Info Edge (India) Limited (NAUKRI) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you for joining us today. I'm Anand Bansal and I will run this conference along with my colleague, Vineet. We'll wait for a moment as people join and settle in their virtual conference room. We will start the conference in a minute. Vineet, we have 65 people with us. We can start the conference.

Sure. Thank you, Anand. Good evening, everyone. Welcome to Info Edge India Limited Quarter 2 FY '25 Earnings Conference Call. Joining us from management today, we have Mr. Sanjeev Bikhchandani, Founder and Vice Chairman; Mr. Hitesh Oberoi, Co-Promoter and Managing Director; and Mr. Chintan Thakkar, Director and CFO. Before we begin, I would like to draw your attention towards the detailed disclaimer included in the presentation for good order sake. Kindly note that the conference is being recorded. [Operator Instructions] Now I will hand over the call to Mr. Hitesh Oberoi for his opening remarks. Thank you, and over to you, Hitesh.

Thank you, Anand, and thank you, Vineet, and a very good evening, everyone, and welcome to the Info Edge earnings call for the second quarter of FY '25. We will start with an update on the stand-alone financial performance, and then we'll cover segment-wise performance and along with the commentary on every business and followed by a Q&A. For the stand-alone business in Q2 of FY '25, billings were INR 650 crores, a Y-o-Y growth of 14% and revenue was INR 656 crores, a Y-o-Y growth of 11%. Billings and revenue, including Zwayam and DoSelect, were INR 671 crores and INR 676 crores, a Y-o-Y growth of 15% and 12%, respectively. Operating profits at a stand-alone level grew by 15% year-on-year to INR 251 crores, and the operating margin expanded by 137 basis points to 38%. The stand-alone business generated cash from operations of INR 262 crores in Q2 of FY '25, a Y-o-Y growth of 5%. The operating profits and other income was higher in Q2 of FY '25 versus Q2 of FY '24. However, the net profit after taxes for the period decreased to INR 86 crores in Q2 of FY '25 as compared to INR 209 crores in Q2 of '24 for the following reasons. As per the change in the Finance Act '25, as introduced in the recent budget, there was a hike in the effective long-term capital gains tax rate from 11.4% to 14.3%. Due to the above and in line with Ind AS accounting standards, we have accounted for an additional deferred tax charge pertaining to previous years of INR 260 crores in the P&L, which led to reduced net profits after taxes. On similar lines, we have also accounted for INR 363 crores as additional deferred tax charges pertaining to previous years in other comprehensive income. Without this deferred tax charge impact pertaining to previous years, our net profits improved by 66% year-on-year to INR 346 crores in Q2 of FY '25. In H1 of FY '25, for the stand-alone business, billings were INR 1,230 crores, a Y-o-Y growth of 13%, and revenue was INR 1,295 crores, a Y-o-Y growth of 10%. Operating profits grew by 12% year-on-year to INR 478 crores, and operating margin expanded by 61 basis points to 37%. The recruitment -- the stand-alone business generated cash from operations of INR 436 crores in H1 of FY '25, a Y-o-Y growth of 10%. The recruitment business generated a healthy cash of INR 479 crores in H1 of FY '25, and the cash losses in the nonrecruitment business has since reduced by 57% from a cash loss of INR 76 crores in H1 of FY '24 to INR 33 crores in H1 of FY '25. EPS before exceptional items and deferred taxes for earlier years for Q2 of FY '25 stood at INR 20, a Y-o-Y growth of 21% and was INR 38 in H1 of FY '25, a Y-o-Y growth of 19%. The cash balance of Info Edge, including those of the wholly-owned subsidiaries, at the end of September 2024 stood at INR 4,268 crores. The Board has proposed an interim dividend of INR 12 per share, and the headcount of the company as on September '24 end was 5,820 people. Moving on to segment-wise performance. We'll first start with the recruitment business. In Q2 of FY '25, billings grew by 14% to INR 492 crores and revenue grew by 9% to INR 495 crores. Revenue growth lagged behind billing growth due to the slower billings observed over last 2 or 3 quarters. The operating profits improved by 6% year-on-year to INR 286 crores, and the operating profit margin was 58%. Cash generated from recruitment operations was INR 289 crores, a Y-o-Y growth of 8%. In H1 of FY '25, for the recruitment business, billings grew by 11% to INR 923 crores and revenue grew by 7% to INR 966 crores. The operating profit improved by 1% year-on-year to INR 540 crores, and the operating profit margin was 56%. Cash generated from recruitment operations was INR 479 crores. In our recruitment business, we saw very encouraging growth in Q2, with a 14% year-on-year increase in billings, a double-digit growth after 5 quarters. The growth was -- has been widespread. Our IT segment grew by 12%, non-IT by 20% and the recruitment consulting segment by about 10%. Key non-IT sectors like BFSI, health care, infrastructure and manufacturing also saw robust double-digit growth. The JobSpeak index for Q2 of FY '25 was better both on a Y-o-Y and a Q-o-Q -- and on a Q-on-Q basis. The billings growth of 14% was an outcome of better -- a slightly better macro environment, as evident in the JobSpeak index and continued healthy performance of our niche and adjacent businesses. On the job seeker side, our Naukri platform now hosts around 103 million resumes and app installs have reached 16 million. We have added an average of -- we added an average of 24,500 resumes every day in Q2 of FY '25, highlighting both steady engagement -- user engagement across the platform. On the recruiter side, metrics like searches and CV views are also on the rise, suggesting that demand for talent is recovering. Our niche and adjacent businesses, such as iimjobs, Naukri Gulf and Naukri FastForward, have all shown good growth in Q2 of FY '25, with year-on-year billings of 40% -- billings up by 40%, 18% and 27%, respectively. Zwayam and DoSelect combined also registered a billings growth of 73% on a Y-o-Y basis. AmbitionBox and JobHai, which began monetization in Q4 of FY of '24, continue to grow and show improved performance in this quarter as well. Although still small, these businesses hold potential and could grow substantially over the next 4 to 5 years. Our employer branding solutions business -- our employer branding solutions offered across platforms like Naukri, iimjobs, Hirist and AmbitionBox, have been well received by our clients. We've been working on -- we are working on strengthening these offerings and expanding our penetration of the market. To sum up, we are seeing good growth in the recruitment business -- we saw good growth in the recruitment business, especially in the IT sector, coupled with healthy performance across our niche and adjacent businesses. We are hopeful that this positive trend will continue into the coming quarters. Moving over to the real estate segment. In Q2 of FY '25, billings growth -- billings were up 16% to INR 107 crores and revenue grew by 17% to INR 102 crores. Operating losses reduced by 14% to INR 14 crores. Cash losses from operations were INR 3 crores. In H1 of FY '25, billings growth improved by 14% to INR 188 crores and revenue grew by 18% to INR 201 crores. Operating losses reduced by 29% to INR 28 crores. Cash losses from operations were INR 22 crores versus INR 35 crores in H1 of FY '24. For 99acres, Q2 billings growth was driven by increases in both the number of billed customers and the average billing per customer. We saw broker billings grow at a faster pace than developer billings. Live listings for new projects grew 8% year-on-year, while live resale and rental listings saw an increase of 9% in Q2. Our per listing realization among primary and secondary brokers rose year-over-year in Q2, led by premiumization of our offerings and product upgrades and selective price increases implemented earlier. In 99acres, our focus remains on growing our user base, enhancing the platform experience and delivering differentiated content that helps make users make informed real estate decisions. Moving over to the matrimony business. In Q2 of FY '25, the billing growth momentum continued. Billings grew by 31% to INR 26 crores and revenue grew by 33% to INR 26 crores. Operating expenses were reduced by 27% year-on-year -- Y-o-Y, driven by a reduction in marketing costs by 36% year-on-year. The business is near breakeven. Operating losses were reduced by 96% to INR 70 lakhs. Cash loss was INR 2 crores, a Y-o-Y improvement of 88%. In H1 of FY '25, in the matrimony business, billings grew by 33% to INR 51 crores and revenue also grew by 34% to INR 52 crores. Operating losses were reduced by 92% to INR 3 crores, and the cash loss was INR 6 crores, a year-on-year improvement of 83%. Our business teams have continued to focus on improving monetization efforts to grow billings. Most of these initiatives are designed to add value for users on the platform, while fully maintaining our commitment to a free chat experience. On the marketing front, the team has launched some campaigns to boost brand awareness and reinforce our free chat promise, and we've been very frugal with our approach, reducing spends -- marketing spends by 36% year-on-year this quarter. Delivering a high-quality matchmaking experience remains a core priority. We are planning further investments to enhance our matchmaking recommendations, improving outcomes for our users. Key metrics, like acceptances and 2-way chats on the platform continue to show healthy growth. We are also expanding on -- we're also working on expanding monetization opportunities on the platform, while actively driving user acquisition as well. Moving on to the Shiksha business. In Q2 of FY '25, billing was INR 25 crores, a Y-o-Y degrowth of 3% and revenue grew by 10% to INR 33 crores. Operating loss was INR 3 crores and cash losses were INR 11 crores. In H1 of FY '25 for Shiksha, billing growth -- billing was INR 66 crores, a Y-o-Y growth of 13%. And revenue grew by 14% to INR 75 crores. The business generated an operating profit of INR 1 crore and cash losses were INR 5 crores, a year-on-year reduction of cash loss by 9%. The campus placement season for FY '25 for graduates has begun on a positive note compared to last year. There's a slight increase in demand for both MBA and computer science programs. Private universities are continuing to broaden their offerings beyond engineering, providing students with more diverse options to choose from. We are investing in making our content even more comprehensive and student-friendly, while building deep domain expertise in this space. Shiksha's traffic share reached an all-time high of 56% as in -- as of September 2024. The domestic Shiksha business grew by 21% on a year -- has been growing on a 21% -- had been growing by 21% on a year-on-year basis in H1 of FY '25. On the study abroad business, though we are seeing some headwinds, tighter restrictions for international students in Australia and Canada, along with fewer job opportunities, post-study, have led to a decline in interest. Despite these challenges, we remain committed to making long-term investments to strengthen our study abroad platform and improving -- and improve the productivity of our functioning team. I will now like to talk a little bit about AI-driven innovation at Info Edge. Today, we have a dedicated team of over 100 data scientists and machine learning engineers at Info Edge. We have been using machine learning to enhance our search, our matching, our personalization capabilities and recommendation systems across all our businesses to improve user productivity and experience. In many of the cases, this has led to a 10%, 20%, 25% gain in efficiency. And with the latest sort of -- in generative AI, we are now using LLM models to develop new features, build new products and increase productivity across the board. Let me just give you a few examples. For job seekers now, we have an AI-powered mock interview product on Naukri 360, that helps them prepare for interviews. It is being used by 10 lakhs users. In the Naukri FastForward business, we have largely automated resume creation using AI. And our AI engine can generate a customized cover letter basis -- based on the uploaded resume. These features are now being used by over 15 lakh users every month. At Zwayam -- in Zwayam, AI helps create job descriptions and analyze candidate profiles, which improves recruiter productivity. In DoSelect, AI helps us generate multiple choice questions for e-assessments. Here are just a few examples. At Info Edge, today, there are over 500 models across AI and machine learning that are driving new products, features and enhancements that are helping us deliver more value to our users and our customers every day. Moving on to the consolidated financial highlights. At the consolidated level, the net sales of the company stood at INR 701 crores in Q2 of FY '25 versus INR 626 crores for Q2 of FY '24. At the consolidated entity level, the total comprehensive income stands at INR 8,170 crores in Q2 of FY '25 compared to INR 3,399 crores in Q2 of FY '24. Profit after tax without exceptional items in Q2 of FY '24 was INR 335 crores -- profit before tax without exceptional items in Q2 of FY '25 was INR 335 crores compared to INR 262 crores in Q2 of FY '24. To summarize, we are truly excited about the growth opportunities across all our businesses. After several quarters of soft demand, our recruitment business is now performing well with growth across all segments, IT, non-IT and consultants. The October 2024 JobSpeak report was also promising, showing an year -- a Y-o-Y increase of 10%. To diversify and grow our overall client base, we've been expanding in the GCC and non-IT sectors by strengthening our go-to-market offerings and acquiring new clients, particularly by increasing our reach in Tier 2 and Tier 3 cities. Our niche and adjacent businesses like iimjobs, Naukri Gulf, Hirist, Naukri FastForward, Zwayam, DoSelect, AmbitionBox and JobHai are showing good results and continue to expand growth opportunities and the total TAM for us. Our nonrecruitment businesses are also doing well and are on the verge of becoming self-sustaining. In 99acres, we are focused on growing our user base, enhancing the platform and delivering content for informed real estate decisions, supported by -- and the market continues to be supportive. There have been -- there are -- continue to be new launches and prices continue to go up. Jeevansathi's shift to freemium model has proven effective in driving both top line growth and bringing the business closer to breakeven. Shiksha's domestic business continues to grow steadily and is already profitable. Across all our businesses, we are making progress in AI and machine learning deployment. As mentioned earlier, these technologies are being used to improve the search and recommendation experience and are also helping us drive -- and are also driving the development of new features and products. This progress has improved user engagement and experience, while enhancing productivity and efficiency for both job seekers and customers. A major strength in navigating these cycles has been our consistent cash generation and healthy cash balance. We are continually assessing the best ways to use this cash to maximize shareholder returns. Thank you. I'll stop here, and we are now ready to take any questions that you may have.

Thank you, Hitesh. Anand, we can now start taking questions.

Thanks, Vineet. Thanks, Hitesh. The first question is from Nitin Jain from Fairview Investment.

My first question is on the margins. So we can see that the margins have improved by about 400 basis points Q-o-Q. So I have a two-part question linked to this. Like regarding the marketing spends in the recruitment business, are we still continuing with the new marketing campaign for Naukri? And can we see margins improve in this business further from here? My next question is for -- yes, my next question is also on the recruitment business. So now that the hiring market seems to be doing better compared to 2, 3 quarters back, how are we thinking about inorganic growth in this business? And if you could also share the -- if you could share the number like the Naukri Gulf contribution in the recruitment business revenue?

So let me answer your first question about margins. See, if top line continues to grow at 14%, 15% per annum, the margins should get better going forward. How much are we going to spend on marketing? We decide on a quarter-on-quarter basis. We don't sort of have a budget for the year. We spent on IPL, then we took -- in Q2, we didn't spend as much. And in Q3 also, it's not -- we don't have a very big budget for marketing. But we'll decide -- as far as Q4 is concerned, we'll decide after Q3. Regarding inorganic, see, we have a lot of opportunity we are pursuing in the recruitment space. Like I mentioned, there's a core business, which is now growing faster than earlier. Besides the core Naukri business, we have -- we've acquired over 7, 8 start-ups in the last few years, and we are now in the process of scaling them. iimjobs, Hirist, DoSelect, Zwayam, Naukri Gulf, FastForward, so there are a whole -- JobHai, which is our blue-collar business. So we're not looking to sort of -- of course, we keep evaluating opportunities, but we're not looking to sort of acquire anything in the near term as far as the recruitment business is concerned. We will continue to invest very aggressively in AI. We've been seeing very good results. And that's -- again, that's opened up a whole sort of new area of opportunity for us. And so -- AI is sort of not -- and traditional AI, which is basically more machine learning and now generative AI, again, we are working on developing a lot new features and new products. So that's the current plan. But JobHai, we'll continue to sort of invest behind sort of -- we started monetizing JobHai in Q1. We are encouraged with what we've seen, and we continue to press the pedal on JobHai also going forward. So that's the plan for the next few months. But if you would ask me what was the plan to last -- for the next 2 years, 2 years back, I wouldn't have been -- we wouldn't have said this. We didn't see, for example, the big opportunity that we are now seeing in AI, right, and the kind of impact it's having on our sort of metrics. So our AI team has actually grown from 20 people to 100 people over the last 2, 3 years, and that's something we'll continue to invest in. So -- let's see how things evolve.

That was helpful. And just on the contribution of Naukri Gulf to the recruitment business revenue?

So it's still a tiny part of our business. I think this year, Naukri Gulf will end up doing about a little more than INR 100 crores.

Thanks, Nitin. The next question is from Nikhil Choudhary from Nuvama.

Congratulations on solid number. Hitesh, after a long time, we have delivered on all metrics, revenue, billing as well as margin. So starting with billing first. If I remember correctly, Hitesh, you have mentioned a few quarters back that let's say, if IT billing start touching double digit, it help generate buoyancy in overall ecosystem, and we can touch 20% type of billing growth. I know we have already reached mid-teen types of growth. JobSpeak continue to remain very strong. So are we headed to 20%? And do you see any risk of our ability to, let's say, see accelerated growth going forward? Like we have seen some slowdown in BFSI. We are seeing some negative commentary there. So I just want to understand in terms of can we see further acceleration here?

So see, we had a tough 5 or 6 quarters, and we've grown in double digits maybe after 5 quarters of low single-digit growth. October was not bad. October JobSpeak looks good despite Diwali being in October this time. So we are hoping that this momentum will continue, at least for some more time. And it's very hard to predict what's going to happen 3 months down the line or 6 months down the line. There are so many sort of -- there's so much uncertainty in the world around us, it's very hard to say what's going to happen. But like I've said earlier, see, IT companies have built up a big bench and the utilization rates had fallen. Over the last 5 or 6 quarters that the utilization rates are now back to what they used to be before COVID. The non-IT markets continue to sort of do well. And we pressed the pedal on a lot of our new products over the last few months. So we've -- what we call internally, what we call our strategic sort of product portfolio business, businesses like iimjobs, Hirist, the Naukri branding -- Naukri and AmbitionBox branding, Zwayam, DoSelect, these sort of products grew by -- collectively this whole piece grew by about 50% for us last quarter. So -- but fingers crossed. Five quarters of very low growth, but one good quarter. Hopefully, this will sustain. And we've, of course, set -- internally, we've set a higher target than 14% for Q3 because our billing growth in Q2 was 14%. So we set a higher target than that for Q3. Let's see. We'll be in a better position to sort of comment on this maybe 3 months down the line.

Sure. Understood. Hitesh, if you can, maybe it's too early, but quantify how big will be this strategic investment or maybe the early AI revenue to our -- amortization you are doing?

So see, there are many use cases for AI. Like I mentioned, see, we are using -- deploying a lot of AI to improve our search experience and to improve our recommendations, to personalize our platforms a lot more than earlier, and the results are very encouraging. And we are doing this in all our verticals in Naukri, in Jeevansathi and now in 99acres as well. And everywhere we are -- and wherever we are deploying AI, we are getting a 10%, 20% kicker, so on satisfaction levels and on user experience metrics and so on and so forth. To sort of -- we are using AI to build data products. So we have a small data product business now in Naukri. It's a tiny business, but helps us build our brand, it gives us access to CHROs. And it generates interesting insights, for example, for the recruitment teams, regarding sourcing strategies, regarding salaries, regarding their peer set and so on and so forth. So building new products using AI and now -- we are now beginning to monetize them. AI is, of course, going to almost every new feature which is being developed or new innovation inside Info Edge now, right? So there are lots of things which are being powered by AI. We are now, for example, just now I think it's like we're experimenting with what we internally called Shiksha GPT. So a chat bot on Shiksha, right? Shiksha is a counseling and -- content and counseling platform. It's got a lot of content. So it's not easy to navigate for students. So we had a chat bot earlier on Shiksha, but the satisfaction levels of users were low. But with now -- it's not being powered by AI, by LLMs and the satisfaction levels have shot up, right, as a result. So AI is being deployed and a lot of new features have been powered by AI. And of course, we have very aggressive plans on how to sort of use even more AI going forward to, one, enhance the experience; two, improve productivity inside the company in every part of the organization; three, to build new features; and four, to build new products.

Sure, Hitesh. Next one is on the real estate side. We have seen jump in website visit and time spend on Housing.com. So is it early indication of increase in competition?

See, Housing has been spending aggressively for many years now, and the competition with Housing continues to be sort of intense. There's not much change on that front. It's -- things are like they were a year ago or 2 years ago. We continue to sort of work on improving our experience. We continue to work on improving our offerings, like I said, and they continue to work on their stuff. There's been no change on that front, right? So our performance has improved actually over the last few quarters. If we are able to grow the 99acres business by, let's say, 20% or 18% in the second half of this year, then for the year as a whole, 99acres will actually be close to breaking even, right? So that's what we are targeting. Let's see what happens going forward.

Sure, Hitesh. Last one on margin. While you have partially already answered that but while this quarter, we were expecting margin improvement because of onetime branding exercise last quarter. But the margin improvement was anyway better than our expectation. And you, in the past, have called out that, let's say, if you deliver 15% type of revenue growth, then you will be able to sustain and improve the margin. So is it fair to say the peak of investment pace or maybe bottoming out of margin has happened and margins will largely remain stable to, let's say, improving trajectory?

So like I've always said, see, if you are able to grow at 15%, we can maintain margin. If we are -- if we end up growing at more than 15%, we'll be able to improve margin. And if we end up growing at between 10% and 15%, we'll have to play with some things to sort of maintain margin. Our -- we are seeing a lot of opportunity to grow faster in some of the new things that we are doing, right? We are not margin-driven in that sense. So we focus on top line. And we, of course, are frugal when it comes to spending, and we spend on the right things. But at the same time, we don't want to starve sort of any business or any department of -- for funding if they have good ideas. So that's how we operate, right? And as far as marketing spends go, we decide on a quarter-on-quarter basis.

Next question is from Nikhil -- sorry, Vijit Jain from Citi.

I just have one question. On the property segment, you've started to provide these disclosures around the split between brokers, builders and consumers on both number of customers and the billings number. Just wanted to get a sense of if there are any pricing actions that you're specifically doing within these categories differently? Because if I just look at the trends in terms of realized billings per customer, there seems to be a fair bit of fluctuation. I mean looks like brokers have gone up, builders have gone up, but customers have gone down or owners have gone down. So I'm just trying to get a sense of what you're trying to change into -- in this segment.

Is your question regarding pricing?

Yes, yes, yes. I mean I'm just trying to understand if you're playing with the pricing you charge owners, builders, brokers differently now versus, let's say, earlier? And is that a part of some kind of a strategy here?

See, we have a resale business and we have a new home business and we have an owner business. And the offerings are different for different -- in different businesses, right? Our broker business has been growing faster than our developer business, right? And we've launched different sort of listing offerings for brokers over the last 12, 18 months, offerings which are -- so there are regular options and there are premium options. And so I think our pricing has moved up as far as brokers go because a lot of brokers have moved to premium offerings over time. The owner business is a tiny part of the overall business. So while we end up working with a lot of owners, per owner, we don't make a lot of revenue. And the model for owners is actually freemium, so they can actually post listing for free and only a small percentage end up paying us. On the developer side, see, we have two kinds of offerings. There are standard listing products and there are -- there's a CPL model also -- Cost Per Lead model also on which we work with some developers. Now pricing in 99acres, actually, we use a lot of analytics. And we sort of -- every quarter, we look at how much response we deliver to our clients, what competition is charging, how much property prices have moved up and we sort of review prices and revise them every few months. In many -- and we don't have one price for -- nationally, we have citywide pricing in 99acres. So our pricing is different in different cities, right? So it's not like -- so I don't know. I mean, at a macro level, I think our ARPUs are moving up, the number of customers have moved up, listings are moving up. But at a city level, there could be wide variations.

Got it. Hitesh, my second question is on the recruitment business. I mean I can see that within that -- within the billings growth, both realizations and the customer base, both are improving sequentially for the last couple of quarters. And I note that you obviously highlight Zwayam, DoSelect, AmbitionBox, some of these new initiatives doing better than the overall number. But your split of revenue doesn't seem to have moved much over the years, right? It's still 68% resume database. So I'm just trying to get a sense of how the revenue split between things like resume database, candidate services and others get influenced as these newer initiatives do better. And why doesn't -- shouldn't, for example, the share of resume database start to meaningfully go down as these other initiatives are doing better?

Sure it's come down over the years, over the last 4, 5 years. See, we have the core Naukri business. In the core Naukri business, there's database access revenue, there is listing revenue and there is branding revenue. Then we have a Naukri Gulf business, then we have resume fast candidate services business. We have these -- we have iimjobs and we have JobHai and we have Zwayam and DoSelect. Now these businesses when we acquired them were tiny. Four, five years ago, they were all in the revenue range of INR 10 crores, INR 15 crores, INR 17 crores. And while they've grown substantially over the last 3, 4, 5 years, they're still tiny, right, in the grand scheme of things. Now Naukri Gulf, like I mentioned, is about INR 100 crores plus, the FastForward business is about INR 130 crores, INR 140 crores, in that ballpark. Zwayam, DoSelect and others may add up to another maybe a couple of hundred crores, right? So I'm sure the Resdex share in total revenue has sort of fallen by a few percentage points. But these businesses today are still small, but they're growing fast. So -- and if they continue to grow at, let's say, double the rate of the core Naukri business or slightly more than that, then Resdex share of revenue will fall over time.

Next question is from Vivek from AMBIT Capital.

Yes. My first question is on the recruitment business. Non-IT is doing quite well and growing at a healthy pace. It has been the case for a while now. So Hitesh, could you talk about the pricing trends, especially on the Naukri Resdex side for non-IT customers versus IT customers? And how to think about price hikes for the non-IT segment? That's question one. Second, you spoke about meaningful revenue contributions from AmbitionBox, JobHai. Is there a way you are looking at TAM or the revenue opportunity in these businesses? How to think about that better for all of us who are looking at the business in the long run?

Let me answer your second question first. See, we've just started monetizing AmbitionBox and JobHai. So right now, the revenue is tiny, right? But if you are able to grow these businesses at a rapid rate -- rapid pace going forward, then of course, they can become meaningful over time. So right now, they are very, very small. I mean JobHai was free till 2 quarters back. And we've -- Q1 and Q2 together are maybe a couple of -- the revenue is like INR 2 crores or less, right? But we've got a lot of traffic. We're getting a lot of traction, and we are now pressing the pedal on monetization, and let's see how that moves. AmbitionBox also, we just started monetizing, right? The year 1 of monetization. We were -- it was free for several years. I think we acquired AmbitionBox almost 7 years ago. So we've worked on building the product. And now we're at a stage where we think we can start sort of monetizing it a little bit. But over time, these businesses may become meaningful, unlikely that they will become meaningful in the next 2 or 3 years, given that the rest of the portfolio is also growing rapidly. But they're strategic from a long-term standpoint. Your second question was regarding pricing, right? First question was regarding pricing.

On non-IT specifically.

Yes. So our business model is we charge per listing -- for job listings. We have branding solutions where we charge for impressions and so on. And on the database side, we charge -- we have a standard -- we have a base price and then we charge on the basis of the number of e-mails you send and the number of resumes you view and so on and so forth. So our model is the same for both IT and non-IT. It's just that the IT companies sort of end up using us a lot more, and they were hiring a lot of people. And therefore, our ARPUs and -- from IT customers are higher. Our share of hiring as far as IT customers go is much higher than our share of hiring for non-IT customers even today, though that those numbers are moving up but -- so the model is the same. So -- and for the -- because our business was slow for the last few quarters, we haven't sort of really taken any price increase. So what you're seeing is -- at least for the last few quarters, there was no -- and Chintan, correct me if I'm wrong, there was no real pricing growth, price-led growth, right?

Yes, there's nothing very -- so significant to call it out.

Okay. Extending this question a little bit. So you're saying that the model is the same, whether it's IT or non-IT in terms of, let's say, number of e-mails or CV views? So does this mean that you are charging the same amount of money, let's say, to hire someone with 5 years of -- or the resume of someone with 5 years of Java experience versus the resume of, say, someone in entry bank sales with 2 years' experience. So my question is that the pricing is on a volume basis without looking at quality of resume, is it?

Yes, that's the current business model. See, the clients buy -- it's on the basis -- there's the base price and then we charge per log-in. And then on top of that, we charge for number of e-mails sent, number of CVs viewed and so on and so forth. And in the core -- as far as the core database offering is concerned, and then, of course, there's a negotiation across the table with customers. So what ends up happening is that we discount a lot less with IT customers than with non-IT customers because IT customers end up realizing more value through the platform. That's how it works out in practice.

Okay. Going forward, do you think it is possible to introduce a pricing model where you are able to charge, let's say, much more for a CV or for candidates who get hired who are very high value to organizations, versus, say, entry level or, let's say, candidates who are easier to find? And what would that entail?

See, we don't actually get to know how many people get hired through us, right? What we can track is the number of e-mails you've send, the CVs which were viewed, right, on our platform. And of course, we use a lot of analytics to understand how much value the customer is getting out of Naukri. But this is our model, right? So we -- and there's an accuracy level of every model. But we have these analytics, we have this data. And like I said, when we use it to determine or to estimate the value that we are creating for our customers, and we equip the sales team with this data. And we -- when we meet customers to -- for -- to sort of -- to sell and negotiate with them, we share this data with them. This is also available to them, right? And then we try and sort of -- and then there's a negotiation post that, right? So some of this stuff is taken into account while negotiating. And customers also understand, we also understand. But we don't have any way of actually knowing how many people got hired through us, right? So that makes it a little tricky. Now can we move to a model where -- which is a credit-based model where, depending on which CV you view, different number of credits are consumed? Theoretically, yes. And we've given it some thought, but it's not on the anvil at this point in time.

Next question from [ Deepanshu Rathi ], he's an individual investor.

Can you -- I am audible, right?

Yes, yes. Go ahead.

So my question is how the ARPUs have changed, the average ticket size have changed over the years for the core business, for the core recruitment business. First question is this. Second question is, in my core recruitment business, we talk about the database access, we talk about the resumes and learnings and et cetera. So what pie the database access holds and what pie the learning business -- the resume business holds?

Sorry. I didn't understand the second question. What -- how big was the...

So database includes -- my database business includes database -- core business includes database access, resumes and I believe the other components must be there, right?

So database access and resume access is the same thing.

Resume access, [Foreign Language]. Okay. So my first question is now how the ARPUs have changed over -- the pricing things have changed over the period? And what are the general basis?

Chintan, you want to...

Vineet, do you have these numbers in...

Yes, I'm just putting it on. Yes. So Deepanshu, if you look at this page, so we disclosed this on -- for a full year basis, this is how our number of clients have gone up, right, and how billings have gone up, and in relation to that, how the ARPU has gone up over the years. So in FY '22, it was 86,000 per client, which went up to 111,000 in FY '23 and was 113,000 in FY '24.

Next question is from [ Omkar ] from Barclays Investment.

Can you hear me now?

Yes, please go ahead.

Yes, so two questions from my side, both on 99acres. So firstly, if we look at the total number of listings on 99acres right now, they are the same as we had them pre-COVID, possibly 5%, 10% higher. So with the increased scale of operations and what you've seen in the real estate industry, I had expected this number to be a lot higher. Why would that be the case that this number is low?

See, could be two, three things. One is, see, of course, we've upped our prices. And when you up prices, you end up losing some customers at the bottom of the funnel. And second, I think the real estate market has been solid for the last maybe couple of years now, right? And in a good market, it's easier to sell property, right? So sometimes in a tough market, it could take you 6 months to sell a house, 8 months to sell a house. In a good market, you can actually get done in like 2 months or some times even a month. So that also makes a difference. So I mean I don't have all the details but these are -- these could be the factors at work.

Okay. And how do you see this number going forward?

I have no way. I mean, I have no idea because also, see, the other thing you must keep in mind is that we have buy listings, we have rental listings, we have commercial listings. So sometimes, buy listings will go up, rental listings will go down. we run various kinds of offers from time to time for our clients. That sometimes also impacts the number of listings we get on our platform. I think at this point in time, the number of listings on the platform are up 8% year-on-year. That's the number I got. How will this number move going forward? Hard for me to say.

Okay. And in terms of monetization of these listings, so pre-COVID -- so right now, it's around 65%, 66%, I guess. Pre-COVID, we also had similar numbers, paid listings as percentage of total listings. And this has decreased during COVID and increased. So this is also due to the pricing thing that you said.

No, see, our model -- business model is that it's free for owners to list. Brokers have to pay if they want to list properties on our platform. So this ratio is a function of how many broker listings we get versus how many owner listings we get on our platform.

There is a repeat follow-up question from Nitin Jain from Fairview Investment.

So just on the backdrop of a good scale-up in Naukri Gulf, would you be inclined to explore any other geographies at this point in time?

See, the bulk of our business comes from the UAE, and we have a tiny business in countries like Qatar, Bahrain, Oman. Saudi, we do some business, but we don't have a physical presence in Saudi. We have a physical presence in Dubai and in Abu Dhabi. This business has been growing at 18%, 20% for us for the last few quarters now, and is now profitable. As of now, there is no plan to sort of expand into more countries. We would -- we will continue to focus on the UAE and some others, like I said, on Bahrain, Qatar, Oman, over the next few quarters at least.

Next question from Amit Chandra from HDFC Securities.

So you mentioned about the benefits we are seeing from the AI tools that we have implemented. So just want to understand, is there any like differential pricing also that we're charging from clients for this AI offering? Or is it only for the customer or for the like resume or for the person who's getting hired? And also, in terms of investments, how to see the investments that are going into this AI? Maybe in the initial years, it's in the investment phase but over the longer run, can we see the higher margins coming out of the investment that we are making here?

As of now, we are not charging extra for AI features, at least in our core offering. We are using AI to improve the experience for both job seekers and recruiters on our platform in Naukri and for both -- and for the people who list on Jeevansathi. And we believe that if we improve the experience for them, more people will get hired through us and more matches will get made through us. And in the end, we will realize value somewhere, right? So that's how we are sort of currently using AI. We have launched some new products using AI. Like I said, we launched a mock interview offering in our resume fast-forward business, right, candidate services business, where you can upload your resume and the AI will sort of help you prepare for the interview -- helps you prepare for the interview. And that's a paid offering, but it's tiny right now. We're not monetizing it very aggressively. So -- and we are, of course, using AI to build new features like, for example, AI -- we're using AI to create content, we are using AI to help recruiters write better job descriptions. We are in a bunch of places, right? So that's where we think, the way things are today, we are constantly thinking of how to create new revenue pools using AI. One area where we have made progress is the data products -- some of the data products we've launched in Naukri, talent pulse, competition pulse, we get some revenue from these offerings, which we now sort of make available to HR departments of companies, but early days here. And -- so we've using machine learning for many years now. LLMs are, of course, new, and we are now -- we're learning how to deploy -- use LLMs also to improve the experience like we just launched Shiksha GPT, chat bot on Shiksha using LLMs to sort of enhance the user experience for our users. But that's also free right now, right? So we're not charging for it. AI will continue to be a major area of investment for Info Edge. In fact, we want to double down on our AI investments. And I think we will realize value very quickly. The value from these investments we will realize them -- we will realize the value very quickly. It's not as if it's going to be a very long gestation period. Of course, the new products -- if we had built some brand new products using AI, now those products will have to be tested, they'll have to be taken to market. Their revenue model will have to be figured out over time. So there, of course, there will be a lag between the investments we make and the sales we get. But on our core platform, wherever we are deploying AI, we are seeing a very healthy ROI already.

Okay. And also, if you can highlight whether the AI is also being used in the same manner in other platforms like 99acres and like Jeevansathi as we are like using it in the core equipment platform? Or is it like too early? Or we are like using it...

It's already deployed in Jeevansathi and in 99acres as we speak and even in Shiksha. Of course, Naukri is a much bigger business. So 70%, 80% of all our AI effort goes into Naukri. But the other businesses are also benefiting tremendously from AI already.

Okay. And you mentioned that we have scaled the AI workforce to around 100. So is there any like number or plans in the near term? Is it all the investment in terms of people are done? Or we need to...

No, no, no. I mean, so we are -- see, we are investing in -- we're hiring machine learning engineers, we're hiring data scientists, we are hiring AI strategists. We are deploying AI tools. We are leveraging LLMs. We are soon going to be buying GPUs. So these investments will -- have just started. So AI is, I think -- and AI is also changing -- I mean, developing very rapidly, right? I mean things are changing very fast in the AI world. So these investments, as long as we're getting great ROI, which we already are, like I said, we will continue to invest more and more in AI.

Okay. And on the like matrimony platform, obviously, we have seen quite good development there in terms of billings and also the losses have reduced. So how do you see it from here on whether it will be profitable, like next year, like meaningfully profitable? Or we want to operate it at the breakeven level? And also some of the initiatives that we have taken have actually worked well in terms of the change in strategy. So is it going to be the same status quo? Or are we planning something else there?

In matrimony, we were losing INR 100 crores plus a year 2 years ago. And we are hoping to get to breakeven this year or close to breakeven this year. That was our goal. And we haven't really given it too much thought on what we're going to do going forward. The model seems to be working. The product innovation is solid. AI is helping. So if we get to breakeven this year or close to breaking even this year, and we're also working on smart monetization because we had free and for a while, our revenue took a big hit and now we're trying to get revenue back. And -- but once we get to breakeven, then we'll apply our mind again to what next in matrimony.

Hitesh, there is one question in the chat, I will read out. So the revenue -- so this is from [ Deepak ]. The revenue by unique customer in recruitment solutions business since last 4, 5 quarters is hovering around INR 58,000 to INR 60,000 on a quarterly basis. With IT now gradually recovering higher ARPU, can INR 60,000 be considered as a floor from here? Or would incremental customer acquisition will be partly discount-led?

ARPUs -- see, when we acquire new customers, they don't -- the ARPUs are lower, right, because most customers start small. And then -- and if the results are good, then they upgrade over time. And of course, a lot of the customers we acquire are small as well -- customers as well. So for new customer acquisition, ARPUs are normally very low, right? Now as far as existing customers go, see, we are in a difficult market, in a slow market. It's hard to apply this, right? So what we're doing right now is trying to sell more products to them. Like I said, we have a whole bouquet of offerings. We try and sell more and more products to them. And that's how we get higher billing from them. In a hot market, when hiring becomes very hard and consultants also up their prices, and it's very hard to get talent, attrition goes -- and the numbers go up, then it allows us to up prices, right? And this is what you -- we saw maybe 2 years ago, when we had the Great Resignation and hiring was hard and attrition rates doubled in almost every company, we were able to up our prices. But for the last 6 quarters, it's been hard for us to even maintain the same price. So a lot will depend on the hiring environment going forward as far as pricing is concerned. The new products, we'll keep pushing because penetration there is low, and there's a whole -- a lot of opportunity to get new customers for the new products in our portfolio.

And also, Hitesh, one should look at it on an annual basis and quarterly because quarter 4 like seasonality we record strong billings. So then this number like suddenly shoots up. So one should also look at on an annual basis like this to understand the quarterly trend.

Yes. So that was the last question, Vineet, we had for the day. In case any more questions, please raise your hand. No, there are none.

Okay. Thank you, everyone, for joining. On behalf of Info Edge, we conclude this conference call. Thank you.

Thank you, and have a great evening. Thanks.

Thank you so much, everyone. We conclude this call.