Good evening, ladies and gentlemen. I'm Bhumika, moderator for this conference. Welcome to the conference call of Route Mobile Limited, arranged by Concept Investor Relations to discuss its Q2 and H1 FY 2026 results. We have with us today Mr. Rajdip Kumar Gupta, Managing Director and Chief Executive Officer; Mr. Vinay Binyala, Chief Strategy Officer and Investor Relations Officer; and Mr. Raj Gill, Group Chief Financial Officer. At this moment, all participants are in listen-only mode. Later, we'll conduct a question and answer session. At that time, if you have a question, please press star and one on your telephone keypad. Before we begin, I would like to remind you that some of the statements made in today's earning 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. Rajdip Gupta. Thank you, and over to you, sir.
Thank you. Good evening, everyone, and thank you for joining us today. I'm delighted to share our results for the second quarter. This quarter truly validates the strategic direction we outlined at the beginning of the year, and it demonstrates the power of disciplined execution. When we began this fiscal year, we made a deliberate choice to prioritize profitable growth over volume. We committed to enhancing our core business while simultaneously building new revenue streams. Q2 reflects the benefit of that discipline. We are seeing strong recovery across our businesses, expanded margins, and meaningful progress on the strategic initiative we have been building over the past several months. What excites me the most about this quarter isn't just the financial performance. Though I'm pleased with our progress on margin and profitability, it's that we are seeing our strategy translate into real-world traction.
Our new product portfolio is gaining genuine market momentum. We are entering new verticals, sectors where we previously hadn't focused, and we are winning with customers that validate the strength of our omnichannel platform. Our partnerships are opening doors into geographies and customer segments we couldn't reach on our own. Critically, we are building capabilities and relationships in areas like network API that represent structural opportunities for the industry. This isn't just about execution against the plan we laid out in Q1. It's about seeing that plan work in the real world, in concrete customer win. In new customer entries, in partnerships that genuinely expand what we can do and where we can compete. The strength we are seeing in this quarter comes from progress across several dimensions. Our core business remains solid. We have maintained disciplined pricing and customer quality while growing.
Our platform is finding traction with new customer segments and use cases. Our partnership ecosystem is delivering results, and we are seeing this reflect in meaningful wins across different geographies. Equally important, we are investing in future-focused capabilities. The partnership we are building, the products we are entering are all positioning us for a different scale and scope of opportunity ahead. What I'm most confident about is that we are only at the beginning of this journey. The foundation we have built in our core business, in our new products, and our strategic partnership position us well for sustained profitable growth. The discipline we have demonstrated, the market opportunities we are capturing, and execution we are delivering give me a real confidence in where we are headed as a company. We remain focused on what we do the best: delivering sustainable, profitable growth while expanding our addressable market.
That balance, I believe, will create superior long-term value for all our stakeholders. With that, I will hand over to Vinay to walk you through the key business developments for the quarter, and then Raj will take you through the detailed financial performance. Over to you, Vinay.
Thank you, Rajdip. Good evening, everyone. I hope you're all doing well. Thank you all for joining us today. We uploaded our quarterly earnings presentation last night, and I hope you had a chance to take a look at it. Let me start by walking you through the highlights of our second quarter performance. We are really pleased with the momentum we are seeing across the business right now. What's particularly encouraging is that we are demonstrating a revived growth trajectory after strategically recalibrating our business over the first quarter. On the financial front, I'm delighted to report that revenue from operations has expanded sequentially by 6.5%. Demonstrating renewed momentum across our core business. More importantly, this growth has been achieved while maintaining strong unit economics. Our gross profit percentage has also expanded sequentially to 22.1%, which is 70 basis points over the previous quarter.
This reflects our continued focus on profitable growth. This dual expansion in both revenue and gross profit margin is exactly what we envisioned when we shifted our business model towards sustainable, quality-led growth. Beyond the top line, EBITDA has also demonstrated strong growth of 16% sequentially. We grew from INR 115 crore in Q1 to INR 133 crore in Q2 in terms of EBITDA. Revenue and gross profit margin growth has slowed down to drive EBITDA margin expansion for us over the past quarter. Now, I want to address an important point regarding our profitability metrics in the past quarter. While profit before tax and before exceptional items has shown solid growth from INR 77 crore to INR 138 crore in Q2, I want to highlight that the reported profit after tax was impacted by one-time exceptional items during the quarter.
This was related largely to advances to certain vendors, which were written off during the quarter. These exceptional items are detailed in the financial statements. However, they do not impact the underlying operational performance and strength of the business moving forward. Our core profitability trajectory remains strong and is a better reflection of the sustainable earnings power in our business. Now, moving to the product and market. On the product and market front, we made significant strides. Our new product revenue has shown solid growth of 13.1% sequentially, which is significantly higher than the growth in our consolidated revenue from operations, which was 6.5% for the quarter sequentially. This growth in new product revenues is driven by expanding adoption of our omnichannel and integrated solutions platform. Let me highlight a few exciting developments in this space. We've expanded our reach into the mobility and transportation sector.
We recently secured a new customer in the train and metro segment, where we are providing our communication platform to enhance passenger information and engagement. Building on this momentum, we've also entered the bus booking segment in Bangladesh, a market with significant growth potential for digital ticketing and customer communication solutions. These wins demonstrate the versatility of our platform across different transportation use cases. Our partnership model continues to yield strong results. We are actively engaging with global system integrators, and our integrations across the RCS platform, WhatsApp capabilities, and omnichannel solutions continue to expand the addressable market and accelerate our time-to-market for these solutions. Additionally, we've added a significant customer through our strategic partnership with Tech Mahindra, which has opened doors into new segments and enterprises that we previously had limited access to.
This partnership model is proving to be an effective channel for accelerating our go-to-market approach and reaching new customer segments. Building on the commentary we shared in the last quarter about the exciting opportunity in the telecom API ecosystem, we are deepening our focus in this area. Although the development is post-completion of Q2, we are excited to share the progress we have made with our network API capabilities, particularly through the Konera initiative of Proximus Global. This positions us at the intersection of enterprise communication needs and telecom infrastructure services, and also highlights the combined business initiatives across the three entities defining Proximus Global. Network API solutions will enable enterprises to leverage telecom operator capabilities to provide value-add services to enterprises. This ties directly to our vision of future-proofing the business by participating actively in the broader API ecosystem and creating new revenue streams for digital service delivery.
The network API space is still nascent but growing rapidly, and we believe our platform and partnership position us well to capitalize on this opportunity. On the firewall and security front, we are continuing to expand our deployments with major mobile network operators, driving meaningful revenue streams from our AI-powered spam protection and network security solutions. Further, as to the announcement regarding our deal with Claro, a leading Latin American-focused telecom operator, we have integrated our firewall platform with three networks managed by the operator and expect significant revenue ramp-up with this client moving forward. Overall, Q2 FY 2026 reflects a strong recovery in momentum across the business. Our strategic decisions in Q1, combined with new product launches, market expansion, and deepening of strategic partnerships, are delivering tangible results. We remain focused on sustainable, profitable growth with a keen eye on expanding our margin profile while growing our revenue base.
The combination of our core CPaaS business strength, emerging opportunities in network APIs, expanding product portfolio, and growing partnership ecosystem position us well for the quarters ahead. With that, I'll now hand it over to Raj to walk you through the detailed financial performance. Over to you, Raj.
Thank you, Vinay, and good evening, everybody. I'll summarize our financial and operating performance during the quarter ending September 25 before opening the call to Q&A. As described by Rajdip and Vinay, the combination of focused execution and unlocking growth from our advantaged products has translated into strong year-on-year and sequential performance. Our Q2 revenue from operations was INR 11,194 million, which is higher by 0.5% year-on-year and + 6.5% sequentially. This is largely due to growth in routing synergies, non-SMS products, and particularly strong growth in massiving, partly offset by structural SMS market impacts in parts of our business. In Q2, we reported a gross profit of INR 2,471 million, representing a 5.2% increase year-over-year and a 9.8% growth compared to the previous quarter.
Due to the flow through of revenue described earlier and gross margin expansion, which I'll come on to next, gross profit margin for the quarter stood at 22.1%, a 100 basis point improvement over last year, and sequentially higher than the 21.4% achieved in the previous quarter. This upward trend reflects our strategic focus on optimizing customer mix and onboarding higher margin accounts, reinforcing our commitment to profitable growth and long-term value creation. We constrained operating cost growth to 11.5% year-on-year, as salary inflation, a one-off severance cost, and trade receivable write-offs partially offset by cost savings from lower headcount and discretionary spend. Adjusted EBITDA for Q2 increased by 0.7% year-on-year to INR 1,333 million and increased by 15.5% versus the previous quarter due to the gross margin performance of the business.
This all contributes to an adjusted EBITDA margin of 11.9%, which is consistent with the prior year and sequentially higher than the 11% seen in the previous quarter. On a reported basis, profit before tax and exceptional items was INR 1,379 million, which is up 80% sequentially and higher by + 5.2% year-on-year, driven by EBITDA and favorable foreign exchange movements in the current quarter. The effective tax rate was impacted mainly by exceptional items and, to a much lesser extent, the mix of profit in various geographies. I will now hand over to the Q&A section.
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 touchstone 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 comes from the line of Rupesh Tatia from Long Equity Partners. Please go ahead.
Yeah. Hello, sir. Thank you for the opportunity and congratulations on a good set of numbers. I am new to the industry, so I have a few questions, and some of them might be basic. First question is on SMS. Out of whatever INR 1,100 crore revenue, what is the revenue from SMS? If you can give that number and further, if you can split that between promotional SMS and regulatory SMS, if you can give some color around that. The reason to ask that question is for the promotional category, it seems like there is a terminal risk to the SMS. If you can address the terminal risk in the SMS business on the promotional side.
Rupesh, Rajdip here. Probably we will not be able to give you the bifurcation, but I will let you answer your question. Promotional-wise, there are multiple channels that have been now used, including RCS and WhatsApp. We do see there is a growth on the promotional side of traffic on WhatsApp and RCS nowadays. As a digital platform, we are offering our solution to our customer where we have all the three options available, including email as a fourth option for our promotional services. Even if you say there's a decline on the SMS side, there is a surge on WhatsApp and other channels. Probably for us, I think one decline does not make any sense, but we make more revenue on other channels. In terms of promotional and transactional traffic bifurcation, I do not think we can share that. Vinay, if you want to add anything to this.
Yes, sir. So Rajdip, I agree that we have never shared the split of the regulatory and promotional message, I said. If you look at some of the slides in the presentation, we do share some details, Rupesh, around the non-SMS portfolio or the new products, as we call them. New products is roughly around 8%-9% of the revenue, and we are seeing good growth traction around that part of the business. That should give you some indication of where we are heading with that product portfolio. As Rajdip mentioned, Email and WhatsApp and all of those non-SMS portfolios form part of that segment.
That is the worry. 90% business is SMS, and I mean, I don't know. If, let's say, 50% of that is promotional, then that is a big risk. That is, I mean, I don't know if there is a way you can address this question.
Let me just answer. Our portfolio is 85% transactional and about 15% promotional. We serve large banks and customers. Most of the transactions which go through our platform are transactional type. We are not lots of promotional traffic. You can say 85%-15% combination.
That's very helpful. The second question, sir, is I wanted to understand how do these telecom operator firewall deals work? Is there like you get some one-time revenue?
Rupesh, I suggest you can have a separate call with our investor team to understand the whole process because that would be good because you need one hour time to get the full clarity on how the deal is.
Yeah, I will reach out.
Yeah, I'm happy to share all this information one-on-one with you, I think, because we have a limited time for this call and there are multiple questions. Can we just do offline that discussion?
Yeah, okay. So maybe let me ask you another question. The another question is, I mean, when I look at Gupshup or when I look at Twilio or some of the global companies, WhatsApp, I think, is a big part of their revenue. Maybe can you give some color around where are we in terms of our capabilities? Where are we in terms of our business development? What are we doing to become, let's say, a WhatsApp-first company, if I may put it like that? Maybe you can address this and then other. I'll come back and let you.
We are a channel-agnostic company. If you see some of the use cases which we have highlighted in our presentation, it talks about WhatsApp and RCS deployment. As a company, we have all the platform capabilities which is required for any company to use a digital platform. When you talk about this concept abroad or even for India, I think we are fairly well placed, right on top, where we can proudly say that all our platforms are working fine, and I think we have the capabilities to serve any customer who requires a digital platform from our side.
Can WhatsApp, let's say, become 25% of our business in three or four years?
Mr. Rupesh, I'm sorry to interrupt you, but please rejoin the queue for further questions.
Yeah, sure.
Thank you. The next question comes from the line of Jyoti Singh from Arihant Capital Markets Limited. Please go ahead. Ms. Jyoti, you are not audio.
Yeah. Thank you for the opportunity. Sir, my question is basically on the Proximus side. Just wanted to understand what kind of revenue and margin from there with the Route. Basically, when we are having the deal wins, how we are doing the sharing as per the revenue and margin, if you can talk about more in detail.
Sure. Jyoti, in terms of business within the Proximus Global Group, it's not really a revenue-sharing kind of deal. It's more of a related-party transaction. The way it works is Telesign and BICS and other components of the Proximus Group, they have certain, let's say, for example, SMS traffic or WhatsApp customers where they want to leverage the Route Mobile platform. For example, when they are dealing with enterprise clients, let's say in the U.S., for whom they want to deliver messages into geographies where Route Mobile is strong, for example, India or the Middle East. Telesign will, instead of purchasing those SMS from a third party, leverage the Route Mobile platform and purchase the services from us.
We will have a cost for terminating those messages on which we would charge a markup which is agreed as per our related-party transaction documents, and we will charge Telesign that cost, and Telesign will then realize revenue from their end customers. That is the way we are working with BICS and other parts within the Proximus ecosystem. Raj, you want to add to that?
Yeah, no. Again, we've had on-routing synergies, which is a material one. We've had a good year-on-year growth there. A lot of this business comes at no incremental sales or marketing cost. At the EBITDA level, it's good, healthy margins.
Yeah, thank you so much, sir. Just wanted to understand what kind of EBITDA we are getting from those kind of deals?
It will be at EBIT level. It is non-dilutive. We make around 10%-11% EBIT margin on that business.
That Route received it?
Yes. That is what Route is realizing. That's right. That is how the entire transfer pricing or the related-party documents are structured so that it does not dilute our EBIT or EBITDA margins significantly or does not dilute those margins for us.
What does Proximus get into this?
Sorry, I did not get that. What does Proximus get into this?
I mean, basically, if Proximus is winning any deal and then those deals transfer to Route Mobile, we just wanted to understand what Proximus charges on those deals.
Again, there is no consulting or any additional cost that we incur which we need to pay Proximus or any other group company. It is more of providing us. For example, one of the large deals which was announced by Proximus was the Microsoft deal. There were certain CPaaS businesses which we were expecting out of that deal where Route Mobile would service Microsoft. There, again, we would make our margins and revenue. There would be no additional consulting or any kind of fee that would need to or partnership fee that would need to go to Proximus or any other group company. That is how the deals are structured.
Okay. Sure. Thank you so much.
Sure.
Thank you. The next question comes from the line of Nikhil Chaudhary from Novama. Please go ahead.
Yeah. Thanks for the opportunity. My first question is on overall growth. This quarter, the growth was clearly driven by the billable transactions, while ARPU declined further. Is it fair to say that the growth was driven by NLD while ILD mix continued to decline? We also saw a decline in contribution from top five top end clients. I just want to understand, are we still seeing pressure in ILD side, and when do you expect that to stabilize?
Let me just start with, and then probably Vinay can add to this. As I already mentioned in my commentary, we are definitely working with the customer where we see higher profitability as one aspect of our business henceforth. Looking at a few customers, I think the customer went in last quarter, and probably the customer potential, we have some customer coming from Proximus as a partnership model. I think we do see a huge potential from this customer in coming quarters also. I think our focus now is going to be more on customer where we can make more margin rather than just volume game, rather than I will play with customer who has a quality requirement, and we are serving their actual, we are solving their actual problems.
I think our focus has completely changed from last few quarters, and we have seen a drastic change in terms of our GP, gross profit, as well as the margin also. Vinay, if you want to add to this.
Sure. Sure. To add to what Rajdip is saying, and again, Nikhil, if we look at the numbers and if we compare to last quarter sequentially, we have seen growth in the top five customers. Also, if we look at the termination in India, whether it is across both ILD and domestic, we have seen an expansion in the volumes that we are terminating in India. If you compare sequentially, we have seen growth across these metrics. I think if you are looking at the chart in the presentation, it is comparing it to the previous fiscal year. That might be where you are seeing the numbers. Because if we look at sequentially, we do not see any negative trend on these parameters.
Got it. This focus on profitable clients, does that mean a reduction in volume from, let's say, less profitable clients should continue going forward, and where are we in this journey?
We have not seen, we did announce certain moves that we made in the previous quarter, but in the current quarter, we have not had any requirement to shuffle our customer base or take any drastic decisions. What we are also doing is on the routing front, we are doing some optimization. We are driving better cost for ourselves and delivering margin expansion. We have not made any drastic decisions on customer base or any of those parameters.
What led to lower revenue for billable transactions sequentially? Why?
That is the mix where the Indian domestic business and certain other market domestic business has grown a bit faster than the ILD piece. The mix of the business has changed slightly, where the average has come down a bit. Plus, we had certain growth in email as well, but that is not a significant contributor. The unit pricing on email is much lower than SMS or any other product.
Got it. Got it. Got it. This next one on the impairments, I think there was one on subsidiary. I'm hoping it's one of the subsidiaries, Shia. Second, the impairment may be related to Myanmar, and third is related to one of an idea. Correct me if I'm wrong. If there is any more impairment to be made or left based on current estimates?
Just to correct it and then Raj can jump in. The impairment was, it is more of a write-off. We have not had any impairment in any of the acquired entities. The write-offs that we are referring to, one was for an operator, and the other is for a vendor which is not really Russian. It is a Middle East-based vendor. Raj, you want to talk about those, yeah?
Yeah. I mean, I'll go into more detail in the published accounts, but yeah. There was one an aggregator and an M&O. Both related to advances, which we've taken a prudent view and written off based on information received in the quarter. Hope that clarifies.
Got it. Do you expect any more, or you have taken most of the, let's say, impairment from this particular M&Os, or any other receivables are still pending?
Again, Nikhil, on these two fronts as well, although we have been conservative and we've taken the write-off, we continue to be in discussion with these vendors. Technically, both are vendors. One is an aggregator, and the other is an operator. We are trying to work out a structure or a deal where we can have some mechanism of recovery or generate some other business where some of these losses or write-offs can be let off through other business initiatives. We are still in discussion, and the legal course of action has not closed out with the large operator either. That is still ongoing.
Yeah. I think there's a question, Vinay, about any further impairment or write-off. Nikhil, to answer your question, I think all other deals are online, and I think there is no further write-off we've seen coming quarters.
Got it. Last one on margin. The margin are back to 12% +. Territory is almost there. Do you think this is sustainable margin going ahead as well, or this is maybe one-time thing due to changing it?
No, I think if you see our overall last two-quarter strategy, Nikhil, I think we are very much focused on the margin portfolio, and we would love to maintain this, or in fact, if possible, we can grow this.
Got it. This was very helpful, Rajdip. Thanks a lot, and good luck for coming here. Thanks.
Thank you. The next question comes from the line of Dipesh Mehta from Emkay Global. Please go ahead.
Yeah. Thanks for the opportunity. Congrats on, I think, rebounding overall operating performance. A couple of questions. First, about revenue growth. Now, typically, Q2, we have seen good recovery in growth. Q3 is usually seasonally strong quarter. Do you expect our growth momentum to sustain? This quarter, we returned to YoY positive growth. Do you expect it to be a sustainable kind of trend entering into H2 from overall growth? And from slightly medium-term perspective, how one should look at this business t o deliver from a growth perspective, whether this business, considering all the plus minuses, considering omnichannel as well as changing channels and all those things, double-digit growth is doable from a medium-term perspective. That is question one. Second question is about capital allocation. Now, we have over INR 1,000 crore cash on balance sheet.
Considering where the price is and valuation is, do you think it makes more sense to invest in the company rather than doing M&A? If you can provide your overall thought process about capital allocation. And last thing is about RPT, related-party transaction. Can you give us some number of what is the percentage of revenue is RPT-related revenue? Thank you.
Dipesh, if you see, new product growth, like sequentially, also we grew by 13% on new product. I think our entire focus now is on new product sales, along with new customer wins, especially the large customers like Microsoft or Tech Mahindra or Infosys. I think we are working very closely with these customers to help their customers to start using the digital platform provided by Route Mobile. We are getting also lots of support from the group companies, especially Proximus, for a larger introduction with the large enterprises where we believe we go along with them and we sell our product portfolio to large enterprises like Microsoft, as I mentioned. We do see the H2 will definitely going to be better, and we will do our best to maintain the momentum which we have received in last quarter.
Because of the seasonality also, I think H2, we have been now certain events like Christmas and other activities which is going to be there. Yeah, our pipeline also looks very strong, and we are working very hard to maintain the momentum towards that. On a capital allocation, Vinay, you want to add on RPT?
Yeah. On RPT, the biggest transactions are with Telesign, and that contributes to around 15% of the total revenue. On capital allocation, Raj, you want to take that?
Yeah. I mean, it's a good question. Yeah. We have got a very strong net cash position on the balance sheet. From a capital allocation perspective, we are generally a CapEx-like business, but we are looking at, particularly, for example, our BPO business, which is showing good growth. We will always look to invest in capability there. We're also working with Proximus on some platform improvement type deals, which may require some initial CapEx investment, but will likely be very positive returns, and we'll see some good benefits from that coming through. We look at it all the time, and we'll look at it on a quarter-by-quarter basis.
I think, Dipesh, just to let you know that probably we definitely want to get into some kind of tuck-in investment for some of the AI-based companies or maybe some companies where we believe can add more product portfolio offering to our product portfolio. Yeah, I think we are definitely in talks with some companies, and we believe there are some good product companies right now, especially on AI. Right now, I can't share much, but definitely, yes, we are working towards that. Something in voice as well. Maybe we can share more detail in coming quarters.
Understood. I think I just want to probe further on two things. I think Raj mentioned investment in BPO capability. Second, you said some deal with Proximus Global. I'm not very clear. If you can provide some further detail on these two investment areas. I think AI and other things, maybe over next couple of quarters, you provide more detail. On these two, if you can give some sense.
Let me just answer that question. Our BPO capability right now, we have about 2,500 seat capabilities, and there are lots of happy customers we have, and they are looking out to offer more seats to us. We would love to build some of the new centers where we can add 500-1,000 more seats. Looking at the demand which we have in the current market and the customer satisfaction, I think that's where we believe we need to invest, not a big amount, but just for rental spaces and office. There are already customers who are willing to give us more business, and that's exactly where Raj is trying to highlight about the BPO.
What about Proximus Group?
Yeah. I mean, just on prop, I mean, we are working with Proximus on delivering the synergies. And some of these are technical synergies related to simplification and improvements in capability, which will come at some CapEx investment. Yeah. We're continuously looking at these. In the coming quarters, we'll update on these initiatives as and when we see them coming in. That would be a good use of capital, as we see, because there are some low-hanging fruit that can deliver some of the synergies that we expect to deliver from the Proximus tie-up.
Just a correction, it's not Proximus. It's Proximus Global, by the way.
Yeah.
Okay. Okay. Okay. Last question from my side is, now we have a healthy OCF to EBITDA in H1, 80% + kind of number. Do we think this, because earlier we always used to maintain 50% +, now 80% is a good number. How one should look at this OCF to EBITDA conversion on a sustainable basis? Thank you.
I think we should be able to sustain this, Dipesh, because we do not see any negative trend on the receivables and also on the payables. We are pretty much in control the way the payables are working. That is the biggest working capital movement for us. We have that pretty much in control. We do not believe there is any reason for this metric to go south.
Okay. Effective tax rate, last, sorry, what? If you can give some sense, how one should look at your effective tax rate? Thank you.
Yes. As I mentioned in my opening remarks, the effective tax rate was significantly impacted by the exceptional items. If you normalize for that, there's only been a slight increase in the effective tax rate. That is largely due to the geography mix of where we're generating profits. We expect over the coming quarters for it to normalize at historic levels.
Thank you.
Thank you. The next question comes from the line of Amit Chandra from HDFC Securities. Please go ahead.
Yeah. Thanks for the opportunity. My first question is on the exposure that we have to the gaming companies. Certainly, after the banning of these real money gaming companies, what is the exposure that we have to these companies? Already, the impact of the downfall from the volumes there is already in the base. If you can provide some numbers from that. The second question is, obviously, we have seen some recovery in terms of growth in this quarter. Maybe the next quarter also, because being a seasonally strong quarter, there can be a growth. From a full-year perspective, despite seeing growth in two quarters, we are still on the negative side for the full year. How do we see the normalized growth panning out? Maybe what takes us to hit the double-digit number maybe next year?
If you can give a simple number that what part of the portfolio is seeing a volume increase and what part of the portfolio is seeing a volume decline. Thank you.
Amit, just to let you know that we are not very much impacted by these gaming companies because one of the companies we onboarded in last quarter, and I think this moment we onboarded and this whole thing happened. We are technically not impacted by any of this regulation because we are not serving these companies as a portfolio customer. That's my answer. What is the next question, Vinay?
The next question was on the overall growth, recovering to double digits. What is the requirement in terms of the portfolio and mix of the portfolio in terms of what part of the portfolio is seeing a volume growth and what part of the portfolio there is a volume decline? Yeah.
Amit, as I think we have already shared that, we won the Claro deal, and I think there is a synergy between BICS and 365s quared right now. We built this AI-powered spam-filtered platform, which is definitely one area where we want to work very aggressively with operators where BICS has a good connect. Along with that, I think the RCS map server is a big opportunity for us. I am not talking about RCS, but just enabling the operator to serve their customer with RCS. Like we have a classic deployment with Ravi Exiata. We are in talks with another operator in Bangladesh, and probably very soon we will announce that deal as well.
I think we are going very closely with BICS to reach out to all these large MNOs globally, and we would love to focus on CFS in a box and RCS map server as one solution along with our spam filter and the firewall solutions. We do believe that is a big market, and still there is a huge opportunity we have right now, and we are working towards that on a product-side basis. In terms of volume growth, I think you must have seen 13% sequential growth on our new products, especially on WhatsApp, RCS, and email. Most of the customers, now we are trying to create a bundle deal with our customer, not just SMS as one offering.
I think most of the customers, they are liking our options where we are coming up with a solution where we are not talking about just SMS, but we are talking about four different channels. Then there is a blended price option, which makes more sense for them to use one platform, one API for all the four channels. I think that is where we see growth on all the channels. We believe in coming quarters also, we will see this growth as well. What was your last question? Yeah. Vinay, you want to add to this?
Yeah. Yeah. Amit, to add to what Rajdip just explained, if you break down the portfolio into segments across, you can look at ILD, domestic SMS, that is for India, and SMS in the rest of the world, and then the non-SMS portfolio. In the last quarter, we have driven growth across all the components of the portfolio. Now, looking at the momentum that we are building, we believe. Given that some of the customer case studies that we highlighted earlier in the discussion, we believe we should be able to sustain this for the foreseeable few quarters as well. It looks like the traction that we have built will contribute to certain volume expansions moving forward as well. Just to add to what Rajdip already explained.
Okay. Sir, in terms of the portfolio rationalization that you mentioned, obviously, that is showing up in the margins. Is this strategy more client-specific rationalization, or is it more from an overall portfolio-specific or the horizontal kind of rationalization where we are changing the way we are approaching the business? In terms of the strategy, if you can give some more color, is it more client-specific, geography-specific, or is it more at a portfolio level?
Amit, you are aware that the business is transactional and fairly dynamic.
Vinay, just.
So Amit.
Sure.
Last quarter, I think from last few quarters, we have just defined two strategies. One is telco, and one is enterprise side of the business. Now we have a telco-focused team, and then we have an enterprise-focused team. When I say telco, our product like CFS in a box or map server or firewall is complete telco side of the business. We believe BICS is helping us on that side. Then we have an entire omnichannel stack, which is like enterprise along with SMS. That is the two different views we have now in the company, and we definitely want to. We already have a team whose one team is completely focusing on telco side of the sales, and then the other one is enterprise. I think previously we were doing all together.
Now we just made two different divisions where people from telco will not sell SMS, and the people from SMS will not sell the telco product. I think that is really doing well for us. Yeah, Vinay, you can continue.
Yeah. Yeah, Rajdip. Again, Amit, what we are also absolutely focused on is because the industry and the business is fairly dynamic where the prices can also move at times. That is where we are taking an absolute conscious call that either if the cost prices in a certain market are moving, we need to still sustain our percentage profitability on those accounts. If you're not able to, then we try to find alternate routing or worst case, if we are still not able to get a price increase with the customer, and if it is significantly impacting our margins, then we take certain drastic calls. It is a mix of various initiatives that we are following to make sure that the portfolio margin is sustained or expanding.
Okay. The last question is on the write-off that we had, all the exceptional items that we had. You said that you're confident that we will not see any such kind of exceptional write-off in the coming quarters. What actually gives you that confidence? What percentage of customers or in terms of our top 10 customers or top 20 customers, how many customers are we working with an advanced model in which we have given advances in terms of the minimum revenue guarantee? What are the total advances that are there sitting on the balance sheet? How do you assess the risk there?
We work with operators only where we give this commitment in advance. I think we have very few right now, and we have already consumed almost the commitment which we have given. There are certain commitments which are left for next week through, I think, four to five months. We are very much confident that we will use those, consume those numbers. Apart from, I think, one or two, I do not think there is any more. We are very much confident that we will consume the commitment which we have given to them, and there is no challenge for us. Apart from that, we are not giving any further such commitment to any international operator. We are very conscious about this call.
We really let certain deals go where we believe that the market, maybe the volume, the operators are expecting high numbers, but we know the numbers exactly, how much traffic, the volume or traffic the operator has. Based on our assessment, we are taking some conscious call to just say no to such businesses. That is the strategy we are going to follow henceforth. Yeah, Vinay, if you want to add to this.
No, I think Rajdip, you addressed it. So not much from my end.
Okay. Okay, Rajdip sir. Thank you and all the best.
Thank you.
Thank you. The next question comes from the line of Nilesh Sharma from Anantnath Skycon Limited . Please go ahead.
Hello sir. Congratulations on a good set of numbers. My question is upon market outlook and cost structure. While the company continues to deliver the steady revenue growth, could you please comment on the sustainability of the gross and EBITDA margin in the light of ongoing price pressure on CPaaS industry and rising cost of connectivity?
Nilesh, as I mentioned, I think now we have a very clear focus on telco and the enterprise segment of the business. Telco business is completely very high margin. If you see the new product portfolio, which is growing 13% sequentially, I think we would love to focus on that area where the margins are high. We are confident that we will be able to maintain the numbers which we have achieved last quarter.
That is where I have already mentioned before also that we have a higher aspiration as a company, but we will love to maintain what we have achieved.
Okay. And one more question. Could you also elaborate on the key sector or geography that will be the driving factor for our revenue growth and EBITDA margin growth?
Route Mobile is a global company. We serve customers all across the globe. We are based out of Latin America, Middle East, India, and Africa. Our growth is coming, I think, from all the different markets. Yeah, India could be the highest in terms of volume growth and the ILD business. Overall, if you see, I think we are well spread all across the globe and serving large customers from outside India.
Okay. Sir, could you also briefly outline the revenue growth expectation that we can expect in S2 of financial year 2026?
I think we are not giving any guidance right now. What I can tell you right now is, yeah, we are very much confident that the growth is something which we really want to work on. We do have a good pipeline. We have now a clear strategy of telco and enterprise side of the business. Looking at how the things are moving right now, we believe the future is good. We all, as a team, are working very hard to achieve new heights.
Okay. Sir, can you—one last question. In terms of revenue bifurcation, can you bifurcate which industry contributes how much percent of revenue?
It is already mentioned in the presentation. I think if you just refer to the presentation, it is already mentioned.
Slide number nine has that data in the presentation.
Yeah.
Okay. Okay. In this presentation, only the geography mentioned—America, India, and all—but no t industry.
On the left-hand side, you see those tables with the industry, sensor, digital native, tier 1 CPaaS. Those are the industry verticals.
Yes, it is mentioned, but percentage—okay. Okay. Thank you, sir. Sir, how much percentage that we are targeting for telecom? That is our new focus area?
It is not a new focus area for sure. I think we are already serving—we already have this product for a very long time. We were already deploying our telco services with multiple operators. Now we have a dedicated focus approach towards both the businesses, and that's what I can—but how much—if you talk about to quantify that, probably I will not be able to. As I mentioned, since we have closed one large deal last quarter, we are looking out for such deals to be closed in coming quarters as well.
Okay, sir. Thank you so much. All the best for future.
Thank you.
Thank you. The next question comes from the line of Dia Jain from Saphire Capital. Please go ahead.
Hello, sir. Thank you for taking my question. I just wanted to understand, with the new deals with Claro and Tech Mahindra, do we see the 15% growth guidance for the next three years sustainable, or can we expect a little better than that?
Dia, as I mentioned already, probably we will not give any guidance, but we are working towards achieving new heights as a company. That is something which I can tell you right now. In terms of quantifying and giving a number, probably I might not be able to give right now.
Okay, sir. Understood. Thank you.
Thank you. The next question comes from the line of Anand Jen, who is an individual investor. Please go ahead.
Thanks for the opportunity, sir. First question is on the CPaaS. If you can give the market share of SMS versus WhatsApp and the growth rate of each segment.
There is no data available right now technically anywhere as we speak. WhatsApp is still very early stage of adoption. SMS is almost 20-25 years old ecosystem. Honestly, Anand, there is no data available which I can share with you as of now.
Our own experience should give us some information around that. That's it. I'll just give one more question here, which is what we realize on the WhatsApp side is that Gupshup and Twilio seem to be the market leader. Where are we when we compare in terms of capabilities with Gupshup or Twilio?
See, I really do not want to comment about any company as such, but if you talk about some of the product deployment which we have done in the past, like ticketing system on WhatsApp, we are the largest enabler for lots of metro in India and now taking the solution to Jakarta as well as Bangladesh. I think in terms of capabilities, if you talk about Route Mobile, yeah, we are as good as any company present in the market today. Who is leader and who is not leader, probably I am not the person to answer that question. We as a company do understand what value these channels can bring, and we really need to invest heavily on this. We have invested in the past.
We are still investing, and we are enhancing our platform every single day to make sure our customers are getting the solution which they need from the market. I think that is where we are today, and that is exactly where we are focusing on.
To add to what Rajdip is saying, Anand, our WhatsApp platform supports native payments. It supports interactive UI. For example, while ticket booking, you can choose a seat within the WhatsApp interface. It is fairly advanced. It supports any feature. I mean, most of the features that any enterprise asks us, we are able to support through our platform. Plus, it is not only WhatsApp. We have the same capabilities across RCS. We have a very strong email platform. In terms of capabilities, I think our platform is fairly evolved, as Rajdip was saying.
Thanks for that. One last question, if I may squeeze in. I mean, I have many more questions on this, but I think it will take a lot of time. One question on something else is on CPaaS, what we are also seeing is that the telcos are going downstream. For example, Airtel is getting into CPaaS. How do you see that as competition now for us?
I think, Anand, for me, it is very critical that what product offering we have and how stable our business platforms are. Whether we get competition from Airtel or any other company, we treat them as a competition. Even you see our numbers are growing every single quarter on the new product. If my numbers are degrowing, probably I have something to think about. I think we are onboarding multiple customers on these channels. We do not see that as a challenge. We treat them as another single competition. That is it.
Okay, great. One last question on WhatsApp side. How do you see our WhatsApp and the newer forms of communication being, as a share of our total revenue, let's say three years from now, if you can give some color around that? Do you think they can be 25% of our revenues in three years?
It can be. It can be more also. It can be less as well. It all depends how RCS and the WhatsApp panels, how the enterprises are going to adopt these channels based on their requirement. Because we, being a channel-agnostic company, it is more important for us to make sure we keep on innovating our product in a way that the current customer requirements are fulfilled. That is the company's main role. It can be 25%-30% also. You never know. We are onboarding customers every single month and quarter. That is what we can do. You never know. It can be more than 30% or 25% as well.
Great. All the best. Thank you.
Thank you.
Thank you. Ladies and gentlemen, we'll take that as the last question for today's call. I would now like to hand the conference over to Mr. Raj Gill for closing comments.
Thank you, moderator. As usual, firstly, thank you for your questions and continued support. I hope you'll all agree this is a quarter that we're showing some genuine momentum and is creating some good excitement here at Route Mobile. We look forward to engaging with you again and see you in the next quarter. Best wishes to you all. Have a good rest of the day. We'll talk again soon. Thank you.
On behalf of Concept Investor Relations and Route Mobile Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.