AERT - Earnings call 3 2024 | Aeries Technology, Inc

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Operator

Good day, and welcome to the Aeries Technology Fiscal Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Ryan Gardella. Please go ahead.

Ryan Gardella

Good afternoon, and welcome to Aeries Technology's Third Fiscal Quarter 2024 Earnings Call.

Joining us from the company is Chief Executive Officer and Co-Founder of Aeries, Sudhir Panikassery; Chief Financial Officer, Rajeev Nair; and Chief Investment Officer, Daniel Webb. with questions. and begin the then will for participants call scripted we'll remarks, open Today's

reminder, conference nature. expressions as a and as expectations, forward-looking call As believe, this identify be are actual which events about may expect materially. statements. are intended and results future estimate may to forward-looking Words as and similar in deemed Statements differ this call on forward-looking contains such statements well as

accordance These to company, financial to statements a Aeries financial be measures measures. reflect to directly presented call. Today's from please considered reconciliations of in the list in measures in release available to found or revise materials circumstances will addition the risks isolation business financial For non-GAAP and undertakes and to webcast G. releases. any include to forward-looking over refer inherent from company's other press website. And to, of the the the for the that non-GAAP turn filings full obligation GAAP not When with company's to calculated and required, substitute financial measures occur or after meaning that, non-GAAP on SEC should events a can or measures or with the the Sudhir. earnings the update GAAP and call Regulation call as all comparable I'd in like SEC of be most earnings no

Sudhir Panikassery

thank you, operator, and joining here Thank for you, us again. everyone,

while off highlights Officer, to our you was deployments Daniel name Today, financial of customer Investment and outlook, that for would the and Aeries. CEO know, with some the million many report adjusted I year line new this happy and our passing commentary Chief with details EBITDA outlook. end As in before Webb, our exited $X.X I'm of walk pleased revenue to our Co-Founder quarter's already million is on to it our high-level Sudhir $XX.X and my result the calendar of of to quarter. I'm some Panikassery, you in like of through

were growth representing Aeries new XX% third our all clients fiscal which quarter, revenues driven For of $XX.X by entering the platform. was million, year-over-year,

For the our representing X $XX.X fiscal first year. was XX% year, million, first a fiscal the of quarters revenue increase over quarters prior X our of

Our exceeded intended bookings professionals Aeries out during as to spend portfolio excellence within internal the in I'm of America XXX companies professionally the and centers in a near fiscal private importance order from sponsors popularity month driven better Mexico, that in in shoring in a platform year-to-date center shoring growth representing by equity retaining American time increasing new professionals growth of us we we combination we our and of coverage new India service and significantly working Aeries And Mexico XX/X refers clients reducing North the support is and with and our was quarter allow approximately in view customers fact, of initiative in with costs. market, Mexico growing, strong Clearly, high-priority and also combination same seeing zones. currently With to which while -- presence to announce quarter are for clients. a as are well already momentum in strongest exactly we new to of client have executing pleased fiscal have as additional existing a year-to-date. strategy on the current maintain as is our the Aeries strategy opened building dual the among quarter, their to called a will or that our such while revenue excellence shoring. Dual forecast Mexico locations over over left remains our go. North XX% in of target to acquisition. our

future. I'm will for near-shoring Aeries to of during of build to that to our in trend clients in and spaces. be a continue the this and X primarily driver pleased separate additional quarter, will Bangalore digital optimization business the centers continue opened representing professionals in for We excellence business X clients our the process also capabilities believe out announce we transformation

has I work Rajeev details the for our Webb, our analytics, digital of effect of our Daniel As like speaks that to over AI professionals to margins will been Aeries the transformation. mention, on the cutting-edge Daniel? discuss Investment client deployments. the work some new nature mix new customers that, turn and gross to have would clients. And of performing to trending and towards positive are which with transformative Chief a call Officer,

Daniel Webb

can only local Thanks, Sudhir, the that wanted this to the for talent bring cross-industry our the with talk cost in world-class is forward call. investment for deployments. we announced company being that everyone In streamline Aerie's and we while tax innovations, a partnered leverage and to I the providing we of scale, years leverage optimization partnered digital transformation a thanks from selling customer and technology of a leading-edge practices world-class some and scale, wins acquisition are insight look leading bring and Aeries of and with shore this working client to management efficiencies on points, simplifying to new come. In that come the talent bring. collaboration improved Bangalore, that talent solutions with client, near about The flexibility professionals to will operations. and global and and efficiency large provider Mexico, to long-term a best again a we recently market process we provider with to was key and spaces. This

near-shoring business to is employed and being fill gaps our combined part the a across shoring strategy by mentioned, prospects of zone clients functions. Sudhir dual As time in critical

offerings revenue approximately year Our calendar year grew in set. public in resulted We have our comparable differentiated peer digital X% service calendar growth XXXX industry-leading transformation tech-enabled XXXX. and XX% in versus for

calendar XXXX year XXXX. comparable XX% accelerate, to to expect growth year XX% the highest we to in and compared grow calendar and calendar continues XXXX. XX% company set and growth revenue expected is to between grow The our peer Our year approximately in

and expansion We within year customers to driver expect calendar be in of continue our word current private biggest to equity XXXX. of our growth mouth

of targets believe in continues Lastly, inorganic acquisition more Nair, view of this be growth, going terms and I'd significant to of turn will over driver a Rajeev evaluate to detailed Rajeev? like now the opportunistically Aeries to CFO, for growth forward. And accelerated financials. it

Rajeev Gopala Nair

through numbers Thank our I walk detail. will you, Daniel. in quarter more third now

the a increase logos number $X.X to was and from remind down entering increase certain $X.X the that existing clients decrease million million to new small ramp Our was this revenue which want be flows clients quarter quarter-to-quarter. million, clear XX% of considered an fluctuations of investors new was the were platform. normal any client that of can due offsetting this and Aeries We ebbs with this to total normal down. I revenues was The a for $XX.X year-over-year. Slightly want with third be to in increase a did existing period not projects. ramp due clients lose from in

representing as XX, to growth For This clients. our the X the of to ended additional clients year-over-year. mix due months as Aeries was coming revenues XX% well were $XX.X platform with new a spend December existing million,

same margin million, was revenue we higher of of our was a analytics. XX% was these the of and for in an XX% secular transformation more the transformation, from mix shift XXX% result third more towards largely towards and period services. versus resulted of increase which generally we shift mix approximately analytics are year-over-year digital expect the AI and $X quarter a profit which XXXX. This gross gross a services, Our in And We solutions. digital AI are continue gross believe shift to to margin seeing in towards

connection an of This quarter for XXX% was a related allowance in year-over-year a to receivables. an which a public million, in customer due our transition company with well legal successful was $X.X a and expenses million $X.X were increase largely million million. from Our $X.X services as SG&A professional increase charge to as to the third $X in

the resulted $XXX,XXX same in XXXX. Taken an compared $XXX,XXX of of the together, increase in period XXX% to operating quarter, which this income of was in third

For the period for approximately XX, in was the million XXX% an on $X $X.X million, we income which December X XXXX. generated same of months ended up operating from

XXXX a $X.X line was release, million same As quarter $XX.X EBITDA change with there related of purchase of was a forward of versus the the which X% in the agreement resulted our loss press GAAP the Sudhir business noted. less decrease XXXX. Adjusted combination. a in This our to million fair we in a year-over-year, of for we net expectations than in loss of quarter third as of third closing noncash $XX.X charge net value the in was mentioned million, of $XXX,XXX upon issued for period

million. debt in cash million The On we ending the XX, long-term the sheet, $X.X $X.X XXXX. total December had balance for period was

as XXXX. reiterate in I year wanted our for press calendar our mentioned Finally, release, to the outlook

between a to expecting that, adjusted million, for ask total questions. line operator million And and an would million. Thank $XXX are for with EBITDA like between the open I you $XX million $XX We all and of to of the Operator? revenue and joining. $XX

Operator

a MKM [Operator We Jeff have Instructions] question ROTH Capital. from with Martin

Jeff Martin

bring and calendar I XX clients business many that you expecting sounds of shift did with a now are firms doing these it XXXX. also many then more additions new client How clients that digital touch on, months next mix wanted continued you on equity you you're here. quarters you private consulting in several weren't during the to And ago? doing towards the revenue of how brought like on,

Sudhir Panikassery

Yes.

of unique engagement Daniel according over that is a before you in terms the to to this plan it of engagement give over base moving of overview fundamental to under transformation transformation services additional detail. of I our model broad have. quite offering we describe services a in So to The hand

So that is one.

ones names. them around respect to this started deal portfolio second equity to with the them larger of to all companies, much the past. are in into further. us their have And of to in of good which existing over with velocity stakeholders compared we a confidence working expanding us size are that the are The right the gives and of working been XX Each we that that marquee private as with you the explain acceleration. Daniel, now, is have

Daniel Webb

Yes.

accelerate. year are So And clients. XXXX, our was as into for to far going continuing that calendar clients, as new XXXX, XX seeing we're there new which best about

we'll track, if So on have -- stay more we we expect year that. than this we'll

private are will And so are within continue growth The private the well firms strategy equity additional in already as be as private those that still equity to add to on those firms and there. equity firms. --

And stop was else anything and there that there's asked. so see if I'll

Jeff Martin

was of how and BPM calendar third much I can mix maybe you just in know -- business or anticipate digital Yes, you 'XX? give the quarter in shifting versus 'XX the in I if don't calendar that

Sudhir Panikassery

So go I ahead, -- think go yes, ahead.

Rajeev Gopala Nair

Yes.

that just we shift provide -- a to say to clients. exact customers robotic and existing are language digital seeing process the going own you clearly efforts. of -- are we flavor, existing generative amounts So we but there have are which offering the don't processing, transformation an was offerings, I their typically breakdown which To a a our we them X is on give started AI, customers and natural automation supporting AI where towards

the and clearly are gross we higher the seeing QX. we in So in margins, which -- reported reflected shift which is also

Jeff Martin

business Okay. And term, displaces today obviously, a as of intermediate lines, maybe if I some maybe AI think those short the term? or view near the doing an what do processes those you're then mean AI threat in that ultimately term clients. along longer you opportunity, curious for and you term

Sudhir Panikassery

And functions, AI with with around the certain them perspective, keep in on paying we clear on partnering clearly believe accelerate us a quarters. Rajeev, expanding. But that future opportunities system. resources. for are at tool respect analytics, respect of of the you this? that the business day, Yes. Jeff, And engine Very like our a in to a over with evolution very and the each we evolving all while direction have this tool. the reduce it as that AI, to that every internally practical the end, And areas the own customer anything as as broadly, end more the AI on adoption AI we -- the their and very need to and higher revenue transformation will of is elaborate from also believe are productivity view customers, we mix will do of technology taking and want enhancement within solutions strategies

Rajeev Gopala Nair

Yes, Sudhir. Thank you.

model want what services Sudhir large to example, And our strategy, to clear just in the they addition and And than U.S. customer for specific on a immediately, their to So Bangalore build team support undertake to their Mumbai the they a can have in that of or are so relationships. And customers when we one us now the own and customers, mentioned, scale embarking efficiently, doing say, which business. turn can in building language we in very long-standing up our industry the we AI the for their process, that's model. related well to process all rather

-- this example, are want cleaning you're building collecting also language the manpower -- do lot Now which for immediate the of it data, all and things, there's a lot like, and to and ingesting model, U.S. high-value a based engineer activities, data, associated when the And large of these needs the data, a doesn't in to work. do. a

and this we cost effectively of Bangalore doing work. So have in engineers kind our efficiently sitting

language and client information, model, large website collect python goes example, the For SEC the using into building. some our which is to scrape

shift of are have relationship. seeing kind we long-standing driver clearly customer. is in we our that a that primary a So The

proven now into have trust analytics. and customer us. are and converting capabilities we also AI-related the We the services our And that

Jeff Martin

And inflation the to like X Are labor wage And on years seeing has down? Great. trending? market year come in then how What's talent. versus a retention I been ago? the maybe or today availability wanted of you dive

Sudhir Panikassery

Daniel, do take you that? want to

Daniel Webb

Yes.

trending been has retention So positively.

So had X%, presentation now X%. down it's about I in our think overall, investor to we about

that, industry on own is. where ahead so that of the we're kind seeing is And well its of

and talent. that venture of more dollars think seen seeing -- And of software there when also need kind with was pool. there the getting just capital in away is there. new a We that play our talent trends the And in in easier so market a -- that difficult get for very venture talent significant more going is talent. But start-ups of that model industry became we're was lot now into good go time kind seeing we're on through lot a -- to for that differentiated development where a the we've overall,

building been we've out a quickly so amount building time. up customers able large in for teams out to excellence, of of scale And our quick handful a of centers

to it's -- get so in that much to And that, them. period we price, now talent right right easier get to years at ago, them and a relative X we're think the to where retain the and

Jeff Martin

Great. And last then one for me.

in strategy? recent past. you've your I this some sales give On made some you... what's in investment longer-term side, terms additional the and plan investment believe know sales for I resources What's that the other there's year [indiscernible] of adding to the things just wanted

Sudhir Panikassery

us -- relationships, with through have give effect. it our To peripherals, over basically decade what this engagement to worked model. far, across to of working And effort from as with led fast have so side and from as of put grown and that have of hand call little have a this in presentations broad period over and the so reaped of and the network has people very we clip the customer time. publicly on It's sales us forth the also, growth the over discussions who Past overview connections, equity years. a side, who with private in benefits we we so us multiple unique

that accelerating businesses on a been companies. into and engagement of put very getting worked force with X in with has focus to have good of is and X up we relationships midsized speak sales us our benefits model which clients marketing elements And are as to who today, on have today, strong One, set to ecosystem. these place. that, As our we a focusing company brought equity we we referenceable and team and U.S. a have is And disruptive second pretty have base -- portfolio leveraging a leveraging streams. take as the the that multiple unique private

strategy terms our we of marketing growth. to sales, In team, the that's organically accelerate adopted

In forward, hand terms over I of progress the Daniel, path and you. it to

Daniel Webb

Sorry.

cover question So go to that the he and guess, fill didn't left I'll I in then the and is whatever blanks. back

Rajeev Gopala Nair

can was for million. which last quarter, SG&A were expenses, from numbers is some On $X.X increase $X.X September around I an diff. the The million, give expense the sales which quarter

So growing as clearly And in increasing our we very Mexico more our team, our we investing have and in are rapidly. Asia the sales also will efforts and we well. in the are Pacific at U.S. look people sales added operations region

in of given significant a seeing making we are are there even growth in So more. we sales sales like the lot stress XX% to strategy, we past, the or and result the are investment terms a say, of like XX% to team in and which expect

Sudhir Panikassery

and think you. appreciate I Thank We for the Okay. there. we call can end joining, everyone

Rajeev Gopala Nair

Thanks Okay. everyone.

Operator

sorry, the has Thank -- is you for call presentation. now has The -- concluded. conference attending conference now today's connected now the

may disconnect. now You

Aeries Technology (AERT) 22 Feb 242024 Q3 Earnings call transcript