A NOTE TO SHAREHOLDERS
It gives me great pleasure to address and update you on the progress made by Subex inthe last financial year.
The two areas of focus that were of primary importance to me since I took over the roleof CEO in last year was revenue growth and a vibrant Subex. And to do this werediscovered our purpose values and set our vision to be the largest player globally inthe space of Digital Trust. This vision further dovetailed into our three- horizonstrategy wherein horizon 1 consisted of our core areas; horizon 2 consisted of high-growthareas of IoT security and analytics; and horizon 3 consisted of aspirational areas ofautomated multi-vertical anomaly detection and digital identity.
I am happy to announce that both from a strategy and execution perspective we did wellduring the course of last year. We closed the year with revenue of Rs.348 cr which was agrowth of 7.3% over the corresponding number of Rs.324 cr in the last fiscal year. TheProfit After Tax also saw a jump of 21.7% to finish the year at Rs.25.2 cr. While we dounderstand that these are small beginnings what gives us confidence is the fact that ouroutlined strategy is definitely taking shape and we see a strong traction for growth goinginto the next fiscal year.
Let me provide you a brief view of how we did in each of these horizons. The marketsegment of telecom BSS i.e. Business Support Systems software that predominantly covershorizon 1 areas is expected to remain flat. As a global leader in most of the areas thatwe operate in this segment our effort was to perform better by increasing our marketshare with differentiated offerings. We embedded purpose-built AI/ML into our productsleveraged technology to effectively manage huge data volumes compute requirements andthereby created significant competitive advantage during the course of last year. We arecompeting very well with a strong pipeline of new opportunities further strengthened by aphenomenal last quarter that resulted in a 30% increase in new business bookings over theprevious year. The Q4 FY19 results reflect the impact of these higher new businessbookings.
Horizon 2 is our key growth area at the moment. With this target our intent was notonly build on the initial advantage that we have from a technology perspective but alsoincrease the coverage of as many segments as possible. Towards this end we have securedcustomers in a diverse range of verticals like smart cities oil and gas connected carsmanufacturing and IoT connectivity providers to name a few. Our honeypot lab has beenenhanced and we have also carefully extended it to top research facilities in SingaporeDubai and Europe. This proactive approach of generating threat signature is becoming a keydifferentiator of our digital security solution. ACT our Analytics Center of Trust theother product offering in the horizon 2 portfolio has now been extended to two customersand both are being driven very strategically at this point.
However the proof of the pudding is the fact that we have met the internal target ofUS$5 million contracted business in the very first year of operation on horizon 2products.
On horizon 3 which is the aspirational areas we are working on much larger use casesand have launched Crunch Metrics an AI/ML based multi-vertical anomaly detection inJanuary this year. After successful completion of PoCs we have now started engagementwith two Tier 1 telcos in Europe and APAC. We have also started POC with a large Fintechplayer in India and are confident of showing good results soon. The second product inhorizon 3 addresses digital identity management and this product will be ready for launchin the first quarter of FY 20.
Subexians our people continue to be the greatest asset to Subex. I am pleased toannounce that we have added some exceptional talent during the course of this year. Webrought a new COO
CFO and a Company Secretary. We also strengthened the domain and business consultingside by bringing heavyweights in the industry with over 20 years of hands-on experience.We now have a well-oiled team that is committed to drive the growth strategy. We have alsoexecuted the first phase of ESOP allocation and have all key Subexians covered.
So what does the future hold for us?
Based on the market reaction and general feedback our growth strategy seems to beright and on mark. Our focus going forward will be on execution of this growth strategy.There are three key global trends that we are tracking and intent to leverage for ourgrowth. The first is increasing importance of Digital Trust; second the onset of 5G andmobile-edge computing and finally digital identity becoming central to digital economy.With access to state-of-the-art technology and also the biggest bank of digital threatsignature and extensive coverage we believe we are well positioned in our pursuit ofbeing the leader in Digital Trust. We intend to invest heavily to scale the coverage bothon the technology and market coverage factor to drive value not only to our customers butalso to our associates and shareholders.
Finally I want to place my deep appreciation to the Board who stood behind us andsupported us in every step of this long and exciting journey in front of us. My thanks arealso due to the Subexians without whose commitment and zeal we will find it hard toaccomplish the growth targets in front of us.
"A journey well begun is half done" goes the saying. We believe we are inthat spot and I am confident that the remaining part of the journey will be one that wewill cherish in the foreseeable future.
Vinod Kumar Padmanabhan
Managing Director & Chief Executive Officer.