OnMobile Global Limited (ONMOBILE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the OnMobile Global Limited Q1 FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Asha Gupta from Christensen IR. Thank you, and over to you.

Thank you, Mallika. Good evening, good morning to all participants in the call, depending on the geography you are in. Welcome to the Q1 FY '22 earnings call of OnMobile Global Limited. Representing the management today, we have FC, the Executive Chairman; Krish Seshadri, the CEO and Sanjay Baweja, the Chief Financial Officer. The call will start with a brief update about the quarter gone by and a business update by FC and Krish, which will be then followed by financial performance by Mr. Sanjay Baweja. We will then open the floor for Q&A session. I would like to mention that some of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. For a list of such considerations, please refer to the earnings presentation. OnMobile Global undertakes no obligation to publicly revise any forward-looking statement to reflect future or likely events or circumstances. Having said that, I now hand over the floor to FC. Over to you, FC.

Thank you. Thank you all for joining. Good traction this quarter on the gaming side for both ONMO and Challenge Arena. We also did better in May that we launched on ONMO, lots of testing, lots of good feedback. The team has been working very, very hard to get the real money, gaming and cash aspect onto the platform. So a lot of changes are about to happen with the UI and user experience considering cash and the way the flow will go. So this will be coming live in the next month. We're right on track, quite happy with the team worked very hard on this one. Happy to -- most of the people have tried and on which we discuss with are very happy with divisions it's really a unique vision, nobody out there has something like we do. And really the feedback from operators and game developer, again, is quite good and experienced gamers. So we're on the right track, right on par as we have said on that front. And Challenge Arena, which is a different product, it's really, really having more traction than we had. Lots of operators are launching Challenge Arena. So in the coming quarters, we should see a good growth on that front happen also. So let me pass it to Krish for more detail. Krish?

Great. Thank you, FC. Good afternoon, everyone. Warm welcome to you all. Thanks for making time. I'd like to share progress in Q1 FY '22. As usual, I'll start by touching upon high-level performance and specific product highlights and our key priorities going forward, especially on the gaming side. So our key highlights, core business revenue in Q1 was more or less stable at about INR 135 crores, roughly a small 1.4% decline. EBITDA was double digits at about 11.3% margin. And our PAT grew year-on-year 35.8% and about nearly 10% Q-on-Q. So I just want to get straight into our products because that's where most of the key insights are. So on our core existing products, we continue to digitally transform many of them, including the operating model. And especially on the video and editorial side, revenue was stable quarter-on-quarter about INR 659 million. We mentioned last quarter that we had an operator that had taken specific measures at capping customer acquisition, and that had impacted revenue in Q4 and we were discussing with the operator to remedy the situation. I'm happy to state that that's happened, and that's why we are seeing revenue stabilization over there. On the Tones side, there was a slight decline in overall revenue, about 2%. But as we continue to digitally transform that business, digital tones showed robust growth of about 12.5% quarter-on-quarter and nearly 17% year-on-year. And much of that revenue growth is primarily driven by more digital app installs. So digital app installs grew about 54% year-on-year to about 21.4 million installs, and that's roughly an 8% quarter-on-quarter growth. So what's happening in that business is we're just seeing migration of users and revenue to digital even in our core legacy business. And this transition is in process and looking good. Coming to our games unit as FC said, lots of progress. I think this is our future growth business. We saw very good traction with customer sign-ups and progress in just the first quarter of our launch with Challenges Arena. So on -- I'll start with Challenges Arena first, excited that this within the mobile quiz gaming genre, we've seen more traction than we had actually originally planned and telco sees that challenges arena is a cutting-edge product with very good gamified experience. So if you look at the past quarter that went by Q1, we've had about 6 customer sign-ups and 2 live customers with total gross subscribers of about 490,000. And Q2 estimates, roughly 12 customer sign-ups, 7 live, 3 more deployments are in progress. And we hope to have more than 1 million cumulative broad subscriber additions. And by Q4, our estimate is, as many of you would have seen in our earnings presentation, we are on track for 25 customer sign-ups and likely 20 live customers. So as I mentioned, this is a fantastic trajectory for the next 2 quarters. It's more traction than we originally planned and thought. And that's primarily because of a lot of things that we've done on the product side. While we talk about revenues, it's also important that the product is a good product that customers and telcos value. And we enhanced the product over the last quarter in telcos and their customers have been very happy. Right now, we have about 17,000 questions on the challenges arena platform. I think we have started last quarter with about 12,000. So we've added roughly 5,000 more questions. And we think we'll continue adding at that same pace and likely end up with about 40,000 questions in our question bank. What's even more important is we also added local language capabilities. So last quarter, we had just English. And now we've moved into most of the prominent Indian languages. We've added Hindi, Tamil, Telugu, Kannada, et cetera, and we'll be adding more Indian languages over the course of the next quarter or 2. And we're also adding other European languages for our European customers. Also from an end user player standpoint, returning payers of challenges arena are playing roughly 75 to 80 quiz questions a month. And that's a lot for just the first quarter of launch. It's a very, very healthy sign of player engagement with the product in the first quarter itself. And I think all this is contributing to telcos adopting this product easily as they see their subscribers engaging with the product. So I think what is key is customers and payers need to engage with the product. It's not just about sales. And we very keenly track some of those metrics to see if customers are engaging with the product. So 75 to 80 questions a month is not a small number. And we hope to keep increasing that, but that's just for start. On the ONMO B2C cloud gaming platform, again, huge progress on multiple fronts in the last few months. I think we -- when we last talked, we had just about released the beta version of the product in -- on May 20. And that was -- over the last 2 months, we've had several conversations with telcos once that product was ready. And in just over 60 days, we are already in 15 advanced conversations with telcos and 3 of them have already reached sign up stage. So we are on track, as we said last time, for a Q3 launch with the telcos. And we said this last quarter 2, 3 months back when we have had those conversations. But today, we are even closer, and we have greater visibility and confidence based on these conversations for a Q3 launch with quite a few telcos. I think that said, what's important is what the telcos feel after having seen the product and having had these conversations, and that's been phenomenal. As FC has said, it's a very differentiated product. And that's resonating really, really well and strongly with the telcos because they feel that our cutting-edge vision, artificial intelligence technology, short gaming moments that we have on our platform combined with cloud streaming makes it a cloud gaming platform that is unparalleled and something that they've never seen before and see all these telcos are obviously across Europe and across Asia, and they've been talking to a lot of different gaming platforms for them to engage with us and give that validation is a very, very strong indication that this is a truly differentiated cutting-edge global product. I think we'll see very similar traction in customer adoption on ONMO like we are seeing with challenges arena. The only difference is it's starting 2 quarters later. And I think by Q4, we'll expect to have about 12 telco sign-ups and maybe 8 to 10 of them live. And the trajectory over the next 3, 4 quarters for ONMO is likely to be the same or even better than challenges arena. So I don't want to give -- I don't want to look 4 quarters down the road, but we are very confident that we'll have about 20 customers over the next 4 quarters. And what is it that's giving telcos this confidence? Of course, we mentioned about cutting-edge vision AI technology, our short gaming moments and cloud streaming, all these are very key differentiators. But over the last quarter, we also added a lot of content on the platform. When we launched this in May, we had about 29 games and 850 unique challenges on the platform. And in just the last 2.5 months, now we've got about 55 games and over 2,500 unique AI-driven challenges on the platform. That means in about 60 to 70 days, we have nearly got 2x the number of games and 3x the number of challenges. And this is the pace at which we think we are going to move over the next 3 quarters, which means that by Q4, we will definitely have more than 150 games and 10,000 challenges. And that will make it by far one of the largest set of unique challenges that you can find globally in the gaming space. And these 10,000 unique challenges will also make ONMO the first challenges creation engine powered by artificial intelligence. This is vision AI technology, which pretty much reads all the scores and creates short interesting game moments out of larger games. And we launched a virtual currency product in May 21. And as FC said, the team is really focused on getting the cash battles and monetization out. That is also on track, as we said. We said last quarter and we continue to go as per our estimates that we will have this out by September. This will be tested for a few weeks with multiple payment mechanisms, and we should see monetization of that starting early October. So once again, it's more B2C. But on B2B, as I said, we are definitely on with the telco launches in Q3. I think to a large extent, we've seen some good interesting usage of the product, average session duration of players. On an average, any incoming player is playing the product for about 25, 30 minutes a day, which is really, really good for a product that is still just about 2 to 3 months into the market. And once we add all these compelling cash battles and the change in UI, which FC mentioned, the engagement is just going to go even more further beyond the 25 to 30 minutes. So if we can get to about 45 minutes, I think that will be really good in the next quarter or 2. So we are really optimistic, right? So with all these things that we are doing with ONMO that it's going to be the dominant social Esports cloud gaming platform. And if you look, both our gaming products are global in nature, and the mobile gaming space is expected to grow from roughly INR 78 billion to INR 80 billion in 2020 to about INR 110 billion. And that's the market that we are playing in. It's a huge market, and we are investing in a space that is growing double digits and rapidly. We have a world-class gaming products team backed by excellent product and engineering talent across India, Sweden and Canada working on this. We'll continue investing in these teams and hiring people from the best Internet and gaming companies globally. So that kind of summarizes everything about our gaming products, which we are on track to deliver as we've been saying with the dates. On the organization side, we continue to emphasize employee safety. They're still predominantly working from home. It's been a challenging few months for us just getting gaming products out into the market. Although I think about 3 quarters back, we thought we're going to launch just 1 product, but today, we've launched 2 products pretty much globally and that too with teams that are working remotely. And frankly, we're just excited about the opportunities that lay ahead of us because the first leg of getting the products out is done. I'm very encouraged by the technology building and the product focus and the quality of talent that we have and the acceleration and momentum we've seen in this quarter. A few quarters back, we said we're just going to launch ONMO. This was a first for OnMobile. It was an audacious goal, but we've done it. And now we've launched not just 1 but 2 gaming products out there. So we are off to a great start in this year. We started it with a clear strategy. Now we are incredibly focused on our execution, product innovation and our customer and telco growth over the next few quarters. So with that, I'll hand it over to Sanjay Baweja, our CFO, for his comments on the financial performance for Q1. Sanjay, over to you.

Yes. Thank you, Krish, and good evening, and a very warm welcome to all of you on the call. I hope all of you and your families are safe and healthy. Let me quickly run through some more details on the financials. I'm sure most of you would have already seen the investor deck that has been mailed to you and also hosted on our website and exchanges as well. If any one of you is not on our mailing list, please feel free to mail us or connect with our Investor Relations team, and we will add you to our distribution list. However, before I start with financials, I'll like to really talk about the comments made by Krishnan. I'm really happy and excited to see what -- that we've considerable traction for challenges arena and have started generating revenue from this quarter. We will continue to remain focused, of course, in our endeavor to create considerable revenue opportunity for our overall gaming business, challenges arena and the ONMO part. Our Q1 FY '22 revenue was stable on a quarter-on-quarter basis at about INR 135 crores. As mentioned in our earlier calls as well, the reduction as compared to last year, same quarter came from Europe and a bit from the EMEA region, Europe and EMEA revenue declined mainly due to some operator policies. We've now sorted those issues and things are already showing an uptick and we are expecting things will improve further from a revenue front as we go along in this quarter and the next one to follow. In line with our strategy to shut down any business entity that does not measure up to our stated goals of revenue and profitability, we are continuing to focus on unprofitable Latin American businesses and are in the process of exiting from those countries. As mentioned earlier in the calls also, I would like to reiterate that we have completed this process substantially last fiscal year and the full closure of entities is expected in the current fiscal of 2022. On the cost front, our manpower declined 11.8% on quarter-on-quarter and about 11.6% year-on-year, primarily due to our cost rationalization efforts. Our long-term stated target for manpower cost is 20% of revenue, we are currently at about 23%. This is both a function of cost decrease and revenue increase, we continue -- I must reiterate, we continue to acquire employees for our gaming business, while we rightsize the legacy business requirements. We expect to achieve this target within the next 12 months of our cost as a percentage -- manpower cost as a percentage of revenue. Our marketing costs increased by about 30% quarter-on-quarter and 52% year-on-year, mainly due to one-time activities involving one of the large customers in Europe. Other OpEx declined by about 22% year-on-year. However, the increase of 10.4% quarter-on-quarter is due to a subdued quarter last year, which had certain onetime reversals in the previous quarter. EBITDA for the quarter stood at INR 14.5 crores and with a double-digit margin of 13 -- 11.3%, mainly due to the above-mentioned manpower cost saving. Our endeavor is to maintain and improve the current margin levels with continuous focus on cost optimization. Operating profit cost stood at INR 11.9 crores with a margin of 9.2% during the quarter. Our profit after tax is at INR 16.4 crores, reflecting a growth of 9.8% quarter-on-quarter and 36% approximately on year-on-year basis with a 12.7% margin. This also included a onetime exceptional gain of about INR 7 crores. Our DSO, again, we've improved to 122 days in Q1 FY '22 from 137 days in Q1 FY '21. The cash on books stood at about INR 227 crores for the quarter as compared to INR 266 crores at the end of Q4 '21. This decrease is mainly due to our investment in Chingari, of INR 31.8 crores and other R&D costs of INR 7.1 crores. The R&D is mainly on the ONMO products. As mentioned by Krish, we will continue to invest in our gaming products. And we are progressing well and we'll start even revenue within this fiscal. A lot of operating metrics and data have already been shared in the presentation deck. I'm sure all of you would have had access to the same. With this now, I will hand over the call to the operator to open the floor for Q&A. Thank you very much.

[Operator Instructions] We have the first question from the line of Jayaprakash Maheshwari, an Equity Adviser and Investor.

Congratulations team OnMobile for another good quarter. I wanted to know about the customer base of challenges arena. It is 4,90,000 right now. And what part of it is paid and what part of it is premium?

Krish, do you want to take this?

Yes. So on challenges arena, there is our gross subscriber additions of 490,000. And the net paying subscribers at the end of the quarter was -- so the paying -- all of them are the paying base, but the net paying subs at the end of the quarter was about 140,000.

Okay. And so you mentioned about the average time per user spend on the app. So is it based on the average per user in a 1-month scale? Or like when a customer enters the app then it is 20 to 30 minutes?

Well, that number I gave you was for ONMO, not for Challenges Arena. But these numbers are on a daily basis. It's not monthly. The number of questions that they answered, which is what I gave was on a monthly basis. So that's roughly between 75 to 85 game plays that they have in the first 12 months.

Great. Great. Great. And as cash battles are going to launch in September, so I wanted to know about the economics behind it, like I suppose I'm battling with a friend of mine. So if I win will I get the complete sum or there will be a part of commission in ONMO -- for ONMO and what part will be in tax? So what is the margin per user if you can explain?

Yes. So I think as we described in the business model or the revenue model for ONMO. So it's essentially, let's say, you're playing against -- there's a player A and a player B and each puts in, let's say, 50-50. So the total gross transaction value on the platform is 100, and ONMO would take a certain percentage of it, which would broadly roughly be around 10%. I can't tell you exactly what that number is, but it will roughly be around 10%. And the rest of the money goes towards the winner. Of course, there are payment processing costs and tax and associated things there. But this is a fairly common model out in the industry. It's not very different from what many of the other real money gaming platforms do.

Okay. So are you also looking for funding? Are you in talks with anyone for marketing expense, as you mentioned last quarter?

Krish and Sanjay after that.

Yes. So we are continuing our discussion with the -- some strategic investors and the bankers who are talking across. So yes, we will -- whenever there is any further development, we'll come back to you guys. But as of now, the discussions are on. And these are the kind of discussions which continue to happen all the while. Whenever we have some more development [indiscernible] from that. But yes, that effort is there.

Okay. Okay, great. My final question is regarding the ESOP policy of the company. So whenever there's an ESOP announced, is there any lock-in period for the employee or they can sell their shares post getting it?

So generally, the way the ESOP policy works is any employees who gets ESOPs, there is a 3-year vesting period, which happens after 1 year, 2 years and 3 years. And that's when -- how -- after the vesting is done, then the employee is at liberty to sell [indiscernible].

We have the next question from the line of Deepak Poddar from Sapphire Capital.

Yes. Sir, firstly, I wanted to understand in terms of the gaming, the entire business size. So what is the potential that we see in this particular arena as compared to our existing businesses, which is let's say INR 500 crores odd top line business over the next maybe few years, 3 to 5 years, so, yes?

I think Sanjay addressed this question last quarter, I'll have him answer that.

So actually, challenges arena will be incremental revenue, and we don't want to give forward-looking numbers specifically. Like Krish mentioned, we've already got many customers who've signed up. We'll -- by the end of this year, we'll have about 25 telcos -- between 20 and 25 telcos who we expect to target. The number while we cannot talk about it, but will be decent numbers and more importantly, to have decent profitability, more than our current profitability level. So I would stop here because I don't think we can give specific numbers as to what is the size that we would look at. But having said that, we've just started. And we expect that within this year between 20 to 25 customers will be signed up and would be live on this. And I think that's our target. As we go along, we will continue to be a lot more transparent about what the revenue is looking like and how it is tracking. Just wait for a couple of quarters, you'll get all the data.

Understood. Sir, like you don't want to share any specific numbers, that's fine. But in terms of like can it be 1 to 2x at least of existing business is that...

In Challenges Arena may not be. Challenges Arena may not be.

Both gaming and challenges arena as well.

ONMO business will be much larger. Let me -- the challenges arena will not be 1 or 2x of the current business. But challenges arena, but ONMO business -- ONMO gaming product, it could be a very different scale altogether, which we look at.

Yes. I'm talking of both together, maybe if I have to talk both together.

Both together. Yes. That could -- like I said, I mentioned the ONMO business could dwarf our current business, yes.

So I missed the last point.

So I'm saying the ONMO business could be much larger than our current business.

Much larger. Fair enough. Understood. And secondly, on the marketing budget. So how do we plan to spend on increasing awareness of this product. So what is our strategy on those fronts?

Krish, do you want to take this? Or do you want me to?

No, no continue. [indiscernible].

So clearly, we -- see the major expense is about the customer acquisition cost. The marketing is more about customer acquisition. And we believe, while in India, the customer acquisition cost per customer would be lower in U.S. and other European markets, the acquisition cost will be higher. Having said that, the revenue per customer or ARPU is also commensurate without the acquisition cost. So to that extent, we will end up. Most of the $100 million that we've talked about over the next 3, 4 years, most of that will be spent on from a customer acquisition perspective. Also, of course, branding will be a big part of it, and we expect to start that within this year itself. But a substantial part of the spend will be on the customer acquisition part. We believe that over the next 3, 4 years, we'll end up spending about $100 million.

$100 million, right?

Yes, that's right.

So 3 to 4 years, $100 million would be approximate on your customer acquisition or the marketing?

Yes, I mean these -- obviously, these things go with the business, depending on the business and the way our strategic and other investors so confident it could have a substantially different numbers. But as of now, that is the target.

We have the next question from the line of V.P. Rajesh from Banyan Capital.

Am I audible?

Yes. Please go ahead, sir.

Okay. So first question, congratulations on the progress you guys have made on both the platforms. So were there any revenues from the challenges business in this quarter or that will come in the next 2, 3 quarters?

So the revenue has started. Let me say that. It's not a substantial number to talk about, but it has started to earn it, and we believe the next -- this quarter, current quarter and the next will really throw up a much larger number. But yes, it has started. Clearly, this quarter was the first quarter with one telco in India, and we expect now that the other telcos, which are non-Indian also joined in, the pace of growth of this revenue will just catapult over the next 2, 3 quarters.

Wonderful. Wonderful. My next question, Sanjay, is around the gross margin. So can you just describe whether our gross margin has now bottomed out? Or do you see more pressure on it, it used to be 56% a few quarters back.

Yes. Yes. I think it has bottomed out. We are making sure that at the gross margin level and at both at EBITDA level, we are ensuring that whatever we had in terms of lower-margins is off the table. While there will be always a mix in terms of some places where the gross margin will be lower, but some places will be higher. But with challenges arena coming in and growing in stature over the next 2, 3 quarters, we believe that at the EBITDA level, the profitability will be higher. At the gross margin level, the -- it may be slightly lower. But since the other OpEx is very minimal in that, at the EBITDA level, we'll show a much better traction. So that's how I'll phrase it.

Got it. And my last question for Krish on the ONMO platform. I heard you say you are approaching it via telcos. But if I remember, you were planning to go direct to the consumers also. So has something materially changed in that strategy or if you can just give more color on that, please?

Sure. No, our strategy has been the same, which is both telco and direct-to-consumer. The telco conversations have started, and we said that launch will be in Q3. And with direct-to-consumer, our beta version is already out there. And as FC also mentioned, we are adding the cash battles and monetization in September. And consumers will also be able to play cash battle on that, and you will see some revenue coming in October. So -- but that strategy of B2C is still there. It's -- in fact, our product is already -- the beta is already out in the market.

Right. Right. So which one do you think will be a better source of revenue for us and more importantly, profitability, is the telco side or the direct-to-consumer side?

It's a bit too early for us to look 3, 4 years down the road. Right now, I think the prospects are very good on both sides because as you know, there are over 100 telcos out there looking to partner with gaming platforms, so B2B looks very promising. At the same time, B2C, the Esports market is one of the primary drivers of mobile gaming. And that could be a multibillion-dollar market in itself. So I would say that we are verily focused on both. It's not either/or.

[Operator Instructions] We have the next question from the line of [ Vinay Bathija from Savilo ].

Yes. Can you -- can you give some color on the virtual currency that you all have launched and is it in form of crypto currency where you can trade it outside? That was my first question. And the second question is on the financials. If I go to see the receivables and payables they from at least 20 -- I mean, is the better, they are around INR 2,000 million. And if I go to see the early revenue would be around INR 6,000 million. So that forms around 1/3 of the sales and even paid payables seem to be higher. If you could please explain the reasons for the same.

The first I couldn't hear it properly, can you repeat the first question? It wasn't audible.

Can you give me the economics behind the virtual currency that you all have launched, would it be an internal usage and there was the currency that was launched in Japan, that's [ ENG ] that's a crypto currency and they utilize that all over the country. And it's a gaming currency. So it is it on that line? Or what was the virtual currency out of home?

Yes. Fine. Yes. So virtual currency are these ONMO coins that you will see on our platform. So people -- it's like a parallel economy. People, players when they come in, they get a little virtual currency to play with the product and engage with the product and go through a few iterations of maybe claim a few moments. So that is what we have right now. Cash battles are what we are waiting for. That is real revenue that actually comes in. So that's what we have planned for in September. So virtual currency is just our own internal ONMO economy with its own -- a virtual wallet per SE. But cash is when you will hook up your external wallet, whether it's a PayTm Wallet or a Google Pay or -- and add cash, real money onto the platform to then battle with someone. And then when you win, you get that money out. So those are 2 parallel economies out there. I think your second question was probably more for Sanjay.

Yes, I'll take that. So I think if you were to compare our receivables from last year-to-year, our DSO, in fact, which was between 140 and 150. The last year, we've been able to bring it down to about between 110 and 120. So that -- in fact, we've reduced our receivables. And yes, you're right, 1/3 120, as 1/3 of 360 is 1/3 of our revenue to that extent. But also from a payables perspective, most of that is content payment, which we generally say after we get our money in place from the customer. So to that extent, both will remain high on one side, we'll have a receivable. But if we get our receivables in place, we don't generally pay for the content. So we need to balance our working capital to that extent. So therefore, you'll see higher numbers on both sides. But yes, there are some -- generally the -- most of the customers are paying us well, except there are a few sticky ones sometimes in Africa, which takes slightly longer. But otherwise, we have. If you were to look at our numbers, we've not had major delinquencies across over the last 2, 3 years or 4 years at all. So we've not been getting cash from the customer has not been the issue for us. Yes. From a DSO perspective, it's slightly -- it was at 140. We have brought it down to 110, 120 range, and that's where we are.

Just a small one. Do we -- I mean, I know that we touched upon the delinquency, but what would be the delinquency expected in these cases and what have been of the past today?

Very, very miniscule. We've not had delinquency, like I said, in the last 2, 3 years at all. So it's hardly anything. I mean, delinquency is not there. That's what I am saying.

We have the next question from the line of [ Abdullah Chaudhry ], an investor.

Am I audible?

Yes, please go ahead.

Yes.

So I mean, I have very basic questions. First is like on context of actually, I had -- saw the presentation, I mean, for investors. So in that presentation, I have one interesting line, although it is like 0.5%. I mean it comes at INR 7 million? Shown as challenges arena revenue, right? And revised presentation for investor and on posted on 8th of August is removed that, I mean, that part? What I'm trying to point here is like we all look for the information on new and more in challenger arena and all those things, right? So then what is the intention to just remove that part because that looks good, actually, from an investor point of view like we are actually making some progress already INR 7 million, but still having, right? So what is the intention to remove actually that from presentation? And it's very silly, but I'm just asking. And two more points.

You're right, it is so small that we didn't want to mention.

But I mean, if you want to, I mean show case to the...

Look, I'll tell you what, so like we've been talking, I think the traction has just begun. It started in this quarter. We've reached from a 0 end users to about 490,000 end users. This is just the beginning from our perspective. And the numbers of revenue are very, very small. Imagine this and imagine that over the next 2 quarters or 3 quarters, we're going to have 25 new customers or telecom operators who will be having challenges arena that's the time we give numbers, and they will look decent, and we'll be happy and you'll be happier.

Okay. And there is any reason actually why challenges arena is removed from I mean Google Play Store that you will go with B2B, and that is the reason it is removed for B2C?

Yes, yes. So the challenges arena, as the brand goes is with the telcos. So when you put it out in the B2C placed over the same brand name, people get confused because there are some 5,000 downloads. We don't have a B2C product there, right? So there was no point putting the same product to the same brand name there when that's more a B2B telco product.

So challenge arena will be B2B, not B2C, right?

I mean it is B2B right now, and that's top line. Any changes, we'll let you know.

Okay. And last point is like we invested actually almost, I mean, INR 35 crores in Chingari app, right, last quarter. So I mean, what is the reason behind? I mean, previously actually been able to see some actual gains on that criteria but not now. Any reason behind that?

Our investment was primarily a distribution of our gaming products on most. So once cash back the bond is ready and then we'll be ready to integrate on more with Chingari and distribute. And Chingari already has 70 million installs in the Indian market. So that's a huge number, and it literally ensures that we don't have huge customer acquisition costs and the Chingari audience base, which is primarily millennials and the gaming audience base for us is also primarily millennials. So it was a good distribution channel for us.

No. But in that have actually -- but we would have -- I mean, added more games, right, rather than removing?

Who removed?

What I'm trying to say is like 1 month back when I actually downloaded Chingari app, I saw actually a few games from actually ONMO and all those things. but now very less or I mean I don't see actually games on that particular.

There was -- we have not put our games there as yet. They might have had something previously, which they might have removed because we are going to integrate our game. So you never -- we never had our ONMO games inside Chingari, that's not yet happened, but it will happen shortly.

[Operator Instructions] We will take the next question from the line of [ Jainam Shah from India Advantage Securities ].

My first question is regarding the ARPUs of challenges arena. So I just wanted to like get a check from the team of this calculation is sound. So can we take 490,000 as the average user base for the quarter and revenue has pointed out around $70 million or $7 million. So dividing that and then maybe taking it -- extrapolating it from the quarter to the year. Can we get the ARPUs and then compare it to the target ARPUs which we had presentation?