Intellect Design Arena Limited (INTELLECT) Earnings Call Transcript & Summary

[Audio Gap] financial results for the third quarter of the fiscal year '21-'22 ending 31st December 2021. The investor presentation and the press release has been sent to all of you and is also available on our website. Our leadership team is present on this call to discuss the results. We have with us today Mr. Arun Jain, Chairman and Managing Director; Mr. Prabal Basu Roy, Adviser to the Chairman and Director on the Corporate Board, Mr. Venkat Saranu, CFO; Mr. Manish Maakan, CEO, iGTB; Mr. Rajesh Saxena, CEO, iGCB; Mr. Banesh Prabhu, CEO, Intellect SEEC; and Mr. Andrew England, Full Time Director; and Mr. T.V. Sinha, CEO, iRTM. Besides, some other senior members of the Intellect management team are also present in the call. Mr. Arun Jain will brief you on the results, and this will be followed by Q&A, which will be replied by the senior members of our management team. [Operator Instructions] On safe harbor. I would like to remind you that anything which we say, which refers to our outlook for the future is a forward-looking statement, which must be read in conjunction with the risk that company faces. With this, I request Arun to give his briefing. Over to you, Arun.

Good evening, everybody, for joining for this Investor Day -- investor conference today. We met just 6 weeks back in Technology Day where we shared with you the kind of progress we as a company making on the various technology platforms and how the tailwinds in digital space helping the company to get into a better traction, which is there, so these results are a validation of some of the elements that you have seen that time. So I'll just take you through the small deck of the presentation. So we are in the business of accelerating digital transformations by 2 ways because of contextuality, composability and cloud-native, which is in the nature of the business, is looking forward by the customers -- by the customer's customer. Today conversation, I'll take you through the Intellect snapshot, just a small repeat of what we presented on Technology Day, performance overview. What kind of deals are we winning? I'll take you through that. Digital transformation, what we are doing and what kind of deals we are winning now, and some observations. If you look at us, we are -- provide large enterprise grade composable and contextual solutions, driving higher business growth, reducing cost and risk on sustainable basis. So Intellect is a company which has the ability to understand the complexity of top 4 banks or top 5 banks of any geography and intercept that, so that detailed long-term relationship can be established by using the complete MACH solution, which is microservices-based, API-based, cloud-native and headless. If I look at the slide. This is a slide which is known to all of you. We look at the design thinking as a core tool for driving the last 2 percentage is 200%. In financial sector, its last 1 percentage is 200% because the kind of security frameworks, the volume framework, the high-performing applications, which is required is phenomenally required, very intense R&D team. I mentioned to you last time, we built up a first, technology stack with the 4 exponential technologies. Then we have a deep data model and then we have products which creates a products. Then we host it on the cloud, which makes the platform. And then when you bring a third-party participant plus fintech then it become marketplace. This is our journey going forward. The last 5 years, we are working on the same journey. We were in first 2 spaces in the last 5 years. Last year, we're moving to third step, and then the final step will happen in the next 2 to 3 years. One other technology shift that is favoring Intellect, there is a movement on premise to cloud but may not be what -- but we are observing the public cloud. There's a mixed feeling of the large banks that they want to set up their own cloud, which is a private cloud but it's on the cloud. But they are -- shift to open architecture is very, very critical. So the APIs a medium of data exchange, segregation of UX layer business logic, headless architecture. MACH as a de facto standard, emergence of fintech and marketplace and predicting trends and investing proactively. Why I'm mentioning these 7 elements because that is aligned to the previous slide, which is driving our growth engine. The other 4 technology platforms, which we had called technologies, we build up a data platform. We built up a intelligent document platform. We built up a hyperscale banking operating system and Turmeric API ecosystem. To give a unified data picture, API-led design cloud-native and configurable integration. So these 4 pieces are the core of our acceleration in the value proposition in the market. This drives us at least 30% to 40% reduction in implementations, and we are able to give a proof of concepts in a period of 4 weeks to 8 weeks. We are able to give a proof of concept to the customer, and this is leading us to shorter implementation cycle, and that's how the collection period has improved substantially in this period. These are the 12 product lines where we deeply go into each product, writing in user journeys, which we have shared already with you. Most of the investors in this call must be knowing about these 12 products. And these are 4 platforms, iKredit360, CashPower, Xponent and GeM. Now coming to the performance review of the quarter. I'm proud to be announcing that we could move from 22% to 33% on quarterly growth in this quarter on -- and cross INR 5 billion mark, INR 5.08 billion to be precise, from INR 382 million -- INR 382 crores to INR 508 crores. In dollar terms, it is 31% growth. The gross margin has moved to -- moved up by 39% year-on-year. EBITDA moved 37% year-on-year. PAT moved 25% year-on-year. Gross margin, which I mentioned to you almost 2 years back, we are inching towards 60%. So in an ideal state, our gross margin should be 60%, it reached from 56% to 58%. EBITDA has moved from 25.5% to 26.2%. Our directional goal is to make it 30%. Collections have really catapulted this quarter, which is INR 485 crores of the collections, which is leading to an EPS of INR 30. The collection days has come down to 129 days, out of which global, excluding India, is 105 and India is 217. Over here, I want to bring one important data point over here for collection that in a product business, there are certain revenues which are contractually not payable by the customer. And they will become due on contractual terms, and that number is close to -- 30% of this number of the receivable is sitting in where due, which is not collectible, and they will be collectable milestone. So your company is 0 debt profitable global company with cash of INR 431 crore at the end of the quarter 3. On breaking down the revenue to next level. We are looking for SaaS and subscription revenue, which grew to 113%, moved to INR 89 crores from INR 41 crores. License revenue this quarter grew from INR 91 crores to INR 112 crores and AMC moved from INR 70 crores -- INR 74 crores to INR 82 crores, on 11%. Now AMC 11% is linked to whatever the growth rate I had in year, 2 years before. So whatever the system has gone live that become due for AMC. So at that time, our growth rate was around 15%, so AMC growth is around 11%. So AMC is directly proportional to our growth cycles, which is there. So in 2 years from now, AMC growth will increase appropriately. Investment in product development, they are remaining constant, around INR 28 crores, INR 29 crores. We have won 10 deals during the quarter. I'll take you then what other traction we are having, the 11 digital transformation we have completed in this quarter. On YTD, we've grown 25% on dollar terms, 24% in Indian rupees. We have given a guidance of high teens. We are able to deliver 25% growth as of now. Gross margins grew by 30%. EBITDA grew by 38%. PAT moved up YTD 39%, close to 40% we move our PAT during this period. Gross margin is 57.7%, EBITDA is 25.7%. And collection is over INR 1,000 crores is the collection -- collections during the period. And other data element remain same. Again, on a second-level breakup, SaaS revenue grew 122% to INR 254 crores. License, INR 278 crore and AMC is INR 243 crores. This is combined, creating 57% of the revenue are license-linked revenue and 43% is implementation-driven. In this YTD in the last 9 months, we have invested INR 85.9 crores in product capitalization. Deal wins is 29, go lives 9 (sic) [ 29 ] again and INR 28 million is CSR contribution. Now this is a important figure over here when we say steady growth in license-linked revenue. When we started 5 years back, it was 33% was license-linked revenue, which moves very slowly to reach 42% in FY '19. It reached 56 -- 46% in '20, 54% and now we are inching towards 57%. Our goal for a good product company is to reach 2/3-1/3 of licensing revenue as we move forward in next 2 to 3 years. That's a cycle we'll look at it. Our pipeline is healthy. It's growing consistently quarter-on-quarter. It's INR 5,000 crores for the pipeline. We have 159 deal alone constitute $565 million of the deals. These are the Destiny deals. So this is a shift we made 2 years back that we moved from the average deal value substantially, and we start focusing on Destiny deals. So that was a shift. So today, we have 57 Destiny deals. So these deals are which we have qualified, we are almost at -- in our cycle of sales, it's a P4 stage. There are 54 deals in that stage. That is the kind of a ledger of the deal. So it's deal ledger, how we move the deal which is 50 -- more than INR 50 crore deals, moving from 8 deals to 11 deal in Q2 and 12 deals as of now, which is there. So it's a 50% jump on large-sized deal INR 30 crores to INR 50 crores is 17. And if you look at it, INR 20 crores to INR 30 crores bracket, they are 28 deals. So there is a significant progress from 42 deals which were there in Destiny deals last year at the same time. We are sitting with 57 of the deals which need to be closed in the next 2 to 3 quarters. These are financial numbers you must have gone through anyway. I will not take much time on this. Now I will take you some taste of what kind of digital transformation we are doing. This, I mentioned about it that we have 12 composable and 4 platforms. And they are new digital transformation, which we have accomplished using our suite. These are 40% faster than other players in the market because of 300 fine-grained package business component, 900 APIs and low-coded and accelerated, predictable implementation technology, iTurmeric that replaces coding with configuration. So this is our secret sauce of transformation. If you look at it, what is the kind of wins we are able to have it now? This is a very celebrated quarter for us. We were able to win 2 new deals to penetrate 2 new banks in U.S., which is a significant celebration for us internally. Both have come in a space of a product called virtual account and escrow. So this is the new technology which we built on cloud in U.S., we launched in U.S. U.S. is the most difficult market for us to enter, and you were asking the question when we'll be entering into the U.S. I think toward this in the quarter. U.S. is there. Substantial success. One thing I want to highlight over here on the cloud revenue, when we win this deal, there's a cycle time of between 3 to 4 quarters they will go live. And during that time, the cloud revenues start taking a revenue lag of 3 to 4 quarters. So even though we would have won these 2 deals but there will be 0 revenue booking in this quarter on account of these 2 banks on a revenue bucket. So cloud revenue lag, is a -- one point I want to bring to your attention. Same thing -- point for the SEEC for the revenue. We won 2 deals in Europe. A top 3 bank signed up for cash flow forecasting, which is iGTB liquidity management platform. And then trade platform has been extended for Austrian Bank. And we won 2 deals in APAC. Another Vietnam leadership is continuing. We signed digital transaction banking for Vietnam. And similarly, we signed Capital Cube for one of the ocean -- Oceanic Bank in -- near Australia. We have 4 deals in IMEA, India, Middle East and Africa. Leading sector bank signed Intellect LIBOR transition in Capital Cube. We have a leading deal in Kuwait signed for the iKredit360 platform. And there are 2 major deals in Africa which we signed up using partnership networks. So a lot of time, you are asking me how is the partnership network moving? Now this is a proof of the pudding that we are able to use partners to win these 2 deals in this market. And they are -- one is a French-speaking customer so it was difficult for us to reach there on our own and partner enabled us and that resulted into higher SG&A because of the partnership commission. So when we start using partnership more and more, our SG&A commission will go up. So that -- maybe that is one question you might have that why the SG&A has moved so much in that quarter to quarter? And the major reason is activating the partnership network, which all love to have because that helps in growing the business faster. So this is the kind of 10 different customers who are approaching Intellect for a transformation of digital platform they want to do. Now this is another important slide that how did we complete the digital transformation, which we will be referencing for the future deals. When I spoke to you in 2019, we said when we entered the new market, we need to have -- wait for 2 years for the system to go live sometime. And then he start using, after 6 months, then it becomes a referenceable accounts. So that's what become for each market, you move from stage 4 to stage 5. Now since we have a -- like in Americas, 1 of the top 5 Canadian banks has modernized their entire commercial banking channel with iGTB Contextual Banking, CBX for payments. Now this is a very, very difficult job to transform on corporate payments in a Canadian market. Today, we have that credibility that went successfully live. It's been working there. Similarly, the GCB business, IDC has gone live with another Canadian bank in less than 10 months from sign up the deal to go live in 10 months' time. So these 2 deals are bringing credibility in America. We have a referenceability on our architecture that it works. It has gone live. In Europe, similarly, the trade platform, which has been written on the basis of U.S. stack has gone online. There are 2 deals over there, and there's 2 go-lives there. Then there is a APAC. It is a very, very interesting deal. One of the Intellect Cards which is -- we have call it in a Stage 3 product right now. We are not calling it a Stage 5 product, has fully gone live for a Singapore-headquartered bank who wanted to enter into Indian market with entire merchant onboarding, customer onboarding, complete card functionality. That will give us a access to the platform in Indian market, so this could be the fifth platform we'll be looking at it in the next 6 months after system goes live. Similarly, entire IDC went live in Southeast Asia large bank where -- there we helped transforming using microservices platform. We have looked at it, a top 3 Philippine bank using CashPower went live. Asian bank went live in Integrated Digital Transaction Banking platforms in Singapore and Cambodia. In India, major system on digital lending platform has gone live with one of the largest banks on the modern architecture. In UAE, we have, again, one more IDC went going live in this period. So if you observe the IDC is becoming a next IDC and CBX, which are driving force, is taking -- getting momentum now because of the reference sites. And similarly, CBX in Oman. So these 11 reference sites and 29 digital transformation which we did in the last 3 quarters, these 29 references have a word of mouth and that becomes a -- pull deals rather than push deals. In fact, when it becomes full deal, it will become much simpler to do that. In this period, what we have added, one is a partnership council we added agenda. Second thing we added is a Strategic Advisory Board, which consists of 8 members. I discussed about this thing during the Technology Day, but I'll just repeat it over here. This is -- this is all the spaces of the financial industry, we brought in the strategic adviser from retail segment, corporate segment. And they're certain market focus, people, people from academics, finance, and there's an 8-member Strategic Advisory Board, we put it together. You know Andrew England and Prabal for quite some time. But Dave Ravell, Pradeep Kapur, Sanjeeb Chaudhuri, Swarup Choudhury, Theodore Roosevelt Malloch, Vikram Sud are members, which created a Strategic Advisory Board for Intellect. These are the small resumes about them. Dave Ravell has the -- was the CIO of CIBC. And I think he brings not just a CIO flavor, he knows our latest technology so well and he works with all the players in that market that he provides a deep expertise of Canadian market. Andrew England, all of you know, he's a master of transaction banking. He is working in Europe. He worked in almost every country in Europe, from France to Germany. I think you -- all the countries, all the large banks, he gives an insight to us what kind of product is required. Prabal brings finance strategy. Ambassador Pradeep Kapur brings a lot of presence since he was the ambassador, retired and diplomat in many countries. He brings a huge amount of ability to work with the central bank areas. Sanjeeb Chaudhuri, I don't know how many of you know. He is the Chairman of IDFC First Bank. And from Intellect perspective, he brings in the kind of a marketing genius, what we are looking for in advisory board. Swarup Choudhury brings the partnership kind of flavors to us because he worked with HSBC, IBM, Thomson Reuters, First Data. He brings that kind of capability. Theodore Roosevelt Malloch is another academician. He taught in Yale, he taught in Oxford and through which we are building a brand of iGTB Oxford. He brings a lot of capability. He's a -- just to mention here, I think he's connected to the Roosevelt family of famous Roosevelt. Vikram Sud has a great experience on operations, the large operations. He handle Kotak operations and then before that, Citi operations, in large multi-location operations. So when we are talking to the customer on our value for their operations, he play this critical role over there. So these 8 people Strategic Advisory Board is already set up with us. So that's -- with that, I finish my call here, my conversation here right now with you. I can open the session for question and answer at this point of time.

Thanks, Arun. Now you can ask a question. [Operator Instructions]

Yes. So I'll just -- Praveen, I'll just respond to -- there's a question. Why there is a secular drop in promoter holding? There's no regular drop. Promoter has not sold a single share in the last 2 years -- last 5 years, rather, since we have taken. So which data you used there. Maybe if you type it out, it will be good.

So the first who raise the hand is Baidik Sarkar. Baidik?

Arun, and congrats to you, Manish, and the entire team on a great quarter. A couple of questions. It looks like now roughly 80% of your incremental earnings are from SaaS, right? So I'm just trying to understand the characteristics of your SaaS income is slightly better here. For example, between Q4 of last year and Q1 of this year, our SaaS revenues incomes were up roughly 21%. And then again, between Q1 and Q2, we were up 13% sequentially. And in Q3, you're flat, which is all right. So what's the right metric that you use to gauge the buildup on your SaaS revenues from here on? I'm assuming they're an ideal combination of the amount of credit and insurance you underwrite plus the installed user base. So how should we read that, A? And B, how should we understand the acceleration of SaaS that we are on?

Yes, SaaS is still evolving, Baidik. Let me be very honest with you. I also cannot judge this, and we always struggle in our management how do we really estimate the SaaS revenue. Though we have a infling, I can share with you how -- what is my understanding of it? But since it's the enterprise-grade cloud revenue, SaaS revenue, it's not a retail player, you can see so many leads and so many leads are getting converted. In our SaaS revenue, the deals can be very large. So our SaaS revenue could be as large as $2 million on annualized basis. Like typically, SaaS revenue when you're talking about in a small company, it will be $20,000 per customer. We have -- per customer revenue pool could be as high as $1.8 million to $2 million. So a typical customer will be between $250,000 per annum SaaS revenue to -- going up to $2 million to $3 million per year. So that's where there is predictability numbers on cloud is -- are there. And normally, when deal start to happening, customer initially asked for a license, then he'll shift to cloud then he shift back to license. So this kind of fluctuation also does happen. So what we need to celebrate is that we are growing -- doubling our revenue in cloud year-on-year. And we have sufficient deal, whether it will come -- it will show in as a license but it will show in a cloud. I think license-linked revenue is a common index, if you can look at, Baidik. That will be a good index for you. My ARR today is INR 684 crores, and license-linked revenue is 57% of the revenue. That is the right metric for us to look at it from an investor perspective.

Sure. I understand, Arun. That's very helpful. It clarifies a lot of our questions. Moving on, the phenomenal traction in the sequential license wins, right? So is the breakout here a function of pent-up demand in decision-making? Or is it just organic, given how the transition to digital is? And if I could just kind of invite your comments on the 57 deals that you highlighted will close over the next 2, 3 quarters. Is there a quantum value here that you probably like to say is a fight to win? And just put a number to that?

If you look at -- if we just do the pattern analysis of last few quarters of when we are publishing this ledger, deal ledger, every quarter, out of these decisions which is there, some gets postponed some gets taken to the next year, budgets get postponed. So there's a pattern there that we typically been -- out of these 4 deals in this quarter, we won, we lost one, added 8 and if you just plot it over the last 8 quarters, we are winning around 4 to 6 deals in a quarter. Now our signs of knowing those deals, resale processes are becoming more mature in the organization. Where our win rate is increasing once the Destiny deal is there, our win rate is over 60% on those targeted deals. But if customers postpone the deal, then it delays out. So our win rate is now 4 versus 1 lost is close to 80% win rate. But that's not the right way to calculate. I'm saying 60% we are able to win when we put our focus on winning.

That's very helpful, Arun. Congrats again, and I'll be in touch.

Thank you, Baidik. Next is Mr. Mayank Babla from Dalal & Broacha.

Am I audible?

Yes, yes. Please go ahead.

Congratulations on a great set of numbers. Sir, my first question is around margins. So our vision is to reach 30% EBITDA margins. Could you give us some sense of the operating levers that we have at hand to see this sort of expansion?

Yes. So Mayank, these are -- anatomy of the margins, what we have, I think we book our RSU cost, which is as per IFRS which comes to 2% of the IFRS parts. We are not talking to you earlier but now that cost over the period of time and the RSU that are getting issued in the company. That cost is in -- it's intangible cost in our books but it's a cost in our books. It comes above EBITDA. This cost comes above EBITDA, not below EBITDA. It's not the other cost, it's a employee cost or SG&A cost. That's a one part of 2%. 46% is there, 2% is that. But the question over here is that in this quarter, when we are building a partnership network, we were looking at Street number more than the -- last quarter, we said we should focus on the growth agenda margins. So we took a call. So in this margin call, 2 places where we invested the money. One is we increased our headcount by at least 400 people during the quarter. This is for preparing the company for $75 million quarterly run rate, which we -- earlier, we were $60 million run rate. To move to $75 million run rate, we needed capacity so we did a capacity enhancement. And second thing we did is we raised the partnership network and that commission cost has gone up in this quarter. So it's a -- 30% can be achievable. It's just a matter of -- any quarter will be good-enough quarter and product companies benefit is that we can't sequentially for that. This time, we never look at it, that 33% growth. If you would have seen 33% growth, I will not be saying high-teen margins. So there's a lot of deals in the pipeline, which we can't predict and how it will move. You will find in the next 3, 4 quarters currently we will move to -- that needle will move there.

Sure. And sir, so my second question was around this capitalization of investment in product development. So around 8 -- INR 20 crores, INR 29 crores per quarter and INR 85 crores to INR 86 crores per YTS, per YTD. Sir, could you just give us some sense of where is this capitalization, which product are we investing in? Or could you give us a breakup of this investment in which products we are focusing on? And how we can expect this to span out over the next 2 to 3 years?

Yes. Since -- you may be new to the product business, I think there technology investments are quite high when we are moving to cloud. We are investing 12 products and 4 platforms. So all the platforms need a constant upgradation. The technology changes so fast that we need to make -- just to remain there, you need to invest. And every product require their road maps. So this INR 120 crores, we invest close to INR 220 crores. And we write off INR 100 crore in the same year, which is around just version upgrade. But where we invest, the major money is in the product there, we are making them ready from India to Middle East or Asia Pacific, then ready for Europe, then we're ready for America. Every time when we move the geography, we need to invest in the same products like IDC, lending, credit card, liquidity, DTB, trade and supply chain finance. So all the products we provide -- market, when we are positioning a product in the market as well as we are building the product for next-generation technologies.

Mayank also, as Arun said, in terms of your first question, you wanted to know the drivers of the margin profile, et cetera. So there's -- I'll give you another cut on that. And you'll be able to link it because we see. There are 3 tailwinds which are working very much in our favor at the moment, and they will get on what we can see. The first is, of course, as we mentioned, our change in approach to going towards more Destiny deals. So the deal sizes are increasing by itself. Yes, by definition. So that is one big lever. The second big lever is with better branding and more acceptability and referenceability, the pricing obviously is on the upside. And third part is the issue of revenue mix. If you have seen our financials for the last, let's say, 16 quarters, you would see that the license-linked revenues are now much more than the implementation revenues, 60-40. Now it's just the other way around. So the confluence of all these 3 things, which will obviously continue as we expected, will -- are the real strong intrinsic drivers of the business from a margin profile perspective.

Next, we have Mr. Mohit Jain from Anand Rathi Securities.

Yes. Sir, I have 2. One was related to deal addition. Like in this particular quarter, the addition seems to be a little on the lower side while pipeline is up. So if you could help me understand what kind of, is it more like seasonal or do you think more deals are likely in the next quarter or so? That was one. And the second was related to headcount. You specified there was like net addition of 400 staff during the quarter. So where is the total count now versus, let's say, 1 year back?

The total count is -- we don't announce the headcount number because product companies are not major headcount but just the 400 is incremental headcount. So it's -- it can come also 8% to 9% increase in the headcount, which increased partial cost in last quarter and partial cost in this quarter will be added to all those have salary in that particular area, Mohit. About the...

Sir, you will be like closer to 4,500 or you would be more closer to like 5,000 like any ballpark range...

[Foreign Language] It's okay. I mean it's closer to -- it may become closer to 5,000. We were running around 4,000. Closer to 4,000, lower end of 4,000. It may be closer to -- may go to closer to 5,000 by 31st March.

Okay. And sir, on the deal win side, like?

Deal win side, I think this is a -- you can't track quarterly basis. I think it's each product by product we are tracking. We are creating a tough strategy to be qualified as opportunity. So we are moving the gate from mere 6 stages of the deal, one P0, which is a lead awareness, P1, which is where customer has seen the demo and he liked the demo and then he moved to P2, where we are given multiple conversation with the customer and then he requested for the proposal. When we requested the proposal is P3 stage. So when we are showing in this funnel, we are showing the funnel. After first 3 steps are not even included into this funnel, $75 million doesn't consist of any...

Sir, I was referring to the deals won, like absolute number of deals won.

10 deals.

You're saying -- you're talking to...

Four Destiny deals that you've announced in third quarter, like last same quarter we were winning at 5, 6 kind of a deal. So what I was looking for is like pipeline is up, deal count is a little down. So what should we expect like midyear?

Yes, I didn't track it this way. I didn't look at the way you are looking at it. This 4, 5, 6, are just the numbers.

Mohit, increasing if you look at larger deals...

Okay. And sir, good quarter from all accounts so congratulations. But I had one point as well. Your disclosures are going down every quarter. So now from this quarter onwards, I'm not able to figure out any number on the advanced market as well. So -- and there's no currency segregation also. So how do we sort of track it apart from the management commentary?

Yes, we are just looking at these numbers, does it make sense to anybody because so many currencies are there, some 2%, some 3% that makes difference to investors.

Sir, even the -- I mean, the keywords like USD, euro, I mean, there are major currencies, right? INR at least top 5 or 3, 4, we can disclose like every other IT company does. And we are also approaching $300 million as you specified in the comments, so...

Sure. We can publish that. There's no big issue about that. That's just a matter that whether the slides are valuable to the investor, when we are looking at a global investor presentation, they are not -- we are finding that it's not significantly valuable to the global investors. So that's why we not publish it, but we can publish it. If you want, we can also circulate it afterwards.

That would be really helpful, sir.

Thank you, Mohit. Now we have Mr. Ankush Agrawal from [ Surge Capital ].

Congratulations on a very good set of numbers. Sir, firstly, I want to understand the whole receivable cycle of our business a little better from a basic understanding. So like, say, if we make a INR 100 deal, right, of with say, I assume, INR 50 license, INR 50 service and implementation, right? And then we get, say, INR 10 as AMC after the implementation is done. So at what point of time will we book each of this revenue segment separately. Like when will we recognize it? When we will bill it and when will we actually get it? So like, for example, if the deal is -- book the entire INR 50 of license revenue upfront? And does that get billed upfront and is receivable upfront? Or it is billed -- recognized upfront and then it is billed at a later stage once the implementation is done? So basically trying to understand this because if I look at our unbilled revenue, those are like twice of our billed revenue. I just want to understand which are this revenue streams, which are contributing to such high unbilled revenues where we are booking the revenues, but we are not actually collecting? You can help me understand that better.

Let me take a step back. I think this is a question which is outside Magic Quadrant. In a product deal of INR 100, which you take an example, INR 50 license and INR 50 implementation. Let's take this example. INR 50, there are multiple methods of booking the revenue. Method one, where the deal is clearly when license is separated from the implementation and license is delivered on the day of signing the deal, 100% revenue gets recognized into books of accounts. There's a second cap of deal, where revenue get recognized with a proof of completion because in a contract, customer says that he will make a milestone-based payments and milestone-based deliveries and multiple stages are there in the product. So then we build and book the accrual on it. As and when the project is getting completed and proportionate license revenue will be booked, which is called proof of -- sorry, POC, percentage of completion basis. That's the second kind of deal. Third kind of deal is a cloud deal where we sign the deal, we set up the cloud for him, and we'll be billing when he start pay per use is the third deal. There is fourth deal which happens where we have the revenue, which is -- this is a 7-year deal and 7-year deal licenses are there. And we booked our revenue based on amortized. We will be doing a subscription. We will charge him on an annualized basis. So we'll say INR 1,000 for 7 years. I'll charge you INR 130 per year for 7 years. Now this is a method given to the customer to make a payment on an annualized basis. Over there, our auditors look at that number, think this deal value is for 7 years, which is written signed contract, but it's only the payment terms are different. You book the full license revenue upfront because you have delivered the license to the customer and then look at the 20% AMC on it and appropriately adjust it. So there are 4 kind of deals which are happening in the marketplace.

Correct. So just want clarity -- sorry, sorry, continue.

Go ahead. Go ahead. Ask the question, it's okay.

Yes. No. So on the first deal, when you said that license component is separate and implementation is separate. So in that case, we'll book the entire INR 50 upfront, and that is bill the client upfront as well, right?

That's bill the client upfront.

Right. And implementation as a based on positive. So sir, on the unbilled revenues, which is the most dominant component, like it might be the implementation, I'm assuming, right?

Yes. So the payment terms are milestone based. So that's why the unbilled revenue, a lot of it is after they pay the license revenue, they will pay after the annuities. So this is a long cycle gap. It takes 6 months to implement, then through doing the completion. The money will go into the accruals, which is not billed. It's because it's not due.

Right. Got it. Got it. Right. And sir, secondly, in our services revenue, you had earlier talked about this hyperscale support, right, which I believe is kind of a recurring component. So can you quantify that for this 9 months?

Hyperscale support is after go live.

Right, right. No, I am assuming that the implementation revenues we have, some part of it is the hyperscale support revenue, right, which is the recurring revenue that we get. So getting our support team available at the client's place to manage their implementation. This is after the implementation is live as well, right?

So we try and keep most of the hyperscale on a monthly basis.

Right. Right. So I'm just trying to understand what is the quantum of that revenue?

It's not as significant. I think total implementation revenue is 43%. That will be another 3%, 4%, 5%.

Okay. It is just 3%, 4%, 5%.

And it's not a significant number for us to track. Our tracking focus is licensing revenues, our tracking focus is the main -- but one more thing I want to highlight to you is unbilled revenue. There are 2 things which are there, which is increasing our days in India. In GeM voluntary marketplace, we have a contract which is gone due because my payments from GeM becomes due when buyers update the system that his sales order is fully closed. So I get 25% upfront. The 70% is sits into unbilled revenue till the time buyer updates our system. Buyer might have procured the system but he has not updated system and my revenue gets stuck there. So I have close to over INR 100 crore sitting here in a bucket of INR 600 crores, which is increasing my number, which is -- there's no delay from the payment from the economy, but there is a contractual issue because still buyer is not updating it. There's a laxity on the buyer side. He doesn't update us this...

Right. So broadly, just the understanding is that -- in our business, for the accounting terms, we are able to recover the revenue, but because of the contractual terms, the actual billing takes place at a later stage, which is what is the entire higher DS, right?

Absolutely. Exactly.

Okay. Got it. So that was very helpful.

Next, we have Mr. [ Vivek Charoria ].

Sir, as you said that you have added about 400 employees in the current quarter, are the costs mostly accounted for in this quarter? Or should we expect some more cost increase? Because our free EBITDA cost has gone up from INR 340 crores to INR 380 crores almost and I'm guessing the quantum of increase won't be to the same extent going forward. So should we expect the cost to stabilize at a certain level?

Yes. Cost will stabilize to some level. But 400 people cost is not fully taken in the first quarter, last quarter because they joined in November, sometime in December. So the only partial cost of those months are taken care of and a few more are -- joined to make, build the capacity of $300 million. That's what where capacity is built up. So employee costs will go up. Sales commission may come down. So as of now, the cost increase of INR 340 crores to INR 380 crores. The past -- there's a cost increase on the delivery side, and there is a cost increase on SG&A side. So SG&A, there is a substantial number this time, depending upon how many deals which we are using partner-led, that number will fluctuate.

Got it. Sir, on the growth prospects, obviously, we've grown very handsomely this quarter. Should we expect like a 5% to 6% quarter-on-quarter run rate? Or I mean, as a management, are we not able to predict? I mean we talked about hitting 400 million in the next 3 to 4 years. But given the way we are going, do you think we are more sanguine about growth prospects? I mean can we do better than the 20% that we've hinted at in the past calls.

Obviously, we reached 25% this 9-month period. So that's a good number from 20% to 25%. So my answer to that is we calibrated the organization a 20% growth on the top line and 30% on the EBITDA line. That's our business calibration. I'm repeating this answer multiple times. Sometimes we'll get some deals on a year, sometime we may not get through the deals. So the fluctuation will happen between 15% to 25% and few years can be much better in the traction stats. So if we can get some -- less wait for few more quarters. But from an investor perspective, if you -- the 2030 is a simple formula. So it would be much better for us to do look at it from a design perspective.

So sir, just one more. Sir, do we track cash flow like internally because I think the market looks at it very -- I mean, as so in this quarter, our collections have gone up quite handsomely. Is that something that we track with the focus internally? Because in the March numbers that number can vary quite a bit. If in some quarter, there's a bit.

Yes. I think, again, there's milestone-based collection. So when we raise the bill. So if you look at it, our DSO for the bill is less than 30 days. So all our clients pay within 30 days once we raise the bill. So that is not a major concern about our financial institutions, which is there. But sometimes, many projects goes live in a single quarter, and you have a bulk payment comes out of that or some license gets signed and advances come for that. So that's where the quarter-on-quarter making the projection looks difficult for us to look at it. But in year-on-year, the detailed focus is there, but every deal is very, very highly focused. Now implementation cycles are coming down, earlier implementation cycles were 18 months to 24 months. And now we are looking -- our implementation cycles are coming down to 6 months to 12 months. And that is also helping us out in bringing better collections in the system.

And Vivek, in terms of just because you have been a old investor from the very difficult days of, let's say, 2018, many of you guys obviously had questions on the cash burn and so on and so forth. So we have said a lot of things which we are going to change, and they are now evident in the results in hindsight. And one of them was exactly that we will change our approach to our capital dilutive approach. Stay on the ground and actually set that, right? At that time, we will not raise capital. And therefore, we will move from a P&L-driven company to a P&L plus operating cash flow-driven company, both of them. So that is the mix -- these are very fundamental changes in the organization, which has transformed us to where we are today. So that will continue. I think quarter-on-quarter, the exact number, obviously, will fluctuate here and there. But on a positive cash flow basis and noncapital-dilutive approach, those are the pillars of the transformation process which we run through that because you've been there for the last so many years.

That is very helpful.

Next, we have Mr. Anil Sarin from Centrum Wealth.

Yes. Yes, sure. Sorry, I took some time. So first of all, congratulations. Am I audible?

Yes, yes. Anil, please.

Please, Anilji.

So great show, and I do recognize that there can be quarterly variations as Arun has pointed out that sometimes you get more deals, sometimes you get less deal. So don't get too excited or too depressed on a quarterly basis, well understood. I just wanted to know that earlier on -- in your earlier calls, you would talk about developed markets or advanced economies versus developing economy. So obviously, there is a trend. We are going more and more towards developed economies. What is the figure for this quarter?

Figure is -- well, now what happens Anil in last -- when we -- begin of this year, we have started seeing that digital transformation is a -- agenda is digital transformation. Digital transformation can happen in HDFC Bank or in developed market like America, both are of similar nature. The nature of digital transformation has changed substantially. Earlier, the product business was very different in nature where Indian customers were not willing to spend that much money. We are finding today, African customers are willing to spend a similar money as developed market customers. So -- but developed market helps us out in expanding the expectation right, our article expectation right. So we are now winning the deals of INR 100 crores in a developing market versus developed market. So that's why we -- our management team has look at it, that now there is no point of looking at it whether developed market or developing market, and we should not look at it. Our -- engineering teams, our organization that were saying, oh, you are working for development market, I'm working for developing market. So it clears a caste system within the organization. So we stopped looking and comparing those 2 deals we are seeing. Any customer who is looking for digital transformation and complex enterprise-grade digital transformation, we are the right customer, right vendor for that. And that's why these metrics are diluted from the investor perspective.

Okay. Okay. That's helpful. Another question I had was your -- you did 2 technology days last year, one, I think, in March and one in December. So I mean, that was unusual. Normally companies do once a year. So obviously, internally, top management is feeling that we have crossed some milestones as far as technology is concerned and hence, 2 technology days. And don't get me wrong, I really enjoyed. I have sort of replayed some of those because first time you don't understand. So it's very impressive. What I wanted to know was there is this fintech on slot upon the banks, banks all over the world are feeling the pressure that certain parts of their business are getting nibbled away by nimble fintech. Now when you spoke in your most recent technology day, you mentioned that somebody a bank which is similar to Bajaj Finance in terms of its character research has sort of chosen you over multiple other contenders. So essentially, if I were to take it one level higher, you are enabling banks to fight the fintechs at one level or -- and second, is that are you also enabling e-commerce-oriented players to sort of acquire a bank-like characteristics. So I'm asking 2 things. One is defending the banks against the fintech at one level. And second, there are e-commerce players who say, no, no, we can do buy now, pay later, we can do this, we can do that. So that again becomes a target area for you. And is that correct? Is my understanding correct?

Sorry, Rajesh, you can comment on it?

Yes. Thanks, Arun. I think let me take the second part of the question first. I think you very rightly said that when we -- a couple of quarters and years back, we would look at only financial services as a core target market. Last year, we announced a deal in Germany, which is the second-largest e-commerce player in Germany, auto. And there, we talked about how we are helping them build the payment ecosystem. So I think that's something that we are specifically focused in Europe market to look at an e-commerce player and enabling e-commerce players to create that payment capability. So we sold a very large deal to auto last year, and we announced that in the market. So I think that's one. Regarding fintech, I think we are doing a combination of both. We are helping banks. For example, in one of the Middle East bank, which is right now under implementation, we are doing what we call as a super app where the bank has tied up with many multiple third parties to offer products. I think we'll be shortly announcing going live of that, right? So we are helping banks to collaborate with fintech players as well as 5 fintech there. So it's a combination of both. And e-commerce, yes. That's a new target market that we are looking at.

Just a follow-up on that. So I mean when I look at you -- the kind of the diverse offerings that you have and the target markets are very large and fast-growing. There one fees that -- I mean, with such kind of sophistication, one needs to be much bigger. When I look at other like Finastra or some of the other people, they're so much bigger. So where is the -- where -- what am I missing with this? Kind of a cutting-edge technology that you possess, why aren't you much, much bigger than what you currently are?

Those companies have -- just like Finastra, you have given example, these companies are not built organically. They are built on a platform, which is a merger or acquisition platform. So I think growth at 20%, 30% growth is a very sustainable growth and callability growth because banking is a complex market. We cannot take any errors. The way the brand has to be built is 0 defect security architecture. So I think we can grow better. Maybe our 12 products are there, if each product does it all the products come to each like a quadrant even 50% 6 product -- as of now, 3 products are in Stage 5. If more -- 3 more comes in, the growth rate will accelerate. So we are not concluding that growth rate. Potential is there. Let's see how it is panning it out. As you rightly said, we have composable technologies. Because of composability of the technology, we can apply the same technology for the e-commerce player, we can apply the same technology for a financial institution, and we can apply the same technology for a banking institution and to a different organization because it's like a back room of me, it's like in Honda backroom. I created a one chassis on which I can do a multiple model design on the top of it. And that's the beauty of Intellect technology architecture, and that's why we wanted 2 technology days because I think the technology are changing so fast in a business that investor needs to understand how the technologies -- we are applying the technology environment. Did we expect 30% growth in this quarter? No, we never said that even in the month of July or October, I never said that we will be growing 33%. But it was a good surprise for us.

No. What I am saying is like that day, Banesh's team was talking about basically disrupting the whole underwriting process. And I mean, it was so impressive to see. So what I'm saying is that you people should be sweeping the market with this kind of technology that you have?

So I just want to add to it, Anil, while I did talk to you about it, I think what we are seeing is that there has been a lot of effort over the last many years on the channel front-end side. But when you actually look at it, there is a lot of change that's beginning to happen with existing large institutions with legacy platforms on the back end. They have to refresh and change the back end because otherwise, they don't get the agility they want for digital transformation. So what is happening, for example, I gave you the underwriting example that would actually apply to many other businesses that we do where we are actually changing the core back-end platform for customers. Like Arun said, with a very 0 defect, with a very high level of security and capability, and I think to do that, sometimes we have to modernize these platforms in stages. So I think the bank is also coming to terms with trying to understand their ability to be able to implement change in their organization across the broad spectrum of products that we have. Now we've built this composable platform across products where they can start with something and keep adding other capabilities on top of it. Now I gave you the insurance example where my main competition is still the old legacy policy admin systems. I'm actually taking underwriting out of it and actually trying to, therefore, change and digitally transform the insurance business away from their old legacy platform because they can't manage those back-end platforms as easily as today, we could offer them in our cloud sort of composable architecture that we talked about on Technology Day.

Great. I think I have used up more than my allotted quota.

Next, we have Mr. Manish Dhariwal from Fiducia Capital.

Yes. I have been associated with this organization for the last maybe a couple of years now. And I'm also participating in the way this organization actually is flowering. I go back to like 2014, when you had taken the decision of demerging it from the original Polaris company. And then you know you had that vision that I want to basically make a product company. And obviously, like it has been a very eventful journey, I would say. Well, as you see a lot of it like Mr. Anilji in the previous question also shared. See, what we understand is that today, Intellect has been able to create a very huge bouquet of products. And each of these products are. [Audio Gap] Wise, competition and the big companies in the global market. INR 5 billion companies. And here, we are -- in our organization, we have so many diverse products. And also, we are a product company. So there, the growth again is like not a percentage basis, like it is -- the growth goes in a different progression. So if you could just kind of give us a flavor of that when are these diverse verticals that we have, meaning what is holding us from all of these products, we are across the world like we are in like 97 countries. So why is it that -- that we are still so small. I'll again repeat that.

We all want to big, so -- including you and we, all want it to be big. I think we need to calibrate and step-by-step approach of looking at it. We don't want to make any accident I mentioned to you. We want to calibrate. The simple process for you to understand -- we said that we have 3 leadership quadrant products. Leadership quadrant means Stage 5 product, which is a Stage 5 where we have a referenceability. We are best in class. We are last 2 percentage, 200% has been taken care of. Now these products are giving very high deal wins. Now we are looking at the next 3 set of products which we want to bring into the Stage 4 to Stage 5. That's -- like payment system going live in Canada makes us credible in U.S. VAM, escrow getting into U.S. once they go live in U.S., it becomes credible. So they move from -- VAM will move from Stage 3 to Stage 4 now. But Stage 4 to Stage 5 will be the -- only when it goes live in U.S. because people wanted a local reference in the country, correct. So more products goes into and out of 12 products suite, which we have -- now the simple question is that why shouldn't each product do me $20 million license revenue per year, it becomes $240 million license revenue. Simple math from your investor perspective can be this. But -- and that same math has a CEO as well as a same math for my leaders, which are running. So there is no difference to be there, but it's a question of journey. When you are at Stage 3, you'll do $3 million to $4 million a year. When you are at Stage 4, you will do $7 million, $8 million a year, when you are in Stage 4, you will do $20 million a year. So Stage 5 products will get $20 million a year, maybe -- and then the market scenarios are there. Sometimes market is drought, some market is poor, budgets are there, budgets are not there. So those years of the drought can also happen during this journey of $20 million license per product. But that potential is there. [Foreign Language] the point is since you supported the company for so many years, I think we are excited about it. We have built up a design thing in culture of -- delivering the products so beautifully. There's a huge opportunity for all of us to enjoy this India leading fintech players. We say 8012, why do I call it 8012? I don't know, did I share it. I always believe that the financial technology of the world should come from a latitude of 80 and 12 degrees. That's the latitude where we build the financial technologies of the world. When will it happen, that's kind of the conviction we have in 2013 when we set up a design center that we will be building the financial technology. A few people believed in us. Few people didn't believe in us. It's okay.

Fair enough. Fair enough, fair enough. Can you also tell us as to how is this INR 100 crore AIF fund that we had set up, meaning how is that shaping up? And what opportunities is that bringing to us?

As of now, it's a legal process going on, application filing should be here for us. So I'd say it's in that stage right now. Nothing much happened.

So -- but what's our vision? Like how is it going to be helping us in our development as a -- maybe a mega organization?

That's right. So that we moved in -- if you look at Slide #4, where we say technologies plus data product, product plus cloud platform, platform plus fintech players and an associated company, marketplace. And that marketplace, so as soon as in the next 18 to 24 months, we move towards marketplace that time AIF fund will be effective there. Last time people have misunderstood the AIF fund and that we are doing something tomorrow or day after. I mentioned clearly in the last message that it's a part of 3-year agenda, which we are setting up now, and it's not a hurried situation. It's a question of some technology spaces where we have a white spaces. We like to invest in them to the AIF fund so that we don't have to invest our own R&D dollar in driving those technologies. We will take minority interest in those companies and leverage those technologies for our marketplace.

Okay. Okay. Wonderful. Wonderful. And sir, how is our GeM opportunity kind of bringing us, meaning where are we on that? Meaning, what kind of revenue buildups happening there?

Okay. So let me clarify. I think GeM, a lot of questions could be there. So I think some of the investor I'm seeing they are going to the website and looking at the order book numbers. I want to clarify, those order book numbers are bid numbers, not order book. Bid numbers when the customer bidded that get published in website of INR 176,000 crores, which is done. So a lot of investors are calculating how much is the GeM revenue and most of the revenues are maybe coming from GeM. That's not true. Our GeM growth is happening very well. A lot of adoption has happened in the market. Substantially buyer market is getting adopted. Government is -- now we build up a credibility that IAS officers, lobby are seeing this is the best way to purchase. It's reducing their cycle time of purchase from 6 months to 2 weeks. And they are committing themselves because they don't have to go through the -- any government process of purchasing, which they were earlier so much difficulty to purchase. So that momentum is happening on. Acceptance of IAS lobby, bureaucrats to accept this is our best platform to have. So our technology teams have done a phenomenal job of wiring the GFR rules, government purchase rules. There are hundreds and thousands of those rules to be embedded into GeM. And that's a complexity which has been put together in a GeM. So the growth is natural. But our revenue is, as you know, if any systems like that, it will be on linked to the volume discounts. So up to INR 50,000 crores, they have one discount value of -- one value we get after INR 50,000 crore, we get second value after INR 100,000 crores, we get third value, INR 150,000 crores we will get fourth value. So that average will come down from a perspective of revenue utilization, which is fair from the deal perspective because our efforts also are lesser when the volume grows up on the platform. So that's our current system. But we are delighted to see that it's making a difference to India.

That's wonderful. That's wonderful. But in terms of billing to us, meaning, is it like it's a quarterly billing or meaning -- I mean, how is Intellect getting the revenue or the income from this particular initiative?

It's a transaction basis, a basis point on the order book in the system.

Okay. Wonderful. And all the very best. So let's -- we're all awaiting how we become a mega organization ourselves.

Yes.

Just one minute, Praveen. There is one question, which you're obviously a very perceptive investor. So this will help also understand the AIF thing in a different perspective, which is very important. It has been central to our thinking. So Arun mentioned about the ecosystem, right, about building from -- going from products to marketplace and all of that for which you need an ecosystem. Now let me give an example which you can touch and feel. For example, as we grow, we need, let's say, a fingerprint recognition system for example. Now we don't necessarily want to build the capabilities for that, right? So we could either buy out a company, which is Wipro's string-of-pearl strategy, so they keep on buying companies or we could take a stake in a company for a much lesser value of cash outflows and then still direct the company towards enabling our ecosystem, right? And if you link it to the question, answer I gave sometime back about the capital allocation, thinking of the organization. This is essentially a very efficient way of allocating capital and getting the same benefits. So that is the thinking behind all of this. And this is obviously a medium-term thing, and it won't happen immediately, all of that. So instead of buying out companies at a certain cash outflow to the organization, but a much lesser amount, we'll be able to influence an ecosystem as we build it. So 2 very different strategies, but essentially on the capital -- efficient allocation of capital is the driving force there.

Okay. Okay. Wonderful.

Next, we have Mr. Rahul Jain from Dolat Capital.

Just 2 quick questions. Firstly, if we follow the total count of the IBS deals, which they usually publish in their annual survey, we have seen that there is not a significant increase in the total number of the deal, and it's been hovering around that 350 number, plus/minus 20, 30 for the last many years. However, we have been consistently growing over this last 4, 5 years, which means it has come at the cost of winning more market share. So when you think this might come as a constraint for growth for you, are you seeing there is a significant improvement in market expansion as well?

Rahul, we are just a -- we are not touching any limits as of now. We are just -- if you have a 12 product with $250 million revenue number, none of the product is taking $0.5 billion market share. So that is not a constraint right now for winning the deals in the market. The percentage of deal is important. Coverage is important. Many markets here, present where its skeleton presentation. We -- when you say 93 countries presence. We are not really present in 93 countries. We are present because we have implemented the solution, we win a deal there. We may present to the partners there. So I think our investment in each country by country that makes an expansion of the deals because of the superior technology.

Right. And...

I think Arun -- and just to add to what you said, the other data point, Rahul, to look at is look at the same, what analysts are saying buy versus build, how the buy percentages are growing. That will also give you another aspect from a third-party independent source. So the market is expanding from that perspective for the product business and the platform business.

And Manish, any number you or Banesh -- Banesh can throw in terms of what is...

I presented for commercial banking in my technology deck. You can look at it, I can send it to you also.

Yes, yes. I mean my question was in terms of percentage growth, is there any expansion in the growth of the market that we are looking at?

No, that's what I said. The buy versus build is growing. That's a data point for you to look at that for us, the space is expanding from that perspective.

Okay. Okay. Understood. And secondly, specific to U.S. market and also in the light of these 2 deals that happened with one with Wells Fargo and JPM possibly with nCino and Thought Machine. So were we are part of such opportunity? If not, why not? If yes, what was the experience?

Rahul I think let's keep working on it. We have few deals more than over $50 million deals. So I think management has only finite bandwidth to take care of it. So we have to choose our battles. So -- and the Thought Machines and these deals offer a new fintech world. We are only -- they are not profitable company. We are the only profitable company in this space with generating a decent margin of 26% EBITDA and net cash in to the company. All these companies are buying the deals here. So we don't know the -- tools of these deals of JPMC versus Thought Machine, whether we've invested there and what kind of stray elements are there. So I think we are a straightforward player, keep contributing in digital transformation to the banks and keep working 20%, 30% growth year-on-year. I think let's not build up over expectations on the team. But it will be consistent -- in one of the conversations I mentioned, I got inspired from HDFC. The consistent performance, I love it compared to any very high performance. So that's what is -- the story we are selling right now.

Right, right. And just lastly, if you could share more thoughts, of course, you have alluded about 2 North American deal, which has helped your visibility significantly in the North American market. But in general, overall sense product-wise or market-wise and our opportunity, if you could share how that market is playing out versus what it was, let's say, a year or 2 years ago?

Yes, U.S. was a difficult market for us because U.S. has all the players, all the markets and they don't like an Indian player or they are -- the many -- or European payers, even European player didn't succeed in U.S. market. It was a difficult journey for Manish to take on that head on bat with local players, and he spotted a white space -- Uppili Srinivasan and Manish spotted a white space, Banesh spotted a white space in that whole. So there, they are -- now they are able to establish a first footprint in U.S. market and they have a solution cloud. And American market is a very -- once you sell and implement for high players, suddenly market can shoot up substantially. So that's what we are seeing that we took some time to identify what is the right space in which we can position ourselves in a company in America. And that required a huge investment. And I think we are seeing some silver lining right now.

Well, you've seen that we do land and expand. It's very important to make every implementation, a successful one. And it's -- you've seen me always go deep into the account. So each of these accounts are marketplaces literally. These are very, very large banks, which we are breaking through in. So keep your support on with us. We will make it large.

And best of luck and congrats on very strong numbers.

Next, Arun, we have Kunjan from First Global.

Yes. Can you hear me?

Yes, Kunjan.

Yes, Kunjan.

First of all, congratulations on the great set. And just a quick question. There was a question also on the chat box, someone asked about the promoter -- decreasing promoter holding. I think there's a confusion because of the RSUs and the ESOPs, the percentage of promoter holding is decreasing. So I wanted to understand -- what is the annual equity dilution in terms of RSUs and ESOPs in our company? I know it is important for us to pay the employees since we are a product company, and we are doing great in our business. But I just wanted to understand what is the annual dilution. And to support that, could we have an option for buybacks, which usually U.S. companies does so that our overall equity position is intact and the dilution doesn't take place?

Yes. So I think you can take it as -- total 10% of the ESOPs, RSU which AGM has cleared. Those are the RSUs, which are there with us, 2015-16, 2018 schemes where RSUs available. And if you take an annualized basis, it will be between 1.5% to 2.5% would be the increase. So that are the reason of promoter valuation, okay. I didn't understand from what -- as a percentage of it. So thank you very much for updating. But that's 1.5% to 2.5%.

So just a follow-up on that. I mean can we have a buyback of shares so that the overall equity is not diluted for everyone, for shareholders, for the promoters, for FIC and everyone. So just your thoughts on that.

Sure. Sure. I'm sure we will do it as soon as we are generating more cash sustained manner. We can look at buybacks. But not other from NPA. That we are -- our board is looking at it. So at appropriate time, and the sufficient cash buyback and we look at. Praveen, that's okay or somebody else is there?

Praveen, you are on mute.

Okay. Let's -- Praveen? Has he gone?

He's on mute I think.

Praveen, can you hear me? There's another candidate. Vaibhav, I think is there. You can ask the question, Vaibhav.

Next is Vaibhav.

Yes. Can you hear me?

Yes, yes.

Yes. So just 2 small questions from my side. One is that if you can give us the number of salespeople for last 3 years, sequentially, just wanted to know the trend, the direct salespeople that we have. That's the first question. Second, on the revenue, basically, you have a different revenue recognization model for different operating structure like cloud, cloud and SaaS and everything. But from the perspective of fact that for cloud and SaaS, whatever technology changes that happens, I think the liability rests with us to continuously update the product. And if there is a substantial technological change that is there, then probably we might need to invest a lot in the product. Then how that is taken care of in the pricing because pricing might be pitched up front itself for the next 6 years, 7 years or whatever is the contractual period. So just wanted to understand these 2 things. That would be from my side.

Because the contract is signed on 6-years basis, even my stack and scope is also defined in that 6 years. So normally, for that period of time, the technology shift, which has happened will not be available to that customer because that's a typical way of managing the cloud. And if something is required, he has to pay separately because as a contract, we have both the things there, price and fixed scope. So that's how we're protecting ourselves on commercial interest. On your sales system, I'll send it to you later on. Thank you. Now it's 6:30. We can close the call here.

Arun, can we have a couple of more questions?

No, no, it's 6:30. I have another call to go. So...

Okay. Thank you, everybody. I'm -- we're sorry that I'm not able to take all the questions. Please write to us. And all the questions will be replied by us. Thanks for joining today. Thank you, Arun, and the management teams.

Thank you.

Thank you.

Now you can unmute. Thank you very much. You can logoff now.

Yes. Yes.