Slides
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Investor Presentation Q3 FY 25
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About Happiest Minds Next-Gen Digital Transformation, Infrastructure, Security and Product Engineering Services Company IPO - In September 2020 • Completed 13 years in August 2024 • 770,000 shareholders • Experienced and diverse board of eight • Professional management led by the Executive Board 96% Digital Born Digital 94% Agile Born Agile 85 Fortune2000 / Forbes200 Billion $ Corporations 278 Active Clients 95% Repeat Business Mission Statement Happiest People Happiest Customers SMILES Values Sharing, Mindful, Integrity, Learning, Excellence, Social Responsibility Disclaimer: All logos are the property of their respective owners. across 13 Countries 6,630 Happiest Minds 27.3% Gender Diversity Note 1 : RoCE / RoE is annualized. Great Place To Work® Top 100 India’s Best Workplaces in IT & IT-BPM for 2023 Top 50 India’s Best Workplaces for Building a Culture of Innovation 2023 Top 100 India’s Best Workplaces for Women 2024 Top 50 India’s Best Workplaces in Health & Wellness 2024 About Golden Peacock Corporate Governance Award 2022 Business Excellence Award 2021 21.8% RoCE1 14.0% RoE Constant Currency growth of 28.2% y-o-y EBITDA margin 21.1% In Q3 FY25 www.happiestminds.com Promoter Ashok Soota 2
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Mission, Vision and Values Our Mission Happiest People Happiest Customers DELiGHT Design for Perpetuity ESG Excellence Thought Leadership Profitable Growth Ambassador for Happiness World Class Team Our 2021-31 Vision - Social Responsibility Sharing Mindful Integrity Learning Excellence Our SMILES Values 3www.happiestminds.com
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Our Business BFSI EdTech Hi-Tech and Media & Entertainment Industrial, Manufacturing and Energy & Utilities IoT DevOps & RPA Software Defined Networking / NFV Big Data & Advanced Analytics Blockchain Cloud Security BPM & Integration Product & Digital Engineering Services Generative AI Business Services Agile and Secure Infrastructure Services Healthcare & Life Sciences Industry Groups (IG) Retail, CPG & Logistics 4www.happiestminds.com
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Born Digital . Born Agile The Mindful IT Company Business Transformation Business Insights Platformize & Modernize Reimagining Customer Experience Engineering & Operational Excellence Agile Delivery Agile Business Agile Organization CREATING DIGITAL CAPITAL MINDFULLY AGILE 5www.happiestminds.com
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Key For a global technology & service major, Happiest Minds is partnering to implement core banking technology to streamline operations and enhance client satisfaction, for the mortgage division of a large multinational banking and financial services company For a US logistics tech provider, Happiest Minds is driving their digital transformation agenda and building intelligent conversational dashboards using Gen AI For an American multinational financial services company, Happiest Minds is transforming their Enterprise Content Management Systems For a US Healthtech company, Happiest Minds is providing Infrastructure Management Services For a global EV Original Equipment Manufacturer (OEM), Happiest Minds was chosen as one of the key partners to build their data platform For an India-based global payments solution company, Happiest Minds was chosen to co-develop multiple mission- critical applications For a global MedTech company, Happiest Minds is leveraging Microsoft Power Platform to build their engineering platform For a Middle East based global bank, Happiest Minds is providing Risk and Governance consulting services
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Happiest Minds’ Integrated Annual Report 2024, ranked #42 globally, wins Gold and Silver Awards at the LACP 2024 Spotlight Awards Recognized among 2024 Avtar & Seramount Best Companies for Women in India in IT and Exemplar of Inclusion in the Most Inclusive Companies Index Top 100 India’s Best Workplaces for IT & IT-BPM 2024 by Great Place To Work®
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Analyst Mentions Everest PEAK Matrix ‘Major Contender’ Microsoft Azure Services Everest PEAK Matrix ‘Major Contender’ AWS Services EVEREST PEAK Matrix ‘Major Contender’ Digital Workplace Services PEAK Matrix® Assessment 2024: Mid- market Enterprises
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Operational and Financial Metrics Q3 FY 25 9
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Results Q3 FY 25 All amounts in ₹ Lakhs unless stated otherwise 10www.happiestminds.comNote 1 – Operating Margin – EBITDA excluding other income Note 2 - Amortization and unwinding interest are non cash items from the acquisition Particulars Q3 FY25 Q2 FY25 QoQ Q3 FY24 YoY 9M FY25 9M FY24 YoY Revenues ($’000) 62,719 62,385 0.5% 49,366 27.0% 180,651 146,053 23.7% Growth in CC 0.8% 28.2% 24.8% Revenues 53,081 52,164 1.8% 40,988 29.5% 151,627 120,737 25.6% Other Income 2,296 2,703 2,429 7,543 6,016 Total Income 55,376 54,867 0.9% 43,417 27.5% 159,170 126,753 25.6% EBITDA 11,686 11,882 (1.6)% 10,519 11.1% 35,240 31,300 12.6% % 21.1% 21.7% 24.2% 22.1% 24.7% Operating Margin1 9,264 9,352 (0.9)% 8,232 12.5% 27,812 25,654 8.4% % 17.5% 17.9% 20.1% 18.3% 21.2% Finance Cost 2,442 2,551 1,014 6,733 3,012 Depreciation 1,172 1,154 871 3,512 2,872 Profit before Non Cash/Exceptional 8,073 8,178 (1.3)% 8,634 (6.5)% 24,995 25,415 (1.7)% % 14.6% 14.9% 19.9% 15.7% 20.1% Amortization/Unwinding Interest 2 1,178 1,406 668 3,845 1,668 Exceptional Item - - 107 (643) 107 PBT 6,894 6,771 1.8% 8,073 (14.6)% 20,508 23,854 (14.0)% % 12.5% 12.3% 18.6% 12.9% 18.8% Tax 1,884 1,820 2,111 5,443 6,211 % 3.4% 3.3% 4.9% 3.4% 4.9% PAT 5,010 4,951 1.2% 5,962 (16.0)% 15,065 17,643 (14.6)% % 9.0% 9.0% 13.7% 9.5% 13.9%
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Born Digital . Born Agile 79.8% 14.5% 1.5% 4.1% PDES IMSS GBS Oth Inc % of Revenue % of Revenue Total Income (₹ Lakhs) Revenue by Business Unit PDES : Product & Digital Engineering Services; GBS : Generative AI Business Solutions; IMSS : Infrastructure Management and S ecurity Services 11www.happiestminds.com 93.4% 93.6% 94.5% 94.4% 95.2% 94.0% 94.9% 93.8% FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Agile 96.5% 96.4% 95.9% 96.2% 96.8% 97.4% 97.3% 96.1% FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Digital 113,075 145,040 171,003 43,417 44,250 48,926 54,867 55,376 FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25
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Operational & Financial Metrics Note: 1. FCF = Free Cash Flow Conversion = FCF/EBITDA and FCF = EBITDA – Capex. (Non-GAAP Measure) (₹ Lakhs) Margin (₹ Lakhs) High FCF ConversionEBITDA 12www.happiestminds.com 29,477 37,997 42,122 10,519 10,822 11,671 11,882 11,686 FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 21.1%21.7%23.9%24.5%24.2% 24.6%26.2%26.1% 29,064 36,480 41,067 9,894 10,744 11,569 11,612 11,180 FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 97.7%99.1%99.3%94.1% 95.7% 97.5%96.0%98.6%
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Operational & Financial Metrics Happiest Minds & Utilization Note 1: Trailing 12 Months Offshore / Onsite By Number of Employees Voluntary Attrition % 1 13www.happiestminds.com 4,168 4,917 5,168 5,246 5,168 6,599 6,580 6,630 80.5% 78.5% 75.5% 76.7% 75.1% 78.2% 76.3% 78.0% FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 22.7% 19.8% 13.0% 14.1% 13.0% 13.5% 14.4% 15.3% FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 4.1% 4.6% 4.1% 4.3% 4.1% 4.2% 4.2% 4.3% 95.9% 95.4% 95.9% 95.7% 95.9% 95.8% 95.8% 95.7% FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Onsite Offshore
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Operational & Financial Metrics Notes: 1. TME: Travel, Media & Entertainment, 2. Based on quarterly revenues annualized. 3. Top 20 includes Top 1, 5 & 10 ROW* Includes – ANZ, ME,APAC, Africa & Others Q3 25 Model Geography Digital Revenue Verticals1 Q3 25 (% Revenue) (#) Revenue Model Revenue Concentration3 Million $ Customers2 % revenue from Clients 50% 47% 52% 50% 53% 48% FY 22 FY 23 FY24 Tenure of Customer 0-5 yrs > 5 yrs 14www.happiestminds.com 76.8% 23.2% T&M FP 64.7% 15.5% 8.0% 5.9% 6.0% Americas Europe India APAC ROW 51.8% 23.6% 7.1% 10.9% 2.8%3.9% Digital Infra / Cloud SAAS Security Analytics / AI IoT Others 23.6% 17.4% 16.4% 15.4% 8.4% 8.4% 6.7% 3.2% 0.5% BFSI Edu Tech Healthcare HiTech (others) Retail / CPG TME 38 43 48 45 48 58 59 56 FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 8.8% 25.8% 39.0% 54.4% Top 1 Top 5 Top 10 Top 20
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Operational & Financial Metrics (USD ‘000) Onsite/Offshore Average Revenue / Active Customer 15www.happiestminds.com 15.5% 15.2% 14.4% 13.8% 12.8% 11.4% 11.4% 10.8% 84.5% 84.8% 85.6% 86.2% 87.2% 88.6% 88.6% 89.2% FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 Onsite Offshore 774 803 794 808 794 840 842 898 FY 22 FY 23 FY 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25
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Operational & Financial Metrics Note : All metrics are reported as % of operating revenues: *Healthcare carved out as a separate vertical from Q1FY24 onwards. Some customers which were earlier part of HiTech / MFG / Others have been regrouped 16www.happiestminds.com FY 22 FY 23 FY24 Q3 FY24 Q4 FY 24 FY25 Q1 FY25 Q2 FY25 Q3 BFSI 13.2% 12.2% 10.9% 11.4% 10.9% 16.8% 22.5% 23.6% Edutech 23.2% 23.2% 24.0% 22.3% 23.9% 21.5% 19.3% 17.4% Healthcare - - 14.8% 16.1% 14.4% 16.4% 16.4% 16.4% Hitech 15.8% 16.9% 14.3% 14.7% 14.5% 14.8% 14.3% 15.4% Travel, Media and Entertainment (TME) 13.2% 12.9% 11.7% 12.2% 11.9% 10.7% 8.6% 8.4% Retail / CPG 10.3% 9.2% 7.6% 7.8% 7.4% 7.8% 8.1% 8.4% Industrial 6.9% 8.4% 6.8% 7.4% 7.5% 7.3% 7.2% 6.7% Manufacturing 8.6% 10.3% 7.4% 6.3% 6.3% 4.0% 3.0% 3.2% Others 8.8% 6.9% 2.5% 1.6% 3.1% 0.9% 0.6% 0.5% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Digital infrastructure / cloud 43.6% 45.8% 43.3% 41.8% 42.9% 47.5% 52.6% 51.8% SaaS 20.3% 20.7% 26.8% 26.5% 25.7% 25.1% 23.8% 23.6% Security Solutions 11.9% 12.3% 9.3% 9.6% 9.6% 8.5% 6.6% 7.1% Analytics / AI 12.1% 12.2% 12.4% 13.8% 13.3% 12.1% 11.1% 10.9% IoT 8.6% 5.4% 4.3% 5.0% 4.4% 4.2% 3.2% 2.8% Total 96.5% 96.4% 96.2% 96.8% 95.9% 97.4% 97.3% 96.1% IP Led 10.3% 10.1% 10.0% 11.4% 10.2% 10.7% 9.8% 11.6% Automation 25.4% 26.6% 29.1% 26.9% 28.1% 23.9% 24.1% 24.7% Verticals Digital Service Offerings
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Operational & Financial Metrics Note: 1: Based on quarter revenue annualized 2: Offshore: Revenues from customers served from India 3: APAC reporting started from Q1FY25 17www.happiestminds.com FY 22 FY 23 FY24 Q3 FY24 Q4 FY 24 FY25 Q1 FY25 Q2 FY25 Q3 USA 66.4% 68.1% 70.3% 69.0% 70.7% 66.5% 65.2% 64.7% India 14.1% 15.6% 16.4% 17.7% 16.3% 16.9% 15.1% 15.5% Europe 10.4% 9.7% 9.0% 9.0% 8.9% 8.7% 8.5% 8.0% APAC3 - - - - - 2.4% 5.6% 5.9% ROW 9.0% 6.6% 4.4% 4.4% 4.1% 5.5% 5.6% 6.0% $ 20 M + - 1 1 1 1 1 1 1 $ 10 M + 1 - 1 2 2 2 2 3 $ 5M to $ 10M 4 6 7 6 6 9 8 7 $ 3M to $ 5M 8 6 4 2 2 2 6 7 $ 1M to $ 3M 25 30 32 37 37 44 42 38 Total 38 43 45 48 48 58 59 56 0 - 5 Years 50.0% 47.0% 52.0% > 5 Years 50.0% 53.0% 48.0% Onsite 15.5% 15.2% 13.8% 12.8% 14.4% 11.4% 11.4% 10.8% Offshore 2 84.5% 84.8% 86.2% 87.2% 85.6% 88.6% 88.6% 89.2% Fixed Price 25.1% 25.3% 27.1% 27.7% 26.1% 26.1% 21.7% 23.2% Time and Material 74.9% 74.7% 72.9% 72.3% 73.9% 73.9% 78.3% 76.8% # Active Customers 206 237 245 250 250 279 281 278 # Billion $ Corporation 54 55 59 61 61 80 82 85 Million $ Customers1 Tenure of customers Revenue Mix Revenue by contracting Model Revenue by Geo
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Operational & Financial Metrics Note: 1: Capital Return Ratios are YTD Annualized, Note:2 Cash EPS & EPS has been annualized Note:3 Cash EPS – Cash Flow from Operating Activities divided by number of Outstanding Shares 18www.happiestminds.com FY 22 FY 23 FY24 Q3 FY24 Q4 FY 24 FY25 Q1 FY25 Q2 FY25 Q3 Onsite 172 227 224 211 211 279 274 284 Offshore 3,996 4,690 5,022 4,957 4,957 6,320 6,306 6,346 Onsite % 4.1% 4.6% 4.3% 4.1% 4.1% 4.2% 4.2% 4.3% Offshore % 95.9% 95.4% 95.7% 95.9% 95.9% 95.8% 95.8% 95.7% Utilization 80.5% 78.5% 76.7% 75.1% 75.5% 78.2% 76.3% 78.0% Diversity 26.4% 27.4% 27.9% 27.7% 27.7% 27.7% 27.6% 27.3% Billed 55 54 57 57 57 58 46 48 Unbilled 35 31 28 29 29 26 37 36 Total 90 86 85 87 87 84 83 84 EPS 12.55 16.01 3.96 4.79 16.73 3.39 3.29 3.33 Annualized2 13.34 Cash EPS3 17.87 24.88 5.47 5.58 22.93 6.11 6.18 6.16 Annualized2 24.60 RoCE 34.8% 32.8% 22.9% 22.3% 22.3% 22.4% 23.1% 21.8% RoE 27.3% 27.8% 16.7% 16.9% 16.9% 13.9% 13.5% 14.0% DSO Earnings Per Share (EPS) ₹ Capital Ratios 1 Happiest Minds
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Operational & Financial Metrics IMSS: Infrastructure Management & Security Services. |. PDES : Product & Digital Engineering Services. |. GBS: Generative AI Business Services *GBS started its operations from Q1FY25 onwards. All figures in ₹ Lakhs 19www.happiestminds.com IMSS 24,168 21.4% 30,694 21.2% 7,299 16.8% 7,551 17.1% 29,746 17.4% 7,992 16.3% 7,876 14.4% 8,045 14.5% PDES 85,199 75.4% 112,236 77.4% 33,689 77.6% 34,178 77.2% 132,719 77.6% 37,677 77.0% 43,442 79.2% 44,215 79.8% GBS - - - - - - - - - 713 1.5% 846 1.5% 821 1.5% Total Revenue 109,367 96.8% 142,930 98.6% 40,988 94.4% 41,729 94.3% 162,466 95.0% 46,382 94.8% 52,164 95.1% 53,081 95.9% Other Income 3,708 3.2% 2,110 1.4% 2,429 5.6% 2,521 5.7% 8,537 5.0% 2,544 5.2% 2,703 4.9% 2,295 4.1% Total Income 113,075 100.0% 145,040 100.0% 43,417 100.0% 44,250 100.0% 171,003 100.0% 48,926 100.0% 54,867 100.0% 55,376 100.0% FY25 Q3 Revenue by BU FY25 Q2FY25 Q1FY24 Q4 FY 24FY 22 FY 23 FY 24 Q3
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Profit & Loss Statement All figures in ₹ Lakhs ‘+Exceptional items for FY22 & FY23 refers to Loss on Fair Valuation of Warrant Liability. For Q3FY24 & Q4FY24 is Gain on fair valuation of contingent consideration, For Q1 FY25 is Expense on acquisitions. 20www.happiestminds.com FY 22 FY 23 FY24 Q3 FY24 Q4 FY 24 FY25 Q1 FY25 Q2 FY25 Q3 Operating revenue 109,365 142,929 40,988 41,729 162,466 46,382 52,164 53,081 Other Income 3,710 2,111 2,429 2,521 8,537 2,544 2,702 2,296 Total income 113,075 145,040 43,417 44,250 171,003 48,926 54,867 55,377 Cost of revenue 64,404 82,827 25,213 25,607 99,204 28,614 33,567 33,691 Gross Margin 44,961 60,101 15,775 16,122 63,262 17,768 18,597 19,390 % 41.1% 42.0% 38.5% 38.6% 38.9% 38.3% 35.7% 36.5% SG&A 19,193 24,215 7,685 7,821 29,677 8,642 9,417 9,999 % 17.5% 16.9% 18.7% 18.7% 18.3% 18.6% 18.1% 18.8% EBITDA 29,477 37,997 10,519 10,822 42,122 11,671 11,882 11,686 % 26.1% 26.2% 24.2% 24.5% 24.6% 23.9% 21.7% 21.1% Operating Margin 26,553 34,453 8,233 8,390 34,044 9,196 9,352 9,264 % 24.3% 24.1% 20.1% 20.1% 21.0% 19.8% 17.9% 17.5% Finance cost 830 2,102 1,010 1,008 4,024 1,741 2,551 2,442 Depreciation 2,423 3,057 942 973 3,716 1,027 1,154 1,172 Profit before acquistion related non-cash items 26,224 32,838 8,567 8,841 34,382 8,903 8,177 8,072 % 23.2% 22.6% 19.7% 20.0% 20.1% 18.2% 14.9% 14.6% Amortization/Unwinding Interest 1,030 1,218 601 521 2,316 1,419 1,406 1,178 PBT before exceptional item* 25,194 31,620 7,966 8,320 32,066 7,484 6,771 6,894 % 22.3% 21.8% 18.3% 18.8% 18.8% 15.3% 12.3% 12.4% Exceptional items* 609 634 -107 -1,295 -1,402 643 - - PBT * 24,585 30,986 8,073 9,615 33,468 6,841 6,771 6,894 % 21.7% 21.4% 18.6% 21.7% 19.6% 14.0% 12.3% 12.4% Current tax 6,310 8,508 2,192 2,809 9,518 2,114 2,179 2,210 Deferred tax 155 -621 -81 -392 -889 -376 -359 -326 Total Tax 6,465 7,887 2,111 2,417 8,629 1,738 1,820 1,884 % 5.7% 5.4% 4.9% 5.5% 5.0% 3.6% 3.3% 3.4% PAT * 18,120 23,099 5,962 7,198 24,839 5,103 4,951 5,010 % 16.0% 15.9% 13.7% 16.3% 14.5% 10.4% 9.0% 9.0% Income
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Condensed Balance Sheet All figures in ₹ Lakhs 21www.happiestminds.com FY 2022 FY 2023 Q3 FY24 FY 2024 Q1 FY25 Q2 FY25 Q3 FY25 Property, plant and equipment 78 13,278 13,856 13,778 14,062 13,978 13,894 Goodwill 7,896 13,913 14,013 14,032 70,773 75,329 75,891 Financial & Other assets 11,788 29,594 36,903 19,192 65,379 42,125 40,348 Total non-current assets (A) 19,762 56,785 64,772 47,002 1,50,214 1,31,431 1,30,133 Financial & Other assets i. Trade receivable 16,738 21,319 25,336 25,444 35,516 25,441 26,927 ii. Cash & Cash equivalents, Investments & Other financial assets 72,609 81,484 1,26,953 1,47,540 1,66,203 1,66,196 1,70,380 iii. Other assets 3,392 4,495 5,242 4,793 4,430 6,980 6,746 Total current assets (B) 92,739 1,07,298 1,57,531 1,77,777 2,06,149 1,98,616 2,04,053 Total assets (A + B) 1,12,501 1,64,083 2,22,303 2,24,779 3,56,363 3,30,047 3,34,186 Total equity (A) 66,580 83,882 1,41,465 1,48,024 1,48,268 1,52,444 1,53,580 Financial liabilities 7,134 18,035 16,174 15,416 28,015 22,202 23,576 Provisions & Deferred tax liability 2,086 4,526 4,975 4,641 14,031 8,989 10,107 Total non-current liabilities (B) 9,220 22,561 21,149 20,057 42,046 31,191 33,683 Financial & Contract liabilities i. Trade payable 6,072 7,052 7,558 7,915 9,844 11,008 10,873 ii. Others 26,266 45,921 47,474 43,839 1,50,036 1,28,412 1,28,844 Provisions & Other current liabilities 4,363 4,667 4,656 4,944 6,169 6,991 7,206 Total current liabilities (C) 36,701 57,640 59,688 56,698 1,66,049 1,46,412 1,46,922 Total liabilities (D = B + C) 45,921 80,201 80,837 76,755 2,08,095 1,77,603 1,80,606 Total equity and liabilities (A + D) 1,12,501 1,64,083 2,22,303 2,24,779 3,56,363 3,30,047 3,34,186 Current liabilities Assets Non-current assets Current Assets Non-current liabilities Equity and Liabilities
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Key Ratios 22www.happiestminds.com *As per the guidance note from ICAI Q3 FY24 FY24 Q2 FY25 Q3 FY25 Additional Balance Sheet Ratios Debt-Equity 0.37 0.35 0.82 0.83 Debt Service Coverage (DSCR) 4.96 5.25 6.68 7.03 Interest Service Coverage (ISCR) 8.89 8.97 3.65 3.82 Current Assets to Current Liabilities 2.64 3.14 1.37 1.39 Long-term Debt to Working Capital 0.12 0.09 0.20 0.18 Bad Debts to Trade Receivable 0.00 0.02 0.00 0.01 Current Liability to Total Liabilites 0.74 0.74 0.82 0.81 Total Debt to Total Assets 0.24 0.23 0.38 0.38 Trade Receivable Turnover 7.03 6.95 8.20 8.18 Operating margin (%) 20% 21% 18% 18% Net profit margin (%) 15% 15% 9% 9%
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Happiest People · Happiest Customers India | United States | United Kingdom | Canada | Australia | Dubai Thank You 23www.happiestminds.com