Ladies and gentlemen, good day, and welcome to the Q3 FY 2024 earnings conference call of RateGain Travel Technologies Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bhanu Chopra. Thank you, and over to you, sir.
Thank you very much, and a very good afternoon to everyone, and thank you very much for joining the earnings call for RateGain Travel Technologies Limited for the third quarter and nine months of the fiscal year 2024. It's great to connect with you all again, and I'm excited to share some key updates from the quarter. Joining me on the call would be Mr. Tanmaya Das, our CFO, and Mr. Vivek Anand, our Head of Investor Relations. We announced our third quarter and nine-month results for the fiscal year 2024 earlier today, and I hope you've had a chance to go through our financial results, press release, and investor presentation that are available on the stock exchanges and also on our company website.
I'm excited to share that the company has delivered yet another strong quarter of healthy growth, improving profitability and a compelling financial performance, underscoring our resilient momentum. It was another record quarter for the company in regards to new contract wins, which now stands at 2.3 times at the same time last year, a significant jump underscoring our strong growth momentum as we continue to add new clients and deepen our presence across marquee global travel brands. Our foundational philosophy and commitment towards delivering value and excellence is evidenced through our impressive operating and financial metrics of Q3 and for the nine months of this fiscal.
Some of those key highlights I'd like to share with you are: our annual recurring revenue, our ARR, has now crossed another significant milestone and now stands at INR 1,008.1 crores, growing at an impressive pace of 82% year-over-year. We continue to scale up at an impressive pace, basis healthy traction across all our three segments as the teams continue to demonstrate value and add marquee logos, along with deepening relationships across key accounts and our wide portfolio of 14 products. Revenues for the third quarter grew by 82% to INR 252 crores compared to the same period last year. Strong revenue growth was complemented by an improved operational performance, with our margins coming in at 20.3%.
It's a notable achievement, and we are now one of the few global SaaS companies that has managed to scale up and doing so profitably. I'd also like to remind the audience, at the time of the IPO, I had promised that we would get to 20% EBITDA from 10% in five years, and thus we have achieved that milestone in two years. Our new contract wins for the quarter came in at a record INR 84.4 crore, a growth of 71% over the same quarter last year. We witnessed healthy traction across all three segments, and with a sharpened focus, we continue to see strong momentum on this front. This is reflected in our pipeline of INR 421 crore.
As we complete our first year of our acquisition of Adara, the quick turnaround and strong all-round performance delivered over the past few quarters is a testament to the RateGain M&A strategy in our playbook. Adara continues to outperform and witness significant traction, leveraging the strength of the RateGain brand and our global presence. Adara continues to deepen its presence across key enterprise accounts and is a key partner for leading destination management organizations, airlines, and leading travel brands. We continue to make investments to add new data partners and build up our global sales teams to strengthen our proposition and accelerate growth. We continue to see improvement across some key operating and financial metrics. Our revenue per employee has improved to INR 1.3 crores, improving 55% year-on-year, capturing improved productivity and ability to scale up in a sustainable manner.
This also reflects the operating leverage in our business. Generative AI and its adoption by various travel brands continues to be at the forefront to improve customer experience, drive cost efficiencies, and optimize revenue. Our expertise in providing accurate intelligence at scale and driving ROI for large brands is helping drive incremental revenue from existing relationships and new client acquisition. The investments related to developing the right solutions are underway, and we continue to be beneficiaries of the same. We have also adopted certain use cases of utilizing AI, such as for more efficient data analysis, analysis to be handled and to handle more volumes. Within our brand engagement offering, we're leveraging the vast repository of social media data to drive better outcomes for our customers and to do it efficiently, to generate more targeted travel intent audiences for running more effective performance marketing campaigns.
Now, let me comment on the state of the industry. The global travel industry experienced a triumphant year in 2023, consistently surpassing 2019 levels and ending the year strong, showing a new normal is setting in. As for the Skift's travel outlook for 2024, this year is going to be a Goldilocks year for the travel industry, with macro conditions easing to support consumer spending, with increasing propensity to travel holding up, especially across the younger folks. The pricing-led growth experienced by the industry is all set to make for occupancy-led growth. Cross-border trips are set to grow over 21% year-on-year, with Asia Pacific region set to grow at a faster pace compared to other regions.
The shifting dynamics and evolving consumer is the industry's driving change, along with adoption of new technologies and attracting new investments into the industry, which is further unlocking new opportunities for players like RateGain to consolidate their position through product innovation and acquisition, to have a larger share of a thriving market as the industry looks at adopting technology to more effectively engage with travelers. With that, I will now briefly touch upon the performance across each of our business units. The SaaS business contributed to 32.3% of the total revenue for nine months. This unit grew at a strong pace on the back of healthy traction with key enterprise accounts, and addition of new logos across OTAs, airlines, car rentals, and cruise.
We continue to see incremental volume demand coming from our existing enterprise customers, driven by strong travel demand and product innovation, with a focus on building AI models. We expect this trend continue to drive growth for our SaaS segment in the near term. Within Air, we are now emerging as a leading player in the APAC geography and now count leading national and fast-growing airlines as our customers. We continue to gain market share across both OTA and car segment, with deepening relationships across enterprise brands. Now let me talk about distribution segment. The distribution segment accounted for 22.2% of our total revenue. We recently completed the integration and have started monetizing on a large order we won at the end of last year and should see the full benefit of the new win in this quarter.
Volumes growth improved in the past quarter in continued demand across our enterprise chain segment on both OTA and GDS channels. We continue to be the partner of choice for large hotel chains as they undertake digital transformation projects to modernize their distribution ecosystem and optimize their presence across channels. We witnessed good traction for our RevMax platform with mid-stay, mid-sized chains in the Middle East, and continue to focus on scaling up in the coming quarters. We continue to add further features to create best-in-class products. Our MarTech business contributed to 45.5% of our total revenue for the nine months, backed by steady growth in the paid digital media segment and healthy traction in our brand engagement segment, with some leading hospitality brands in the North American geography.
on efforts from the team and targeted focus, there is a renewed sales momentum with key closures and healthy pipeline growth to our brand engagement offering. With a comprehensive paid digital media offering, the value we are driving for large travel brands, based on the strength of their travel intent data, is really allowing us to drive market share within the DMO segment and across large enterprise travel brands, making RateGain the partner of choice. Our paid digital media offering for hotels to optimize direct customer acquisition continues to gain traction in the European and APAC regions. We continue to strengthen the leadership team as we strive to further scale up the business, and I'm happy to share that we made some notable additions in the senior leadership in the past quarter.
Gomti Shankar joined as the commercial leader and will be heading our GDS for the Asia Pac, Middle East, and Africa region. She's an accomplished business leader, known for her expertise in business development, enterprise sales, product management, and strategic partnerships, especially in the fast-evolving sectors of digital and big data monetization. Gomti has held key positions in globally renowned companies such as Sony, Motorola, Philips, Vodafone, Netflix, and more recently, Taboola. Along with Gomti, I'm proud to welcome another industry veteran, Michel Taride, who joins us as a board advisor and will play a crucial role in guiding RateGain's product and commercial strategy for its car rental offerings, including RevAI. Formerly the Group President of Hertz International, he was responsible for their operations across 150 countries.
His profound knowledge and visionary leadership in the travel and hospitality sector aligns perfectly with our deep mission to revolutionize this industry through technology. We also have Nitin Kumar, who joins us as a Senior Product Leader and will be responsible for enhancing our solutions and steering our product management to new heights. Nitin, an alumnus of IIT Delhi, brings with him vast experience from his earlier roles at Paytm and Myntra prior to joining RateGain. As we complete another quarter with remarkable achievements, I'm thrilled to share our outstanding milestones at the people's front as well. We have now achieved a record low attrition rate of 12%, and it reflects our strong commitment to retaining and nurturing top talent. Additionally, we secured the Great Place to Work certification for the fifth consecutive year. That reflects our positive work culture.
As we bask in this success, our focus remains on building future leaders, cultivating an internal pool of talent, and creating a diverse, inclusive, and equitable culture that propels us forward. I express my heartfelt gratitude to our dedicated employees for their unwavering commitment and hard work, which has contributed to RateGain's continued success. We are very excited about the future and the journey ahead. With that, now I'd like to ask our CFO, Mr. Tanmaya Das, to take you through the performance of Q3 and nine months of the fiscal year.
Thank you, Bhanu, and a very warm welcome to everyone on this call. I'm delighted to report that the company has delivered another quarter of robust performance with strong growth momentum, steady margins, and stellar new contract wins. The strength of the underlying business model, with strong and continued execution from the team, has been key to improvement across key operating metrics. With a focus on sustained growth across segments and operational efficiency, the operational margins crossed the 20% mark in the past quarter and much ahead of the guidance we had given to the markets at the time of listing. The solid foundation positions us well to drive growth, innovation, and capitalize on future opportunities.
The successful completion of capital raise in the past quarter highlights the faith from our investors, who are focused on delivering on the stated objectives with a healthy pipeline into and in line with our vision of building an integrated tech stack to help our customers increase their revenue. For the third quarter of 2024, the company reported a revenue of INR 252 crore, with a year-over-year growth of 82.2%. EBITDA grew by 123.5% to INR 51.3 crore in the quarter, as compared to INR 22.9 crore in the same period last year.
EBITDA expansion continues at a healthy pace of 20.3% margin in this past quarter, compared to 16.6% last year, as the company continues on its path of fiscal prudence and operating leverage kicking in as we scale up. The total operating expenses grew at a pace of 74% in Q3, compared to 82% growth in revenue. Our PAT grew by three times compared to the same quarter last year and stood at INR 40.4 crore, up from INR 13.2 crore. For the nine months of the year, the company recorded a revenue of INR 701.2 crore, with year-over-year growth of 83.5%.
This was on the back of strong growth from all three verticals: DaaS growing 127%, MarTech at 123%, and distribution at 12% for the nine months. EBITDA grew by 158.3% to INR 135.5 crore for nine months, with the margins coming in at 19.3% as against 13.7% the same time last year. EBITDA continues to hold steady, with strong growth in DaaS segment, continued traction in Adara, and with uptick in our distribution segment. Our PAT grew by 775.5% in nine months compared to the same time last year, coming at INR 95.4 crore, up from INR 34.6 crore.
The company continues to have strong customer relationships with low churn and a focus to expand existing relationships to build sustainable and reliable revenue streams. Our gross revenue retention and net revenue retention stood at 90% and 110% respectively, with an expanding customer base, which currently stands at 3,210. We closely track and strive to outperform on key operating SaaS metrics, and for nine months, our revenue growth per employees stood at INR 1.34 crore, growing at 54.5% over last year. With continued traction across key customer segments and sharpened focus from our teams, our current pipeline stands at a new high of INR 421.5 crore. We continue to drive investments in key geographies and areas to propel future growth.
Our cash, cash flow generation has improved significantly compared to last year. The cash flow from operations stood at INR 99 crore in nine months period, as compared to INR 29 crore in corresponding period last year. This is on the back of improved profitability and improved DSO. We continue to have strong balance sheet. Our net worth almost doubled compared to last year, now stands at INR 1,400 crore on the back of increased profitability and recent capital raise of INR 600 crore. Our cash and cash equivalent balance as at quarter end stood at INR 101,020 crore. In terms of guidance for FY 2024, given the YTD performance, we are increasing the revenue guidance to close to 69% year-over-year growth, up from 65% growth guidance given on the last earnings call and up from 55% given at the beginning of the year.
Concurrently, given the improved margin performance so far, we estimate EBITDA margin for the year would be close to 19.5%. With that, I would like to conclude my update, and we are happy to open the floor for questions.
... 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 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. The first question is from the line of Shobhit Singhal from Anand Rathi. Please go ahead.
Congrats for the good numbers. So my first question is, so how had Adara performed in Q3? So last quarter, you had mentioned that the revenue was around $10 million. So if you can share, what is the revenue rounded this quarter and ex of Adara, what is the organic growth? And, yeah. So this is my first question.
Yeah. So last quarter, Adara closed around INR 90 crore. We are—this, this quarter, we are closing around INR 94 crore. And the organic growth that we have experienced in this business is around 30%.
Okay. My second question is, so, why the distribution? So if I calculate the distribution revenue this quarter is around 2% year-on-year. So I just wanted to ask, so why is this segment steady when travel sector is doing so well? I mean, it is due to the discount we have given to some large hotel chain or maybe we are losing some market share to competitors. So if you can explain the disconnect between distribution and the strong travel demand.
Yeah, I mean, if you look at the for the year, we are close to 12% growth. Q3 was not only 2% growth year-over-year, primarily because FY 2023, Q3, we had a few one-time revenues, minimum guaranteed revenues that was recognized in some of the large customers. That's why you are seeing a little bit anomaly, but for the year, nine months, if you see, it is a 12% growth, at this point of time. But I think the, the, we, as Bhanu mentioned, that one of the large contracts that we signed last year, which has, you know, one more, more, which we have, we have monetized this quarter, well, half of the quarter is affected. So from next quarter, you will see, much better growth in distribution business.
Okay. My last question is, so we have a cash and cash equivalent of around close to 10 million. So how are we looking to deploy it? Like, are we looking out for one, any big acquisition? And if yes, so in which segment and geography are we looking at?
So yeah. So as you are aware, you know, we did a QIP just a couple of months back, and the goal of, you know, re-doing the QIP is because we have a very robust M&A pipeline. We are in active conversations with a couple of prospects. So the utilization of the cash on the balance sheet is going to be towards M&A. And, like I said, we are in active conversations, and I'm pretty optimistic that, you know, something should bear fruit in the near term.
Okay. Thank you.
Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Am I audible, sir?
Yes.
Yes.
Okay, yeah. Thank you very much, sir, for this opportunity, sir. First up, I just wanted to know what sort of inorganic aspiration or any pipeline we have if you have to look at for next two-three years?
Yeah, sure. So, as you know, our goal is to really become the integrated tech stack that allows customers in travel and hospitality to go acquire, get, retain, and engage them, and have a wallet share expansion. So some of those capabilities we possess as a company and some of those capabilities we do not possess and believe that it might be better suited to acquire those companies. So from an M&A perspective, our lens is A, to see if we can find capabilities that are part of our product roadmap and the vision that I talked about. B, they help us, you know, get deeper in certain geographies. As you know, we are fairly concentrated in the U.S. and Europe. We continue to look for opportunities that deepen our presence in those geographies. And three, opportunistically, we also look at competition.
So with that, we have a very large prospect database of almost 350 companies in this large universe. At any given point, we're actively engaging with a dozen of them. As you know, and have seen that we have showcased that we have a track record of integrating these companies very successfully, but more importantly, also paying the right price. Sometimes it's a matter of engaging and having the right, you know, patience to get the right price before we execute the deal.
Mm-hmm. And, I mean, what sort of investment in this acquisition we are looking at over the next two-three years?
So-
What ARR is what we are looking at?
We've not earmarked a certain pool of money in terms of M&A activity. As you can see from our numbers, the company is extremely cash generative. We are doing now north of INR 200 crores EBITDA. And then the cash on the balance sheet is over, you know, between INR 1,000-1,050 crores. So we intend to use that pools of capital for any good acquisition that might come about. Our typical size so far has been around INR 150-200 crores, but, you know, given the track record that we've had, you know, if there is a bigger opportunity, we will not shy away from it.
So we look at every opportunity from the lens of what it does to us strategically, and if there are opportunities, if they're larger in nature, but of huge strategic value, and, you know, also, you know, if we do a fitment test in terms of IRR, strategic value in our hand, EBITDA we can generate, you know, we will not shy away from such opportunity.
Fair enough. That's very helpful, sir. In terms of, I mean, if you wanted to look at growth, I mean, this year you mentioned about some 60-69% growth, right? If I have to look at FY 2025, 2026, I mean, how do we see the growth?
So, something that I have guided in the previous call also, our goal is we are now, as I mentioned in my opening remarks, at a little over INR 1,000 crore ARR on a run rate basis. Our goal is to double the revenue in the next three years, which implies a CAGR of 26%. So, some of it will be organic, some of it will be inorganic, but organically, you know, we should land between 20%-25% for the next three years.
Okay. And when we say this INR 2,000 crore, this 26% CAGR, so that is purely organic, right? And inorganic will be over and above, whatever it comes.
No, I've actually factored inorganic as well, but yeah, you know, you might say that with that in mind, you know, the growth potential should be larger. But we just wanna be diligent in what we commit and what we promise and what we deliver. If you see our track record over the last two years on revenue, on margin expansion, we have over-delivered than what we promised. So we want to be conservative in our commentary and, you know, be prudent in delivering on what we promised and, you know, that's sort of the narrative we want to maintain.
Fair enough. That's very helpful, sir. And just one last thing, I mean, at INR 2,000 crore, I think roughly about 25% EBITDA margin is what we might have aspirations.
That is correct. That's the aspiration that we believe we can get to.
Okay. Okay, great, sir. I think that's it from my side. I think you are doing pretty good. I mean, all the very best to you. Thank you so much.
Thank you.
Thank you. The next question is from the line of Pradyut Ganesh from ICICI Securities. Please go ahead.
Yeah, hi. Am I audible?
Yes. Yes, you are.
Yeah. So my question is, this Skift travel index for December 2023 was at 102, against 106 in September of 2023. So is RateGain seeing some slowdown in travel industry? Could you give us some color on how the current quarter has been in the month of January till now?
Yeah. So, you know, as I noted in my opening commentary as well, we are going away from a pricing-led growth to more of an, you know, occupancy-led growth. And if I see people's attitude towards travel post-COVID, there has been a fundamental shift. And if you look at sort of consumer surveys also, they all point to, you know, from a macro level, the discretionary spend is continuously going towards travel. So when I look at, you know, our numbers as well, the cross-border trips are continuously growing, and we are witnessing about 21% year-over-year growth in them. Also we are witnessing, you know, significant growth in the Asia PAC region. So when I look at even our current quarter numbers, we don't see any slowdown and see a pretty, pretty, you know, robust demand curve there.
Got it. Thank you. So second question is, subscription revenue was at about 60%. It is similar to last quarter, so... But it has come down steadily from 65% in Q4 of last year because, because of Adara being part of transaction revenue. So can we expect this figure of 60% to be steady state number going forward, or do you see contribution from subscription revenue decreasing further in the coming quarters?
It will depend upon how Adara grows vis-a-vis how our SaaS business grows, because SaaS is mostly subscription and Adara. But it is Adara is slated to grow faster, so I would say it will decrease a little bit, but I don't think it will be significant decrease.
... Perfect. Just one final question. In an earlier quarter, you had spoken of moving up the value chain in the distribution segment of your company. What's the progress regarding the same? What have you done till now to achieve this?
Yeah, I'm very glad that you asked me the question. So, you know, we've had some very good momentum building over the last sort of month or two, where we are, you know, we've gone from generating nothing to generating now almost $100,000 of sales every month. So we've got that rhythm going, and that rhythm is expanding as we speak, week over week. And, you know, we are looking to accelerate that engine now. So I'm pretty confident that this could be a big game changer for the next few quarters. I think I talked about, you know, the analogy of having adults, teenagers, and babies, and we've produced these babies or sown these seeds of future growth, and I'm happy to report that some of it is beginning to bear fruit now.
This is part of the RevMax platform, right?
Yes.
Or is this something else? Okay, it's part of it.
It is very much part of the RevMax platform. You know, for other listeners, what it is, is it's really bringing all the pieces of MarTech, DaaS, and distribution together onto one platform, which basically allows our customers to acquire guests, retain and engage them, and have a wallet share expansion.
Okay, got it. Thank you so much, and all the best. Yeah.
Thank you.
Thank you. The next question is from the line of Ashish Chopra from Goldman Sachs Asset Management. Please go ahead.
Yeah. Hi, thanks for the opportunity. Couple of questions from my side. Firstly-
Ashish, can you be a bit louder, please?
Yeah. Is this better?
Yeah.
Okay. Yeah, a couple of questions. First, Tanmaya, if you could just help us with the profitability in Adara in Q2 and Q3.
So Adara will be around 18% EBITDA margin for the year. I think when we picked up the asset, it was breaking even or making losses. So we have turned around the company. I think first half it was 15% margin. I think now they're closing on 18% margin.
Okay. Okay. And secondly, you mentioned that the run rate there is INR 94 crore. So if I adjust for that, then the organic revenue would be INR 158 crores, which is a 14% growth YOY. So just wanted to reconcile your number of 30% organic growth, as to, you know, what would I-
So 30% organic growth was taking as if Adara was also there with us last year. So there is a 63% growth of Adara in our hand after we acquired the company. Okay? As well as I can give you segment-wise growth, like, for example, DaaS, organically, we're growing 54%. Distribution, we're growing around 12%. In MarTech, you know, the businesses that we have, like BCV and MHS, MHS is growing around 16%. BCV, which really is where we have been talking about it in the past few quarters, where we are facing challenges in terms of profitability and retaining some of the customers. So that com- business is kind of degrowing. So that's the business-wise growth percentages.
Understood. Tanmaya, would it be possible to share the run rate of BCV currently?
Sorry, run rate of? I couldn't hear.
BC, BCV, sorry.
So, Ashish, we don't disclose segment-wise numbers so far. So we'll connect with you separately on it and can give you more commentary, overall commentary, because it's all getting intertwined with bundling of the products into one platform that we are calling Demand Booster, which is part of the RevMax platform. So it's becoming a little complex to be able to give segment-wise revenue.
No worries. I understand. That, that's it from my side. Thank you so much.
Thank you. The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead.
Hi. Thanks for the opportunity. Bhanu, again, we have guided for the 69% growth, which implies a muted growth in Q4, despite the traction that we may see in the distribution deal. So, is it more like a conservative stance that you've been having for the last couple of quarters, or do we see some scale down in DaaS MarTech segment?
No. So we're not seeing any scaling down in literally any of the business. We just want to be prudent in how we guide the market. As I said, you know, we wanna be very, very prudent and diligent in what we are guiding the market so that we over-deliver on whatever promises we make.
Just, Rahul, just to add Bhanu's comment, I think Q4 is a strong quarter for us for organic business. But we do have some seasonality for Adara in Q4, where Q3 is much better than Q4. So again, we are, we are again learning for Adara, so that's why we are being cautious, nothing else.
Got it. And Tanmaya, also, if you could, guide on the ideal tax rate for us that we should build in for FY 2025 or beyond.
Currently we are around 21-22%. We are making our efforts to effective taxes to go down. So yeah, I think currently just we're going to factor between 20-22% at this point of time.
Right. And just one bit on M&A. Since we, you know, I'm sure you've done a good transaction last year, but is valuation the concern right now for you in the market of the deals that you're looking at? Or it's more about identifying the right business that matches our need, which is causing this transaction not happening?
Yeah. So I think there are lots of interesting assets, and for the most part, it's around price. But this is not the first time we're seeing the movie play the way it's playing. Usually, it takes a certain amount of time to get and arrive at the right structure from a pricing perspective. So I'm not too perturbed about it, because I believe that this is sort of, you know, part and parcel of the M&A playbook. And I'm pretty confident that something should come about in the near term.
Right. And just one more, if I may. I think you shared one client success story. I think it was with Sarovar Hotels, I guess. So just wanted to understand, since it's part of a very large hotel chain, is it like a fresh entry into that larger group, that's why we are articulating that? Or what could be the opportunity to scale up, really scale up on big big chain, where we might be slow or small right now, but we could see a much larger play, given the success that we may see at a lower part of that bigger chain?
Yeah. So, you know, as I was mentioning earlier, we are beginning to see some very good success in the sort of the assembly line that we've built in our go-to-market motion of showcasing the value that we bring to our customers. So as part of showcasing value, you know, we are building a lot of success stories because, as I mentioned previously as well, we work with pretty much every major hotel chain, including mid-market chain. And there is an opportunity for us to both penetrate these accounts more with our RevMax platform, but also showcase it to logos where we are not present. So this is our attempt to showcase value, and as I noted in my earlier commentary as well, we're starting seeing some very good traction and pickup as a result of, you know, this marketing activity that we are engaging in.
Right. So one part of it is still remain unaddressed, which is like, I think you mentioned it's part of some Louvre Hotels Group, which is much larger, some five million or something. So are we addressing a very small part of that chain right now, and that should be a benchmark for us, or you're still decent in that group already?
Yeah, I can't comment on that specific hotel group, but usually our strategy is what we call land and expand. So we can land in a large hotel group through one of these brands, very similar to this particular case, and then demonstrate success. And once demonstrated success, we are able to replicate it across the other brands as well. So it becomes a success story within the group that we can use to make a compelling value proposition for the larger brand to adopt across all their brands.
The next question is from the line of Anmol Garg from Dam Capital. Please go ahead.
Yeah, hi. Thanks for the opportunity, and congratulations on strong set of numbers. Just one part on the strategy. So going ahead, are we expected to tap into smaller hotel chains with lower number of properties or maybe to cross-sell to existing our existing services to our own clients? So how should we think about the total number of clients versus the penetration within clients?
Yeah. So you know, something that I've indicated earlier also, so when you think about the 1,000 to 2,000 crores in revenue, I believe, you know, half of that will come from existing clients and another half will come through new logos that we sign. So in terms of the mid-market, so we don't really necessarily go after, you know, the long tail of hotels. Our focus is on the mid-market, so any chain that's over, you know, let's say five hotels, we go after any group like that, and there are about 1,200 such groups which are, which have anywhere between five hotels to, you know, a group like Marriott, which has 7,000 hotels. So we could sell to any of those groups. We currently sell to about, I want to say, about 400 out of those 1,200 groups.
So there's an opportunity to, you know, win on a bunch of new logos. And even with the hotels that we sell to, you know, up until three-four years ago, we were just a, you know, two-three product company, and now we have 14 products. So the ability to penetrate, especially with our RevMax platform, that we sell through different modules, you know, is quite significant. In terms of the small hotels, I'll just touch upon that. Now that we have an integrated platform and we're not selling individual modules, some small individual hotels can be interesting also, because everything in a hotel could be paying us, you know, anywhere, depending on how big it is, depending on number of rooms, anywhere from $10,000 to $100,000 per property, so it becomes quite significant.
But our, you know, go-to-market is not really to the small independent hotels, but if they were to come to us, we would entertain them. Our focus is in this mid-market and the big enterprises, elephants market.
Sure, Manu. And should we think that our revenue per client would more or less will keep on increasing as we cross-sell?
Yeah.
And don't penetrate much into smaller hotels?
Yeah. So, you know, we'll, we'll see. Like I said, we will continue to see little bit of revenue coming from the smaller mid-sized hotels also, but I do believe that our big hotels will continue to get significant. Not just big hotels, big, because now we work with not just hotels, we work with DMOs, we work with, you know, hotels is about 45% of our revenue now. So I do believe the big enterprises will continue to get bigger. Like, for instance, you know, there are two very large enterprises that are nearing eight-figure. So I see a lot of that happening. I mean, another dimension to look at this with is, our top 20 customers can give us, you know, $20 million each.
Our 20-100 customers can give us $5 million, and 100-1,000 can get us $1 million. So I see a lot of action within the top 20 segment. I think that will become larger first before the other segments.
Sure. And secondly, just wanted to understand your point of view in terms of the Adara growth. So for the next year, should we assume that Adara should grow at a faster pace than the company's organic, or the company's other businesses?
Yeah. So, you know, as Tanmaya pointed out, we're still a year into the company, and we're still learning about it. I mean, I'm very comfortable guiding for, like, a 20-25% kind of number, although this year has been quite phenomenal, and I do think the low-hanging fruit is getting to INR 100 million. But, you know, as we continue to learn, you know, we'll be able to harden these forecasts a little bit better, because we are learning some very interesting things about the business on, you know, where the opportunities are, you know, what the margins for each of the segments are. So we're calibrating and recalibrating basis all these learnings. So I'll be able to come back and give you, a better sense. But, you know, net-net, does Adara growth look higher than, let's say, RateGain growth? Yes, it does.
For today, it does.
Sure. And just one last thing. We are seeing very strong growth in our DaaS segment, apart from Adara as well. So, can you highlight where is the growth coming from, and what's the sustainability over here?
Yeah. So, you know, growth has been both a function of volume growth with some of our larger customers and also on the airline side and on RevAI, we have signed up a bunch of new logos in the airline side. We're becoming pretty dominant in the Asia Pac segment because we signed some very key large Asian, national Asian airlines. And we continue to see, you know, hunger for more and more data. As you know, you know, as we move towards the big shift to all decision models being run by AI, you know, we sit on such, you know, as they say, data is the new oil. It's, and we sit on a, you know, very, very rich and good quality data that our customers are becoming more and more hungrier for to feed these AI models.
So a large portion of our growth has been a result of our key customers growing to feed their AI models. Sure. Thanks, thanks, sir, for the answer.
Thank you. A reminder to all participants, to ask a question, you may press star and one. The next question is from the line of Miten Shah, an individual investor. Please go ahead. Mr. Shah, your line is unmuted. Please go ahead with your question.
Yeah. Am I audible?
Yes.
Yeah. So thanks for giving me the opportunity and, heartiest congratulations to the entire team, you know, on, this thing, such a stellar result. The first question, you know, I would like to ask from the management, you know, our contribution from top 10 customers amounts to about 72%, which I see has reduced from 75% from the earlier quarter. However, it still looks a little bit high. So what is the thought on this? If you can please, and, what, what is the benchmark, that you would like to set for the top 10 contribution?
I think the top ten contributes 27%.
Is it that I am reading it incorrectly? It shows 72%, top 10, in the presentation.
Just a second.
This doesn't sound right. So...
Yeah, I think that is the number-
The presentation shows top 10 contributing 27.7%.
Oh, okay. Maybe I saw it topsy-turvy. Okay, fair enough.
Anyway, I think one year back it was like 36%-37%, so it is constantly decreasing, almost 10% decrease in that. So it is diversifying the risk.
So I think it is up, so maybe I, I just read it incorrectly. Second thing, can we know what is the percentage of India, not from geography? I mean, we can see Asia Pacific as such. I mean, the reason why I'm asking this, you know, we can see a lot of thrust nowadays, you know, with respect to tourism in India, especially latest we saw, you know, with the latest development in Ayodhya and then Lakshadweep. So how far and how deep are we concentrated are in India compared to other geographies?
So, uh-
Sorry, go ahead, Ram.
Tanmaya, you have the exact numbers, so you can go ahead and answer the question.
No, I'm saying it is very negligible. It is less than 1%, in terms of revenue contribution from India.
Mm-hmm.
Uh, yeah.
All right. Okay, fair enough. Fair enough. I mean, is there any thought to increase the penetration? I mean, given the thrust of the government on tourism, you know, especially in this latest and, I mean, these hot two places, I mean, the way it is being depicted in the media.
Yeah, it's definitely on our radars and I think we're also evaluating a different go-to-market commercial model in India. 'Cause you know, on the subscription fees that we have, you know, it's very difficult to get similar values from Indian hotels versus, you know, outside. And that's why predominantly we've always been focused outside.
Right.
However, on our distribution side, we are now evaluating an adjacency, which would broaden the scope of how we get a hotel, a business, and make it less of a tech value proposition, but make it more of a commercial value proposition, where we're saying to them that, "Look, we will charge you percentages, percentages of the business that we get you." This is something new that we are, you know, testing and piloting, that could commercially make it more viable to go after hotels in India as well. So it's definitely a thought in our head, but give us a couple of quarters to come back to you with, you know, feedback on how that is progressing.
Thank you. The next question is from the line of Vikram Gupta from ICICI Prudential Life. Please go ahead.
Hi. Hi, am I audible?
Yes, sir. Please proceed.
Hi, congratulations on a good quarter. My question was primarily on North America and Europe. Can you just talk about what is generally the seasonality that we see in our business? That's one, in these two geographies. And secondly, what explains the sharp jump in the Asia Pacific revenues from Q2 to Q3? What are we seeing in that market? These are the two questions. Thank you.
So, in terms of seasonality, if you look at our business, Q3 and Q4 historically have been, you know, the stronger quarters. However, in the case of Adara, we're still learning, and our sense is that the Q4, as Tanmaya mentioned, is gonna be likely to be either similar or a little softer than Q3. It's just because that is more directly in the ad space, ad tech, MarTech space, where generally there is a reset of advertising dollars in January. So, we may not see the kind of growth we've been seeing in Adara quarter-over-quarter, but otherwise, the rest of RateGain, Q4 is usually the strongest quarter for us, and especially in, you know, U.S. and Europe.
On the point about Asia, yes, it is a, you know, huge area of emphasis for us, and Asia was the last to open up post-COVID, and we are seeing some very robust recovery. In fact, when you think about the supply and the number of new hotels that are opening, it is very, very significant in this part of the region. And that's why I talked about this new leadership addition in the earlier commentary as well. So we've got Gomti, who's joined us to head this region for us. So we're really doubling down in terms of bringing leadership and adding sales folks there, local sales folks in the region that we operate in.
We've also recently launched a partner program where we are enlisting independent hotel consultants in sort of, you know, some of the geographies like Vietnam, Philippines, where we are not directly present, to help us open gates, you know, in those areas as well. So I'm pretty bullish on the Asia Pac region and as a result of which we are doubling down as well.
Thank you so much. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Bhanu Chopra for closing comments.
Thank you very much, everybody, for giving us the opportunity to go through details of our Q3 performance. I want to take this opportunity to thank each and everyone on the RateGain team for continuing to excel and continuing to over-deliver on the promises that we have made to the market. Thank you.
Thank you, everyone.
Thank you. On behalf of RateGain Travel Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.