Ladies and gentlemen, good day and welcome to the Q4FY25 conference call of Quick Heal Technologies Limited, hosted by Valorem Advisors. As a reminder, all participant lines will be in the 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 touchstone phone. I now hand the conference over to Ms. Nupur Jaink unia from Valorem Advisors. Thank you, and over to you, ma'am.
Thank you. Good evening, everyone, and a warm welcome to you all. My name is Nupur Jainkunia from Valorem Advisors. We represent the investor relations of Quick Heal Technologies Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year 2025. Before we begin, a quick cautionary statement: some of the statements made in today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions.
The purpose of today's conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now, I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. Sanjay Katkar, Joint Managing Director, Mr. Vishal Salvi, Chief Executive Officer, and Mr. Ankit Maheshwari, Chief Financial Officer. Without any further delay, I request Mr. Vishal Salvi to give his opening remarks. Thank you, and over to you, sir.
Thank you, Nupur, and good evening, everyone. Thank you for joining us today as we discuss Quick Heal Technologies' performance for the fourth quarter of FY25. In the wake of our current conflict with our neighbor, while there are kinetic actions which have been initiated, there's a parallel cyber war which is ongoing, and we are playing an important part to protect the digital infrastructure of our country. FY25 was a year of change management and course correction for the company. While we faced turbulence throughout the year, we remained focused and committed towards our goals. Our performance for the year FY25 was below par, largely on account of headwinds in consumer business, government buying slowing down. However, we do have a very healthy pipeline and are confident of our outlook for FY26. There are three levers of our growth trajectory, which are product, consumer segment, and the geography.
On the product lever, we've launched multiple new product categories in Horizon 3, along with our regular updates and version releases that we have done to the existing solutions. In the consumer segment, we launched our groundbreaking fraud prevention solution, AntiFraud.ai. We are continuously fine-tuning our products, sales motion, etc., to make it a success. I'm very happy to share that now we are going to launch AntiFraud.ai Premium in this quarter. Given the rise of cybercrime in India impacting gullible citizens, we remain committed to fight this battle with AntiFraud.ai. On the enterprise side, we launched Seqrite Malware Analysis Platform, SMAP, and Seqrite Threat Intelligence Solution with first customer already onboarded. These solutions have been created on the foundation of deep research at our Seqrite lab, creating a value layer for democratizing malware analysis and cyber threat intel.
While organizations have been investing in multiple layers of cybersecurity tools, a large number of security leaders continue to flag alert fatigue and resource overload as pressing issues. The reality is this: security teams are overburdened due to the complexity of security technologies and the scale of cyberattacks. The threat landscape is dynamic and growing exponentially, and the traditional approaches simply aren't scaling enough and fast enough. This is where I'm excited to introduce SIA, the Securite Intelligence Assistant, which we have launched a couple of days ago. SIA is a virtual AI-powered assistant designed to augment security teams, not replace them, but empower them. Built using advanced generative AI, including agentic AI capabilities, to be purpose-oriented and scalable for large volume of queries. SIA understands natural language, interprets context, and provides precise, actionable intelligence.
With the launch of SIA, our aim is to democratize cybersecurity operations and make effective cybersecurity accessible to our customers. This also underlines our commitment to simplifying cybersecurity by reducing the need for highly trained cybersecurity professionals. With this launch, all our NVR customers are experiencing the power of SIA now. With these series of launches that we have done in FY2025, we remain confident to provide a holistic cybersecurity stack to our customers. On the second lever, speaking about our customer segment, there is a marked improvement in our retention of our large customers, which is giving us confidence on product portfolio maturity. Our current pipeline has not only grown in terms of size but also has a good business mix across markets as well as product segments.
The two critical metrics of enterprise and consumer mix and the cloud adoption are showing a very positive trend, with our enterprise business now contributing 40% of the company revenue, and the cloud product adoption has reached 31%. Last quarter, we talked about the opportunities in our academy business. Happy to share that we have been acquiring marquee customers through this offering and continue to grow this business. We have been tirelessly working towards strategic project wins for government, and it gives me immense pleasure to state that we have closed a large deal, which is now reflected in our order book. The third level, which is the geographical expansion. While we have been largely focusing on India as a market, we are beginning to see a growth in our international business, which accounts for a significant part of our enterprise business now.
We are now focused on onboarding more partners in new geos, and I'm happy to share that we now have a new large partner onboarded in Europe and North America, while we continue to strengthen our existing partnerships in the Middle East, Africa, Southeast Asia, and Latin America. To summarize, fiscal year 2025 has been a building year for us, both in terms of products and our teams. I believe that a good solid foundation has been put in place, which will help us to leapfrog in fiscal year 2026. Thank you for your continued support. Now, I'll turn it over to Ankit Maheshwari, our CFO, to provide further details on our financial performance. Ankit, over to you.
Thank you, Vishal. Good evening, everyone. FY25 was also a year of investment for us. Investments across products, brand solidification, and team building, especially in the sales organization. We launched multiple products across the Horizon 3 category, including AntiFraud.ai, Seqrite Malware Analysis Platform, SMAP, Seqrite Threat Intelligence Solution, STI, and SIA, Seqrite Intelligence Assistant, which we launched earlier this week. These launches demonstrate our thought leadership and our focus at customer value creation by strengthening their defense against cyberattacks. Our confidence in product vision and launches is further strengthened from the fact that our new product billing for the year is three times that of the previous year. The new product billing largely comes from the Horizon 2 category, as Horizon 3 products were launched towards the second half of the last year and would undergo a typical product maturity cycle of cybersecurity products.
Having said that, we missed our revenue expectations for the year FY 2025 and stood at INR 280 crore as against INR 292 crore last year. However, incremental deferred revenue for the year stood at INR 12 crore plus, marking a stark increase over previous years. Enterprise revenue now accounts for 40% of our current top line. The revenue performance has been affected by headwinds in the consumer business, government buying stalled due to generalizations, and postponement of strategic government deals, as Vishal highlighted earlier. I would like to highlight that despite increased investments in Horizon 3 category and continuing R&D spends in Horizon 2 category, our costs are relatively stable. Following prudent accounting principles and the dynamic nature of the industry, we expense all the R&D investments in the P&L. While it might have impacted the profitability in the short term, these are long-term investments made towards our growth journey.
FY25 EBITDA stands at negative INR 6.6 crores as against operating profit of INR 18 crores last year. Our P&L for the year is INR 5 crores. We are immensely confident with our strong current pipeline of the enterprise business, which not only comes from its quantum but also the mix across products and customer segments. Our order book, as of date, stands at INR 24 crores plus, including the last deal that we closed, which Vishal spoke of earlier, as against INR 7 crores stated in our last earnings call. The momentum in the areas of strong pipeline, order book, and deferred revenue instills us with confidence for the road ahead. The fund and bank balances stand at INR 198 crores versus INR 190 crores at the end of quarter three. We are a cash-rich company focused on lasting shareholder value creation through right investments in the business at the right time.
We remain committed towards our vision of the transformational pivot of the organization. With that, I would like to open the floor for the question and answer session. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to withdraw 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. Participants, you may press star and one to ask a question now. Ladies and gentlemen, you may press star and one to ask a question. The first question is from the line of Mihir Manohar from Carnelian Asset Management. Please go ahead.
Yeah, thanks for giving the opportunity. Am I audible?
Yes, Mihir, go ahead.
Yes, sure. Sir, congratulations on launching the new product and getting some actions over there. I wanted to understand on the consumer side, the consumer is high-feeling weak also this year, particularly the first quarter. What is the reason around it, and how to understand it going ahead? Will there be some reversal, some arrest around that that will be helpful?
Hey, thanks, Mihir, for that question. See, before I talk about the headwinds, I think what we wanted to share with you, based on our market intelligence and analysis, currently, we are a market leader in the consumer segment business in distribution. From a customer-based point of view, we are at a 33% market share. From a revenue-based, we are at a 50% market share. We continue to maintain our market-leading position as far as the consumer business is concerned and also our very premium product, which is basically recognition of the quality that we provide in our solution. Now, what we are seeing is that there are headwinds in this business primarily because of pre-AV and also pre-bundle AV, which is shipped from overseas. As a result of that, there is a degrowth in the paid antivirus as far as India is concerned.
We do believe that our degrowth is far, far lesser as compared to our competition. We are continuing to come out with different strategies to see how we can overcome these headwinds and show the value that we bring to our customers. That is really what we are seeing right now. We continue to remain invested in our distribution channel and invested in our partner network and have a renewed approach towards how we are going to approach it in FY 2026. I hope that answers your question, Mihir.
Sure, understood. Second, on the IDRBT side and specifically this remote arrangement with IDRBT, just from a technical capability perspective, how do we compete on this particular side with other global giants, specifically the IDRBT? If you can throw some light around the manual game.
Yeah, I think specifically on the cyber threat intelligence product that we have launched, which we have won the deal with IDRBT, we have actually replaced a very globally competent competitor. That shows that we are able to compete with our product in the market. That project is going quite well, and it is getting deployed across the top 100 banks in the country. We are well-positioned. Of course, that's primarily also because of the value of information that we collect through our sensors in our malware lab, which is actually powering that cyber threat intelligence. It is encapsulated through the bundling of solutions that we have created for IDRBT. Cyber Threat Intel or Seqrite Cyber Threat Intel feed is a very potent feed, which we are now taking to the market, and we have got some pipeline created for that as well.
Sure. Here, I mean, why did the buyer think of changing the existing vendor? Was it because of incremental offerings or add-on offerings that our platform offers, or was it the cost which was the driver? How to understand that?
It is primarily the valuation that we bring on the table.
Understood. Sure.
It is not a cost arbitrary. We have not done it on cost.
Understood. Sure. Just last question was on the fact that new products getting launched. Also, you made a comment that a good solid foundation has been laid in this particular financial year. Should we see some green shoots to be there in FY 2026, material green shoots, or how to see that?
Yeah. Like we had said in that commentary, we are seeing a very improved product mix in our pipeline, which is improving. You're already seeing that now in the enterprise segment is 40% of our overall business. Within that, also within enterprise, the new product mix is constantly growing, and that is coming from the way the pipeline has got generated. We believe that we are already seeing green shoots because of the healthy pipeline and the mix that we are seeing. You can expect that we should be able to translate that into a good performance for FY2026.
Understood. Sure. Thank you very much. That's it from my side. Best of luck.
Thank you, Mihir.
Thank you. Participants who wish to ask a question may press star and one. Ladies and gentlemen, to ask a question, you may press star and one. Anyone who wishes to ask a question may press star and one now. Ladies and gentlemen, you may please press star and one to ask a question. The next question is from the line of Aditya Singh from RoboCapital. Please go ahead.
Hi. Thank you for the opportunity. I see that our research and development expenses have come down to 33%, and earlier it used to hover around 49%.
We are unable to hear you clearly. Your voice is sounding very muffled.
Okay. Is it better now?
Yes. Please go ahead.
Okay. So I was asking that our research and development expenses, as a percentage of revenue, have decreased to 33%, and earlier it was around 45%, and it went to 61% at times. Is it going to settle around 33% for the next two years, FY 2026 and FY 2027?
We are constantly monitoring our R&D expenses. Like we mentioned, last year was an extraordinary year, and we had also announced the investments that we will do for the Horizon 3 product. We can successfully say that most of those products have been launched as we had talked about them. As a result of that, we've invested in the R&D expenditure for last year. This year, we are going to be focusing on how we can double down these products and get them to the market. We might not be spending as much as we did because we did some extraordinary expenditure last year on the new products which we launched. You might see either a similar spend or slightly lower spend in R&D coming to this financial year.
All right. So these products are for the enterprise segment, right?
Yeah. These products are for the enterprise segment. As we had mentioned last year, we also launched AntiFraud.ai, which is actually our consumer segment. That is a new category that we created for cybercrime, fighting cybercrime. That product is also something which we launched. We will keep continuing. Like I mentioned today, we are also going to launch a premium version of AntiFraud.ai in this quarter, which will help us to reach out the benefits of the core benefits of the product free of cost to customers. If they want, they can actually upgrade to premium for some special services. That is our consumer product which we created new. Apart from that, everything else that we created new was for enterprise segment. I hope, Aditya, that answers your question.
Hello.
Yeah. Can you repeat that, Aditya? Your voice got cut.
I was asking, is it possible for you to share how much incremental revenue can these new products bring in two, three years down the line?
We are not right now sharing that number. As it stabilizes, just like we have been sharing about our business mix between our consumer and enterprise, in the near future, we will start sharing you a business mix between our core products and our new products.
All right. Okay. Okay. So those are my questions. Thank you.
Thanks, Aditya.
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Smeet Ghalas from Sicom oro Advisors. Please go ahead.
Hello. Am I audible?
Yes, Smeer. Go ahead.
Yeah. Thank you, sir. Sir, one question regarding the AntiFraud.ai. Since we have done heavy marketing in that, and we have launched a product last year, any revenue flows which have started in the AntiFraud.ai into consumer segment business?
Yeah. Smeet, actually, we have had around 300,000 downloads till date, in excess of 300,000 downloads which have happened. The revenues have also started occurring for AntiFraud.ai. We are tracking that now. Of course, we are also getting some good feedback from customers in terms of what more features they would like to know. I'm also happy to share with you there are many examples and case studies of how we have prevented fraud from happening for those customers who are using it. They are able to see value. That is encouraging us to now launch a premium version for AntiFraud.ai.
Got it. Got it, sir. So any revenue numbers in that which you can know or not to touch for now?
We are not right now giving a bifurcated number by each product. But maybe in future, we will start doing that as well.
No problem. Got it, sir. Another small question. I just wanted to understand what is the usual margin for mature enterprise cybersecurity business somewhat similar to our current or overseas?
Yeah. Sorry, Smeet, you are asking about margin? Yes, for enterprise, yeah.
Got it. In future, when our enterprise business matures, what would be the margin going forward? Probably for us, if there are any global competitors in this space, what's the average margin in this space?
Generally, in our case, I can tell you that we don't share these margins as a separate number. Overall, for a mature business, the margins should be in the range of 30-50%, depending upon what services we are using and which products we are using. If it is an on-prem product, the margins are high. If it's a cloud product, the margins are lower because we have to incur the cloud cost to service it. It is in the range of 30-50% when the product matures.
Understood, sir. Got it. Thank you so much. That's it from my side.
Thank you.
Thank you. Participants who wish to ask a question may press star and one. Ladies and gentlemen, you may press star and one to ask a question now. Participants, please press star and one to ask a question now. Ladies and gentlemen, you may press star and one to ask a question. As there are no questions from the participants, I now hand the conference over to the management for closing comments.
Thank you, Nupur, and thank you so much for joining us today. Have a good evening. Thank you. Bye now.
Thank you.
Thank you. On behalf of Quick Heal Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.