Cigniti Technologies Ltd — Interim / Quarterly Report 2022

Jul 25, 2021

Cigniti Technologies Ltd. Investor Update

Q1FY22

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Q1 FY22 Highlights

• The Company accelerated its revenue in the current quarter by 13.4% to Rs. 264.36 Cr. in comparison to previous quarter.
• The revenue growth has gained momentum with a healthy Run Rate in June of Rs. 92.54 Cr (USD 12.55 Mn.) and good order book.
• The Company during the quarter has won 28 new clients.
• Notable client addition includes two clients with a TCV ($ 14.1 Mn.) signed on outcome-based model
• The Company has invested in additional manpower in line with its business transformation initiatives and commencement of outcome-based contract, which has subdued the EBITDA.
• EBITDA for the June quarter was at Rs 24.31 crore and EBIDTA margin stood at 9.2%.
• The Company expanded its footprint with opening offices in Singapore and Czech Republic and representative offices in Mumbai and Chennai inline with business plan.

264.36Revenue (INR in Cr.)	230+Active Clients50+ Fortune 500 Clients
9.2%	10+
EBITDA	Delivery Locations
7.7%PAT	Offices in9Countries
52 Days	3100+
DSO	Cignitians

Q1 FY22 Financials (INR in Cr.)

Data in [ ] for Q4

EBITDA/PAT Analysis (INR in Cr.)

• Salary Revision/replacement of resources has resulted in approx. 3% reduction in EBITDA comparing to previous quarter.
• New Hires made for execution of outcome-based project and deployed in KT has resulted in reduction of EBITDA by 1.5%
• Hires made for COE and expenditure incurred for marketing in line with the business transformation initiatives has resulted in reduction of EBITDA approx. by 1.0%
• Normalizing the New Hires / investments the Company has made a healthy EBITDA with acceleration in Revenue
• The Company has front loaded its cost in its endeavor to accelerate as per business plan and it has mechanism in place to even this out in coming quarters.
• The Group has revised its transfer pricing model, w.e.f. April 1, 2021, wherein there is a assured return to all the subsidiaries and Cigniti India retains the residual return as per the functions performed by Cigniti India and its subsidiaries.
• The company has started adopting new tax regime in India from current financial year.

Client Composition / Geography Mix of Revenue

ACTIVE CLIENTS AND NEW CLIENTS

Clients	Q4 FY21	Q1 FY22
Number of Active Clients	218	233
New Clients Added	22	28

Employee Metrics

Utilization	Q4 FY21	Q1 FY22
Onsite	95.1%	95.4%
Offhsore	81.2%	76.1%

Resource Mix	Q4 FY21	Q1 FY22
Onsite	22.1%	20.8%
Offhsore	77.9%	79.2%

Revenue By Sector (%)

Cigniti's Core Service Offerings for Large Enterprise Clients

Quality Engineering and Specialized Offerings

• Performance Engineering
• Service Virtualization
• Test Data Management
• Tools Streamlining
• End to End Automation
• DevOps Enablement
• Test Environment Management
• Resiliency and Reliability Testing

Quality Assurance and Traditional Offerings

• Security Testing
• Functional Testing
• Test Automation
• Globalization Testing
• Performance Testing
• Compatibility Testing
• Regression Testing

Digital and Next Generation Offerings

• IoT Assurance
• Cloud Assurance
• Omni and Multi-Channel Testing
• AI testing
• Block chain Testing
• Robotics Automation
• Mobile Testing
• Customer Experience Testing

Awards & Recognitions

Awards & Recognitions

• World's first Independent Quality Engineering Services Company to be appraised at CMMI-SVC v1.3, Maturity Level 5, and we also are ISO 9001:2015 & ISO 27001:2013 certified
• Positioned as a 'Star Performer' and 'Major Contender' in the Everest Group PEAK Matrix. 4 years in a row.
• Positioned in Gartner's Magic Quadrant for Application Testing Services, Worldwide for 5 years in a row.
• Recognized as a Leader by NelsonHall in NEAT charts for Software Testing.

Financial Highlights Q1 FY22- Consolidated

All values are in INR Million

Particulars	Q1FY22	Q4FY21	Q1FY21	Q-o-Q	Y-o-Y
Income
Revenue from operations	2,644	2,330	2,184	13.4%	21.0%
Revenue from operations ($M)	36.04	31.98	29.25
Expenses
Employee benefit expense	1,656	1,341	1,311	23.5%	26.3%
Other expenses	745	657	513	13.4%	45.3%
EBITDA	243	333	360	-26.9%	-32.6%
% EBITDA	9.2%	14.3%	16.5%
Depreciation & Amortization	33	T31	30	7.0%	10.1%
EBIT	210	302	330	-30.4%	-36.5%
Other Income(Expense)	5	(3)	23	--	-80.3%
Finance Income	37	16	25	124.2%	47.1%
Finance Costs	11	12	16	-10.4%	-34.9%
PBT	241	303	363	-20.4%	-33.6%
Tax*	37	56	72	-34.6%	-48.8%
PAT	204	247	291	-17.2%	-29.8%
EPS (Basic)	7.29	8.82	10.45

Cigniti's Income statement FY 21 – Consolidated

All values are in INR Million

Particulars	FY20	FY21
Income
Revenue from operations	8,720	8,965
Revenue from operations ($M)	124	122
Expenses
Employee benefit expense	5,190	5,216
Other expenses	2,243	2,295
EBITDA	1,287	1,455
% EBITDA	14.8%	16.2%
Depreciation & Amort	115	123
EBIT	1,172	1,332
% EBIT	13.4%	14.9%
Other Income	158	36
Finance Income	58	98
Finance costs	80	56
PBT	1,308	1,308
% PBT	15.0%	92
Tax	92	92
PAT	1,216	1,216
% PAT	13.9%	43.87
EPS (Basic)	43.87	37.77

Cigniti's Balance Sheet FY21- Consolidated All values are in INR Million

Disclaimer

This presentation is strictly confidential and may not be copied, published, distributed or transmitted. The information in this presentation is being provided by Cigniti Technologies Ltd. (also referred to as 'Company'). By attending a meeting where this presentation is made, or by reading this presentation material, you agree to be bound by following limitations:

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This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Company or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding expansion plans and the benefits there from, fluctuations in our earnings, our ability to manage growth and implement strategies, competition in our business including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, our ability to win new contracts, changes in technology, availability of financing, our ability to successfully complete and integrate our expansion plans, liabilities, political instability and general economic conditions affecting our industry. Unless otherwise indicated, the information contained herein is preliminary and indicative and is based on management information, current plans and estimates. Industry and market-related information is obtained or derived from industry publications and other sources and has not been verified by us. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.

This presentation is not an offer for sale of securities in the UNITED STATES or elsewhere.

India

Hyderabad

Cigniti Technologies Ltd. 6th Floor, ORION Block, "The V" (Ascendas) Plot #17 Software Units Layout Madhapur, Hyderabad-500081 Rep Office-Mumbai /Chennai

US

Cigniti Technologies Inc. 433 E Las Colinas Blvd, Suite 1300, Irving, TX 75039 UK

Australia

Cigniti Technologies (Australia) Pty Ltd Level 9, 401 Collins Street VIC 3000 Australia

Canada

Cigniti Technologies Canada Inc 2000 Argentia Road, Plaza 4, Suite 302, Mississauga, Ontario L5N 1W1.

Singapore/ Czech

US

630 Freedom Business Center, 3rd Floor, King of Prussia, PA 19406

Cigniti Technologies (UK) Limited 30 Churchill Place, London, E14 5RE

South Africa

Cigniti Technologies Ltd. Ballyclare Place, 14 Ballyclare Drive, Bryanston 2021

UAE

Cigniti Technologies Ltd. 2W 403b PO Box – 54756 Dubai Airport Free zone Dubai, United Arab Emirates