Affle 3i Limited — Q3 FY26

Affle 3i Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=zzIljkYkG0M Published: 3 months ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the FL3I Limited Q3 and 9M FY26 earnings conference call hosted by 0:11 11 seconds Anandati Share and Stock Brokers Limited. As a reminders, all participant line will be in the listenonly mode and there will be an opportunity for you to 0:19 19 seconds ask questions after the presentation conclude. Should you need assistance during this conference call, please signal an operator by pressing star then 0:26 26 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. So Singhal from Anandrati Shares 0:35 35 seconds and Stock Brokers Limited. Thank you and over to you sir. 0:39 39 seconds Uh thank you Shubhham. Uh good morning everyone. On behalf of Anandrati Shares and Brokers uh we welcome you all to Q3 0:46 46 seconds and 9 months uh FYI 26 conference call of FL 3II Limited. I take this opportunity to welcome the management of 0:54 54 seconds FL3I Limited represented by Mr. Anoj Khandas who is chairperson MD and CEO of the company and Mr. Capil Bhutani who is 1:03 1 minute, 3 seconds chief financial and operations officer of the company. Uh before we begin with the discussion I would like to remind you that uh some of the statements made 1:12 1 minute, 12 seconds in uh today's conference call may be forwardlooking in nature and may involve some risk and uncertaintities. Kindly refer to slide two of the company's 1:21 1 minute, 21 seconds earnings presentation for a detailed disclaimer. I will now hand over the call to Mr. Drum Karna Suhham for his opening remarks. Thank you and over to you sir. 1:32 1 minute, 32 seconds Good morning everyone and thank you for joining our call today. I trust all of you are keeping in good health. Q3 FI26 1:40 1 minute, 40 seconds marked an important milestone as we surpassed INR 7 billion mark in quarterly revenue run rate while delivering our highest ever quarterly 1:48 1 minute, 48 seconds AITA profit after tax CPCU conversions and CPC rate. During the quarter, we 1:55 1 minute, 55 seconds delivered revenue of INR 7.18 billion, a growth of 19.2% year-onear and 10.9% 2:02 2 minutes, 2 seconds quarteron quarter, reflecting the consistent resilience of our business. 2:07 2 minutes, 7 seconds This performance underscores our ability to execute effectively in a challenging global environment and across market cycles, reinforcing the strength of our 2:16 2 minutes, 16 seconds AI powered consumer platform stack. Our sustained focus on higher productivity and innovation enabled us to achieve 2:24 2 minutes, 24 seconds IITA of INR 1.63 billion, a growth of 24.1% year-onear and 11.6% quarteron 2:31 2 minutes, 31 seconds quarter. Notably, it marked our seventh consecutive quarter of sequential margin expansion and it resulted in profit 2:39 2 minutes, 39 seconds before tax growth of 25.1% year-on-year and 13.7% quarteron quarter from operations excluding the other income. 2:48 2 minutes, 48 seconds We achieved highest ever profit after tax of INR 1.19 billion, a growth of 19.1% year-onear. 2:58 2 minutes, 58 seconds In terms of our CPCU business, we continue to operate from position of strength both strategically and operationally. Our CPCU business drove 3:06 3 minutes, 6 seconds 119.7 million conversions at a CPC rate of INR 59.6 3:13 3 minutes, 13 seconds and we earned CPC revenues of INR 7.1.4 4 billion, an increase of 19.6% year-onear and 12.9% quarteron quarter. 3:24 3 minutes, 24 seconds It is also important to mention that our non CPCO business serves as an important entry point for certain customers and partners for top of the funnel tech 3:33 3 minutes, 33 seconds enablement on our platform. Thus, the non CPCU business is aligned to eventually drive our customers towards 3:40 3 minutes, 40 seconds deeper funnel conversions on the CPCU business model itself. 3:45 3 minutes, 45 seconds With the global digital advertising spending on the rise, we see significant market-wise performance growth opportunities across all our billing 3:53 3 minutes, 53 seconds entities. Our India and global emerging markets contributed 73.9% to our revenue 4:00 4 minutes and grew by 19.8% 8% year-on-year and 11% quarteron quarter. This performance was achieved despite the full quarter 4:09 4 minutes, 9 seconds impact of real money gaming in India and was supposed supported rather by broad-based demand across industry verticals reflecting our naturally 4:18 4 minutes, 18 seconds diversified revenue mix. Our developed markets delivered robust performance growing 17.8% year-on-year and 10.9% 4:26 4 minutes, 26 seconds quarteron quarter and contributed 26.1% to our revenue. This growth was also driven by deeper customer engagements, 4:34 4 minutes, 34 seconds conversions of pipeline activity and steady new accounts additions in these entities. As anticipated, the 4:41 4 minutes, 41 seconds normalization of budgets supported this momentum, and we continue to unlock new avenues of expansion, strengthening our 4:48 4 minutes, 48 seconds position as a privacy compliant, trusted, and resultsdriven platform. 4:54 4 minutes, 54 seconds In terms of 9 months FI26, we achieved revenue growth of 19.3% year-onear, AIA growth of 28.5% 5:03 5 minutes, 3 seconds year-onear and PAT growth of 20.3% yearonear. Our year-to-ate performance reinforces our confidence in sustaining 5:12 5 minutes, 12 seconds robust growth through Q4 FY 2026 and FY2027 to attain our Apple 3i 10x growth vision. 5:22 5 minutes, 22 seconds Beyond the numbers, what continues to excite us is how our growth is powered by technology-led differentiation and 5:29 5 minutes, 29 seconds AIdriven innovation. Over the last few quarters, we significantly deepens the role of AI across our unified consumer 5:36 5 minutes, 36 seconds platform stack. Nico, our most advanced next generation agentic AI optimization engine enables fully automated 5:46 5 minutes, 46 seconds self-service mode with concurrent and realtime decisioning across bidding, targeting, and budget allocation. Over 5:53 5 minutes, 53 seconds the last quarter, Nico automated and accelerated campaign learnings and optimized outcomes for the Newton 6:00 6 minutes platform, strengthening our ability to deliver superior ROI and higher lifetime value users for advertisers at scale. 6:09 6 minutes, 9 seconds In our earnings presentation, we have featured five customer approved case studies for three industry verticals. 6:16 6 minutes, 16 seconds The first three case studies focus on our verticalized strategy for AIEL multi-placement dynamic optimizations to 6:24 6 minutes, 24 seconds drive conversions for hospitality and travel vertical across India and emerging markets. The next case study highlights our repeat conversion 6:32 6 minutes, 32 seconds strategy across Android and iOS to expand user monetization for the gaming vertical in US. The fifth case study 6:41 6 minutes, 41 seconds highlights our capabilities in scaling premium iOS users conversions globally for the edtech vertical leveraging our agentic AI capabilities. 6:52 6 minutes, 52 seconds Apple continues to be recognized as a technology thought leader across industry forums. Our platform secured 70 6:59 6 minutes, 59 seconds recognitions across various categories in the latest apps flyier performance index. We also received several accol 7:07 7 minutes, 7 seconds accolades across leading industry forums, notably the emerging markets innovator of the year and the best use of martekch at the martekch AI awards 7:15 7 minutes, 15 seconds 2025 along with the most effective tech platform at the madis 2025, the best 7:22 7 minutes, 22 seconds partner award at the OPPO ad awards 2025 and the global best support partner at the honor global developer and AI conference 2025. 7:32 7 minutes, 32 seconds We also won 30 plus 30 plus customer campaign level awards across industry events reflecting the strength of our 7:40 7 minutes, 40 seconds partnerships and the impact of our AI powered consumer platform stack. 7:45 7 minutes, 45 seconds With three new patents filed in this financial year, our IP portfolio has grown to 39 unique patents filed, including 16 patents granted. 7:55 7 minutes, 55 seconds Our strong balance sheet and robust operating cash flows continue to support sustained investments in technology, talent, and strategic initiatives. We 8:04 8 minutes, 4 seconds remain disciplined in the capital allocation while ensuring that we continue to invest and innovate proactively to strengthen our long-term 8:12 8 minutes, 12 seconds mode and to drive sustainable value creation. 8:16 8 minutes, 16 seconds We have also laid a solid foundation for Apple 3i 10x growth vision. We have successfully onboarded Samir Sundi as 8:24 8 minutes, 24 seconds our CEO for North America with a dual role as our chief strategic investments officer. Samir's 25 years of credible 8:32 8 minutes, 32 seconds track record of scaling at tech platforms in North America and beyond will play a key role in accelerating our organic and inorganic growth plans. 8:42 8 minutes, 42 seconds Earlier in this financial year, we had internally promoted Vipulcadia as our chief operating officer to anchor our growth in India and emerging markets. 8:51 8 minutes, 51 seconds These steps have deeply aligned our leadership commitment and conviction towards the next phase of accelerated and compounded growth impact. 9:00 9 minutes With that, I now hand over the discussion to our CFO Kapil Bhutani to discuss the financials. Thank you and over to you Kapil. Thank you Anj. Good 9:09 9 minutes, 9 seconds morning and hope all of you are keeping safe and well. We continued our steady growth momentum in quarter 3 FI26 9:17 9 minutes, 17 seconds marking our 11th consecutive quarter of sequential growth on topline and IITA and seventh consecutive quarter of AITA 9:24 9 minutes, 24 seconds margin expansion. This consistent performance reflects our operational rigor and sustained focus on profitable 9:31 9 minutes, 31 seconds growth. We concluded quarter 3 fi26 at a consolidated revenue of INR 7.17 billion 9:40 9 minutes, 40 seconds delivering a year onyear growth of 19.2% and sequential growth of 10.9%. 9:47 9 minutes, 47 seconds In 9 months FY26 we recorded revenue of INR 19.85 billion delivering a growth of 9:54 9 minutes, 54 seconds 19.3% yearon year reflecting a balanced performance across all three quarters. 10:01 10 minutes, 1 second This quarter on a standalone basis India revenue grew by 20.6% year-over-year while on adjusted basis the growth stood 10:09 10 minutes, 9 seconds at 23 23% yearon year supported by robust momentum in advertising spends despite full quarter impact of real money gaming in India. 10:20 10 minutes, 20 seconds We continue to enhance productivity by scaling our platforms operations and strengthening Apple's AI self-service capabilities. These initiatives combined 10:29 10 minutes, 29 seconds with steady revenue growth have further strengthened our operating fundamentals. 10:34 10 minutes, 34 seconds As a result, AITA for the quarter stood at INR 1.63 billion, an increase of 24.1% yearonear and 11.6% sequentially. 10:45 10 minutes, 45 seconds We achieved aa margin of 22.7% despite extra cost for change in employee related provisions due to change in 10:53 10 minutes, 53 seconds labor code. In 9 months FY26 our increased by 28.5% yearonear as we as we 11:02 11 minutes, 2 seconds achieved INR of 4.49 billion at aa margin of 22.6%. 11:09 11 minutes, 9 seconds Moving on to opex inventory and data cost stood at 62.4% as we rammed our investments in EFGH industry verticals across international 11:18 11 minutes, 18 seconds markets to further strengthen our verticalized offerings and unlock new growth avenues. Our employee benefits 11:25 11 minutes, 25 seconds expense remains largely flat sequentially supported by productivity gains and efficiencies from ongoing investment in intelligent automation. 11:34 11 minutes, 34 seconds Our other expenses were lower at 6% of our revenue versus 6.4% in quarter 2 FI26. However, in absolute terms, the 11:43 11 minutes, 43 seconds other expenses increased by INR 19.5 million primarily driven by higher business promotion activities aligned 11:51 11 minutes, 51 seconds with seasonal demand and sales initiatives during the quarter. 11:55 11 minutes, 55 seconds We achieved a PBT of 9 uh 1.06 billion INR during the quarter, an increase of 12:03 12 minutes, 3 seconds 18.1% yearonear and 8% sequentially despite lower other income. If we look at our PBD from operations excluding 12:12 12 minutes, 12 seconds other income, we delivered a growth of 25.1% year-onear and a 13.7% sequentially outpacing a topline growth. 12:22 12 minutes, 22 seconds Our profit after tax stood at INR 1.19 billion marking an increase of 19.1% 12:29 12 minutes, 29 seconds yearonear and 8% quarteron quarter. Our operating cash flows for 9 months period 12:35 12 minutes, 35 seconds was INR 2.54 billion. We continue to pri we continue to prioritize efficient 12:42 12 minutes, 42 seconds working capital management as there were no material changes in our collection risk for all other vertical except 12:49 12 minutes, 49 seconds incremental provision done for RMG business uh in India during the previous quarter. Our OCF pad for 9 months stood at 75.8%. 13:00 13 minutes This is because of temporary increase in collection days from agencies due to their periodic client audits in this period. they should normalize in quarter 13:09 13 minutes, 9 seconds 4. Overall, our prudent financial management and disciplined execution positions us uh uh positions us well to 13:18 13 minutes, 18 seconds capture emerging opportunities and drive sustainable growth to F526 and beyond. 13:23 13 minutes, 23 seconds With this, I end our presentation. Let's let's please open the floor for questions. 13:30 13 minutes, 30 seconds Thank you very much. We will now begin with the question and answer session. 13:34 13 minutes, 34 seconds Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you 13:41 13 minutes, 41 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q 13:49 13 minutes, 49 seconds assembles. The first question is from the line of show Singal from Anandrati. Please go ahead. 13:57 13 minutes, 57 seconds Yeah. Hi. Uh so congrats on a good set of numbers. So sir, I have two questions. My first question is on your 14:04 14 minutes, 4 seconds gross margin. So how do you see your gross margin moving in the medium term because uh we have seen a sharp jump up around 230 bits year on year and around 14:13 14 minutes, 13 seconds 130 bits Q1 Q on your inventory and data cost uh which has been around uh 60 60.5 261% for the decent period of time say 14:22 14 minutes, 22 seconds around 12 to 14 quarters. So if you can just uh guide us uh it will continue for some time at this elevated level or it 14:29 14 minutes, 29 seconds should go back to normalized level going forward. 14:34 14 minutes, 34 seconds Well, thank you for that question. Uh first of all, uh we are absolutely uh clear that our data and inventory cost 14:41 14 minutes, 41 seconds is uh has two elements to it. One is the uh element to earn the revenue within a reporting period of a quarter and second 14:49 14 minutes, 49 seconds is where we are actually investing we are expensing it out fully in the reporting periods where the cost is incurred but we actually fundamentally 14:56 14 minutes, 56 seconds and consciously investing in our own expansion across international markets and verticalizing deeper into those international markets so that we can 15:05 15 minutes, 5 seconds launch all our EFGH category verticals across international markets. Right? So we are in that phase of expansion where 15:13 15 minutes, 13 seconds we are investing into the data and inventory cost to build our intelligence verticalized intelligence for 15:20 15 minutes, 20 seconds international markets and therefore what you see here as is is two factors right we are fully expensing it out in the 15:27 15 minutes, 27 seconds reporting period but a part of that incremental like what you call you know the increase in the data and inventory cost has to be seen as a as an 15:35 15 minutes, 35 seconds investment being made to verticalize our uh intelligence for international markets, right? I hope that answers the question. 15:44 15 minutes, 44 seconds Uh yes sir. So sir my uh second question is a uh follow up of your last quarter comment on inorganic acquisition uh where you said that you are evaluating 15:53 15 minutes, 53 seconds around 10 12 companies. So any progress on that front and how soon uh we can expect to close. 16:01 16 minutes, 1 second Thank you for that question. Yes. Uh we have as a board and the investment committee been evaluating about 10 to 12 companies uh which we think are all 16:10 16 minutes, 10 seconds honorable you know targets for us but we have shortlisted amongst them. We've narrowed that pool down to now four companies and we're doing active uh due 16:18 16 minutes, 18 seconds diligence assessments of those four companies uh and we will make a firm and a sensible decision progressively at the right time at the right price. 16:29 16 minutes, 29 seconds Okay. Uh thank you. That's all from my side. Thank you. 16:36 16 minutes, 36 seconds The next question comes from the line of Deep Sha from BNK Securities. Please go ahead. 16:43 16 minutes, 43 seconds Yeah. Hi. Uh good morning. Uh thanks for the opportunity and and of course congrats on on a great set of numbers. 16:49 16 minutes, 49 seconds Uh Tapil the first question is is for you on the opening commentary that you made about uh slightly higher agency 16:58 16 minutes, 58 seconds business but but what I see is the incremental revenue say over the last 6 months has been 968 million 3T minus one 17:06 17 minutes, 6 seconds to incremental revenues but incremental data increase is 15 90 million. So uh is 17:12 17 minutes, 12 seconds there something more to it or or uh this entirety we are we are used to looking at 17:19 17 minutes, 19 seconds absolutely 90 to 100% OCF that entirety will be taken care of in 4Q so that is 17:26 17 minutes, 26 seconds my first question um thanks uh we have been mentioning that our target uh of OCF to pack ratio 17:35 17 minutes, 35 seconds is greater than 80% year on year we have been achieving 90 to 100% uh consist consistently for last few years. We uh 17:43 17 minutes, 43 seconds believe that we'll be achieving uh in the range of 85 to 95% OCF uh for this 17:50 17 minutes, 50 seconds this year also in uh we believe that the payment cycles uh with the agencies have started to ease off and we should be 17:59 17 minutes, 59 seconds able to deliver 85 to 95% range of OCF. 18:05 18 minutes, 5 seconds Perfect. That that's very real. That's very reassuring also. Thank you for that. Um secondly on this increase in um 18:12 18 minutes, 12 seconds CPCU rate that we've delivered 3.1% Y and Y so uh is this largely on account 18:19 18 minutes, 19 seconds of say uh better quality of campaigns which we've undertaken the reason I'm asking this is the share of developing 18:28 18 minutes, 28 seconds or EM rather has increased which would typically naturally put strain on the CPC rate and yet we've delivered 3.1%. 18:36 18 minutes, 36 seconds So is this a shift of the nature of campaigns that we've undertaken? Is this the dollar appreciation which has helped 18:43 18 minutes, 43 seconds us? Uh if you could give some color on that that would be very useful. 18:49 18 minutes, 49 seconds I'll take that question Mr. Sha. Uh thank you for that observation. First of all, it is uh exceptional that we have 18:56 18 minutes, 56 seconds achieved consistent growth in our revenue total revenue increase and at the same time of course it's guided by 19:03 19 minutes, 3 seconds driving higher volumes of conversions but in terms of bottomline sensibility of ensuring margin sort of defensibility 19:11 19 minutes, 11 seconds we have been able to inconsistently increase our charging rate the CPCU rate uh and we have achieved the highest CPCU 19:18 19 minutes, 18 seconds rate till date. Now there are two main factors which actually help us to enhance the CPCU rate or to let's say 19:25 19 minutes, 25 seconds it's a reflection of how much value we are adding to our advertisers right to our customer. Therefore they have a willingness to pay a higher unit price. 19:34 19 minutes, 34 seconds Now there are two key strategies that are differentiated for our company and the differentiation is not only in how we you know sell it or what we deliver 19:42 19 minutes, 42 seconds in the end but you know it goes into the technology mode and several other data intelligence mode uh capabilities of the platform. The first one is verticalization. 19:51 19 minutes, 51 seconds When we go and deeply work as a tech platform, for example, if we are working with a healthcare customer, we are able to give them not just a consumer 19:59 19 minutes, 59 seconds conversion but a conversion of what they see as their patients, right? Revenue generating users. The persona of those 20:07 20 minutes, 7 seconds uh people that they targeting is like a patient. If we are talking about entertainment category, we are giving them users who are viewers, right? who 20:14 20 minutes, 14 seconds are subscribers who will pay uh to subscribe or gamers or shoppers or when we talk about education tech one of the case studies which we which we have uh 20:23 20 minutes, 23 seconds shared in our earnings presentation we're talking about uh targeting parents you know parents of students who would 20:31 20 minutes, 31 seconds then convert for education tech. to the deeper verticalization uh strategy and therefore the second factor there 20:38 20 minutes, 38 seconds related to that is giving them premium users right so premium placements driving premium users who will have a 20:45 20 minutes, 45 seconds higher lifetime value for the advertiser so consequently because of this verticalization strategy as well as with 20:52 20 minutes, 52 seconds the ability to target premium consumers in a very deeply intelligent way uh with personal personalization of those 21:00 21 minutes personas which are relevant into that industry vertical. These two factors are allowing us to charge a higher price and the advertisers is seeing the value that is coming through the Apple platform. 21:11 21 minutes, 11 seconds Thank you. 21:14 21 minutes, 14 seconds Uh perfect sir that that is useful. Uh thank you so much and and all the best. 21:21 21 minutes, 21 seconds Thank you. The next question comes from the line of Anmul Girk from Dam Capital. Please go ahead. 21:28 21 minutes, 28 seconds Yeah. Hi, thanks for the opportunity and congratulations on good set of numbers. 21:33 21 minutes, 33 seconds Um, a couple of questions. Firstly, uh, we have seen good growth in India, you know, despite the residual impact from 21:40 21 minutes, 40 seconds RMG and some early festive demand in the last quarter. So, what is uh leading to this? Uh and uh secondly, now that we 21:50 21 minutes, 50 seconds are already at 19% kind of growth levels uh on the overall company side, do we kind of maintain our 20% growth guidance going ahead? 22:02 22 minutes, 2 seconds Uh thanks for that question. That's a great observation. India is our anchor market. India is where we have the highest number of employees. We are 22:09 22 minutes, 9 seconds listed here. You know our customer base is robust and we are clearly a thought leader like none other in the adtech 22:17 22 minutes, 17 seconds ecosystem in India. Our growth in India is uh is very resilient and I'm very happy with the way uh it is uh 22:26 22 minutes, 26 seconds diversified across industry verticals and that is super important because you know there will always be some issue or the other because of either regulatory 22:34 22 minutes, 34 seconds reasons or otherwise in some vertical and that's natural course of business and we understand that and we have modeled for it right therefore we have 22:42 22 minutes, 42 seconds ensured that we are diversified across verticals and India is one market where we are covering all our verticals you So uh rather comprehensively 22:51 22 minutes, 51 seconds also if we go further into that uh we would find that our growth in India is also coming not only earlier it was very much anchored on Android now we are very 23:00 23 minutes doing really well on iOS and I think that segment is a premium segment within India and we are able to you know help 23:07 23 minutes, 7 seconds uh advertisers to grow in that segment and that is giving us a lot of differentiation because not every competitor is strong in that capability 23:15 23 minutes, 15 seconds and so giving premium iOS-based conversions across Ross the channels that are available across our platforms to those advertisers who are willing to 23:23 23 minutes, 23 seconds pay more for that category of users is really helping us. And the third pillar would be uh CTV right we are doing 23:30 23 minutes, 30 seconds exceptionally well on CTV and are consistently winning industry awards several industry awards that I also talked about earlier. I think this is uh 23:38 23 minutes, 38 seconds these are the you know anchors for our India growth right and uh from the company overall 23:46 23 minutes, 46 seconds perspective do we maintain a guidance of 20% plus growth 23:54 23 minutes, 54 seconds look I'll tell you uh I'll give you an insight into how I uh drive the variable incentives of our you know sales and 24:01 24 minutes, 1 second management and leadership internally so that will give you a sneak preview into you know how the organization thinks and behaves waves and at what point in time 24:09 24 minutes, 9 seconds does the internal organization you know celebrate uh that okay we have achieved enough growth. So there are two key metrics uh that we want in terms of 24:18 24 minutes, 18 seconds growth. One revenue growth right in terms of percentage revenue growth across geographies across markets. The 24:24 24 minutes, 24 seconds second metric that we want is EIA growth right percentage EITA growth across all markets. And our internal KPI to the 24:32 24 minutes, 32 seconds team is that both of these areas have to grow on an average of about over 20 to 25%. 24:39 24 minutes, 39 seconds Which means that typically if you look at it like what Capil was reporting earlier like this quarter we have grown 19.2% on revenue and IITA 24.1%. So if 24:48 24 minutes, 48 seconds you combine these two numbers you get a 45% number right. Uh so the internal team has to say you have to get revenue 24:55 24 minutes, 55 seconds growth, you have to get EITA growth and the bottom line is that it has to be with margin expansion. All right. So so 25:02 25 minutes, 2 seconds these are the three uh let's say parameters. The margin expansion is like an underlying qualifying criteria but on top of that we have to deliver stellar 25:11 25 minutes, 11 seconds revenue growth and we have to deliver also aa growth. So these are the metrics. So when I say when you model our company at a 20% or a 19 to 20% 25:21 25 minutes, 21 seconds growth rate that is a sensible way to model us because internally I'm pushing for 20 to 25% across these metrics and which our team has been consistently 25:30 25 minutes, 30 seconds achieving and still keeping hungry to push for more right and just one last thing on margins 25:38 25 minutes, 38 seconds u so do we do did we have wage hike uh during the quarter um and uh uh if Yes. 25:46 25 minutes, 46 seconds Uh our employee expense was more or less flat uh during the quarter. So just wanted to understand that. 25:54 25 minutes, 54 seconds So I do not know what you mean by rate hikes. Okay. But I mean I can tell you that 26:02 26 minutes, 2 seconds wage hike. Okay. Yes. uh what we are seeing is clearly that in terms of the uh uh total growth and efficiency of our 26:10 26 minutes, 10 seconds platform the adoption of AI and some of the functions getting more centralized into the India market or let's say uh 26:19 26 minutes, 19 seconds the Southeast Asian markets which are relatively lower cost compared to uh say markets like US, Israel or Europe. we 26:28 26 minutes, 28 seconds are able to use AI automation effectively and we are able to upgrade the you know 24x7 26:36 26 minutes, 36 seconds uh support services to our teams internationally as well as to our customers using tremendous amount of AI automation while centralizing some of 26:44 26 minutes, 44 seconds the functions of our workforce and uh lower cost markets. So overall what we are seeing is that we have given a handsome VA to the people who deserve and the talent who deserves to have it. 26:55 26 minutes, 55 seconds But overall even with all of that we are able to keep our operating expenses in check in control. 27:03 27 minutes, 3 seconds Uh right. So going ahead we should further expect some rationalization in the employee expense to continue. 27:13 27 minutes, 13 seconds uh I would say uh you know we will see consistent and high margin growth in terms of 27:20 27 minutes, 20 seconds revenue and the efficiencies will be realized even more on the beta level because of the fact that our opics is not going to grow at at pace with that. 27:30 27 minutes, 30 seconds Of course, we'll keep investing in the right areas and taking care of our talent in the most honorable and competitive way, but um you know it is 27:38 27 minutes, 38 seconds not going to keep pace with the uh with the revenue growth because we enhancing the productivity of Athlas across the 27:45 27 minutes, 45 seconds board. Uh if you uh tuned into our Apple 3i uh uh you know launch in April uh in 27:53 27 minutes, 53 seconds this financial year we talked about super afflers giving all of them the power of AI tools and agentic AI 28:00 28 minutes capabilities to expand the productivity of each affer by almost 50% and more. So 28:08 28 minutes, 8 seconds given that context we just have to hire lesser people for the incremental growth. So therefore the efficiency you will see in the AIA expansion will be 28:16 28 minutes, 16 seconds faster or the rather the AITA growth would be faster than the revenue growth in most cases. 28:23 28 minutes, 23 seconds Sure understood. Thank thank you so much for answering my questions and best of luck for future. 28:29 28 minutes, 29 seconds Thank you. The next question comes from the line of Rohan Nakpal from Helas Capital Management. Please go ahead. 28:36 28 minutes, 36 seconds Hi thanks for taking my question. Um so I just wanted to follow up on the gross margin uh remark that you made. Uh so 28:44 28 minutes, 44 seconds you said um there is some portion that is uh that is for revenue generated in 28:52 28 minutes, 52 seconds this quarter and there's some portion that is uh investments that you're making for uh future uh revenue growth that you're expecting. Can you please uh 29:01 29 minutes, 1 second provide some uh colors on the split between the two so we can get a sense of what the underlying gross margin is for the business. 29:11 29 minutes, 11 seconds Right. Thank you. So this question has been asked of me a few times and I think I've always given uh you know this uh the same consistent answer that to earn 29:20 29 minutes, 20 seconds the revenue that we make right. uh one could say that hey only target those users or only target those devices where 29:28 29 minutes, 28 seconds you are expecting an immediate conversion but we also need to consistently invest into looking at 29:36 29 minutes, 36 seconds those expanded pool to cast a net wider to build our intelligence about the various verticals that the end users are 29:44 29 minutes, 44 seconds engaging with right to profile or to make sure we have a deeper persona of these users. Consequently, 29:51 29 minutes, 51 seconds in any given reporting period, I would say at least or around 10% of our data and inventory cost is 30:00 30 minutes in is investing into the future or it is looking at a broader view of what we can do with our verticalization and 30:09 30 minutes, 9 seconds profiling and a lot of times it's focused on geographies where we are looking to go deeper. Let's say you know very we are let's say underc calibrated 30:17 30 minutes, 17 seconds in healthcare as a vertical in certain markets. So we may invest in that to build that deeper intelligence and verticalization for healthcare because 30:25 30 minutes, 25 seconds then we are expecting to utilize that for future revenues. Right? So similarly across all the top EFGs category 30:32 30 minutes, 32 seconds verticals we would look at different geographies and different markets and prioritize where do we invest more and when and that's more of a tactical u 30:42 30 minutes, 42 seconds let's say execution decision but on a general basis you can say that around 10% of the data and inventory cost is actually investment in nature. 30:53 30 minutes, 53 seconds Uh okay. So I was just trying to get a sense of the increase. So is the So is it fair to assume that uh because there 31:01 31 minutes, 1 second has been an increase this quarter um that 10% is higher um this time around or is it still 10%. 31:13 31 minutes, 13 seconds I would say it would be in a certain range. It can it will I mean in certain quarters you may see that this is going a bit higher in certain markets 31:21 31 minutes, 21 seconds depending upon where we see the immediate growth opportunities or how aggressively are we pushing. Are we pushing for all verticals to have deeper 31:30 31 minutes, 30 seconds insights across international markets as is the case right now because we absolutely wanting to go and realize the 31:37 31 minutes, 37 seconds full ambition and potential of our growth in international developed markets. So therefore at this point in time you're seeing that in incremental 31:44 31 minutes, 44 seconds push and but I was giving a more long-term answer that for many years I have already qualified that this is investment there is a percentage that's 31:52 31 minutes, 52 seconds investment in nature and I will not be able to give any short-term breakups for that. So in the short term it would suffice to say that why you are seeing 31:59 31 minutes, 59 seconds an increase right now is because the investment component has grown for verticalization of all our verticals in international markets. But will I be 32:07 32 minutes, 7 seconds able to give you a specific breakdown for this quarter? I would prefer not to. Okay, understood. Thank you very much. Look, answers my question. Thank you. 32:16 32 minutes, 16 seconds Thank you. The next question comes from the line of Anandi from Nepan Capital. Please go ahead. 32:24 32 minutes, 24 seconds Yeah. Hi, congrats on a good serve number. Uh my questions relate to real money gaming. Uh I'm assuming with the ban on real money gaming, you must have 32:33 32 minutes, 33 seconds had a loss of revenue on the back of that. Could could you quantify what that reduction is and what areas outside of gaming have made up for that loss? 32:46 32 minutes, 46 seconds Uh Capil, I'll pass this question to you please. 32:49 32 minutes, 49 seconds Yeah. So um uh you can assume about about 10 to 12 crores of revenue on the 32:56 32 minutes, 56 seconds base effect uh for the quarter three of the last year which has not recorded in this quarter. Yep. But it is a 33:04 33 minutes, 4 seconds broad-based recovery from our uh growth of revenue from the all the verticals uh in India. It is not uh concentrated on 33:12 33 minutes, 12 seconds any cutting of vertical which has given us u a growth back despite the RFG setback. 33:20 33 minutes, 20 seconds Okay. So is it fair to say that the net if you if you if you take the base effect our growth in India would be higher. 33:31 33 minutes, 31 seconds Got it. So the RNG ban has only resulted at 10 to 12 crores loss or loss of revenue for you. That's it. 33:39 33 minutes, 39 seconds Yeah. Yeah. Okay. Interesting. 33:41 33 minutes, 41 seconds That was in the base effect and the uh Yeah, that was the base effect. What do you mean base effect? 33:48 33 minutes, 48 seconds That was in quarter 3 FI25. The revenue of RNG in quarter 3 FI25. 33:57 33 minutes, 57 seconds Got it. because we can't predict we can't predict how much revenue would have come into quarter 3 of this year. Sure. 34:06 34 minutes, 6 seconds Okay. 34:10 34 minutes, 10 seconds Thank you. The next question comes from the line of Abishek Banerjee from ICICI securities. Please go ahead. 34:17 34 minutes, 17 seconds Yeah. Hi. Uh uh thanks for the opportunity. Uh just a couple of questions. So first you know adding on to the question uh asked by 34:27 34 minutes, 27 seconds so last uh time around you had actually talked about segments like uh quick 34:34 34 minutes, 34 seconds commerce etc uh which were kind of driving the growth. Uh so can you can you just tell us uh overall right in 34:42 34 minutes, 42 seconds India now which are the segments which are which would have become you know largest for you. 34:50 34 minutes, 50 seconds All right, thank you. Uh well, in the EFGH categories, we are doing very well in categories E and category F in India, 34:59 34 minutes, 59 seconds which is of course driven by e-commerce, education, uh so e-commerce, entertainment in category E and in 35:06 35 minutes, 6 seconds category F by fintech and food tech, right? As well as FMCG. Uh so overall, let's say in category E and F, we are doing exceptionally well across the 35:15 35 minutes, 15 seconds verticals. And in gaming, we already mentioned that there's impact of real money gaming. But we have also uh shown you know case studies of uh of other 35:25 35 minutes, 25 seconds kinds of gaming categories which are non-real money gaming where we continue to be very strong and resilient and category H which is hospitality and 35:33 35 minutes, 33 seconds travel. Again in this earnings presentation we have given a very uh very clear uh case study of three of our case studies for this for India and 35:42 35 minutes, 42 seconds emerging markets. So, so these are the broad set of verticals where I would say E and F are continuing to be very strong 35:49 35 minutes, 49 seconds and resilient. In category G, we saw some pullback. In H, hospitality and travel is doing well. In healthcare, we need to double up and we need to do 35:57 35 minutes, 57 seconds more. Uh, so we investing towards those efforts. I hope that answers your question, Abishek. 36:03 36 minutes, 3 seconds Yes, that answers uh the question in India. And uh one more question on the global markets. So uh what what do you think and by when do you think we can 36:12 36 minutes, 12 seconds you know go back to the kind of growth rates that we are seeing a couple of quarters back? 36:20 36 minutes, 20 seconds Well, first of all, I have to say that given uh the overall u you know macroeconomic factors and the the fact 36:28 36 minutes, 28 seconds that you know there are cycles in the market uh the overall uh growth that we have achieved I would say is a very very 36:35 36 minutes, 35 seconds resilient and uh very robust and defensible uh sustainable type of growth. So this is let's say the baseline of growth that we can anchor 36:44 36 minutes, 44 seconds ourselves on and uh in order to accelerate that further we are looking at both organic and inorganic uh 36:52 36 minutes, 52 seconds investments right so organic investments I mentioned deeper verticalization for international markets we are already investing in that we are also investing 37:00 37 minutes in our salesforce uh right growing that presence we talked about uh our management and leadership expansion and reorientation where we have Ripple who 37:09 37 minutes, 9 seconds is leading India and emerging markets its uh growth initiatives and we have Samir who has joined on board to lead the North America and developed markets 37:18 37 minutes, 18 seconds focus for us. So I think we are investing in all areas uh both organic and inorganic opportunities are being actively evaluated and we will 37:26 37 minutes, 26 seconds absolutely go for capturing the full growth potential of international markets as we go along. 37:34 37 minutes, 34 seconds Okay. Thank you. 37:37 37 minutes, 37 seconds Thank you. The next question comes from the line of Mayank Babla from Enam MC. Please go ahead. 37:46 37 minutes, 46 seconds Hi, thank you for taking my question. 37:48 37 minutes, 48 seconds Uh, congratulations on a great set of great set of numbers and you know the sustainable performance that you displayed. My question pertains to uh you know the other expenses part of it. 38:00 38 minutes uh while I acknowledged that earlier in the call couple sir gave some commentary on it uh you know it has consistently 38:09 38 minutes, 9 seconds you know trended down from 8.3% of revenue to now 6.4% of revenue. So how 38:16 38 minutes, 16 seconds should we look at this uh uh uh over the next 2 to 3 years uh um and is this 38:23 38 minutes, 23 seconds because of uh you know as a function of operating leverage playing out or there is uh some other element to it because 38:31 38 minutes, 31 seconds the lowest uh it has been reported was at 4.5% of revenue in June of 2022. 38:39 38 minutes, 39 seconds Uh so how should we look at this component? Thanks. Sure. 38:45 38 minutes, 45 seconds Uh our marketing spends are driven by uh events and uh sponsorships of various uh 38:52 38 minutes, 52 seconds agencies in various events uh largely uh buckled in uh quarter 3 and quarter four 39:00 39 minutes also internationally right so there is uh there is a seasonality to these spends. However, the operational 39:06 39 minutes, 6 seconds efficiencies as you mentioned will play because u our revenues uh will grow at a certain level and our expenses will not 39:15 39 minutes, 15 seconds grow in tune with our revenue growth. So there will be operation operational leverages being played in the entire 39:22 39 minutes, 22 seconds other expenses bucket including the marketing spends. 39:28 39 minutes, 28 seconds Sure. Sure. And uh Anj could you uh also my second question would be about the uh 39:35 39 minutes, 35 seconds you know the connected TV space. Uh could you give us uh a little more uh you know uh color or uh shed some more 39:45 39 minutes, 45 seconds light on the progress of that and the overall scheme of this. 39:54 39 minutes, 54 seconds Thanks for that question. Well uh when we look at um uh you know this uh the 40:00 40 minutes consumer platform stack of Apple our business model is very consumer centric 40:07 40 minutes, 7 seconds and when we talk about consumer centricity we look at how do we reach this consumer across connected devices. 40:14 40 minutes, 14 seconds So where all can this consumer be? The consumer is spending disproportionate amount of time on their mobile screen 40:22 40 minutes, 22 seconds and increasingly the screen that is becoming very very uh important in the 40:29 40 minutes, 29 seconds lives of consumers and the households is CTV. So therefore our focus on mobile 40:35 40 minutes, 35 seconds inapp experiences as well as CTV ondevice and inapp CTV experiences are 40:44 40 minutes, 44 seconds actually leading to great engagements in terms of this consumer ccentric approach across connected devices. 40:51 40 minutes, 51 seconds When we go to the advertisers uh now we are able to convince them that our platform should even attract budgets 40:59 40 minutes, 59 seconds even more budgets on CPCU business model. Earlier we were going to them and saying give us your digital budgets and let's take them on CPCU model right 41:08 41 minutes, 8 seconds because we are deeper funnel conversion verticalized conversion orientation platform now we are able to go to the advertisers 41:16 41 minutes, 16 seconds and say move your linear TV or traditional TV advertising budgets to 41:23 41 minutes, 23 seconds digital CPSU business model because we can now place ads inside and connect those ads to the mobile phones. 41:32 41 minutes, 32 seconds connect those ads on CTV screens and mobile phones within a household context of devices across connected devices to drive conversions for the advertisers. 41:41 41 minutes, 41 seconds So therefore the CTV business is contributing meaningfully to this expansion of growth of the advertisers budget towards the CPCO business model. 41:50 41 minutes, 50 seconds So overall the business model is consumer centric CPCO business model on one integrated consumer platform stack because the consumer is the same. Now 41:58 41 minutes, 58 seconds whether you show the ad on the mobile phone to this user or you show the ad on CTV and mobile phone we will only earn 42:05 42 minutes, 5 seconds the conversion on the same user right we're not going to be earning it differently but now we are able to triangulate better between these 42:13 42 minutes, 13 seconds connected experiences and drive more efficient conversions and able to tell the advertisers hey shift some of your budgets to this because you're even 42:22 42 minutes, 22 seconds getting the upperfunnel benefit of branding when you do CTV ads even if you don't drive a conversion your branding your upper funnel midfunnel impact is 42:30 42 minutes, 30 seconds much better. So I think this is becoming more compelling and CTV is a very strong growth uh uh sort of factor in terms of 42:39 42 minutes, 39 seconds how we are shifting advertisers budgets to CTCO business model. 42:44 42 minutes, 44 seconds Right. Right. Thank you so much and best of luck for the future to the entire team. 42:50 42 minutes, 50 seconds Thank you. The next question comes from the line of Sidat Mishra from Fidelity International. Please go ahead. 42:58 42 minutes, 58 seconds Hi uh you know my question is around uh the growth uh for developed markets and also emerging markets outside of India. 43:07 43 minutes, 7 seconds So I wanted to understand like uh you've done some investments as you mentioned uh to you know elevate uh Vulcadia and 43:15 43 minutes, 15 seconds also you've made summits on the CEO of North America and then you've also talked about investments in different verticals to get the full potential of 43:24 43 minutes, 24 seconds growth. So just wanted to understand when you talk about full potential of growth is that growth you know like the 43:32 43 minutes, 32 seconds organic growth materially higher which is possible in developed markets and emerging markets outside of India. I just wanted to understand what is that 43:39 43 minutes, 39 seconds potential can it accelerate materially or you know this is this is the investments you've done to maintain the growth at these levels. 43:49 43 minutes, 49 seconds I'll uh I I'll give you a very you know grounded answer to this question. We have 43:58 43 minutes, 58 seconds one of the let's say best uh technology platform capabilities which are also not I mean not just in my words saying it 44:07 44 minutes, 7 seconds I'm saying it anchored on the kind of number of you know awards that we have won for our tech stack and tech platform in comparative independent jury 44:16 44 minutes, 16 seconds environments. Five of those awards I named earlier. I also mentioned about our patent portfolio expanding. I think 44:23 44 minutes, 23 seconds all of these are grounding our claim that we have one of the strongest tech capabilities in this area. So there I'm 44:30 44 minutes, 30 seconds very confident of our propositions what we are taking to market in developed markets. However, our or even other 44:38 44 minutes, 38 seconds let's say emerging markets right international markets beyond India. Now to get meaningful coverage across all of 44:45 44 minutes, 45 seconds our 10 12 verticals with all the advertisers in those markets it is going to take time right because you need to 44:53 44 minutes, 53 seconds invest in sales invest in marketing build those case studies build that build their confidence they say hey there's this company from India which 45:01 45 minutes, 1 second has come to this market so you have to go a step at a time and that is what you're seeing in terms of organic growth 45:07 45 minutes, 7 seconds right now now let's look at how can we accelerate ate that further. If we were to let's say do an inorganic uh uh you 45:16 45 minutes, 16 seconds know transaction focused on let's say developed markets or international markets and we gain access to a steady 45:24 45 minutes, 24 seconds or a more let's say uh operational sales team on the ground which already has 45:31 45 minutes, 31 seconds relationships with uh some of those customers and you know opens the ability or the highway for us to now upsell and 45:39 45 minutes, 39 seconds cross-ell our product propositions at the back of that sales team to those customers. Now I would think that that 45:46 45 minutes, 46 seconds is both organic and inorganic growth, right? Because the inorganic part is that when we acquire a business, they are already selling their products to 45:54 45 minutes, 54 seconds those customers. Once we acquire, we create a rider or we create a short circuit where we can now go and approach those customers and sales team with our 46:02 46 minutes, 2 seconds upselling cross-selling services to drive organic growth to a to shift the gear of organic growth from let's say 46:09 46 minutes, 9 seconds third gear to fifth gear. And I think uh that is the whole thesis of doing the inorganic investment. So therefore we 46:17 46 minutes, 17 seconds are looking at not only our own internal leadership expansion clear leadership orientation and conviction to fuel our 46:26 46 minutes, 26 seconds growth going forward. We are investing in data and inventory cost to build verticalized intelligence for 46:32 46 minutes, 32 seconds international markets. And we are obviously looking at doing inorganic uh transactions where I mentioned we have 46:40 46 minutes, 40 seconds shortlisted from 12 to 4 and hopefully from 4 to 1 in the in the near term because we want to make sure that if we 46:47 46 minutes, 47 seconds are going to do that one transaction may that be the best inorganic expansion move of our company compared to whatever 46:55 46 minutes, 55 seconds else in the industry was available that money could buy. So we are casting our net wide. We are evaluating every single target that we think we can uh afford to 47:04 47 minutes, 4 seconds transact with and we will uh make the most sensible and carefully calibrated decision hopefully in the near term. 47:13 47 minutes, 13 seconds Got it. Uh thanks that's very clear. I just had one more question on the inventory costs uh and the gross margin. 47:19 47 minutes, 19 seconds So so the inventory costs have gone up this quarter uh as a percentage of revenues. So is it something which will 47:28 47 minutes, 28 seconds uh kind of come down from these levels or will be structurally higher going forward? Uh so I just wanted to 47:35 47 minutes, 35 seconds understand whether this quarter was uh you know just an aberration in terms of higher investments or uh or you should expect this to continue. 47:46 47 minutes, 46 seconds I think this this is an investment. I have already mentioned earlier that we have invested more towards prepare 47:53 47 minutes, 53 seconds ourselves for greater growth in developed markets going forward uh across verticals in international markets and therefore this is something 48:01 48 minutes, 1 second that we will uh continue to do for at least a few more quarters till we can unlock the full potential of all the 48:09 48 minutes, 9 seconds industry verticals that our platforms can serve in international markets. 48:13 48 minutes, 13 seconds Right? So we are actively pushing that agenda at this moment and I think you would still see that we are calibrating 48:20 48 minutes, 20 seconds that sensibly to to have EIA margin expansion overall. Right? So our like I mentioned the internal organization's goals are 48:28 48 minutes, 28 seconds revenue growth a bit growth to be accelerated with margin expansion and overall delivering uh in that range uh 48:37 48 minutes, 37 seconds you know in terms of 20 to 25% for bottom line I evita margin growth and around 19 to 20% on revenue growth. 48:46 48 minutes, 46 seconds Okay. Okay. Sorry just one more question if I can. Is it on the inorganic acquisitions? So you will follow a similar playbook like which you've done 48:54 48 minutes, 54 seconds in the past or is it could be something completely different like uh I'm just trying to understand. 49:03 49 minutes, 3 seconds So I think uh if you look at our track record and credibility of uh inorganic transactions between since we went 49:10 49 minutes, 10 seconds public in 2019 we did a few acquisitions in 2020 to 2023. 49:16 49 minutes, 16 seconds Last 3 years we have not done any in organic transaction. Why? because this was part of a considered plan. I want to 49:24 49 minutes, 24 seconds prove our playbook to all our investors and show that we are a team that understands how to do acquisitions and 49:33 49 minutes, 33 seconds how to integrate them sensibly into a single cash generating business unit of a CPC performance business. And I think 49:40 49 minutes, 40 seconds with that track record and confidence as we go further now into the rest of this decade, we are seeing we will do one meaningfully sized transaction in 2026. 49:51 49 minutes, 51 seconds We will do one more hopefully in 2028 and one more in 2030. Our view is very clear that we will with a spacing of one 49:59 49 minutes, 59 seconds to two years do we may have some smaller transaction happening but I'm saying meaningfully sized um transactions given 50:07 50 minutes, 7 seconds where we are today in the journey and given our management bandwidth and capabilities today we believe that we can undertake a meaningfully sized 50:14 50 minutes, 14 seconds transaction but the playbook overall will largely remain the same we'll be looking at similar sort of valuation multiples like what we have paid in the 50:23 50 minutes, 23 seconds past uh whether in terms of revenues or uh you know and in terms of expansion again our goal would be how do we unlock 50:31 50 minutes, 31 seconds greater synergies after the acquisition to transform that acquired unit towards greater growth greater profitability and cash flows. So our playbook will be the 50:40 50 minutes, 40 seconds same but I think the size and the scale would be the only differentiating factor versus what we did you know at the start of this decade. So between 2020 to 23 50:50 50 minutes, 50 seconds how we were playing versus how we'll play from 2026 to 2030 the difference would be in size and scale not in the other areas of the playbook. 51:00 51 minutes Okay. Thank you so much. Yeah. 51:03 51 minutes, 3 seconds Thank you. The next question comes from the line of Vivec Dhi from Nepon India. Please go ahead. 51:09 51 minutes, 9 seconds Sir I hope I'm audible. Uh so thanks for the opportunity. So just wanted to ask you one question on the DPDP act. So are 51:18 51 minutes, 18 seconds there any additional compliance or consent requirement that AFLE and its app partners need to implement uh and will this lead to any incremental cost 51:27 51 minutes, 27 seconds and uh also is there any possibility of reduced data signal for AFL uh for targeting uh or all of is already 51:36 51 minutes, 36 seconds consent and largely consent based and largely unaffected. 51:42 51 minutes, 42 seconds Well, thank you for that question. Well, first of first and foremost, AFEL uh has a you know we'll complete 21 years in 51:50 51 minutes, 50 seconds April this year as a company and with this track record we have been across all the uh important jurisdictions where 51:58 51 minutes, 58 seconds data protection acts have been around for more than a decade right starting from Singapore to Europe to US and we've been playing across these jurisdictions 52:06 52 minutes, 6 seconds and we have proactively gone and certified our platforms and processes for you know whether it is ISO certification ifications or Singapore 52:14 52 minutes, 14 seconds government's uh you know data related certifications, data privacy and security certifications and we have done 52:21 52 minutes, 21 seconds these audits for many many years. So we are not waiting for let's say uh data protection act of India uh to become 52:30 52 minutes, 30 seconds operational before we let's say start adhering to you know those uh standards that we hold ourselves up for in other 52:37 52 minutes, 37 seconds markets because once we uphold those standards in any jurisdiction it applies across the board to the whole organization's process because we are 52:46 52 minutes, 46 seconds effectively one unified uh consumer platform stack and we're not running two different processes that okay in this market there is data protection act to 52:54 52 minutes, 54 seconds let's run it this way and another market doesn't have it so run it another way having said that if there are certain let's say nuances which are specific to 53:03 53 minutes, 3 seconds the Indian data protection act then those have already been taken care of by our platform because we know this uh act has been in the making for a long time 53:11 53 minutes, 11 seconds in fact we have been playing an industry body role you know to to part participate as an industry voice in uh 53:19 53 minutes, 19 seconds giving inputs of what should be there for best practices uh in this case so uh my Short answer is that we are fully ready and we welcome data protection 53:28 53 minutes, 28 seconds because it in fact increases the confidence of the consumer that hey uh if I'm giving consent my data will be 53:36 53 minutes, 36 seconds safe and if there are any industry players who are not doing anything sensible then the regulators will go and take them to accountability. So 53:45 53 minutes, 45 seconds regulation and data protection regulation across jurisdictions if you go and check the data the consumer confidence in the industry has gone up 53:53 53 minutes, 53 seconds there they are more willing to give consent even in jurisdictions where people are much more uptight about the consumer privacy for example Europe and 54:00 54 minutes US India has been generally very generous and trusting I mean Indian consumer if you ask 54:07 54 minutes, 7 seconds you know what do you where do you live interested people who are willing to share readily they're not as alert on consumer privacy 54:16 54 minutes, 16 seconds as the developed markets. Having said that, even in India with the regulation in place, the confidence of even let's 54:23 54 minutes, 23 seconds say high netw worth or iOS premium users who are more let's say aware or educated or are behaving like developed markets 54:30 54 minutes, 30 seconds conscious users about their privacy and concern even they have greater confidence to give consent. So I don't see any issues uh with respect to this. 54:39 54 minutes, 39 seconds uh on the contrary given our credibility the international advertisers or the agency groups or international 54:46 54 minutes, 46 seconds publishers who are operating in India will actually say now India has data protection act we would rather work with a top player like Apple who they can 54:55 54 minutes, 55 seconds trust which will uphold these standards uh you know as a sensible corporate citizen versus working with let's say 55:02 55 minutes, 2 seconds smaller players who may or may not have these you know credible credentials to inspire trust. So we think that a lot of partners around the world will trust 55:10 55 minutes, 10 seconds Apple as a credible player in India uh to give us uh any first party data or collaborate on data uh privacy initiatives with us. Thank you. 55:22 55 minutes, 22 seconds Sure sir. Thanks a lot. 55:24 55 minutes, 24 seconds Thank you. A request to all participants please restrict your questions to two per participant. For more question please rejoin the queue. The next 55:34 55 minutes, 34 seconds question comes from the line of Swapnail Portugu from JMFL. Please go ahead. 55:40 55 minutes, 40 seconds Hi, thanks for the opportunity. Uh my first question is with respect to the INR deposition which is happening currently and to that extent I uh I 55:49 55 minutes, 49 seconds would like to understand what is the benefit that we are getting uh in your revenues uh especially when when it comes to international revenues. We are 55:57 55 minutes, 57 seconds at 5.3 something. Hello. Can you repeat? 56:04 56 minutes, 4 seconds Are you taking that question? Could you unmute yourself? 56:07 56 minutes, 7 seconds Yeah. Yeah. Can you repeat your questions because that line was not very clear? 56:11 56 minutes, 11 seconds No. The question was uh because of the INR depreciation what is the benefit that we are getting in the revenues today and uh given that the rupee 56:19 56 minutes, 19 seconds continues to depreciate uh I mean do we expect more benefit to come? 56:24 56 minutes, 24 seconds Um the answer to this question is that it's not only the revenue, it is the costline items is also seated mostly outside India. When the India revenues 56:33 56 minutes, 33 seconds the uh the exchanges or the SSB players are located outside India. So the exchange movement up is not a very uh 56:41 56 minutes, 41 seconds positive scenario for us. It is we manage our exchanges uh uh to have no effect on the P&L. 56:49 56 minutes, 49 seconds So it is not only on the revenue, it is across. So there is no impact on the bottom line due to the exchange uh movements. 56:59 56 minutes, 59 seconds Okay. Uh okay. Uh and the second question is with respect to the uh several geopolitical issues which are 57:06 57 minutes, 6 seconds ongoing across geographies. So to that extent uh uh if I were to just ask you which countries do you think have the 57:13 57 minutes, 13 seconds highest risk uh in in case any uh adverse uh uh you know uh uh activity happens in some of these geographies 57:22 57 minutes, 22 seconds because you are exposed to a wide range of geographies beyond India as well. So that's where this come uh question is coming from. 57:31 57 minutes, 31 seconds So at the moment with regards to either if you're talking with regards to the um tariffs or with regards to the geop 57:38 57 minutes, 38 seconds aggression on the uh political side or the uh military side we believe that uh there is no impact on us because uh 57:47 57 minutes, 47 seconds entities uh operating out of US are independent entities which have their own cost structures and revenue structures. So we are not uh dependent 57:55 57 minutes, 55 seconds of supply of information from India. So there is no impact of tariffs on us. Uh with regards to other geopolitical activities which are going on uh we are 58:04 58 minutes, 4 seconds a cloud-based company and we can operate from any corner of the world. Uh we have the uh disaster management plan uh 58:12 58 minutes, 12 seconds enabled and uh we have been seeing this through co we have seen through Israeli war we have seen through Ukraine war. So 58:21 58 minutes, 21 seconds we we believe that we are resil resilient to that effect. Okay. 58:27 58 minutes, 27 seconds Yeah. I would like to add to that. I think we are uh sorry, I would just like to add to that. So on let's say geo 58:34 58 minutes, 34 seconds geopolitical economic financial side I think we operate as a very uh localized uh sort of uh compliant business and 58:42 58 minutes, 42 seconds advertising is a local business. I mean even if you're working with global players if their team is advertising in India or in United States the thought 58:51 58 minutes, 51 seconds process of that team is very local is looking consumer centricity in a very local way you know they are responding to local festivals local holidays and so 58:59 58 minutes, 59 seconds on so forth right so it's a very localized business and therefore and even if it was more internationalized I don't think that advertising or software 59:07 59 minutes, 7 seconds or digital is you know currently under the purview of you know any tariffs and so on now uh regarding the uh bigger 59:15 59 minutes, 15 seconds issues let's say you know in terms of uh peace and stability I think we have a very very diversified and risk 59:23 59 minutes, 23 seconds management riskmanaged presence across the world including our tech team's presence across continents right so we have a tech team that is based out of 59:32 59 minutes, 32 seconds India that is anchored here we have also got a tech team in Israel in Spain in uh Argentina so overall when we look at the 59:39 59 minutes, 39 seconds tech talent of the organization I mean right from Australia to Argentina. We have got this collaboration metrics that 59:46 59 minutes, 46 seconds is going uh and the companies working 24 by7 and during co and especially with the Israeli war situation we tested 59:54 59 minutes, 54 seconds ourselves that okay what if everybody has to work from home I mean and not only home I mean in in the case of the Israeli team they're working from you 1:00:02 1 hour, 2 seconds know very very difficult situations and uh we have seen a lot of resilience in our team to operate uh in any situation. So 1:00:11 1 hour, 11 seconds when we look at risk management, we go to all levels of worst case imagination and we see how can we manage redundancy, 1:00:19 1 hour, 19 seconds how can our workforce be productive including there are plans like you know uh some key people who are super 1:00:26 1 hour, 26 seconds important should have you know power backups should have uh different forms of alternative internet connectivity so that they can keep our systems up and 1:00:34 1 hour, 34 seconds running in the most dire and difficult circumstances. 1:00:41 1 hour, 41 seconds Got it. And thanks. 1:00:45 1 hour, 45 seconds We request you to return to the question queue for the followup questions. 1:00:51 1 hour, 51 seconds Thank you. The next question comes from the line of Rahul Jane from Dalat Capital. Please go ahead. 1:01:01 1 hour, 1 minute, 1 second Yeah. Hi, thanks for the opportunity. Uh most of my question has been answered. 1:01:07 1 hour, 1 minute, 7 seconds Just one thing uh purely from an uh AI point of view. You obviously highlighted about that extra bit of investment that 1:01:15 1 hour, 1 minute, 15 seconds you've been doing already on the inventory cost but have you seen a meaningful jump in the uh the traffic on 1:01:23 1 hour, 1 minute, 23 seconds the scraping uh for inferencing or the various other AI uh activity which is leading into some dynamic change in 1:01:32 1 hour, 1 minute, 32 seconds terms of uh the uh data which could be fraud data which could be not so relevant not intent based or anything 1:01:40 1 hour, 1 minute, 40 seconds like that. So is there a meaningful change in behavior the way people are consuming AI versus a pre kind of a period? 1:01:51 1 hour, 1 minute, 51 seconds Well, thanks for that question Rahul. Uh look uh in terms of uh traffic dynamics uh there are enough sort of industry 1:01:59 1 hour, 1 minute, 59 seconds reports which are out there which are saying that the web browsing you know on the browser people doing web browsing 1:02:06 1 hour, 2 minutes, 6 seconds those patterns are clearly shifting and instead of going and doing you know search on Google or Bing and these kind 1:02:14 1 hour, 2 minutes, 14 seconds of uh search t the traditional search engines uh platforms the traffic is clearly shifting that people are going to AI 1:02:22 1 hour, 2 minutes, 22 seconds um and uh asking AI for for answers, right? And I think there is there is some change in the web browsing 1:02:30 1 hour, 2 minutes, 30 seconds behavior. So and also similarly on web content consumption. I we think that there is there are certain changes that are happening. Having said that, I think 1:02:39 1 hour, 2 minutes, 39 seconds all industry um uh you know leaders have confirmed that there is no change or in 1:02:48 1 hour, 2 minutes, 48 seconds fact there is an increasing adoption of what's called inapp mobile consumption. 1:02:54 1 hour, 2 minutes, 54 seconds So the inapp mobile consumption for people who are using apps on the phone uh and shifting away from the browser. 1:03:02 1 hour, 3 minutes, 2 seconds So AI is absolutely helping the consumers to go more focused on the inapp traffic. So the our business is 1:03:09 1 hour, 3 minutes, 9 seconds non-browser focused mobile inapp or ondevice or CTV. This kind of category of traffic is not seeing any uh 1:03:17 1 hour, 3 minutes, 17 seconds significant uh sort of change or disruption due to AI. On the contrary, it is in fact seen as a great 1:03:24 1 hour, 3 minutes, 24 seconds opportunity because the AI uh apps for example the uh agentic AI or assistant chatbot kind of AI tools which are out 1:03:32 1 hour, 3 minutes, 32 seconds there, they're essentially apps and they are uh not all of them have the power to you know sell subscription based revenue 1:03:41 1 hour, 3 minutes, 41 seconds as a business model. In fact, even the largest of them have started to adopt advertising as the business model and we are going to be benefiting from that 1:03:50 1 hour, 3 minutes, 50 seconds because that will create a new type of ad inventory of users who are on AI uh tools and apps which again is an area of 1:03:58 1 hour, 3 minutes, 58 seconds focus for us in terms of both helping those apps to get new users as well as to help them to monetize on advertising. 1:04:05 1 hour, 4 minutes, 5 seconds So that's a growth opportunity for us on AI. One of the patents that we have also filed recently as I mentioned that our patent count and portfolio is constantly 1:04:14 1 hour, 4 minutes, 14 seconds increasing is to look at uh how to do this uh better filtering of AI oriented 1:04:21 1 hour, 4 minutes, 21 seconds let's say non-human traffic right so we we would like to make sure that we understand which traffic is genuinely coming from the human versus from an 1:04:30 1 hour, 4 minutes, 30 seconds agentic AI tool acting on behalf of that human right so we are doing much deeper filtration for that in our technology VG use cases and this is called pre- bid 1:04:39 1 hour, 4 minutes, 39 seconds filtering. Even before we uh make a bid for that traffic, we should be able to classify it as is this a human uh engagement that we can show an ad for. 1:04:49 1 hour, 4 minutes, 49 seconds Is it a human delegated to an AI agentic engagement which is still authentic? It is acting as a authenticated AI or is it 1:04:57 1 hour, 4 minutes, 57 seconds a fraudulent uh machine-based simulation to try and earn money for some publisher unfairly. So we are doing very clear um 1:05:06 1 hour, 5 minutes, 6 seconds and proactive technology innovations in these areas and also protecting that by filing the appropriate patents for what we are doing here. 1:05:16 1 hour, 5 minutes, 16 seconds Got it. Got it. That's pretty clear. Thank you so much. 1:05:20 1 hour, 5 minutes, 20 seconds Thank you. The next question comes from the line of Ashwin Meta from Ambit Capital. Please go ahead. 1:05:27 1 hour, 5 minutes, 27 seconds Uh hi thanks for the opportunity and congrats on good numbers. 1:05:31 1 hour, 5 minutes, 31 seconds An one question in terms of acquisition strategy. So historically when we earlier did the acquisitions these were 1:05:38 1 hour, 5 minutes, 38 seconds to add services which could expand our offerings. Uh then we moved to adding verticals and geography presence. Uh in 1:05:47 1 hour, 5 minutes, 47 seconds terms of the next set of acquisitions that we are looking at uh are we looking at newer models of monetization like say 1:05:56 1 hour, 5 minutes, 56 seconds pass for example or the supply chain side of things? uh uh how are we looking at in terms of this round of acquisitions? 1:06:07 1 hour, 6 minutes, 7 seconds Well, our focus in terms of acquisitions uh is is always having a multi-pronged approach. Uh you know, it's not just 1:06:15 1 hour, 6 minutes, 15 seconds anchored on one dimension of u you know just a particular type of service but you know there are several factors that 1:06:22 1 hour, 6 minutes, 22 seconds contribute to it. At this moment I would say that uh there's the single word that would define the strategy for inorganic 1:06:30 1 hour, 6 minutes, 30 seconds is verticalization. Okay. So verticalization I'll give you three dimensions of verticalization that we 1:06:36 1 hour, 6 minutes, 36 seconds are evaluating. First uh in terms of ad industry verticals right uh the customer base the sales organization or even the 1:06:46 1 hour, 6 minutes, 46 seconds data capabilities of that particular target company. Is it going to give us a greater ability to verticalize into 1:06:52 1 hour, 6 minutes, 52 seconds these EFGS category verticals that we want to go into? So if they have run a lot of advertiser campaigns for a while 1:07:00 1 hour, 7 minutes um in that market is it that intelligence can we train our AI models on that and therefore verticalize our platforms much faster. So that is one 1:07:09 1 hour, 7 minutes, 9 seconds dimension of verticalization. The second area of verticalization that we're talking about is from a adtech 1:07:15 1 hour, 7 minutes, 15 seconds perspective. Right? Atte right from demand side where these advertisers all the way to the text stack to the supply 1:07:23 1 hour, 7 minutes, 23 seconds side to the ad server to ondevice operating system level deeper insights. 1:07:28 1 hour, 7 minutes, 28 seconds Right? So we are saying that right from device all the way to demand. So from demand to device verticalization is it going to help us with that? Right? uh is 1:07:37 1 hour, 7 minutes, 37 seconds it going to add complementing tech capabilities within our um you know consumer platform stack uh to become 1:07:44 1 hour, 7 minutes, 44 seconds more deeply act verticalized. So that's another dimension that we're looking at. 1:07:48 1 hour, 7 minutes, 48 seconds And then of course the third uh the third area of dimension is on the consumer data and uh you know part of 1:07:55 1 hour, 7 minutes, 55 seconds the uh verticalization approach where we can go deeper on the consumer personas right. So again uh these are the three 1:08:03 1 hour, 8 minutes, 3 seconds dimensions. So from a consumer standpoint how can we go deeper right from the top of the funnel to the lower funnel conversions with the consumers. 1:08:12 1 hour, 8 minutes, 12 seconds On the advertiser side, we are looking at how can we go deeper and verticalize for EFGs categories. And the third is on the ad tech stack, how can we go deeper 1:08:21 1 hour, 8 minutes, 21 seconds all the way from demand side down to the device. 1:08:25 1 hour, 8 minutes, 25 seconds Uh thanks, this explains. Uh thanks, thanks for the insight. 1:08:30 1 hour, 8 minutes, 30 seconds Thank you. The next question comes from the line of Deepak from Sundaram Mutual Fund. Please go ahead. 1:08:37 1 hour, 8 minutes, 37 seconds Yeah, thank you for the opportunity. I'm audible. Yes, sir. 1:08:41 1 hour, 8 minutes, 41 seconds Yeah. So first of all, congratulation on a good set of number. So my first question let's say is to understand the split of growth. What I mean by that is 1:08:50 1 hour, 8 minutes, 50 seconds let's say assuming that we do a 20% growth in the next two to three years on the top line. you know would it be fair to assume that 17 to 18% of that growth 1:08:59 1 hour, 8 minutes, 59 seconds will be driven by converted user and let's say 2 to 3% would be toward driven by the average CPC rate going higher or 1:09:06 1 hour, 9 minutes, 6 seconds is it that you know average CPC rate would have a higher incremental share in this growth you know since in the past couple of calls we have been calling out 1:09:14 1 hour, 9 minutes, 14 seconds that you're targeting premium user CTV channel more iOS conversion so just wanted to understand the split of growth 1:09:21 1 hour, 9 minutes, 21 seconds going forward from that angle Yeah, I have already given a very clear 1:09:28 1 hour, 9 minutes, 28 seconds breakdown uh in the uh in how we internally look at growth and what are the formulas and the KPIs for the internal organization, the management 1:09:36 1 hour, 9 minutes, 36 seconds team, the leadership team, the sales organizations and we are absolutely looking at a formula where the revenue growth on a 1:09:46 1 hour, 9 minutes, 46 seconds year-on-year basis plus the IITA growth in terms of percentage AITA growth on a year-on-year year basis combined has to 1:09:54 1 hour, 9 minutes, 54 seconds be around 45%. So it can be 19% revenue growth and 25 26% EIA growth and that 1:10:02 1 hour, 10 minutes, 2 seconds leads to 45 or it can be 22% revenue growth and 23% EIA growth and that's 45. 1:10:11 1 hour, 10 minutes, 11 seconds But in both scenarios we are saying aa growth has to be faster than revenue growth which means margin expansion has to be part of the equation. 1:10:20 1 hour, 10 minutes, 20 seconds Now I would like to retain uh you know some execution tactical flexibility to ensure that in certain cases we may put 1:10:29 1 hour, 10 minutes, 29 seconds push for higher margin expansion and let's say the revenue growth is uh this thing or in case for slightly lower margin expansion but let's push for the 1:10:38 1 hour, 10 minutes, 38 seconds revenue growth as what you're seeing uh right now right what you're seeing is we pushed for revenue growth but we invested more for verticalization in international markets and data and 1:10:46 1 hour, 10 minutes, 46 seconds inventory cost and so on and so forth so the abita margin expansion was you know happening but not as much as it could 1:10:54 1 hour, 10 minutes, 54 seconds have happened had we not pushed for that uh element so these are tactical things any further uh distilling it uh would be 1:11:02 1 hour, 11 minutes, 2 seconds perhaps too restrictive what I would say is that if you're modeling our company for growth modeling it for around 18 to 1:11:08 1 hour, 11 minutes, 8 seconds 20% revenue growth and around uh let's say close to 23 to 25% a bit percentage 1:11:16 1 hour, 11 minutes, 16 seconds growth would be a sensible way to model our growth Okay, very helpful. Now my second question is relatively short-term in 1:11:23 1 hour, 11 minutes, 23 seconds nature. Uh since now first couple of quarters our base is not largely normalized and you know Q3 is the strongest quarter for us. Would it be 1:11:32 1 hour, 11 minutes, 32 seconds fair to assume that in this Q4 quarter we should see some cyclicality and some decline in the revenue front on QQ basis 1:11:40 1 hour, 11 minutes, 40 seconds or do we think that we still have that revenue visibility for us to be at a similar run rate of Q3 or even better in Q4? 1:11:50 1 hour, 11 minutes, 50 seconds Let me put it this way. If uh depending upon what what all happens in the geopolitical world, you know what side of the bed the world leaders wake up 1:11:58 1 hour, 11 minutes, 58 seconds from every other day. If things are stable, I think we will do better in Q4 versus Q3 or at least like flattish, 1:12:06 1 hour, 12 minutes, 6 seconds we'll beat that trend again. But if you know there's still two months to go, okay, February and March and you know, every day the situation is dramatically 1:12:14 1 hour, 12 minutes, 14 seconds different. Yeah. So, uh given that context, you know, it could range to, you know, uh slightly below Q3 to 1:12:22 1 hour, 12 minutes, 22 seconds slightly above Q3, but we should be very resilient in Q4. Yeah. Very. 1:12:28 1 hour, 12 minutes, 28 seconds One month is already gone. January has been January has been positive. uh I have reasons to be optimistic but I would say that look I mean in order in 1:12:37 1 hour, 12 minutes, 37 seconds order to beat the Q3 uh seasonality lift trend okay so I in a normal scenario let's say everything being sensible in 1:12:45 1 hour, 12 minutes, 45 seconds this world Q3 should be our highest quarter and we should see we should all expect to see a slight dip in from Q3 to 1:12:53 1 hour, 12 minutes, 53 seconds Q4 that's a normal expected scenario but we are such a fast growing company across verticals across markets that we 1:13:00 1 hour, 13 minutes have been beating this trend over last few years and I think we can we have a good chance to beat it provide provided the uh geopolitical situations allow the 1:13:09 1 hour, 13 minutes, 9 seconds advertisers to continue to put their budgets the way we are expecting it. 1:13:14 1 hour, 13 minutes, 14 seconds Okay. I believe that then because we have been doing very well even in Q3 despite all the RNG impact and also 1:13:21 1 hour, 13 minutes, 21 seconds there was some uncertainty regarding US because of tariff we have done relatively well. So hopefully it should be a good number in Q4. Yeah. Thank you 1:13:30 1 hour, 13 minutes, 30 seconds for the clarification and all the Yeah, I would say if you're if you're modeling it, be prudent and model it like slightly lower than Q3. But let us surprise you. 1:13:39 1 hour, 13 minutes, 39 seconds Yeah, sure. Thanks. 1:13:42 1 hour, 13 minutes, 42 seconds Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you and over to you, sir. 1:13:54 1 hour, 13 minutes, 54 seconds Well, thank you very much for the highly engaging uh earnings call today and for your wonderful questions. Uh I look forward to meeting you again soon with 1:14:03 1 hour, 14 minutes, 3 seconds our Q4 results and the full financial year results. This is our first year of Apple 3i first year of our third decade 1:14:12 1 hour, 14 minutes, 12 seconds and I'm looking forward to our company turning 21 years old on 5th of April 2026 and there will be exciting news to 1:14:20 1 hour, 14 minutes, 20 seconds follow. I think we've laid a great foundation for Apple 3i in its first year already n 10 months gone and I think we have already done fantastically 1:14:28 1 hour, 14 minutes, 28 seconds well and I'm very very convinced that we have a great growth um uh ahead for Apple 3i 10x growth vision. Thank you. 1:14:37 1 hour, 14 minutes, 37 seconds All the best. 1:14:40 1 hour, 14 minutes, 40 seconds Thank you on behalf of Anandraati Share and Stock Brokers Limited. That concludes this conference. Thank you for joining us and you will now disconnect align.