Banking tech firm Zeta turns profitable; reports Rs 816 crore revenue in FY23

The Indian arm of banking tech firm Zeta has witnessed a massive financial change in the fiscal year ending March 2023 by achieving profitability. 

Although the company didn't surpass the growth rates of the previous fiscal year (FY22), Zeta India reported a 32.7% increase in its revenue from operations, reaching Rs 816 crore in FY23, up from Rs 615 crore in FY22.

What are the offerings of Zeta?

Zeta, tailored for financial institutions, provides a comprehensive suite of services including credit, DDA, prepaid, loans, savings, processing, authentication, and FRM solutions.

The company's primary offerings encompass credit and debit card processing, along with APIs that seamlessly integrate with cloud-native applications. Notably, Zeta's sole revenue stream is the sale of software development services.

Having established its footprint in seven countries globally, Zeta claims that it has generated a significant 76% of its income from international markets outside of India.

What about the company's expenditure?

Employee benefits formed the lion's share of Zeta's expenses, accounting for 79% of the total expenditure in FY23. This translated to a 22.7% rise in costs, amounting to Rs 632 crore, up from Rs 515 crore in FY22. Included in this is an ESOP cost of Rs 68.3 crore, which is non-cash in nature.

Other significant expenses for the company comprised subscription, server, rent, and legal/professional fees, which collectively increased the overall expenditure by 25%, taking it to Rs 796 crore in FY23 from Rs 637 crore in the same fiscal year.

Zeta turns profitable 

As the company continues to manage its expenses well enough, Zeta achieved profitability in FY23 with a recorded profit of Rs 22 crore in the said fiscal year, a significant turnaround from the Rs 21 crore loss reported in FY22.

This comes at a time when several elite startups are focusing on achieving profitability either by limiting their focus on lucrative segments or reducing their cash burn rate.

Additionally, its EBITDA margin saw an improvement, registering a positive 4.3%. On the operational front, Zeta spent Rs 0.98 to generate a rupee of operating revenue during FY23.