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Exotel Posts Flat Growth in FY24, But Losses Shrink by 61%

Exotel, a Bengaluru-based cloud telephony platform, reported a flat growth for the fiscal year ending March 2024. Despite stagnant revenue, the company made significant strides in improving its financial position, reducing losses by over 60%. This was largely due to strategic cost-cutting measures that focused on employee benefits and advertising expenses.

Modest Revenue Growth Amid Strategic Cost-Cutting

Exotel’s revenue from operations saw a modest increase of 5.7%, reaching Rs 444 crore in FY24, compared to Rs 420 crore in FY23, as per the company’s consolidated annual financial statements. However, its overall revenue, which includes Rs 16 crore from interest on deposits and investments, grew slightly to Rs 460 crore in FY24, up from Rs 447 crore in FY23.

While the growth in revenue was not explosive, the company’s ability to trim its costs played a crucial role in improving its bottom line. Despite the flat scale, Exotel managed to shrink its losses significantly, which is a testament to its improved operational efficiency.

Exotel Bengaluru cloud telephony

Diversified Business Model and International Reach

Exotel operates in the cloud-based voice and SMS contact center industry, offering businesses solutions to efficiently manage customer engagement. The company derives its revenue mainly from internet-enabled cloud communication services, along with income from software licensing, chatbot services, and the sales of products such as APIs, browser extensions, software development kits, and mobile applications.

While Exotel has not disclosed a detailed breakdown of its income sources, it’s worth noting that 14% of its business came from markets outside India, specifically Southeast Asia, the Middle East, and Africa in FY24. This international exposure helped diversify its revenue streams and could prove pivotal in the company’s future growth prospects.

Streamlining Costs for Better Financial Health

One of the key drivers behind Exotel’s narrowing losses was its ability to manage and reduce its expenses. The company’s cost of telephone and postage increased by 10.2% to Rs 195 crore in FY24. However, it successfully reduced employee benefits by 24%, bringing the total to Rs 186 crore in FY24, compared to Rs 245 crore in FY23. This cost reduction was achieved through a combination of workforce reductions and other operational efficiencies.

In FY24, Exotel laid off 15% of its workforce, which contributed to the reduction in employee-related expenses. Additionally, the company slashed its spending on advertising, legal services, payment gateways, travel, and IT, among other overheads. As a result, Exotel’s total expenditure decreased to Rs 499 crore in FY24, down from Rs 555 crore in FY23.

Losses Narrowed Significantly

Despite the modest growth in revenue, Exotel’s loss narrowed considerably. The company’s net loss shrank by 60.6%, from Rs 109 crore in FY23 to Rs 43 crore in FY24. This marks a significant improvement in its financial health, which is encouraging for both the company and its investors.

Exotel’s EBITDA losses also saw a decrease, standing at Rs 16 crore in FY24, down from a higher loss in the previous fiscal year. This improvement, combined with better cost management and an expanded global footprint, positions Exotel well for future growth, even as it continues to grapple with industry challenges.

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