Ladies and gentlemen, welcome to RateGain Travel Technologies Limited Q2 FY 2024 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all the participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bhanu Chopra, Chairman and Managing Director. Thank you, and over to you. Thank you, and a very good afternoon to everyone, and thank you very much for joining the earnings call for RateGain Travel Technologies Limited for the second quarter and first half of the fiscal year 2024. It's great to connect with you all again, and I'm excited to share some key updates from the quarter. Joining me on the call are Mr. Tanmaya Das, our CFO, and Mr. Divik Anand, our head for Investor Relations. We announced our second quarter and first half results for the fiscal year 2024 earlier today, and I hope you've had a chance to go through our financial results, press release, and investor presentation that is available on the stock exchanges and on our company website. I'm happy to report that the company has delivered another impressive quarter, marked by robust growth, stellar margins, and a compelling financial performance that underscores our positive momentum. The travel industry continues on its path of strong recovery across key markets, and with a shift in people's attitudes towards travel, we are poised to capitalize on macro-level surge in demand and look to get deeper ingrained with our key customers across segments. Our unwavering commitment to delivering excellence and value for our customers and key stakeholders is evident through the strong operating and financial metrics of Q2 and first half. Some of the key highlights I would like to share with you here are: Our ARR has grown to a new high of INR 938.9 crores, growing at an impressive pace of 92% year-on-year. We continue to scale up at a healthy pace with a steady organic growth and successful implementation of our M&A playbook, as shown in the quick turnaround and continued traction in Adara. Revenues for the Q2 grew by 88% to INR 234.7 crore compared to the same period last year. Robust revenue growth was backed by strong margins, affirming the strength of the SaaS-backed business model to convert revenue growth to sustainable profitability. Our Q2 margins have grown significantly year-on-year and now are at 90.8%. The sales momentum continues on a strong footing, with new contract wins of INR 125 crores in the first half, compared to INR 40 crores last year, highlighting the strength of our comprehensive digital marketing offering and strong volume demand as industry leaders focus to adopt AI to drive efficiencies and optimize their revenue. This continues to be backed by a strong pipeline of over INR 401 crores. We continue to witness good traction in our Adara business as the focus remains to reconnect and reactivate the lost revenue from pre-COVID. Sales teams have seen healthy conversion of the built-up pipeline, and we continue to make investments to accelerate growth by hiring back a lot of the exit Adara employees and maintaining that growth focus. We've increased our focus on the Adara MarTech offering, which is higher up the value chain as we manage the performance marketing campaigns for our customer partner brand. Adara's brand recognition has improved significantly as it continues to capture market share across leading travel brands, DMOs, airlines, and hospitality chains. Based on our product proposition, our renewal conversations are turning into upgrades, and more clients are choosing to activate performance marketing with us, based on our AI modeling capabilities leading to improved performance. We continue to see improvement across some key operating and financial metrics. Our revenue per employee has improved to INR 1.3 crore, improving 62% year-on-year, capturing improved productivity and ability to scale up in a sustainable manner. Generative AI and its adoption by companies continues to be at the forefront for many companies to improve customer experience, drive cost efficiencies, and optimize revenue. Our expertise in providing accurate intelligence at scale and driving ROI for large brands is helping drive incremental revenue from existing relationships and acquire new clients. The investments related to developing the right solutions are underway, and while on one hand, we are beneficiaries of the same, we are also adopting and exploring first AI-based use cases that have commercial viability in our industry. On the state of the industry, global travel continues to hold steady despite recent macro uncertainty. Global travel growth continues to remain strong, with the global travel health index by Skift coming in at 106 for September, a new record high. All key regions continue to hold on or are above the 2019 levels, with North America continuing to outperform. International travel performance is at par with domestic travel in most regions and actually clocking a higher score in the North America region and making strong pickup in cross-border travel. India is another region reporting strong recovery in international travel, with outbound travels surpassing pre-pandemic levels. The momentum in the industry is driving change, adoption, upgradation of existing tech stacks, and attracting new investors into the industry, which is further unlocking new opportunities for players like RateGain to consolidate their position through product innovation and acquisition, to have a larger share of a thriving market as the industry looks at adopting more technology to engage with travelers. With that, I will briefly touch upon the performance across each of our business units. The DaaS business contributed to 31.9% of the total revenue for H1. This unit grew at a strong pace on the back of healthy traction with some key enterprise accounts across OTAs, airlines, car rentals, and cruise. We continue to see incremental volume demand coming from our existing enterprise customers, driven by strong travel demand, product innovation with a focus on building AI models. Given the importance of AI, a lot of our customers are seeking to deploy enterprise AI-led capabilities for their decision support systems, helping in revenue management, personalized recommendations, and digital marketing. We expect to see this trend continue to drive growth for our DaaS segment in the near term. RevAI are set for transforming the car rental industry, is showing strong growth as we take a land and expand strategy across franchisees and have seemed to have achieved a product market fit. New sales have registered a healthy growth. The need for RevAI increases as higher resource costs and increased competitiveness in the market pushes car rentals to look at AI-based solutions that can tell them how to increase revenue. The distribution segment accounted for 22.4% of our total revenue. Volumes growth held steady in the past quarter, with continued demand across our optimized chain segment on both OTA and GDS channels. I'm also proud to report that the volumes on GDS channels have surpassed 2019 levels for the first time, as we continue to gain traction with marquee customers in enabling connectivity for them across demand partners. We continue to be the partner of choice for large hotel chains as they undertake digital transformation product projects to modernize their distribution ecosystem and optimize their presence across channels. We started to monetize our order book from some key wins at the end of last year and expect to see the full effect of that in the second half of this fiscal. Our MarTech business contributed to 45.7% of our total revenues for H1, backed by improved growth in the paid digital marketing segment as we continue to see healthy growth, managing performance marketing campaigns for leading hotel chains, regional and global DMOs, airlines, and attraction parks trying to achieve higher returns on their digital marketing investments. The value we are driving for large travel brands, based on the strength of the travel and tech data we are generating, is really allowing us to recapture market share within that segment. With the continued investments, we're confident of scaling up this business in the near term. Our PDM offerings for hotels to optimize direct customer acquisition continues to gain traction in the Europe and APAC region. We continue to strengthen the leadership team as we strive to further scale up the business, and I'm happy to share that we've recently appointed a new GM for Adara, Jay Wardle, who in the past role was leading a renowned ad tech firm, Dstillery. Jay has extensive experience, having worked with leading brands like American Express and AOL, and has a proven record in the data and technology space. His role will be invaluable as we continue to drive growth and innovation at Adara. His expertise in leading operations, sales, and marketing will be critical for us to drive more well-rounded, sustainable growth as we aim for our next big goal. As we navigate through another successful quarter, it brings me immense pride to share some remarkable achievements on the people front. Our attrition rate continues to trend lower to 13.8% annually, reflecting our commitment to retaining and nurturing talent, while our record-breaking ENPS of 51.7 highlights immense employee satisfaction. Additionally, our teams invested over 2,300 hours in training, emphasizing our commitment to upskilling and growth. These achievements are a testament to our collective efforts and dedication to making RateGain the undisputed employer of choice. I'd like to now ask our CFO, Mr. Tanmay Das, to take you through the performance of Q2 and H1. Thank you. Thank you, Bhanu, and a very warm welcome to everyone on this call. I'm delighted to report that the company has posted another robust set of results in the quarter gone by, summing up a strong performance in the first half, building on its performance from a record year. Strong, sustainable revenue growth across verticals, backed by healthy margin expansion, which continues ahead of guidance and stands at a 15-quarter high on the back of operating leverage playing out. Our steadfast focus on operational efficiency and value creation has resulted in stable margins for H1, affirming our capability to convert revenue into sustainable profitability. The solid foundation positions us well to drive innovation and capitalize on future opportunities. Despite recent macro uncertainty, we see growth holding steady across the travel space, but we maintain a cautiously optimistic approach, keeping an eye on developments across key regions. Our inorganic growth front, we continue to mine a healthy pipeline and engage with various companies, exploring the right value and synergies in accordance with our strategy to build an integrated tech stack focused on revenue maxi-maximization.... This continues to be a very key focus area, and we remain steadfast in our approach to finding the right fit in line with our vision. For the second quarter of 2024, the company reported a revenue of INR 234.7 crore, with a year-over-year growth of 88.4%. As Bhanu mentioned earlier, that we continue to see significant traction in the paid digital media segment of our MarTech offering. This has resulted in this vertical growing at a faster pace of 142.3% in Q2, with DaaS growing at 119.6% and distribution at 10.5%. With the monetization of our large order wins from last year underway, we expect a healthy pickup in our distribution segment in the second half. EBITDA grew by 163.9% to INR 46.4 crore in the quarter, as compared to INR 17.6 crore in the same period last year. EBITDA expansion continues at a healthy pace to 19.8% margin in this past quarter, compared to 14.1% last year. As the company continues on its path of fiscal prudence and operating leverage to keep in as we scale up, the total operating expenses grew at pace of 76% in Q2, compared to 88% growth in revenue. Our PAT grew at 132% to INR 30 crore, up from INR 13 crore last year. For the first half of the year, the company reported a revenue of INR 449.2 crore, with a year-over-year growth of 84.2%. This was on the back of strong growth from all three verticals, with DaaS growing 129%, distribution at 18% and MarTech at 114% for the first half. EBITDA grew by 185% to INR 84.2 crore for H1, with the margins coming at 18.7%, as against 12.1% in the same time last year. The H1 EBITDA comes in higher than the guidance given at the end of the last year, with our, with our high-margin business DaaS vertical witnessing strong growth, with increased demand and data volumes from our key customers, coupled with continued traction in Adara on both growth and improved margin performance. Our PAT grew 157% in H1 compared to the same time last year, coming in at INR 54.9 crore, up from INR 21.4 crore. The company continues to have strong customer relationships with low churn and focus to expand existing relationships to build sustainable revenue streams. Our gross revenue retention and net revenue retention stood at 90% and 110% respectively, with an expanding customer base, which currently stands at 3,104. We closely track and strive to outperform on key operating SaaS metrics, and for H1, our revenue per employee stood at INR 1.26 crore, growing at 62% over last year. We continue to make investment in expanding our sales teams in U.S., Latam, Middle East, and other key geographies, and have also stepped up our marketing efforts to propel growth. With that, our current pipeline stands at INR 401 crore. Our cash flow generation has improved significantly compared to last year. The cash flow from operations stood at INR 76.9 crore in the first half, with the cash flow conversion to EBITDA coming in at 91%, compared to 61% for the full year last year. This is on the back of improved profitability and improved DSOs. We continue to have a strong debt-free balance sheet, where our net worth saw an increase of 18% as compared to last year's, to about INR 769.9 crore. Our cash and cash equivalent balance continues to grow and now stands at INR 423 crore. In terms of guidance for full year FY 2024, at the end of Q4 last year, we had guided for a growth of 55%-58% for the full year over FY 2023. Given the performance in the first half, we revised the guidance upwards to around 65% growth over FY 2023. Consequently, given the strong margin performance in the first half of this year, we revised the guidance upwards from 17% to around 19% for the full year FY 2024. It will be a 400 basis point improvement over last year. With that, I would like to conclude my update, and we are happy to open the floor for questions. Thank you. Thank you very much. We will now begin the question and answer session. Participants present on the audio bridge who wish to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vipul Jhawar from AK Capital. Please go ahead. Yeah, thanks for the opportunity. Excellent set of numbers, Bhanu, and the team. I have roughly two questions here. So, Bhanu, last call you have mentioned that, like, we are just scratching the surface, and there is a lot of growth that should happen in the coming years, you said. And particularly related to in-house, I'm talking about, like, you said, now currently, whatever the growth we are seeing is from the acquisition-led. But I wanted to understand that, the tools that we have built related to AI modeling or AI or this. So how much that we can scale up, and when actually we can see, because these are the high-margin product, I'm assuming that. So when this margin will be upticking, will be happening to, like, 25%-35%? That is the first question. The second question is regarding the employees. Currently, if you see the strength of RateGain is, I would assume that it is employees, but, how much of the ESOP or the skin in the game the higher management has, because that gives the motivation for them also? And the third question is regarding the guidance. You have mentioned that. So currently, if I see, you have said that 60% or above. If I see the run rate, we are now only clocking roughly INR 900-1,000 crores of revenue. Why I see that is like decline of guidance or margin also, it is mentioned that it is 19%, and when you scale up the revenue, I think the margin should go up gradually more since we are a totally SaaS-based product. So can you throw light on these three things? Thanks. Yeah. So I was just writing down the questions so that I address each one of them. Your first question on what does the organic growth opportunity look like? So I want to start by saying something that I said in the last quarterly earnings call as well, and sort of reinforce that we are absolutely committed to doubling the revenue from here in the next three years, which is sort of a CAGR of 26%. My overall sense is that our organic growth will continue to be sort of north of 20%, between 20%-25%, and, you know, the balance would be, you know, we run a programmatic M&A program, and we continue to look at M&A opportunities, and we have a very, very robust pipeline as well. But from an organic perspective, the way we think about our business is really, you know, there are three levers for growth organically. So we have mature products that we continue to penetrate. There is a very, very large addressable opportunity. These are mature products, have very, very healthy EBITDA margins, and we continue to penetrate them. These are all the existing products that you see, you know, in the areas of SaaS distribution and MarTech. The second category of products, I classify them as sort of teenagers. These are products that, you know, we've invested in. You know, I talked about at the time of the IPO, about all the investments we were making through RG Labs, and now it's been a couple of years, they have matured, they're revenue generating and, you know, hopefully we will be hitting at some point, a tipping point from which we can see a hockey stick effect. So I believe that we have the first profit using that, with one or two of the new products that we have, including RevAI and the integrated RevMax platform. And, you know, the third category is, you know, really what, what I call babies. You know, these are products that are at an infant stage. They are pre-revenue, but they burn a lot of cash. And, these are experiments that as a company, we continue to do. Some will, some will work out, some babies will grow into teenagers, but some will have a terminal effect. So, as in things that focus on tech, it's very important that we continue to focus on that. So our assumptions are largely on growth, organic growth from our mature products. But I do feel like, you know, there will be one or two products in that major category that will grow into a dozen over this next period. The second question was around how do we ensure that the senior management team has a skin in the game? So we already have a SARs program where, you know, for, as sort of the stock price goes up, you know, there is rewards for the senior management team to participate in that upside. You know, they are about 100 people out of the 800 people that participate in the SARs program. Secondly, what we are also doing now is we recently got an approval for the ESOP trust. So the goal is that, you know, we will also now start providing stock to senior employees, and we're working on internal modalities on how we do that. But that creates another incentive for senior management team to participate in the upside of the company. So far, it, you know, it's really working very, very well. As was evident in the attrition numbers that I pointed out, the industry is the product industry, product fit industry is usually averaging around 20% attrition, but we are now at about 13%. And this is in addition to other HR programs that we run as well. Your third question was a question around the existing numbers that we have, and the opportunity to continue to, basically, I think you mentioned the point that, look, we're trending towards INR 900-950 crore to INR 1,000 crore, and margins are already at 19%. How come the division in upside is not more? Look, I think, as you've noticed, the performance is already exceeding what we had guided for two quarters ago, and we've actually funded that guidance now, given the performance that we are seeing. We want to continue to, you know, promise and over-deliver on that promise, and that's the hope. But your question on the margins, I think, you know, we are in very early stages of the large opportunity that exists in, in the travel industry. And again, a metric I've talked about, you know, it's a $2.35 billion industry with almost close to $100 billion spent on tech, travel, and hospitality. So we are still a very, very small company, and there is a large addressable market that we need to, you know, focus on and, and grow the company. So we are actually quite ahead of schedule in terms of the margin profile that we wanted to get to. So if you look at our LTV to CAC, it's very efficient and, you know, I was hoping you would ask me the question that, why aren't you investing more in sales given the LTV to CAC, right? So even our customer acquisition cost is also so efficient, and with all the different programs that we are running, I see a much larger opportunity to continue to reinvest in the business. And we don't wanna—I mean, when I talked about all the three different categories, the babies, teenagers, and adults, so all our mature product lines are actually, in fact, north of 30% margin, and we can turn them on very, very easily. But we don't really wanna do that at the cost of growing the company. Absolutely not. I mean, we see the opportunity, and we wanna capitalize on it. And look, this is gonna go through investment cycles when we, you know... I'm trying to build this company for, you know, getting to, ultimately getting to $1 billion. So, you know, whenever we see the opportunity to invest more and scale up, you know, we will go through those investment cycles. We see the opportunities where we want to invest more. So, at this point, I would say we are extremely comfortable with the margin profile that we have attained. And as I have indicated in the last quarterly call, pretty much attainable in the three-year time horizon that we can get to that, close to that 25% number. Okay, that sounds good. Bhanu, last, just to follow up this one, you said the second category, right? The first one is mature and the second one. So when that- Yeah. the second one, since we have been working on for past 3 years or 2 years, right? So- That's correct. It will come mature. I just wanted to understand the life cycle of this product. Anyway, yeah. I would say that, you know, we're increasing revenue, and the products are growing extremely fast, but the revenue base is small. So even if I told you each of these new products are growing at 100% year-on-year revenue, the base is small, and given the size of the company is overall now scaled quite significantly, for it to create a meaningful impact is at least a few quarters away, where you can see, you know, a meaningful impact on our overall top line and bottom line. But as I mentioned earlier, I feel very, very comfortable with our mature products that I call it as continuing to give us that 20%-25% growth, and I see this actually as a bonus. So we are at it, but, if the company size goes from, you know, from two years ago, if I told you that, you know, we do INR 30 crores, it, it would still be meaningful, right? Because we were at INR 300 crores. Now, we're closing in at INR 1,000 crores. INR 30 crores is neither interesting for you nor for me to talk about. So I do think, as we get scale, as we reach the tipping point, you know, these, these teenager products, you know, would be the future seeds. I mean, it's the seeds of growth that we have sown, that it will ultimately do create that meaningful impact for us. Great. Great. Thanks, Bhanu. Thanks for that. I will come back in the queue. Thank you very much. Ladies and gentlemen, in order to ensure that the management will be able to address the questions from all participants in the conference call, please limit your questions to two per participant. Should you have any follow-up question, please rejoin the queue. The next question is from the line of Karan Uppal from PhillipCapital India. Please go ahead. Yeah, thanks for the opportunity, and congratulations on a strong set of numbers yet again. So two questions from my side. Firstly, on Adara, so how has Adara performed in Q2? Last quarter, you mentioned that the revenue was around $8 million. So if you can share what is the revenue run rate this quarter? And ex of Adara, how is the growth in the MarTech segment? So that's question number one. Second question is on distribution. So why is distribution revenue steady when travel sector is doing so well? Is it due to the discounts you are giving to some large hotel chains, or maybe you are losing market share to competitors? So if you can explain the disconnect between distribution and the strong travel demand. Yeah. Bhanu, do you want to take that question? Yeah, yeah. I'm sorry, I was speaking on mute. I'm sorry. So, yeah. So the first question was around Adara. I think Adara is growing, you know, around, it registered around 57% growth in H1 and 81% in Q2. So it is incrementally growing, sequentially growing and showing all signs of an excellent year. And it's now crossed around $10 million quarterly revenue mark, which was around $8 million-$9 million last quarter. So, that's on Adara. On next question was on distribution. Yes, the distribution revenue is flat this quarter, primarily because one of the large OTAs, which are connected to us, is not performing well from their perspective. So the book, number of bookings are not great, but at the same time, good news is that we had, one, one of the large, OTA connecting to GDS, last year, and that has started to monetize from this month. The benefits have not been seen in H one, but from Q three and Q four, you would see a uptick because of that. And it is the biggest contract ever won in RateGain. So we should see some good uptick in Q three and Q four. Okay. So for the full year, can we expect Adara to grow maybe 30%-35%? Yeah, Adara will grow around 45%. Okay, great, and all the best for full year. Thank you. Thank you so much. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead. Hello, am I audible? Yes, you're audible, sir. Yeah, thank you very much, sir, for the opportunity and, and many, many congratulations for the extremely good set of numbers. So first up, I just a few clarification on the comments that you already made. You mentioned that 25% is an organic growth, right? So, I mean, and the balance will be through M&A. So overall, what percentage growth you expect from M&A as well? I mean, would it be 10%-15% on a yearly basis, as you mentioned, they have a good pipeline, right, of M&A activities? Yes. So, you know, it's very hard to, like, put a number on, on, the inorganic growth, because, you know, we're looking at companies that are different sizes, so it's hard to comment. But even if we were to, you know, sort of take, conservative numbers in terms of, the size of companies that we undertake, given the past performance, you know, that's why if you sort of do the math, you know, this goal of coming to doubling the revenue in the next three years is basically a CAGR of 26%. So we think that organically we can grow between 20%-25%, and the balance will be, inorganic. And, you know, it's also important to, look at how disciplined we've been about M&A. So if I take you back to 2015, when we raised our first round of private equity money, and it was for the purpose of M&A, we didn't actually acquire any company for the first three years. So you know, it's not going to be a straight line, for the next three years. But it, it's very much possible that we may do one or two deals, within the next year. Or it could be that, you know, it's postponed to the second year. It, it really all depends on, the value that we get these deals at, because we've been fiscally very prudent about what we pay and we are patient, strategic buyers. So it's hard to, you know, put down a number, but what basis, whatever past, or at least, you know, over the last three, four years and the core acquisitions that we've done, we've given some, you know, we've taken some conservative numbers on what that inorganic growth looks like. Yeah. So, and you mentioned doubling revenue in two years, right? No, 3 years. Three years. So, that effectively- Yeah. means 25% CAGR. I mean, that, that's organic, right? No. So it's 26% is what it is, and that does account for inorganic as well. Like I said, we've taken sort of like conservative numbers on what inorganic growth will add to our revenue growth. Okay. Okay, fair enough. I understood. And, and, and my second clarification on your margins, I mean, we do have an aspirational margin of 25%, right? In the medium term. That's what you mentioned, right, in one of the comments earlier? Yeah. So like I said, you know, at a scale of, let's say, INR 2,000 crore, I do believe that we will be at a 25% margin, despite, you know, us wanting to continue to invest in R&D and scale up. Because from here on, on a lot of our mature products, I continue to see, you know, the operating leverage play out. So, yeah, so we do feel comfortable. But like I said, we've been exceeding our margin guidance as we have listed, and I'm very comfortable with where we are. And, you know, we'll get there in three years, but I don't want to get there at the speed we are expanding margins and, you know, continuing to actually accelerate our investments. Correct. Correct. So at a 2000 revenue scale is what we might aspire for such kind of margins as well, right? That, that is correct. My last question is on your, I mean, current global situation. The current global situation, do we see any kind of impact on the demand side or on the client side, or any reservation, I mean, how is the situation right now? Yeah. So look, clearly we are seeing some level of impact in the Middle East. You know, the conversations that we are having with customers is slowing down, because of the situation in Israel and Palestine. But overall, you know, so far, I mean, this conflict started on the seventh of October, but we've not seen any other impact on the overall business, either in the U.S. In fact, I'm sure you've seen the GDP numbers that came out. Similarly, on the travel numbers also, we are seeing, you know, pretty robust demand. So although we have seen some impact in the Middle East area, and it is, you know, it is very, very small, the business for us today. So on the overall numbers, it's a marginal impact. But I would say that Middle East was an area that we really wanted to focus and grow in, given all the investments Saudi Arabia is making in trying to actually become bigger than even UAE. So that's obviously on a pause, but only in the grand scheme of things, you know, it's not impacting our numbers. Okay. So overall, we are not seeing much impact, I mean. That, that is correct. That's it from my side, sir. I think, thank you so much. All the very best to you. Thank you. Thank you so much. The next question is from the line of Ritik Dolsiyan from Concept Investwell. Please go ahead. Hello. Yeah, hi, am I audible? Yes, you are. Yeah. So I have two questions. So first is, what as a company we are doing differently, leading to such a high LTV to CAC? Because, you know, the average of SaaS company is far lesser than your company. So, like, I want to understand what we are really doing differently, and where do you see this number heading in, you know, in, let's say, two, three years down the line? So that is my first question. Second, I'll ask after you have answered the first question. Yeah. So, so look, I can talk about, you know, what we are doing and how our sales structure is and how we go to market. So, basically, two, you know, broadly speaking, there are a couple of segments that we go after. One is, you know, the enterprise and mid-market, and the other is sort of, the long tail. And if you, look at our business, predominantly, we're heavily concentrated in the mid-market and the enterprise segment. And we effectively go to market by utilizing our global center of excellence in marketing based in India. So while the enterprise team is actually operating in each of its respective regions, there's a lot of ammunition and support that is provided by the COEs of marketing based out of India. So, effectively, we are able to manage our, you know, marketing costs. But in terms of, you know, our enterprise strengths are local in the market. The other thing that is really, really powerful in the RateGain platform, that's something that I've talked about in the past and we haven't fully leveraged it, is as we acquire more companies and capabilities, there is a huge bunch of overlap in terms of the commonality of customers that we have. And as a result of which, it creates tremendous opportunity, go to the customer and say, "Look, we are doing already these things with you. Now we have this interoperable platform where we can become the one-stop shop," you know, which helps us increase the size of share of wallet with each of these customers. So, you know, I don't see your other question about, you know, do I see the LTV to CAC changing quite significantly? No, because we will continue to be focused on this mid-market and enterprise market, and I do not believe that we have fully leveraged the platform of cross-selling and upselling yet. You know, the work is underway, and I do not see these numbers changing significantly over a period of time. Okay. Thank you. And my second question is, so like we have good amount of cash and investment on our balance sheet, right? Yet we are going for QIP. So I just want to know, do we have any big M&A in pipeline or in, you know, in line for which we need such huge amount of cash? So I don't understand the need for QIP right now. So if you can explain on that part. So that was my last question. ... Yeah, you're right. I mean, we are, we're at INR 425 crore-INR 450 crore now, of cash on the balance sheet. And as you saw, in the first half, we generated INR 76 crore. So it's a valid question. And, as we've been saying that, you know, the goal is to actually build a war chest, and we do have, significant opportunities, in front of us from an M&A perspective. And we do believe that, you know, we need to be ready, that, you know, because when, when opportunity knocks at your door, you need to be able to respond very, very quickly. And, thus, we believe we need to have this war chest to be able to execute on some of these deals to capitalize at the right price for us. Okay, thank you so much, and have all the best for your future endeavors. Thank you. Thank you. Thank you. The next question is from the line of Anmol Garg from DAM Capital. Please go ahead. Yeah, hi. Thanks for the opportunity, and congratulations on strong set of numbers. Sir, I have just one question. Particularly, how should you think- Mr. Anmol, can you use a handset in case if you're using the loudspeaker? Because there is a lot of echo. Yeah. Am I audible now? Perfect. Yeah. So, lastly, wanted to understand that how should we think about the new client additions going ahead? So, going ahead from cross-selling, will it be driven by additions towards smaller hotel chains, or how should we think about ARPU, going ahead as well? Yeah. So like I said, you know, the additions will continue to be, you know, in the mid-market and enterprise segment. And I do see the ARPU actually going up as we continue to cross-sell and upsell to those mid-market accounts. So while we will continue to see the addition, I think the larger focus for us is continue to penetrate the accounts that we have. Because one of the comments I mentioned earlier is, you know, when just three, four years ago, just prior to COVID, you know, we were really a one, two-product company, and now we have 13 products, and we've just begun to, you know, realize the value of being able to leverage our platform. And that continues to be our area of focus for us. And that I do believe that the ARPU will continue to go up. Yeah. So we think that cross-sell would be enough to increase our ARPU, apart from the smaller client additions that will go ahead with? I'm sorry, can you repeat the question? Would the cross-sell be enough for? So what I'm asking is that you think that cross-sell opportunities, which particularly can increase our ARPU, will be enough to offset the new client additions, which would be largely smaller hotel chains, and will give you a lesser ARPU in the initial start at least? I think maybe you've misunderstood. I do not see... It's not like we have, you know, pretty much capitalized on every big hotel chain or big enterprise. And remember, you know, we are now have diversified our customer segments, right? We've gone across to airlines and rental companies and destination management companies as a result of the acquisition that we did of Adara, which is predominantly based in the U.S., the DMOs. But now we have DMOs all across the world that we can add. Airlines is something that's new for us. There's a bunch of big new airlines that we are pursuing, and we have RFPs. And similarly, you know, even the hotel chain segment, we haven't penetrated every hotel chain. So our, you know, our focus will continue to be the mid-market and the enterprise chain. I don't see any new deals that we sign, you know, going significantly down either. We are continuing to see that we sign, you know, larger deals. Sure, understood. Thanks. Thanks for answering the question. Thank you so much. The next question is from the line of Rohan Nagpal from Helios Capital India. Please go ahead. Hi. Thanks for the opportunity. I have a couple of questions on this. The first, I'll just ask them sequentially. So the first one is- Rohan, your line is a bit... It's not clear. Yeah, one second. Can you try the handset, please? Is this better? Yeah. Yeah. So I think on recently information I was given out in this call, Adara revenue this quarter was about $10 million -$10.5 million, and last quarter it was about INR 66 crore. So if I adjust for Adara revenue, on organic basis, your revenue is flat, Q-on-Q. So are there any, like, so there clearly seem to be some headwinds that the organic business is facing. So could you just shed some light on that? On the organic, Tanmay, do you want to take that? Because I'm surprised with the comment. I mean, we are- Sure. Sure. Yeah. Because sequentially, I mean... Yeah, okay, go on. ... Yeah, I mean, I talked about distribution segment, right? Because, you know, we talked about distribution segment, where one of the bigger OTAs is not performing well. But we are, you know, as I said, we have started monetizing one of the very big contracts, so we'll see it uptick in Q3 and Q4. On that segment, on organic side, we had to actually, you know, defer a few revenues because one of the large renewals could not get signed by 30th of September. But I think that's now is being signed as we speak, so we should see that uptick in again, Q3 and Q4. That is obviously another 3%-4% for that, which we kind of missed because we could not, you know, agree to a price increase with them. On the market side, as I said, like, excluding Adara, we have got Myhotelshop, which is the paid digital media. That is going pretty well. I think that has grown around 46% in Q2, and sequentially it also, it has grown around 7%. On the social side, as we have been selling that, telling that we, we still are not out of the woods there. I think that's, that's slacked quarter-over-quarter at this point of time, because we wanted to make it, you know, profitable and we let go a few loss-making customers. And we are, you know, we are at our endeavor to, to make it, you know, a 15% EBITDA margin going forward. So from that perspective, we'll see growth challenges in that business. Hope I answered your question. Yeah, that's helpful. Thanks for the color over there. And then my other question was that, so one thing that I noticed is that this, in the first half of this year, transaction revenue accounted for 40.8% of your overall revenue. And since it was 37% in Q1, the share in Q2 was even higher. So if I look at this on a year-on-year basis, your transaction revenue has gone from INR 29 crore in Q2 of FY 2023 to INR 104 crore in Q2 of FY 2024. So now, with a company that derives that much more money from transactions, you're fundamentally a different business, right? Earlier it was a recurring revenue business. Now there's a much greater emphasis on transaction revenue going out quarter after quarter, fighting for revenue, making sure that it gets booked. What exactly is going on there? Could you provide some color? That's primarily because of Adara growth. Adara, the paid digital media, is primarily on a transaction model, on a per impression model. Look, I think, from a contractual perspective, it's you know, most of our transaction revenue across RateGain are kind of annual renewal contracts, okay? It's mostly the transaction, you know, but they're billed on a transaction basis. Yeah, I mean, that way, actually, I would say we have a very- Let me, let me also comment. So, Rohan, you know, like, if you actually look at the numbers, a significant amount of our growth, like, Tanmay mentioned, came from the Adara, paid digital media business. And, you know, as you know, that the company was really suffering, and we had adopted, models just to survive. And one of those models was actually this transaction model that, that bring in the money however we can. So, as we get into, subsequently there of owning the asset, the goal is to move this more into what we call evergreen contract or subscription types of contracts with minimal commitment. So I do see that happening, but not immediately, because, you know, we, as you have noticed, we've been very, very deliberate, and slow in making any, big changes. I think our strategy of being very deliberate in the changes we want to make in the business has paid off dividends. And similarly, we don't want to now upset what is working, but eventually we do want to, you know, secure and go more towards our, our also preferred model of subscription. And I do think, you know, that will happen, but it will not happen anytime, you know, like in this quarter. We will begin-- We've already begun to have those conversations because a lot of the customers there are common, and they understand the, you know, the purchase model that through which we operate. As we become more important to them and we can also establish that we are a company, a global company that has been around and will be around, it's also much easier to have that conversation to get them to commit, you know, to an annual subscription minimum as well. So if I understand you correctly, the transaction model was adopted by Adara as a survival tactic, but over a period of time, not immediately, but over the medium term, you expect to transition that transaction revenue into a hybrid sort of model? Yes, that is correct. Okay. And last, Mr. Rohan Nagpal, may we request you to return to the queue for the follow-up? Oh, sure, sure, sure. ... Thank you. The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead. Yeah, thanks for the opportunity. Hope my line is audible. Yes, you're audible, sir. Yeah. Yes, sir. So, basically, just to understand to you, firstly, from a seasonality point of view, based on your guidance, is it like now the seasonality post Adara kicking with your share of the revenue? Yeah, Rahul, I can't hear you. Can you try the handset, please? Sorry. Yeah. Yes. Is it any better? Yeah, yeah, much better. Yeah, sorry for that. So I was saying, with Adara now fully integrated into our business, is there a very different way we have to see the seasonality for our business? And in general, what are your sense from a pure market perspective that can things change materially faster? Because, irrespective of the economic behavior, the spend behavior on travel continues to be much better that way. Yeah. So look, your first question about seasonality, no, I don't see that changing. So we will—you will continue to see that our H2 is stronger than H1. And, you know, going into Q3 and Q4, they usually are stronger quarters and, we see some of the similar, trend in Adara as well. Now, like I said, I think I tried to address this question earlier as well in terms of the geopolitical risk that we see around us. We've seen some level of impact. It's hard for me to say, you know, what this does this to, does this, you know, escalate to an all-out, you know, Middle East war or, or, or three, you know, it's, it's, it's difficult to comment on that, but I can tell you what we see today. Mm-hmm. Like I said, we went through, you know, even in the Q3, you know, end of October, we continue to see good traction on our numbers, both revenue numbers as well as sales numbers. We've seen some impact in Middle East, but like I said, that part of our business is very small. Although, you know, we did intend to invest quite significantly given all the activity we were seeing in Middle East, also in Saudi Arabia. But obviously that, you know, will have to be postponed now. But in terms of impact to our business, it's, you know, it's non-material at this point. But it's hard to comment on, you know, how the problem escalates or de-escalates in the Middle East. But I can, I can tell you in terms of the overall activity, especially in North America, you know, we are not seeing any letdown. We, we continue to see quite robust growth. And also, please remember, the function of growth at RateGain is, you know, as a result of two things. One is the growth of the overall industry, but also, you know, us gaining market share. And the fact that we are the only company that provides an end-to-end platform is enabling us to also gain market share and get much, much deeper with our clients. So while the industry, you know, growth is, if you look at the numbers now, it's, it's poised to grow to $2.35 trillion, which is about 7.5% either from now up until 2030. But I do believe, you know, we will, we will continue to grow much, much faster than that. Okay. Okay, great. I appreciated the color. Thank you. Thank you. The next question is from the line of Miten Shah. Please go ahead. Hello, am I audible? Yes, sir, you are audible. Yeah. So I would just like to know, you know, I've been seeing this tagline of inception of IPO, like we served, you know, top 23 of the 30 hotel chains of the world and the top 25 out of 30 of online travel agents of the world. Why is this number not improving? Is it that the balance hotel chains and OTAs are looking in Antarctica? That's the first question. I think it's a great point. You know, we need to come back to you. My first suspicion is that it will potentially improve, especially on the hotel chain side, and possibly also on the OTA. On the car rentals, we already work with all the car rental companies. On the airline side also, the number is far more significant than what we had in the past. So, thanks for pointing that out. Maybe we, in the next call that we have, you should see that tagline improve. Thank you. Thank you. And so the subsequent question, subsequent question after this would be, can any new verticals be added, you know, if like hotel chains, online travel agents, we have DMOs. Can any new verticals can be added in the future? ... Yeah, so we've added destination management companies. And in terms of additional customer segment, you know, one area that we float with continuously is the vacation rental market. But there isn't, you know, more focus on it as of this point, but that, as you know, is a massive, massive industry and it's an industry and a segment that is of interest to us, but we're just trying to execute. I mean, there's already a lot for us to execute on, so focus is to continue to deliver on the segments that we are focusing on. But, but yes, there are some one or two adjacent segments that can be very, very interesting for us. Vacation rentals is one. The other is tours and activities, which is also a very high-growth area in the travel industry. Fundamentally, everything that we do can be applied to those segments as well. But like I said, you know, we want to continue to focus on the key market segments that we focus on and, you know, continue to gain market share before we begin to venture out. I think the easier way for us to get into these segments would actually be, you know, M&A, so that we're not really starting from scratch, but we have, like, a customer base. You know, we do evaluate those opportunities from time to time as well. All right. Thanks. Thanks a lot for the opportunity and once again, congratulations for great set of numbers. Thank you. Thank, thank you. Well, we would take that as our last question. I would now like to hand the conference over to Mr. Bhanu Chopra for closing comments. Yes, thank you everyone for taking the time out for this call today. We appreciate everybody's support. Thank you. Thank you very much. On behalf of RateGain Travel Technologies Limited, that concludes this conference. 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