Thank you, Faram. Good evening to all of you.

Welcome to Q4 FY '26 earnings call of IRIS RegTech Solutions Limited. The results and presentation have already been mailed to you, and you can also view it on our company's website.

In case anyone does not have the copy of press release or presentation or you're not marked in the mail, please do write to us, and we will be happy to send you the same. To take us through the results today and to answer your questions, we have the top management of IRIS RegTech Solutions Limited, represented by Mr.

K. Balachandran, Co-Founder, Whole-Time Director and CEO, and Ms.

Deepta Rangarajan, Co-Founder and Whole-Time Director, along with other management team members. We will start the call with brief overview of the quarter and year gone by, which will be then followed by the Q&A session.

Before we proceed, I would like to remind you that the discussion may contain certain forward-looking statements that may involve known or unknown risk or uncertainties and other factors. It may be viewed in conjunction with our business risk that could cause future results, performance, or achievements to differ significantly from what we have expressed or implied by such forward-looking statements.

Having said that, I will now hand over the call to Mr. K.

Balachandran. Over to you, sir.

Good afternoon and welcome to this IRIS fourth quarter earnings call. As usual, we are grateful for the time you are spending with us.

This time around, we advanced the call to 4:00 PM from our usual 5:00 PM slot. If that is inconvenient going forward, please let us know.

From IRIS side, we have Deepta, Thomas, and I attending this call, apart from our senior business leaders. We uploaded an investor presentation on the exchange websites today afternoon, around 1:00 o'clock in fact, and we hope that some of you had the opportunity to see this as well.

As usual, we have been maintaining that a business like ours is best examined through the lens of annual results rather than quarterly numbers. We would like to talk more from an annual point of view on our financial and business performance.

Coming to the commentary on our performance, we are pleased to report that over the past one year, both our SupTech and RegTech businesses have further strengthened. Obviously, the SupTech segment has contributed materially in the growth of our revenues, while in the RegTech segment, specifically for IRIS CARBON, this has been sort of a milestone year, where our foray further into the enterprise, which is also a largely non-mandatory area, has borne fruit, and we have scored creditable wins.

Our focus on the enterprise business, which is termed as our RegTech segment, is unequivocally to grow the annual recurring revenue. For the previous year, IRIS CARBON ARR, the annual recurring revenue, grew at 33% on the back of several wins in the disclosure management space.

We also opened our account in the ESG reporting solution area, which is an additional module on IRIS CARBON. On our BFSI automated regulatory reporting solution, IRIS iDEAL, the ARR grew at 17%, despite the fact that we faced some delay, especially in the first half of the previous financial year, in purchase decision-making at customer ends, especially in Indian market.

Going back to IRIS CARBON, I would say that it's a business where we see substantial headroom for steady growth, and our efforts are focused on making this happen. Towards this, we are now working on multiple fronts, including direct sales, partner development, marketing, and new product features.

We have also been able to break into large enterprise accounts, and which gives us a lot of confidence in competing with the best in the market. We have articulated before, we plan to spend in a measured and well-thought-out manner as we increase investment in key areas, such as sales and marketing, along, of course, with product enhancements.

On the BFSI regulatory reporting business, which is IRIS iDEAL, we are now actively exploring markets other than India, and we see potential slowly unfolding in both Africa and the Middle East. Let me now look at the SupTech business briefly.

We added three new logos in FY '26, which included the Government of Qatar for tax reporting. This is an interesting and new area, and combined with our deposit insurance management segment, this opens new markets for our iFILE SupTech reporting platform with new regulators.

We are also expanding this product suite to offer more end-to-end features for the regulatory customers, which includes risk-based supervision, licensing and registration management, and a few other modules as well. The idea is to expand the product suite, we are a bit of a one-stop shop as far as regulatory reporting requirements are concerned for any financial regulator, and even people who are in financial and operational regulatory segments from a regulatory perspective.

Coming to our financial performance, our growth has been steady all through the full year, with total revenues growing at about 23%, while the EBITDA margin came in at about 14%. We have mentioned before, our endeavor is to partially balance customer acquisition expenses in the SaaS business with profits emanating from the SupTech business, so that EBITDA numbers are not severely impacted.

Post the tax tech divestment, our balance sheet has strengthened considerably, and cash right now in the books is at around ₹155 crores as on March 31st, while the net worth has moved to ₹200 crore from ₹76 crores as at March 31st, 2025. The book value has gone up as well to about ₹98 from ₹37.

Before I close, I want to briefly touch upon a couple of global developments. We have been asked time and again by a few of you about whether the AI revolution that is sweeping across the globe is an opportunity or a threat.

Our honest take at this point of time is that it is both. For us, we feel it opens significant opportunities in the space we operate, even as customer expectations move up proportionately.

We see it as being critical for us to embed AI technologies in both our product stack and in the software development process itself. We are doing that expeditiously with speed and focus.

Our investor presentation also includes a couple of slides which talk about our product initiatives on the AI side. On the whole, let me say that we are both watchful and excited.

We have also been asked about the impact of the Middle East crisis on our business. It is possible that a prolonged Middle East crisis might have a possible adverse impact on the SupTech pipeline.

Having said that, so far, we have not seen any indications along these lines, but it would be fair to factor in this possibility if the crisis goes well beyond the first quarter of this financial year. This applies to, I think, most businesses which are operating in the Middle East area.

From our point of view, we operate in Asia quite a bit as well as in Africa. If there is fiscal constraints which governments experience at highly elevated oil prices, it might have some impact on government regulatory budgets, though we haven't seen it yet emerging.

Now, we also mentioned in our press release that our fledgling data tech business, we have spun off into a subsidiary to give it sharper focus. Finally, I want to say that we are pleased to mention that we have moved to a new office, which is in Navi Mumbai SEZ, which is in Turbhe station, and you are welcome to visit us when you get an opportunity.

Thank you so much, and now we can leave the floor open for question and answers.

Hi, am I audible?

Yes, you are. Yeah.

Thank you for the opportunity. Sir, just a couple of queries.

I am a new shareholder, pardon me if I ask something which I'm not aware of. After divesting our business and building a healthy cash balance, just wanted to understand what's our aspiration going to be in terms of growing the business faster?

I read somewhere that we are targeting ₹500 crores of revenue. What's the roadmap for that, and by when latest can we expect that?

Just some color on that.

This is something we mentioned the previous financial year, and we stick to this number. This is our aspiration, and we are setting the conditions for reaching this target.

This would require a little above 30% growth, I would say at this point of time over the next 4 to 5 years. Our aspiration on the SaaS business is to definitely grow this at about 35%.

We expect the SupTech business with a combination of one-time revenues plus recurring revenues to move little at a lower rate, but there could be surprises as we go forward. The short answer is the target is ₹500 crores, and we feel we are getting into a position with our new products also getting accepted in the market to grow at a higher rate compared to our previous few years where we grew in the mid-20s.

Got it, sir. Sir, I saw a couple of slides on AI initiatives.

To a layman, how is AI helping us? On the flip side, can it lead to any increase in the competitive intensity also for us?

Some color on that.

The second part of the question about competitive intensity, of course, there are theories going around saying that enterprises can create their own software, or AI-native companies can come in. For us, we haven't seen that yet in the markets we operate, but our customers are getting excited about what AI can do to their requirements.

We're getting enquired, and we are building offerings as we speak. We expect this to deepen our value proposition for our customers.

That could help us go deeper as well as expand into new customers as well. Competitive intensity, so far, we haven't seen, but one has to be very, I would say, cognizant of what is happening around us.

We are making sure that we are adopting AI technologies very quickly and making this part of our stack. On the whole, we feel it's an exciting opportunity for us.

AI could be an accelerant for us rather than constraining our business.

Understood, sir. Sir, on this Middle East crisis, I know we don't have a concrete answer to this, but keeping in mind that it extends into Q2 and all that, how is the year looking for us?

Would we still be able to manage maybe a lesser conservative number, but would it hamper our business significantly?

On the SaaS business part, which is enterprise-oriented business, we don't see much of an impact because our SaaS business is predominantly Europe and US focused, and to some smaller extent, India as well. We don't see much of an impact.

On the SupTech side, to some extent, our pipeline is linked to the Middle East with discussion with Middle East regulators as well. There also it is progressing, but I wouldn't be surprised if there is some delay if this whole thing continues beyond a point.

Far, as I mentioned in my opening remarks as well, we are not worried too much unless this really prolongs. I would start getting worried post June, I would say.

We are looking at 3 to 4 wins in the SupTech side, as usual, every year, and this could be more or less given the situation. At this point of time, it looks we have to be watchful, but not unduly worried.

Understood, sir. Sir, just one final question if I can squeeze in.

On the data tech side, I think the Peridot app, if I'm pronouncing it correctly, has a good amount of active users. What's the ambition here in terms of catering to the MSMEs and all that?

What's the ambition here, and how do we plan to scale this up?

As far as IRIS MSME is concerned, we are catering to the IRIS MSME market through IRIS Peridot app. The idea is to increase the number of users on Peridot by offering a slew of digital enablers for MSMEs, which includes invoicing, includes government scheme mapping, and also now loan facilitation.

The loan facilitation, we have rolled out starting from February in a pilot basis. Now, we are slowly increasing the number of lenders, and we are also reaching out to MSMEs in a calibrated fashion.

The business model, to some extent, is linked to working as a loan aggregation platform for MSME loans, and we are at an early stage, but I would say that we are getting MSMEs on our platform inquiring about loans, and there are three lenders who are already committed. This is a very initial stage, but we are quite hopeful that this can scale going forward.

We are trying to see how to scale it in a way which is not too onerous in terms of our spends.

Yes, sir. Maybe in a couple of years, we can see the monetization part going up significantly and the revenues starting to trickle in, right?

Is that fair to assume?

I would be happy if it is earlier than that, let me say. Our internal target is a little bit earlier than that.

Sure, sir. Sir.

Thank you, sir, for answering all the questions, and wish the team the very best.

Thank you, Samarth.

Yes, thank you for the opportunity. To understand that what is the plan with respect to the funds which we are holding?

Are we planning for some acquisition, or to develop some new product in-house, or enter some new business vertical?

Of course, the first and foremost path we want to pursue very vigorously is organic growth. We're also already deploying the excess money in CARBON sales and marketing, and we want to do it, as I mentioned, in a measured and calibrated fashion.

We are already seeing 33% ARR growth, and we want to up it as we go forward. On the inorganic side, if you want to look at whether we can deploy it inorganically, nothing is off the table, but we'll be disciplined.

There is a lot of volatility in the market. We don't know how it is shaping up in terms of AI impact on enterprise software.

We do not want to do a deal just because we have the capital. We'll be open to evaluating opportunities, particularly in adjacencies that could enhance our RegTech footprint.

Early days, but we are just on a wait-and-watch mode even now, because things have changed quite a bit over the last 6, 7 months.

As a

product development, we are aggressively trying to enhance our stack of AI offerings. That is going on.

Okay. Out of about 150-odd crores, entirely won't be spent on marketing, right?

Any number on your mind how much would be spent on marketing, say, over the next 1 to 2 years, and how much of revenue we can expect coming from that, or some thought process how you are planning? Obviously, I understand the bulk of the money you are keeping as a reserve to see how things pan out and maybe in future you would decide.

On the sales and marketing side, especially for our SaaS offerings, we have said that in the conference calls as well, we are well below the SaaS benchmarks where people spend at times more than $2 for $1 of net ARR. We are at about 1.1, 1.2 levels.

We might go a little higher than that, but we don't want to be spending indiscriminately. We are looking at net ARR growth of around 35% or more.

That will give some indication of our marketing spend. We could spend more aggressively if we see, for example, the market really shaping up well, for example, on the ESG side or even in digital reporting across financial reporting later energy reporting, etc.

There is some sort of, I would say, volatility in the market. Right now, we are going with these numbers.

We will be more aggressive as our base grows for IRIS CARBON, because we don't want to be doing this in a EBITDA-negative mode. We want to make sure that we remain EBITDA-positive and still grow the business.

There will be money left post the marketing expense, but we want to keep that with us, because there could be inorganic opportunities which might come up, and we don't want to be, at that point of time, be left with inadequate capital. When things are anyway a little volatile, uncertain, which is the current environment, I think it is prudent to keep some capital within IRIS.

Absolutely fair. Thank you so much for the detailed answer.

Thank you.

Good evening, sir. Sir, you spoke about a growth of 30% CAGR going forward for the next few years.

Could you just provide some more color on how you plan to go about achieving it? Which are the markets that you want to focus on?

Are you going to be adding new products to your current verticals, or are you going to add more sales people, and so on? Could you just please throw more light on that?

Vikas. I would take a shot at it.

Primarily, if you look at the product segments that we have, we have this enterprise product segment where we have IRIS CARBON as the flagship product, plus we have the automated reporting for banks. IRIS CARBON right now is looking at financial reporting, and we are venturing to ESG reporting as well.

Here, we definitely want to make sure that we grow at a good clip, and which could be 35% is the benchmark we have set for ourselves, should be more internally speaking, but this is what we are externally communicating. On top of that, we are also looking at adjacent markets in the SaaS reporting area, which we are now trying to explore, which could be in capital market-related reporting, it could be energy reporting, but these are early days for that.

Outside that, we have the bank automated regulatory reporting area where we are very strong in the Indian markets. We are trying to expand outside.

Here, it is a combination of subscription revenue, and at times there is an implementation revenue plus license revenue as well. We are looking at the African and Middle East markets more than other markets.

Of course, we are also looking at Europe and to see whether we can provide a compelling value proposition there. That's the second part.

Then, in terms of geographies, we see a lot of headroom in the US and European markets, because disclosure management as a category is still fairly young, and when we speak to our customers, when we look at people who are doing structured data reporting, there are many prospects out there. If you look at how we're going to focus our efforts, it could be certainly looking at these developed markets first, then working our way downwards.

As far as iFILE is concerned, which is our SupTech offering, which is the regulatory reporting platform, we are expanding the product portfolio so that we are not just in data collection and associated analytics alone. We are looking at, for example, licensing, registration management, which regulators need to do.

We are looking at risk-based analytics, and we are also looking at case management going forward. These are modules we want to build on the existing platform, we can go deeper.

We see the SupTech platform going at a good clip, may not be matching the SaaS growth revenues, but here there is the possibility of getting lumpy revenues as well. It is linked to the regulators' push for digitalization.

We see many regulators are still at a very early stage. When we speak to some of them, we hear that many of them want to go digital very fast, because they feel if they don't go digital, they'll miss the AI revolution, which is slowly taking shape in those countries as well.

We remain bullish on this, and we need to see how this plays out over the next 3, 4 years. Our footprint is there.

We need to go deeper into existing SupTech segments.

Would you also be hiring more in these markets, sir, these developed markets?

Hiring?

Hiring,

yeah. Hiring.

I think, certainly yes, we have plans to deepen our presence in sales and marketing, including on-ground hires in these markets, clearly yes. We have started looking at that actively now.

Got it, sir. I've been invested and following your company for a long time.

One of the things we saw was that private companies would, let's say, adopt cloud much faster than the regulators. Given that they tend to be a little more cautious and so on, would they be sort of late adopters as far as AI is concerned as well?

I'm talking about the regulators. Because they would say that this is all financial data, we have to proceed with caution and so on, right?

You can't just trust AI to do everything, because if there are mistakes, then who owns it? It might lead to other issues.

Would you say that the regulators are more cautious as far as AI adoption is concerned?

I think you are absolutely right. We have been speaking to regulators.

In fact, we have actually one regulator already on the cloud, which is PFRDA in India. That's a private cloud which they're using.

When you talk about AI services and cloud-based architecture, there is reluctance on part of the regulators to embrace that completely. There are multiple ways to overcome this.

We are also looking at a small language model which can work, which is a structure where the data doesn't go out. The LLMs which some of the regulators can use, which could be their private or sovereign LLMs.

That is a structure we are talking about. In fact, in couple of Middle East implementations, this is a subject which has been further explored.

I would say that when it's public data, or annual report information which needs to be further structured and taken into regulators, you can definitely use public AI services. When it is confidential data, there could be some reluctance, or there could be great reluctance by regulators to go back to generic AI services.

Got it, sir. One final question, sir.

The days receivable has been trending downwards. Is it because of more effort on our part to collect our money regularly?

Is there something to call out there?

I think it's a combination of, of course, enterprise part of the business has been slowly moving up, that's number one. Number two, on the SupTech side also, I think regulators have been, I would say, more amenable to making prompt payments.

It's a good situation,

but

I would say that further improvement will become progressively difficult.

Okay. Around 80 days is what we can expect, sir?

I would say that 75 to 80 days is what we would be comfortable. If the enterprise SaaS revenues really gallop going forward, it could further improve, but we need to wait for that.

All right, sir. Thank you for your answers and best

Thanks, Vikas. A pleasure to have you, as usual.

Thank you so much. This time it has been a shorter investor call.

I hope all of you are happy with the way we are progressing. I hope we have been able to address all of your questions.

Please feel free to write to us if you have further questions, and we are open to interacting with you on a face-to-face basis, as well as through emails. Thank you so much.

Have a good day ahead. Bye.