Nazara Technologies Limited (NAZARA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Nazara Technologies Q4 and FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jay Shetty from ICICI Securities. Thank you, and over to you, sir.

Hi, everyone. On behalf of ICICI Securities, I welcome you all to the quarter 4 FY '25 earnings call of Nazara technologies. We have with us the management represented by Mr. Nitish Mittersain, CEO and Joint MD of Nazara Technologies; Mr. Rakesh Shah, our CFO of Nazara Technology; Ms. Anupriya Sinha Das, Head of Corporate Development, Nazara Technologies; Mr. Terry Lee, CEO of Fusebox Games; Mr. Akshat Rathee, Co-Founder and Managing Director of NODWIN Gaming; Mr. Ajay Pratap Singh, CEO, Absolute Sport Private Ltd; Mr. Puneet Singh, Co-Founder and CEO of Baazi Games; and Mr. Senthil Govindan, Founder and CEO of Datawrkz Business Solutions Private Limited. I would like to hand over the call to the management for opening remarks. Over to you, Nitish sir.

Thank you. Good evening, everyone, and thank you for joining us, especially on a very rainy day in Mumbai. In FY '25, we delivered our highest ever annual EBITDA of INR 153.5 crores on revenues of INR 1,624 crores with a PAT of INR 62.5 crores. Our gaining EBITDA margins stood at 20% as well as generated healthy operating cash, reinforcing our intent to focus on core gaming business going ahead. In Q4 FY '25, we delivered revenues of INR 520.2 crores, up 95% year-on-year and EBITDA of INR 51 crores, reflecting a 74% year-on-year increase. I'm also happy to share that since our IPO in FY '21, 4 years ago, Nazara's revenues have grown 3.6x and EBITDA has grown 3.4x, translating into a compounded growth of 38% and 36%, respectively. During this year, we have being very busy building out our strategic plans. We acquired Fusebox games in the U.K. establishing a strong fold in narrative-based mobile gaming. We also entered offline gaming with Funky Monkeys and Smaaash, creating a 360-degree gaming ecosystem. We took full ownership of Kiddopia, enabling fungible cash flows for faster and for faster strategic execution. We made our largest investment to date in PokerBaazi, strengthening our leadership in skill-based pure money gaming, and we also acquired well-known gaming IPs from Zeptolab. We made strong progress on key leadership hires, and strengthening our internal capabilities. Our centers of excellence are in user acquisition, analytics and AI are rapidly taking shape, and they will drive cross-group efficiencies and enable organic scale up in FY '26. As we look ahead the coming year FY '26 is poised to be a year of acceleration with increased contribution from high-margin gaming business, expecting to further strengthen our profitability. Our latest acquisition Curve Games enhances our global publishing capabilities with a strong portfolio of PC and console titles, further expanding Nazara's footprint across Western markets. We remain focused on building a sharper and locally relevant gaming platform, defined by creativity, execution excellence and strong IT ownership. With our growing presence across North America and Europe, strategic global acquisitions and recognition among the world's top gaming publishers, Nazara is steadily making its mark on the global stage, not just as India's gaming leader, but as a rising force in the global gaming ecosystem. With this, I would like to request Anupriya to talk to you about segmental performance. Thank you, and over to you, Anupriya.

Thank you, Nitish. Good evening, everyone. Moving to the Gaming segment. In Q4 FY '25, our Gaming segment revenue grew by 72%. EBITDA grew by 111%, with EBITDA margin of 21.4%. In FY '25, the segment revenue grew by 27%, EBITDA by 27% with EBITDA margin of 19.9%. Fusebox reported revenue of INR 161.6 crores and EBITDA of INR 30.2 crores in FY '25 for the period, it has been consolidated with the books of Nazara. Q4 FY'25 revenue stood at INR 79.1 crores and EBITDA at INR 13.1 crores, up 149% year-on-year, higher UA spend in Q4 FY '25 led to a strong top-line growth with a temporary margin dip. These UA investments are expected to drive growth in FY '26. Momentum will also be boosted by new game launches, starting with Big Brother and Bigg Boss [indiscernible]. Moving to Kiddopia, in FY '25, Kiddopia posted revenue of INR 191.8 crores and EBITDA of INR 43.7 crores with a strong EBITDA margin of 22.8%. Revenue stood at INR 46.3 crores with EBITDA of INR 9.3 crores in Q4 FY '25 with EBITDA margin of 20.1%. Kiddopia launched branded mini games in FY '25 through strategic licensing deals with Moonbug and Mattel, featuring Little Angles and Barbie respectively. A new partnership with Hasbro will introduce PJ Masks theme content featuring Catboy, Owlette and Gekko set to launch later this year. Moving to Animal Jam, revenue grew organically 11% to INR 104.9 crores, while EBITDA rose 16% to INR 21.9 crores. In Q4 FY '25, revenue increased 12% to INR 26.8 crores with EBITDA surging 69% to INR 4.9 crores. This growth was driven by strong engagement with premium features such as Wishing Coins, [ super boxes ] and theme content highlighting the effectiveness of our [indiscernible] and monetization strategy. Animal Jam signed a partnership with Slinky in January '25 and is developing a new casual game aimed at cross-generational appeal. Now moving to Funky Monkeys, Nazara acquired 60% of Funky Monkeys, a leading indoor play center for kids aged 2 to 14 years in tier-1 Indian cities. FY '25 revenue was INR 17 crores and an EBITDA of INR 7.3 crores with a flat growth due to temporary closures in Gujarat, partially offset by gains in Chembur and Bandra. Q4 FY'25 revenue was INR 4.3 crores. EBITDA rose 45% year-on-year to INR 1.6 crores. Focus in FY '25 was on stabilizing operations and reopening centers FY '26 will prioritize expansion center revamped and enhanced marketing in CRM with Nazara strategic support. Moving on to PokerBaazi, Moonshine PokerBaazi's parent is accounted as an associate and not consolidated in our books. PokerBaazi delivered strong operating metrics in Q4 FY '25, gross gaming revenue up 50% year-on-year, gross transaction value up 38% and deposits up 35%. Moonshine reported revenue of INR 588.3 crores in FY '25 with an EBITDA of negative INR 57.5 crores. Q4 revenue was INR 180.5 crores with EBITDA of negative INR 22.1 crores. March 2025 was PokerBaazi's best ever revenue month driven by NPS 2025, IPL and shark tank campaign and increased mid- to high tax engagement, centering monetization and top funnel growth for FY '26. Moving to other segments, Norman continues to execute its strategy of a strong organic growth and targeted acquisitions backed by hands on integration across teams, geographies and internal delivery centers. Q4 FY '25 grew 50% year-on-year post Wings deconsolidation. The business update will be covered by Akshat in a later section. Moving to Datawrkz in October 2024. Datawrkz through its subsidiary -- through its U.K. subsidiary acquired 100% of Space and Time for an equity value of GBP 4.8 million or INR 52.3 crores. Following the acquisition, S&P has been consolidated into Nazara's financials. On a stand-alone basis, data was reported 3% year-on-year growth and 13% year-on-year EBITDA growth in FY '25. This performance reflects the successful shift towards more profitable business lines in its independent active operations. Sportskeeda, Absolute Sports included Sportskeeda and PSM Goods revenue and EBITDA by 22% and 19%, respectively, in FY '25. The core sports era business continues to grow well, with revenue and EBITDA increasing by 25% and 25%, respectively in FY'25. PSM revenue grew by a robust 51% in Q4 FY '25 in revenue, reflecting a strong recovery with each quarter. This business continues to have strong EBITDA margin in Q4 FY '25. In May 2025, Absolute Sports have signed definitive agreements to acquired 2 IPs. TJRWrestling.net and ITRWrestling.com from Titan Insider Digital in an all-cash deal valued at $1.25 million or around INR 10.5 crores. Before we open the floor for Q&A, we'd like to take a moment to spotlight 2 of our key businesses. Starting with NODWIN. I'll hand over the mic to Akshat. Akshat, over to you.

Thank you, everyone. Just doing the sound check, if you can hear me.

Yes, we can.

Perfect. Thank you, everyone, for going and joining the call. I'm very happy to go and take you through NODWIN been up to the last year as you can imagine as a very public action item company we have been acquiring some assets and very, very actively get our hands dirty to go out and do consolidation, but also integration of those assets into our businesses. And typically, we acquire companies for growing 1 of 3 verticals for us, 1 of 3 metric for us and it's very always important to we either grow in geographies we care about. We either care in Invest into IPs we care about or monetization metrics that we care about in the activity. You'll be happy to know that our live business vertical, which typically has DreamHack in the gaming matters, all that mattered, N87 and all our Comicon properties is doing extremely well. When we acquired Comicon, they were running 5 IPs. We have gone from 5 to 8 in the first year of acquisition, and we are now expanding from 8 to multiple cities in double digits now this year. And we'll also -- since we acquired this internationally, we'll also be expanding Comicon internationally to multiple markets this year. We'll also go and talk about our portfolio of the battles. So gaming matters went to the UAE, cricket matters with the ICC in the U.S.A. with sport matters with Hong Kong and for that matter, it remains the large one that sits out of India. Dream Hack, obviously does really well, and you'd be very happy to know that now gaming and e-sports are all doing well. We have states that come to support us in our activities. It's all very great news for us. Our content IP, which is typically our influence for business and our media business and our broadcast business keeps on growing very well. Playground happens to be one of our marquee properties. You might have seen that we just announced a big partnership with Endemol/Banijay to go out and expand that into multiple languages in the country of India and also codevelop this into other languages across the world. We'll also be building other properties with Endemol and Banijay in different market. Influence the partnerships on our MCN, are again, doing extremely well with master partnerships in multiple geographies with YouTube, Meta and X. We've also been going and doing something, which is the flywheel approach, which is the ability to go and get really large clients to go ahead and keep on engaging with our portfolio approach, which has allowed us to go ahead and get over 100% growth in all our large client base, the people who typically pay about $1 million to us. So across the world category, the e-sports business itself with our PGM properties, PGM on star sports. We are also executing BMPS and Valerin Championship in India. And also the Starladder has announced the world's largest major on counterstrike in Budapest in December, that we are going into in tickets are selling out like hot cakes. Finally, our Central Asia division is doing again very, very well. We've been able to go and make beachheads into Kazakhstan and Uzbekistan, while our German operations with Prime League on eSports continues to do well, and that has allowed us to be market leaders in CIS in Africa within 18 mix of operations and setting up a bit. And these are typically growing because some of our founders we acquire. You typically have 2, 3 people, founder teams they go ahead and take new missions and they go across the world to go ahead and find newer and crazier things to go out into and they will help us to go our have very high momentum in what we are building. Finally, our Middle East, which is U.S., Saudi Arabia and Egypt continue to do well. The EBITDA loss that you actually go out see is predominantly because of our NH7 Pune cancellation and the Freaks4U EBITDA hits that are there. And the good news is we've been able to go ahead and absorb most of those hits because of the diversification and the integration we were able to go ahead into. I often like to say NODWIN in the big ship that we fly and sometimes we don't know, which engine gets hit every year, either a team gets banned or something bad happens, but the diversification and the integration has helped us go ahead and not to hit as badly as that. I mean we are also focused very clearly into turning around Freaks4U into core EBITDA positive engines as we go forward. Final note on brand scale, which is being the input of proactive measures in play for a onetime impairment of INR 15 crores on the OCD investments that we have done that were in Q4 of '25, and there are also an additional loans worth about INR 25 crores, which will be provisioned in due course based on the comparability and fixing of that business. And finally, we'd also like to go ahead and declare that NODWIN will continue to go ahead and raise additional capital to fuel it's growth in the future. As we go and carry forward this momentum become -- trying to become one of the largest people in the youth media culture in the world. Back to you Anupriya.

Thank you, Akshat. I'll now call upon Puneet Singh with the Co-Founder and COO of PokerBaazi Business. Puneet, over to you.

Thank you, Anupriya. Hi, everyone. Just to begin with, FY '24 to '25, journey has been about capturing the market share and also optimizing deposits to the gross revenue percentages. We all know that the new GST regime on deposits came into effect from October '23, a strategy post October has all been about optimizing the deposits to the gross growth revenue numbers and also about brand building. In terms of deposit to gross revenue percentage, we went from 33% to 57% currently. In terms of the gross gaming revenue, we grew from INR 848 crores to INR 1,363 crores. That's almost 60% growth from financial year '24 to '25. We were able to achieve this because of our product optimization and scale. The growth from quarter 4 financial year '24 to '25 represents that. We grew our GGR from INR 229 crores to INR 343 crores, while optimizing the deposits. The deposits grew only 35% during that period. Brand building becomes even more important post the new GST regime because at scale, we need to reduce our marketing spends to achieve higher EBITDA margins. We have spent monies on properties like Shark Tank, IPL to create that top of the mind recall for poker and PokerBaazi. Apart from that, we've also launched and spend monies on IPs like National Poker Series and [ circuit ] to support the brand recall. The result of all this is an excellent March '25, where we have recorded a peak numbers. Our focus will continue to grow on the entire Poker system and the ecosystem around poker. Our focus will be on the pillars of the game like watch, learn, play, analyze and glorify. And for all such details, we have made some products around that as well. We have developed a poker TV app to support the watch aspect, where a person can personalize and content-based 1 poker journey can be seen emerge. But there is for the Learn aspect, we have the PokerBaazi school app, which focuses on the learning aspect of the game. Then we have for the play aspect, we have the best-in-class desktop and the mobile products, which are highly engaging in terms of the game play. For the analyze, we have the Poker shorts tool, which helps one analyze and improve one's game play. And for Glorify, we are building our products like an IP like National Poker Series and Indian Poker Master, which helps the winners and we help and also helps us in glorifying that. Going forward, our focus will continue to be spending on the ecosystem of poker and a main driver for the long-term growth would be the levers like watch, learn, play aspect in glorify. We all know Poker is a global recognized game. And we the category leaders currently will be focusing on growing the market of poker in India, which will indeed benefit our numbers going forward as well. Thank you, Anupriya over to you.

Thank you. With this, I conclude my remarks, and we'll now open the call for Q&A. I would request Nitish, Rakesh and rest of the management team to join me for the session.

[Operator Instructions] The first question is from the line of Jinesh Joshi from PL Capital.

Sir, my question is on NODWIN. I mean what is the path to profitability over here? I mean, we have seen an EBITDA loss of INR 15 crores in FY '25. And you also mentioned in the opening remarks that performance of Freaks 4U has been a bit subpar and we intend to turn that around in the near future. In addition to that, I believe additional provision of INR 25 crores from wins might also come through. So just to get the big picture right. I mean, how should we think about the profits coming back into East pools. While in terms of scale, we are doing reasonably well, but I think consistently, we have been in the negative territory at the EBITDA level. So your thoughts on that?

This is Nitesh here. As you know, for us, all along, we are focused on growth for the sports business and the NODWIN business, given that they are market leaders, and we want to ensure that we build the right kind of moats for this business going forward to take advantage of the macro trend that eSports offers us and the market leadership opportunity that it offers us. So I think broadly, we've all along been okay with kind of breakeven business as long as it's growing strategically and growing fast. I think that's what we have approached. This year a couple of [indiscernible] a little lag on Freaks 4U profitability and the surprise last-minute cancellation of a NK7 weakened colored the P&L a bit. But we are quite hopeful that FY '26 will see better. Akshat, can you add comments to this.

And this is exactly what Nitish said. And my answer to this is our core businesses remain extremely profitable. The reason why you can go out and see us what have small EBITDA loss that we had now are aberrations that you want to go into, right? And towards these are the nature of the business of thing you build -- you'll see that across the world, very few companies in the world in the eSports in the [ pop ] culture space that we are in are profitable because most of them go ahead invest into long-term growth. And that's exactly where we want to go ahead and do. We do not like losing money. It's very against our DNA [indiscernible] and loose money. We will continue to go ahead and make sure that we hedge our businesses as we go forward. But we do live in a territory, where last-minute aberration are the nature. Rest assured that I want to go ahead and make sure that having an EBITDA positive is extremely important for us, but we'll continue to go ahead and create momentum as we want to be the best in the world.

Sure. One bookkeeping question from my side. So if I look at our commission cost, it has gone up to about INR 61 crore in this quarter versus the past run rate of about INR 15 crores to INR 18 crores. Now I believe this cost predominantly pertains to the App store commission for our early learning business. So has there been any change in the share with our app store partners, so that's 1. And secondly another bookkeeping 1 is, if I look at our stock in trade, it is at about INR 39 crores in this quarter. But I believe after the deconsolidation of brand scale. We do not have any product-centric business, if I'm right. So what is this exactly pertain to?

So Jinesh, I'll take this. On your first question around the app store commission is such of addition of the business of Fusebox. So it's not only for [indiscernible], but also for the addition of Fusebox which is much larger business. So I think that's what's happening. I think what you should look at is that globally the app stores are on significant pressure to reduce commissions there have been recent ruling to let people back as [Technical Difficulty] and starting to see early signs. I think internal mandate is to push downwards on these commissions that we pay. I hope that answers your first question. I'm not sure I got a second question properly. Could you just repeat that.

Sir, the purchase of stocking trade in this quarter, that future is INR 39 crores. And I believe we don't have any product-centric business after the deconsolidation of brand scale. So what does this pertain to?

Jinesh, I will have a good check on that will come back to you.

Sir, just 1 last question from my side, and that is on PokerBaazi. I think in Q3 we were in the positive territory at the EBITDA level with about INR 18 crores of EBITDA. And in this quarter, I think we are into losses at about INR 22 crores. And also for the full year, given the change in tax regime, I think at EBITDA loss what we have stated is about INR 58 crores. So from a 2, 3-year perspective, how should we think about the path to profitability given the fact that we are operating in a slightly unfavorable regime. And what would be that breakeven level, which we should ideally look forward in this business?

Sure. So in terms of PokerBaazi, I give it the first shot and I think [Technical Difficulty] I think that clearly again with PokerBaazi, right is by far the clear market leader, and it's imperative for us to create the maximum mode for this business. And the biggest brand which will become a long-term differentiator for us. And I think from that perspective, the PokerBaazi team is quite aggressively using the current market and what the situation to build out this brand. You will see the movements in profitability, depending on the season and the spend. So for example, the fourth quarter -- Q4, you would have seen a lot of spends on Shark Tank, Q1 of '26, you will see significant spends on IPL. So I think some of these spends are seasonal in nature when the large opportunity provides ourselves, and that's what we're really seeing. Puneet, do you want to add something here?

Yes. So just to add on it. In the poker market in India, we've already hold around 60% market share. Like Nitish rightly pointed out, the quarter 4 negative was because of the spends, which we have done in the -- on the Shark Tank and the IPL spend, which fall in the first quarter of financial year '26. The idea behind is to grow the market. Being the market leader, we will be the first ones to benefit once the market grows further in terms of poker, and we are very confident on doing that going forward.

The next question is from the line of Samarth Patel from Equirus Securities.

My first question is on NODWIN. So can you just help me with NODWIN's revenue mix between, let's say, [ PPPs ], IPs sponsorships and merchandise?

Akshat can you take that please?

Of course. The way to think about the NODWIN business is actually not that so I'm happy to take you through a very 1 minute crash course on this. IPs are not independent, right. So I'll give you an example. NODWIN works on a strategy, which is called the triple dip strategy. That means our influencer that we manage to playground and we discover through playgrounds is the person we go ahead create content with that in goes and offers to go ahead and do brand endorsement. If that influencer also comes in place at our festival and then also participates in our eSports tournaments, which is there, right? And then finally, we launched business lines with this influencer for any merchandising, so where do we put what becomes there? You can actually go out and look at capitalization across all our downstream subsidiaries and our consolidated results, which has line by line into the separate businesses that go ahead into this. On the top of that, you will actually have intracompany transfers, where those services, those products are then utilized across the board. When you actually go ahead and look at our stand-alone of our downstream companies, I think you'll be able to go and look at some [indiscernible]. But we actually do not go ahead and report lines of revenue or profitability in any of our segment.

Understood, Akshat. That was helpful. My second question is on Curve Games. So with the Curve Games global publishing reach, how do we plan to scale, let's say, Indian development games through this channel. And what would success look like for us over the, let's say, medium term over the next 2 to 3 years?

Sure. I'm going to take that, this is Nitesh. So I think what we have been noticing in the Indian market is increasing the -- a large number of games are being developed on the PC platform. And we see this even in IGDC, et cetera, which is the large gaming conference that happens in India, that there's a lot of velocity of Indian developers. Now with the AI available to a lot of the developers in India, they can also make PC games faster, better and somewhat bridge the talent gap that has been there on certain aspects like monetize spend or graphics, et cetera, right? Compared to global titles. So I think India is going to have a large opportunity and a large funnel of games coming in. But a lot of these developers in India don't really have access to global markets or the market publishers. So I think with Nazara now owning Curve Games, Nazara becomes a perfect bridge for Indian developers to the world. Curve already has fantastic relations with the major distribution platforms on PC and console and I think Indian developers can take advantage on the same through the Nazara gateway. So I think that's what we are quite excited about, even from Curve's perspective, right? Getting high-quality games at potentially lower costs would improve their unit economics a lot. So I'm sure they will be very excited in coming down to India and spending time on ground with us discovering what the Indian market has to offer. In terms of what success would look in the next 2, 3 years, is our ability to work together with the Curve team, who's already very strong. They were fantastic management team, who understands what games could potentially work. If we can add the Nazara network credibility brand to them and jointly be able to negotiate and elongate good funnel of games to publish and see some breakouts from that funnel that we launch in the next year or 2, I think that would be a very successful for Curve. They've already seen successful titles like For the King Human Falls Flat, Human Fall Flat, et cetera, which have been very popular. And we are very hopeful to get more such titles in our funnel over the next couple of years.

Understood Nitish, that was helpful. My next question is on capital allocation. So for FY '25, I believe we would have deployed around INR 1,500 crores towards inorganic growth. Now what IRR threshold that you have in mind across verticals? And how does that shape our FY '26 capital deployment?

Yes. I think for us, what is important is to the business that we acquired. It's not short-term IRR that we are chasing. It can strategically plug into the overall ecosystem we are building. Obviously, as you know, we like to acquire businesses that are profitable, cash flow generating and can help scale, take us to the next level. So I think 1 thing we are quite clear about is we are seeing across our investments that our core gaming investments, where we are having the thesis of acquiring a established gaming IPs, good team's recent scale of revenue existing profitability. We really like that segment of the business because there are a lot of tailwinds coming ahead of us. Like I mentioned earlier, the App Store commission are potentially coming down. AI is going to help us improve the velocity of content at the same cost or potentially optimize our cost. So we see future margin expansion happening in these businesses and also very healthy cash flows. These businesses are usually working on positive working capital. They get paid by an Apple or a Google before they have to spend money on user acquisition, et cetera. So we like that as well. So I think this year, we are shortly going to double down our capital investments towards that segment.

The next question is from the line of Madhavendra, an Individual Investor.

Sir, I have 2, 3 question. First, our depreciation and amortization has increased significantly in FY '25. So where do you see this in FY '26 and the same for advertising and promotion expenses. And the third question is like Kiddopia is still struggling since I think it's been 2 years, and the segment is still struggling and the recent acquisition Curve Games, since [indiscernible] checking its last 3 years revenue is stagnant. So how do you plan to bring growth in this segment and the third one is it like we have acquired a lot of bigness in the last 2, 3 years and revenue have almost doubled really encouraging. But the bottom line is still, I think, not showing that growth. So can't we just consolidate all these entities as of now. And aims to bring the growth in these entities rather than going into acquisition in the years ahead.

Those are many questions, so I'll try and answer some of them. I didn't really get your first and second question well, but let me answer a couple of questions and you can ask the follow-on. So with respect to Kiddopia, as you know, we took control of this business a few months ago by acquiring 100% stake from the founders. And thereafter, we have put in our own growth strategies in play. We are starting to see results. As you can see from our presentation, in this quarter, you've seen a significant drop in the cost per trial, which has gone up to $40, $42 has come down to $33, $34 almost a 20% reduction on cost per trial, while more or less maintaining the amount of money we are spending at the number of prices we are getting. So I think that is a positive sign. We've also increased monthly pricing from $9.99 to $12.99, somewhere in the middle of Q4, and we will start seeing results of that. That has been fairly well accepted, and we've not seen any real negative reaction to that. It also helped us increase our annual activations to 40% from 30%. Usually, the annual activations give us better ARPU. So that's again a positive. So I think we're seeing a lot of positives in what we are doing. We've put in technology layers, which allow us for faster KB testing there are a lot of different experiments we are doing to find at a sweeter spot that allows us to scale the business. Lastly, we've spoken many times about building IPs or bringing IPs to Kiddopia. The good news is that you've started seeing that happen. We launched a small IP called Little Angel from Moonbug. And we've seen good results from that. Then we have launched Barbie from Mattel, which has seen even better results. So early signs show that the IP strategy is working for us and should show positive results going forward. So I agree that the last 4 years have been a lot of, I would say, efforts without measurable results, but we continue to feel optimistic that FY '26 will be the year of turnaround for Kiddopia. So I hope that answers your question on that. In terms of your question around the many acquisitions we have done and the growth versus new acquisitions, right? I think yes. I think you can look at -- if you do more since the time of our IPO, right, which was in March '21. So it's been 4 years. If you look at products like Kiddopia and NODWIN gaming, or many of the other businesses, Sportskeeda, they have actually grown extremely well. Sometimes when you zoom into 1 or 2 years of these businesses, they may have plateau, but if you zoom out you will see that a CAGR on them still remains very efficient. And we will obviously continue to focus and prioritize organic growth wherever we can. That said, I think, especially in the gaming space, we are at a moment in time, when Nazara's perfectly placed to very aggressively expand globally because we have the brand in place, we have a playbook in place, and we have very, very attractive valuations and opportunities in the global markets due to a multitude of reasons. So I think this time will not present itself to us forever. And therefore, we must act on it simultaneously. That's our view.

Okay. And sir, and the Curve Games revenue is a stagnant for 3 years. So how do we plan to scale this business?

For curve, I think the business, there were a couple of issues they bloated it up a bit into the run-up of COVID during the boom of COVID and then came off in terms of revenues post-COVID, which a lot of gaming businesses have. But a lot of the optimization that was required to be done over there has already been done. So we're buying a business with a strong team, a lot of the cleanup has already happened there. And therefore, we can focus on positive growth going forward, which is why we bought this business. It has good revenues, strong profitability and very good cash flows. We'll be able to reinvest by it's own cash flow in its growth, and we will, of course, continue to support our team.

And sir, 1 small question. Where do we see depreciation and amortization stems in FY '26 and advertising and the promotion expense. Because there has been a significant jump in FY '25?

Yes. See, the thing with amortization is because we are a very acquisitive company, right? We tend to bring on a lot of intangibles onto our books through the acquisitions, which lead to a noncash amortization, which has been growing, which is why our PAT looks much lower thanks to the amortization that is happening on these acquisitions. You will find that our cash flow is actually much higher than the factory report and even in the current year, I believe, close to 75% of our EBITDA is we've been converted into OCF pretax OCF. So I think we're very focused as a company on our operating cash flow. The cash to -- the EBITDA to cash that we are generating as key North Star metrics for ourselves. In terms of the user acquisition, I would say it's very dependent on what the opportunity with each of our gaming businesses provides us. If we get a sweet spot where we are able to scale user acquisition and scale the revenues, we will definitely press on the accelerator. So we don't have fixed budgets for it. We're looking for profitable growth. And if we see profitable metrics, we will spend as much as we can. Sorry, did you ask another question?

[Operator Instructions] The next question is from the line of [ Ramana Chandak ] an individual investor. Please proceed.

Sir my question is regarding our ad-tech platform. What kind of ad-tech platform does Nazara have? Is it open ended like Meta or Google or a close-ended platform only for limited customers?

So it's open-ended where we have -- I think it will be best for me to get Senthil, he's on the call to answer this question in more detail.

So question broke up a little bit, but I think the question was -- do we have an open stack advertising for our ad-tech platform? Or is it closed with an[indiscernible]...

Can common people access our ad-tech platform directly?

I see. Understood. So yes, so we have a product which is 100% self-serve, right? So anyone who wants can actually go to the platform its quite Vizibl, Vizibl.ai And they can just log in into the credentials and pay as they go, right. So the whole purpose of that stack is to try and democratize ad-tech for people who are relatively smaller in size as well. Otherwise, there are some very large minimum thresholds for people to get access to similar products, if they were to close the market...

Sir, how is a -- what is the pricing plans in that platform? How is the pricing decided?

So is the question, how is the pricing decided?

Yes, yes.

Okay. So the pricing is essentially a percentage of the per day trade. So essentially, whatever amount is placed on the platform, it works through our vizibl platform and will essentially retain a percentage of that advertising budget and the rest of it will go towards the actual media that is being purchased.

Like later this will have a paper click or they have paper view, we do have a like.

No. Currently, the platform is -- it essentially allows impressions to be a -- so every time you see an ad, it's an impression. So currently, it allows the impressions to be purchased. It gives algorithms internally, which allow you to optimize towards clicks or conversions.

So do you see any more acquisition further needed to expand our platform or we -- is this sufficient what we have as of now.

So I think the current intent is to focus on the acquisition that we have, right? Obviously, as with the larger Nazara ecosystem, if there is something that opportunistically we can look at we might review it. But our current tenancy is going towards ensuring that we are able to expect synergy from the acquisition that we made last year, which has taken time.

So my second question is regarding PokerBaazi. Are there any tax litigation pending on PokerBaazi? And if there is any -- what is the current status of that?

Sure. As you know, there has been an ongoing GST litigation on last tax, which I can ask Puneet to talk a bit more in detail.

So as of now there is only the point of the retrospective GST, which is in the court, that's an industry matter, which affects the whole gaming industry. And all the companies, all the gaming companies in India are already in the Supreme Court and the court is currently hearing that matter. Apart from that, there is no other tax issue, which is spending at PokerBaazi side or I can see on the gaming side.

So I want to know more about the PokerBaazi. Like we have seen Nazara is a Global company, we have a well-established markets in Middle East, Northern Africa, Europe and U.S.A. Is there any opportunity that we could send PokerBaazi into these other markets also, not just India?

Nitish, you want me to take that?

Sorry, can you repeat that I have not heard it properly.

We have seen earlier, our games have been very successful in U.S.A., Europe, Middle East and Northern Africa as well -- so do you want to expand PokerBaazi into those markets also do you want to keep PokerBaazi only for Indian market?

Yes. Sure. Look, I think right now, PokerBaazi has an amazing opportunity to really grow big in India and it's very important for the team and all the capital that is being allocated to focus on achieving what is possible in India. That said, PokerBaazi has a fantastic technology platform as an in-house technology platform, which are continuously updating. And I believe the product is already very competitive in global markets. So at the appropriate time, the team may consider taking it global. At this point of time, they are focused on the Indian market.

I want to know the -- what is the current regulatory regime regarding real money gaming in other countries outside India. We are other countries friendly for real money gaming or most of the countries are [indiscernible]. What's the current environment.

No. I think different countries have different regulations. A lot of countries are open to skill-based gaming, including the U.S. markets. But yes, every country has its own specific regulation around skill-based gaming.

So compared other countries, how do you find Indian regulation, how is our regulatory environment? Compared to others?

I think I would say, except for -- at this point of time, the GST taxation issue, right? There is not a national regulation put out around skin-based gaming. There was some talk about it earlier, but it hasn't come through yet.

So my last question is what kind of company should we see at the competitors of Nazara? We have seen right in 2021 Berkshire-Hathaway trying to take control of Activision business. So later on, they could not -- so should we consider gaming companies as our competitors or who should we really treat as our competitors of Nazara.

Look, we have quite a diversified platforms. And of course gaming companies definitely have different IPs, different games and we would be competitors to them. At the same time, we are more diversified in a stand-alone gaming company. So I would say -- it really depends on how you look at it, you can compare to Tencent in China, you can compare us to electronic arts in the U.S. would be much smaller companies, much larger companies, I would say, we have our own first company from India with that kind of approach. Can we move onto other questions, please, because I think there will be others in the queue.

Nazara as a holding company, are there competitors like Nazara, who have same business model like us.

Like I said, there are different companies with different platforms. And yes, it's difficult to compare exactly any company to us, I would say.

The next question is from the line of Abhiram Reddy, an Individual Investor.

I have 2 questions. One focus has been core growth drivers for Moonshine. So what are our plans to expanding into adjacent categories and R&D space like Rummy and Fantasy both at Moonshine level and also at Nazara level?

And your second question. I think right now for Moonshine, the biggest focus is on Poker given their market leadership on that space and the rapid growth that they're experiencing -- that said, of course, we will continue to look at all opportunities and do what is the right thing for the business. From a Nazara perspective, given the size of our investment in Moonshine, at this point of time, we are not taking other initiatives ourselves directly on the skill-based R&D space. Like I mentioned earlier, atleast in FY '26, a lot of our capital allocation and focus is on the core gaming studio business.

And the second question is what's the current revenue of Smaaash, if you can share that? And what are the plans to make it either EBITDA positive or profitable and also grow the business moving forward?

Yes. We are -- we will probably get control of this business sometime in June. So we'll be in a position to share specific financial numbers, maybe next quarter or the quarter after that. But we do see a lot of low-hanging synergies between what we do online as well as French Smaaash Centers. So after we acquired the first approach, the first plan is to because it's been in NCLT for 2, 3 years to get it up to speed and then start driving synergies, for example, we have a large online user base, which we can drive offline. There are a lot of partners with large ecosystem players, which we can bring offline. So I think we have a lot of ideas, but we will detail it out maybe in the next quarter.

The next question is from the line of [ Nikhil Parwal ].

My first question is related to NODWIN. So I think earlier in the call, Akshat mentioned that the core business remains profitable. So what is core here? Does it exclude Freaks and NH7?

Yes, Akshat. I'll let you take that.

Of course. When we have -- NODWIN had 3 core businesses that NODWIN runs 1 is the Lives business, 1 is the eSports business that we have? And the third is the media business that we have. These are the 3 core engines of NODWIN. But as an example of the Freaks business when you talked about, Freaks is a company based out in Germany. They go ahead do Games form work, which is typically happens in Cologne in Germany. They also do market entry consulting and agency work. They have an IP called [ primarily ] that they go ahead and run -- and so across this, you see the air spread across 3, 4 verticals, which is there. We like to go ahead and keep the core business going, which is either the festive business, the lives business or the media business or the eSports business. The other businesses which are much more agencies than our businesses, we actively try to optimize for centers of delivery across the world, right? It makes no sense for us to go out and have manpower City and very expensive that is doing just agency business across the world. And those are the optimizations that take time to go ahead and rational. Our core businesses remain the 3 long-term creation businesses of media eSports and of live.

Got it. Got it. And in the long run speed, what's the steady state EBITDA margin possible for NODWIN as a consolidated business? And how long will it take for the company to achieve that?

I wish I knew the long-term answer to this question, and I'm not going and just being smart about it and then answering that, I'm being very honest. See, I think you have to understand where NODWIN is in its journey, started off as a 9-year-old company, and we've been able to go ahead and make a name that government and residents and Prime Minister, now invite us to go ahead and build for them. I believe NODWIN will continue to go ahead and grow its top line, while defending its profitability on a level for the next 2 to 5 years. We don't like loosing money, I would say that. We believe very strong IP, steady-state EBITDA is typically, if you look at any sports IPs there to 25% costs, you have 70% to 80% EBITDA that come from long-term subjection -- that's the 1 that creates for you. That's the reason which you create that, but it needs -- typically 5 to 7 years to go ahead and builid those out, and you're seeing it, right? You're seeing it with when you do BGMS. We are in season 4 right now, playground season 4, the cost that you would invest typically to go ahead and build IPs would be between 2 and 4 years of cash breakeven, but then they go ahead and create numerous rewards in the future. Good question is how many can I go and invest in? And obviously, except the fact that there will be failures as we go ahead and do it, because no one's got I wish I knew the answer of which people work and not. So a very simple answer on steady-state EBITDA on a long-term basis on IP that we are looking at between 60% and 80% EBITDA on long-term IPs. On a consolidated basis because we will keep on running experiment and those would fail, they would ahead bring down data pickup into more sustainable levels. We do believe on a long-term basis, that's not been going between -- anywhere between 30% and 35%.

You already answered my second question partially. I wanted to actually ask what kind of investments have gone into building a few own IPs like BGMI or even [ play down ] for that matter? And I'm sure that actually some of them have already made money.

And the number of things that you see us make money, we actually lose money on a loss that you would not know about because we try smaller expense experiment, right, the 20 lakh experiment here of INR 50 lakh experiment there an INR 85 lakh experiment there. We all hear about the big ones when you do a Comicon and we're doing 11 Comicon, but behind every Comicon [Technical Difficulty]. But we need to try, otherwise, there'll never be enough supplier for us to go out and have these big ones that are successful.

Right, right. Got it. Got it. My next question is related to publishing. So it is probably pardon my ignorance. Can you talk about how does this business work? In general, now you've acquired Curve Games, and you are also trying to publish a lot of games out of India, take them to the world. But in terms of revenue and et cetera, how does the business work?

Publishing is basically, where you partner with third-party developers. Or you publish your own games, which are first party games and the focus is how to market the games better, monetize and better, leverage distribution platforms and relations over there to be able to get these games distributed by widely. Live ops is another important thing. How these games are ongoing update support to keep it interesting for the users. So I think there's a host of publishing activities that need to be done, which is a value add for the developers, who can't usually do it themselves. Publishers also many times, fund the development process for the developer. So I think that -- whether it's on mobile, whether it's some PC, console, whether it's in India, whether it's globally, I think that's what still publishing business about. In India, we are trying to push the Nazara publishing business because we believe that as an Indian publisher, we can add a lot of value to local developers as well as global developers wanting to promote games in India effectively. Curve is already established globally in the PC and console space. So they have an existing business that spokes and they understand them. And we just plan to put a lot more into the funnel.

Got it. Got it. Got it. And in general, we just acquire now how do you look at the return on capital employed in such businesses.

Like I mentioned earlier, I think this business is a high EBITDA margin business on the current business of GBP 20 million, they're doing maybe GBP 9 million or GBP 10 million of EBITDA. But the post CapEx EBITDA is also pretty good GBP 4 million, GBP 5 million. There's high free cash flow generating. So I think the business is in a good stage right now. A lot of the cleanup, I was talking about a lot of the optimization has already been done and is behind us before our acquisition. I think the whole focus right now is on getting the right games and pushing it. The return on capital is already very high in this business.

Okay. My last 2 questions are related to PokerBaazi. So in the presentation, I see the GGR growth has been higher than the GDV growth. So does that mean the take rate has increased?

Puneet.

The take rate has not increased. As of now, the whole GST hit is something which we are taking, and we are not passing it on to the end user. And you know that post the new GST regime post October '23, the GST margins, GST is on deposits, that's 28% on deposits. So because of that hit and which we are taking, most of it gets reduced from the gross before it comes to the net.

Right. No, I particularly asked about the current quarter where the gross saving revenue growth has been higher than the gross transaction value. So how does that usually happen?

So that is because of the smaller stakes stable because what we have also seen in the past quarter is that smaller stakes stable and mix stake stable traffic has increased. And usually, the percentage of the rate that is a service fee is slightly higher. And as soon as you go to the higher stake tables, that percentage goes down. So that's the reason why you are seeing that percentage decrease as compared to the GR.

Perfect. So that take rate -- the blended take rate has increased broadly for the business in...

That's what to do with the traffic, which is -- which we get -- because the users, which we acquired on lower and mid-stake stables, that has increased.

Can we move to the next question in line, please. And prior to that Anupriya. Can you clarify that 1 question that was the earlier which was not answered.

Yes, sure. So the INR 40 crores of purchase of stock in trade is all related to [ EPI ], which is a digital recharge inventory that NODWIN sells for Google's teams, [ Globo ] and ride game rechargers. I hope that clarifies.

Thank you. Due to time constraints, that was the last question. I would now like to hand the conference over to the management for the closing comments. Thank you, and over to you.

Thank you, everyone, for logging in today. I hope to call us productive for you. Thank you, and goodbye.

Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the lines.