Good evening, ladies and gentlemen. I'm Rio, moderator for this conference. Welcome to the conference call of Route Mobile Limited, arranged by Concept Investor Relations, to discuss its Q3 and 9-month FY 2025 results. We have with us today Mr. Rajdipkumar Gupta, Managing Director, Mr. Gautam Badalia, Chief Executive Officer, Mr. Raj Gill, Group Chief Financial Officer, and Mr. Vinay Binyala, Chief Strategy Officer. At this moment, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session. At that time, if you have a question, please press star and one on the telephone keypad. Before we begin, I would like to remind you that some of the statements made in today's earnings call may be forward-looking in nature and may involve certain risks and uncertainties. Kindly refer to slide number two of the presentation for the detailed disclaimer. Please note that this conference is being recorded.
I now hand the conference over to Mr. Rajdipkumar Gupta. Thank you, and over to you, sir.
Thank you, Rio. Good evening, everyone. I hope you are doing well. I would like to share an important update about our evolving organizational structure and what it means for Route Mobile. As you may have seen in the recent announcement, Proximus Group has created Proximus Global, which brings together BICS, TeleSign, and Route Mobile under a single umbrella. We believe this marks the beginning of an exciting phase of growth for all of us. For us at Route Mobile, this organization represents both an affirmation to our strength and a significant opportunity to leverage the combined capabilities of our sister organization on a much larger scale. Within this new structure, our leadership has evolved to position us for maximum impact.
I have now assumed the role of Managing Director, and I will focus my expertise on accelerating our business across international markets and tapping into the remarkable product diversity across Proximus Global. Gautam Badalia has now taken on the role of Chief Executive Officer of Route Mobile Limited and will guide our day-to-day operations and strategic vision, continuing to build on the momentum we have already seen. Gautam and I will closely collaborate to ensure that our long-term strategic initiatives align seamlessly with all our operational activities. It's essential to note that this expanded group structure on how our clients or partners interact with Route Mobile. In fact, the new setup promises to enrich our offering by drawing on BICS's global connectivity footprint and substantial stronghold in digital identity. All of this blends seamlessly with Route Mobile's strength in customer engagement solutions.
We believe that together, under Proximus Global, we can move more swiftly on innovation and streamline decision-making across the board. That synergy should directly benefit our enterprise customers, OTP clients, and Mobile Network Operator and partners worldwide. We are also excited about the far-reaching potential of having access to an established footprint in more than 100 countries. This type of coverage creates an avenue for faster product rollouts, stronger collaborative solutions, and far deeper global support networks ultimately. That should translate into tangible advantages to investors, not just in terms of operational resilience, but also because it gives us the kind of skill needed to solidify our market leadership in the future space. As always, our commitment remains to drive sustainable, profitable growth.
We will keep you updated on how the changes at Proximus Global impact Route Mobile, including any new product strategies or regional expansions that result from this collaboration. I'm confident that these steps we are taking now are the position for long-term success, and I look forward to sharing more details as we continue on this path. Now, I hand over the call to Gautam.
Thank you, Rajdip. Good evening, everyone. Wishing all a very happy New Year. It gives me, so we have uploaded our quarterly earnings presentation. Hope you had the chance to go through the same. It gives me immense pleasure in stating that Route Mobile has yet again delivered industry-leading growth, both on revenue and profitability, despite the festive season being not so buoyant. In an environment where most of our regional and global competitors are demonstrating flattish to single-digit growth, Route Mobile performance definitely stands out.
Since H2 FY 2024, the CPaaS industry has been going through a structural shift in terms of the overall market dynamics. The industry has been grappling with issues like artificially inflated traffic, overall macro headwinds, and trust deficit issues with large global enterprises, which has caused them to evaluate alternate channels for communication. We believe Route Mobile, along with Proximus Global, is best poised to capitalize on these adversities by virtue of the following three factors. As a trusted partner to the enterprises globally with 450+ mobile network connects, Route Mobile continues to have the widest reach with the telcos globally. Route Mobile also has been the biggest proponent of curbing gray routes by deploying firewalls on the networks. Additionally, Route Mobile has also started deploying anti-spam filters with leading telcos globally. In terms of the second factor, so we kind of today are following a follow-through approach.
So Route Mobile, along with Proximus Global, has an unparalleled reach across the globe, which definitely helps us render the best quality of service and plus be the partner of choice for all large global enterprises. In terms of the third factor, we leverage the diversified portfolio across the group to cross-sell, upsell, and become one of the most integrated and comprehensive service providers across the connect, engage, and protect layer of the communication value chain. While we continue to leverage these strengths, we have also started our journey to move up the value chain by drawing actionable insights from the first-party data models using LLMs and machine learning tools to render more effective and personalized communication. In terms of some of the developments for the quarter gone by, we have demonstrated an industry-leading revenue and gross profit growth of over 15% on a YoY basis.
Gross margin continues to be stable. Operating margins were impacted marginally, owing to the impact of INR 57.1 million of long-term incentive plan, which pertained to the period July to December 2024. We shall continue to have an impact of INR 120 million during Q1 FY 2025. However, about INR 10 crore of operating cost is non-recurring on a quarterly reported basis. Adjusted for that, reported EBITDA would have been INR 40.72 crore in Q3 FY 2025, which is 11.9% EBITDA margin. And I mean, some of the related party transactions that's happening across the group actually is happening at a lower markup than the portfolio operating margins. And hence, adjusted for that, I mean, EBITDA margin for nine months FY 2025 would pan out to be about 12.33%.
Other income during the quarter gone by reduced significantly, owing to forex loss in Q3 FY 2025, as against gain of INR 250 million in Q2 FY 2025 and gain of INR 147 million in Q3 FY 2024. This impacted the PAT margins, and hence the PAT margins were slightly lower. One area where we have done exceedingly well has been the free cash generation capability of the business. During the nine months gone by, our CFO to EBITDA conversion was a staggering 102%. Considering the superlative performance, the board has recommended an interim dividend of INR 3 per share. With these updates, I also welcome Raj Gill as the Group CFO and would request him to quickly introduce himself and highlight his key areas of trust. Over to you, Raj.
Yes, sir. Thank you, Gautam. And good day, everybody. So firstly, let me introduce myself. My name is Raj Gill, the newly appointed CFO of Route Mobile, and I'm terribly excited to be here and work with you all. In terms of kind of focus areas, clearly, we are very much focused on driving value. Key pillars of that will be clearly driving synergies and focusing on revenue opportunities to proceed through partnerships, but also cross-sell, upsell, and driving efficiencies across the Proximus Global family. And to that end, I'll be working very closely with Proximus Global to unlock key areas of growth for the next phase of our growth journey. So again, looking forward to working with you all and excited to be here. So I will now hand over to Vinay for the next phase.
Thank you, Raj. Good afternoon, everyone. It's a pleasure to speak to all of you. I wish you a very happy New Year. We already uploaded our quarterly earnings presentation on our website as well as on the stock exchange websites. Hope you had a chance to go through the presentation. Adding to the overview shared by Gautam, I will run you through the highlights of our financial and operating performance during Q3 FY 2025 and nine months FY 2025. Despite the industry headwinds as highlighted by Gautam, we have delivered industry-leading YoY growth of 13.1% in the nine months FY 2025. Revenue from operations grew from INR 30,063 million in nine months FY 2024 to INR 34,006 million in nine months FY 2025. We have delivered 150% growth in the new product revenue, 60% growth in revenue excluding new products over the last 11 quarters. EBITDA has grown by 60% over the same period.
This translates to a CAGR of 40% in the quarterly new product revenue, 18% in the quarterly revenue excluding new products, and 19% in the quarterly EBITDA. This reflects our consistent business performance over the recent past despite evolving industry dynamics. You may refer to slide 13 of the earnings presentation to see more details on this. Now, to discuss some of the key business metrics. In volume terms, we processed 116.6 billion delivered transactions in the nine months FY 2025. Compared to this, we processed 38.9 billion delivered transactions in Q3 FY 2025 versus 31.2 billion in Q3 FY 2024 and 40.5 billion in Q2 FY 2025. Average utilization per delivered transaction marginally increased from 27.5% in Q2 FY 2025 to 30.4% in Q3 FY 2025. This was driven by a change in the mix of domestic and ILD traffic volumes in India.
In nine months FY 2025, we had net revenue retention of 105% with 90% recurring revenue. The same is discussed on slide 11 of the earnings presentation. Another key aspect is the geographic mix of our business. In terms of geography, India continues to be our largest market by termination, accounting for 51% of our revenue by termination. The details on other geographies which we focus on are available on slide nine of the deck. We continue to witness strong momentum on the next generation products, which grew by 21% on a YoY basis. You can see the details on slide seven. Gross profit margin was sustained at 21.1% in Q3 FY 2025. EBITDA grew by 9.1% on a YoY basis. EBITDA margin, though, contracted marginally from 12.5% in nine months FY 2024 to 12% in nine months FY 2025.
Effective tax r ate for the nine months FY 2025 was 21.2% against the 15.1% in nine months FY 2024. PAT in nine months FY 2025 declined by 4% versus the same period in FY 2024. Cash and cash equivalent stood at INR 9,303 million and net cash was INR 7,457 million as of December 31, 2024. Cash flow conversion, which Gautam highlighted in the nine months FY 2025, was very strong at 102%. We onboarded 60 new employees during the quarter. Unfortunately, 57 left us, so net addition was three employees during the quarter. This is a very quick summary of the quarter and nine months gone by. Thank you, and with that, we will open the floor for Q&A.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the touch-tone 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Jyoti Singh from Arihant Capital Markets. Please go ahead.
Yeah, thank you for the opportunity and.
We can't hear you.
Hello?
Jyoti Singh, if you can hear us, please go ahead with the question.
Yeah, so if you can guide us on the guidance trend going forward?
Yeah, so hi, Jyoti. So I think we continue to kind of drive industry-leading growth. I mean, a few things, I mean, which are kind of outside our control, I mean, are external factors, macro headwinds, right? But despite that, I think we'll continue to maintain, I mean, the kind of growth trajectory that we are talking about. And the endeavor will be to do better than what we have done in Q4. And then going forward on a three-year basis, I think we already had kind of indicated about a 15% CAGR growth. So largely, I think we'll try to kind of embark on that kind of a trajectory. And in terms of margins, I think, as I said, I mean, there were a few one-offs. Adjusted for that, I think we'll be in that vicinity of our current operating margins run rate.
Okay, thank you, sir. Is there another question on the shifting on the messaging side? So earlier, we were getting messages through SMS. Now we are getting only WhatsApp message. So obviously, it is impacting the margin. So if you can guide us, what kind of opportunity we are seeing going forward?
Yeah, so I think, yeah, let me start and probably we can talk about a bunch of areas. So if you see, we as a company, probably the first Indian company who deployed the RCS messaging server-based campaign in Bangladesh. And RCS is evolving very big in various markets as we speak right now. So we definitely see, I think, there is an impact of traffic shifting from SMS to WhatsApp, but there are many cases which are still there on SMS. And as a company, I think we are not only focusing on one channel of communication, but we are focusing on RCS as in the big way. And in coming days, we believe that RCS is definitely going to be more impacted, I think, more val ue creation than SMS, but I think both the products will have the market.
As far as the WhatsApp is concerned, we are also supporting lots of customers where the customers are shifting from SMS to WhatsApp. We are also getting those kinds of customers on board. So I think it's definitely a channel shift from SMS to WhatsApp, but in that case, also we are fairly well-planned and we already have a platform and technology where we are serving customers for WhatsApp as well. Gautam, if you want to add.
Yeah, no, no. Just adding to what Rajdip is saying, I think a lot of conversational use cases are definitely moving to the OTT platforms. And that's where I think differentiated, I mean, and kind of a lot of thought leadership, I mean, needs to kind of go in.
I mean, and some of the examples that we have done, I mean, in terms of the metro ticketing use cases, we are trying to replicate that for various other industries, and hopefully, I think by the time we do the next quarterly earnings presentation, we'll come back to, I think, the wider audience with a few unique use cases. I think that we'll be able to kind of coin on the conversational platforms, so I think we are working and creating more and more such unique use cases across the platforms, and I think seemingly, I mean, it seems very, very exciting, I mean, to kind of drive the SMS leg of the business, which continues to be a cash cow, and also capture the conversational pie of the business through such unique use cases.
Just to add here, like our metro ticketing solution, which we have deployed in India, we have deployed the same solution in Indonesia for the metro ticketing, and that is the kind of opportunity we believe with Proximus Global, which is set up in almost 100 countries. We have a larger market now where we can use all these use cases in those markets, and the last example for deploying this ticketing solution in Indonesia. Yeah, Gautam.
Yeah, sure. Thank you so much, sir.
Thank you. Next question is from the line of Pritesh from Lucky Securities. Please go ahead.
Yes, sir. Between your commentary in H2 and what growth has been some important, can you tell where are those misses, Pritesh?
Sorry, Pritesh, can you please repeat the query?
I said between the commentary of your quarter two, if you check your commentary in the quarter two, and the growth that is coming in quarter three now, so you had a clear situation where H2, you had said that the growth would be far, far higher than H1. So I'm just wondering if there are any areas of slippages that you want.
Yes, sir, Pritesh. So yeah, I mean, that's a very, very fair observation, though we have demonstrated a higher growth than Q2 in Q3. But I think one thing, I think in terms of the domestic volumes, I think the domestic volumes have come off a little bit. That's largely because I think till Q2, I mean, for a particular bank, we were getting their entire share of traffic while there were two CPaaS players in panel with the bank because of, I think, some issues with the platform of the competition. Unfortunately, I mean, in Q3, I mean, the platform of the competition, I mean, started working fine, so we lost that volume. So that actually led to a little bit of an impact in terms of the domestic NLD business.
But for that, I think we have witnessed almost mid to, I mean, close to mid-teen kind of a growth in terms of volume on ILD and rest of the world. So I mean, from that perspective, I think it was a very strong quarter. It was only on the domestic front, I think, where because of, I mean, we were getting that opportunistic traffic, we lost that traffic in Q3. So that was only the slippage if I were to kind of call it out. And a little bit of impact on the new products front, largely driven by, I mean, the change in pricing strategy, I mean, that played out, I mean, by WhatsApp. I mean, but for that, I think it was a pretty strong quarter from our perspective.
And is there any other, say, on a nine-month basis where you can tell us how much is the TeleSign's? Yeah.
Yeah, so on a nine-month basis, I think with TeleSign, we have done close to about INR 298 odd crore of business.
So let's say INR 300 crore of business coming from TeleSign, and then you had the Vodafone deal execution this year, right?
That's correct. That's correct.
If you could then tell us which are the pieces of business which would have declined and how much is the pricing declined?
This INR 300 crore also has, I mean, on a like-to-like basis, last year also we had a decent amount of business with TeleSign because they were our existing clients. Not this entire INR 300 crore.
It was INR 100 crore. No, it was INR 100 crore last year. Last full year was INR 100 crore.
Come again, Pritesh. Sorry, I missed your voice there.
Last full year was INR 100 crore, right?
No, no, no. Last full year was INR 150 crore.
INR 150 crore, okay.
Yeah, yeah, yeah.
And Vodafone?
Vodafone, again, I'm kind of trying to highlight. Vodafone actually is a supplier. So we are getting the volumes from the enterprises. So across all enterprises, we have seen growth. I think where the growth has kind of been a little muted has largely been with the aggregator business of ours, where because of issues around the AIT, the artificially inflated traffic, I think that's where I think the business has kind of got a little impacted. But for that, I think on the enterprise side of things, business continues to be rock solid.
Okay. And any areas of pricing decline?
So this quarter, I think we have on an overall basis, we've seen pricing, I think, pretty much, I mean, be stable and marginally increased. So there isn't any much significant increase.
On a nine-month basis, sir?
On a nine-month basis.
The ILD pricing adjustment would have flowed in this year, right? In nine months?
Yeah. So essentially, I think you're right. In the first half, I think there was certain adjustment. That is normal. So we've seen, I mean, growth happening both on volume front as well as on. On the nine-month, I'll ask. So Pritesh, I can come back to you on the nine-month. I don't have it offhand, but I can share that perspective.
Okay. Thank you.
Thank you. Next question is from Yashodhara from RSPN Ventures. Please go ahead.
Yeah, hello. Am I audible?
Yeah, go ahead.
So, a few disrupting questions. So as you rightly said, the employees have increased by three in this quarter on a net basis. How are the employee?
Turbulent. Not very clear.
Oh, very clear. Hello.
Yeah, go ahead.
Yeah. Employee cost has increased by quite a bit while the net additional employees are only three employees. Could you please explain how has the employee cost increased so much?
Yeah, yeah, yeah. So I think in the employee cost base, there is a long-term incentive plan, I think, which is there, which is almost to the tune of about INR 5.77 crore, which was not there, and that pertains to July to December in 2024. So essentially, I mean, the entire impact was taken in the quarter gone by. And as I mentioned, I think the total operating overhead, if you were to look at it for the last quarter, I think about INR 10 crore of the operating overhead is non-recurring. So you can pretty much, I mean, on a run rate basis going forward, adjust that INR 10 crore into the operating cost run rate.
Are you expecting the employee cost trajectory to be going on, or is it going to reduce by INR 10 crore?
No, no. It wouldn't reduce. So I think if you add up the employee cost plus the other expenses, which includes about exchange loss, so what we are seeing is about INR 10 crore of that pie is non-recurring. So going forward, about INR 110 crore would be the running base.
Yeah, got it. And what about the employee cost? Is it going to run in the same trajectory, or is it going to decrease from there since the incentive plan will be there?
Yeah, incentive plan would be there for the calendar year as well. So as I said, I think last quarter had an impact of two quarters. So it will reduce to about three crore per quarter, which was about INR 5.77 crore for, I mean, which got booked in Q3 FY 2025. Going forward, on a quarterly basis, that run rate will be about three crore till the end of the calendar year.
Okay. And secondly, if you could explain why the interest cost decreased a bit and the Effective Tax Rate guidance for there?
Yeah. So the interest cost has reduced because we have retired a loan that we had during the month of December, early December. I think we retired a loan that we had. And in terms of the Effective Tax Rate, I think it is fair to assume it to be in the vicinity of 20%.
The final question, in the beginning, you said that there's an issue of inflated traffic, artificially inflated traffic. If you could explain what that is and how does it affect your business?
No, essentially what has happened is, I think globally, I mean, if you remember maybe a year and a half back, I think when, I mean, the Twitter deal was happening at that point in time, Elon Musk had called out about a lot of, I mean, about 5%-10% of the traffic coming onto the Twitter platform was actually fake bot traffic. And this was kind of an issue that I think all large global enterprises were grappling with. And it led to a larger introspection by a lot of large global enterprises. And since then, I think, I mean, a lot of these artificially generated traffic, which enterprises were paying for, which wasn't yielding them any ROI per se, that has completely kind of been shaved off from the industry growth.
This is one area, I think, that I think the overall CPaaS industry kind of grappled with over the course of the last one and a half years.
Okay, and any guidance for the full year FY26 going forward?
I think let us try and kind of close the next quarter, I mean, and kind of demonstrate a stronger performance than Q3, and I think then we will kind of reassess and come back to you with the guidance for the subsequent year, but on a three-year trajectory basis, I think we're talking about a 15% CAGR.
Okay. Thank you. Thank you.
Thank you. Next question is from Nikhil Choudhary from Nuvama. Please go ahead.
Hey, hi. Good evening, everyone. Thanks for the opportunity. First, I just want to understand some data on guidance. How we are thinking the exit run rate for us will be in Q4 FY 2025, and the guidance was 18%-22%. So how we should think about Q4?
Yeah. So Nikhil, I think the NLD will definitely need to do better than Q3 that we have performed. I think the run rate also kind of is kind of reflecting the same. I mean, so the NLD will need to kind of really up the ante, I mean, in terms of the growth there. So yeah, I think we'll definitely need the NLD to do better than what we have done in Q3.
Sure, Gautam. Again, I think your comment that related party volumes are coming at a lower margin. Why there will be lower margin on related party volume?
Essentially, I mean, the related party approvals and the mechanism, I mean, that's been kind of validated by a large accounting firm as well, has been, I mean, at an EBIT margin level. I mean, most of these transactions are happening close to in and around our EBIT margin levels, and hence, I mean, which is lower than our operating margins, so to that extent, I mean, it is dilutive at the operating margin level.
But any reason for that to happen? Let's say going forward, if volume people increasing from TeleSign, then that should be margin dilutive. Is this their understanding?
So this is governed by a very detailed exercise done by one of the large Big Four firms. And I think they do this assessment on a periodic basis. So whenever, I mean, there is any material change, we'll definitely call it out. But today, I mean, some of these related party transactions are happening in and around our EBIT margin level.
Sure, Gautam. The last one, just want some clarity on the contingent liability for one of the contracts we created. Any details and updates there?
Yeah, yeah. So I think this is a contract, I think, where so this is actually an exclusive firewall contract in Southeast Asia, where what has actually happened is there have been challenges in terms of, I think, increased sanction conditions, where a lot of social media apps have been banned, and there are some structural shifts happening in that market. So I mean, we are in the midst of a renegotiation with the partner, invoking the contractual rights under the signed agreement, where some of these structural shifts or any change in their existing conditions, I mean, gives us the right to negotiate or renegotiate the terms of the agreement. So we've already triggered that. There have been a couple of rounds of negotiation there. So hopefully, I mean, we should be able to kind of come to an amicable solution there.
Since this is an ongoing discussion, and we have not been able to close that discussion, and considering the materiality of the contract value, I think the auditors deemed fit, and even from a management standpoint, I mean, we thought it would be prudent and pertinent to kind of get this captured as an emphasis of matter.
Sure, Gautam. Thanks, Gautam. And good luck for coming together.
Yeah. Thanks.
Thank you. Next question is from Yash Dedhia from Maximal Capital. Please go ahead.
Hi, sir. Good afternoon. So this is Sarvesh here. So I had two queries. One is just from my understanding. So now we are moving in terms of channels, moving from SMS to, let's say, WhatsApp and other communication modes. So in terms of the pricing, how do they differ? Are we getting lower price per transaction? And in a sense, then there is a revenue gap that we'll have to fill. So that is one. And second is you had that edge that you so from a client perspective, you will be having ties with all telecom operators, etc. So you can provide that sort of a single solution, which the client will be finding very difficult to do it himself. Now in this mode, where basically things are being done over internet rather than SMS, so does that edge go away for you?
Yeah, so in terms of.
Yeah, Rajeev. Yeah, it's a very good question. Let me start with this. We also understand the opportunity as a group we bring on the table. Let's take an example of TeleSign product. We can all completely security-based product. Like this is liability and this is security product. And these products are we have a direct access of all the product what they have built. And we can bring all these products to market where we operate. We will create more value to Route Mobile. Along with that, we need to also understand this is one of the largest wholesale voice players in the world, and they are providing voice solutions to the global operator as well. We will also get a direct access to all operators where this is supporting them to sell our product as well as a part of our solution.
So it is not just SMS as a one-solution offering or WhatsApp or RCS one-solution offering. We are now talking about Engage, which is a customer engagement program platform, along with that Security, which is a secure product, and then the Connect, which is our connectivity piece. So all these capabilities we have now in-house as part of one team. Before, when we used to go to a single operator, we only used to sell our next firewall. Along with the f irewall, we have a digital security product. Along with that, we have SMS, RCS, and other channels. So our portfolio has grown multi-fold, and we can actually offer multiple solutions to the same customer or a new customer. I think that is the advantage being on the table as one single group.
And I think one need to look at Route Mobile as a company where we have a solution, which is a combined solution of BICS as well as TeleSign. Yeah, Gautam, you can add to this. Hello, Gautam?
Yeah, yeah, yeah. So yes, I mean, does that answer your query, or do you want anything, any other issue clarification?
Yes. On the revenue that we realize per transaction, so I understand now you have a broader suite of products. But now if the transactions were to move from SMS to, let's say, WhatsApp, do you realize similar or lesser, and to what extent lesser sort of a revenue per transaction?
It's more than SMS for sure. I can tell you.
Okay. And secondly, given that.
Just to highlight, I mean, the use cases are different. I mean, so per se, I mean, one is not cannibalizing others. I mean, so there are different use cases, I mean, where SMS is being used and conversational messaging, I mean, is used for a differentiated use case.
And given that, where we are seeing some shift also, the new product revenue, which is where we have grown at 20% odd, which was probably the aspiration for the entire company, isn't it too low a growth number for something which is at a nascent stage and where we are also getting the benefits of synergies from the group as a whole?
No, it has a little bit of an impact because of the WhatsApp advertising, I think. Overall, I think got edged southwards, so it also has that effect, I mean, as part of the overall kind of revenue number growth that we have garnered there.
But I think what I want to add out here is this whole merger, and I think everything you are announcing is, I think, month of January itself or mid-December. But now we have access of all the customers of BICS as well, and then we can go and sell RCS, WhatsApp as one solution to all the existing customers of these two companies as well. And that is a big opportunity we see in coming days for Route Mobile.
Yeah. Yeah, fair point. I think some of those Proximus synergies, I think it's more a timing effect. It is a matter of time that we will start to kind of unlock those Proximus synergies. So I think the entire Proximus Global team is kind of very, very optimistic and very kind of excited about the new product opportunity, and we are creating some big-ticket audiences.
And sir, earlier we had a vision of reaching $1 billion in revenue in three, four years from now. And now I think our guidance is more like 15%, so more like a 50% growth over three years. So have we revised down our sort of aspiration to reach in three, four years meaningfully?
So I think right now, I think the industry is going through a little bit of a structural shift. Let things stabilize. I mean, what we can kind of always definitely call out is when the industry today is growing at kind of about 10-11% kind of a growth, as I said, I mean, most of our competitors are growing, I mean, a flattish or single-digit growth. We are definitely outperforming the industry. So I mean, once there is a little bit of more confidence in the market, I mean, the sentiments improve, I think we'll definitely increase our growth trajectory. So at this point in time, I mean, we would not want to be very, very overambitious in terms of calling out a very high number. But that aspiration of a $1 billion definitely is an aspiration that we want to achieve sooner than later.
But looking at the current market conditions, we'll want to stick to that 15% kind of a growth guidance for the next few years. 15% figure, yeah.
Okay. And finally, on your attrition rate, now BICS looks to be as high, much higher than many of the IT services companies also. And since there, generally, the job profile is a little bit different than what is expected out of a tech-focused company. So how do we see this? Do we see this 20%-25% attrition rate to be lowering? And what is the target attrition rate in this? How do we see this in that situation?
No, no. So I think let's look at it holistically right now. I mean, let's look at because, I mean, we are talking about Proximus Group as an integrated framework, right? And where we are looking at drawing kind of generating synergies. And that synergy, I mean, will entail a little bit of cost optimization as well so that we remove redundancies in the system. So I mean, historically, our attrition rates have been kind of at par with the industry. And I mean, for this quarter, I mean, a little bit that has happened, I mean, is a function of a wider integration initiative, I think, across the group.
Okay. Thank you and all the best, sir.
Thank you. The next question is from Kaustav Bubna from BMSPL Capital. Please go ahead.
Yeah, thank you for taking my question. So you spoke about Proximus Global and how Route, BICS, and TeleSign is grouped under one umbrella now. But could you speak more about currently in the current formation, if Route accesses TeleSign's client, what is Route paying for? I mean, is there some sort of a transaction? Is TeleSign getting a certain percentage of the financial gain from that transaction? That's the first question, and the second question is, where do we go from here? We've spoken previous calls about because I think TeleSign first had a few years ago tried for an IPO, and then that did not happen, and now Proximus has gone into Route. So could you give some sort of direction on where do we go from here?
Is there a potential of TeleSign getting listed through Route, or speak a little bit about both these things?
Yeah. So in terms of the first question that you had, so yeah, yeah. So all the related party transactions that we do, largely, I mean, they are on a cost-plus markup basis. The markup, as I said, I mean, is closer to the EBIT margin levels. So that's the broad framework of transactions that we do. I mean, and it applies both sides of the equation. In terms of TeleSign, I mean, and Proximus Global, I mean, the broader strategy around there, I mean, so TeleSign, I mean, they've been doing phenomenally well in terms of growth. I think where they were kind of looking at was a lot of cost offshoring. And that's where, I mean, India today continues to be, I mean, one of the key markets from a GCC standpoint.
And then, considering Route Mobile, I mean, we were always functional where we were able to demonstrate high growth with, I mean, by driving profitability as well. So some of that, I think, as part of these integration synergy exercises, which even Raj alluded to, will be the cornerstone, I mean, to kind of drive going forward. And in terms of merging integrations and all, I mean, right now, I mean, all the options are open. I mean, everything is at the drawing board level. I mean, there is nothing concrete that has kind of been discussed, finalized. So I mean, it will be difficult to call out or very premature to call it out right now.
Understood. When you say how much revenues is Route right now doing in the digital identity business?
So currently, what we are doing, we were already doing this with Masivian, which is our only owned subsidiary. We were doing close to $1 million already with them. And as I think we've highlighted, I think TeleSign has a very, I mean, a significantly more evolved digital identity stack. So we'll leverage their strengths of the stack and take it to customers. But a lot of these digital identity solutions needs, I mean, governance from, I mean, the data privacy regulations and stuff. So it requires a lot of, I mean, so a little bit of approval process. And in India, in particular, I mean, with the DPDP law, I think recently, I think, kind of being in vogue. So some of these things are being navigated. Discussions are ongoing with regulators. We are doing sandbox testing, I mean, for some of those solutions with enterprises and telcos.
So I think it's moving in the right direction. But I mean, we haven't seen, I mean, any significant revenue from that coming through right now because, I mean, it will entail, it's a little longer sales cycle. But once we are able to demonstrate the value prop to an enterprise in terms of helping them curb the digital fraud, I think we believe, I mean, it has huge potential.
When you say TeleSign is INR 300 crore business in nine months, what business is this?
No, this is all. I mean, for destinations where we have better cost economics. They are using our route to terminate their enterprise traffic.
Okay. Understood. Great. Thank you so much. Thank you.
Yeah. Thank you.
Thank you. The next question is from Saumil Shah from Paras Investments. Please go ahead.
Hi. Thanks for the opportunity. So we've been always guiding for a 13% EBITDA margin. And I mean, even in the previous call, you were mentioning that 13% EBITDA margin is our endeavor to reach. But for the nine months, we are still at 12%. So are we facing severe competition? And would you like to revise our guidance?
No. So I'll tell you, I mean, so as I said, I think, I mean, the nine months gone by had few cost elements, which are one-offs. I mean, a large integration kind of happened. There were a few incentive schemes that were rolled out. When we were giving that guidance, I think some of those things were not baked into it. And particularly, I think the most important thing is the related party transaction that's happening. That's happening today at a margin which is lesser than the operating margin for the company. So I mean, if you adjust for that, I think we are already at a 12.33% kind of EBITDA margin trajectory. And I mean, we still maintain that we'll be closer to, I mean, 12.5%-13%.
For this year?
For this year, on a adjusted basis, we'll be closer to the 12.5%-13%. So non-GAAP basis, yes.
Okay. And the related party transaction, what you mentioned, so that is this INR 300 crore, which we are doing.
That's correct.
Which we did for nine months.
That's correct.
So as the scale increases, then I mean, what do you expect for coming years?
So I think we are constantly kind of looking at all avenues where we could maximize this. I think now a decent amount of run rate is already kind of baked into in terms of monthly throughput. And I think the market's also very dynamic. So I mean, this needs to be kind of looked into on a real-time basis regularly. So at this point in time, I think there are some additional routes that we've been able to identify during the course of this month. We are looking at increasing the throughput there. But it will be a minor kind of an increase. We're not looking at a very major increase, I mean, from the current run rate.
Okay. So, as of now, for three quarters, we are seeing we had a INR 300 crore run rate for three quarters. So, it's INR 100 crore per quarter.
A little more than that because the throughput started from June 18th onwards.
Okay.
One other thing, I think essentially what's not played out yet is the cross-selling synergy where, I mean, Proximus Group is selling our omnichannel solutions, and we kind of selling solutions around digital identity and some of the pieces, I mean, that BICS has in terms of their platform capabilities. So some of those things, I think we haven't seen, I mean, revenue traction yet. But I think we've already made a few pitches and submitted our proposals. So as and when we have it, I mean, some of these opportunities could be baked, and these are high, high in terms of margins.
Okay. Okay. That's it from my side. Thank you and all the best.
Thank you. Next question is from the line of Meet Rachchh from Equirus Portfolio Management. Please go ahead.
Yeah. Thanks for the opportunity. Gautam sir, any update on large deal wins apart from the metro ticketing solution? Any large RFPs in which we have been participating organically as well as in synergy with the parent company?
Yeah. So there are some large deals I think in the offering. I mean, offhand, we know, I mean, we stand very good chance, I mean, some of them. But I mean, till it's kind of officially kind of there in black and white, I mean, we'll not want to call it out. But I think there is some good momentum there.
What could be the average size for a large deal win for CPaaS Industry?
I mean, it depends. I mean, but it is difficult to call that number out yet. I mean, let us first sign it. I mean, we'll definitely kind of make it public.
Sure. Sure. Thanks.
Yeah. But the only thing I can tell you is the large win size.
Okay. In terms of tenure, it will be like three years, five years, seven-year deal, or one year and then renewal will happen?
It will definitely be long-term deal. Tenure, we can't mention right now, but it will be a long-term deal.
Okay. Okay. Thanks.
Thank you. Next question is from Karthik, who's an individual investor. Please go ahead.
Hi. Can you hear me?
Yeah. Go ahead. I'll talk.
Yeah. Thank you for the opportunity. So I have two questions. First is more on. Maybe my understanding. And based on what participants had spoken, and essentially when you move from OTP-based digital authentication to digital identity solutions that you're talking about, I was under the impression that every time a notebook is created, you get some revenue on that, right? So obviously, you're losing some revenue when you move to digital solutions, right? And I know you talked about trying to see how you can tap more revenue based on digital identity solutions. Is it possible? I mean, first of all, is the understanding right? And second is, how much revenue loss are we looking at when we move away from OTP-based solutions to non-OTP?
No, so this will.
Yeah.
Yeah. I think we need to also understand that this adoption is having a different use cases also, right? There are many use cases of customer support moving out to WhatsApp, which is not the SMS piece of it, right? We need to understand the entire omnichannel piece as an opportunity for the entire ecosystem. Okay? It is not just SMS going from SMS channel to WhatsApp channel. It is a use case which is being created because of the OTP channel. That is a potential we see in long-term coming years to come. RCS has its own potential as compared to WhatsApp, along with the different products which we have. Like digital identity, we have a different market itself, right? Because we know the digital adoption is increasing. Digital fraud will also increase.
But right now, we probably have that unique solution for this market, like market where we operate. We can definitely create more value out of that. So I think we should not think that, "Oh, SMS is lower than these channels will." No. There are different use cases which is going to remain there. And WhatsApp or even for RCS may have different use cases. And we will see the growth in those channels because of the new use cases arriving right now. Gautam?
Yeah, and just adding to what Rajdip is saying, the biggest reason for digital fraud today, I mean, is because with OTP, you have something to phish, right? And with digital identity solution, you pretty much make it silent. So if you don't have anything to phish and the entire two-factor authentication happens at your backyard with an algorithm that I think we'll be able to kind of that digital identity solution is able to provide. So we would make the same money. It would be better in terms of margins. But it wouldn't, I mean, reduce the TAM from our perspective. I mean, the TAM will only increase, and it will only increase our stickiness with enterprises.
Excellent. Yeah. That's heartening to know. Yeah. Thank you, sir. So the next question is more on the. I think you talked about using LLMs for better customer service. And I was looking at your presentation. You also mentioned you have about 20 data centers. And with the recent DeepSeek news that is running around, do you foresee using DeepSeek model and potentially that reducing your cost and helping? I assume you use some sort of NVIDIA GPUs for these LLM-based solutions. And what are your thoughts on the recent DeepSeek turmoil?
Yeah. So in terms of the LLM models, I think definitely, I mean, there is a lot of disruption around it. And we believe, I think, this LLM models from a communication standpoint could really kind of be a big, big differentiator, I mean, for the world of communication. And within that, I think we are already looking at kind of adopting some of these models for internal optimization in terms of the ticketing systems, in terms of creating intelligent data insights, data models, which we can then kind of through AI/ML make it more and more robust. I think some of these things are already kind of happening as we speak. So we believe, I mean, with LLM models, I think the opportunity and essentially, I mean, the personalization and effectiveness for any campaign that an enterprise runs can significantly improve.
That is what I think we are already kind of working on internally.
Okay. Do you use NVIDIA GPUs, or do you use accelerators, or just CPUs? Do you know that?
Sorry. Can you please repeat your query?
So do you call the LLMs? Do you use NVIDIA GPUs or Intel CPUs? Or do you know that? Can you throw some light on the infrastructure use for LLM inference here, or?
Probably that will be different discussion we can have with you.
We can add more technical detail in this call. So whenever we have a one-on-one call with you, we'll know more about the strategy on that side.
Okay. Thank you.
Thank you very much. We'll take that as the last question. I would now like to hand the conference over to Mr. Rajdipkumar Gupta for closing comments.
Thank you, everyone. Thank you for joining, and have a nice evening. Take care. Thank you.
Thank you very much. On behalf of Route Mobile Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect the lines.