Chennai-based data and analytics firm LatentView Analytics is witnessing delay in closure of new deals and contraction in deal sizes due to prevailing macroeconomic uncertainties in the global markets.  

“In general, the market is still a little slow when it comes to decision making. Many of the clients who even have budgets at this point in time are still sitting on the fence when it comes to kicking off large initiatives,” Rajan Sethuraman, CEO, LatentView Analytics, said in the company’s Q1FY24 earnings call. 

He added that while the clients are ready to take on some small pilots, commitments to the larger initiatives will take a little bit more time.

Revenue rises 23%

The company posted a muted 4 per cent growth in net profit at ₹32.9 crore for Q1FY24 as against ₹31.5 crore for the corresponding quarter of the previous fiscal. Its revenue from operations grew by 23 per cent year-on-year to ₹147.6 crore (₹119.9 crore) during the latest quarter. 

As of Q1FY24, the company had a total of 65 clients. Three clients in $500 million plus size, 10 ($100-500 million clients), eight ($50-100 million clients), and 44 ($50 million clients).

Sethuraman said the average deal size of the company a year ago was in the range of $600,000-$700,000. “What we have witnessed in the last two quarters is because of uncertainty, most new projects that get kicked off are smaller in size.”.

He further said, in the last couple of quarters, the deal sizes have fallen down to $214,000 kind of a mark. However, he added that the average deal size will inch up closer to $1 million kind of a range and the tenure will get longer than the 12 months from a three-year perspective. 

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In Q1, the top five clients contributed 60 per cent of LatentView’s total revenues. Sethuraman said two of its clients have crossed $15 million annualized revenue run rate. The company also had its first client in the European market, which it is looking to penetrate for a while.  The company had also got an Indian client, which is one of the largest two-wheeler manufacturers in the country. 

Sethuraman said, many of the new wins have started off on a much smaller ticket size in comparison to what was experienced in the previous quarter. “I think that is the reflector of the general macroeconomic scenario.” 

As of Q1FY24, the US market contributed 96.5 per cent of the company’s total revenue, followed by the rest of the world (3.2 per cent) and Europe (0.3 per cent).

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