Sasken Technologies Limited (SASKEN) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Saskin Technologies Limited Q2FI 2027 earnings call. As a reminder, all participants will be in the listen-only mode. There will be an opportunity for you to ask questions after the management's commentary concludes. Please note that this call is being recorded. I now hand the conference over to Mrs. Siddharth Rangnekar of CDR India. Over to you, sir.

Thank you, Inba. Good afternoon, everyone, and thank you for joining us on Saskin Technology Limited's Water 2 and H1FI 27 earnings conference call. We have with us Mr. Rajiv Modi, Chairperson and Managing Director and CEO of the company, Mr. Harish Ramana, Director and President, Box Technologies, Mr. Anoop Savla, Chief Executive Officer, Silicon, Saskin Silicon, Mr. Yogesh Rathi, Global Delivery Head, and Mr. Pieranjan, Chief Financial Officer of the company. Mr. Rajiv Modi will begin by sharing his perspectives on Saskia's strategic direction and the key developments during the quarter. Mr. Priyaranjan will then take you through the financial performance for the quarter, following which we shall open the floor for a question-and-answer session. Before we start, I would like to point out that there are certain forward-looking statements that could be made on today's call, and a disclaimer to this effect has been included in the earnings presentation that has been filed on the stock exchanges. I would now like to invite Mr. Rajiv Modi to make his opening remarks. Over to you, sir.

Thank you, Cesar. Good afternoon, everyone, and thank you for joining Saskin's Q2 FI27 earnings call. For those who may be new to Saskin, we are a product engineering and technology ER&D company. We work with global customers and hyperscalers to design, develop, test, and support technology products across their lifecycle. Our work spans semiconductors, embedded software, automotive systems, communications, and connected devices. Our chip-to-cognition approach brings these capabilities together, turning technology ideas into products and solutions that can be developed, deployed, and scaled for our customers. Let me start by sharing with what we experienced from the market during the quarter. Technology spending is increasingly directed at engineering-led programs that connect silicon, software, and connected devices, which is where our capabilities sit. Customers are consolidating vendors and looking for partners who can take on larger, more integrated scope. In automotive, the longer-term shift towards software-defined vehicles, connected mobility, digital cockpits, and evolving electric vehicle architectures continue to create opportunities for engineering partners like us. Similarly, in communications and connected devices, evolving network architectures and intelligent connectivity requires specialized engineering capabilities. These are areas where Saskin has built experiences over several decades and where it continues to engage closely with marquee customers. Over the past two years, we have brought semiconductor design, embedded software, connected devices, and ODM capabilities together into an integrated business. The priority now is for us to make these capabilities work seamlessly across customer programs, take on greater product responsibility, and translate this breadth into deeper relationship, stronger execution, and sustainable growth. Artificial intelligence is changing both the products our customers build and the way engineering work is delivered. We see it as an opportunity to strengthen our business while recognizing that customers will expect measurable productivity and quality improvements. Complex work in chip design, firmware, and safety-critical embedded systems will continue to depend on domain knowledge, validation, and engineering judgment. Our four priorities are internal efficiency, AI-enabled delivery, customer-facing AI capabilities, and organizational readiness. We'll measure progress by value delivered to customers and the improvement in our operating performance. Turning to the quarter, Saskin recorded a consolidated revenue of rupees 321 crores, representing 26% year-on-year growth, while moderating 5.4% sequentially. Our scale was accompanied by improved profitability, with EBIT increasing meaningfully over the previous quarter, reflecting our focus on disciplined execution, even as we implemented annual salary revisions across levels in July, keeping with Saskin's established commitment to its people. We added 40 logos in the quarter, expanding our active customer base 201. Notable wins included a multi-year telematics engineering program with the leading European Automotive Group. Cockpit and ADAS work for European Automotive OEM, engineering across applications, HMI, middleware, and testing for an Indian EV company, and an integrated asset tracking solution, spanning devices and software. During the quarter, we also launched Juniper Alta, a new device developed end-to-end and brought to shipment within 18 months. The program demonstrates our ability to take products from concept through engineering and commercialization. These engagements demonstrate how customers are interested in Saskia with broader engineering responsibilities. Our task is to convert these wins into steady program ramp-ups, disciplined delivery, and stronger returns. Our customers continue to value how we work. Our CSAT stands at 4.5 out of 5, well below the industry benchmark of 3.75. At the close of Q2, the ad count grew by 7%, with LTM attrition lowering to 9.3%, and utilization improving to 86%. We recognize that the timing of customer decisions and program ramp-ups can vary. We'll remain close to customers, invest selectively in relevant capabilities, and maintain discipline around execution, margins, and working capital. As we have said before, scale must translate into stronger operating performance and sustainable shareholder value creation. I'll now hand over to Ranjan to take you through our Q2 FY27 financial performance and other key operational details. Thank you.

Thank you, Rajiv. And a good day to everyone. Q2 was a quarter of meaningful profitability improvement and healthy order momentum, supported by disciplined execution across the organization. Our consolidated revenue for the quarter was 321 crores, up 25.6% year-on-year, and lower by 5.4% sequentially. This takes our first year's consolidated revenue to 660 crore, a growth of 24.8% over the same period last year. Software services continue to drive this growth, supported by operational efficiency and ongoing improvements in our business model. Software services revenue was $252 crores, up 34% year-on-year and 14.6% sequentially. Product solutions revenue moderated to $69 crores, up 2.4% year-on-year and reducing by 42% sequentially. As volumes were impacted by ongoing pressures relating to memory availability and component pricing. It is useful to view our two business segments in the context of their different operating characteristic rather than through a blended lens. Software services is driven by ongoing engineering engagements, customer spending cycles, and team ramp-ups, hence more appropriately assessed on a quarterly basis. Product solution, on the other hand, can have a quarter-to-quarter variation depending on program milestones, shipment schedules, and product life cycles. We therefore believe product solution is better evaluated over a longer period rather than through the moment in any single quarter. Our gross margin for the quarter stood at 26.8% or 86 crores in absolute terms, increasing 64.7% year on year and about 490 basis points higher than the last quarter. Gross margin for half year also improved to 24.3% as compared to 19.3% in the previous year. The margin improvement was primarily driven by favorable business mix, improved utilization, operational efficiencies, and exchange rate gains during the quarter. Software services gross margin improved by 160 basis points sequentially to 32.2%. Product solution gross margin also improved to 7% in Q2 from 5.9% in Q1, supported by a ramp-up in silicon product margins. As we benefit from operating leverage, EBITDA for the quarter was 41 crores, translating into an EBITDA margin of 12.9%, an improvement of 330 basis points sequentially, and 700 basis points year-on-year. EBITDA for the quarter stood at 29 crores, with an EBITDA margin of 8.9%, up 250 basis points sequentially, and 660 basis points year-on-year. Consolidated profit after tax stood at 26 crores and a margin of 8%, up 8.8% sequentially, and 143.8% year-on-year. For the first half of the year, EBITDA margin was 11.2%, EBIT margin was 7.6%, and PAT margin was 7.4%. I am pleased to report that we closed the quarter with a healthy order book. Our total contract value signed during the quarter was USD 47 million, of which 25 million represented new bookings, and the rest was renewals. TCV increased by 66% over the same quarter last year. Annual contract value for orders one in the quarter was about 34 million. Our customer base continues to expand as we broaden our revenue base. Contribution from our top five customers improved to 49% as compared to 56% in Q1. While contribution from top 10 customers was at 63% in Q2. We continue to track the development of our strategic accounts and the conversions of new bookings into revenue. Our balance sheet remains strong. We close the quarter with a cash investment position of about 399 crores. Our focus for the remainder of FI27 remains on converting bookings into revenue, improving the quality of business mix, maintaining cost discipline, and strengthening profitability. Emphasis remains on financial discipline and prudent capital allocation, while remaining flexible to invest in capabilities and opportunities that support the business. With this, I'll hand the call back to our moderator to open the floor for questions.

Thank you very much, sir. Ladies and gentlemen, we will now begin the Q&A segment. Anyone who has a question may click the raise hand icon located at the bottom toolbar on your screen. When called upon, you will receive a prompt to unmute. To ensure we provide space for as many participants as possible, we request you to limit yourselves to two questions per turn. We will wait for a moment while the question queue assembles. We will take our first question from Dev Gulwani. May we request you to please unmute and go ahead with your question.

Good afternoon, Rajiv sir and team. Sir, since there is going to be memory shortage going forward, how do you see the product solution segment performing? What growth can we What do you expect in the segment in F527?

Can I request Arish to answer that question?

Yeah, thanks, Ajith. So, we all know that memory segment is very crucial for our product solutions. And that is one component which is very high in demand. Working with our enterprise customers, We are able to work with multiple semiconductors manufacturers to secure almost 90 to 95% of memory required for AFI-27. So we are looking at a healthy, you know, the next two quarters. This also is, you know, there are multiple channels we have approached. First, one is through direct engagement with various suppliers. Second, our customers have leaned on this, and they are helping us getting memory from various other suppliers as well. I mean, their partner, other partners, and we are also securing memory from the open market. Last but not the least, we are also changing the memory configurations from higher memory configurations to a lower memory configuration to manage the cost. That has significantly helped us retain the outlook of our products and solutions because the higher memory configurations obviously We also moved from DDR5 to DDR4 in most of the cases, so we are able to get larger or less because we moved to DDR4.

Okay, thank you, sir. And, sir, what drove the sharp increase in revenue in the service business, software business, and do we expect this trend to continue in coming quarters?

I mean, 15% growth quarter on quarter is something really a phenomenal thing that our team has delivered. I'm really proud of that. However, going forward, I think we would be moderating that growth to above industry average, particularly for the mid-tier or small-tier companies. So, we should be delivering single-digit growths on a sustained basis, at least for the foreseeable future.

And what was the reason behind such increase, such sharp increase?

I think we saw ramp up on multiple programs happening simultaneously, but Yogesh, maybe you can shed some more light on that.

I think, as we have been telling in the previous quarter, we won a couple of large deals, and there was a growth opportunity, And we also modeled our bench such a way that we were able to quickly ramp up the people from the bench and overall training programs, which is being run by the company by the capability engine was also instrumental in making sure that the right talent is available when the ramp up is required. So all these things discipline execution and overall synergy across multiple teams helped to achieve this kind of a phenomenal ramp up in Q2 for the company.

Okay, sir. Sir, there has been addition of new customers consistently each quarter, which is a very positive thing. But the customer mix across revenue buckets is unchanged since the year. So, what is preventing smaller customers from scaling up? And what is your strategy to move them into higher revenue buckets?

So, it takes at least a year or two before we start seeing this scale effect come in with the customers that we start engaging with, unless, of course, there are earlier relationships that allow us to move very rapidly, which we have seen in one of the large hyperscalers and adding in a meaningful way in our numbers for the last two quarters and moving forward too. So, we do believe that our focus is there both from sales and delivery. And to ensure that we broad-based, as we have promised, to grow our customers and ensure that we are more broad-based and scaling customers, I think we've seen movement, particularly in the 2 to 4 million bracket in the last quarter, as well as we have seen movement in the 1 million bracket kind of customers. So, focus, obviously, is there to see how we sell more, both from delivery and sales.

Okay, sir. And, sir, also, Saskane's incremental revenue appears to be increasingly driven by new customer addition and smaller customer, while the absolute revenue contribution from top 5 and top 10 contribution is declining from last two quarters. What is the reason behind this, and how should we expect revenue growth from existing big customers going forward? As this always has been the risk for Saskin since many years, that is decline in contribution from top customers.

No, let me take that. See our strategy of 60 by 4 by 3 was to actually broad base the customer who contribute to our revenues. And it's been a conscious effort to see how more customers can contribute to the revenue rather than being dependent on a few set of customers. So, that effort is ongoing and we would like to kind of reduce the customer concentration and that's the focus area for both the sales and delivery team at Saskin.

But having said that, I mean, as far as I know, all the top five customers are the same names that are there in quarter one and quarter two.

If I look at the data, so in Q4, FY26, the top five customers contributed 187 CR, but in Q2, it has reduced to 157 CR. So isn't that a concern?

No. See, I mean, some of the revenues, when you see it on a mixed basis, right, there's a product and services mix which is there in the revenue. The product mix definitely varies as the shipment changes. But largely, if you look at the services side of things, all the customers have actually grown in the quarter. So, we don't see that as a concern at this point in time.

Mr. Gulwani, I'm sorry, may we request you to return to the queue? There are several participants waiting for their turn.

No, I will be back in the queue.

Thank you. That question was from Dev Gulwani of KRPMS. We'll take our next question from Kossav Bhubna of Kamna Holdings. Please go ahead. Mr. Kossav Bhubna, you may go ahead with your question.

Yeah, can you hear me? Yeah. So I wanted to understand really, you know, over the last few years, margins have been pretty volatile. I wanted to understand now that we segregate our business between software services and product solutions. Could you give some guidance to us on how to look at sustainable margins on each of these businesses, software services and product solutions? If product solution margins are going to be lumpy, how do we look at it? What do you mean by, you know, your focus to improve margins as we go ahead is improve business mix, you had said in your opening comments. So, so what do you really mean by that? And what levels of margins in each business should we see as sustainable?

So, obviously, as I explained in the opening room, software services, typically, the margin improvements and the growths can be measured on a quarter-to-quarter basis because of the nature of how the engagement develops. But when we look at the product solutions, we need to look at a longer term horizon because of the how the lifecycle of the product is from the design phase to commercialization. And as a result of it's more reasonable to look at it on an annual basis. That's one. Second thing is, if you look at the gross margins, which we have published, you will get an idea of how the margin distribution is there between the software and the product solutions business. All right. Obviously, the overall portfolio mix will depend on how the scaling happens and the ability of the product solutions to scale up very quickly once we have a product win is generally much higher because it's non-Hetcon driven. The third thing is that if you look at the software margins, I think consistently over the last five, six quarters, there has been a focus to continuously improve. So from a segment perspective on the software services, you wouldn't see volatility or seeing continuous improvement, which we've been able to institutionalize both by changing the business mix, which we mean in terms of trying to change the business to more ownership driven, As well as trying to see how we can bring in concepts of non-headcount, non-lean revenues. So that effort is on on the product services side. On the product solutions, yes, there is a little bit of a challenge in terms of how to determine the quarter-on-quarter moment and the margins because the shipping volumes can definitely impact the absorption of the overheads, which could impact the margin. So that will need some more time. We will have to rate the wave of the memory challenges, all of that before things stabilize. And we will see consistent improvement in margins on that segment as well.

Okay, but could you give some sort of understanding on when this business becomes more mature versus what it is today, the product business, what steady state margins it could be on an annual basis, not on a quarterly basis? That's my last question.

So, at about a run rate of about $60 million, on a yearly basis, we should be delivering about 10% EBIT margins, Ranjan? EBITDA margins. EBITDA margins.

Okay, this is the product business, right?

That is correct. Product solutions, which we typically are running currently at about 7-8 million per quarter. Fair enough. When we scale that business up to approximately 12 to 14 million per quarter is when we will start seeing about 10 to 12% of EBITDA markets.

Fair enough. Thank you. Thank you for the analysis.

Thank you. Our next question is from Nikhil Chowdhury of Toro AIF. Please go ahead.

Yeah. Hi. I'm on Aadigul.

Yes.

Yeah. Just wanted to understand, like, despite dip in product What led to the margin improvement in that business and just wanted to understand you said that the other services business margin improvement were driven by resource utilization, operating efficiencies and currency impact. So what was the currency impact? Like, I just want to understand how much is structural, how much is one of this quarter and how much is the sustainable run rate that we should assume going forward?

So, product margins primarily improved because, again, about the operational efficiencies which we brought about in how the execution happens, largely driven by some of the executions which were done from the silicon segment, where we had some challenges in the last quarter, which we've been able to recover in this current quarter, and we believe that some of the issues which we have solved will continue to give us good results going forward. As well as the volumes have slowly started to improve on that side. So that will also help better absorption. And that's where the margin improvements can be seen in the product solutions business. On the exchange rate front, which is something which is dependent on the overall economy, I think we did about 0.5% of the margin improvement could be attributed to it from a quarter on quarter perspective.

So, technically, most of it is due to our internal better utilization and operating efficiencies.

Yeah. So, the operating efficiency comes from both sides. It's how we are deploying people onto the project, how we are structuring the projects in terms of larger ownership, and we being able to derive higher value for the services which we are doing. That's one part And the other part of things is the execution efficiencies in terms of trying to cut the bench-related costs and make it more efficient, as well as taking advantage of the scale to have better operating leverage.

Got it, got it. Thank you so much.

Thank you. Our next question is from Krupa Desai of Electrum Capital. Please go ahead. Krupa, could you please unmute your microphone and go ahead with your question.

Hi, sir. Am I audible now? Hi, congratulations on good set of numbers. I'm fairly new to the company, so I may have some basic questions. First, sir, in the product business, what exactly are we doing? Like besides designing and writing software for the devices, are we also manufacturing?

So we take a turnkey solutions from our customers. So, what it means is right from concept to design to manufacturing and as well as support. So, we do everything. So, we get the PO from the customers for the complete life cycle of the product, right from the concept to the deployment and as well as after maintenance support for that, which includes warranty.

Okay. We use third-party EMSs for manufacturing.

Okay. Besides this, out of this 47 million dollar order book, can you give a bifurcation of how much is software and how much is product solution business?

Let me just close it up.

Roughly about 38 million would be software services and the remaining will be product solutions.

Okay. And so in the software business, is any part of revenue like recurring platform or IP led?

We do have certain IP led revenues which are started to build up. But large part of the revenue that we derive is from supporting and either maintaining, supporting existing platforms or developing new platforms for our customers. Okay. We have initiated, signed up a program in our silicon business, and maybe Anup can brief on that, which is IP letter. And Royalty will derive royalties out of that.

Anup? Yes, so we have had a long-standing roadmap for us to continue to develop our IP and then leverage that IP to derive direct IP licensing and royalty, as well as attach that to additional services that we provide around that. So, we have currently engagements which take the core of our IP and license that and then derive additional revenues on top when we enhance those IPs to suit the customization needs for our customers and then attach some royalties as those designed products go into manufacturing and are sold by those customers.

How much revenue right now is coming from that royalty portion?

We do not derive any royalties yet. Royalty earning is a multi-year endeavor, which requires the customer to finish the design phase of it, continue to go through to manufacturing and then to the sale of those products. And we expect to see that in the coming years. Yes.

Okay, sir. And what are the growth guidance on consolidated levels?

At the consolidated level, while we don't give the guidance, we believe we will continue the momentum both on expansion in our top line as well as our margins.

Okay, sir. Thank you.

Rupa, one correction. The order on the services side was 33 million, not 38, as I said.

Thank you. We take a next question from Divyam Doshi of 923 Capital. Please go ahead.

Hello, sir. Congratulations on the great numbers. I am fairly new to the company as well. I just wanted to ask one thing. The European Telematics deal, the cockpit, ADAS, Cellular, SOC, IP deal were all announced. So, when do we start recognizing revenue for them? Or what's the plan about them?

I think we have already initiated the program and have started to recognize the revenue in quarter 2. And there will be further expansion on that in the starting quarter 3. Is that correct, Yogesh?

Yeah, I think so. Whatever deal we have won. So, we have achieved already the full ramp up as on 1st of October. So, we continue to work on that deal and execute and deliver Okay,

and also I wanted to know where are we for the 60x4x3 plan that is a USP?

Where are we on that in terms of, in terms of if I, there are two questions I presume you are asking. One is 240 million revenue and second question is broad basing our business. I think on the first one, we are on the task. And like I said last time, maybe I think we may be delayed by 12 months or so, but our focus is intense to see how we achieve that goal objective, both using organic and inorganic means and ensure that we meet our objective. So that's one point. And the second thing on broad basing is a continuous affair attempt at us to see that we ensure that we broad base. And that's a focus that's there inside the organization. And you will see and we are disclosing what progress we are making on that. So, that's a meta goal that we have set for ourselves to ensure that we really broad base our business and don't get caught the way we have been in the past.

Okay, so that's it. Congratulations. Thank you so much.

Thank you. Our next question is from Ritesh Chaudhary of Molecule. Please go ahead. Ritesh, your connection is unmuted. Please go ahead with your question.

Hello. Am I audible? First of all, congratulations to the entire Saskan team for such a wonderful set of numbers. Right. Sir, my first question is about the European Telematics win, right? Can you give the sense of the size, or even the range of the order, and how long is the commitment for us? And further, will it also fructify in our box division later? Sir, if you can give some clarity on that.

Well, we may not be allowed or we will not share on the total deal size in terms of dollar terms, but I can say that this much that it's over a multi-year thing, at least three to four years, gives us a good entry into a large OEM and their software company. And allows us to expand further because of the presence now we have created along with them in this area and navigate and build systematically our business with this large OEM, which is the European OEM.

Okay. Thanks, sir. So there are chances that we might even have our other segments also involving in this deal itself.

Yeah, so this is in the area of telemetrics and we are expanding and we systematically will be expanding with them on other areas also.

Okay, so my second question would be, so service revenue grew decently in first half. Given you carry 9 to 10 months of backlog roughly, how much of the second half service revenue is already covered by the signed up orders? And, sir, in general, what kind of growth we are looking in FY28?

I think on your first question, I think we would have about 90-95% of our revenues tied up for the second half, and all efforts are also on for winning more business in quarter three and quarter four. That should add. So, overall, we are fairly comfortable, confident on achieving our overall yearly numbers. For the next year, I think, obviously, we are targeting to see how we can sustain the momentum that we have created, and find ways in which we can really scale and sustain this thing that we are delivering on.

Okay, sir. One more thing. Sir, we said we have 101 active customers in our presentation, which we posted. So can you, sir, clarify how many customers would be having more than one engagement with us? Like some might be in, you know, Silicon or engineering or, you know, the box division, if we can put a roughly ballpark figure on it.

I think many of our customers will have multiple engagements, meaning multiple offerings that we are delivering into them. So, while we are not disclosing that, I can assure you that many of our customers are of the type where we have multiple engagements of different types, which is broad-basing our growth as well as stability with them.

Okay. So similarly on the automotive side, recently we have talked a lot about automotive, right? So out of our current order book, how much would be automotive, if we can give rough sense?

I don't think we give that data.

So we only publish services and product solution segment information. We don't currently publish vertical level detail because given our size, If you try to split the numbers by vertical, there will be fluctuation quarter on quarter, which would not give meaningful information for the investors. So, at an appropriate size, going forward, we will probably make that disclosure. But at this point in time, we don't give a vertical base split.

Fair point, sir.

All I can assure you is that the order books are broad-based and it's not segregated in one specific area. So, we have order books in semiconductors, in automotive, in devices, in communications, in our ODM, our semiconductors, every of the things have a LD order book as we are progressing through this.

Sir, one more thing. There is a spike in our inventory, right? I am assuming it would mostly be memory.

That's correct. It's a combination of largely memory and other components which are required to deliver to customers where there are supply chain issues.

But these are all backed by firm customer orders so there is zero risk on us holding on to the inventory.

Okay. Fair point, sir. That was it from my side. And all the best for your future endeavors. Thank you. Thank you.

Thank you. Our next question is from Vimal Gohil from Alchemy Capital. Please go ahead.

Thank you very much for the opportunity, sir, and heartiest congratulations to the entire team at Saskin. Splendid quarter. And very, very exciting to see our margins scale up, Especially in the on the software piece scale up to a level with we are at par or above some of the larger peers as well. My question is to Anoop on the silicon space. Given the environment we are in, I think a lot of enterprises globally are looking to sort of have things in house. How can we, you know, capture this particular opportunity to help You know, large technology enterprises, you know, in their endeavors, endeavors to design their own silicon chips. How are we looking to capture that opportunity? Is that limited to only, you know, some of these large technology companies or, you know, you're looking at similar opportunities outside as well?

Thank you for that question. And that is indeed one of the founding themes of Sask and Silicon when we formed it as a group company. And a trend that we're continuing to benefit from. So what we've seen is what used to be traditionally what you would call the silicon design and manufacturing companies are no longer the only ones designing custom silicon for applications. What I think the trend is obvious in the last five to 10 years that a lot of hyperscalers who would not count manufactured silicon as their core business are getting very seriously with a lot of capital investment into manufacturing their own silicon. That trend is also reflected by some medium sized companies who need custom silicon to enhance the performance and quality of their products. So we are going after all of those companies. And in fact, they remain one of our strongest growth areas.

Anup, how are we looking at the scale up of this business? Of course, we're not reporting it separately. But, you know, what's the five-year vision here? If I may say so, qualitatively, what are we looking at?

Sure, thanks for the question. We have multiple pillars in this business. It is something that we've expanded upon in previous quarters as well. Our consulting business, which is driven by us Helping, consulting with companies and helping them design products of their own, and our IT licensing business are both driven towards how do we capture all the trends that we're seeing and continue to do better licensing deals, larger licensing deals, as well as help companies achieve greater, faster design cycles, especially the types of companies we just talked about. The other part of it is, how do we leverage our know-how in Silicon to derive product-level growth and design products and continue to ship them, either completely owned by us or enabled for products of other companies? In all of these, we see very healthy growth that is available in the future on a secular basis. So the as the semiconductor cycle continues, it helps the data center domain, it helps the SATCOM domain, it helps the communications domain and all of that. And we see ourselves riding the growth of all of those trends and helping all those companies.

Awesome. Thanks, Anup. Sir, just one question on automotive, sir. Given the environment we are in, some of our peers have been sort of stagnating and are facing client-specific issues. A lot of large global OEMs have given profit warnings. In that backdrop, if you would want to share some of the qualitative efforts and outcomes that we've had, which has, you know, led us to grow. How have we sort of managed to grow when some of our peers have, you know, sort of facing some short-term challenges or client-specific challenges, so to say. It's a tough environment out there, especially for autos. So, how are we doing there?

I think the automotive industry is going through a transition, both macro as well as from a technology perspective. So, simultaneously, two things are coming together. One is, of course, the geopolitical one and second is the technological one. I think our closeness to the technology is helping us navigate because we do still see spends happening and customers having to spend on what's the next coming in. I think we have talked about it. We are starting to see investments getting made in high performance compute and all. And those are largely led in many ways because of the impact AI is expected to bring in. So I think those are the areas where our focus is while we are managing and supporting customers in their current customer programs. So, those two things, and third, of course, large part is our closeness with semiconductor partners. So, those three things, in my opinion, are the key pillars for us to kind of continue to build our focus on, which is helping us navigate the tough environment out there.

Thank you very much, sir, and best wishes for the quarter ahead. Thank you.

Thank you. Our next question is from Hitesh Kumar of Kosha Capital Advisors. Please go ahead.

Hi, thanks for the opportunity. Sir, I have two questions. One is on the BOX hardware and another one is on Saskan Silicon. So on BOX hardware, I believe you have built a good front-end sales team for the North American market over the past few quarters. Could you share what the early market response has been to the BOX hardware and ODM capabilities and whether that has translated

So, having a sales in North America has really opened up a lot of channels to us. We are getting a lot of RFPs from major U.S. telecom carriers. We are about to sign a couple of closures, agreements as well, for some of our IoT devices. It's all in the process. We look forward to a healthy next few quarters where we are going to sign at least a couple of them. We got, I won't say, we didn't put one more logo. Actually, we got Best Buy back in our saddle. Best Buy had gone off to someone else, but we got Best Buy back, right? This was not, we were serving Best Buy, you know, four years back, and we've stopped serving them, so they're back. So, like that, we are establishing our credentials with major US carriers now. So, we are getting direct RFPs from them as well. So, we hope to convert to you.

Great. Good to hear that. Thank you. And second is on Saskin Silicon. So within the Saskin Silicon business, how do you see the revenue mix shaping up between the consulting and design services work on one side and the end-to-end design through tape out and production support model on the other side, which I believe is more of an IP driven segment. So, what is the current mix? How do you see this mix evolving? And when do you really start seeing the IP-led revenues, which I believe will come along with the hardware supply? So, when should one look at that segment starting and scaling up?

Thank you, Hitesh, for that insightful question. So, the first thing that I would stress upon is that the two revenue sources that you describe are not mutually exclusive. As I was pointing out earlier, having IP, in fact, enables us to have much stronger pitch, a much stronger value proposition provided to our customers for whom we provide consulting and services. And the vice versa is also true as well, that a lot of times while we may have IP and other IP providers also may have IP, but our ability to move and be very nimble and actually customize our IP to the specific needs of the customer helps us wean that IP licensing deal as well. To answer that question more specifically, our revenue right now is on a very rough basis, split equally between two types of deals. I, however, going forward into the future, I envision that both of these will, as I mentioned, leverage each other's strengths, our consulting and our IP licensing business. And we would like to see both combined turned into a strong revenue channel.

Sure, sir. If you can share some numbers about, you know, the current size. I think last year we were about 6 million, I guess. How is that shaping up in the current year? And depending on the deal pipeline, should we, I believe it's a small base. So I think growth should continue, right? Healthy growth over here also.

I'll direct that question to Priya Ranjan to guide on how we can disclose.

We don't currently disclose separate entity level or offering level information. The segment level information is what we'll be able to share. But having said that, I can tell you that silicon has been continuously growing at a good pace. Given that it's small size, I think it's taking full advantage of that to scale up. And we would see that continue to grow in the coming quarters.

Sure. Thank you so much, and all the very best to the entire team.

Ladies and gentlemen, that was the last question for today. I now hand the floor back to the management team for closing comments. Over to you, sir.

Thank you all for your time and your questions. We appreciate your continued interest in Saskin and the perspectives you have shared with us today. This quarter reflected improved profitability and healthy order momentum supported by the trust our customers lays in us for critical engineering programs. Our priority remains consistent, building a business that is a scalable business and resilient business. If you have any further questions following today's call, please write to us at investoratsaskin.com or reach out to CDR India. Thank you once again for joining us. We look forward to engaging with you in the coming quarters.

Thank you, members of the management. On behalf of the leadership team, I would like to thank you for your time and for your continued interest in Saskin Technologies Limited. Thank you and you have a good day. Goodbye.