OnMobile Global Limited (ONMOBILE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the OnMobile Global Limited's Q3 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Jagtap from EY Investor Relations. Thank you, and over to you, sir.

Thank you, Rio. Good day, and welcome to Q3 FY '25 Earnings Call of OnMobile Global Limited. Representing the management today, we have FC, Executive Chairman and CEO; Radhika Venugopal, Global CFO; Bikram Sherawat, President and COO. The call will start with a brief update about the overall performance during the quarter by FC; Bikram will share insights on operations; followed by Radhika, who will update on financials. After that, we will 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 that we see. 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 Mr. FC. Over to you, FC.

Thank you. Thank you all for joining this call. A strong quarter, as we can see, 26% quarter-on-quarter growth, INR 1,665 million. I must say it's really in line with the size of the projects we're deploying. So I will focus on the gaming side, which really drew all the growth. And then we'll let to Bikram explain and Radhika the details on the balance of the business. So gaming is now 45% of revenues. Let me start by talking about the gaming subscription, which grew -- which is Challenges Arena and ONMO, which grew by 16.9% quarter-on-quarter, so a decent growth, in line with what we have said in the past that our main focus is to optimize the accounts, reduce the marketing costs and grow. We had mentioned that we would last quarter double the revenues in the next 5, 6 quarters. So we're still in line with this so that in the next 5 quarters, we should be at INR 2 million revenues -- monthly revenues in the next 5 quarters. So that growth is in line with this. Now let me talk about the question, which I'm sure you all have is the gaming platform revenues, INR 450 million. The gaming platform revenues is also in line with the discussion we had last quarter about the DeOSphere infrastructure that we're deploying. These revenues were booked, as mentioned, last time. DeOSphere is deploying their software on our network. We have a global network today. We have a lot of sunk costs. It took us 20 years to build this network. And the objective is to actually build a specialized network that would be open for AI and gaming companies. Now just to be clear, to be able to maintain these revenues and really support the AI companies, DeOSpheres as today, which are quite big, very big gaming in AI companies, they need important deployment of GPU servers. And that -- just to be clear, that's why we wrote in the notes here, we have to invest $15 million in servers deployment to be done actually in this coming month. So this has to be linked with the fact that we can finance and deploy these servers, and I must say this is only a start. There's a lot more demand for servers deployment for being able to deploy a specialized network. As I mentioned last time, the DeOSphere technology enables twice the performance at 6x less cost. This is why it's so attractive for AI and gaming companies, and it enables us to do new services also. And to that end, you might have seen in our results also that we booked a high-cost of license that we need to -- that we purchased and that we're buying. This is for a new service in the subscription side, which is not tied to ONMO and CA, that will be deployed with key operators in our network. We are today in important discussions in advanced business cases with operator groups, and this will necessitate a lot of servers also and important CapEx deployment. So we've not announced that service yet. We will revamp in the future quarters. But it's hitting our cost because we have to spend the money now to be able to showcase the service and deploy it and obviously launch it after. So that's why when you look at our results and the mix right now, there's a key impact on the gaming platform revenues. And that's why also we're doing advanced stage for financing the CapEx that will be required, and it's key for us to be able to raise the money so we can deploy the CapEx so we can generate the revenues. So to that, I'm going to pass it to Bikram to explain in detail the operation of the business. Bikram?

Thank you, FC. Good evening, everybody. I'll touch upon the key lines of business beyond gaming, which FC already spoke about. If you see on Tones side, we have increased our subscriber base, which we were serving from 57 million to -- 55 million to 57 million. We have around 500-odd million tone plays a day on an average in the last quarter. We had one deployment major in LatAm region, which we were expecting to happen in Q3, which has been pushed to Q4. As of end of Q3, we have 32 customers, which are live on the Tones business. Q-on-Q, on the Tones business, we have seen the revenue is flat, but with new focus on new business and new deals, which are going to go live, we are expecting positive movement there. In addition to that, we've been discussing with one of the key clients in one of the largest markets for us to launch bundled packs on Tones. We've been able to do that. We did that in the last couple of weeks of the quarter, so we are seeing some initial good green shoot results coming out of there. We are also very excited in one major operator in Middle East who have launched an AI tunes based RBT, which also went live end of November to beginning of December. Around 100,000 users have started using that. That's very exciting for us to see that new technology is getting incorporated in the way users are trying to buy the content. We have renewed one major contract in South Asia with one of the large Tones customer for 3 years. Those are the key highlights. The business, I would say, is stabilizing, and we would be focusing and ensuring that we start seeing upward trends there. If I move to the next line of business, which is Videos. On the Videos side, what we have seen is that we have seen a certain amount of capping on the kind of go-to-market strategies we have in one of our largest customers. We are in discussion with them to launch a large premium video service, which is under discussions with the customer. We would see that going live soon. And I'm sure with that we would be able to arrest the revenue decline there as well. In addition to that, on our Infotainment business, mobile entertainment has multiple aspects. In our Infotainment business, we are in discussion with large operators to relaunch contests. So that is something which is going well for us. If you see the overall business on the mobile entertainment, Tones, we've been able to fairly strongly predict where we are going. So the way we have tried to package the discussion with our operator partners here is that we're showing value with new technology. We are showing new packages, which we are ready to go live with the customers on the pricing front. We are repackaging old content and new content in bundles for the customers. And we believe that with this, we would be able to maintain and grow this revenue in the coming quarters. I will hand it over to Radhika, who will take us through the financials.

Thank you, Bikram. A warm welcome, and thank you, everyone, for joining this call. Wish you all a very happy and prosperous New Year. I'll share the key highlights of the financial performance for quarter 3 and 9 months ended December 31, 2024. In terms of 9 months FY '25 performance, we reported a revenue of INR 424 crores, growth of 6.6% on a Y-o-Y basis, while our Gaming revenues have grown by 120% on a Y-o-Y basis to INR 133 crores. Gross profit remained stable at 49%. On the cost front, OpEx has reduced by 10% on a Y-o-Y basis, as we continue to drive efficiency and productivity across our business lines. EBITDA for 9 months stood at INR 10.8 crores, which is down by 56% on a Y-o-Y basis. This is mainly because of manpower cost, which was being capitalized in the previous year pertaining to ONMO development, which is now charged directly to the P&L. On a like-for-like basis, EBITDA is up by more than 100% over the last year. In terms of Q3 FY '25 performance, we reported a revenue of INR 167 crores, which is a robust growth of 26.3% on a quarter-on-quarter basis and 36.2% on a Y-o-Y basis. This is mainly driven by the gaming revenues of INR 75 crores, which has more than doubled on a sequential basis. Gross profit stood at INR 73 crores, up by 10.6% on a quarter-on-quarter basis, and gross margin stood at 44.6%. EBITDA is up by 4x to INR 8.1 crores. This is mainly due to the revenues in gaming verticals. We reported a reduction in net loss to INR 5.2 crores as compared to INR 12 crores on a quarter-on-quarter basis. So this shows our efforts to get back on track and back to be in profitable business in near future with right execution. Overall, DSO is also down to 94 days as compared to 113 days in the previous quarter. During the quarter, we incurred R&D and product development expenses of INR 2.1 crores. With this, I will hand it over back to Pratik.

[Operator Instructions] The first question is from Vedant Sekhri from Artha India Ventures.

Am I audible?

We can barely hear you, Vedant, if you could speak a little louder.

How about now?

Yes, please go ahead.

My name is Vedant. I'm from Artha India Ventures. I just had some questions on the expenses that were reported this quarter. The cost of software licenses have significantly gone up year-on-year from about 2.5% to about 22% of total income. Any particular reason for this? Is there a new license that hasn't been purchased? And another question that I had was regarding the content fee and royalty expenses. They have also gone down year-on-year from about 48% to about 34% of total income. So are these trends a sign of things to come? Is this what we will see going forward?

So let me just address first the license fees that went up. As I was saying in the financial, right, it's directly linked with the new subscription service on the gaming front that we're developing right now. There will be even more costs to that service development. It's quite a big endeavor that we're doing on that front. It's a service that we didn't announce yet, and it's not linked to the current subscription revenues of CA and ONMO. So that's why the license went up. As for content, I can let Bikram or Radhika answer.

So content cost, we have been in continuous negotiations with multiple content partners across the globe. And as a result of these negotiations, the content cost has come down this quarter. Negotiations are still underway with some of these partners, but there is no timeline as to -- so as and when these agreements come up for renewal, we negotiate and revise the content percentages.

I understand. Just another question on the geographical split that you've seen in this quarter. The revenues from the mobile entertainment services coming out of India have gone up rather significantly, whereas Europe has held steady, in fact, has declined a bit. So what would be the core reasons for this as well?

So thanks for the question. In Europe, yes, one of our largest customers in mobile entertainment is based in Europe. And what we are seeing there is there is more focus on premium services there. So we're trying to reposition and launch new services, which are far more premium with more premium content there. So what we are in discussion, and as a result of that, what we are seeing is that existing services, we will continue to hold forth and launch new services in Europe if I've answered your question properly.

Understood, sir. I just had 2 final questions. One was on the tools. This con call, you had mentioned that the ARPU should remain -- would be around INR 27 to INR 28, and for mobile entertainment services, noted at INR 15 to INR 21. So could you also give the revised estimates as of this quarter? And my second question was regarding Vodafone as a customer, you'd mentioned that you lost them previously. There was a possibility that we would engage with them going forward as well. So is there any update on that as well?

So I didn't get the first question properly, probably you'll have to repeat, but I'll take the second question first with regards to Vodafone. I just mentioned in my brief intro at the beginning that with one of the largest customers, we've been in discussion to launch bundled packs on Tones for at least 4 quarters now, and we've been -- successfully been able to do that finally in quarter 3. In addition to that, we are in discussion for them for relaunch another key service, which we had with them previously, and those discussions are moving very well. And I didn't get the first question. Probably your voice was not very clear.

Understood. I'll repeat my first question. The first question was regarding average revenue per user estimates that were given in the previous con call. For gaming, the numbers were quoted at INR 27 to INR 28 as the average revenue per user. And for mobile entertainment services, it was quoted at INR 15 to INR 21. So I was just wondering if you could provide the latest estimate for this result.

So ARPU is a factor of the revenue, which is actually delivered, right? If you see, our intent always is to always increase ARPU and focus on subscribers, which are going to help us grow revenue at minimum marketing costs, right? So what we look at is always sequential growth in ARPU, but that depends a lot on market conditions. And given how the world is moving and the -- in some key markets, how the currency fluctuations are also happening, if we discount that, we always expect a better ARPU every quarter, and that's how we've been sequentially trending. It will be difficult for me to estimate right now for the quarter. I have some -- we have focused on improving that quarter-on-quarter, right?

Next question is from [ Bhavesh Patel ] from [ Patel Investments ].

Really great updates from all of you, FC, Radhika as well as Bikram. And congratulations on a great set of numbers in terms of growth and active customer base as well as reduction in DSO. I do need your strategic inputs. In terms of direction that we are taking to be net PAT positive, Radhika alluded to that, but not sure in terms of the timeline as a franchise what we are looking at. And the second question is around the plans as well as the timeline for the QIP. I do understand that we would use $15 million out of that for the servers and infra to enhance the gaming revenue in terms of CapEx. Anything additional from a strategic perspective?

Radhika, I'll let you answer first. I'll take the QIP.

Yes. So QIP, we are planning to close it by end of Feb with all the process and legal documentation getting completed by first week of March. That's the timeline for QIP. Currently, the due diligence is in progress. And the investor roadshow will be somewhere around second half of February. That's how it is planned.

Very good. On your first question on how do we start making money, right? Basically, that's what you're asking, like cash flow wise when will we turn positive? It's clear that with the gaming platform that you can see, right, every additional customer will require CapEx. So just to be clear, $15 million is just the current customer. So every time there's a new customer, there's additional CapEx. Now the key here is obviously to get the leasing plan right so that we can leave the CapEx long term and make sure that it's a net positive on the cash every month, not something that's depleting cash every month, right? But it's clear that it's a model also that will need more cash than the $15 million that we're discussing here. Same with the new subscription service, it's a high investment product. I really look forward to announce it once it's ready. And actually, in the next call, I'm going to try to make this on a Zoom call so we can actually do a demo of the service instead of having a call like this on the phone. I think it will be way better for everybody. But I'll just say that a lot of investment that goes today will pay back quite rapidly. So our objective is that within -- in the next 12 months, cash flow-wise, should be positive every month on a cash flow basis.

That's great to know, FC, and really appreciate if you can do the demo on Zoom. Definitely, we'll understand it more as well as probably the scaling opportunity.

Yes, totally agree. And I understand also for you, it's very difficult, right? I mean, we had a call. I explained you DeOSphere in 10 minutes, right, in November and now here. I understand it's very difficult also as a public company not to be able -- it's not like a private company where I can do a lot of works in progress, right? We have to announce stuff once it's ready, not when it's under development. So -- but yes, the goal is that by next call, we would do a nice demo and do this on Zoom.

Next question is from Deepak Poddar from Sapphire Capital.

Am I audible, sir?

Yes, Deepak.

Sir, first I just wanted to understand, in this quarter, what was your gaming EBITDA margin versus your legacy business EBITDA margin in the third quarter?

Radhika, do we give this out or we don't?

We don't publish segmental reporting.

Okay. Okay. We don't publish the segmental. But what is your legacy business EBITDA margin that we are seeing in general? I mean that data we can give, your -- yes.

See we do not give segmental P&Ls. So it's -- you can see the overall EBITDA percentage, which is around 4.9%.

Okay. Okay. Understood. And I mean...

But just in the past -- just to answer your question, clearly, in the past, and we used to have a slide on this, right, the actual traditional business is doing between 15% and 18% contributing margin. And it was our goal to be breakeven by next year on the gaming. That's what we had said in the past. So we're still in line with that.

Okay. So legacy was doing in the past some 15%, 18% kind of EBITDA margin, your traditional business, and gaming business, you are targeting to break even by about next year?

Yes, exactly.

Okay. Okay. Understood. And -- I mean, how do we see the revenue trajectory in the gaming business? I mean we have seen a very strong growth, I mean, even on a quarter-on-quarter basis. So if you have to look at next 4, 5 quarters, this INR 75 crores revenue in gaming in this quarter, so how should one look at the trajectory? I mean, some sense on that would be very helpful.

And that's why also I kept it separate, right? I mean we didn't club all the gaming revenues, so you could understand the platform revenues, right, which is driven by infrastructure and the DeOSphere agreement. And I kept the -- we kept the subscription revenues for CA and ONMO separate. So you can see what we've been investing in the past, where is that trending, right? And as I mentioned, right, the key here is to double the revenues by -- that was last quarter, so we said 6 quarters last quarter, so now in 5 quarters, we should be at $1 million a month, right, basically $24 million of revenues a year for CA and ONMO. That's based on subscription, and that's driven also on amount of marketing that we invest that we're pushing really down the cost per marketing to bring it down in the 50% and eventually in the 40s. So that's one variable. On the platform revenues and what you see right now as a growth, it's directly driven from our ability to raise the money and deploy the servers. So -- I mean, right now, there's more demand in the market than -- in infrastructure than we can deploy. So really, for us, it's a matter -- just to be clear, like leasing companies, they ask for deposit also, right? They can leave, but they still need equity. So we need to have equity in our balance sheet to be able to capture these revenues, properly deploy the servers and keep on growing the revenues, right? So...

Okay. Okay. So I mean, on the run rate part, I mean, we are looking at in the next 18 months $2 million per month kind of a run rate in gaming, right? So I believe that annually run rate comes to about $24 million number.

Yes, that would only be on the subscription for CA and ONMO only, not including the new subscription service.

Not including the new user. So ideally, we are looking at a high growth trajectory even on a quarter-on-quarter basis, right? I mean, would it be fair to say, I mean, on a quarter-on-quarter basis, we will see an upward trend only in the gaming revenue that we have seen in this quarter on a quarter-on-quarter basis?

Honestly, this quarter, as you see, mobile entertainment went down. I mean I still believe there's no reason why our mobile entertainment business should go down, right? We should be able to make it grow, not go down. But for sure, as we said, subscription business should be between 15% and 20% a quarter just on subscription. And the platform business, as you can see, we've got a jump now with the DeOSphere agreement and the AI companies they have is directly linked for our ability to be able to raise the money, deploy the servers and then get a new customer, raise more money, deploy more servers. And obviously, as we do this, that will have a direct impact on the revenues.

Okay. Understood. That's very clear. That's very clear. That's very helpful. Just one last thing. I mean, we have said once -- I mean, gaming revenue will reach optimum scale. So we can see a 25% kind of EBITDA margin in that business, right?

That's 100% the goal. Now what we have to consider though is the new investments, right? So we have multiple products, and we're investing in new products. But if you just take, for example, CA and ONMO combined, as we said before, that's the target. As we get through that $2 million a month, we should generate that 25% for just that segment of that gaming business.

So at $2 million run rate, we can achieve 25% kind of EBITDA margin, right?

That's the goal.

Okay. But that is after considering the investment expenses, I mean additional expenses that you might be passing to P&L? So -- I mean some of these expenses you would be capitalizing.

No, no. The additional investment is for other service, right? That's just -- and I know it's a bit confusing because we have multiple investments, but the additional investments right now is for a new subscription service. It's not for CA and ONMO.

Next question is from Raaj from Arjav Partners.

Sir, am I audible? Hello, Am I audible?

Yes. Yes. We can hear you.

Actually, I wanted to understand the product ONMO. What exactly is this product?

So ONMO is a streaming product specialized for mobile phones, so mobile experience. So we call this social eSport, right? So you can play any moment. So we cut out any games that you can add on the App Store today, Android or Apple App Store. We take any game, and we're able to cut out moments of that game. And you don't need to download the game. That's right from our service. You have access to thousands of moments of multiple games, and you can play multiple games without downloading any games. And you can actually compete on that specific moment. So that's ONMO. It's a subscription-based service that's distributed today around 40 operators in the world. And yes, we call this social eSport.

All right. And this product, you sell it to the telecom operators, right?

So actually just -- so we actually sell it to the consumer of the operator. So what we do is that we integrate the billing of the operator a bit like an App Store, right? We do an App Store integration. It's actually a billing integration from the operator. And we do invest marketing campaigns in that market on Google or other marketing means, and we acquire subscribers. So that's why we have a cost of marketing associated to it for marketing the service and getting -- paying subscribers.

All right. So for example, if I am a subscriber of Airtel, right, so how does your product reach to me?

So you go, let's say, on Facebook, right, or you navigate on the web and you see an ad of ONMO. And as soon as you click on it, we already know your phone number and your billing credential because you're at Airtel. And it just asks you, do you want to subscribe for INR 25 a month, and you say yes, and then, it goes right into your Airtel bill, and then, you can start playing ONMO.

Understood. So first, I need to log into our site, and from there, I get the access to all these games, right?

Exactly.

Understood.

It's what we call the Progressive Web App. So you don't need to go to the -- normally, you would see an ad, you would click on it and you would need to go to the Android store, right? And then you have to download the app. In our case, you don't. The app gets put on your phone in 1 click. So you can actually have right away the app on your phone, but the app is a web app, so it's actually streamed. But users don't notice that it's not a realized -- it really feels like a real app from the app store, but it's streamed on your phone. And from there, you can actually have access to thousands of game moments.

All right. And the content cost which you spend on these games, so is it passed through the P&L or it goes into the balance sheet as an intangible asset?

On both CA and ONMO, it's in our P&L, so it goes -- it's expense.

All right. It is expense. Also in the intangible asset, I see a very high amount of around INR 700 crores or so. So what exactly is this?

That was the actual investment to build the product. That's the IP. We have a lot of patents on how we actually create moments. We're the only one in the world who actually can take any app in -- any gaming app and create moments out of it and run eSport competition on moments. So that's the investment that we've been doing for the last 4 years on that product.

All right. So is this the content cost?

No. That's not content cost. That's product development cost.

Product development cost. And how do you determine the life of the product?

Sorry, how do we determine the...

So in the intangible assets, so when you amortize it, so how do you determine that rate, amortization rate?

Radhika, what's the rate of...

I'll take that question. This is determined based on a valuation which is done, and the valuation is done by one of the Big 4s. This is also vetted by the auditors. The valuation certificate gives us the number of years over which this is amortized.

Understood. I'm not sure about the number of years, like how do you determine the years anyway?

Sir, this is done technically based on the study of the technical aspects of the product, the upgrades or updates, which are required. There is a professional valuation team who does this work. They do the valuation along with the life of the product and gives us a rate of amortization.

Okay. And sir, overall, how much...

Raaj, I'm really sorry to interrupt, but maybe request you to rejoin the queue as there are several participants waiting for their turn.

Okay. All the best.

We take the next question from [ Prakash Ramaseshan ] from [ Pragya Consulting ].

The questions I had, at the beginning of the call, were brought up by the previous participants. Radhikaji, I would request you if you could give us some kind of notes document on the amortization policies. It would kind of help us as investors to understand the intangibles. So that was one small suggestion. The other one for FC was basically on the platform revenues, which are incremental to CA/ONMO, could you give us indications of the kind of mathematics in terms of revenues vis-a-vis the server investments, which is the $15 million? Or are the investments going to be larger over time? So if you could give us visibility on both the investments and the potential revenues.

Yes, let me take this, and then, I'll let Radhika on the amortization. The current revenues we have is linked to the fact that we need to deploy the $15 million, right? So that's in link. Obviously, I mean, right now, as I was saying earlier, we could deploy way more in CapEx. And once we deploy it, then we can capture way more revenues, right, in line with that same ratio. So that's -- I mean, I'm a bit vague here, but it's really directly linked, the revenues on the platform side to be able to -- every new customer needs new CapEx, right? They need the access to GPU servers. As you know, all the AI and gaming companies need the latest NVIDIA cards and GPU cards, right? So that's what we're buying. We have our own configuration on server, and we deploy this in data center. So every time there's a new customer, there is automatically CapEx. And the key obviously is to be able to lease this so that we make a cash-on-cash benefit every month, right? So that we're not stuck in a loop here where we're just bleeding money, and we never make money, right? So we have to, to get to a point where we have a very strong relationship with leasing companies or debt companies that can actually lease this CapEx and that we can capture the revenues and have a decent return. So does this answer your question, Prakash?

No, I was just asking a broad indication, FC? Hello?

Yes, broad indication of...

No, I was just asking a broad indication of, let's say, I invest $15 million in servers, potentially how much revenue can that get me, just ballpark? And on that revenue, what is the broad EBITDA? So it may not happen in a day, which we understand. So just looking at the longer-term mathematics.

Yes, yes. So I'll keep it simple. I think $15 million of CapEx will give you about $2 million a month. They will cost half of that. So that's -- in rough, that's about the math, which change by the way...

So $15 million CapEx should give you $24 million of revenues vis-a-vis on which you should have about $12 million EBITDA.

Yes, there's other costs in CapEx, let's say, contributing margin, right?

Fair. No, that just gives me an understanding of the mathematics there. Fine, sir. On the amortization, my request to Radhikaji is if you could give us some kind of an amortization policy, that helps.

Yes. So on amortization, there is already an accounting policy, which is available in our annual report. You can refer to notes to accounts, Page #129 in the annual report, which will give you the details. Currently, we are amortizing the intangibles pertaining to product development over a period of 10 years based on the valuation.

Next question is from Elesh Gopani from Gopani Securities and Investments.

I have 3 questions. The first question is, why has the gross margin declined even when gaming revenue has increased substantially? Question number two is, at what monthly subscription revenue in gaming do we aspire to end this year? Third question, at what revenue level do we break even at PAT?

Radhika, you want to answer this?

So the first question regarding the decline in gross margin is mainly pertaining to the decline in legacy revenues. As you can see, the legacy revenues have declined, and this is -- legacy revenues are high gross margin revenues, and this has contributed to the decline in gross margins. Sorry, can I have your second question, please?

At what monthly subscription revenue in gaming do we aspire to end this year?

So if you see the subscription revenue quarter-on-quarter is growing between 15% to 20%, and what -- we are looking at maintaining that sense.

And third question, at what revenue level do we break even at PAT?

For which line of business?

So overall company level, right now, the PAT is at a loss of INR 5 crores. So anything which contributes to the margin or to the EBITDA of INR 5 crores should make it breakeven, but it's not a straight math. It depends on which stream of revenues get added to the overall P&L and what is the margin on that. Approximately another INR 10 crores, if I take incremental revenues coming at a 50% margin, it would be around INR 10 crores to INR 15 crores -- INR 10 crores of revenue, which gets added to the top line, which will make the PAT neutral. But always remember that there is also the interplay of exchanges, ForEx rates and other surprise expenses, which may come in. So it's not a very strict guideline on this. But yes, in the current scenario, an addition of INR 10 crores will make the PAT neutral, neither positive nor negative if I take the quarter 3 results. I cannot comment on the...

In the presentation, you have mentioned that we will grow from $1 million to $2 million in 12 to 18 months. So can we expect that we will be doing PAT in 18 months?

Yes.

Hello?

Yes, yes, for sure.

That's for sure, no? Okay.

That's for sure. Now keep in mind, it all depends on the other investments we do and what we capitalize or we don't capitalize, right? So it's important also.

One last question, when will we complete our QIP, by March end this year?

Yes. The target is to between -- in March, so beginning or end of March. That's where we plan to complete the QIP.

So when will we complete the investment that we are expecting, in one -- first quarter, we will complete the investment after the QIP?

We have to -- honestly, we have to deploy servers in March. So I mean, we -- so we need that $15 million to deploy.

So we'll give -- we'll receive the money in March. So can we complete the investment in first quarter of next year?

When you say complete, you mean the QIP would go until April or May? No. I would prefer to do it in March.

No, I'm asking if we get the money in March '25, can we complete our investment in the first quarter of '25-'26?

We can. But just it's -- now right now, it is like we have a customer that wants his servers, right? So normally, let's make sure the customer is happy, right? I don't want to have unnecessary delays because we're dragging our feet to raise the money, right? So that's...

[Operator Instructions] The next question is from Vedant Sekhri from Artha India Ventures.

I just had a question on the people cost that you have mentioned. The employee benefit expense line item year-on-year has gone down from 22% approximate to about 18% in this quarter as a percentage of total income. Could you give an estimation or guidance on whether this trend is likely to continue or whether this level will go back to the 22%, 23%?

So you are talking about the employee benefit expense in the numbers? As a percentage of revenue, this has come down because of the rationalization measures, which were undertaken and moving a lot of work from the international geographies to India. So these are the steps, which we took for cost optimization, and this trend is likely to continue, and it will continue. We even expect this to go down going forward.

And just a follow-up question on that. In your investor presentation, you have mentioned that the cash position of the company from last quarter has gone down from INR 41.3 crores to INR 33.6 crores in this quarter and that reduction has been due to the utilization of this cash for severance paid to international employees. Is this a part of the cost optimization plan that you were talking about?

Yes, that's right. So there is a severance part which is paid out to the employees who exited as a part of this rationalization and optimization. And part of this cash reduction is due to the payout to these employees.

I see. And it also mentions the prepayment for gaming license cost. Is that what goes back and links to the cost of license line item on the results?

That's right.

[Operator Instructions] As there are no further questions, I would now like to hand the conference back to the management team for closing comments.

Thank you. Thank you all for joining. Really excited for next quarter coming up. As I mentioned, we will do this on Zoom. We'll make sure to do a demo of our products so you can understand the distinction between each and look forward to sharing the results of the coming quarter. So thank you very much, and speak to you soon.

On behalf of OnMobile Global Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.