Newgen Software Technologies, based in New Delhi, has set an ambitious goal to boost its revenue to $500 million within the next 3-4 years, driven by growth in the US and Europe markets.
Currently generating $150 million annually, the mid-tier technology services company is positioning itself to capture a larger market share in the mature regions of the United States and Europe. Virender Jeet, CEO of Newgen Software, emphasized the company’s serious investment in this strategic roadmap. “We aspire to hit the $500 million mark within the next 3-4 years. We’ve laid the groundwork and are making significant investments, but market dynamics and timing will play crucial roles. We hope our strategy proves successful,” Jeet stated.
The company expects to maintain its consistent growth rate of approximately 20% in FY25. Jeet expressed confidence in Newgen’s potential but acknowledged that execution challenges could arise. “While I don’t doubt the company’s potential, sometimes execution can be a limiting factor. However, we are progressing in the right direction,” he said.
By the end of FY24, Newgen, with a workforce of around 4,400 employees, posted annual revenue of $148 million (Rs 12,438 crore), reflecting a 26% compound annual growth rate (CAGR).
For Q2 FY25, ending in September, Newgen recorded a 23% year-on-year (YoY) revenue growth, reaching Rs 361 crore. This growth was driven by license sales across key markets, including Asia Pacific (APAC), Europe, the Middle East and Africa (EMEA), and India.
The company’s net profit soared by 47% YoY, hitting Rs 70 crore, up from Rs 47.8 crore during the same period last year. Profit margins also saw a substantial increase, improving by 350 basis points to 23%, compared to 19.5% last year. The rise in margins was mainly attributed to higher license revenue, particularly in the financial services sector.
Newgen is also focusing on its health insurance and government sectors, which contribute 20% to its overall revenue. Meanwhile, the banking and financial services industry remains its largest segment, accounting for 72% of total business.
License revenue saw a notable 52% YoY growth, fueled by strong deal closures, with contract sizes ranging between $700,000 and $2 billion. In Q2 FY25, Newgen added eight new clients, with notable wins across India, APAC, and new markets in Australia and Europe.
Regionally, India and the Middle East saw a 19% revenue increase, while EMEA experienced 21% growth. The APAC region, excluding India, posted a significant 53% growth, particularly in Singapore and the Philippines, contributing 15% to Newgen’s overall business.
Currently, India and EMEA account for 30% and 33% of Newgen’s revenue, respectively, while the US market, which holds a 22% share, grew by 17%. The company is making concentrated efforts to increase its presence in the US and Europe, as these markets account for roughly 70% of its addressable market.
In the near term, growth in India, the Middle East, and APAC will remain strong, but Newgen’s long-term strategy focuses on leveraging the potential of the US and Europe as key drivers of future growth.
Jeet anticipates the US and European markets to expand further as demand cycles improve.