Tanla Platforms Ltd

Dear Shareholders,

As I reflect on FY24, it is a year where Tanla has displayed its resilience and rebounded strongly after a challenging FY23. I will share my thoughts across three dimensions:

We delivered a strong revenue growth of 17% and all profitability metrics growing over 20%. I am a big believer in driving profitable growth I track profitability metrics more than revenues. Therefore, it is a source of great satisfaction that we surpassed the milestone of INR

1,000 Crores in gross profit and generated very strong free cash flows of over INR 400 Crores. Our gross margins improved by 194 basis points to 26.9%, while EBITDA improved by 111 basis points to 18.6%. Our EPS grew 23% YoY in the year.

Our financial performance also stands out in comparison with our global peers. Our revenue growth, profitability metrics (EBITDA/PAT), and efficiency metrics

(GM to EBITDA conversion) are benchmarks for the industry. We trail only on gross margin percentage with a leading global player, and we are addressing that through increasing our digital platforms business.

The bedrock of our financial performance is our discipline towards capital allocation. Out of the INR 590

Crores of operating cash flows generated in FY24, we invested INR 159 Crores towards capital expenditure (around building new platforms and modernizing existing platforms), INR 134 Crores as dividend payout, and INR 374 Crores towards strategic acquisitions.

We see a strong ROI on our investments – our investments in platforms are reflected in the new platforms we announced and deployed in FY24 like

Wisely ATP and Wisely MaaP. We closed our first commercial agreement with a bank on Wisely ATP. We launched our MaaP platform for Google RCS and signed an MoU with Vodafone Idea Business Services to deploy the MaaP platform in India.

Our track record of acquisitions continues to be stellar. When we announced the ValueFirst acquisition from Twilio, we had said that it was a slam dunk acquisition. In three quarters since the acquisition, I am happy that we integrated their India business very quickly and have been able to drive double-digit EBITDA (from mid-single digits pre-acquisition) resulting in an ROI of 20%+ on the acquisition payout based on exit run rate.

This acquisition has been EPS accretive from the first quarter post-acquisition, once again demonstrating our ability to create significant value through our strategic acquisitions.

The digital interaction space is evolving in a very interesting way. On one hand, enterprises are looking to enhance their quality of interactions with users, with a focus on ROI. We are seeing the expansion of channels – historically, it was only SMS but now OTT channels like Meta WhatsApp, Google RCS, and Truecaller are also gaining strong traction. On the other end of the spectrum, regulators are looking to protect users from scams, and spam, and provide data privacy and data business, and innovation. security. These are causing changing dynamics in the market. For example, we saw a significant shift of ILD business from SMS to OTT channels during the year. performance with

We see higher conversions for promotional messaging through RCS and WhatsApp – this is driving enterprises to shift promotional messages (around 35-40% of the market) to OTT channels, while SMS continues to be the preferred option for OTPs and transactional messaging.

Tanla is very uniquely positioned to address the changing industry dynamics due to our ability to work with the entire ecosystem – customers, partners, and regulators. While there is a lot of competition in the market, there is no competitor who addresses the entire ecosystem.

Tanla serves over 2,000 customers with 323 customers giving us revenues of more than INR 1 Crore a year. We have 21 customers who give us more than INR 50 Crores in revenue. We work with industry leaders across all segments.

We also have the deepest partnerships with OTT players. We are the exclusive partner for Truecaller. We are probably the largest partner of Google globally on RCS. On WhatsApp, we have scaled our revenues 3.4X in FY24 compared to FY23. 33% of new customers added during the year were on WhatsApp. In fact, we exited FY24 with OTT contributing 18% of our consolidated revenues, a significant leap from 4% in FY23.

To me personally, what is most unique about Tanla is that we are the only company in the CPaaS space that is focused on users. We have developed platforms to protect users from spam and scam by working closely with regulators.

Innovation is the core DNA of Tanla. We have built gigantic platforms, and our digital platform business demonstrates all the characteristics of a SaaS business.

We operate the business at very high profitability levels (~70% EBIT), a very predictable business (20%+ growth over the last four years), and monetizable at scale (commercial model includes revenue share or subscription fee per user per month).

We have a track record of building gigantic platforms. We are embedding Wise Albert, our Gen AI platform, in everything we do. For example, in Trubloq, our DLT platform, we have reduced the time in the registration process by 90%+ with Gen AI. Our innovation is reflected in the IP we create we have five granted patents for our flagship platform, Wisely. We have also filed nine provisional patent applications for new products and platforms, reflecting our dedication to advancing technology and setting industry standards.

We are entering FY25 with clear strategic focus areas – scaling our platform business, attaining leadership in the OTT space, and expanding globally. I am personally driving initiatives across these strategic focus areas, and I am very confident that we will make significant progress here.

Why am I confident? We demonstrated our investments in these strategic areas to 30+ CXOs of enterprises from India and overseas as well as global partners like Google, Meta, and Truecaller at our flagship event in Mobile World

Congress. We saw tremendous resonance with each of them. We have enterprises on our side, and we have partners on our side – with our innovation track record, we are very optimistic about the opportunity ahead.

FY24 was a year where we gained significant external validation.

We were named ‘Visionary' in the Gartner Magic Quadrant for CPaaS. The only reason why we were not leaders in the quadrant was due to our concentration in India. This is something I am proud of – we want to be leaders in the market that we operate in. As we look at geographical expansion, we will be technology-led, and our aim will be to lead in any market we enter.

We won the ‘growth partner of the year' award from Meta for driving the WhatsApp business. We were recognized as an ‘Industry Mover' in the S&P Global's 2024 Sustainability Yearbook, highlighting our focus on ESG. Perhaps the icing on the cake was London Business School's case study on Tanla's journey, a prestigious recognition that motivates us to continually push boundaries and solidify our position as a global SaaS leader.

I want to take this opportunity to express my gratitude to all our stakeholders for their unwavering support and contribution to our incredible journey. My team and I have rolled up our sleeves and are working tirelessly towards a better tomorrow. Together, we are shaping the future of digital communications and striving to make a lasting impact. Thank you all for being part of this remarkable journey.