. I'm just trying to understand when the operating leverage can play out.
Exactly. Now, if you play last year also, Q2 costs, we went up by some. I don't remember the number, but there was. When I had a call on October, the number went up. Q2, Q3 number went up. Two quarters number went up on the salary cost. That was the time when we were preparing from $55 million to $75 million. That $15 million dollar jump has seen in this quarter. In three quarter later, you've seen the jump. That number got accommodated and my EBITDA margin is around 21.6% this time. Though 3% is a drop compared to 25%, which is normally in industry which happen, which is the talent cost increase and the travel cost increase.
Now whatever we do in Q1, Q2 cost increase will service us for the next $90 million run rate.
Sir, any color on the top line growth or are we seeing any headwinds in Europe or other parts? What is the two to three year outlook? I mean, are we still hoping to hit an INR 100 million run rate in the next eight to 10, 12 quarters? I mean, some color, and how confident are you of achieving that? Or is it only a case that where we need to just increase the capacity to service the demand?
Demand is there. Healthy demand is there, Vivek. Market is looking for privacy-built . Quarter-on-quarter, the way we saw last quarter one or two deals here and there, Ukraine deal, two deals. Because of Russia, we dropped on it. Otherwise, we are seeing a positive traction right now in Europe and America. Now I have given the commentary, country by country commentary. I'm not even giving a general commentary of advanced market. Based on that, I think you can make it out, that $100 million quarter-on-quarter, I think all of us are looking for eight to 12 quarters to get into a $100 million per quarter. That trajectory we are working on, Manish, me, Rajesh, Manish, all of us are working.
Beauty is now third business of Manish. He also started delivering substantial results after last quarter. If you look at it, in 2019, we spoke that iGTB is now got $100 million. Then we said iGCB will now work for next two years. Now, iGCB started giving significant result. Now is the time SEEC, which is a third business, started delivering results from this quarter onwards with Xponent, underwriting, AI, machine learning strategy. three out of four businesses we look at it have started giving substantial throughput. Now we have to spend time in the iRTM. It's going as per the very calibrated structure.
Just one last question. Just trying to understand this once again. While we're in the investment phase, our margins will be depressed, as you said, in the 21% to 22% to 25% band. When we are at a INR 100 million run rate in the next two to three years, I'm guessing the margin should be much higher than that, or would that be wrong to assume?
Could be again. At $100 million level, it should come back to 30%-35%. At $100 million level.
That still stands, correct?
Yeah, yeah.
Thank you so much.
Thanks, Vivek. Next, we have Mr. Ankush Agrawal from Surge Capital. Ankush?
Yeah. Hi, Arun sir. Thank you for taking my question, and congrats on a great set of top line growth. Firstly, what I want to understand over here is that when you say that you will be reinvesting 4%-5% margin to support platform revenue growth, can you talk little bit more over here, like where is this investment going? Is it going on the sales and marketing front, or is it going in the product R&D? And, you know, for how long you expect this to continue?
Ankush, you can just understand when any platform is created, like Nokia gets created, or you take EasyTax that gets created. When you create a platform, initially you put up a full kit team. Put up a few architects for the layer, few designers for it. First year first, then you put up a full go-to-market team, marketing team. The money goes in all the six dimensions of a business, from brand to end customer, to leadership, to IT, to execution and finance capital. All the six capitals, which we call BELIEF as a framework. All the six areas the investment goes in. That investment in a platform. As I explained, it costs $5 million typically for a platform on annualized basis.
Initially, the revenue may be INR half a million to INR 1 million in first two years or one or two years.
Right.
When it crosses $5 million with seven to eight customers, then we can shift it up.
All right.
Yeah, Ankush.
Okay. Sir, then, you know, if we are saying that we are now investing in these products and these are gonna add to the top line, you know, would you be saying that, you know, our outlook for revenue growth, which was, you know, earlier at high teens to about 20%, that would increase substantially since we are now investing in this additional platform.
If we are able to do any product company, so Ankush, one point is product company, 20% growth is equivalent to 30% growth of service company.
Right.
Because I have LTM revenue.
That is fine.
So-
That is taken. What I was asking is, you know, earlier we had this framework, you know, that high teens to 20% growth, and then you had this margin outlook of growing to 30%. Now since we're investing more into additional platform, so shouldn't that add more revenues and then increase our top line outlook because, you know, now you're investing more.
Ankush, I said there, like in LTM, we have 29% growth in LTM. I still calibrated the business at 20%. We may get higher number, but we still say 20% is the calibration of the business.
Right. Yes. Okay. With this 20% growth that you're now saying and with the additional investments, would profitability at least grow, you know, at that rate or it would be much lower than that? Because earlier we were guiding, you know, X growth in top line and then, you know, relatively higher growth on the bottom line front because of the margin expansions and all that stuff. Now since we're investing more, you know, would it, you know. The higher growth obviously is not gonna come because now investing 4-5%, but would it be much lower or would it be like, at least still what the top line is growing?
The margin will always grow higher than the top line. In this quarter, it was change of the quarter. This quarter number should not be reference number because this quarter-
No, I'm not saying about this quarter. I'm taking it from the comment that you're gonna invest 4%-5% of the revenue. That would obviously. That is going to be continued for a couple of quarters at least. Since, say for example last year, FY 22, I think we did about 20-odd% in EBITDA margin, and if we're gonna invest 4%-5% more, that would put a lot of pressure obviously, right?
No, Ankush, if you see last year, you look at the numbers, it moved from 20% EBITDA to 27%-28% EBITDA. There is operating leverage play also happened. Four to five percent when we are investing back.
Right.
That operating leverage lever between the top line and bottom line as a product company will always have that advantage. Today, the talent cost, which has gone up in the industry, but once it's cooling down, that impact will not be so much in 2023, 2024. Margin will improve going forward and it will be growing faster higher than the top line growth.
Yes, sir. Got it. Basically you're saying that, you know, even though you are making this much investment, but there is an element of operating leverage and that could cushion some of this 4%-5% cost increase, right? Yeah. Lastly, just on the use of cash. Now we have more than INR 500 crore and, you know, obviously we had allocated some INR 100 crore to the AIF investment. But that is gonna be in the future. It will be more, you know, piece by piece. Any thought on how we're gonna use this cash? Because historically we've mentioned that we are not so much invested into inorganic growth. We are still going to generate a lot of cash this year as well. Any thoughts on that?
Still the amount of cash is just sufficient. It's a one-quarter cash. We have INR 531 crore revenue, INR 558 crore. I think as a product company, we need this much cash as a bucket to reserve. We'll talk about it when we cross INR 1,000 crore cash.
Okay. You want to keep some INR 500- INR 600 crore cash, is what you're saying?
Yes, sir.
Okay. I'll get back on the call for that question. Thank you.
Thanks, Ankush. Next, we have Mr. Moez Chandani from Centrum Broking. Moez?
Yeah. Hi. Good evening, sir. My question was on the employee benefits and on employee attrition. Are you seeing a decline in the employee attrition, both on the senior level as well as the junior level? That's one. Secondly, are you also, I think you mentioned that you're going to hire a lot more people this year. Can you just give us an idea of how much is the hiring expected to be this year as opposed to what it was last year?
Okay. The two questions you asked. Three questions you asked. First is attrition level. Yes, we are seeing the pattern. It's dropping since May onwards, because the startup issue started happening. It's dropping now. Attrition is dropping. Our attrition is dropping. Second question you asked about senior level attrition for us is less than 10% from last year. We didn't have a senior or mid-level attrition. I think we have a very strong culture to retain there. That's not a concern. Last year also, our attrition was in the bucket of two to five years bucket. That is because we may not provide them the global opportunity of going to send them on the body shopping assignment.
That's the area where we now refilling back with a strong module of fresh engineers and creating a fintech engineer program for them. That's attrition. Exact numbers for this year, how much we need to recruit, I think that's that plan is very as of now not fully worked out. It will be between 800-900. Last year, I think we would have done 800, 900. This year will be similar number maybe there. I think we need to work it out with the platform right now, platform strategies. We'll come back. As of now, we are not firm. We'll take some time to firm up, maybe another one or two months from that.
Sure. Thank you for that, sir. When are the salary increases being rolled out? If you can just remind us.
In our case, it's almost the major load of salary increase happen in first quarter and second quarter. It's a quarterly cycle, so we don't have a one single cycle. We have a rotation cycle.
Sure. The salary increases that are being rolled out this year are in line with what was last year, or are we doing better in terms of salary increases this year?
This year is higher than the last year.
Higher than last year. All right, sir. Thank you so much.
Thanks, Mohit. Next, we have Mr. Aman Thadani from Solidarity. Please unmute him. Aman, ask your question.
Hello.
Yes.
Can you hear me?
Yes.
Thank you for taking my question. Sir, my first question is, can you help us understand the target addressable market versus the products that we have in each business division?
Aman , when I look at the market, I told you about each product. I took you to the global market presentation deck and look at it which products are relevant in which markets. If you can just go back to that presentation, I think, I don't need to repeat the same.
Size of each market, or for each product that how much can we do for our transaction business, or how much can we do for our core banking business? Or what's the size that would be of each market?
Yeah, we are not announcing how much revenue per product per market. That's what we don't announce. It's the overall number we can announce. We don't want to do that for our competition, so we don't announce those numbers, Aman.
Sorry.
Yeah.
Sir, my second question is, did banks replace their existing software with ours or did Intellect make something new which is like an add-on software?
Can you be little louder?
Sir, did banks replace their existing software with Intellect or did Intellect make something new which is an add-on software for banks?
Multiple schedule, Aman. Aman, we are not able to hear you.
Can you hear me now, sir?
Yes, repeat.
Sir, the products that we offer to banks. Did banks replace that existing software with ours, or did we make an add-on software which they are using above the legacy software?
We do both the things. Some of the time when we do a complete digital transformation, we replace the existing banking product, and then we do a specific platform. They act as a periphery solution, and they coexist with the existing solution. Both the things are there, Aman.
Sir, can you help us break this down, like what proportion of the revenue would be, we are replacing someone and what proportion it would be that we are offering something, completely new?
How will it help you? I also don't track it. How will it help you to forecast? I think we don't do an over-analysis of the numbers, so...
Okay. So that is it from my side. Thank you, sir.
Okay. Thank you, Aman.
Thank you, Aman. Next we have Mayank Babla from Dalal & Broacha. Mayank?
Thank you for taking my question. Sir, I just, in the early part of the call, missed your commentary on you're going to, you know, spend this year for these products and R&D. What was the amount that will be routed through P&L and what would be capitalized? Could you just elaborate on that?
Typically, if you look at six platforms and $5 million, $30 million, between 25, 30 million dollars, we expect the investment in all the buckets. But we are capitalizing only a small piece of it. As our capitalization amount is still remaining less than $20 million. It will be close to 18.5 or 20. INR 140 crore will be the investment in the capitalized amount. Rest of amount is expensed out, whether in sales and marketing or expensed out in R&D or software development expenses. All of three years get expensed out. Almost 70% of amount is expensed out and 30% amount is capitalized.
Okay, sir. Got it. That's all from my side. Best of luck, sir. Thank you.
Thank you, sir. Prabal, you want to just summarize?
Sure. Yes, of course. See, there are a couple of things I think. You know, we have discussed a lot of numbers and questions from investors. I think there are just a few points which I would like to leave you with. You know, in a quarter like this, which is actually quite a pivotal quarter in many ways. Very similar to two years ago in July 2020 when we started on a new journey and the results are something which are there for you to see. This is also pivotal in that sense. I think Arun has spoken a lot about the crux of this quarter, which is journey from product to platforms. That is the.
That is fairly fundamental in this entire journey from product stack to products to platforms to ecosystems. You know, in that entire journey, this is which we are highlighting today is actually very fundamental. The important thing for all of us to understand and appreciate is that, you know, the company, as we have disclosed earlier, is built on four fundamental pivots. We continue to remain on these guiding principles and foundational blocks, so to say. I'll just highlight those four in a moment so that, you know, we all have common understanding. The four fundamental pivots are, one, that we are an IP-led company. Monetization of IP through new and innovative business models is something which is the core DNA of this organization, and that is what pays well. Right?
Being a young company, of course, our priority remains to populate the market with our IPs. So far it has been products. Now it will be products and platforms. This is the fundamental of an IP-led business. The second important pivot is that we will continue on our path of calibrated growth with predictable profitability. We will grow, but we'll grow in a calibrated manner in selected markets, in our chosen accounts and so on and so forth, and with a predictable profitability. Right. The third one is that our growth with respect to competition will always be market leading. We don't want to give numbers of 35%, 30%, 40%, all of that. We have said that the organization is geared up for a 20% type of growth, but it will be market leading depending on where the markets are.
The world is not in a good place, as all of you know. Therefore, we will be market-leading with respect to our competition. This growth will require continuous investment in the IP and in the business to keep the technology contemporary and ahead of the curve. Right? We talked about this at length in the Technology Day. I think this is the third important pivot, that there will be market-leading growth and that growth will require continuous investment in our IP, right? The fourth important pivot, very important pivot, is that this growth and investment will not be capital diluted. Efficient capital allocation will be the cornerstone of our growth strategy, which we have mentioned earlier, and we continue to do that. There'll be no capital dilution.
The moment you put all these four in a bucket, in terms of a strategy, it becomes obvious that to secure our future in terms of the new opportunities which are coming in the marketplace in the current context of these platforms, the investments for that will necessarily have to come from the existing cash flows. That is the point which Arun was making, that, you know, the trajectory which we have talked of EBITDA so far of 25%-30%, that trajectory will get compromised because we will use about 4%-5% of that and put it into the bucket of investments. Now it will be 22%-25% of the revenues. That is the crux of this entire thing.
As long as we sort of appreciate this fundamental precept, we will know that the company is actually going to create the institution which we have always talked about. We are on a certain path which we have chosen for ourselves, and it's all about the choices we've made. Now, we see massive opportunities in the platform player. I think Arun mentioned that. Which is really an extension of, you know, the solutions ecosystem play which we had outlined. Therefore, this current state, what it does for us, just to give you a benchmark, is what it did for i-flex in 2008, 2009. Since then, i-flex has not grown significantly. If you have seen, they have not grown at all in many years. But look at their cash flows, look at their margins.
It all is a result of that phase of i-flex from 2007 to 2009. I think, and I dare say that, you know, we being a young company, we are actually creating revenues and avenues for future flows from these platforms. Most importantly, it does not cannibalize the existing revenue streams. Because the large banks, as Arun mentioned, tier one banks will continue to the user license route and all of that. We are creating new opportunities for avenues growth by monetizing our IP. I think this is a very fundamental shift and a fundamental of fundamental importance to understand. Therefore, our financials you have seen both YoY as well as LTM's, we have been healthy on practically all parameters. The pipelines speak for themselves.
I think $600 million-$800 million in one year is saying a lot. The average deal size of course has gone up and all of that. Therefore, I think we are by and large on the chosen path within the choices we have made and sort of sticking to the path of you know making a sustainable business which will have value creation at the end of that. Yeah.
Thank you.
Thanks, Praveen.
Manish,
Uh.
Manish, you want any speaker? Yeah,
Yeah, Arun.
Arun?
Arun, we have couple of more questions.
Okay.
Can we have?
We can have.
Yeah, just questions we can have it.
Yeah, sure. Okay. Mr. Rohit Balakrishnan from iThought.
Yes.
Hi.
Hello. Sir, am I audible?
Yes.
Yes. Go ahead.
Thank you for the very detailed presentation, Jen. Very helpful. Sir, I just had, probably it was sort of answered, but just couple of clarifications. One was the path, the glide path that you explained, maybe towards the margins. Is it? So to understand this, is it the right way that, probably from H2 FY 23 or probably Q4 FY 23, the margins will be back to what they were, let's say, I mean to the earlier guided range. And from there on the margins will sort of see an expanded path as you explained that whatever platform that, I mean, platform revenue that should will take. Is that the right way to think about it?
Yes, absolutely. Therefore, think about it as in. See the choice which we had now. Let's just step back for a moment. The choice which we had now is because of this emerging platform play which has sort of shown a lot of traction. If we did not invest properly in this area, we could have still remained at 25%-26% margin very easily. Right? That is not the wisest thing to do. Therefore, we are creating avenues for future growth. Apart from product license. Product license remains. I mean, that is something which will remain. These are creating different avenues with the same IP. That is the beauty of an IP-led model at the end of. Obviously there'll be a glide path and there'll be a, you know.
Just, that's why I gave the example of i-flex in 2008 and look at it today. I mean, more annuity cash flows, right? Being a young company like ourselves, our priority is obviously to populate the market with as many products and platforms as we can in the next few years. The ultimate objective and the ultimate sort of goal at the end of all this would be when we reach a certain mature phase, we'll have enough populated products and platforms in the market which will give those cash flows. Yes, absolutely. Whether it's, you know, one year or whether it's one and a half years or two years, that's a moot point, depending on how. Because you see, today we are faced with two things.
The entire industry is faced with cost increases. We all know that. Plus we are opening up after COVID. That also we know. Plus, we have this platform opportunity. All three are coming together and that is the reason you see this, you know, this minor recalibration of the EBITDA path, which we have talked about. Yeah.
Sure. No, no. Very, very well explained, sir. Again, thank you very much. Sir, the second question was, now, the subscription or now we what we call this platform is about INR 116 crores this quarter. One question that I had was, you don't disclose GeM, how much it is, but I'm assuming that GeM will probably come from contract renewal. Just, I mean, just qualitatively, can you share like, what? Is there any risk on that part for it to sort of,
I mean, I don't know how much you can share in terms of how much quantity in terms of quantum it is there, but as an investor, I just wanted to get that part understood from you from a risk point of view, let's say, somewhere in FY 24. If my understanding is right that revenue is going to come from or the contract is coming for renewal.
Would you like to just answer that, please?
Yeah. Demo revenue, he's asking about demo revenue. Unfortunately, we don't announce it and it is not right in a confidential requirement. Unfortunately what Rohit is asking, we cannot answer right now.
Right. Okay. I understand, sir. I mean, but if you can give us some qualitative commentary in the sense that my context of the question is that. Hello?
It's difficult for them to build it up anywhere, Rohit. These platforms, once you design, the chances of extension are higher, substantially higher with the TCS has got a passport office. Unfortunately I cannot disclose it, so I'll leave it at that, Rohit.
Okay. Sure. Sure. All the very best, sir. Thank you very much.
Thanks, Rohit. Next we have Mr. Rahul Jain from Dolat Capital. Rahul, please ask your question. Rahul, you're there?
Yeah. Can you hear me?
Yeah, Rahul. Please go on.
Yeah, yeah. Thanks for the opportunity. Just wanted to understand, and sorry to harp on the question which has been asked earlier. This, the need for the investment on the platform side, is it also led by the evolving demand in the market and where some of our past, the power and the progress to win off of our existing product may not be as sharp as we may need to, and that's why there is this sudden need for investment? Or this you think is a logical investment which any R&D company has to do as part of the business equation?
Rahul, how many companies are entering to U.S. market as a platform from India or even Europe? It's very difficult to enter into U.S. platform coming from India or Europe companies also on an organic basis. Not inorganic and acquired, but Temenos acquired the company. These investments are required to meet, have a big opportunity in Europe and America to leverage using platform and building a recurring revenue stream. It's such a big opportunity, your company has built up, Rajesh has built up, Manish has built up, which is need to be supported by the. This is getting supported from the margin redeployment, not by capital generation. A 4% margin redeployment is a very normal for any business decision from a board level.
Just to extend that thought, in terms of, as you said, the kind of a product which is relevant for that market. If you could share your thought on how the current product would compete with the likes of a product that we see new age product like Mambu or maybe Thought Machine. Or you would say that this kind of a development is just a small.
Rajesh, will you take up this question? Competition with the Thought Machine, Mambu and Temenos.
Sure. I think, let me, before answering that question, I've been listening to this conversation. Let me give you a little bit of business commentary, especially looked at from a retail banking or a core banking perspective. I think the way we are looking at the market is really if you look at our products, right? We have three products. Quantum, we talked about it, right? It's a very specialized product that we built for central banks on the back of our win on RBI, right? In the last four quarters, we have won 10 deals on Quantum, right? So that's the kind of momentum we are seeing and that's the kind of momentum when we say that, Arun talked about the pull being generated. Today, we are called for opportunities, right?
Where we don't have to do our sales, we are getting pulled in by that demand that we have created from a product perspective. That's about Quantum. It's a leadership product. It's going from strength to strength. We have made lot of progress in Africa, Middle East. We recently won, I think it's in the news, the Saudi crown prince has talked about this new country, NEOM. We have won the Quantum banking deal from NEOM. We are seeing a phenomenal momentum on Quantum. We are now seeing some growth in Quantum even in advanced markets. In the coming quarters, hopefully we will be able to take Quantum to even advanced markets.
That's on our first product, which is Quantum. The second product which Arun talked about, which is moving from phase two to phase one, is our core banking product. You saw in the list of deals won, we won four deals last quarter on the core banking as a product. That's again, if you compare, if you go and look at what Temenos is winning or Oracle is winning, we are in the same league from a number of wins perspective. We are also seeing momentum on lending. You saw four more deals were announced where we won on lending. From a product perspective, we have a very clear strategy. We are focused on Quantum. We want to take it all. iGTB is on a hyper-growth trajectory now in lending we want to take. Now let's talk about platform.
What we have done is we have from a retail banking perspective, we have two platforms. One is of course our iCredit 360 platform, which is typically targeted toward Europe, and we have an open finance platform, which is again targeted in Europe. This is a platform which Arun talked about, which has the breadth of core lending and cards. We are in a unique position to offer that. What we are seeing in the market is that many European banks, regional banks, as well as large banks, are looking at modernizing their platform. We see we are in a good position in that. If we specifically talk about Europe, we are in the large five deals, we are in the last three. Who are our competitors in all these five deals, right?
It is Temenos, it's Intellect, and it's Thought Machine. We are now in the same category as a Temenos and a Thought Machine, where Temenos brings the functional depth, it brings the brand name, it brings a lot of references. Thought Machine is building a cloud-native architecture. What we are bringing is the width and the depth as well as the latest architecture. I think in many of these deals we are seeing a lot of competition happening between us, Temenos and Thought Machine. Some of the deals, Thought Machine may be ahead, some of the deals we are ahead, some of the deals Temenos may be ahead. It's a neck-and-neck fight in many of these deals in Europe that we are seeing. I think that's what I would like to say.
If you look back and see Temenos Capital Markets Day presentation, you will see that even Temenos has recognized us as the second as coming closest to them from a winning deals perspective. I think that's where this platform story, the open finance platform story of Europe and the iCredit 360 platform is fitting in. Good momentum in the European market is what we are seeing, both in U.K. as well as continental Europe.
Right. Okay. Appreciated the color, and sorry if I can possibly ask one more. Just to, you know, sum up the entire thought process, what I essentially found is that we are getting into newer market, we are getting better acceptance in the market for our offering. We are coming up with new offerings which also expand our market scope and positioning. We are also getting a lot of proactive deals because of the kind of offering we have.
Now, when we have this kind of accelerated thought process in terms of the revenue potential, and we are also investing more and more in the business, somehow the margin comment is very, very clear, which is getting aligned with this kind of an thought that you have. Somehow the growth comment is not reciprocating the same enthusiasm. I think somebody else also asked about this, but is it somewhere like the real advantage of all this exercise may come much later than in the recent year, and that's why you are trying to not give that kind of a view right now? This is more about being conservative in general?
Whatever you interpret, Rahul, that's okay. We are seeing our LTM is 29%. We are saying calibrated growth of. We have designed the optimal 20% growth. We don't give a guidance. We told guidance we stopped giving. We are saying how the business is designed and we are scaling nine principles which Prabal has shared and I'm sharing. What interpretation you want to have it's your call as an analyst what you want to look at it. 29% growth we have demonstrated in last LTM. Commentary can be better. It will be good for the investor, but there's no point of looking at it. Any, my competitors are not growing more than 5%, 7%, single digit growth in my entire product journey.
If I'm growing 20%, I'm very, very happy. If it's 25, 26, 27% happening, lucky to have everybody on the same page. We have many strategic deals on the table. We have 15 strategic deals on the table. Each deal is more than $10 million deal. It can change the color of the growth differently. There's no point of till the time we win the 15 deals of the nature which are now getting us into $10 million to $100 million range. We are fighting in many deals which is more than $50 million. After RBI deal win, we are now getting to $50 million, $100 million dollar deal fights with Temenos and with Thought Machine.
We are very enthusiastic, but specific number to put it, I think we don't want to put. We said, what is my design principle? Design principle is 20%. The rest of it is the interpretation, what we perceive.
Sure. Thanks a lot. That's quite encouraging. Thank you.
Thank you.
Thanks, Rahul.
Yeah, that's, Manish, is there any other one?
Can we take a couple of more questions?
No, this is already 6:30. Now we can just take the question by writing.
Okay.
Unless somebody... Any co-
One last question we can take, please.
Yeah. Just last question you can take.
Yeah. The last question. Ashish Das from Sharekhan. Ashish, can you quickly ask your question?
Hi, sir. Am I audible? Yeah.
Yeah, yeah, please go ahead.
Thanks for giving opportunity. Two questions. Yeah, I understand you stopped giving the revenue growth guidance. At the start of FY 23, you mentioned 20%, but now you stopped the guidance. Okay, what is that reason? Second, last quarter, in your commentary, you mentioned that you are entering into three new markets and you want $10 million per country in next three years. Now you entered into the U.S.. Is that commentary, is that outlook still remains?
Yeah. That's right. It's the same outlook. Three countries: Vietnam, Saudi, and France, and now we are looking at Germany. That country commentary remains. We never given a guidance. We always said design the business for calibrated growth. It's understood as a guidance, which is okay. It's an understanding is there. That's what we designed the business because there could be ups and downs in license revenue. Sometimes we can win a very large deal and we may so in other quarters we may not win a large deal. It's not quarterly. Then we are looking at LTM as a growth chart. In LTM we are able to ensure that it will be 20% as designed. Okay?
Right, sir. Yeah.
Uh-
Sir. Yeah. Okay, sir. Thank you so much.
Thanks, Ashish. Since we have many questions, we request everybody to please do write to us any questions which we might not be able to take because of the shortage of time. Thank you all of you for attending the call. Thank you so much. Now we can close the call. Thanks everybody.
Thank you.
Thank you.
Thank you.