IZMO Limited — Q4 FY25 earnings call

Call held 6 Jun 2025

Management summary

IZMO reported robust full-year FY25 results with significant growth in revenue, EBITDA, and PAT, driven by new client additions and contributions from Geronimo and Izmo Microsystems. Q4 FY25 saw strong revenue growth but a decline in PAT. The company provided optimistic guidance for FY26, targeting 25-30% revenue growth and 35-40% EBITDA margin, with the semiconductor business expected to break even and contribute from Q3 FY26.

Highlights

  • Full Year FY25 Revenue of ₹224.61 crores, up 20.27% YoY.

  • Full Year FY25 EBITDA of ₹73.57 crores, up 70.14% YoY, with margin at 32.75%.

  • Full Year FY25 PAT of ₹48.88 crores, up 87.6% YoY, with margin at 21.76%.

  • Q4 FY25 Revenue of ₹59.81 crores, up 18.9% YoY.

  • Cash and short-term investments of approximately ₹50 crores.

Concerns

  • Q4 FY25 PAT declined to ₹6.89 crores from ₹9.04 crores in Q4 FY24.

  • Employee costs expected to increase by 10-12% in Q1 FY26 due to appraisals.

  • Working capital increased due to longer payment cycles from large clients.

Key financials

2 periods

Q4 FY25

  • Revenue
    ₹59.81 Cr
    YoY +18.9%
  • EBITDA
    ₹12.09 Cr
  • EBITDA Margin
    20.2%
  • PAT
    ₹6.89 Cr
    YoY -23.8%
  • EPS
    ₹4.63

FY25

  • Revenue
    ₹224.61 Cr
    YoY +20.3%
  • EBITDA
    ₹73.57 Cr
    YoY +70.1%
  • EBITDA Margin
    32.8%
  • PAT
    ₹48.88 Cr
    YoY +87.6%
  • EPS
    ₹33.9

What they filed

Q1 FY27: revenue down 9.6%, net profit down 81.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue12 12 12 11 11 −7%11 −8%9 −29%10 −10%
EBITDA1 0 0 0 0 −91%0 +350%-2 −1629%0 −93%
Net profit24 0 0 0 0 −99%0 −80%-0 −311%0 −81%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹25 Cr

as of 2025-03-31 quantified

Execution

for this year

The company has an order book of ₹25 crores for the current financial year, primarily from project-based semiconductor business.

Source: Q&A

Capital allocation

high confidence
  • Capex ₹5 Cr
    • Regular CAPEX for Izmo Cars (servers, computers) and AI computing systems
    Like I said, we do not have a CAPEX listing between Rs. 5 crores to Rs. 7 crores. I do not expect it more than that.
  • Liquidity Cash ₹50 Cr Cash is being maintained due to uncertain times and to capitalize on organic growth opportunities and innovation investments.
    I am seeing that we have around short term investments and cash of around Rs. 50 crores, which is I think the highest it's ever been.

Guidance & targets

Profitability

  • Izmo Micro Operations Break-even Profitability · Current financial year (FY26) · High confidence Break-even
    So, this year we will break even in Izmo Micro operations in the current financial year. So, you will start seeing the PAT growth happening from, say, Q3 of this year, where it will start contributing to the PAT as well as the EBITDA.

    — Sanjay Soni

  • Overall EBITDA Margin Profitability · FY26 · High confidence 35-40%
    So, we would look at, say, between 35% to 40% at least.

    — Sanjay Soni

Revenue

  • Semiconductor Business Revenue Revenue · In three years · High confidence ₹200 crores
    In three years, we should be doing at least Rs. 200 crores, if not more.

    — Sanjay Soni

  • Overall Revenue Growth Revenue · FY26 · High confidence 25-30%
    We are looking at around between 25% to 30% overall growth.

    — Sanjay Soni

  • Geronimo Revenue Revenue · FY26 · High confidence EUR 3 million
    I think around EUR3 million is what we expect to close this year.

    — Sanjay Soni

  • FrogData Revenue Revenue · FY26 · High confidence ₹100 crores
    That's our internal target. Let's see how much we can do. But internal target is Rs. 100 crores.

    — Sanjay Soni

Employee Costs

  • Employee Cost Increase Employee Costs · Q1 FY26 · High confidence 10-12%
    Between 10% to 12% aggregate across average.

    — Sanjay Soni

Tax Rate

  • Low Tax Rate Tax Rate · Until 2030 · High confidence Low
    It will remain low till around 2030. After that it will start going up, because we still have enough tax shelter in the US.

    — Sanjay Soni

Product Launch

  • Photonic Circuit Product Launch Product Launch · Q3 FY26 · High confidence First product launch
    Yes, yes, it should be Q3 this year, the first product should be coming out based on the chip.

    — Sanjay Soni

Revenue Contribution

  • IZMO Microsystems Revenue Contribution Revenue Contribution · FY27-FY28 · Medium confidence 30%
    40% to 50% should be a good number, or less, it will be around 30%, sorry.

    — Sanjay Soni

Capex

  • Capex Range Capex · FY26 · High confidence ₹5-7 crores
    Like I said, we do not have a CAPEX listing between Rs. 5 crores to Rs. 7 crores. I do not expect it more than that.

    — Sanjay Soni

What to watch in Q1 FY26

Izmo Micro Operations Profitability

Q3 FY26
Current Loss-making (contributing to expenses)
Target Break-even and contributing to PAT/EBITDA

Why it matters

Indicates successful integration and monetization of the new semiconductor vertical, crucial for overall profitability growth.

So, this year we will break even in Izmo Micro operations in the current financial year. So, you will start seeing the PAT growth happening from, say, Q3 of this year, where it will start contributing to the PAT as well as the EBITDA.

Risks & concerns

  • Geopolitical situation and potential for global conflict

    high

    There are risks everywhere. Risks in all businesses. Particularly geopolitical situation right now is very unstable. We do not know what's going to happen. But this is a manageable risk. We try to mitigate risks at all times. But you never know. Third World War breaks out. Everything goes out of the window. Other than that we do not see anything significant.

    Management acknowledged

  • Global economic volatility and geopolitical challenges

    medium

    Despite global economic volatility and geopolitical challenges, Izmo has maintained its growth trajectory and extended its global reach, demonstrating resilience.

    Management acknowledged

  • Competition in IT sector

    medium

    We are always abreast of the competition. We know what is in the horizon. We know what is coming. And like I said, we keep innovating. We keep upgrading our product portfolio. And that is, we spend a lot of money on R&D. Precisely because we have to be ready for the next requirement of the customer.

    Management acknowledged

  • Generative AI disruption

    low

    Generative AI right now in terms of imaging is not affecting our business. Maybe in three to five years it may, because what AI does is it searches for images already there online and then modifies them to a certain extent which are not copyrighted, of course. Our images are shot in the studio, very, very high quality. And as of now, we are not seeing any threat from generative AI.

    Management downplayed

  • Working capital increase due to longer payment cycles

    low

    Working capital has increased partly due to new businesses and partly because clients are taking longer to pay, especially big clients like Hertz and Avis. However, no delinquency past 98%.

    Analyst acknowledged

Q&A highlights

7 direct
PAT growth outlook and new verticals' contribution Direct
So, this year we will break even in Izmo Micro operations in the current financial year. So, you will start seeing the PAT growth happening from, say, Q3 of this year, where it will start contributing to the PAT as well as the EBITDA.

Clarifies the timeline for profitability contribution from new semiconductor operations, addressing Q4 PAT dip.

Asked by Sudhir Bheda

Semiconductor business revenue target Direct
In three years, we should be doing at least Rs. 200 crores, if not more.

Provides a specific long-term revenue target for the high-growth semiconductor segment.

Asked by Sudhir Bheda

Overall consolidated growth and EBITDA margin guidance for FY26 Direct
We are looking at around between 25% to 30% overall growth. ... So, we would look at, say, between 35% to 40% at least.

Sets clear top-line and profitability targets for the upcoming fiscal year, indicating significant margin expansion.

Asked by Meherwan Kotwal

Valuation for potential investment in FrogData Partial
Yes, we expect the valuation to be better. Of course, AI is becoming very mainstream, in fact, every product today is talking of AI. So, I think definitely valuation will be better. We cannot give a number right now, let us come to that point before we talk specific numbers. I think it's too early to discuss.

Indicates ongoing plans for external investment in FrogData, with management expecting better valuation due to AI integration, but no specific numbers yet.

Asked by Sudhir Bheda

Employee cost increase in Q1 FY26 Direct
No, there will be an increase in the current quarter because we do appraisals in April. ... Between 10% to 12% aggregate across average.

Highlights a near-term headwind to margins due to annual wage hikes.

Asked by Prasenjeet

Value addition and competitive advantage of IZMO Microsystems Direct
We are trying to do very specialized complex packaging like 3D packaging which is done probably today in only four countries in the world. So, we are designing packages which can miniaturize, which can protect your IP and which can also do multiple functions within the same package.

Explains the niche and high-value nature of their semiconductor business, differentiating it from commodity OSAT work.

Asked by Avinash Nahata

Impact of Generative AI on IZMO's business Direct
Generative Al right now in terms of imaging is not affecting our business. Maybe in three to five years it may, because what Al does is it searches for images already there online and then modifies them to a certain extent which are not copyrighted, of course. Our images are shot in the studio, very, very high quality. And as of now, we are not seeing any threat from generative AI.

Addresses a key industry concern, stating no immediate threat from GenAI to their core imaging business but acknowledging potential future impact.

Asked by Het Shah

Purpose of high cash balance Direct
We are just being cautious because times are uncertain. Plus, we are keeping cash to see if we get a good opportunity in organic. And like I said, we are in the investment mode in terms of innovation. So, that's where the cash is there. It's just being ready for something. Anything which happens if the world goes haywire, you should be in cash.

Explains the strategic rationale behind maintaining a significant cash reserve, indicating preparedness for both organic growth and potential market uncertainties.

Asked by Het Shah

3 min read 6 chapters

Detailed narrative

Q4 and Full Year FY25 Financial Performance

IZMO reported Q4 FY25 revenues of ₹59.81 crores, marking an 18.9% year-on-year increase. EBITDA for the quarter stood at ₹12.09 crores with a margin of 20.22%. However, Q4 PAT was ₹6.89 crores, a decline from ₹9.04 crores in Q4 FY24. For the full year FY25, revenues grew robustly by 20.27% to ₹224.61 crores. EBITDA for FY25 surged by 70.14% to ₹73.57 crores, achieving a margin of 32.75%, while PAT increased by 87.6% to ₹48.88 crores, with PAT margin improving by 781 bps to 21.76%.

Semiconductor Business (IZMO Microsystems & Photonics)

A major milestone was the operational launch of the SiP manufacturing facility in Bangalore under IZMO Microsystems, targeting high-performance SiP solutions for automotive, consumer electronics, telecom, and EVs. This facility, equipped with advanced technologies like 3D Die Stacking, is central to the company's push into the semiconductor sector. The company partnered with IIT Madras as the sole industry partner for a pioneering initiative in photonic chip packaging, leveraging over a decade of research in silicon photonics. The first product based on photonic circuits is expected to launch in Q3 FY26, with the semiconductor business targeted to reach ₹200 crores in revenue within three years.

Automotive Software Business Update

IZMO continues to expand its automotive software offerings, including IZMO Studio for imagery, izmoEmporio for virtual showrooms, and Izmo Auto for digital retail and CRM. The company launched a Spanish-language platform, www.autogozo.com, to tap into the $220 billion US Hispanic automotive market, supported by over 2,000 dealers. Its CRM solutions are mandated by Stellantis for European after-sales under a multi-year contract. FrogData, the AI and data intelligence arm, is seeing strong growth, with an internal target of ₹100 crores in revenue for FY26, up from approximately ₹65 crores in FY25.

Strategic Acquisitions and Integrations

The strategic acquisition of Geronimo Web, a UK-based digital marketing powerhouse, has boosted IZMO's footprint across European and Latin American markets. Synergies from this acquisition are coming in well, with a contract signed in Germany expected to contribute to current financial year revenues. Geronimo is targeted to achieve EUR 3 million in revenue for FY26. The integration process involved cross-selling IZMO's products to Geronimo's client base and offering Geronimo's products to IZMO's existing clients.

Industry Trends and Growth Outlook

The company aligns its strategy with key global industry trends, including the semiconductor industry's strong growth trajectory (projected $697 billion in 2025), the rapid momentum of the EV market (4 million EVs sold globally in Q1 2025), and the booming digital marketing software market (projected $110.2 billion in 2025). IZMO expects an overall revenue growth of 25-30% for FY26 and aims to achieve an EBITDA margin of 35-40% for the same period. The tax rate is expected to remain low until around 2030 due to tax shelters in the US and Europe.

Capital Allocation and Liquidity

IZMO maintains a cautious approach to capital allocation, holding approximately ₹50 crores in cash and short-term investments. This liquidity is preserved to navigate uncertain times and to seize organic growth opportunities and innovation investments. The company's CAPEX is modest, projected between ₹5-7 crores for FY26, primarily for regular upgrades in Izmo Cars and advanced computing systems for AI. The management does not currently plan for share buybacks, preferring to invest in growth areas.

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