NIIT Learning Systems Limited (NLSL) has reported a robust performance for the quarter ended June 30, with significant revenue growth and strategic expansion through acquisition. The company's financial results and recent developments highlight its resilience in a challenging global economic environment.

Financial Performance

NLSL reported revenue of INR 4,514.00 million, representing an 11% year-over-year growth and a 5% quarter-over-quarter increase. In constant currency terms, the growth stood at 8% year-over-year and 5% quarter-over-quarter.

The company's EBITDA reached INR 951.00 million, with a margin of 21%. While this represents a 7% year-over-year decline, it shows a strong 11% quarter-over-quarter improvement. The EBITDA margin expanded by 112 basis points compared to the previous quarter.

Strategic Acquisition

NLSL completed the acquisition of MST Group, a leading provider of managed learning services based in Munich, Germany. The acquisition, valued at EUR 22.37 million, was executed through NLSL's wholly-owned subsidiary, NIIT Ireland Limited. This strategic move is expected to strengthen NLSL's presence in the DACH region and expand its capabilities across Europe.

Key highlights of the MST Group acquisition include:

• Addition of seven new Global 1,000 clients to NLSL's portfolio
• Expansion of NLSL's managed learning services client base to over 100 globally
• Enhancement of capabilities in the automotive, industrial, and energy sectors
• Establishment of a nearshore hub in Hungary for multilingual service delivery

Business Highlights

NLSL continued to demonstrate strong customer traction during the quarter:

• Added two new MTS (Managed Training Services) customers
• Renewed three contracts, maintaining a 100% renewal track record
• Total MTS customer count reached 95 by the end of Q1

The company made significant progress in building out its AI capabilities, implementing enterprise-grade AI solutions for key clients.

Market Environment and Outlook

Despite challenging macroeconomic conditions leading to longer decision cycles and increased focus on cost optimization, NLSL remains optimistic about its growth prospects. The company provided guidance for the fiscal year:

• Organic growth expected to be 10%+ in constant currency
• Full-year EBITDA margin guidance of 20-21%
• The MST acquisition is expected to contribute an additional 3-4 percentage points to growth

Sapnesh Lalla, CEO of NIIT Learning Systems, commented on the results, stating, "Despite this challenging environment, the business delivered an 11% year-on-year growth and 5% quarter-on-quarter growth. This echoes the trust and faith that our customers put in NIIT to be able to service their critical needs."

NLSL continues to invest in new capabilities and go-to-market strategies, with a particular focus on generative AI across multiple work streams. The company aims to leverage these investments to deliver measurable learning outcomes for clients and transform how learning is delivered.

As NIIT Learning Systems navigates through the current market uncertainties, its strategic initiatives and robust performance position it well to capitalize on the evolving needs of the global learning and development market.

NIIT Learning Systems Limited (NIIT MTS), a global leader in managed learning services, has announced its financial results for the first quarter of the fiscal year, ending June 30. The company demonstrated resilience in a challenging economic environment, posting revenue growth while facing pressure on profitability.

Revenue Growth Amidst Economic Uncertainty

NIIT MTS reported a consolidated revenue of Rs 4,513.54 crore for Q1, marking an 11% year-on-year increase from Rs 4,072.29 crore in the same quarter last year. The company also saw a sequential growth of 5% compared to the previous quarter.

Profitability Under Pressure

Despite the revenue growth, the company experienced a decline in profitability:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stood at Rs 951.00 crore, down 7% year-on-year from Rs 1,024.00 crore in Q1 of the previous year.
• EBITDA margin contracted to 21.00%, a decrease of 408 basis points from 25.00% in the same quarter last year. However, it showed a sequential improvement of 112 basis points from the previous quarter.
• Consolidated net profit decreased to Rs 493.00 crore from Rs 600.00 crore year-over-year, representing an 18% decline.

Key Financial Metrics

Business Highlights

• NIIT MTS added two new Managed Training Services (MTS) clients during the quarter, bringing the total MTS client count to 95.
• The company maintained its track record of 100% contract renewals, with three contract renewals in Q1.
• Revenue visibility stood at $388 million at the end of the quarter.

Strategic Acquisition

Subsequent to the quarter end, on July 9, NIIT MTS completed the acquisition of Germany-based MST Group through its wholly-owned subsidiary NIIT (Ireland) Limited. The acquisition, valued at €22.37 million, is expected to expand NIIT MTS's presence in Europe's fastest-growing region and increase market penetration in the automotive and industrial market segments.

Management Commentary

Vijay K. Thadani, Co-founder NIIT and Vice Chairman & Managing Director of NIIT MTS, commented on the results: "NIIT MTS continues to demonstrate remarkable resilience by delivering strong sequential growth with a healthy margin in a volatile and uncertain environment. The addition of MST Group to NIIT MTS' family marks a major next step in our global expansion strategy."

Sapnesh Lalla, CEO and Executive Director of NIIT MTS, added: "NIIT MTS continues to maintain its track record of 100% contract renewal. Key customers and leading industry analysts acknowledge our pole position in AI in learning. The addition of MST Group creates an opportunity for the company's growth in the DACH region."

Industry Recognition

NIIT MTS continued to receive strong industry recognition for its capabilities:

• Named a Strategic Leader on the Fosway 9-Grid™ for Digital Learning for the third consecutive year.
• Recognized in the Top Training Companies in Learning Services by Training Industry, Inc. for the eighteenth consecutive year.
• Featured on the Training Industry, Inc. Top 20 Custom Content Development Companies list for the fifteenth consecutive year.
• Earned the Databricks APJ Training Partner of the Year award.

As NIIT Learning Systems navigates through economic uncertainties and cost pressures in the market, the company remains focused on leveraging its strengths in AI-driven solutions and expanding its global presence to drive future growth.