MPS

MPS Limited reported a strong Q3 FY25, with revenues reaching INR 185.52 crores, representing a 38.19% year-on-year growth on an FX-adjusted basis. The company's EBITDA margins improved to 32.38%, leading to an overall EBITDA growth of 35.17% compared to the previous year. This robust performance underscores a positive start to the second half of the fiscal year.

The company highlighted key strategic achievements, including a reduced customer concentration where the top 15 customers now contribute 58% of revenue. Geographical diversity also improved, with North America accounting for 45% of revenue and the Rest of the World (primarily APAC) contributing 30%. Furthermore, revenue quality has enhanced, with platforms now responsible for approximately 28.56% of the consolidated revenue.

The Content Solutions business demonstrated strong growth of 38.7% in Q3 FY25, driven by the AJE acquisition and momentum in the global education sector. The eLearning business experienced a significant margin improvement, with EBITDA margins scaling to 32.63% and the India entity (MPS Interactive Systems Limited) crossing 28%. This turnaround was attributed to strategic right-sizing, optimized resource allocation, and a flexible delivery model leveraging outsourcing and gig workers.

MPS Labs continues to drive innovation with AI/ML-driven solutions across content structuring, editing, and accessibility. The platform business, branded HighWire, saw an 88.9% revenue growth, largely due to the AJE acquisition. HighWire launched DigiCore Pro, a next-generation publishing platform, aiming to consolidate pre- and post-acceptance workflows, with clients expected to utilize the full end-to-end solution in 2025.

MPS reiterated its 'North Star' vision to achieve INR 1,500 crores in revenue at similar margins by FY28, with an anticipated 60% organic and 40% inorganic growth. The company is prepared to take on up to INR 150 crores in debt for acquisitions, focusing on healthy, growing assets in the education sector, including adjacent markets and platform plays, while maintaining a disciplined approach to valuations.

The company is bullish on APAC, with the Chairman and CEO relocating to Singapore to lead growth in the region. Key markets include China and Australia, focusing on researcher support and eLearning for corporates/educational institutes, respectively. India's market centers on digital learning and scaling the researcher business via the Curie platform (Rubriq), with South Korea and Japan identified as new target markets.

Based on robust earnings growth, the Board declared an interim dividend of INR 33 per equity share. As of December 31, 2024, the company held an existing cash balance of approximately INR 124 crores, which would be around INR 68 crores after the dividend payout. MPS generates approximately INR 15 crores of free cash flow monthly, ensuring sufficient funds for future acquisitions and shareholder returns.