TANLA PLATFORMS LIMITED — Interim / Quarterly Report 2022

Jul 22, 2021

T: +91-40-40099999 info@tanla.com www.tanla.com

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Tanla Platforms Limited (formerly Tanla Solutions Limited) Tanla Technology Center Hi-tech city Road, Madhapur, Hyderabad, India - 500081 CIN: L72200TG1995PLC021262

July 22, 2021

To,

BSE Limited National Stock Exchange of India Ltd. Phiroze Jeejeebhoy Towers, “Exchange Plaza” Dalal Street, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 001 Mumbai - 400 051 Scrip Code: 532790 Symbol: TANLA

Dear Madam/Sir,

Sub: Investors Updates for the quarter ended June 30, 2021

With reference to the subject cited, we are enclosing herewith Investors Updates for the quarter ended June 30, 2021.

Yours faithfully,

For Tanla Platforms Limited

(Formerly known as Tanla Solutions Limited)

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Seshanuradha Chava General Counsel and Chief Regulatory Officer ACS-15519

The world’s leading brands trust Tanla

Q1 21-22

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Safe Harbor

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‐

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2

State of the business: leading innovation, growth and value creation

High Growth Best in Class margins and free cash flow profile 4x 8x

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9x 1004

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883 815

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in 5 years from FY2017-21

Accelerated Innovation

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TRUBLOQ

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CPaaS Market leader in India

800B

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42%

62%

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41%

75%

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Enterprise segment market leader

30%+

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9/10 8/10 7/10

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60%+

1300

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Listed in Indices

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3

Stellar start into the year Key financial metrics

Revenue

Gross Margin

Cash

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Revenue Gross Margin EBITDA EPS Cash conversion Cash
(₹ Million) (₹ Million) (₹ Million) (₹) (₹ Million) (₹ Million)
6,264 7,171
1,735
4,555 1,345 1,375
7.68
38 1,053
750 5.16 2,470
65
79 49 +190%
271
+408%
Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22
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4

CUSTOMER UPDATES

Wisely platform helps Axis Bank pave the way for true customer data privacy and security

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• Blockchain based end-to-end secured messaging platform

• Customer trust & confidence. My bank My Message.

• Transparent – Verified, Zero dispute reports

• As-a-Service model – Scalable and reliable

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6

7

One of the largest life science company unlocks SMS communication for millions of farmers with Tanla

Right crop information and products using interactive SMS links in multiple languages

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7
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Ground-breaking innovation for the telecom industry, powered by blockchain based communication stack

TRUBLOQ

• Over 44,000 enterprises are now using Trubloq solution; 2 million content templates registered

• Enabled 5 out of 7 telecom operators in India with 62% market share of all scrubbed messages

• Reduced subscriber complaints by 60%

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8

8

“A better life, A better World” – How Panasonic improves customer care with Karix and WhatsApp

• Automated conversational solution for product and service-related inquiries

• 2-way communication between brand and the user, in language of choice

• Solution helped Panasonic deflect 10% inquires to WhatsApp from their call centre

• Helped the brand increase overall NPS by providing info and service on demand

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9

Resulted in 8x increase in farmer engagement

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Paisa Bazaar uses Gamooga Omni channel marketing platform with 8X increased conversions

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Personalized omni-channel campaigns
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11

Large online beauty brand uses Gamooga Re-targeting solution to convert anonymous visitors to registered

users

• Personalized sign-up forms enabled for capturing details of site visitors based on their product browsing history

• Displayed personalized banners to these users with targeted offers

• Re-targeting these visitors with these specific offers resulted in 2x conversion rate

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12
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13

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13

Revenue grew across all customer segments

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(₹ Million)
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Customers with revenue > ₹ 500 million contributed 56% in Q1 21-22 as against 44% in Q1 20-21

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6,077
+42%
3,484
1,843 4,287
+76%
751
+14%
+9% 1,984
1,613
691
Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22
>₹10M- < ₹100M >₹100M - < ₹500M >₹500M For three segments
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Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four)

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14

Customer addition in all segments

(No of customers)

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146
• +28%
146 customers with
99
+21%
revenue of > ₹ 10M+ up 114
82
from 114 customers in Q1 34
+31%
20-21 26
13
+117%
•
13 customers with revenue
6
> ₹ 500M up from 6 in Q1
20-21
Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22
>₹10M- < ₹100M >₹100M - < ₹500M >₹500M For three segments
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Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four)

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15

Average revenue for > ₹ 10M customers is increasing

(₹ Million)

Average revenue per customer contributing > ₹ 10 million is at ₹ 42 million for the quarter, up 11% from Q1 20-21

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42
+11%
38
Q1 20-21 Q1 21-22
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Customer segments are arrived at on a quarterly annualized basis (quarter revenue multiplied by four)

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16

Continue to expand our customer base

(₹ Million)

In Q1 21-22, we added 73 new customers as against 65 additions in Q1 20-21

In Q1 21-22, revenue from new customers is ₹ 28 million as against ₹ 17 million in Q1 20-21

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73
+12%
65
Q1 20-21 Q1 21-22
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28
+70%
17
Q1 20-21 Q1 21-22
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New customers include every unique new contracting entity added during the quarter

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17

Reducing client concentration

(₹ Million)

Revenue from our top 20 customers is increasing

Customer concentration of our top 20 customers as a % of total revenue is decreasing

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600
4,148
+31%
400
3,173
200
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-
Q1 20-21 Q1 21-22
Revenue
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72%
70%
68%
66%
64%
Q1 20-21 Q1 21-22
Percentage of revenue
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18

FINANCIAL UPDATE

Operating above Rule of 40

(₹ Million)

• SaaS companies target to operate at Rule of 40 (revenue growth + EBITDA%)

• Operated at Rule of 40 in Q3 2021 and moved to Rule of 60 in Q1 21-22 organically

• Innovation led strategy helping accelerate revenue growth as well as enhancing profitability

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60%
37% 40% 45%
31%
38%
24%
22%
21% 21%
20%
19%
17%
16%
15%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
Revenue growth EBITDA margin %
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20

Accelerated revenue metrics reflecting industry leadership

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(₹ Million)
20% 21% 24% 38%
15%
6,541 6,486
6,264
5,832
4,555
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
Revenue YoY growth
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• Improving growth trajectory every quarter over the past five quarters from 15% in Q1 20-21 to 38% in Q1 21-22

• Growth driven from one geography – India. Maintaining leadership in a competitive geography

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21

Gross Margin Development – at 27.7%

• Gross Margin growth at 65% YoY

• Gross margin has improved 460 bps YoY in Q1 21-22

• Platform business gross margin contribution to total at 31% in Q1 21-22 as against 17% in Q1 20-21

• Ability to operate at scale and handle large volumes increased gross margin

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(₹ Million)
65%
55% 58%
37% 36%
1,769 1,735
1,611
27.3% 27.7%
1,343 24.6%
1,053 23%
23.1%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
Gross margin Gross margin % YoY growth
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22

Gross margin profile shift towards platform

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17% 23% 28% 25% 31%
69%
83% 77% 72% 75%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
Enterprise business Platform business
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• Platform business gross margin at ₹ 533 million in Q1 21-22, up 204% from Q1 20-21

• Platform business gross margin contribution to total at 31%, improved by 1400 bps YoY

• Enterprise business gross margin at ₹ 1201 million in Q1 21-22, up 37% from Q1 20-21

Note :

Platform business: Revenue from Platform as a service offering where revenue is earned from our IP (Platforms) and no cost of services is incurred Enterprise business: Revenue from services where cost of services is incurred towards fee paid to Service Providers such as carriers and other network providers (e.g. SendGrid)

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23

Increased conversion of Gross Margins into EBITDA

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(₹ Million)
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• Driving strong operating leverage on indirect cost- reduction of 630 bps YoY

• Employee cost at 15% of gross margin in Q1 21-22, as against 19% in Q1 20-21

• Other expense at 8% of gross margin in Q1 21-22, as against 10% in Q1 20-21

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79% 76% 78%
73%
71%
1,769
1,735
1,611
1,343 1,340 1,345
1,269
1,053
975
750
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
Gross margin EBITDA EBITDA as % of Gross Margin
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24

EBITDA levels at all time high

• EBITDA growth of 79% YoY

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(₹ Million)
210%
140% 129%
99%
79.4%
1,340 1,345
1,269
20.7% 21.5%
19.4%
975
750
16.7%
16.4%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
EBITDA EBITDA margin YoY growth
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25

EBIT doubled in a year

(₹ Million)

• EBIT has improved 610 bps YoY in Q1 21-22

• EBIT growth of 97% YoY

• Cloud focused strategy resulting in lower depreciation. Depreciation at ₹ 91 million in Q1 21-22, as against ₹ 115 million in Q1 20-21

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1,254
1,248
1,180
19% 20%
15%
876
635 15%
14%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
EBIT EBIT margin
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26

100% + cash conversion for four quarters in a row

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(₹ Million)
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• Operating cash flow ₹ 1375 million in Q1 21-22, up 408% from Q1 20-21

• Cash conversion at 102% for Q1 21-22

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2,252
1,663 177%
1,340 1,424 1,345 1.375
1,269 106%
171% 102%
975
750
36%
271
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
EBITDA Operating cash flow
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27

Cash balance at all time high

(₹ Million)

Cash & cash equivalents at ₹ 7,171 million in Q1 21-22 as against ₹ 2,470 million, up 190% from Q1 20-21

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CCE
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7,717
5,841
4,493
2,470 2,339
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
3,698
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CCE composition 2,786
2,139 2,167
1,883 1,876
1,361
1,009
843
614
475 449 446 470 464 432 268 446
288
202
Restricted cash INR- Current account Foreign currency account Fixed deposits
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
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28

Net profit at all time high

(₹ Million)

• Second consecutive quarter of ₹ 1000 million+ Net profit

• Net profit at ₹ 1,045 million in Q1 21-22, up 33% from Q1 20-21

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1,045
1,025
17%
935 16%
14%
815
786
14%
17%
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
Net profit Net profit margin
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29

(₹)

EPS at all time high

• Earnings per share at ₹ 7.68 in Q1 21-22, up 49% from Q1 20-21

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7.68
7.54
6.87
5.85
5.16
Q1 20-21 Q2 20-21 Q3 20-21 Q4 20-21 Q1 21-22
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30

Efficient working capital management

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(₹ Million)
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• Debtor days at 58 in Q1 21-22 as against 59 days in Q1 20-21

• Operating at negative working capital for two consecutive quarters

CCE- Cash & cash equivalents

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Net working capital including Net working capital excluding
CCE CCE
6,657
1,714
4,184
(514)
Q1 20-21 Q1 21-22
Q1 20-21 Q1 21-22
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31

ROCE at 169%, all time high

• ROCE at 169% excluding cash

ROCE (excluding CCE)

ROCE( including CCE)

• Reflects cloud focused innovation led business model

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169%
50%
31%
45%
Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22
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ROCE- Return on capital employed CCE- Cash & cash equivalents

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32

Capital allocation of FY’20 & FY’21

₹ 3,885 Million Karix and Gamooga acquisition

₹ 1,661 Million Buy back of shares

• ₹ 692 Million

Capex largely on Trubloq & Wisely platforms

• ₹ 136 Million Dividend

₹ 7,171 Million Cash & cash equivalents

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Capex includes spend for Q1 21-22 and CCE balance is as of Q1 21-22

33

Strong balance sheet

₹ 9,996 Million Strong reserves & surplus

₹ 7,171 Million

Robust build up of cash & cash equivalents

169% ROCE (excluding cash & cash equivalents)

Debt free Asset lite Net block of ₹ 1,278 Million

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34

Environmental Social and Governance

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Environmental Social
Resource sustainability Equal opportunity
Creating resource efficiency for a Make work more equitable and
greener and cleaner tomorrow rewarding for people
Climate and Focus on green Skill Diversity & Community
energy cover development Inclusion development
Selected meritorious students from
Net carbon neutral by 2025
government school for the
Publish sustainability report
implementation of digital education
Devised trees plantation project to
through ed-tech apps.
deliver carbon sequestration of 2000
tCO2e by 2024
ESG pillars
areas
Key focus
Key initiatives
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Governance

Integrity in conduct Governance risk and compliance integrated into our business model

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Data security
Transparency
and privacy
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Continuous focus on governance, disclosure and transparency Alignment of corporate values and business goals

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35

The world’s leading brands trust Tanla

Appendix

Profit and Loss account: First Quarter 21-22

In millions, unless otherwise stated	Q1 20-21	Q1 21-22 ∆%
Revenue from operations	4,555	6,264 38
Cost of Services	(3,502)	(4,529) 29
Gross Margin	1,053	1,735 65
Operating expenses	(303)	(389) 28 1,345 79 (91) (20) 1,254 97 (2) (77) 43 (67)
EBITDA	750
Depreciation & amortization	(115)
EBIT	635
Finance cost	(7)
Other income Profit before taxes Tax expense (including deferred tax)	132
	760	1,295 70
	(26)	(250) - 1,045 33 7.68 49 136 -
Net profit	786
Earning per share(INR)	5.16
Weighted average shares outstanding	152

37

Free cash flow up 414% YoY

In millions, unless otherwise stated		Q1 21-22 ∆%
	Q1 20-21
Operatingcash flow	271	1,375 +408%
Capital expenditure	(21)	(91) +339%
		1284 +414%
Free cash flow	250
		, 20% +1501bps
Free cash flow in percent of total revenue	5%
Free cash flow conversion rate	33%	95% +6215bps

38

Key metrics: First quarter 21-22

Gross Margin

EBITDA

+460bps +501 bps 27.7% 21.5% Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22

EBITDA to cash Gross margin to ROCE conversion EBITDA conversion +6610 bps +630 bps +12500 bps

PAT

-60bps

17%

102%

78% 169% Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22

Q1 20-21 Q1 21-22 Q1 20-21 Q1 21-22

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