Uniphore’s turnaround story: Rs 675 Cr revenue and 33 Cr profit in FY22

Conversational automation platform Uniphore turned unicorn after raising a $400 million Series E round at a valuation of $2.5 billion at the end of the fiscal year 2021-2022. The staggering rise in its valuation came with an over 9X surge in its scale during the same period.

Uniphore’s operating revenue ballooned 9.4X to Rs 674.6 crore in FY22 from Rs 71.25 crore in FY21, according to its consolidated financial statements with the Registrar of Companies.

Subscription income from software license, professional services such as implementation, configuration, training, and other managed service offerings were the main revenue sources for Uniphore. The firm didn’t give any revenue break up.

The United States contributed 95.2% of its total collections while the rest of the income came from Singapore and India.

On the expenses side, employee benefits accounted for 47.6% of the company’s total spending. This cost surged 76.1% to Rs 330.64 crore in FY22 from Rs 187.78 crore in FY21. It also includes Rs 42 crore expense on ESOP which was settled in equity (non-cash).

The cost of legal and professional fees were the second-largest cost center followed by employee benefits which grew 2.9X to Rs 134.31 crore during the last fiscal year.

Advertising cost for Uniphore shrank 35.3% to Rs 35.63 crore in FY22 while the cost incurred on subscription/software charges and agency/license costs were recorded at Rs 57.65 crore and Rs 66.01 crore respectively in FY22. The firm’s total cost surged by 96.4% to Rs 694.17 crore in FY22 from Rs 353.43 crore in FY21.

With an explosion in its scale, the company made a turnaround and posted a profit of Rs 33.45 crore in the last fiscal year (FY22) as compared to a significant loss of Rs 281.8 crore during FY21. Its ROCE and EBITDA margin also turned positive and stood at 34.65% and 12.35%. On a unit level, Uniphore spent Rs 1.03 to earn a single rupee of operating revenue in the fiscal year ending March 2022.

Besides Uniphore, a bunch of SaaS unicorns also reported profits in FY22. The list counts Browserstack, Unicommerce, Wingify, and Zoho.

With all the hype around ChatGpt recently, Uniphore seems to be in a good space with its AI driven offerings. The firm is also reaping the benefits of a product driven offering, with incremental revenues coming at relatively lower costs as compared to its early inroads into the market for its offerings. The high dependence on the US for revenues at almost 95% is not a bad thing, considering the better margins and benefits from a successful market fit there. That probably explains why early mentor John Chambers (Former CEO of Cisco) got the firm to shift base to Silicon valley early.

While not as deeply embedded as many other software products and services, firms like Uniphore do have an inbuilt moat once they have been in use for some time with clients. Only part of this has to do with the time taken and invested in roll out initially. Over time, the firm would itself be on a virtuous cycle of incremental improvements based on the results and feedback from its clients. The firm had a stretch target of  $100 million in recurring revenues by 2022, which it has missed. However, it has clearly done enough to get there and more in FY2023, one would imagine.