Unbound Medicine, Inc. (MPSLTD) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the conference call of MPS Limited on the acquisition of Unbound Medicine, Inc. USA. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Arora, Chairman and CEO. Thank you, and over to you, sir.

Good morning, everyone. I joined today from Media, Pennsylvania, the Development Center for Unbound Medicine. Today marks a transformative milestone as we detailed the acquisition of Unbound Medicine. I request the MPS team to please share the presentation on the screen. At MPS, our DNA is built on pushing boundaries in the knowledge industry. By acquiring Unbound, we aren't just entering a new market, we've acquired a platform that sets up a critical intersection of health care and intelligence. Over the course of the next 20 minutes, I will walk you through why this high conviction move for MPS. And how we plan to drive outside value for our shareholders. A broad agenda of the next 20 minutes, back up. I'll start by talking about Unbound a little bit, focus on the platform, move on to the market opportunity, both from an industry perspective, but also from a customer and partner perspective. And what is the moat for Unbound in this marketplace. What our strategic rationale was in this acquisition, how we see things behaving in a short-term and medium-term format, so the growth trajectory and unlocking of synergies. We will then showcase a quick product demo so that you get a good understanding of what the platform is all about. And then finally, talk about value creation and what the combination of Unbound and MPS really means for us as an organization, but also for the industry. And then we'll open it up to questions after that. So to begin, Unbound Medicine is a leader in Healthcare Knowledge Management. The core development center is in Media, Pennsylvania, close to Philadelphia, which has historically been the hub for nursing and medical education in the United States for many years. Unbound provides an end-to-end platform that curates and streamlines Healthcare Knowledge, which essentially enables foundational education, just-in-time learning as well as informed decision-making. Unbound is defined by a unique multidisciplinary team at the nexus of medicine, health care IT and artificial intelligence. Unbound has a history of pioneering technologies from launching the first mobile platform in the medical space to today's proven AI-powered solutions. The focus at Unbound is clear, empowering clinicians, educators and students with the right knowledge exactly when they need it. These numbers validate Unbound's market authority. Unbound brings with it over 20 years of clinical expertise and serves more than 1,000 health care facilities. To give you a sense of scale, the platform supports over 5 million clinical lookups annually across 50-plus evidence-based databases. Crucially for our investors, this is a subscription-based recurring revenue model. We're acquiring high customer retention, low B2B client concentration risk. For example, the largest customer is less than $300,000 of revenue and a robust B2C community of approximately 90,000 paid subscribers. Unlike past acquisitions of distressed assets, this is a stable, scalable foundation for the global expansion we are planning aligned to Vision 2027. We're stepping into a market with massive tailwinds and also expanding our total addressable market as MPS. If you look at the global health care, AI and knowledge management market, it's projected to reach $188 billion by 2030. The growth itself is driven by necessity, not discretion. The world faces a projected deficit of 10 million health workers by 2033. This puts an unsustainable administrative tax on clinicians. In the U.S. alone, 57% of physicians cite that reducing this burden is the top priority. Unbound is particularly focused on the AI-driven knowledge management subsector, which is expected to grow from $3 billion to $102 billion by 2034 at a staggering 42% CAGR. As hospitals in the U.S. shift from manual databases to intelligent smart agents through agentic AI. Unbound is perfectly positioned through the solution set to capture this transition and enable this transition. From a customer and partners perspective, Unbound is deeply embedded across the health care landscape. In nursing and medical schools, Unbound provides the digital resources replacing traditional textbooks. In the clinical world, they partner with marquee institutions like Johns Hopkins to integrate specialized tools like the Hopkins Antibiotic Guide directly into local stewardship programs. Unbound also serves as the digital backbone for leading medical and nursing associations, providing exclusive content through branded portals. This high level of institutional trust creates a significant barrier to entry and ensures Unbound remains indispensable to the clinicians' daily habit. So what's the moat? What differentiates Unbound from? What sets Unbound apart is the unified AI native platform. Unlike old-school competitors like UpToDate or AMBOSS, which are often fragmented, Unbound offers an integrated model spanning reference, education and test prep. The Unbound advantage is built on proprietary analytics, exclusive content and most importantly, seamless API integration into hospital EHR workflows. This enables rapid authoring where we can deliver tailored AI-powered solutions to a specific hospital faster than any legacy competitor. We are the disruptor in this space, not the incumbent. We are moving from being a reference tool to being an integrated workflow partner. So looking at the strategic rationale, it's built on 4 pillars. Firstly, the team. We have acquired a deep domain expertise with an average tenure of 12 years. Second, the credibility. Unbound provides clinical authority that opens doors to regulated workflows we could have not entered on by ourselves. Third, platform leadership. At MPS, we believe platforms win and Unbound is a proven end-to-end ecosystem platform. And finally, scale innovation. This partnership between MPS and Unbound allows us to combine the MPS global delivery reach with Unbound's medical informatics expertise to build something truly enduring. From a synergy perspective, this is where the MPS engine meets the Unbound platform. We aren't just leaving Unbound to run it as it is. We are supercharging it. First, we will use MPS established presence outside of North America in Europe, APAC and the Middle East to move Unbound outside of North America. Second, we see a clear path to EBITDA uplift by sharing infrastructure and using the R&D efficiencies of MPS Labs. We're merging 25 years of medical informatics at Unbound with the MPS platform engineering to create a unified workforce of over 3,000 professionals. This is how we move from a U.S. leader to a global intelligence powerhouse. I want to be very clear, this is not a short-term tactical play. It's a long-term strategic lever for growth. Unbound acts as an accelerator for the entire MPS foundation. We have a clear road map from integration to capability growth and eventually into a massive market expansion. This moves MPS from being a content player to a primary stakeholder in the future of health care intelligence. So we're now going to take a look at a product demo from the Founder of Unbound, Bill Detmer.

I'm delighted to introduce you to the Unbound platform, our end-to-end AI-powered engine for transforming health care education and clinical decision-making. For over 25 years, we built and refined this platform, now entrusted by more than 500 health care organizations worldwide. Today, we operate in a $15 billion market, medical knowledge management, where the demand for smarter AI-powered solutions is more important than ever. At its core, the Unbound platform combines 3 elements: embedded content that's modularized and enriched, AI-driven intelligence that transforms information into personalized insights and seamless delivery to every device and environment. These elements are powered by our 3 parallel core strengths: expert curation and enrichment of medical content, advanced informatics and AI methodologies and cutting-edge delivery technologies, including our leadership as the first -- mobile-first medical knowledge platform. These assets are already being deployed by our AI infrastructure to truly personalize actionable insights at scale. The Unbound platform powers multiple distinct solutions, each tailored to different health care segments, but all sharing the same powerful foundation. Let's start with our flagship for nursing education. Nursing Central is an all-in-one platform adopted by hundreds of nursing schools and programs that brings together everything students and educators need, accessible on the web and on our award-winning mobile apps, which many students these days prefer. It includes comprehensive clinical references, drugs, diseases tests and built-in calculators, a full range of core nursing texts, interactive patient scenarios to help build judgment, adaptive flashcards and Assist, our AI-powered tool for instant answers and creating learning activities. Let's see the Nursing Central features in action. Let's start with quick lookup. Suppose you need to check for a drug interaction with Amlodipine. As you type, Auto Complete takes you directly to the drug profile, where you can perform dosing calculations, hear audio pronunciations, few pill images, brand names, et cetera. Click the interaction section for an instant clear summary with links to interacting drugs. Don't know a word, use glimpse to get inContext medical definitions and use crosslinks to jump to foundational content like the drug's physiology found in a major text, all within seconds. Beyond quick lookups, we help teach clinical judgment required to be a practice-ready nurse. Our Unbound scenarios developed in partnership with nurse educators immerse students in realistic patient cases using a familiar tagged medical record format. To help busy educators, we provide unbound intelligence Assist, enabling them to quickly generate highly customized learning activities fully aligned with their curriculum and student needs. Assist can be triggered from within any nursing central topic. In just seconds, Assist generates a complete case study with a variety of next-generation NCLEX-style questions, each with detailed rationales linked directly to the reference content. Educators can rate and provide feedback, which we use to improve the product continuously. In a 6-month pilot, hundreds of nurse educators used and rated Assist, giving it a 4.4 out of 5 stars for quality and accuracy and reported savings an average of 5 hours per week, freeing up valuable time. Assist for Nursing Central launched to customers in April of 2025. So those are some of the core Nursing Central features. And of course, all these same features are available simultaneously on our award-winning mobile apps. Now let's turn to uCentral, our solution for medical centers and their students, clinicians and researchers. While it shares the same platform foundation as Nursing Central, uCentral is designed for clinical practice and research needs, adding clinical tools such as personalized step-by-step algorithms, point-of-care calculators and advanced medical literature tools, including Prime PubMed, our sophisticated in-house version of PubMed, and Grapherence, our proprietary literature visualization tool. Now let's look at our third major solution, Society Solutions. These are branded member portals built for medical and nursing professional societies. While powered by the same core platform, these solutions are tailored to meet the unique needs of each organization. I will show you only things that you haven't seen so far. The first is society exclusive AI search. This leverages our retrieval augmented generation technology shown elsewhere to create a secure walled garden within the trusted content of the association. The other element I'd like to draw your attention to is continuing education or CME. The CME module is quite extensive and can be individualized for different associations. Here is shown the [ 4U tab ] which is the customized view of continuing education for this learner. The personalized knowledge gaps area includes topics that have risen to the top based on AI assessment of prior interactions with the CME content, relevant NaT or NaT is the name of their text, the content that also relate to the knowledge gaps and recent articles in the literature of the [ Q2 ]. This view is the preferred entry point because it's customized for the individual. From here, they can generate a personalized course. And these questions are drawn from a data bank of 1,500 questions based on the knowledge gaps that have been identified by AI for this learner. They then can take that particular custom course asynchronously on any device. And while they answer questions, they get rationales, links to the literature, et cetera. Throughout the year, learners earned CME credits for various educational activities that are available on the platform. At the end of the year, they can come here to download a report of those credits. But most conveniently, credits are now sent directly to the surgical board, so they don't have to even do that. At Unbound medicine, AI isn't just a feature. It's woven into our DNA. Our approach is embodied in Unbound Intelligence or UB, a proprietary system that uses advanced AI with trusted human expertise. We spent a decade leveraging machine learning and in the last 2.5 years, we've been rapidly integrating generative AI across our platform development tools and company culture. UB Search allows users to ask complex clinical or educational questions and instantly receive synthesized evidence-based answers complete with references and links to deeper exploration. UB scans a wide range of vetted sources, including reference text, journal databases and clinical trials. As we've also discussed, UB Assist, our next-generation AI feature is embedded across all of our products. Users can select from purpose-built assistants for tasks like literature management, [ here ] nursing education or clinical trials. The experience is highly interactive. Assist uses targeted questions about the user's contact experience and goals and delivers a customized reference synopsis combining vetted content, pedagogical best practices and the users' unique needs. We say the best for last. Now you get a chance to look into the future and see the cutting-edge AI we're developing here at Unbound Medicine. Let me introduce you to AgentFlow, a new way to create AI systems tailored to your needs. Let me show you how it works. Here, I'm using the AgentFlow manager, the interface for the knowledge engineer to create flows. It starts by asking, "Hi, I'm the AgentFlow manager. How can I help you." And I answer, create a deep research report flow. Then in a prompt, I asked the following: ask the user to provide the detailed topic for research, then search the medical literature and clinical trials for the highest quality evidence, then generate a report, starting with an executive summary and then detail all the major research areas, all highly referenced. It then generates the executive summary as requested, providing links to the most important articles using our artifacts. At the end of the report, I'm given the opportunity to say to Google Docs, which generates a document in my account. That's the future of AI in Unbound Medicine. Agentic workflows that will help us build purpose-built AI assistance for individuals and groups and institutions to help them with their knowledge problems and educational needs, all for the betterment of education and patient care. We're delighted to have spent this time with you learning about our platform, our products and our underlying AI infrastructure.

Yes. So as you can see, AI is front and center of -- at Unbound and Unbound is not the incumbent, but rather the disruptor that's disrupting legacy players in this space. So talking about value creation, our road map is structured around 3 areas: First, revenue acceleration that we expect through geographic expansion as well as through cross-selling into each other's star accounts. Second, margin expansion through shared infrastructure, which gets executed fairly quickly; and then strategic positioning. We are looking to become a Healthcare Intelligence leader with deep institutional relationships across the world's leading hospitals and universities. This is a clear path to accelerate growth and shareholder value. I'd like to conclude these opening remarks by saying, looking ahead, our execution plan is already in motion. I spent the last week here at N-Media unlocking that plan. We plan to integrate global delivery, expand the product suite with Unbound Intelligence and Assist and scale into new institutional markets in Southeast Asia, the Middle East, Europe and Australia. In conclusion, this is about a unified ambition, transition, continuity and one team. MPS has always believed in pushing boundaries. And by joining forces with Unbound Medicine, we are officially ready to redefine the limits of health care knowledge. From here, we officially go Unbound. Thank you for your time. And now let's open the floor to questions.

[Operator Instructions] Unbound Medicine Inc. Our first question comes from [ Arjun Balakrishnan ].

So I have 2 questions, Rahul. One is on your assumptions for this investment on profitability. Can you elaborate on that?

Sure. So Unbound comes with an EBITDA margin of 14%, and that's just been the historical EBITDA margin of Unbound stand-alone without MPS involvement. So we expect first quarter to pretty much be in that range. And then from second quarter onwards, we start traveling towards the MPS average with improvements every quarter. I think the second quarter itself we'll travel to the early 20s. And then as we progress through the course of FY '27, we'll probably end up exiting the year at the MPS average.

Okay. Perfect. So second question I have is, I don't have much knowledge about the health care industry. Can you elaborate on how and -- sorry, what the moat is for Unbound and whether this is replicable in the current market?

Yes. So as we shared in the opening remarks, there is a massive -- so unlike some of other businesses where the participation is based on a discretionary requirement, this is coming out of a necessity. There's a huge shortage of talent in the medical and nursing sector. And as a result, a tremendous pressure on the health care education market to bring skilled workers to the market. So this is coming out of that very big necessity. In terms of what is Unbound's moat, it's built on a few pillars. So firstly, it's -- a lot of it is about clinical authority and institutional trust. So for example, Unbound offers resources that are often unavailable in the public domain or in the model. They have partnerships with marquee institutions like Johns Hopkins, for example, where they've created a Hopkins Antibiotic Guide. The workflows itself are regulated. So the platform operates within a highly regulated health care environment, which means that you have to have established a high level of clinical authority and trust, which creates a significant barrier to entry for others. As well as there's a lot of long-term partnerships. So Unbound has partnerships with the leading medical and nursing associations that provide the expert content through their branded portals. The second big moat is around deep technological integration. So on the workflow side, unlike stand-alone tools, Unbound is actually seamlessly integrated into the hospital Electronic Health Record workflow. So this daily habit integration makes it indispensable to clinicians during the actual shifts during work. Also, unlike some of the legacy systems, Unbound has an AI-native architecture. The platform is designed with a unified scalable knowledge model where AI is deeply embedded. So the delivery, in fact, is adaptive to the information needs of the practitioner which allows for rapid authoring. So a practitioner is actually getting the information that they need real time versus a monthly or a weekly update that a legacy provider would provide. It's a very sticky business model. So the business operates on a subscription-based recurring revenue model of 97% retention. The B2C part of the business is actually a lead generator with approximately 90,000 paid B2C subscribers and over 9 million lifetime users, Unbound has massive brand loyalty in the early career of a clinician. So that ultimately, when a clinician then goes into a more tenured space, it carries into their professional practice. There's also a lot of intellectual capital with the team. And of course, finally, with the combination with MPS, Unbound gives access to the global market beyond just North America as well as MPS Labs proprietary AI and RPF frameworks as well.

Our next question comes from the line of [ Mahesh BP ] an individual investor.

Rahul, my first question is on what are your thoughts on competition from emerging agentic frameworks like Claude Code for health care? What are your thoughts? How do you -- what is your approach if these agentic frameworks use model context protocol to connect to the same verified sources that Unbound Medicine also has access to.

Yes. So we are that disruptor. So that's what I've been trying to describe. Unbound is not the incumbent. We are the disruptor. We, in fact, are using not just Claude. So we use Claude Opus for one of the use cases, but we are pretty agnostic across the various models. So I guess the big difference is unbound distinguishes itself from these general purpose AI or generic bots through several core differentiators. So the unbound piece is more linked to the actual domain. So firstly, we are tethered to authority. So unlike general AI, which can hallucinate, Unbound AI is deeply integrated with over 50 authoritative evidence-based databases. Our Assist technology is already scaling our own Agentic product, which is Assist, which combines various AI frameworks to create this industry's most advanced clinical decision support experience. Like I shared earlier, the workflow integration here is a massive barrier to entry. So while a stand-alone agent requires a clinician to leave the task, unbound is already in the task, integrated into the hospital's workflow, allowing Unbound AI to be a proactive partner in the daily habit of a clinician versus a clinician having to go out of the environment. Unbound, there's rapid authoring and which is enabled by AI, which allows Unbound to, through AI, deliver very customized clinical solutions as well as local hospital guidelines that are constantly changing faster than legacy competitors. So in some ways, to answer your question, we are that disruptor that is disrupting some of the legacy competitors. So we are on the right side of this whole world.

Just to follow-up, Rahul. I understand you are the disruptor for the legacy players, but something like Claude Cowork for health care is a disruptor in that sense. Would you develop NCP for Claude Cowork if the need arises?

Yes. I think, again, so think of like Claude is an input. It's -- we are using Claude and configuring it for this space. It's like saying we used to work on Windows mainframes and now we have laptops. As a business, how are you going to -- is laptops going to disrupt your business? No, we are going to use laptops now. So Claude and all these other models are an input on top of which we've built the entire solution set. So these generic models are not something that you can just slap. They have to be enabled, and that's exactly what Unbound is. Unbound is built on top of these models.

Our next question comes from the line of Madhur Rathi.

Sir, I [ most ] wanted to understand, you mentioned that for Unbound either we would like to grow into new geographies or with new customers. But sir, when we say that this is a very authoritative kind of a scenario where because of that, it's an entry barrier to displace us, but it's also entry barrier to displace our competitor. So if you could just help us understand how do we plan to achieve that? And on the margin, it's -- we are planning to almost double the margins from 14% to MPS average of closer to 30%. So how do we see these margins going forward? Because I would -- from my understanding, this business would be very technical or people heavy where we would like to have that knowledge workers of these medicine or diseases and that data helps us to train our model on whatever Claude or ChatGPT that we're using. So if you could just help us understand how do we plan to bridge this margin gap and on the customer additions for this business?

Yes. So in terms of international expansion, like I said, Unbound has a lot of authority. And to kind of bring the response to the last question as well, we are the disruptor in this marketplace. And like we have -- there's legacy competitors in North America, there's also legacy competitors outside the U.S. MPS, of course, has partnerships. So it's not that we're going into greenfield. We are basically going to begin by cross-selling where MPS already has these partnerships. And some of the legacy competitors, they offer -- often focus on a single category like clinical reference or education, whereas Unbound offers a unified scalable knowledge model. And that particular product offering is unique, and that's really what's going to help displace the competition. As well as given the level of profitability that MPS has and Unbound has, we will be price warriors undercut competition as we see fit in some of these international markets to acquire market share. Now coming to margin expansion, that's -- we have a 12-year track record that speaks to that. So we've done 11 -- 10 acquisitions prior to this. AJ, the last one has traveled from negative 5% to 30-odd percent in less than 12 months. HighWire traveled from, again, negative 5% to positive 30% in 6, 8 months. So margin expansion is something that is core to MPS. Like I said, the low-hanging fruit, which is shared services, that's being solved for immediately and will get us to the early to mid-20s in the next 3 to 4 months. And from there on, a lot of it is around other expenses, operational efficiency by using some of the tools and technology that MPS uses, combination of infrastructure such as cloud infrastructure, for example. So yes, I think those kind of things are something that is core to MPS. Every business unit at MPS operates higher than a 25% EBITDA margin. So we don't see that to be the major unlock here. For us, that's a way of life. The major unlock here is going to be really around the revenue synergies that we're looking to open up through the cross-selling initiative.

So what was the revenue for Unbound for 2025?

Yes. So we are unable to share that because those accounts are not audited and closed. So -- but we will be sharing that in subsequent [ course ] once the accounts have been finalized.

So when we say that we are the disruptor, will grow by acquiring or undercutting, but the revenue has been flat for this business for the past -- since FY '22 -- between '22 and '24 that we have published on the stock exchanges. So I'm not trying to understand how should we see at this.

Yes. So like I said, Unbound has been confined to North America, right? Like while North America is a very important market for MPS, it's about 50% of revenue. There's a whole another world outside of North America. So if you just look at it from an MPS perspective our revenue from the North America is now 45%, 50%. So if I were -- a half glass full eternal optimist, I would say double the revenue, $9 million becomes $80 million very quickly. And North America becomes 50% of the revenue. But of course, business doesn't often function like that, but doubling of revenue over the course of the next few years looks very doable from an Unbound perspective.

Our next question comes from the line of [ Arjun Goyal].

So sir, a couple of questions from my end. One is that will -- how much of the management team of Unbound will be retained in this company? Or are you going to take over management of Unbound?

Yes. So the only change in management that's taking place is Bill is now transitioning to an adviser role. In fact, he's already transitioned. So he's now a strategic adviser to me. So he's going to be working instead of abnormal hours, he's going to be working 5 to 10 hours a week, advising me and the management team. Of course, there's consolidation of the CFO role given that we have a CFO. But other than that, there is no change to the management team. CTO is continuing, the Head of Sales is continuing, the Head of Marketing is continuing. The Head of Product -- everyone is continuing, and they've also been -- like MPS, they also have been provided with stock options at the MPS level.

Okay. And sir, secondly, I wanted to understand a little bit about the cross-sell opportunity that you've talked about because it doesn't seem that our -- I mean, we may have had a couple of medical institutions as customers. But I don't quite understand what we are going to -- of our original products, we're going to sell to Unbound clientele and what can we sell of Unbound client of the Unbound solutions to our otherwise customers. So if you can just highlight that.

Yes. Again, Arjun, I will just illustrate with examples because some of this is highly competitive information. We are operating in a competitive market, but I'll just give you examples that will help you understand the context. So let's talk about geographic expansion, right? So let's talk about China as a use case. If you look at AJE, Prarthana, correct me if I'm wrong, but 70% of AJE revenue comes from China?

Yes, yes, Rahul.

So 70% of AJE revenue comes from China. Over 90% of China's revenue AJE's China revenues, it comes from funders that are universities and institutions. And most of the work that we do at AJE is in the field of medicine, right? So there's an immediate opportunity to knock on the doors of institutions in China and say, here, we have Unbound. We've been working with you in China for the past 2 decades. We have a high level of trust. Let us enable the Unbound platform for you. Just illustrating with an example how easy -- like the cross-sell start is so straightforward. And I just pick China as an example. There are many more. The reason I can't like go too crazy on talking about them because my competitors will have access to this call as well. Let me now talk about the cross-sell when we have to now [ sell ] MPS Solutions. So MPS at the core is built for science, right? So we were built by nature, which is Macmillan's that most prestigious journal portfolio. So we are built for science by science. A lot of the content development, the course development that we do for institutions, a good example is Northeastern University out of the New England area. We power a bunch of their courseware development engagement is about $1.5 million a year. And essentially, we are powering their courseware development. Now can I go to John Hopkins, which is Unbound's largest competitor -- sorry, customer and say, right now, you're using the Unbound platform for enabling off-the-shelf content. Can I actually build custom courses for you and enable the executive education and the continuing education arm of John Hopkins. In fact, just yesterday, I was on a call with Johns Hopkins, in fact. And they're very excited because they want to localize and translate into different languages across different markets and take that content into different markets. And suddenly, through Unbound, they can do that because MPS does that work. MPS has a subject matter expertise. We have the tools and the technology that can do that at a very low cost. So it's not a big investment. So again, very high level of cross-sell as well from marketing MPS product suite into Unbound's customer set. So again, just pick 2 examples because I don't know what.

No, no, it helps. It helps. And finally, sir, what does this acquisition mean in terms of future dividends or future buybacks? If you can throw some light because it's a large acquisition by historical standards. If you -- any comment will be helpful.

Sure. So I think like I've shared with you previously, we don't believe in sitting on excess cash. So if we do not have an appetite to deploy capital over the course of the next 6 to 12 months, we will distribute surplus capital in the form of dividends or buyback depending on what the Board decides. And with Unbound, essentially, we've raised, I believe, INR 42 crores of debt, Prarthana.

Yes, INR 42 crores.

INR 42 crores of debt. And from my perspective, we're very comfortable with this level of debt. We have a very good balance sheet. Our DSO is now closer to 45 days instead of 60 days. So assuming this level of debt, I think we'll be comfortable as a Board to continue to distribute dividends and buybacks. But again, that's a Board decision that will be discussed at the next Board meeting. So having said that, I don't see this as a blocker given that this level of debt is very comfortable.

Our next question comes from the line of Ravi Naredi from Naredi Investment.

I would like to know how much the EBITDA of this new company which we have acquired? And what is our planning to take this margin?

Sure. So as I shared previously, the incoming EBITDA is -- EBITDA margin is 14%, stand-alone without any MPS involvement. So the first 3 months, we'll probably continue with the same level of EBITDA. That will then grow very quickly in the next quarter to the early 20%, mid-20% EBITDA margin. And by the exit of FY '27, so Q4 FY '27 will be closer to 30%.

Very nice, very nice. And what is the top line of this company?

So we have not -- when we acquired this business, the accounts for 2020 -- so they operate a calendar year. The accounts for 2025 are not closed. But 2024, Prarthana, can you share the numbers for 2024, Prarthana?

Yes. 2024, the total top line of the company was -- I just give you the exact number. So that was around $8.88 million.

The business is stable and growing.

Our next question comes from the line of Krushi Parekh from BugleRock, PMS.

So I think some of the questions in some form and shape have been answered. But can you just help me understand how we went about acquiring Unbound. Was it through some ID? Was it some relationship that we already had with the company? And what kind of conversation we had with the founder now that I believe he is in the -- because he's in the advisory relationship now, he's looking to move out of the business as well. But what kind of conversation we had? And so something on those lines, please?

Yes, good question. I think for several quarters now, I've been talking about these 2 acquisitions in the education space. It's interesting because -- the other one actually started before this one, and this one closed, but -- so we've always signaled that there are 2 -- there are lots of deals in the pipeline, 5 are at an advanced stage and 2 are near completion. And the reason why it's been longer than a typical M&A activity, I think it's taken almost 8 to 9 months from when the term sheet was signed, which is very atypical for us because usually after the term sheet is signed, we close in 2, 3 months. And a large reason for that has been the meeting of the minds. So Bill and I have spent a lot of time together. I have spent time with the management team, traveled extensively to the U.S., been on I don't know how many Zoom calls as well. And really, it was about the meeting of the minds and how do we extend this forward. From Bill's perspective, this is his legacy. He's built this -- he's founded this company in 1999 with 2 friends from a previous organization. Those 2 friends are continuing with us. And for him, what's most important is the impact, right? So Bill himself is an MD. So for him, the impact of Unbound is more important than the financial value of Unbound. And he felt that with MPS the impact would be significant. Firstly, Unbound would actually go global and impact clinical practitioners, not just in North America but across the globe. And even within North America, it would go deeper. So for him, the MPS platform, when I say platform, I'm not talking about from a SaaS perspective, but more from a foundation perspective, the old school definition of platform. The MPS platform really gave unbound as a mission, the highest level of impact as well as gave the employees at Unbound tight -- a good home and tight integration. So unlike in past distressed asset acquisitions where he came in and started to operate the business and pushed a bunch of things into different parts of MPS, this is a very nimble organization. There's only 35, 37 employees. So it's not like we have to come in here and nuke everything. It's basically coming in and being a supporter to the existing organization. And so that journey has been remarkable. I think there's a lot of commonalities between how Bill thinks, how I think, how my management team thinks the culture at Unbound at MPS, our deep purpose of why we exist is to make learning accessible to everybody on this planet. Similarly, from an Unbound perspective, their purpose is to make medical information and available to as many people as possible available in real time. So that alignment on purpose and mission is there. And overall, that process took time simply because we were trying -- both parties were trying to make sure that this works. And in terms of the process itself, of course, it started off with the banker. But as I've shared previously, MPS invests a lot in nurturing relationships with founders, relationship with bankers. [ Ran Vijay ] who is on this call, for example, that's a full-time job, and he has a small team behind him. So it's been a journey, and it's been longer than usual because we've invested the time and effort to get this right. Like I said, this is the first of the education one and hoping to close out the one in the coming months and quarters.

So broadly, it lended it to us via some team, which was in the investment banking side. Is that correct? Or we had some relationship with them earlier?

We had a relationship with the banker and with them earlier as well. So it's just a very tight and MPS does a lot of work in building relationships with other founders, other organizations as well as banks. Again, I can't get into too much detail because it's competitive information.

Sure, sure. Got it. And just lastly.

Sorry to interrupt. May we request you to please rejoin the queue.

Sir. I had only one question, sir.

Please go ahead.

Yes. Sorry. So any earnouts apart from the ESOPs that the existing team has or maybe even for the Bill?

Sorry, I didn't get the question.

Sorry, hello can you hear me? Are there any.

Could you just repeat your question?

Yes. Are there any earn-outs for the existing team beyond ESOPs and maybe even for Bill as over the next 2 or 3 years?

No, there are no earn-outs. The transaction is complete. I know that we had provided as the disclosure requirements require us to provide a transaction value of $16.5 million. Having said that, we expect with all the adjustments that will happen post closing for the transaction value to be -- Prarthana, do you want to give the number?

Yes, it would be around $15.18 million.

So $15.18 million is what's finally going to happen because there's a bunch of adjustments around working capital in cash and closing adjustments. So that will happen more on the purchase price side. In terms of earn-outs, there are no earn-outs. But we guess, the management team has been entrusted with Phantom Stock given that they're based out of the U.S. So that has been awarded right away.

Our next question is from the line of Shreyash Limbachiya from Bastion Research.

Most of my questions are already answered. I have just one question, like given the situation, what MPS experience with regards to AJE in the past, do you foresee any similar challenges for Unbound as well such as some potential divestitures of some non-core business, so which could be pressurizing margins as such?

Not at all. I think these are 2 very different worlds. When AJE was landed on our desk, it came from a strategic customer, one of MPS's largest customers. Who said, this is a non-core asset. We are filing for an IPO, help us that you want to divest, can you take it on as part of the overall strategic partnership with that customer. We agreed. It was a loss-making company. We agreed to take the pain on and since then I've taken the business from a loss-making business to a highly profitable, exciting business in a matter of 6 to 12 months. Unbound has been at 14%, 15% EBITDA margin for many years. It's not a flash in the pan. It's been at that level for many, many years. So it's a healthy, stable business. It's just that the playground for Unbound has been North America. And now with the expansion outside of North America, we expect the growth to be significant. Going forward, possibly unbound revenues from North America will be less than 60%. While the North America continues to grow at single digits, the real growth will come from outside North America.

Our next question is from the line of Parimal Mithani from Credential Investments.

Rahul, I just wanted to know since you said you have taken MPS by a far a long time back and the synergies that you've been acquiring since the business, how do you see all these acquisitions that you have done in terms of adding value in terms of for next 3 to 4 years? And if you can tell us according to which areas will be more useful going forward?

Yes. I think in the market that we operate in, if the appetite is to grow at 20%, 25% year-on-year, so if you track MPS earnings growth from FY '21, we've been growing at a PBT CAGR of 21%. In order to get that level of growth in the market that we operate in, you have to have a blend of organic and inorganic growth. And with the vision that we have of getting to INR 1,500 crores at similar margins in a few years, acquisitions are a very core part of our growth strategy, about 60% of our growth strategy. In terms of how that is playing out, I think it's played out differently than we thought a few years ago. So to give you some sense, when we had enabled the strategy, we were operating in these 3 markets, right, research, education and corporate. And the thinking was, at some point, corporate would potentially become a very large part of our portfolio. That then evolved into research kind of becoming once again 2/3 of the revenue. And now with the Unbound acquisition, education and with -- so firstly with the education business has been growing phenomenally for the last few quarters. And on top of that, now we have an acquisition that is mostly education, some research, but mostly education. And now education is getting to a point where it will again be a core business. So the way I see it is we're probably heading to a 40, 40,20 world where research is 40% of our revenue. Education is 40% of our revenue and corporate also, which is now starting to do well again, is another 20% of our revenue. So that's how I see it evolving over a period of time. Having said that, a few years ago, this forecast was made, and I was completely wrong. But the forecast that was right was the total revenue and the total EBITDA. So we're tracking against that. So the [indiscernible] for us is INR 1,500 crores at similar margins. I've done some star gazing and shared this 40, 40, 20 with you, but it could look very different in a few years. Time will tell.

Okay. And you maintain to keep the dividend payout as previously going forward also, right?

Yes. So in terms of what that will look like in terms of percentage of profits, that might go up and down depending on current investments. But I think we will continue to pay out dividend as long as -- so we will always take into account what is our expense outflow for the next 6 to 12 months and then work backwards. So like I've shared previously, INR 100 crores, INR 200 crores of debt doesn't really bother us given that now our DSO is now closer to 45 days as well as the business is much bigger than it used to be. So yes, I think dividend and buybacks will continue for the foreseeable future.

We will now take our last.

With that, I think we've hit the hour. So I think we'll go ahead and close the meeting. So thank you all for your active participation. Really appreciate it. Your questions and insights always help us do better. I really enjoyed some of the questioning on this call. I think one of the things that I'm going to take away and discuss at the Board level is the capital redistribution around dividends and buyback because clearly, the shareholder base and the markets want that to continue, and we take that as feedback and we'll discuss it at the next Board meeting. So thank you so much for your wonderful support and look forward to it going ahead as well. Thank you.

On behalf of MPS Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.