Operator: Ladies and gentlemen, good day and welcome to Nazara Technologies Limited Q2 FY27 earning conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jinesh Joshi from PL Capital. Thank you, and over to you, Mr. Joshi.
Jinesh Joshi: Yeah. Thanks, Siddhant. Good day, everyone. On behalf of PL Capital, I welcome you all to the Q2 FY27 earnings call of Nazara Technologies Limited. We have with us the management represented by Mr. Raymond Stauffer, CEO, Mr. Mithun Sacheti, Executive Director, Mr. Arun Agarwal, CFO, and Mrs. Anupriya Das, Head of Corporate Development. I would now like to hand over the mic to the management for opening comments. Over to you, Raymond.
Raymond Stauffer: Good morning, everyone, and thank you for joining us. Well, since day one, my priority has been to align the teams and operations, while leveling up group capabilities by enhancing Nazara's central platform. Part of that has started to show throughout Q2 FY27. This quarter, as you have seen, has been a key step in Nazara's evolution into a global gaming platform. It is also the first quarter to include Bluetile and Bestplay consolidated from 1 August 2026. Q2 was a record quarter for us. Revenue was INR 803 crores, our highest ever, up 53% year-on-year. EBITDA grew 93% to INR 120 crores, and EBITDA margin expanded 311 basis points to 14.9%.
Raymond Stauffer: Profit after tax from continuing operations was INR 35 crores, compared with a loss of INR 34 crores in Q2 FY26. For H1 FY27, revenue grew 20% to INR 1,232 crores, and EBITDA grew 52% to INR 166 crores. Gaming revenue grew 122% to INR 656 crores at a 21.5% EBITDA margin, contributing 82% of consolidated revenue and effectively all EBITDA before corporate costs. Mobile revenue grew 167% to INR 550 crores. In their 2 first months as part of Nazara, Bluetile and Bestplay generated revenue of INR 329 crores, up 49%. EBITDA grew 64% to INR 64 crores, driven by rapid product iterations, new markets, AI-automated user acquisition, and cross-promotion. Bluetile's leadership team holds 5.8% Nazara, aligning our interests effectively with all of shareholders.
Raymond Stauffer: Our existing gaming studios delivered organic growth of 11% in revenue and 17% EBITDA, underpinned by sustained investment in content. WildWorks grew revenue 41% on Animal Jam content. Kiddopia grew revenue of 21%, and Fusebox launched Traitors and a new Big Brother season. Curve grew about 27% and EBITDA 61%, driven by Sovereign Tower, the mobile debut of Wobbly Life and Human: Fall Flat, which has surpassed 60 million players. Much more importantly, long term, our platform is strong and is being enhanced. Bluetile's core capabilities now operate as group centers of excellence across marketing, data, products, and technology, with AI embedded in all 4 of them.
Raymond Stauffer: In a single month, the marketing COE team has produced over 290 ad creatives for 3 studios across the group, and a single AI-ready data stack is going to power analytics across the group. Every game we launch and every studio we acquire now plugs straight into these proven systems, enabling us to scale faster and more profitably. As you know, we have also expanded our leadership team.
Raymond Stauffer: Besides myself, we are very excited to have Mithun Sacheti, founder of CaratLane, join us as Executive Director, and Arun Agarwal, former Global CFO of Ness Digital Engineering, on board as the Chief Financial Officer. With that, I will hand it over to Anupriya to discuss segmental performance. Anupriya, over to you.
Anupriya Das: Sure. I just wanted to ask if Mithun, you would like to add something here, and then I can probably cover the segmental performance.
Mithun Sacheti: Sure. Thanks, Anupriya. Good afternoon to everybody. Some of you might know this. I have been a non-executive director on the board of Nazara. Recently moved into the executive role as a part of the promoter group, and I want to share why it is relevant as well. My life has been focused on building businesses and working with founders, obsessing about consumers. I think the new consumer is spending most amount of time in gaming, and I think Nazara provides that opportunity more than any other place right now. The current market opportunity for us and consumer trends both point towards an intersection of short-form casual gaming. Along with the market of US, it is possibly one of the few categories in the world which is seeing the kind of growth it is right now as well.
Mithun Sacheti: At Nazara, my role largely is going to focus on making sure that we have strategic conversations and focus on governance, which is of utmost important for anybody who is dealing in the public domain. Arun has joined us as a CFO in this, and we are all very excited as the new management. The team transition is more or less complete now, and with Raymond leading as the CEO and Arun as the CFO, it is exciting times for Nazara going forward. Thank you. Over to you, Anupriya.
Anupriya Das: Thank you, Mithun. I will now cover the segmental performance. In Q2 FY27, our gaming segment revenue grew 122% year on year to INR 656 crores. EBITDA grew 114% to INR 141 crores, resulting in an EBITDA margin of 21.5%. Excluding Bluetile and Bestplay, gaming revenue grew organically by 11%, and EBITDA grew 17%. Mobile gaming revenue, including Bluetile and Bestplay, grew 167% year on year to INR 550 crores, with EBITDA up 151% to INR 103 crores. Kiddopia revenue grew 21% year on year as subscribers growth 5% and ARPU increased to 7.94, growing 8% year on year. EBITDA declined as Kiddopia stepped up user acquisition spend to accelerate subscriber growth while keeping unit economics within our target thresholds. WildWorks grew revenue 41% and EBITDA 39% year on year on new Animal Jam content, including a Monster High themed season.
Anupriya Das: Fusebox revenue fell 4% year on year on lower organic installs as downloads of similar games declined globally, while EBITDA grew 7%. Fusebox launched Traitors and a new Big Brother season. Love Island was the number one free role-playing game on the US App Store in July. In PC and consoles, Curve's revenue grew 27% year on year to INR 77 crores and EBITDA grew 61% to INR 30 crores, with margin expanding from 30.8% to 38.9%. Sovereign Tower received an overwhelmingly positive response in Steam. Wobbly Life's mobile launch reached number three on both App Store and Play Store's honor chart. Human: Fall Flat has crossed 60 million players. Moving to offline gaming, EBITDA grew 29% year on year to INR 8 crores on high revenue of INR 29 crores, with margin rising from 20.3% to 26.2%.
Anupriya Das: Funky Monkeys opened 10 new stores in the last 12 months, with 5 more to open in FY27, and margins improved on record birthday revenues. Smaaash 2.0 design and rebranding is complete. It launched slightly delayed pending regulatory approvals. Within our other businesses, AdTech, comprising of Datawrkz and Space & Time, delivered Q2 FY23 revenue of INR 124 crores and EBITDA of INR 1.8 crores. Datawrkz pipeline is converting into new clients, though we expect a temporary dip in H2 as an anchor client restructures and pauses ad spend. Absolute Sports posted revenue of INR 23 crores and an adjusted EBITDA of INR 1.7 crores, excluding pickleball franchisee costs and one-time expenses. Pro Football Network's revenue grew 20% year on year with an EBITDA margin of 17% versus -18% in Q2 FY26.
Anupriya Das: At Sportskeeda, content syndication partnerships launched in Q1 are now contributing revenue, partly offsetting lower ad rates, while operating costs were down 13% quarter on quarter. With this, I conclude my remarks, and we will open the call for Q&A. Thank you.
Operator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you 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 queue assembles. The first question is from the line of Aditya Kumar from AK Investments. Please go ahead.
Aditya Kumar: Yeah. Thanks for the opportunity. Firstly, Raymond, congratulations for taking up the CEO position at Nazara. It is a very big responsibility. I have a couple of questions. First question is, what is the focus area for us under your leadership for one year that you want to fix or you want that some things needs to be streamlined, like developing team or center of excellence, whatever. Can you just share that? What is your focus for one year that you want to fix things in Nazara?
Raymond Stauffer: Sure. Thanks a lot for the question. We are focusing firstly on the Nazara platform. We have a really strong baseline to work on top of. The first actions we are going to take is leveling up those COEs and leadership positions from the Bluetile team over to Nazara in order to enhance our marketing data, tech, product, AI capabilities. In the future, we will also create a new COE, an ad monetization COE, that will allow us to also enhance every single studio's ad monetization capabilities. With this, what we want to do is create a very strong but flexible platform. A platform that is informed by all studios, but is also able to share with the rest of the studios all the learnings and everything that we have gathered. So it is an ever-evolving platform that keeps up to date with the standards of the industry.
Raymond Stauffer: I think the biggest focus is going to be to align operations, set a deliverable bar, and introduce AI in every single one of the studios through the COEs. In a year's time, what we need to achieve is an AI-operated company group and set of studios that could feed into and from that central platform. Of course, this is all, and the main focus as we have discussed and has been previously laid out, is gaming. So that is where most of our efforts are going to go into.
Aditya Kumar: Okay. Great. Sounds good to hear. On the gaming part, should we expect any flagship product launches under your leadership for next one year? Or mostly it will be on the existing games only, the majority of our focus will be to get more and more revenue share. Can you-
Raymond Stauffer: I think-
Aditya Kumar: Share some light here?
Raymond Stauffer: Sure thing. Yes. Both of them, right? So the teams, all our studios are launching highly qualitative games in their respective verticals. We need to do two things. One is relentlessly iterate over the existing games, which are proven to work and have a really big audience. Second of all, keep on launching new games. You can see, for example, the Curve team improving certain unit economics in some of their past games, but also signing new IPs and consistently launching new games, right? There is many in the pipeline right now that have been launched recently. We have had several successes and others that are coming in the next months. You also have companies like Fusebox. They have found great success in Love Island. They keep on optimizing that game. Recently, this month, they just launched Traitors, which has great initial metrics.
Raymond Stauffer: The answer is, we will focus on both in order to maximize our reach, both horizontally and in depth as much as we can.
Aditya Kumar: Okay. Lastly, I have a question on, as I am a shareholder. For a long-term vision for the company, you have grown revenues very strongly, right? In your leadership in Bluetile and Bestplay. Where do you see under your leadership for Nazara in next 5 years, that you would be disappointed that if you do not achieve that under your leadership for 5 years. What is the target you have for 5 years? Thanks.
Raymond Stauffer: I think we need to remain focused on the target, which is growing qualitatively. We need to ensure that each studio has the capabilities to keep on delivering games and keep on delivering growth organically, through each one of these studios, and then at a central level, inorganically through further M&A. Our target is to grow qualitatively, consistently, throughout the next 5 years.
Aditya Kumar: What is the growth rate that we are targeting? 25% or 30%? What is that?
Raymond Stauffer: Well, I am not giving an exact guidance right now. As you know, I just entered the job. But what I can say is that, we are consistently going to expect growth, both organically and inorganically from both the studios and the central group.
Aditya Kumar: Sure. Looking forward. Thanks.
Operator: Thank you. A reminder to all the participants that you may press star and 1 to ask a question. Next question is from the line of Kunal Bajaj from Choice Institutional Equities. Please go ahead.
Kunal Bajaj: Yeah. Hi, good afternoon. Thanks for taking my question. Firstly, Raymond, congratulations on your new role. I have four questions, if you don't-
Raymond Stauffer: Thank you.
Kunal Bajaj: Starting with, can you help on explaining the renewed COE strategy and post Bluetile consolidation? That is one. Secondly, I have seen that we have stopped giving NODWIN business as well as breakup of the offline games. So why are we doing that? Thirdly, we have seen that the Fusebox revenue have fallen around 4% on a YOY basis. This is purely on the fact of lower organic installs. I believe Q1 was also kind of a weaker quarter as well. So how we see the revenue going forward for the next 2 quarters? Lastly, any update on the disinvestments that we have highlighted in the last call over the non-core verticals?
Raymond Stauffer: Thank you very much. Yes. Thank you very much. Regarding the first question, and the COE leadership. The leadership at Bluetile was operating at a larger scale and essentially with tooling operational capabilities and the AI know-how that was already there and being applied. So what we decided to do is, in order to fast track this COE transition, essentially change that leadership and enhance it with the Bluetile existing capabilities. Each one of these is going to bring a lot to the table. I will give you a few examples. Marketing, for example, is bringing to the table a fully operational AI-ready ad creative production system, which has allowed us to release 290 creatives in 1 month across 3 studios in the group. This will increase exponentially as the team sets up the right tooling, the right systems with each one of the studios.
Raymond Stauffer: The second piece, for example, in marketing is, through AI, through these tools, through the scalability, being able to, from 1 team, manage essentially the marketing or help manage the marketing across pretty much every single gaming studio. That allows us to optimize FTE employees or contractors. Essentially, we are able to reduce blocks when we have a spike of work and we do not have enough people in a studio or reduce idleness by really deploying the FTE efficiently across the group. On the data side, for example, we are working on essentially building a semantic layer that is consumed by AI and then makes a marketplace available to every studio that allows us to scale without throwing people at the problem. This will increase, and allow for growth without having a proportionate increase in FTE behind it. Products and tech will also bring a ton of efficiencies and capabilities.
Raymond Stauffer: On the tech side, our new AI frameworks will reduce game development cycles by a lot. We are talking very high percentages. Teams will be able to launch new games faster, develop new features faster, integrate them in their existing games, also launch new games. That is kind of the rationale behind that COE leadership change. We are building the teams around this. This is now in transition, but we have gotten a hold of it, and they are pretty much deployed across all gaming studios as of today. The second question, you broke off slightly. I believe you were mentioning something about offline gaming. Could you repeat that question?
Kunal Bajaj: Yes. I wanted to understand that we have discontinued giving NODWIN numbers as well as the breakup of the offline business. Any strategy behind that?
Raymond Stauffer: Well, on the offline business, essentially our strategy is to continue to grow the different centers, right? And essentially look at it as one single unit, because both of them are very much intertwined. As you know, Funky Monkeys has been really delivering both growth on the top line and bottom line. They have launched a ton of new centers. They have done really well in the centers that they have opened. And we expect their success to keep on delivering. On Smaaash 2.0, we are making really good progress in the new Smaaash experience. However, there has been a slight delay, so I believe it is going to be launched in the next few months. Regarding NODWIN, I will defer to Anupriya. Anupriya, do you want to quickly jump in?
Anupriya Das: Yeah. In line with our focus on gaming businesses, we have started reporting. We did not include NODWIN as an update. However, it is an associate and a part of our business, and the business is growing well. A few points that I would like to cover is that the Comic Con IP is growing very strong. Vizag is one of the cities that Comic Con debuts. And they have seen very good traction. They are expanding. Their youth media strategy is playing out very well. In terms of numbers, we are seeing almost flat revenue and EBITDA growth for H1 for NODWIN. And it is because two of the IPs, iPopStars and All That Matters, have moved from Q2 to Q3. So accounting for all of that, we will see growth in the coming quarters as well.
Anupriya Das: I think other than that, I just also want to mention that in line with our strategy, and maybe Raymond can pitch in here, we are looking at ourselves increasingly from a platform lens. So, we will also try to report our gaming businesses in a consolidated way, which allows us to make more decisions on the capital allocation prudently, focusing on businesses which are growing in a particular quarter, and we are seeing good ROAS, the ability to spend increases. Raymond, please feel free to add in here where we want to talk about our platform strategy.
Raymond Stauffer: Yeah. So essentially, as we grow these units, we want to be very flexible in how we deploy capital, how we grow this platform, and how we invest across the board. I think that's a key piece of this forward-looking growth, qualitative growth. As we move forward, we will consolidate these units in order to be able to invest flexibly and also be able to share much more between those units throughout that specific segment. I think your third question was around Fusebox revenue. Anupriya, I can take this.
Anupriya Das: Yes.
Raymond Stauffer: So essentially for Fusebox, as you correctly mentioned, we've seen a slight revenue decline. This has been mainly due to a decrease in slight organic installs. However, the team has done a great job in optimizing EBITDA on the other end of things. They've increased the unit economics and the average revenue per user. This has been done through our own web shops. So instead of the fees that are being charged through the normal app stores, now the fees are much lower on our proprietary web shops. Also, they've optimized content and employee costs throughout the year. I think that the most important piece here for Fusebox, though, is we're pretty bullish into what they're doing as a team. The capability they have to sign new IPs and to launch new games with those IPs, those reality TV show IPs. The market is extremely big.
Raymond Stauffer: There's barely any competition. Essentially, they're extremely good at executing on that segment. We've seen this with Traitors. They just launched it, great metrics. So we'll know more about this in the coming months. But we're very excited about the team's capability to keep on launching these IPs, specifically now with the platform enhancing those development times and marketing capabilities. The fourth question, sorry, I didn't get it fully. It was about investment in non-core elements. Is that correct? Can you rephrase?
Operator: The participant got disconnected. The next question is from the line of Priyam Shah from Trinetra Asset Managers. Please go ahead, Mr. Shah.
Priyam Shah: Yeah. Hello. Hi, thank you for the opportunity and exciting times ahead for you all. I just wanted to understand, over the last two odd years, almost all of Nazara's growth has come through acquisitions, be it Fusebox, Curve, Smaaash, and now Bluetile. This has been in our DNA, acquiring anchor studios and then ramping them up. The organic base that we had went through the PokerBaazi write-off, the NODWIN sort of deconsolidation. This is the first quarter where post PokerBaazi, the portfolio is fully in the numbers, more or less, right? This is the right sort of base to anchor on. Given our run rate of roughly INR 900 crore a quarter, once Bluetile is in for a full period, can you just give us a three to four year revenue framework, what organic growth rate the existing gaming portfolio can deliver and from which engines?
Priyam Shah: What share of future growth will come from M&A and what will come from organic? This is what I wanted to understand. Basically, a three to four year sort of roadmap in terms of numbers.
Raymond Stauffer: Yeah. Thanks a lot for the question. Essentially our main focus is qualitative growth, as I mentioned. I think as you correctly pointed out, this was the first quarter in some time with organic growth. I think we want to double down on qualitative growth coming from the synergies that this platform creates. By enhancing this platform, by fully focusing on having state-of-the-art tools, capabilities, and AI synergies in each one of the departments, we really expect each one of these gaming studios and the gaming segment to grow organically. At the same time, we know that there are many interesting opportunities, specifically now with the onset of AI across the industry that we would like to think about.
Raymond Stauffer: That combination can be a very powerful one in which we built this platform to support the studios, but we also allow the studios to inform that platform. Or we also acquire new companies that can actually also mold that platform and make it better and more efficient to double down on the organic growth, compounding both sides of it. As of now, we cannot really give that future guidance. We cannot just set those numbers because we are just focused on delivering qualitative growth, and that is our main target, both organically, also inorganically in the next few years. That is what we are focused on, and that is what we will deliver.
Priyam Shah: Sure. Thank you.
Operator: Thank you. A reminder to all the participants that you may press star and 1 to ask a question. The next question comes from the line of Samarth Patel from Equirus. Please go ahead.
Samarth Patel: Thanks for the opportunity and congratulations, Raymond, for the new role. I had a couple of questions. For the Bluetile and Bestplay, if I look at the Q1 FY27, we had around 10.5% EBITDA margin, and the user acquisition was around 85% of our total revenue. While I look at the August and September numbers that you have given, the margins are at around 19.5%, and our advertisement and promotional spend has fallen to around 75%. I just wanted to understand that we have deliberately dialed down the acquisition and does the revenue growth hold at this lower intensity of advertisement spend? And what kind of margin and spend ratio we should build from here onwards? That's my first question.
Raymond Stauffer: Thank you very much for the question. When it comes to gaming, and specifically mobile gaming, there's a very strong seasonality component. And you essentially need to move with that seasonality. August is like this quarter is the worst seasonality. Essentially August is pretty much the worst month in the year. Essentially what we do, and the team does in those cases, is adapt progressively. When we talk about EBITDA margins, when we talk about these kind of things, we need to look at the year as a whole, and we need to look at quarterly evolutions, but we should never anchor ourselves in one quarter or another in terms of EBITDA margin. The team's main mandate is qualitative growth, year-on-year qualitative growth. And that you can see with the numbers from comparing these quarters, FY27 with FY26.
Raymond Stauffer: The team will continue to drive that qualitative growth through the right marketing allocation. If there is a certain seasonality element to be taken into consideration, the marketing team adapts accordingly. That is pretty much the reason behind this. You also need to understand that as we purchase current users, we are building our future cohorts, users that will play for years in our games, right? We will deploy marketing spend whenever it makes sense, wherever it makes sense. Ultimately always with one thing in mind, which is qualitative growth.
Samarth Patel: Well understood, Raymond. Can you help us understand what kind of revenue growth we can expect from Bluetile and Bestplay from here onwards? The margin aspect is well understood, but any sort of guidance that you can provide on the revenue growth side?
Raymond Stauffer: We are focusing on that word qualitative growth, right? We intend to deliver year-on-year growth throughout the next years. We will not commit to any specific guidance, but as I mentioned, both Bluetile and Bestplay are also receiving a lot of information and a lot of capabilities from the rest of Nazara too. So we expect this to be a bidirectional relationship with Nazara in which Bluetile and Bestplay will also incorporate a lot of good practices and a lot of tools that the rest of the teams are using in order to further our growth.
Samarth Patel: Understood. That was really helpful. My second question is on Fusebox. If I look, and we touched upon this, Fusebox revenue fell around 4% on a year-on-year basis, and slightly lower organic installs. Now with Traitors live and I think Big Brother season also starting from September, when do you expect Fusebox to return to growth and any flavor that you can give around Traitors cohort and how it is monetizing against, let us say, Love Island cohorts?
Raymond Stauffer: Yes. Thanks for the question. Essentially, we are not going to give any specific timeline on any of this because it does not really make sense. What I can definitely say is the team is doing the right things at a very fast pace. They have launched Traitors, and they are also preparing several new seasons. They are shortening the content cycles, so the amount of time they need to release new content, also the amount of time they need to release new games. The forward-looking strategy is essentially we are going to keep on signing IPs and keep on signing games with a growing speed capacity in both content and game launches. Traitors itself is looking pretty good. The initial numbers put some of these cohorts, they are the most loyal cohorts, of course, because they are coming from our other games.
Raymond Stauffer: I believe it is a 2x of what Love Island is seeing or even more. Anupriya, correct me if I am wrong.
Anupriya Das: Yeah, 3x. Yes.
Raymond Stauffer: 3x? Yes. Essentially, we are seeing very good initial metrics, very good retention, very good payer retention. Day 1 payer percentages are extremely healthy. Of course, this is the initial cohort, so we need to now pretty much expand marketing operations and ensure that the game reaches the right audiences.
Anupriya Das: If I may just add a few things here, especially for Fusebox. We have a very steady cadence of seasons across our IPs. Now that we have 4 IPs, and we have around 7 seasons planned for 2026. 4 have already been delivered, and then 2 are live now, as you mentioned, Big Brother, as well as a new season of Traitors is being launched. There is Love Island also live. In all, the content calendar of Fusebox is extremely busy, also driven by their own process optimization, which allows them to create content faster. As Raymond mentioned, Traitors is a great success that we are seeing early days, but we are excited about it and we will step up UA and content investment as and when we are seeing. You will see temporary dips on revenue depending on the seasonality of content.
Anupriya Das: There is strong effort going on both long-term and short-term basis for delivering growth profitably.
Samarth Patel: Understood. That was really helpful, ma'am. Now on WildWorks, for this particular quarter, we have seen very strong revenue growth. I think Animal Jam's public release was supposed to be on Roblox by end of Q1 FY27, and then I think we had also planned for launch of Slinky GO! in Q2 FY27. Have both of these been completed and what are they contributing currently in terms of revenue?
Anupriya Das: WildWorks has seen a very strong content launch in this quarter. Kitsune, which they have launched, have both drove the highest daily revenues in games lifetime. Monster High integration also supported this revenue along with Mythical Jam Tournament and new pets. Going forward, as Raymond mentioned, WildWorks will benefit from that AI creative ads engine and the IAP prioritization framework that we are working towards. In terms of the 2 newer bets on Roblox and GO Slinky GO!, Roblox, the traction that we saw didn't meet our bar yet. We have shelved the game for now. On GO Slinky GO!, the early soft launch retention metrics are not strong enough, but we are doing several iterations and features which are underway through October and November, and we will scale this once the KPIs clear a green light gate. It is the same discipline that we spoke about.
Anupriya Das: We will put UA and capital behind titles where data supports us, and we will continue to look at launching GO Slinky GO! once the KPIs meet our threshold requirement. Raymond, please feel free to add.
Raymond Stauffer: I believe you summarized it correctly. Yes.
Samarth Patel: Thank you. Just one last bookkeeping question, if I may. If I just look at the share of loss from associates, it was around INR 23 crore this quarter. This was entirely driven by NODWIN. If that's the case, what has been NODWIN's growth this particular quarter and any fundraising listing timeline that you can help us with, please?
Anupriya Das: NODWIN reported an EBITDA loss in this quarter, in this H1 because of which you are seeing the impact. Plus they have also taken an impairment on a Turkish company, PublishMe, that was invested in, because of which there is a loss at the PBT level. Yes, you're right. The loss mentioned in Nazara books is due to that NODWIN consolidation. Arun, please feel free to add in case you want to.
Arun Agarwal: No, you covered it well. It is because of NODWIN. The whole loss is because of NODWIN. As Anupriya mentioned, they have done the impairment of their Turkish asset, which is causing this number to be higher. Operationally also there is a loss, but that is not that high number. This looks higher only because of that one time. Otherwise, on an operational basis, the numbers are quite flattish.
Anupriya Das: Just to add on the fundraising plan for NODWIN. NODWIN is looking at a pre-IPO round as well as gearing itself for IPO that we are all excited about. The efforts are still on, as you would imagine that IPO timelines take time. So efforts are on that as well, as NODWIN team has mentioned earlier.
Samarth Patel: Thank you so much for providing me the opportunity. That is it from my side.
Operator: Thank you. The next question is from the line of Rahul from Dolat Capital. Please go ahead. Mr. Rahul, please go ahead. Mr. Rahul, please unmute yourself and go ahead. Since there is no reply from the line of Mr. Rahul, I will promote next, that is Rishi Mody from Mody Advisory. Please go ahead.
Rishi Mody: Audible?
Operator: Are you audible?
Rishi Mody: Can you hear me?
Operator: I can hear you.
Rishi Mody: All right. I am new to the company, so excuse me if the question is a bit late. From what I understand, and I think a previous participant also pointed out, and I will just add my thing to it. We have grown inorganically. Two issues with this that I have is, firstly, we have grown somewhat where I do not see a synergy between our acquisitions. We have grown offline. Then we have Sportskeeda in the US, which is an online media article writing platform, and then we have our gaming. I am not seeing a clear strategy. If you could help me understand what is the strategy there behind doing various seemingly unconnected things. Second, I want to understand is the industry. When you say we are going to keep accelerating acquisition of IP, from my understanding, and if I compare it to, say, a music label industry.
Rishi Mody: The IP life of a gaming seems quite less versus, say, the IP life of a music. While we are not paying extremely high valuations, we are not realizing a terminal value for these acquisitions, in my opinion. If you could just help me understand how your thought process is around acquisitions, what you see as the terminal value for these gaming-led IP acquisitions, and how are we trying to improve the lifetime value for these games or the studios that we acquire?
Raymond Stauffer: Mm-hmm. Thanks for the question. The first thing, regarding the strategy, as we have discussed, our main focus is gaming. In gaming, we have three pillars. We have mobile, we have PC console, and we have offline gaming. The total addressable market in gaming is over $200 billion. There is great opportunities in each one of these segments. Beyond that, there are a few other companies that are under the group. These obviously, were setting up for success and trying to work towards increasing their capabilities, through also some of the COEs and trying to enhance their operations to increase revenue and EBITDA. But ultimately, we are open for a strategic exit at some point. Essentially, they are not core to the company's future strategy. As we have discussed several times, our main focus and goal is to become a global mobile gaming platform.
Raymond Stauffer: These companies represent a very minor share of revenue and EBITDA. In fact, in Q2, as we mentioned, 82% of revenue and 100% of EBITDA pre-corporate costs came from the gaming segment. To the second question regarding IP, essentially, these IP licensing deals are not short-term. They respond to user and audience preferences that are pretty much-
Operator: Ladies and gentlemen, Mr. Raymond's line has been disconnected.
Anupriya Das: By the way.
Operator: Just give me a moment.
Anupriya Das: Yeah. While you try to connect him back, I will take that question.
Operator: Sure.
Anupriya Das: Yeah. So, our
Rishi Mody: Yeah. Anupriya, just before you answer that question, I didn't mean the IP life as in the legal life of it, I meant the useful life of it.
Anupriya Das: Yeah.
Rishi Mody: In that context, yeah.
Anupriya Das: Sure. Thank you for the clarification. Our gaming business is very diversified, and our portfolio has a mix of games which addresses different genres of gaming as well as the user profile. Some of our games are extremely long in tenure in the sense that, for example, HFF, Human: Fall Flat, a Curve IP, we have just celebrated the 10th anniversary for that game. Animal Jam has been around for a really long time. Our diversified business model, which has IPs with a very longer lifespan or shorter lifespan where people churn out, it is a diversified gaming platform which, because of its diversification and the nature of IP, allows us to grow over time. I think our valuation consideration when we are buying the businesses are also taking into consideration on what is life of the IP that we see.
Anupriya Das: Or for that matter, life of the game engine, right? For example, we acquired Fusebox, a very solid game engine, which started with one IP in the past, but we have layered on further more IPs and we will continue to diversify into different IPs. When we acquire businesses, we think of longer term growth and profitability of the platform team or the IP to price it accordingly.
Rishi Mody: Okay. All right. If you would allow me just one more question. Mithun, I just wanted to ask this question to you. Given your past track record with CaratLane, and just in general, any cross-learnings. If you would have to replicate the success of CaratLane at Nazara, something from CaratLane or people, I am just trying to understand what you are trying to build here with Nazara now in your second stint.
Mithun Sacheti: Thank you for the question. I think the principles of building a business are certainly what you can repeat across businesses. You stay true to the problem and stay focused on the problem. You stay agile to solve for what you are doing. The goal has to be to solve for the consumer. As long as our eyes are on the consumer and we have built the COEs to sort of keep solving across all of this, I think we are strategically well-placed to go after this opportunity. There is nothing that is short-term. Some of the questions that you are asking are valid, and we are going to grapple with those as well.
Mithun Sacheti: That is the honest answer. Everything is not sorted, but I understand you have to go wide before you go narrow. I think now we have the scale to go narrow and really go after the business. 80% of our business now comes from gaming. That is where we are going to focus and sort of keep building on that part of it. The platform is built by the team before us and really the right time for us to scale on this with all the extraordinary talent that we have put together.
Rishi Mody: All right. Got it. Great. Looking forward to tracking this journey of yours.
Mithun Sacheti: Thank you.
Mithun Sacheti: That is it from my end. Thank you.
Operator: Thank you. The next question comes from the line of Naitik from NV Alpha Fund. Please go ahead.
Naitik Mutha: Hi, sir. Thanks for taking the question. Sir, I have only one question. I just wanted to understand this transaction, the acquisition that we have done with Bluetile and Bestplay. What sort of payment is already made, what sort of it is yet to be made, and how do we plan to fund all of that?
Arun Agarwal: I can pick this up. So the approximate value at which we have bought it is $303 million, of which 85 and a half has been already paid. The balance will be paid in three tranches. One will go in October, other two will go between December and March. October payment is already funded with the share issuance which has been done and informed to the exchange. So that money is ready to go out in October. For other two payments, we are looking for debt. There are conversations which are happening with multiple bankers at this point of time, and those will get converted. So approximately $100 million is what we are planning to raise as a debt, and balance will be funded through internal accruals.
Naitik Mutha: Sorry. So you mentioned out of 300, 86 you have already paid. Then what part is via share issuance and what is left, 100 and 200 million still left? Or how much still left, which we will be raising funds for?
Arun Agarwal: Yeah. So out of $303 million, 85 and a half is already paid. $77 million will go in October, which has been raised through issuance of shares, which Nemanath has invested, and he spoke about it at the beginning of the call. So this 77, 86 is done. For balance, $100 million approximately will be taken as a debt. We are in conversation with multiple bankers, and it is at the very closest stage. And for the balance remaining will be few million dollars, that will be funded through internal accruals.
Naitik Mutha: Got it. Very helpful. That is it from my side. Thank you.
Operator: Thank you. The next question is from the line of Nikhil Gupta from Vayu Capital. Please go ahead.
Nikhil Gupta: Thank you for the opportunity. My first question is with respect to our Bluetile and Bestplay segment. Can you provide the split of advertising-based revenue and the in-app purchases, the split of the revenue among these two particular segments? How many games currently we have as of now, and do we want to scale it up going forward in terms of our qualitative growth?
Raymond Stauffer: Yes. Currently the revenue share stands roughly at about, mostly the vast majority is in-app advertising. Depending on the game, depending on the specific seasonality. I would say it is about 95% to 96% in-app advertising, and the rest is in-app purchases. This, however, will change in the future as we ramp up or release games that are more IAP heavy. Regarding new games, yes, of course. Right now we are scoping new games to launch. We launched a game about two to three weeks ago, called Wildoku, which is now being technically tested, and we will know about its numbers shortly. Throughout the next year, we have definitely a few releases planned within the Bluetile and Bestplay ecosystem.
Nikhil Gupta: Okay. The next question is on our balance sheet, how we are planning to reduce the burden on balance sheet. I think previously we have communicated that we may try to disinvest some of investments in NODWIN and also some non-core assets of Absolute and AdTech. Any color how we are thinking in terms of doing that? In addition, what will be our acquisition strategy going forward, maybe this financial year and next financial year?
Arun Agarwal: I will take the first question and, Raymond, you can take the other one. Our focus is very clear. Anything which is non-core, we are looking out in the market. Obviously, it is a process which will be followed, but the focus is very clear. Gaming is where we want to double down, and anything which is non-gaming, we will deconsolidate and keep monetizing it as the time goes by.
Nikhil Gupta: Have we reached to some additional stages, additional conversations in non-core assets?
Arun Agarwal: It is a process. It will take some time, and we will come back at the right time to inform as it moves to a stage where this needs to be communicated.
Anupriya Das: I will also add. All of these businesses are also profitable in their own right. There is no urgent need. Of course, if we are able to find the right value and right home for these businesses, we would like to monetize that. But it is not a distressed sale or anything, or a hard timeline that we are committed internally to. We will opportunistically look at options and strengthen our balance sheet should an opportunity come along. Thank you.
Nikhil Gupta: Thank you.
Raymond Stauffer: Regarding the second question.
Nikhil Gupta: Yeah. Please go ahead.
Raymond Stauffer: Yes. Apologies. Yes. Thanks for that question. We are very, again, as we have been discussing. The main focus for the company is going to be qualitative growth, both organic and inorganic. Regarding inorganic, we are of course right now focusing on Bluetile's acquisition and the integration of the new COE, so there is a lot of work to be done internally. However, we are still reviewing M&A opportunities on a consistent basis. M&A is not something that is a faucet you can turn on and off. We want to make sure that we are evaluating every opportunity. We are not aggressively pursuing inorganic as of now, and we are focusing on that Bluetile integration, new COE transition. However, if the right opportunity comes along our way, we are willing to take a look, and we are willing to evaluate.
Raymond Stauffer: In the mid to long term, we will for sure evaluate inorganic growth once again. It has to be an acquisition target that fits our thesis, our gaming thesis, together with a target that either can pretty much grow and take a lot from our Nazara central platform, or can lend a lot of capabilities to it to further enhance the rest of the group.
Nikhil Gupta: That makes sense. Thank you so much. That is all from my side.
Operator: Thank you. The next question is from the line of Nandan, who is an individual investor. Please go ahead.
[Analyst]: Hello, everyone.
Operator: Yes, you are audible. You are audible.
[Analyst]: First of all, many congratulations to the new management, and really exciting times ahead. My question is to Raymond. As Nazara scales up, how do you see the balance between India and international markets evolving? Where will the primary focus be, say, for next three to five years? Which of these markets do you see offering greater growth potential in terms of scale and profitability?
Raymond Stauffer: Mm-hmm. That is a great question. India has the largest population in the world. As new users come and become digitally active, we are gaining pretty much potential addressable audience by the year. In the short to midterm, however, India still has to develop a lot of the mobile unit economics that other parts of the world have developed. From our perspective, we focus on both. We focus on India through many of our companies that are actually sitting in India and targeting Indian users, but also not leaving out other, say, digitally active markets like could be the US, Europe, and so on. Our strategy is short to midterm, combine those two with a little bit more of a heavier investment in, say, US and Europe.
Raymond Stauffer: However, really maintaining a stronghold in India and in the mid to long term, as India develops those unit economics further and includes more digitally active users to the market. We will, of course, have a great standing to target all that potential user base. We are pretty much balancing the current addressable market between those two. But mid to long term, India will have a huge, increasingly acquisitive, addressable market that we will have a unique advantage to address against every other gaming company out there.
[Analyst]: Thank you very much. Best of luck.
Raymond Stauffer: Thank you.
Operator: Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I now hand the conference over to management for closing comments.
Raymond Stauffer: Well, thanks a lot everyone for joining. Thanks for your questions. As we mentioned previously, we are extremely excited about the new leadership transition, everything that is going on on every echelon in the company. Of course, we really appreciate you all joining, and big shout-out to also the previous leadership and management team for making this transition possible. Thanks a lot once again, and we will see you and hear from you soon.
Arun Agarwal: Thank you.
Mithun Sacheti: Thank you, everyone.
Anupriya Das: Thank you.
Raymond Stauffer: Thank you.
Operator: Thank you. On behalf of PL Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
