Newgen Software - Strong Q4 To Drive FY23 Revenue; Looking To Accelerate Growth Thereafter: ICICI Direct

ICICI Direct Report

Newgen Software Technologies Ltd. reported revenue of Rs 254.9 crore, up 25.9% YoY. Annuity revenue (ATS/annual maintenance contract, software-as-a-service and support) (which is 61% of the mix for Q3) was at Rs 154.4 crore, up 38.4% YoY while license revenue was 23% of the mix for Q3, up 16% YoY to Rs 57.7 crore.

The subscription revenue (ATS/AMC and SaaS that is 33% of mix), grew 36.9% YoY to Rs 84.4 crore.

Ebitda margins increased sequentially by ~650 basis pointss to 23.1% while YoY it reported a decline of ~550 bps. The company indicated that margins in the last year were higher due to the lower travel and marketing cost due to the Covid restrictions.

Geography wise India (33.8% of revenue mix) led the growth with 39.9% YoY growth while Europe, the Middle East, and Africa (27.7% of mix), U.S. (24.4% of mix) and Asia Pacific (14.1% of mix) grew 26.9%, 27.1% and 13.4% YoY, respectively.

On the India market, Newgen indicated that it has been traditionally strong in the market and growth in this quarter was a positive surprise.

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