Affle 3i Limited (AFFLE) Earnings Call Transcript & Summary

Yes. Hello, everyone. On behalf of Ambit, we'd like to welcome you all to the Investor Meet of Affle. We have the pleasure of hosting Mr. Anuj Khanna Sohum, Anuj is the founder, MD and CEO of the company. We also have the pleasure hosting Kapil Bhutani, who is the CFO of the company. We also have Karish. Karish heads the Investor Relations for Affle. So the format of the session is Anuj will take us through the strategic initiatives, and also touch up upon the acquisition that happened yesterday, followed by a Q&A for the participants here. And then, we might have some questions on the webinar. So over to you, Anuj. Thanks for giving us the opportunity.

Rahul, thank you for hosting us today, and for the investors who have taken the time to come in person. A very warm welcome to you. For those who are on Zoom online, very warm welcome to you as well. It's been 4 financial years of results that Affle has announced since its IPO in 2019. And it gives me a lot of comfort and conviction that we know each other much better now. So we understand the public markets, better public markets, institutional investor [Technical Difficulty] better. For financial years of results and discussions, I think we have [indiscernible] about how to be together. And I feel very comfortable and [indiscernible] you and in every earnings call I become even more comfortable in actual to share about our company, about our situation about plans. And we have seen enough in these 4 years with this slowdown [indiscernible] in COVID situation. Everybody [indiscernible] we didn't know how a [indiscernible] of the e-commerce people couldn't advertising budgets were suddenly low, and we were always -- we were not sure what would happen. I think, we went through that tide of 2021 very well. And then, we started to see some turbulence around FY '23, the last one financial year about the macroeconomic headwinds. And I think all of us have seen different levels of that, and that's still kind of continuing. But we have also seen how app has performed through these various changes and most importantly, how we have communicated to these changes. And the idea is that whatever is going on, let's provide transparency, let's provide clarity, be proactive to make sure that our investors can always appreciate what this team is doing and what we are up to. In the last month, April 2023, Affle turned 18 years, which is, in my opinion, a young [indiscernible]. Affle is still a young and an upcoming company. We are a fast-growing company. And when you lead the company for 18 years, I think what matters most is credibility. Making sure -- and of course, I'm only 45. By the time Affle is 45, I hope all of you would see what a credible journey this company has delivered, and made that create great disproportionate value for the shareholders as well. So with that in mind, I'm here to present to you Affle's growth strategy and update by 2024, a year that's already started. We are almost 1.5 months into the year. And where there's quite a lot of foundational strategic execution that has already happened, and is happening in the first quarter itself. And we hope to deliver great outcomes and incremental upward lift in what we achieved in this financial year through the next quarters and onwards. So let me take you through that in more detail. These were the five things that I talked about in our earnings call, which was just a few weeks ago. And I will just do a quick recap of that, and also give you a peak of how we have done in those since the time, I last updated you. So the first is that with respect to developed markets, right? We have already talked about it for the last 2 to 3 quarters that there are headwinds there, and we have seen impact there. How do we turn around that situation? This is really where a captain knock comes in, right? As the CEO of the company, as an entrepreneur who's hands on building Affle, I take direct charge of the developed market teams, so that we can upsell, cross-sell all our platform capabilities on CPCU market in the developed markets. As we talk right now, there's an event -- an industry event being in Las Vegas. It is called the MAU. It's one of the most important industry events for our company or our industry. And there are 17 people from Affle, who are at that event, right now. And they are out there with a very strong message, we're standing to all. We are standing confident telling our customers or potential customers, if you're spending on mobile advertising, you must spend with Affle. Also, [indiscernible] our competitors and employees of those competitors that if you are a strong talent in this company and you want a long-term career growth, work for us. So I think, we're putting a very strong content front in the industry, in developed markets, and I'm directly leading this -- the business units for this financial year. And I think, that's a very important message where when there is a challenge, maybe put our best foot forward. And I think we're not shying away behind. It's far you've got to travel, you're going to travel more actively, and I'm ready to do whatever it takes to make it right. I'm very confident that we are already seeing signs of that. Second, strategic partnerships that our company has with our publisher partners, with our operators and OEMs around the world, we are also realigning and strengthening and making [indiscernible] right? So again, that's [indiscernible] and on -- and this is not just an impact for this financial [indiscernible] the next 3 to 5 years, right? To solidify our position across emerging markets, across developed markets and leverage those partners giving them stronger visibility of what they can get when they [indiscernible] right? So there are several things involved with them, technology integrations, data integrations, making sure that there is a deeper connect people, dedicated teams and so on. A lot of let's say, deeper engagement that's involved in it. In fact, starting on a call with one such partner and we were supposed to clenching and finalizing these things. And whenever we sign a significant material contract. Of course, we will notify and inform you all so that you know what to expect. Third, in terms of products and platforms, we are also seeing, how we can go higher up in the value chain, which means that we should help us in having a higher pricing means the CPCU rates should be helped further, as well as higher margins as you go higher up in the value chain, typically [indiscernible] is no different. You end up getting better pricing, better margin and better negotiating power and very importantly, greater pride within the organization that we are playing in the highest segments and better respect from the stakeholders in the industry that we're going up. So how do we achieve this point number 3 and 4? CTV. Everybody knows this is an important area. This is an upcoming area. And within the CTV [indiscernible] with the differentiation called household sync, where all the people who are within the household, we are supposed to provide some ways of contextualizing the messaging and communications with them. And our advertisers already appreciate it. But, now what we're doing is saying we're going to marry that to the CPCU business model. And when we marry that to the CPCU business model, we become, in my assessment, the only CTV platform that offers CPCU-based conversions and ROI linked model to the advertisers. This would give us a sharper penetration point in getting budgets, even in markets where we are let's stay relatively less or known. In developed markets, we go with CTV plus CPCU, we have a seat on the table to have a negotiation, discuss, can we get your budgets? Because we're offering, a, differentiated product, but more importantly, combined with the differentiated and a compelling business model, especially more compelling when there are economic headwinds. So this should help us. And again, this is basically going higher up in the value chain, both on the product, as well as on the business model in combination. The fourth point is Apple, iOS devices. And on Apple iOS devices, I think all of us will be agree that in any country in the world, developed or even emerging iOS device users are probably having the higher purchasing power, right? And they are being more premium segment. Now within iOS, we already have a product that delivers solutions to advertisers on what's called the scan or the SCAD network of Apple, and we have solutions on that. But we're also now rolling out very important touch points on the Apple App Store, right? So they have certain touch points there, where you can help apps and products to be discovered by the consumers, and those are unique placements. So when we combine these propositions, we're seeing on iOS platform, both in developed markets as well as in emerging markets, we have the right solution for the advertisers to work with us for the highest and the most premium consumer conversion segment, okay? And finally, the fifth point, which is about recalibrating our strategy for inorganic growth by focusing on how our customers, which is the advertisers, how can all of our customers, advertisers have their own unique first-party data. How can they leverage that their own data better, to drive higher conversions across all use cases across the journey of the consumer life cycle. And then, we are focusing on certain key emerging verticals. Now on this particular point, I mean all the other 4 points have already kind of rolled out because they were internal initiatives of the first 4 points. And we were already making the foundation for that in this quarter. On the fifth point, which is about inorganic, we have also announced yesterday that we have done an acquisition. So this was announced yesterday, which is in line with the growth plan this year, which we had outlined just a few weeks ago. And we are consistent with that because Affle has acquired YouAppi because it is a global gaming focused mobile app marketing platform. It's a programmatic platform, which is working very well for the top gaming publishers on the go, especially so in developed markets at the moment, and we think that this is perfect sort of example of how we will execute the strategy that we'd already explained to you before. In terms of the transaction details, I mean, most of it is already disclosed on the stock exchange yesterday. So we signed the agreement yesterday. And within hours of that, we disclosed it, of course, to all of you. Affle International Private Limited is our wholly owned subsidiary and one of the very important subsidiaries in Singapore. And this company, our subsidiary, has now taken 100% ownership in YouAppi based on the agreement that was signed yesterday. The total consideration, and it's paid in some parts, some upfront and some end of year 1 is $45 million, of which $35.44 million is getting paid upfront. Incidentally, although you are thinking how do we come up with these numbers and budgets and negotiations, this is approximately the EBITDA we made last year. We're saying whatever EBITDA we made last year, can we -- we are already having a good cash conversion cycles in our company [indiscernible] is that in buying this company. Is that design will not be stretching ourselves beyond our means? I think, I just wanted to know we're very sensibly calibrated. And then, there is a contingent consideration, which has paid USD 9.56 million at the end of the first year into several conditions, performance, handover, both qualitative and quantitative considerations based on which we would pay that amount, right? YouAppi at a glance. I think I already gave you some sense of it, but this is a company which has been around, since 2011. And that is quite credible. Over 10 years, the team has been at this business. They have strong ground presence in the U.S. They have strong ground presence in Israel. Both of these places, we have our own teams as well, but of course, smaller teams. And now we will combine forces and become much stronger, and they have a stronger presence as well in Japan. And there, again, Affle is a small level team, but we are basically saying, "Together, we are becoming stronger with better on-ground presence in these markets with them." Their focus in terms of customers or where they run their consumer-focused campaigns is North America, EMEA and so on. And they have very strong capabilities in terms of what they have proven to do well for the gaming segment with AI and machine learning algorithms that we hope that we will further augment with -- because Affle is there and how we can combine it to make it an even sharper algorithm to drive greater conversions going forward. In terms of the revenues of YouAppi in the last reported period for them, they've done about [ USD 32.83 ] million. But since they are focused on developed market [indiscernible] of about how much you push for this financial year. But what I want to push for a lot more is the fact that YouAppi did a bad performance or margin performance, call it, a 7.5% in the previous year. And as I [indiscernible] to all of you before, I think in some interactions I had mentioned clearly that we will only acquire inorganic investments or do on investments where I believe within the first year itself, 15% to 20% bottom line performance. And I'm very confident that we've done our homework well, and we will make sure that we drive that margin on year 1 and then push the accelerator for much more growth, right? So given what's happening in the market, I think the -- our focus would be how do we maximize the synergies together within year 1 and then ramp up for much greater revenue growth. All right. So if you remember this, we had an Investors Day, and it's been a while, we should do another one soon. And in that, we have still the Affle 2.0 consumer platform stack.. And this actually -- the way to read this slide is it bottoms up, the foundation of the company is our culture, which is about entrepreneurship and the right balance, tech and innovation, sustainable growth, then comes our strategy, which is about verticalization, emerging markets and emerging verticals, [indiscernible] focus and so on. And then comes our core, let's say, data platforms, data science algorithms, capabilities, machine learning, artificial intelligence capabilities based on which we transform ads into consumer recommendations, right? So this may sound like a lot, but is this sensing you the qualitative aspect, strategic as [indiscernible] that -- and then comes our technology platforms, and that's where YouAppi fits in as well. It's one such platform that's focused a lot more on the developed markets and gaming, but we hope to expand that by bringing not only our capabilities to their customers, but also bringing their capabilities to global emerging markets, where we are very strong and gaming will continue to be a strong growth area, even in emerging markets for many years to come. So it's our important bet with respect to going into the developed markets because there, gaming is a very large addressable market, and we believe we can now have a much stronger winning position together with YouAppi. There is also a synergistic capability of bringing YouAppi and growing gaming in the emerging markets as well, including India. So this is how, we look at our consumer stack and it's consistent with our strategy and how this all fits in together. Now let me refresh you with something one of our investors message me, right? He said in your DRHP you had quoted YouAppi as well. I said, "Oh, yes, I mean, I know our DRHP quite well." But let's revise it. And we had a very clear strategic vision in our 2019 RHP code. And where we said that in our industry, there can be hundreds of companies around the world that offer some kind of digital advertising technology-based solutions, but there are a few companies that operate globally, internationally, such as us and some of those include, by the way, and we named YouAppi there and we had identified that, that this could be a good consolidation strategy. That means over 3.5 years of watching, coding, carefully assessing, waiting for the time, knowing the numbers this year, next year, next year, we saw, okay, 7.5% profit last year. Gaming quality of customers, all right. This makes sense. This is the right timing. Given the economic situation, the pricing, the valuation, the terms, all of that made sense, and therefore, we took a calibrated move. Also, in the 2021 QIP, we had very clearly given a verticalization strategy, where we said certain key emerging verticals is where we'll focus on gaming being one of them, clearly identified. And so, why I'm putting this out here for you is to tell you that we say what we talk about whether verbally or in documented positions is actually what we also do, and we follow through with that, and this is what we are doing consistently in what we're doing. And this is -- the key capability attributes about knowledge and customers, how we assess inorganic transactions and investments, how do we justify and fit this into our strategy. We look for a few things. People, the team must have domain expertise and capabilities that is complementing to our team. And it will be -- that kind of knowledge and team building is you can't just say we'll go and hire slowly and build. You can do it but it takes longer. Next is product, what do they have in the technology that is complementing. What algorithms are they working with? And how is it complementing? And finally, the platform. Platform means that they have customers, an ecosystem of publishers, advertisers, what kind of data is flowing through their system. How credible are they in the market and so on, looking at that platform and how are they rank, all of these parameters when it fits in well at the right price point is when Affle does an acquisition. And this, we have actually presented in all our corporate presentation, I think the first year after IPO. And then this is something that I wanted to tell you that is pointing towards YouAppi and it fit in all the criterias, and therefore, we did this transaction. In terms of the value that we will deliver for our shareholders through this acquisition, I think there are a few points that I want to raise. So the rationale, I've already explained to you, we have an Affle 2.0 growth strategy around verticalization. We have a clear consumer platform stack within which this fits in perfectly. And therefore, we went ahead and did this acquisition to focus with CPCU business on the gaming vertical. In terms of synergies, we have clearly seen both on iOS and Android. Android more emerging markets but also in developed markets with iOS, much more in the developed markets, but increasingly also a very big and important segment for emerging markets, including India, we see deep synergies on those platforms to work together with our algorithms augmenting what YouAppi is doing, so that we can enhance the value proposition and hopefully enhance the margins and then scale up the business, therefore. Deeper client penetration. So some of the gaming publishers and customers, they already have integrated their own apps and products together with the YouAppi platform, including some data integrations that are done. And those are valuable and they take time. It's not something we can knock on the door of a customer and say, "Hey, guys, we have a solution lets this integrated. So they have a good position there. On that, let's think of it as a highway. Right now, only the YouAppi car is driving on it. Can we drive other Affle platforms on a highway and get a greater value creation? The answer is yes. So our goal would be to upsell, cross-sell and create possibilities for those customers and more customers that are on Affle's platforms and create a complementing deeper client penetration. Of course, financial fundamentals, we could have done this acquisition 1 year ago, when they were losing money. I don't think you all would be too pleased about it. Once you know that they're already at 7.5% margin, and you know Affle's track record and the previous acquisitions we have done, where at that time, I used to guide you that I'll take 3 years to bring them to 15% to 20%. Now given our confidence and experience and our playbook is much more clear, and by the way, there's no more COVID. So we can actually go and meet and solve things much faster and better, we think within 1 year. Instead of 3 years within 1 year, [indiscernible] in 20% margin. And with that condition financial fundamentals are being met and the transaction makes. Finally, FY 2024. The question that everybody is most interested in, what's happening this year, Anuj? All right. Organic growth, let's look at FY '23, okay? FY '23 is a base point. We did about $178 million or roughly USD 180 million of revenue, about $36.4 million, 20.4% EBITDA. Quick reference, that's the money we are investing to buy YouAppi right now because that's what we have earned last year. Going forward, we expect industry level. Even with the dynamics of the headwind and the confidence that we have that are emerging markets already grew north of 20%, 25% for the whole year basis last year with the headwinds that were there. So we are confident that the emerging markets' growth plan is clearly anchored and it's over 80% of our business. In developed markets, we have taken very strong key measures, and our confidence is very high that as an overall growth organically, we should be growing 20% to 25%. Some investors ask me, you used to say 25% to 30%. Why are you saying 20%, 25%. I said depending upon the backdrop, I'm still anchored around 25%. But when I used to say 25% earlier, and we were beating it hands down year after year, so you are being too conservative. It should be at least 25% to 30%. Now, because last year's backdrop headwinds are there, are still anchored on 25%. But acting the backdrop of what's happening in the market and so we're saying 20% to 25% is a sensible way to calibrate. But what I'm trying to tell you is that we are consistent, we are anchored, we are fighting to get that kind of a growth for us. Finally, on YouAppi business consolidation. We've already told you what the numbers were for the previous period. I've told you my focus is on margin expansion first. And then, scale up or much better quality of revenue and going higher up in the value chain. All right. The presentation has come to a conclusion, but this is the start of the more fun part, which is a Q&A and we have live in-person interaction, please feel free to ask any questions you have. We also have a good audience online on Zoom, so they'll benefit from your question, if you speak with the -- there's a microphone here, so you can speak into that.

Yes. I think -- yes there's a question there at your back.

So I have three questions. First is around this acquisition. So, could you give us a little more detail? This company has established in 2011. Now last 3 years -- only the last year, it's made profit. So what changed in the last 3 years that the turnaround came in the last year?

So this company used to do general horizontal mobile advertising based services. Given that it's a relatively small team and had been around for a while, in and around, let's say, late 2019, which is soon after our IPO, they decided to focus deeply on gaming and on developed markets, particularly North America and EMEA. And they took that pivot. We said we're going to focus our resources all on gaming and so on, and they say, okay, interesting. I was interested in seeing that what they would do because I also thought that this is great, but we had -- of course, much deeper priorities and across emerging markets. And I wanted to showcase that Affle's platforms are successful across the top 10 verticals that we have and then verticalized deeper. So, I was watching and I was connected. Over these years, they just got more and more gaming customers one step at a time, improving their product and services to reach that critical mass, where they can make enough revenues and margins to cover cost of 50, 60 people that they employ to make the 7.5% that they delivered last year. So I think, it's just a natural progression, but they're pivot to focus on gaming and on developed markets was interesting. They focused on it, executed 3 years. We watched it closely. We thought this is the right time to take them on. The company -- I think you have two more questions. But basically, the company had a lot of venture capital investors, financial investors owning over 85% or so of the company. And so, it was time for them to exit and this was the time for us to come in.

And my second question is, I want to understand your strategy in terms of build versus buy. So with this, I think this is the sixth -- fifth or sixth acquisition. And I understand by nature of this or by virtue of this industry acquisitions are important, and I think you've laid this emphasis earlier as well. So can we expect this inorganic approach or an acquisition -- one acquisition per annum as a recurring phenomena? Or what do you prefer?

So let me clarify, first for the benefit of everyone. The facts are that since our IPO, which is 3.5 years ago, this is our fourth acquisition to be precise. The first one was Mediasmart, then was Appnext, then was Jampp. And Jampp was in June 2021, almost 2 years ago. So in that time -- so let's say, we are going for, let's say, slightly bigger, but still within kind of a range. I mean, just given where we are in terms of our scale and stature, we think this is still going to be like 15% of our revenue or something like that, on a forward-looking basis and or less. So I think, it's still within size, right? We're not going -- we're not biting into something that's, let's say, much bigger where integration and other complex cities in the [indiscernible] -- this is within the [indiscernible] that we have already done. So having done Jampp integration over the last 2 years, we think we are confident that we can do this transaction now. We have spaced it out enough. We have made enough profits and EBITDA to shore up our cash balances, say, let's go ahead and do that. So I think we are very carefully calibrated first. There's not some world conquest that we are on that let's go and acquire here. And they're very carefully calibrated. We have a strategy, which is well communicated, documented, and we are executing one step at a time, on that strategy and delivering enough guidance. I think for the last one year, I've been saying gaming is where we'll focus. Last year, sometime our Board approved, we can use equity to acquire, and we know what has happened to equity. Our peak -- at peak share price to now if you compare, there is a 58% upside, I'm not going to use equity to buy this company. We had enough cash built up. We said we're going to use cash and buy a carefully calibrated transaction, which fits perfectly into our strategy of growth. So, could we have built this and used maybe less money? Possibly, but we have taken 3 years. And for me, the value of, let's say, time because we are a fast-paced company, we're a fast-growth company. And this is the time when the markets are down, when the confidence of the competitive. So taking the inspiring people, easy talent is available. One could have said, go ahead and hire that talent. It is cheaper to I'm saying, but I want a full team of talent, which is already profitable at the right price point, and that accelerates you further. And the message to the industry is very clear. Like I said earlier, there's an event that is happening in our industry today. What is the message out there at the event? Watch out for Affle. This company is out there in North America to make a dent. Today, in -- as you know, Series ABC fundings are low. Consolidation is happening. Any transaction in our industry, valuation benchmarks, Affle is there. We are top of radar for all of these players; customers, competitors, partners, investors anywhere in the world, even if Affle is not doing big business. We are on the radar of the world. And we are saying that we are confident to accelerate in this time to take these investments so that you know that we're not just bullish about our organic growth. We are ready to invest and we love our business. We like what we do, and we are doubling down on that. We're not diversifying. We are verticalizing going deeper into our business. We're not saying that okay, "We already have a good business here. Let's do something else. Let's hedge and invest." We're not doing that. We know our business deeply, and we're going deeper and more premium, and higher margin. That's our game and that's what we're still very small. So I think, we need to play to our strengths, and that's what we're trying to do.

And my last question is more of a macro sort of a question. So with the launch of this ChatGPT by OpenAI. So I think, the search world or in turn the ad search word -- world that's become more democratized and possibly more competitive, ad rates might get more competitive publishers may get better yield. So I just wondered your view since you spent so much time in the industry, your view and outlook now, hence forth, what can we look forward to?

Sure. I think this is a great opportunity. First of all, search help productivity fundamentally. And I think, AI and these kind of personal assistant tools will continue to help and raise our productivity for all of us, right, from writing e-mails to writing essays to even checking algorithms or code tests or even writing code. There's a lot that you can automate. And I think, using that as a tool to enhance productivity to potentially optimizing the OpEx increase for a growing company. We'll continue to invest in our operating expenses. Our teams will get appraised. We will grow our teams and so on. That's very clear on where we are headed, but we can raise the productivity, so that for every new $1 million of business that we are doing, we need to add incrementally lesser cost, right, to grow. I think that part is one aspect. In terms of, let's say, even on ad tech, we think certain things that we can use it, AI and ML, we're already using that, by the way, it may not be in a chat format. We live by that, right? We can also say let's make our team to make a simple , but that's not our game, right? I think what we're trying to say is that we are using these technologies and capabilities to improve like when we do creative optimizations. Who do we show which creative, too? Like somebody likes green better, somebody likes red better and their response rate on conversions. A lot of these things are algorithms that we are doing. What I expect is that, yes, search will see some disruption and that's good for us. Why? Because there is a lot of money that goes into search, a lot of money that goes into search to just one particular industry player. And I think that will open things up a bit more and will allow for all kinds of innovations there, and we can also maybe at some point time innovate. In fact, one of our patents is about improving search latency, in how things work and so on. So it's not like these are out of bound zones for us, right? So we are an innovative company. We are a fast-paced company, we adapt and innovate around situation. So there -- I mean that's as much I can tell you. But one of the things that we plan together with our CTO is that there will be all kinds of automation that will happen, and these assistance will change fundamentally how much screen time happens, okay? So there may be a lot of voice-based engagement, especially for the youth, and even for the older people. So you may have a lot more vernacular and voice-based solutions that will come up. So there are innovations. We have won some patents already granted in the U.S. patent office. So we are forward-looking, and we are watching and we have a view to it. and we're keeping ourselves ready. But I think for the next 3 years, we can say this is still very nascent. It's not going to be as disruptive or as fast as what you're thinking of. So at least the next 3 years, we would continue to see a natural progression. And even then, I think the mobile device will continue to become the nucleus of how a lot of these engagements would happen with other connected devices. So I think, our focus is very clear. Let's focus on mobile. Let's focus on connected TV, connected devices, wearables, let's think of a scenario of more vernacular and voice. And I think we are prepared and we are timing it sensibly. We're not overinvesting in future use cases, but we are securing IP positions, we are creating proof of concepts, evangelizing at the right programs with customers. And when the right time comes, either we will build in house or we'll invest in minority investment or we'll acquire those companies, as the case might be. But we would be staying relevant at all points, yes.

[indiscernible] which is $33 million. In terms of client or users, are the CPCU model and the current margin, what exactly are you looking at to take it to 15%, which you said it will be within a year, you can achieve that?

Yes. So that's a great question. So in terms of the quality of the revenue, I think one of the reasons to the transaction is see, hey, the financial fundamentals should be sustainable. So yes, Affle is confident. Affle is pacing along, and I think the industry, our customers, our employees, everybody feels it. But, we are pacing along steadily, sensibly, sustainably. So the first thing is, will the revenue continue? Are they selling because they are worried that something might go away. We are very sure that we have checked it carefully, and it's defensible revenue. Second, can we enhance the margin profile of that within the -- is the 7.5% defensible? Or was there some one-off thing going on there? We've checked very deeply. We are sure that 7.5% was honorable, defensible with proper -- they have been audited by Deloitte. And I think we have turned it left, right center all around to Asia it's proper. So 7.5% is also, let's say, defensible. And question is, how do we expand that? So there are 2, 3 areas and 2, 3 levers, which are very similar to what we have done in our other acquisition playbooks, right? So first is efficiency, okay? How many servers and thousands of servers are needed to get the job done. So can we make it much more efficient? Can we drop there cloud computing costs using Affle's technology, servers and capabilities to improve their software and algorithmic performance. I think we can do that. And when we do that, we get a few basis points of margin straight away. And it doesn't involve too many people. I just need to get 2, 3 people from my team working with 1 or 2 people from their team and let's say, in a month or 2, we should be able to get that going, right, or something like that? And there is the CPCU model. Can we go deeper funnel conversions? Could we go for lifetime value improvement? Can we look for higher value users by going more iOS? Let's say, better balancing towards premium segments, you can improve pricing and margin, which is what we do day in day out in Affle's business, to say, let's give them some of that and make that happen over the course of the year. So you improve that further. And of course, some incremental growth in revenue without necessarily growing OpEx too much. In OpEx, we are typically very conservative. We don't trim around the companies that we acquire or our own company, and we're very particular about hiring sensibly and hopefully, never needing to fire anyone. But I think, what I'm trying to say is that there will be some efficiencies there. They may not need to hire incrementally because their group synergies, whether across back-end functions or otherwise. So in each of these 3, 4 initiatives, you can save a few percentage points and move it up closer to the 15%. That's how we get nothing rocket science. There's no -- I mean it's not something that -- it's not a bet which is risky and huge probability of whether it will happen or not. Otherwise, I wouldn't say it so clearly.

Two more things, is this 33, is it also number of users into grade?

Well, I think at the moment, it is some kind of a hybrid, where it's going for charging for clicks, but also some hybrid, but we will graduated to that and normalize it to that with CPCU. And we will get back to you, when we are reporting next time onwards. But our goal is to make it 100% CPCU business for sure. And like I said before, we like what we do. We believe in what we do, and we are doubling down on what we're doing going deeper in terms of verticalization and hiring more premium. So I think that's our role with this transaction as well.

Last is on this company, how many employees does..

56. Yes. Yes, sir. If you can use the mic, then the people on Zoom would also be able to hear you well.

I've got three questions. So just on the M&A front, right, let's say, looking at the business 3 to 5 years from now, what are the key gaps that you think either on the vertical side, either on the technology side that you want to acquire? You've talked about giving you've already done something on this. But, what are the key areas that will evolve over the next 3, 5 years? And any color on that would be useful.

I think it's still early, 3 to 5 years is a long time. But let's just say that is there something missing, which I am feeling handicapped about that I need to come out and buy and fill up with? The answer is no. Even here, we were not -- I mean this was a choice. It was -- it's not a compulsion. I think -- so we are in a very strong position to make choices, which makes sense had the time and price of our calling versus acting out of necessity or some kind of a pressure and therefore, perhaps making wrong decisions, be it in timing or the target or the pricing. So I think, we are in a very privileged position that we have a very strong foundation of our own, and we can choose to go slow and say we will build or in certain situations like this one, we would say no, it makes sense to buy. So there is no obvious sort of gap, which I am nervous about, filling today. Having said that, the moment we gain clarity about where we think we want to buy, we start communicating that and educating that as part of our strategy, ahead of the execution, so that when we execute you're not surprised we didn't see this coming. I think most of our investors would safely say that they already knew, they just didn't know the timing, the candidate or the pricing, which even I didn't know because we were evaluating quite a few of them, and saying which one should we clinch on, and we were evaluating them for 3 years. I already started talking about that. So, when I know something, you would know it as well is the kind of promise, unless it is competitively sensitive, or if I tell you and the pricing changes for those targets, and I will be a little bit more careful and calibrated on that, but you would know. So 3 to 5 years a long time, let's give it some space and now I'll keep you informed.

The other question is you made an interesting point on the OEM and the operator connect, right? And that's something we've acquired a couple of smaller or we made smaller investments in that area. But, if you could just provide us color on how big that contract could be? Is there a time line? I know it typically takes longer?

See, we already work with operators and OEMs or contracts already there. It's not -- that's why it's like organic, right? It's an incremental. How do you create a deeper connect? And when I say deeper, what does it mean deeper in terms of people and relationships, which means our relationship with their top management becomes stronger. It's more qualitative. It's kind of obvious. Tech integration is going deeper. We're just doing, I don't know, API connect, let's do it now deeper as the [indiscernible] of having just 5 points, let's connect to 20 touch points, right? So things like that, then it goes into the length of the contract. How long could it be? Or the depth of the contract? Is it exclusive or they'll work with 4, 5 others? How deep is it? Who can terminate? Who cannot terminate? How long will we stay married, things like that. So I think what I'm saying is that these are existing partners. We're already working with them. I am just upping the game there, and trying to make it a stronger position for our company so that -- let's put it more like this is not about how much more revenue. This is about how much more multiple. So, if I do the strategic partnerships better, for you as an investor, you say the quality of revenue has gone up the predictability has gone up, and therefore, the multiple has gone up. I'm not playing for that, but I'm just telling you and an investors language, you were thinking about it as revenue growth. I'm seeing it as a quality of revenue becoming much deeper, better predictable and therefore, it's lifting the value of the company for the shareholders.

So what I'm trying to understand is, let's say, if you do one of these contracts, could the revenue look a lot higher, let's say, one of these contracts would be, let's say, $10 $15 million, $20 million contracts in a single go or not?

But it could already be like that even without that contract, it could be like that. So I'm just trying to say that it's not -- let's say if I announce [ $15 million ] in your modeling for us, you'll see, okay, now let's had another $10 million because that $10 million was maybe already there. But when we do that deeper integration and contract, you know that this $10 million is much more sustainable, dependent, reliable for next 5 years, something like that, I'm trying to say. But of course, I mean, I'm trying to -- I don't want you to model to change every time I announce something. Now it's become -- I think I'm already quite an aggressive leader about how to grow my company. But I'm just trying to tell you, that we're improving the quality of revenue, the sustainability of that growth because what's very important for us is that each quarter that we end the next quarter has to be -- we have to be secure about what we have achieved. It can't be that you achieved so much, but you are on a safety wicket. I want a solid foundation as we go further because we have a very long-term plan with our company.

The last question, for the developed market strategy, right? It could go wrong and I've asked this question in the past. But it's because we are a relatively smaller company, which is trying to make a dent there.

As long as I'm healthy and fit, development will go find this year, at least. I mean -- but jokes apart, I think the -- our base is so small. I mean, there's nothing more that can go wrong. There's already gone wrong, okay? So this is -- we will grow from here. That's it. there has to be something to go wrong, right? The basis was small, what else will go wrong. The addressable market is big. Our products, competence team is very strong. That's why I'm saying that I'll be the capture -- I'm so sure it will be successful. I think, let's take it on.

Just on YouAppi, I wanted to understand, does this give an in-game purchase advertising option, how does YouAppi essentially work?

That's a great question. So from a consumer point of view, let's say, you're a gaming user and you're playing lots of games. Most of the game publishing houses have multiple game titles. And so one of the challenges is that the user who's playing one game, may not be playing the other 7 games and so on, so how do you create that discovery. Second is, if they are paid games. So they're trying to make money, so they could be in-app purchasing and so on, that's also there. But I think, all kinds of use cases are there, whether it's acquiring a new user, getting that new user to buy or play another game of that game publisher, increasing the value and the volume and the frequency of the transactions in-app transactions that we do, so that you increase the lifetime value. A lot of these use cases are there, already in what they do. But what we are trying to do together with them is to strengthen that much more together with Affle's platforms and capabilities.

So it won't be I'm playing game X from a provider, and I see an add in between of a provider why. That is not what YouAppi does?

So YouAppi's customers, what you just said is a case where a company's publisher is a gaming company. So the gaming company is having users and somebody is buying their inventory to show ads to that user. These guys are on the other side. They're more like demand at the gaming companies are their advertisers, and they're saying, please help me, to get these users to come and play my game more and buy more. So they may advertise within games. They could also advertise outside games to a gaming user of that customer. So I think -- so here, we are making money from game publishers rather than spending money on game publishers.

So it's basically helping them augment their revenue as well?

Absolutely. Absolutely. So the goal is to drive more conversions and augment that. But sometimes, the thinking in the business not as sharpened. So how we define it as CPCU, how we contract and how do we sell it to them. I think that embracing an alignment is going to happen very naturally with YouAppi.

And how will this new team operate -- so do you give them a free hand, as do they continue to do what they were doing because that is the most difficult part of integration that we've seen?

I give them a free hand, but I put a big hug around them.

So they'll continue to operate internally freely, as they would have been operating otherwise?

I would say we are very naturally members of the family living in the same house, which is Affle. Why? Because half of the team is technology people, which is very similar to how Affle is and how we think. And for technology people, the language and the communication, and they are excited by the challenges. They want to learn what's happening. Okay, what algorithm did you do here and so on. So that will be a natural marriage. I don't think I'm so concerned. Sales team, they are hungry to sell more. What else can I sell to this gaming customer. I've got this gaming customer, what else can I sell? Can I sell Jampp? Can I sell Appnext. Can I sell MAAS? What else can I sell? Can I sell the Apple scan and CTV? So the sales team is hungry to sell more. The tech team is eager to learn. And that's out of 56 people, let's say, 45 is that. Then in the management team, for them, there's a charm of being part of a public company and so on. So a lot of this is -- and plus the team is based out of those locations where we already have local teams as well. Let's say, in San Francisco, in Tokyo, in Tel Aviv, in Israel, these are the 3 places where there are people. We also have people. There will be a natural fitment there. But, I will tell a different story to different people, so I for example to put a hug and said, "No, no, no, there will be no change. So we'll see. But of course, they are -- the logo has changed. It's now powered as an Affle company. So the identity has changed. There -- so well, let's put it this way. So earlier, they were in the foothills. Now they are standing on the top of the platform, which is Affle. And I think they can stand taller. They'll be heard better, they will be seen better and a lot of that will change. So maybe we don't change them fundamentally, but let's lift them up.

And just coming to the learnings from Jampp itself because where there we still would not have hit that 20% mark, which you're saying that we will with these new acquisitions in 1 year. So what is the learning from there? What has changed in your playbook to be confident to say that now we hit that mark in a year?

Well, let's say that we will obviously it was earlier 3 years. And why was it 3 years? A, it was COVID times. B, I hadn't done acquisitions as much as a public company. So we're learning to be a public company. We are learning to do acquisitions as a public company. So, I wanted to also underpromise, overdeliver. And I think we have delivered in Mediasmart and Appnext. And in the case of Jampp, the reason we haven't achieved it because 3 years is not over yet, not even 2 years ago over yet. It's only there. And of course, we saw headwinds in developed markets and Jampp was much more in the developed markets. Why am I more confident? Because I have gone and learn through Jampp, and I'm holding the reins for developed markets in its entirety. So with that, I'm more confident now that, okay, this acquisition I will be able to deliver it within 1 year because we can travel, we can meet, we can fix it. We can -- plus our own confidence and execution has become better. So let's put it this way. In sort of 3 years, we're seeing 4 quarters.

Got it. And the third bit, which is on the OEM partnership. So fair to assume that solves the issue of you continuing to get data on a nonstop basis through these contracts, which in turn improves the quality of data that you see. And that, in turn, improves what you can offer to your customers as well, even if situations are not that tough and [indiscernible] campaigns don't keep coming in?

So data is a delicate topic. Why is it delicate is because of course, about privacy reasons and so on. But what is actually quite a wonderful opportunity is that when you partner with such large, let's say, publishers, customers, even the advertisers who are large enough, they have their own first-party data, which is huge. And you -- and our algorithm is working to support and help them with our platform to leverage their own data to get their own ROI to be improved is a huge use case and we are finding that the more bigger partners that we're [indiscernible], we can actually leverage what they know with the -- let's think of it that's potential energy. They have data. But when you combine it with apples algorithms and platforms and give it and to empower them to them, that becomes transformed into kinetic energy. And therefore, they can see ROI from it. And that's a huge combination. So I think -- so you're right, working with operators and OEMs, there is that advantage. But typically, we wouldn't want to shout out about it too much. I think, the way to do it is to say a combination of technology with the right touch points with the end consumer in a way that's differentiated. So like an operator and OEM have a way to connect with you on your device that nobody else has. And finding those touch points exclusively or differentiatedly for many years can be a huge competitive advantage because in those moments with those consumers, only our platform and that operator and OEM is able to show an opportunity to convert to. So I think that's a huge competitive advantage.

And just last bit on Jampp, fair to assume low-hanging fruits in terms of what you could do from an efficiency point of view are through and the rest now will come from growth itself?

I think now it's about growth. I think we have done all those efficiencies, integrations, so on and so forth. And I think a good place there. This is now about growth. And I think, we need to solve the developed markets in some of the verticals together. In fact, YouAppi and together, I think we should be able to see a much greater outcome. So when I say YouAppi, let's give it one year, by that one year, Jampp would have also done it 3 years margin expansion.

[indiscernible] growth categorically in that market in terms of the category growth and not have the market share gains yet because you are a small so. Does that limit because of the scale?

No, I don't think so. I think we -- scale is a double-edged sword. I mean there's 2 types of scales, scale that sustains and scale that only delivers in that particular quarter or year, right? So what kind of customers do you want, right? You want to be able to choose. And if, we calibrate our growth sensibly, let's say, 20%, 25% organic growth, we think we can exercise choice. We don't have to go for any kind of growth. Would we have delivered 50% revenue growth Sure. Is there enough advertising out there to pick that? Yes. Will that continue to be the next year? We had, this year is 50%. Next year, 25% is gone because that came from some, I don't know, whatever category of customer who doesn't have enough money next year. So I think the idea is to find sensible calibrated growth, which you can continue to deliver predictably for a long period of time. And this is not something that I'm saying because now we are a public company for last, let's say, 16-odd quarters. But because this is how I've always built Affle. Ever since we were doing it, I mean, that's why we retain majority ownership in the company still till date after being 18 years in business with all kinds of investors, Microsoft, Docomo. There is add that going public still almost 60% held by the promoter company in Singapore. Why? Because we were always having financial fundamentals, sustainable growth, not just let's grow at any cost, never mind what happens to profitability, never mind whether that's there is next year or not. I think we are carefully calibrating and that is why we say that this level of growth is a sustainable sensible growth. There will be other revenues, which is no margin, there's that suddenly show big revenue, but margin, that's not about to be implied.

So just related to that, then what advantage would Affle get if it's just to exercise of what it is today?

Well, we will be 25% EBITDA instead of 20% EBITDA, that's one. So you'll get margin efficiencies, maybe 25% because we are an asset-light business. So when you scale up, your OpEx doesn't go up as much. I mean, you don't need 500 employees when you go 2x. You need another 50 or 100, that's it. So I think there is efficiency there in terms of, let's say, scale up, that's one. Second is with each customer as we work longer with them, we become more important for them. So they're used to getting ROI from us. Else, we pitch them something super super exciting [indiscernible]. There is no means we're delivering to them great ROI, they're not going to switch out of us sometimes. So I think that's getting deeper with customers becoming more important to them, more sticky with them. So that's the advantage. This is not necessarily a business where you say the winner takes it all. This is not a business where you say there will be only 1 or 2 players. The rest will somehow fold into, so what we want to be in the top like a few, we are here to win, we are here to dominate and to lead. That's mature. But does it have to be within a year or 2 years? It doesn't. And we're not nervous about [indiscernible] -- it's not like it takes all kind of situation. And we have tried enough. We have seen all kinds of competitors playing let's go big, let's go big and that fizzle out because let's go big is the funding game. It was not let's go big because the product was better or the revenue was better. Let's raise $300 million, let's burn it through. Would you not advertise with us if I told you with us, I'll give you $200 back. That's not the business we are in. In our business to do 20% plus EBITDA consistently in emerging markets, I can tell you, we are one of the only companies in the world anchored 80% plus on emerging markets that's delivering this financial outcome. I do not know of others.

Just one thing on the valuation of the acquisition you've done. We saw acquisitions in this space and also news flows around it. It was much higher than what it was available to you. So is it distress sell? What is the..

I can tell you it's a happy sell for them for their investors. Could they have asked for more possibly? Could there be somebody else who could have offered them more possibly. We had a very deep -- and sometimes not all offers are genuine. Just because somebody may offer you something that does not mean that's genuine. So it's money on the table. What are the terms? If somebody said, "I'll pay you $120 million, we only pay you $10 million now, I'll pay you $110 million in the equity of a private company that will probably go public in 3 years' time. Which deal would you take? $45 million or I do not know. I do not know what was offered, what's there, whether the news was right or not, but I know that we have the deal. We know that people are happy. 85% of the sellers are invested. So even if they're not happy, it doesn't matter as long as the 15% who are continuing as employees, they are reasonably happy and they continue, we should be okay. What do you say? We've got a good deal. We deliver value to our shareholders. We should all have a smile for that, unless you wanted us to pay $50 million, $60 million more. Frankly, I don't want to give credibility to that news. I do not know whether that happened, whether it was a deal, it was a league, whether it was a negotiation, I have no idea. All I know is that we have our deal, it's time, it's done and everybody we know seems to be happy with it.

[indiscernible]

Since last several quarters, we've been sharing 3 case studies about our customers across countries, across different industry verticals. If I'm not wrong, we've shared how many case studies so far, 25 -- 21 cases for the next quarter, there will be 24 and so on. But basically, you have 21 case studies where you know the customer's name. You know what we did for the customer, what kind of outcome, what were they evaluating us on which countries, what kind of solutioning was involved and so on. So I think there's a very deep flavor of what we're already communicating back to you. And maybe that would be the best way to answer it, versus taking any further. So we answered it more qualitatively than quantitatively. And we prefer to do it like that because we feel that it will be competitively sensitive information about which verticals we are targeting. Like how much size and dice could we come is, okay, this vertical is somewhere is a CPCU of this vertical is this and that. We will probably give almost like a map of how our competitors would chase after us, which I think at the moment is not easy for them to figure out.

Just trying to understand the customer stickiness with you, like what is it for them for -- be with you versus not others?

So let's put it this way, our business is, while you would see it as an ad tech company, advertisers are the revenue providers. But fundamentally, we have always defined ourselves as a consumer platform company. Why? Because, yes, revenue comes from the advertiser, but it comes because the end consumer saw something that we chose to invest to present to them with, and they converted with that. If the consumer doesn't convert with something, doesn't matter what that advertiser is paying to Affle, a, I'm not going to make money because a business model is calibrated on the consumer. So let's put it this way, that when we work with our advertisers, we are saying, look, this is the number of conversions that we think we are going to be getting. But the highest rate takes different advertisers, let's say, in a particular category, e-commerce or education or let's say, fintech or gaming, is wanting to drive conversions with a particular category of consumer, whoever is paying us a better CPCU rate and where we think the probability of conversion would be better, we do our algorithmic math, and we'll prioritize showing the add of that advertiser. So we are not necessarily on the command of the advertiser. We had a lot of time telling them, sorry. I mean we can't serve you because there's another competitor who is -- so yes, there is a sense of relationship loyalty and budget, but it's all consumer-centric. If the consumer responding to something, it will scale, if it is not then it will not scale. Does that answer your question somewhat?

Yes.

We're trying to not give that much power and keep the power of pricing and budgeting. And it's not a necessary promise that each advertiser's budget would [indiscernible]. That's how we maintain our pricing. Any questions from the online forum?

Yes, Anuj. So some questions from the online forum. So one of the questions is that our comfort zone is EM. And when we've not necessarily stabilized that acquisition of Jampp, why are we taking more exposure to DM? And a follow-up to that is that can what YouAppi do? Can it be taken to markets where Affle is and they are not yet there?

Okay. So first thing, with respect to Jampp, I think we have stabilized and it's about turning it around towards greater growth, and this is year 3. And our goal within year 3 is to make sure that we deliver on the kind of outcomes that we had planned for, for the company, and I'm pretty confident that we are on track towards doing that and doing whatever it takes to make sure that we get there. With respect to YouAppi, this is not -- and by the way, the answer to your question is in our action of doing the YouAppi transaction. If we were not stabilized as -- in where we were, we would not dare to double down. But because we are stabilized and we know that we are turning it up, this is the time to accelerate, not to slow down. And therefore, we are going ahead with YouAppi. Now it's not only about developed markets. I think it's much more about gaming, as an emerging vertical in developed markets that we are calibrating on, and we think that is part of the core strategy to turn around and lift the whole developed markets play for us. Bringing YouAppi to emerging market for gaming. This is again, a very clear opportunity because gaming is going to grow in emerging markets in India, in Africa, in Southeast Asian markets, LatAm. And with our ground presence there, I think, we're already going to start calibrating for that and be a first mover advantage, as gaming becomes a much more stronger vertical for emerging markets. So we are looking at it with a global lens and not just one dimensional.

The other question was in terms of the recently announced longer-term partnerships with OEMs and operators. Would that entail certain upfront payments? And could there be a risk that if we don't deliver or convert certain number of users that our margins get affected?

So when we -- in fact, on the contrary when we, first of all, go to any upfront payments or something like that, it's strictly a revenue share-based relationship. But when we do longer-term contracts and we provide deeper quality of integration of higher, let's say, volume possibilities -- in more cases than list, we have found that we can actually negotiate better margin positions than not, okay? So we're providing more predictability. We're providing more clarity. We're providing better, let's say, technology innovation integrations and so on. We are able to see our ability to negotiate better margin contracts with these players. If you do a short-term kind of a thing, you don't get much. If you do a bigger size transaction, you are able to get higher margins. If we don't deliver, we will lose the partnership, and that will not be good for us. And therefore, we go back one tier lesser where our margins might be worse off. So, if we do well, which is the premise of doing these deals, our margins would become better than what it is. If we don't do as well, we come back to where we are. Does that make sense? So it's more incremental margin. And if we don't perform, we can go back to where we are, which is not too bad. But our goal is to do margin expansion, and to lock in longer-term predictable path.

The other question was in terms of management bandwidth of the leadership team, especially given your involvement on both the Jampp as well as YouAppi side?

Yes. So I think the management bandwidth was already there, and therefore, we were doing some of these strategic initiatives, that's what management bandwidth is for, and that's where we are applying it. In terms of -- let's if you look at our leadership team today, you find that lot of breadth and depth in the management team. We have probably got one of the most global and most comprehensive management teams in any other company that you compare in our industry and ours or any other company for that matter, very entrepreneurial, very capable. Most of them have more than 10, 15 years of experience in our industry as founders, and they are leading our organization's core functions and strategies. So I can choose which areas to take on from a strategic point of view where there will be maximum impact [indiscernible] for this year, I think that's developed markets and solving for that and taking a company to a more premium level, the 5 initiatives that [indiscernible] that's what I'm driving it and really the organization. And that's -- a lot of those are not limited to just developed markets. CTV plus CPCU or iOS weighted Apple app store initiatives that -- these are product changes that are applicable globally, including all emerging markets. So same way YouAppi. I think yes, we are anchored on developed markets and gaming, but we'll also be selling and bringing them to emerging markets. So a lot of the initiatives will have application across the board across all our markets.

So any questions from the participants here. So I'll go with one question. So in terms of like we've always had some segments which have kind of done well, and have kind of compensated for the fall or the deceleration in some others. So we had, for some time, you had fintech, you had crypto, you had gaming. And then that kind of slowed down. So as you go along, and as you see the market right now, what are the spaces? So gaming is one of them that you've mentioned and you've done initiatives in that, but as you go along, what are the areas that you think come back or some of the ones which kind of decelerated for regulatory or other reasons start to come back?

Yes. Look, I think fintech is an area that we will continue to see how we can grow further in. I see huge potential there. It's a very essential service. It makes sense to do it through mobile and connect through mobile. There is -- there will be a lot more traditional well established players coming in and spending more and more money in digital, I think so. So financial banking is definitely 1 category. Also see health care as another category that will -- essential services, education, finance, food, health, all of these categories would be important. And we think that we can continue to push and do more in these categories because these should be stable, long-term categories. And then comes, of course, gaming, entertainment, e-commerce, more consumption, entertainment level categories where. Again, I think to me, these top 10 verticals that we have, they should be at all times evergreen, unless something abnormal happens to them, like fintech, crypto went through a cycle, which was not so good. Ad tech in India went through a cycle that was not so good. But fundamentals of these verticals are actually very strong. You wouldn't expect that ad tech will continue to be in the low -- I mean, maybe one year, and therefore, having a diversified but deeply verticalized portfolio is super important to Affle. In fact, a lot of our competitive peers, which are either U.S.-listed companies or are well-funded private companies. Almost 80% of the revenues is on gaming. I don't want to be that company. I wouldn't want to be the CEO of the founder of that company because that's too much on one vertical. But at the same time, I mean, as Affle, I mean, gaming is less than 10% of our business. So solving for that became important. But I'm looking for a well-balanced, all-rounded growth with a wide base of customers, but yet deeply verticalized products and teams, so that we can maximize margin and value creation. That's how I would like to answer this.

The other question was in terms of like we always talk about sustainability of growth. Now from a risk management perspective because we've seen funding winter across a whole lot of areas. So how do you kind of manage that risk in your portfolio? Because we are looking at that sustainable optimized kind of growth and not necessarily going higher. So how do you kind of protect that?

It's very simple. So the -- like I answered her question that it's not about chasing the advertiser only. It's about driving conversions with consumers, and that's our business. Now, which advertiser would you prioritize. So let's say, there is an advertiser with $100 million funding on Series C or D round. And then there's a well-established player that you know is going to be around for the next 5 to 10 years. If they are paying the same CPCU price, I would like to scale that campaign more than this one. So even though both were giving budgets and answers, can you not scale both and consume all the budgets at one moment of truth, I can only drive on advertisers' conversion. So we pick and choose our battles. So when we look at our revenue mix internally, for us, sustainable quality of revenue is quite important. So we're looking for those advertisers, and we know that we're going to collect our money. They're going to be around for next year and next year and so on and so forth. That's what we mean by sustainability. Therefore, I was also talking about choice. You're not going for every kind of growth that you can get. You can get all kinds of revenue in the market, but you're going for those which are higher value, higher margin, which will continue to be with your company the balance between different verticals, not becoming too lopsided in one. And that's risk management. And that's what we do day in, day out are algorithms do it, in fact, more than we do it. That's how we manage it.

And the last one from my side. So we've done a -- like one of the good things about Affle has been that the companies that you have acquired, those founders have stayed on with you, for a long time. And we are now, say, 3 to 4 years of post-acquisition time. So how do you kind of -- because founders typically have that itch in terms of that?

So not all founders stay on, that's a fact that we have to accept. Some will not -- okay, one of the things that is hardest to predict, which I think even we all think we know each other, but I mean, we know ourselves rather. But one thing that most people do not know is how will your behavior change if you're suddenly your bank balance goes up by 100x. Even though you know yourself, you wouldn't know. I mean, you may think that I don't think money will change yet, but you don't know until that happens. So in an acquisition, when you're acquiring companies of founders, like, no, we love our company. We'll keep running it with you, Anuj, yes, yes, yes. But they also don't know that when money hits their bank out with millions of dollars, how will things change? It is a risk factor, but then you hedge that. So as long as you have -- and there's nobody who can get it right all the time. And we have got it wrong before, and we will continue to get it wrong even in future. But we are already fundamentally a very strong entrepreneurial team. We know how to drive this kind of a car. We can afford to change the driver. We would try to keep it because in some cases, we want to grow our management bandwidth and entrepreneur bandwidth. But in some cases, if we can, then we are not handicap. We know how to do it. So I think we are already risk hedged on that. So we're not over calibrated on that. And to align founders fundamentally, I think give them a sense of identity and pride. So we typically don't change the names and the logos. We try to keep that survival so that the legacy and the love for that brand just continues. That's one way. Second is aligning incentives with earnouts, year 1, year 3 and so on, which is more contractual, if you like the money in your account so much, may you want more. So stay aligned. Those are the levers. I mean, there's nothing particularly unique about that. I think we have a good track record. I would say we have a 70% success rate on retaining founders. And even in the companies that we have acquired. So typically, also, there are more -- they are founding team members that are sometimes more important than the founders, in some cases. And then even in Affle's case, I mean, you always think Anuj is the most important, is there's Charles Yong, who is our CTO for 70 years -- 17 years. There's Anuj Kumar, there's Kapil Bhutani who's been at least the founder of our public company and many others in the team who are very, very important people, right? So I mean that's how you kind of hedge it.

So as far as I understand, most of our customers might be digital or new age companies. So are we seeing a shift in traditional company's mindset. Where they have started spending more and more on digital? Is that number meaningful because the future is mobile, right? So at some point, you will see all the traditional FMCG, Apparel or all companies also shift to largely mobile advertiser?

See, it's already happening in a big way, which I was also answering earlier that when you look at the essential services, health care, finance, education, food. I mean, this is not indulgence. This is basic lifestyle that everybody would consume. And it will go on mobile. I mean, it will be digital. And therefore, schools, hospitals, doctors, pharmaceutical companies, pharmacies, Anybody who has marketing budgets should spend it on digital, right, finance, banks, so on. First movers are always the digital companies because they go and disrupt. They say, okay, let's create the -- but the traditional banks are all going digital. I mean and so on and so forth. So the essential services will be -- I don't think, it will see that much fluctuation in FMCG categories and so on. I mean you will see stable, consistent patterns of spend coming there. And therefore, digital has a very bright future in my opinion. And we are not -- as some of you might think is vulnerable around funding or hot money. That's not exactly my lens about it, long-term lens about it. Even on, let's say, consumption-led services, gaming, it's a digital category, but it's a huge category. I mean it's so small. I think next 5 years, we'll keep on growing, not to be worried. Then e-commerce, it's probably become essential now, right? Entertainment has all gone digital, all mobile, TV watching is, of course, becoming more connected TV watching and so on. Sitting in a living room and watching versus everyone on their own devices, doing their own private watching. So a lot of these consumer trends are shaping consumption trends. Those consumption trends are bringing in traditional home or even new age players have become really large, and they will be stable players. So there's enough money in digital to be made from people who you know will be around and are not dependent on the next round of funding.

I'm new to the company. So it's a question that you might have answered in the past. Which is regarding what is really wrong with the developed market piece of the puzzle? Why are we seeing a degrowth there? And what gives you the confidence that, that has turned around or is on the verge of turning around to that extent?

All right. So in the developed markets, we -- our teams were very small. And those teams who are focused on selling 1 particular type of a product and proposition of ours, and not selling the whole suite of Affle's capabilities into those markets, and that was clearly one of the factors. The second factor was what I was saying earlier that how the founders behave, once they have lots of money in their bank accounts. And sometimes, they are faking it even to themselves that they are as committed but perhaps they're not. And I think those things have been found out and corrected. So I've taken charge directly and making sure that I fix it. So when the issues are external to you, you cannot sometimes be sure whether you can solve it. But then issues that are internal to you and you have figured them out and you know how to solve them, their confidence goes up. Plus our base is so small in developed markets that I think the shrinking in the developed markets that we saw, I think there's not much more left to shrink there. We will turn it around.

And so in developed markets, the macro or the regulation is not a big?

No, there's no -- I mean there are, of course, macroeconomic headwinds. Some customers did reduce their budget. But let's say, 50% or 40% of the problem was external, 50% to 60% of the problem was internal. That 60% is sorted out. If I fix that, we will already see a massive positive change. The addressable market is large. And then, we are calibrating on certain we are picking battles where we know we will win and we can accelerate. So I can see it clearly, and therefore, I'm confident.

Yes. And just one more thing on the -- this regulatory aspect. So Apple came up with a set of changes and Google is also talking about a sandbox or something like that. So does that impact our conversion rate? What are the measures that we are taking to ensure that our conversion rates remain the same, once these changes, if and when they get implemented?

So the changes happened sometime in 2021 in iOS world. In '22, '23, we have already taken not only a first mover advantage, we'll build some credibility in the space to even say that as part of our strategy for this year, iOS is an anchoring sort of component of that strategy. One of the 5 things is about how do we go more premium on iOS devices on Apple app store with scan network and offer solutions to advertisers, not only in developed markets, but also in emerging markets and on CPCU business model. And so what that implies is that we have already solved that puzzle and it's about scaling it up, and making sure that we go more premium, more deeper into that category. So I think we have crossed that bridge already since 2021. The change happened about 2 years ago. And I think, we have worked well through that change, and now we're enjoying the growth and actually a competitive advantage because not everybody has solved it. Some people gave it up, say, the changes are too many. Let's just focus on Android. So a lot of competitors are still, when a customer says due to iOS, it's an over Android because we haven't solved. But those who have solved it like us, I think is a huge opportunity.

[indiscernible]

I would love to answer that with a yes, but I do not know. I'm not in the shoes, but I can tell you that everyone is taking notice of Affle. This is not just a story of a company listed in India where it's the investors globally that know us now. I think the competitors, the customers, everybody is taking notice of it. And we know that based on the kind of inflow of resumes of competitors, employees that is coming to us. The customers, of course, I mean, I think we are -- we already have a large base of customers. We also work with global agency groups, and we do partnerships or trying to see how we can work with many of their customers, the respect that we have in the industry has grown much higher than our revenues are. So I mean, we have grown our revenues over time. Our valuation has -- you guys know that better than I do sometimes. But I think, in terms of respect, stature credibility, I think we have definitely established our mark. And that, hopefully, is changing that perception. But maybe it's still a few years away to say -- but at least in some emerging markets, I would think that customers are already seeing us like an important part of their strategy as a multitouch point, single point kind of solution. It's still work in progress, I would say. Give it a few more years, we will get there.

[indiscernible]

I think it will inch up, but let me report that to you, as we go along. I would think that it should anyways inch up over time. I've always mentioned that and whenever we change our calibration or the ratio of business across verticals, I think, we used to be somewhere in the INR 40-odd to now INR 50 plus to -- it will inch up. It should. Can I give you a precise guidance, let us report as we go ahead.

[indiscernible]

Geographies and region-specific and in many cases, we are verticalizing them. We're saying, "Okay, you guys focus on this vertical, you guys focus on some other -- so we are verticalizing our organizations with more verticals and geographies as we go along, that's the direction that we are in.

[indiscernible]

No. I think it's by use cases. I mean end of the day, you go to an advertiser, somebody is looking for -- I want to get new users in this geography. Somebody is saying I have existing users who are not doing enough. I want to get more ROI on that. And some is looking at a budget for CTV, what should I do? Some of them are shifting Google, Facebook budgets to the other side, non-Google Facebook. So I mean, there are different pain points of each advertiser in each financial year or each quarter of that financial year. And the job of the sales team is to make sure that we serve that and upsell and cross-sell naturally to fit that in.

[indiscernible]

So there's a centralized management team. And then, within those pockets, we have product experts, right? Those product experts would go together with the sales teams to ensure that the right kind of selling is have we call them account managers, right? So you're doing account management overall and then your job is to maximize the account. And of course, some people are ACE people there. They know how to do it very well. Some are still learning the things -- not everybody is a top performer. And therefore, the organizational efficiencies is a constant work in progress to do even better account management, better cross-selling and upselling. So we're getting there. It's work in progress. Yes.

So we have time for one last question.

Really? What is the time?

It's 5:30 or so. So thanks, everyone, for joining in. Thanks, Anuj. Thanks Karish and Kapil for giving us the opportunity to host you. Join us for high tea outside, and I think management will be there for some..

Absolutely. I would love to spend time together. This could have been all done on Zoom. For those of you who couldn't meet in person, I would love to meet you in person as well. I think it's time we start getting together. So I thought it would be great to be in Mumbai. Thanks for showing up, and let's have a high tea together. Thank you, everyone, for joining in online. Take care. All right. So Kapil, over to you, you get to speak as well. I'm sorry, I hogged it completely. But now over the high tea, we can catch up. Nice to meet you, sir.

Yes. Thanks.