Vertoz Limited (VERTOZ) Earnings Call Transcript & Summary

Ladies and gentlemen, good evening, and welcome to the Vertoz Limited Q2 FY '26 Earnings Conference Call. Today, we have with us the management team of Vertoz Limited represented by both the founders, Mr. Hirenkumar Shah, Managing Director; and Mr. Ashish Shah, Director, Vertoz Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Hirenkumar Shah. Thank you, and over to you, sir.

Good evening, everyone. And thank you for joining us today. I would like to welcome you all to Vertoz's earnings call for the half year and quarter ending September 30, 2025. I'm joined today by our Promoter and Director, Ashish Shah, along with members of our senior leadership team. Before we move to the numbers, a quick look at the macro landscape. Marketing and advertising technology remains one of our core focus area. The global advertising market has grown into nearly $1 trillion industry and continues to expand faster than the overall economy. Over the past decade, advertising spend as a share of GDP has climbed from 0.6% to roughly 0.85%, a clear sign that brands are investing more aggressively to reach consumers. Digital is driving most of this growth. Digital drilling has been expanding at 15% to 20% annually for the past decade as brands follows consumers online. While North America still leads in the total drilling spend, the real momentum is shifting towards Asia Pacific, India, in particular. It's scaling rapidly. This is on account of rising consumption, a young and growing population and an accelerating shift to digital. This is the backdrop we have been building against, and we have shaped our offerings to match where the market is clearly headed. Our performance in the first half of this financial year reflects that revenue for quarter 2 booked at INR 19.12 crores, which is 62% increase over last year and about 6% higher than quarter 1. PAT for the quarter was INR 1.68 crores, up 71% year-on-year and 9% higher than quarter 1. Margin held steady at 9%. For the first half of the year, revenue stood INR 37.19 crores, up 58% from last year. EBITDA for H1 was INR 6.37 crores, representing strong growth of more than 5x compared to H1 last year, and PAT for H1 was INR 3.21 crores, which is up 69% year-on-year. Speaking on consolidated numbers at the consolidated level, the momentum has been consistent. Quarter 2 revenue was INR 72.26 crores, a 14% increase over last year and 3% higher than quarter 1. PAT for the quarter was INR 7.24 crores, growing 10% year-on-year and 12% subsequently with a stable 10% margin. For the first half, consolidated revenue reached INR 12.75 crores, up 15% from the last year. EBITDA for H1 was INR 20.43 crores, a 30% increase and PAT for H1 stood at INR 13.71 crores, up 11% year-on-year. And with that, I would like to invite Ashish to share more on the business update and the journey ahead. Ashish, over to you.

Hello. Am I audible?

Yes.

Okay. Thank you, Hiren Bhai. Quarter 2 has been a steady continuation of the foundation we have set in quarter 1 with stronger execution and newer sector presence. On the business front, we have expanded further to key verticals, especially in education sector, adding more well-known institutions and consumer-facing brands to our list of clients. Strengthened our regional presence with more campaigns now running across multiple cities and new market gaining traction. Our campaign works this quarter continued to scale in the volume and impact. In digital and ad tech campaigns, the performance was flat compared to the previous quarter, but the number of campaigns we ran in quarter 2 financial year '26 was 36% higher than the same quarter last year. In outdoor advertising, the number of holdings campaign grew from 56% -- sorry, grew 56% from quarter 1 2026 to quarter 2 '26. On the CloudTech side, we continue to hold one of the strongest position in the country in domain management. We registered more than 43% domains in quarter 2 '26 as compared to same quarter in last year. SSL renewals, uptime and service performance have all shown steady improvement through quarter 2. Looking ahead, our goals are more focused on expanding deeper into global markets, strengthening our platforms with more AI native capabilities, continue to assess strategic acquisition opportunity that accelerate our road map. Before we move to the questions and answers to all our shareholders, partners and every members of our team, thank you for your continued trust and believe in what we are building. Over to you.

[Operator Instructions] Thank you very much. The first question comes from the line of [indiscernible] an investor.

Congratulations, sir, firstly. And secondly, you mentioned deeper global expansion. Which markets are you prioritizing? And is there any traction you have seen so far?

2 Yes, [indiscernible], let me answer this question here. So our global focus remains in North America, Middle East and select Asia Pacific markets. In quarter 2, nearly a substantial percentage of our consolidated revenue had some international contribution either through campaigns, domain sales or reseller activity. The U.S. continued to lead in ad tech traction, while the Middle East is showing faster adoption for MadTech and CloudTech offerings. Our approach isn't only to open multiple offices. It's to deepen partners-led distribution and expand our performance and cloud reseller network.

Okay. Just a last question from my side. Could you please explain campaign?

Sorry?

Could you please explain about campaigns?

[indiscernible]

I wanted to know about campaigns.

What is the campaign? You want to understand what is the campaign?

Yes.

Campaign is basically we get a mandate from various brands about their brand awareness or various different KPIs. For example, for a specific real estate sector, the KPIs are lead generation or maybe people to visit the site. For automobile sector, they need a test drive. For example, e-commerce players, they need direct sales. So depend on different industry and different categories, they have different KPIs. And for each of these KPIs, we run whatever spend and whatever media buying we do for those customers, that comes under a campaign. So that is what we call as the campaign.

The next question comes from the line of [indiscernible] an investor.

Congratulations. So you see that margins have remained consistent or improved across both stand-alone and consolidated level. How sustainable is this to you?

Good question. Let me answer you here. So our margin -- if you look at our margin expansion is a structural, not one-off. The levers contributed in quarter 2, let me explain here. So there are 2 levers. One is that higher digital-led revenue mix and new verticals in MadTech and second is a better platform utilization on the CloudTech side. So with stand-alone EBITDA margin has grown and consolidated margin at 14%, we expect that stability with moderate expansion on it.

Okay. I had another question. So you spoke about strengthening AI native capability. Can you elaborate on what's already live and what's coming next?

Let me just take up the question. So definitely, with respect to the AI, like say, we deploy the AI across MadTech and CloudTech. I'll just take the MadTech side of the stuff. So from a MadTech standpoint of view, we leverage the AI essentially in the real-time bid optimizations, audience clustering and predictions, dynamic creative automations. This quarter, many of our programmatic campaigns have used some of the layer of AI-driven targeting as well as the optimizations. From a cloud tech, as I mentioned, let's say, our business has got 2 subsegments, MadTech and CloudTech. On the CloudTech, we have begin deploying the AI tools for domain health checks and automated SSL alerts and anomaly detections on the uptime performance. Looking ahead, we are building AI-led modules for attribution, fraud minimization and campaign quality scoring. All of which will further improve the margins and scalability for us. Hope this answers your question, [indiscernible].

The next question comes from the line of [indiscernible] an investor.

I need to know about your revenue realization model.

Sure. Let me take up this. Like as I mentioned earlier, like there are 2 business models under which we operate. One is the MadTech and the CloudTech. In MadTech, we act as a bridge between the advertisers and publishers, earning revenue by facilitating the targeted ad campaigns. Advertisers pay us for the ad impressions, and we share a portion with the publisher. Similarly, in the CloudTech, we provide the scalable cloud solutions, generating the revenue through subscriptions and the service fees.

Okay. Got it. And I have another question. Can I go ahead?

Sure.

Are you looking at acquisitions? And if yes, what are the areas...

Sure, [indiscernible], let me just take up these questions. Definitely, our acquisition filter or a criteria is very clear. One is looking at somebody with the technology, distributions or capabilities that accelerates our road map of the MadTech and the CloudTech. We are currently evaluating a couple of opportunities across multiple geographies. And definitely, you will hear back more on this soon with us.

Ladies and gentlemen, we'll take that as the last question for today's call. I would now like to hand the conference over to Mr. Ashish Shah for closing comments.

Thank you. Thank you, everyone, for participating and joining this call. Very good evening, and thank you.

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

Bye-bye.