- Adjusted EBITDA: Broke even at the adjusted EBITDA level (ex-ESOP) in Q4 FY24.
- AUM: Increased by 13% QoQ to INR179 crores.
- Fintech Channel AUM Mix: Contributes nearly 45% of AUM mix, up from 20% since October 2023.
- Recoveries: iServeU saw recoveries amounting to INR1.2 crores in Q4 FY24.
- Revenue (ex-device sales): INR47.6 crores in Q4 FY24, down 13% QoQ.
- Device Sales: Increased to INR3.7 crores in Q4 FY24.
- Transaction Volumes: Nearly 30 million transactions processed in Q4 FY24.
- Gross Transaction Value (GTV): INR11,034 crores in Q4 FY24, down 2% QoQ, up 90% YoY.
- Average Transaction Size: INR3,678 in Q4 FY24, up from INR2,664 in Q3 FY24.
- Gross Take Rates: Decreased from 34 bps to 29 bps in Q4 FY24.
- Net Take Rates: Decreased from 6 bps to 5 bps in Q4 FY24.
- Finance Professional Network: Increased by 13% YoY to 5,884 as of March 31, 2024.
- Loans Processed: 48,089 loans in Q4 FY24, up 822% YoY and 93% QoQ.
- Total Income: INR51.3 crores in Q4 FY24, up 41% YoY, down 5% QoQ.
- Non-GAAP PBT: Negative INR2.3 crores in Q4 FY24.
- Revenue (FY24, ex-device sales): INR194.3 crores, up 79% YoY.
- Total Income (FY24): INR198 crores, up 69% YoY.
- Adjusted EBITDA (FY24, ex-ESOP): Loss of INR14.8 crores, down from INR17.2 crores in FY23.
- ESOP Charge (FY24): INR3 crores, down 38% from INR4.8 crores in FY23.
- Gross Transaction Value (FY24): INR43,754.1 crores, up 192% YoY.
- Cash and Cash Equivalents: INR131.5 crores as of March 31, 2024.
Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Niyogin Fintech Ltd (BOM:538772, Financial) achieved EBITDA breakeven in Q4 FY24, marking a significant milestone.
- The company reported a 13% QoQ increase in AUM, closing at INR179 crores.
- The acquisition of SuperScan, an AI-enabled toolkit, is expected to streamline workflows and reduce operational costs for BFSI clients.
- The fintech channel now contributes nearly 45% of the AUM mix, up from 20% since its launch in October 2023.
- iServeU, a subsidiary, turned EBITDA positive this quarter, indicating improved internal efficiencies and strong recoveries.
Negative Points
- Gross transaction value (GTV) decreased by 2% QoQ in Q4 FY24, indicating a slowdown in transaction volumes.
- Revenue ex of device sales was down 13% QoQ, reflecting subdued UPI volumes till mid-February 2024.
- Gross take rates decreased from 34 bps to 29 bps in Q4 FY24, while net take rates decreased from 6 bps to 5 bps.
- The company faced challenges in scaling up one of its payment offerings, which slowed its stride.
- The non-GAAP PBT stood at negative INR2.3 crores in Q4 FY24, indicating ongoing profitability challenges.
Q & A Highlights
Q: Congratulations on your first EBITDA breakeven quarter. Can you elaborate on the soundbox platform contract for the PSU bank? Are we looking at similar contracts and cross-sell opportunities?
A: The soundbox platform is a different proposition from our other device management programs. It involves technology that converts UPI payments into confirmed statements in split seconds. We are supporting large financial institutions in deploying this technology. We have more than five or six incremental contracts in discussion. This technology creates a SaaS business model with monthly annuity income, separate from GTV-based revenues.
Q: Will the soundbox platform help in increasing UPI volumes for Niyogin?
A: No, the soundbox platform will not directly increase UPI volumes as it serves existing banks with acquiring capabilities. It creates a separate income stream for us. The nature of transactions is different; soundbox transactions are proximity payments, while our original UPI volumes were related to webpage payments.
Q: Can you provide details on the SuperScan acquisition, including current revenue and client base?
A: SuperScan has about seven contracts with large clients, including banks and insurance companies. The technology was initially evaluated for our own use, and we realized its broader potential. The contracts range from INR50 lakhs to INR3 crores. We are optimistic about scaling this technology within our ecosystem and beyond.
Q: What are the expectations for AUM growth and GTV for FY25?
A: We are confident in achieving the AUM target of INR400-475 crores due to our strong partnerships. For GTV, we aim to solve for net revenue rather than focusing solely on GTV numbers. We expect non-GTV revenues to become significant, contributing to higher gross margins and profitability.
Q: What technology services does iServeU provide to banks, and what is the revenue model?
A: iServeU provides agency banking solutions, switching capabilities for various payment rails, and soundbox technology. The revenue model is transaction-based, with fees linked to the number of transactions or a monthly software cost per device.
Q: What are the next steps in terms of EBITDA and revenue targets?
A: We aim to achieve INR500 crores in revenue and INR50 crores in EBITDA this year. The focus is on net revenue, which is net of commissions. We are also adding SaaS opportunities, which have higher gross margins.
Q: How will the soundbox system revenue model work?
A: The revenue model varies; it could be per transaction or a monthly rental per device. We are flexible and can adapt to different banks' requirements. The NBFC can provide financing for rental models, creating synergy between Niyogin and iServeU.
Q: How is the iServeU business evolving, and what were the issues affecting GTV growth?
A: The UPI business faced challenges due to licensing interpretations, which were resolved by February. AePS volumes contracted due to industry-wide fraud issues. We are now focusing on financial inclusion and TSP business, including soundbox technology, which will drive future growth.
Q: What are the developments on the liability side for the NBFC business, and will you focus on lending or off-balance sheet expansion?
A: We plan to raise INR200 crores this year, with INR100 crores from existing lenders and INR100 crores from new sources. We will focus on both lending and distribution, leveraging our partnerships and digital platforms like NiyoBlu.
Q: How will the SuperScan acquisition be monetized, and what are the potential use cases?
A: SuperScan has high operating margins and significant scale-up potential. Use cases include Aadhaar masking, document scanning, and OCR technology for various sectors beyond BFSI. We aim to expand within existing clients and our ecosystem.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
