* Geographic Expansion and Market Penetration: Newgen is experiencing significant growth in various regions. The APAC region has shown a 53% year-over-year (Y-o-Y) growth, for the second consecutive quarter. The EMEA region also shows strong growth with 21% Y-o-Y growth, and the India region grew by 19%. Newgen is working on a strategy to tap larger accounts in the US market and saw 17% Y-o-Y growth.
* Increased License Sales: There was a substantial increase in license sales, with a 52% Y-o-Y growth during the quarter. This indicates a strong demand for Newgen's software products.
* Cross-Selling and Upselling: A significant growth area for Newgen is cross-selling within its existing customer base. Customers are expanding their adoption of the platform and solutions, highlighting the value of Newgen's offerings. The company relies on about 50% of its growth coming from upselling to existing customers.
* New Logos: The company added 8 new logos in Q2. The company is primarily focused on new logo acquisition, as this is where the larger growth potential exists.
* Product and Solution Development: Newgen continues to see traction across its existing accelerator line, including customer onboarding, SME lending, supply chain finance, payment hub, and trade finance. They have also launched an Islamic retail and SME financing product for the Middle East market. New versions of enterprise content management products, OmniDocs and OmniXtract, were released. Enhancements to video KYC and NewgenONE Marvin APEX were also made, to streamline workflows and enhance customer engagement.
* Vertical Market Expansion: While banking and financial services remain Newgen's core vertical, there has been increased traction in the insurance and government sectors. Newgen is building capabilities in these sectors, with plans to expand product lines. The company aims to have the government and insurance sectors contribute around 40% of the business.
* Strategic Partnerships: Newgen continues to work on strategic partnerships with leading technology firms and industry alliances. Their partnership with Fadata, a core insurance solution provider, is aimed at helping insurers manage complex processes.
* Investment in Technology: Newgen is investing in critical areas like AI, GenAI, and machine learning to ensure they remain competitive in the modern enterprise software market. They also continue to invest in their global workforce, training, and development programs.
* Focus on Larger Deals: The company is focused on increasing the average deal size, which contributes to their overall revenue growth.
* Digital Transformation: As businesses increase their adoption of digital transformation, Newgen is well-positioned to support them with relevant skills, expertise, and product innovation.
Additional Points:
* Annuity Revenue: While annuity-based revenue growth has been softer recently, due to a shift in focus to larger accounts in the US and longer execution cycles, it is expected to recover.
* Order Book: The order book has grown by roughly 20-22% for the first half of the fiscal year. The company's pipeline is also strong, with traditional markets growing and new opportunities in insurance and government.
What are the growth triggers?
Key Growth Drivers for Newgen
* Geographic Expansion and Market Penetration: Newgen is experiencing significant growth in various regions. The APAC region has shown a 53% year-over-year (Y-o-Y) growth, for the second consecutive quarter. The EMEA region also shows strong growth with 21% Y-o-Y growth, and the India region grew by 19%. Newgen is working on a strategy to tap larger accounts in the US market and saw 17% Y-o-Y growth.
* Increased License Sales: There was a substantial increase in license sales, with a 52% Y-o-Y growth during the quarter. This indicates a strong demand for Newgen's software products.
* Cross-Selling and Upselling: A significant growth area for Newgen is cross-selling within its existing customer base. Customers are expanding their adoption of the platform and solutions, highlighting the value of Newgen's offerings. The company relies on about 50% of its growth coming from upselling to existing customers.
* New Logos: The company added 8 new logos in Q2. The company is primarily focused on new logo acquisition, as this is where the larger growth potential exists.
* Product and Solution Development: Newgen continues to see traction across its existing accelerator line, including customer onboarding, SME lending, supply chain finance, payment hub, and trade finance. They have also launched an Islamic retail and SME financing product for the Middle East market. New versions of enterprise content management products, OmniDocs and OmniXtract, were released. Enhancements to video KYC and NewgenONE Marvin APEX were also made, to streamline workflows and enhance customer engagement.
* Vertical Market Expansion: While banking and financial services remain Newgen's core vertical, there has been increased traction in the insurance and government sectors. Newgen is building capabilities in these sectors, with plans to expand product lines. The company aims to have the government and insurance sectors contribute around 40% of the business.
* Strategic Partnerships: Newgen continues to work on strategic partnerships with leading technology firms and industry alliances. Their partnership with Fadata, a core insurance solution provider, is aimed at helping insurers manage complex processes.
* Investment in Technology: Newgen is investing in critical areas like AI, GenAI, and machine learning to ensure they remain competitive in the modern enterprise software market. They also continue to invest in their global workforce, training, and development programs.
* Focus on Larger Deals: The company is focused on increasing the average deal size, which contributes to their overall revenue growth.
* Digital Transformation: As businesses increase their adoption of digital transformation, Newgen is well-positioned to support them with relevant skills, expertise, and product innovation.
Additional Points:
* Annuity Revenue: While annuity-based revenue growth has been softer recently, due to a shift in focus to larger accounts in the US and longer execution cycles, it is expected to recover.
* Order Book: The order book has grown by roughly 20-22% for the first half of the fiscal year. The company's pipeline is also strong, with traditional markets growing and new opportunities in insurance and government.
You could have present peer analysis or how Newgen operates differently than traditional ITs
Thank you for your suggestion. Will include in future updates