According to its annual financial statements filed with the stock exchange, Tracxn’s revenue from operations rose to Rs 82.7 crore in FY24 from Rs 78.1 crore in FY23. Sequentially, the company reported a 3.9% decline in revenue to Rs 20.31 crore in Q4 FY24 from Rs 21.14 crore in Q3 FY24.

In FY24, Tracxn’s sole source of revenue was the income from the sale of subscriptions to access its data and software. Additionally, the company garnered Rs 4.3 crore from non-operating sources, bringing the total revenue to Rs 87 crore for the fiscal year.

Significantly, 70% of Tracxn’s revenue was generated from markets outside India, with a strong presence in international regions such as America, APAC (excluding India), Singapore, the UK, Germany, and others.

Similar to other internet companies, employee benefits were the largest expense for Tracxn, comprising 88.3% of its total expenditures. This expense grew by 3.39% to Rs 69.25 crore in FY24 from Rs 66.98 crore in FY23.

Other costs, including legal, travel, advertising, depreciation, information technology, and overheads, increased overall expenses by 3.5%, reaching Rs 78.4 crore in FY24 compared to Rs 75.7 crore in FY23.

The combination of flat revenue growth and deferred tax expenses (as explained below) resulted in an 80% drop in profits, from Rs 33.1 crore in FY23 to Rs 6.5 crore in FY24.

Note: In the quarter ending March 2023, management recognized deferred tax assets on carry-forward business losses based on the anticipated future taxable profits. This deferred tax led to Rs 33.1 crore in profits for FY23. Excluding this, the profit would have been Rs 9.94 crore in FY23.

On a per-unit basis, Tracxn spent Rs 0.94 to earn a rupee in FY23. As of Monday, Tracxn’s shares closed at approximately Rs 94, with a total market cap of Rs 982 crore. Backed by investors such as Peak XV, Accel, and Elevation Capital, Tracxn listed on the Indian stock exchange in October 2022.

While the market cap might appear ambitious, market expectations for margin improvements in knowledge-based businesses remain high. Additionally, Tracxn’s

significant international presence offers potential for substantial gains. However, despite the low margins, fierce competition for talent will likely continue to pressure margins. Ultimately, with its considerable scale and global reach, Tracxn needs to discover cost-effective sales strategies or target new market segments.