Zaggle Prepaid Ocean Services Limited is a leading Indian fintech company offering spend management solutions through SaaS and prepaid card-based platforms. It serves over 3,400 corporate clients with products like Zoyer, Propel, and Save. Zaggle integrates AI-driven automation, UPI, and card issuance to streamline expense tracking, employee benefits, and vendor payments, driving digital financial transformation across enterprises.
In this article we are going to discuss the summary of the management commentary that was delivered on Q4FY25 performance.
Business Overview
-FY25 was the best-performing year ever for Zaggle.
-Q4 FY25 Revenue: ₹411 Cr (51% growth YoY), Adjusted EBITDA: ₹38 Cr (40% growth YoY), PAT: ₹32 Cr ( 67% growth YoY).
-FY25 full-year Revenue: ₹1,303 Cr (68% growth YoY), Adjusted EBITDA: ₹125 Cr (46% growth YoY), PAT: ₹88 Cr (99% growth YoY).
Investments & Acquisitions
–TaxSpanner: FY25 revenue of ₹3.35 Cr; FY26 growth expected at 60–70%. Targeting underserved gig worker ecosystem with ZUGS (Zaggle Unified Gig Worker Savings).
–Mobileware Technologies: Revenue up 98% YoY to ₹33.89 Cr; supports UPI infrastructure and API banking (notably with Suryoday Bank).
-Board-approved strategic investment in EffiaSoft Pvt Ltd.
-Signed an MoU with Mesh Payments (US) – expands AI-driven T&E solutions globally.
AI & Innovation Focus
-Transitioning from rule-based systems to AI-powered, context-driven platforms.
-Launching Zaggle Co-Pilot: AI assistant for finance teams.
-Emphasis on Model Context Protocol (MCP) for faster onboarding and revenue realization.
FY26 Guidance
–Standalone Revenue growth: 35–40%.
–EBITDA Margin: Raised guidance to 10–11% (vs. 9–10% earlier).
-Targeting long-term EBITDA margin of 12–15% in 3–4 years.
Operational Highlights
-Serving 3,455 customers, with churn <1.5%.
–3.28 million active users on Zaggle-powered platforms.
-Signed marquee clients: Indus Towers, Mamaearth, Truecaller, Aster DM Healthcare, etc.
-App improvements for better expense tracking and incentive monitoring.
Product-Specific Developments
-Expanded Zoyer, Propel, and Save offerings.
-Strategic collaborations:
- GIFT City: Prepaid citizen card and visitor management system.
- Thomas Cook: Integrated T&E platform.
- Redington & Google: Co-developing Smart Employee Purchase Program (Smart EPP).
Platform Usage & Cross-Sell Success
-Cross-sell examples:
- Tech Mahindra: Added Zatix and corporate cards.
- Physics Wallah: Adopted BROME to manage 850+ branches.
–Bank of India empanelment as prepaid card issuer.
–TPAP approval from NPCI enables UPI payments directly via app.
Financial Highlights (Q4 FY25)
- Revenue: ₹411 Cr (⬆️ 51% YoY).
- Adjusted EBITDA: ₹38 Cr (⬆️ 40% YoY).
- PAT: ₹32 Cr (⬆️ 67% YoY).
- Cash PAT: ₹39 Cr (⬆️ 86% YoY).
- Propel revenue: ₹245 Cr; SaaS fee: ₹9.3 Cr; Program fee: ₹157 Cr.
FY25 Full-Year Financials
- Revenue: ₹1,303 Cr (⬆️ 68% YoY).
- Propel growth: 71%; Interchange Fee growth: 70%.
- Adjusted EBITDA: ₹125 Cr (⬆️ 46% YoY).
- PAT: ₹88 Cr (⬆️ 99% YoY); Cash PAT: ₹111 Cr (⬆️ 66%).
Capital Expenditure & Efficiency
- Improved cash flow from operations: ₹19.8 Cr in FY25 vs negative in FY24.
- DSO reduced from 82 days to 60 days.
- FY26 expected ESOP expense: ₹9–10 Cr.
- Capex includes new office and product development (Zatix, ZIP, Fleet solutions).
Question and Answer Session Highlights
Why did program fee growth slow to ~15% in Q4, and what’s the outlook?
YoY program fee growth was ~70%, but Q4 saw 15% due to a focus on rofitable and cash-efficient growth. We aim for 35–40% growth in FY26 and expect program fees to grow in line with this guidance.
Why did Propel margins reach 10% in Q4 vs ~6% for the year?
The Q4 boost was driven by Overriding Commissions (ORCs). FY26 margins for Propel are expected to remain between 6–7%. Margins will further improve once a planned merchant platform acquisition closes.
How will the Mobileware UPI integration impact revenue and margins?
Mobileware is a 38% owned investment. We use their UPI/API infrastructure for Zaggle’s TPAP and BROME solutions. While we are a client, the investment boosts ecosystem capabilities; Mobileware’s financials remain separate.
What was the customer acquisition cost (CAC) for FY25?
Zaggle spent ₹360 Cr in customer acquisition.
Cash from QIP will be used for product development, working capital, and acquisitions.
Why did Zoyer growth appear muted despite being a star product?
Zoyer is growing well. However, we consciously controlled incentives to improve profitability. This temporarily moderated top-line growth. The take rate remains around 1.7–1.75%.
When will large quick-commerce client deals (e.g., Zepto, Blinkit) scale up?
Some clients are live; others will go live in 4–6 months. Post-PoC, scale-up takes time due to large branch networks and client-specific integration needs.
Why didn’t Propel margin expansion flow into overall EBITDA margin?
Q4 margins are typically compressed due to corporate incentive payouts. Nonetheless, full-year EBITDA margin was 9.6%, within FY25 guidance of 9–10%.
What caused the spike in “Other Expenses” in Q4?
Mainly due to marketing, sales promotions, and network integration charges for new clients. Capex also increased due to new product development and office space.
What are the “Other Current Assets” blocking ₹40 Cr+ of cash?
It includes ₹60 Cr of gift voucher stock and ₹90 Cr of preloaded card balance. The year-end timing (with holidays like Eid) led to unfulfilled but paid orders.
Will EBITDA-to-OCF conversion improve in FY26?
Yes. DSO improved to 60 days from 82, and cash flow from operations turned positive at ₹19.8 Cr. Focus will remain on capital efficiency.
What is the current performance of TaxSpanner?
FY25 revenue was ₹3.35 Cr. FY26 growth expected to be 60–70%, especially with the ZUGS platform targeting gig workers.
What’s the status of the M&A pipeline post QIP fundraise?
We are in advanced stages with multiple targets. Delays are due to lengthy due diligence. Expect updates soon. Acquisitions will be largely margin-accretive.
How does BROME feature in the revenue split?
BROME is part of the Zoyer suite, and while growing well, its contribution isn’t disclosed separately yet. Future reporting may provide more visibility.
What is the expected consolidated revenue growth for FY26?
Standalone guidance: 35–40% growth.
If all acquisitions close before September, consolidated growth could be around 80%.
Can Zaggle provide Monthly Recurring Revenue (MRR) metrics?
We’ll consider sharing MRR data in future updates to give better visibility into predictable SaaS income.