R Systems Intl.

R Systems International Limited closed Calendar Year 2024 with a revenue of Rs. 1,741.7 crore ($208 million), marking a 4.6% year-on-year growth excluding a one-time^📎 BOT transfer fee. Adjusted EBITDA reached Rs. 291 crore ($34.8 million), an 18.7% increase year-on-year (excluding the BOT fee), leading to a 200 basis point expansion in EBITDA margin to 16.7%. This improvement was primarily driven by enhanced operational efficiencies and a peak utilization rate of 82%.

For the fourth quarter of CY2024, the company reported a revenue of Rs. 449 crore ($53.2 million), reflecting a 7.8% year-on-year growth and a 1.1% quarter-on-quarter increase. Operating EBITDA for the quarter stood at Rs. 80 crore ($9.5 million), growing 24.6% year-on-year, with an operating EBITDA margin of 17.8%. Net profit after tax for Q4 was Rs. 39 crore ($4.6 million), despite a Rs. 7.9 crore impact from lower billing days compared to Q3.

The company significantly strengthened its market position through strategic investments and partnerships. It achieved CMMI Level 5, PCMM Level 5, ISO 9001:2015 & ISO 27001:2013 certifications and was recognized as a Top 10 Leading AWS partner. Partnerships with Microsoft and Salesforce were elevated, with Salesforce moving to Crest partner status. These efforts, coupled with the addition of nine key leaders across management functions, aim to build deeper capabilities in AI, cloud, and security.

R Systems is actively pursuing the growing trend of Global Capability Centers (GCCs), offering a playbook for mid-sized enterprises to establish and scale their India operations. Management highlighted that their project-based product development and R&D work, which constitutes the bulk of their business, provides a shield against the pricing pressures and vendor consolidation risks prevalent in managed services. New offerings include modernization solutions, Chaos Engineering Integrated DR Model, and Power BI migration services.

The company reported a positive trend in client acquisition and pipeline health, with deals over $0.5 million in revenue growing by more than 50% during the year. They are now responding to over double-digit RFPs each quarter, a significant increase from single digits two years ago. New ISV clients, including some valued over $1 billion, were signed, and the company continues to add 1-2 clients per quarter from the Blackstone channel, bringing the total to 14 active clients in Q4.

R Systems maintains a stable balance sheet with equity attributable to shareholders at Rs. 624.1 crore and cash and bank balances at Rs. 196.1 crore. Days Sales Outstanding (DSO) remained consistent at 61 days. The company's effective consolidated tax rate for CY2024 was 31%, with an adjusted rate of 27-28% excluding non-tax deductible amortization. Management reiterated its openness to inorganic growth, leveraging Blackstone's backing for scouting, valuation, and funding of potential acquisitions.