Affle 3i Limited (AFFLE) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the FL3R Limited Q4 and 12-month FY2026 earnings conference call hosted by AmbedCapital. 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 have the conference, sir. Mr. Ashwin Mehta from Ambit Capital. Thank you. And over to you, sir.

Thank you, Ikra. Good morning, everyone. On behalf of Ambit Capital, we welcome you all to the Q4 and 12-month FY26 conference call of Apple 3i Ltd. I take this opportunity to welcome the management of Apple 3i Ltd., represented by Mr. Anuj Khanna Soha, who is chairperson, MD, and CEO of the company, and Mr. Kapil Bhutani, who is the chief financial and operations officer of the company. Before we begin with the discussion, I would like to remind you that some of the statements made in today's conference call may be forward-looking in nature and may involve some risks and uncertainties. I kindly refer to the slide 2 of the company's earnings presentation for a detailed disclaimer. I will hand over the call to Mr. Anuj Khanna Soham for his opening remarks.

Thanks, and over to you, Anuj.

Thank you.

Good morning, everyone, and thank you for joining the call today. I trust all of you are keeping in good health. Apple's growth story is of consistent compounding for the last five years. We have delivered on our medium-term guidance across both top-line and profitability on the back of our robust AI-powered consumer platform stack. FY 2026 has been a strong foundational year in our 3I journey as the first full year of our third decade as Haffle 3I Ltd. We have advanced our vision with disciplined execution and clear strategic intent. We are firmly on course to deliver on our medium-term guidance of 20% each year as we progress towards our 10x decadal growth vision. We concluded another year on a remarkable note, registering our 13th consecutive quarter of sequential top-line growth, despite a challenging macro environment. In Q4 FY2026, we delivered revenue of INR 7.24 billion, an increase of 20.3% year-on-year, sustaining the growth momentum that has defined Apple's trajectory over the past years. Our continued focus on improving operational efficiency and productivity translated into EBITDA of INR 1.61 billion, growing over 20.3% year-on-year. FAT stood at INR 1.2 billion, increasing by 16% year-on-year, with the growth remaining relatively subdued given our lower effective tax rate in the base quarter last year. Our profit before tax from operations, excluding other income, grew in line with EBITDA at 20.8%. Our CPCU business continued to scale, delivering 120.3 million conversions at a CPCU rate of INR 60, translating into CPCU revenues of INR 7.21 billion. Our growth has been consistently broad-based across key industry verticals and geographies. India and global emerging markets together contributed 71.6% of our revenues, while growing by 21.2% year-on-year. Our developed markets delivered a resilient performance, growing 18% year-on-year, and contributed 28.4% of our revenues in Q4 FY2026. This growth was achieved despite some temporary softness in select markets and verticals during the quarter due to the geopolitical events. However, our growth was driven by disciplined sales efforts, deeper customer engagements, and new logo additions. My sincere apologies for the disconnection and the disruption. I will restart from, I believe, the last line that was heard was that our CPCU revenue of INR $7.21 billion was achieved. Our growth has been consistently broad-based across key industry verticals and geographies. India and global emerging markets together contributed 71.6% of our revenues, while growing by 21.2% year-on-year. Our developed markets delivered a resilient performance, growing 18% year-on-year, and contributed 28.4% of our revenues in Q4 FY2026. This growth was achieved despite some temporary softness in select markets and verticals during the quarter due to the geopolitical events. However, our growth was driven by discipline, sales efforts, deeper customer engagements, and new logo additions. We continue to unlock new avenues for growth, further strengthening our position as a trusted, privacy-compliant, and results-driven platform. For the full year, we delivered revenues of INR $27.1 billion, a growth of 19.5% year-on-year, with EBITDA of INR $6.1 billion at a robust growth of 26.3% year-on-year. and path of INR $4.55 billion, growing 19.1% year-on-year. These outcomes are underpinned by our continued investments in AI and platform innovations, enhancing camping effectiveness, conversion quality, and operating efficiency. During the year, we further augmented our capabilities through the integration of Optics AI, NICO, into our consumer platform stack, driving improvements in creative optimization and automated campaign management. We are deepening our AI-native capabilities across the organization with focused efforts on upscaling our teams and embedding AI into day-to-day workflows, enabling higher productivity and more effective execution. This quarter, we have also featured three customer-approved case studies across key industry verticals in our earnings presentation. The first case study highlights our capabilities in driving high-value iOS shoppers conversions for a quick commerce player in the US, leveraging our ability to target high-lifetime-value users at key intent moments to drive first-time purchases. The second case study focuses on driving existing gamers' conversions for a global gaming advertiser, where we boosted repeated conversions and ROI through AI-driven audience modeling and interactive creatives. The third case study highlights our ability to scale new user conversions and maximizing ROI for an Indian fintech customer, leveraging on-device, in-app premium placements through our AI-powered intent and recommendation engine and dynamic creative optimization. Apple continues to be recognized as a technology thought leader across industry forums. Our platforms have ranked amongst the top ROI driving, AI ad partners, and growth leaders globally in the singular ROI index 2026, earning several other placements across various categories. We also received several accolades across leading industry forums during the year, notably the best MarTech platform of the year, along with five other accolades at the DigiXX Summit and Awards 2026. Most effective tech platform at the MADIs, and wins across categories in the 16th India Digital Awards. We continued our efforts to take strongest strides in greenfensing our technology mode. We received five new patent grants during the year, taking our comprehensive IP portfolio to 18 unique patents granted, 21 filed and pending. With over or around 300 unique, enforceable patent claims, our patents span across fraud intelligence, human versus non-human distillation, precision targeting, contextual and gesture-based advertising, and next-generation AI-native ads and engagements across key industry verticals. The breadth and depth of this position or portfolio of our IP is unique and accessible. From the standpoint and the vantage point of the digital advertising, can you still hear me well?

Yes, sir, we can hear you.

Thank you. The breadth and depth of this position with the unique and defensible IP ensures that when the digital ecosystem continues to evolve and it is evolving rapidly, we have been future-proofing our business for the next phase of digital advertising growth. As we look forward, the structural tailwinds of our efforts in FI 2026 are compelling. We see global ad spends rising, with AI expanding the frontiers of ROI-based, returns-based advertising in ways that will fundamentally reshape how brands engage and convert consumers. These are structural shifts that play directly to Apple's core strengths. Our first-party data intelligence algorithms, unique IP on ads and audience intelligence, and our deeply verticalized approach across key industry verticals and geographies collectively positions us to capture a disproportionate share of this growing opportunity. We are future ready, and we remain agile and steadfast in our commitment to delivering sustainable, profitable growth and creating enduring value for all our stakeholders. Lastly, on inorganic efforts, we continue to actively pursue growth opportunities that are strategically aligned with our 3i vision. To further bolster our readiness in closing the deals, our board has approved a preferential issue of equity shares to strengthen our balance sheet. Both are shareholders' approval. Our corporate promoter, Apple Holdings, will invest to acquire 7.4 million warrants at INR 1,487, totaling to approximately INR 11 billion, with 25% upfront payment. This will ensure that we are well capitalized and ready to move swiftly this year on the right acquisition opportunities. This is a proactive step towards executing our inorganic growth strategy with the calibrated discipline and conviction that has defined our organic growth journey. With that, I now hand over the call and discussion to our CFO, Kapil Bhutani, to discuss the financials. Thank you, and over to you, Kapil.

Thank you, Manoj. Wish me everybody a good day, and hope all of you are keeping safe and well. As we turn the page from financial year 2026 to financial year 2027, in Apple's consistent book story, we do so with a greater conviction, concluding F526 on a stronger note. For the full year, on consolidated basis, we achieved revenue of $27.09 billion, representing 19.5% year-on-year increase, as our unique ROI-linked PPCU business model continues to be in a high-growth momentum. Our sustained focus on operational efficiency and profitable growth concentrated into EBITDA of INR 6.10 billion for the full year, resisting a robust 26.3% year-on-year growth with a margin of 22.5% on an improvement of 120 basis point year-on-year. We are cheap. Operating cash flows of INR 5.02 billion during the year, increasing by 25% CSGR over the last five years. This underscores the quality of other earnings, our disciplined working capital management, our consistent ability to convert profitable growth into strong cash flows. Our tax for the year stood at INR $4.5 billion, an increase of 19.1% year-on-year, with a tax margin expanding to 16.3% versus 16.2% in financial year 2025, despite lower other income during the year. Our profit before tax from operations, excluding other income, stood at INR $4.80 billion for the year, growing 28.5% year-on-year, outpacing our EBITDA growth. And reflecting an underlying strength of our core business, commerce operations. Now, coming to quarter four for financial year 2016, there were some macro challenges due to geopolitical events which required recalibration. Despite this, we achieved our 13th consecutive quarter-on-quarter top-line growth. On the consolidated basis of the quarter, the revenue stood at INR 7.24 billion, registering a year-on-year growth of 20.3% and a sequential growth of 1%. We were able to sustain balanced growth across India and international markets. On an adjusted basis, our India revenue grew by 19.5% year-on-year, developed market increased by 18% year-on-year, and emerging market registered a robust growth of 22.3% year-on-year. We recorded EBITDA of INR 1.61 billion for the quarter, resisting a growth of 20.3% year-on-year. Our EBITDA margins stood at 22.3% broadly in line with Q4 last year. In terms of OPEX, our inventory and data group cost stood at 63.3% of the revenues for the quarter, an increase of approximately 90 basis points sequentially. Our employee benefit expenses remain largely flat as we continue to leverage our ongoing investment in AI and innovation, driving greater productivity across teams and operations. Our other expenses declined by 4.3% sequentially, reflecting a natural moderation in business promotion equity, holding a sequentially active quarter free. We achieved a profit before tax of INR 1.4 billion during the quarter, an increase of 19.5% year-on-year, and 1.3% quarter-on-quarter. Our profit after tax stood at INR 1.2 billion, marking an increase of 16% year-on-year, and 0.2% on quarter-on-quarter basis. The pad growth in percentage terms is subdued on account of lower tax rate in Waterpool last year. However, on a full year basis, our ETL was in line at 18.6% versus 18.3% last year. We continue to prioritize efficient working capital management, and as such, there were no material changes in collection risk during the quarter. Building on the five-year consistent and profitable growth, we remain confident of resilience of our business model and strength of our AI-powered consumer platform stack to sustain this momentum through FY27 and beyond. Even as the global environment continues to present new challenges and opportunities in equal measure, our disciplined financial management supported by healthy balance sheet and robust operating cash flows provide strong foundation to capture emerging opportunities ahead. With this, I end our presentation. Let us please welcome the floor for questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and horn on their touchtone 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 Ashwin Mehta from Ambit Capital. Please go ahead.

Thanks for the opportunity. So, one question in terms of how is the competitive dynamics evolving in the GNI era, especially from walled gardens as well as the GNI natives, and while we've talked about on the creative side of Dixiei platform helping us, but on the campaign management and the targeting side, how are things changing versus earlier? And what are our priorities in terms of investments there?

Thanks, Ashwin. Regarding the competitor ecosystem evolving, you know, there's no significant change. I think all of the competitors are, you know, responding towards AI in their own sort of initiatives and ways and, you know, largely trying to do what is appropriate and obvious at the moment. I would say that the competitive edge that Apple has versus, let's say, most of the other competitors is that we are working with the advertisers directly. We are integrating, you know, as part of our CPC unique business model, deeper conversion level first party data integrations. With our advertisers directly, and I think that makes us a very unique position. What also is different and unique about us is the fact that we are across all the top key industry verticals, and our platform is being verticalized. Deeply integrated with the advertisers across those unique verticals. It's not just like a horizontal solution. We are very focused on those industry verticals and our premium sort of positioning for that and even our, let's say, AI algorithms or AI-related experience are deeply verticalized for those industry verticals. So that gives us another sort of differentiation and edge. In terms of, you know, how we are performing versus the competition, I find that across e-commerce, entertainment, fintech, food tech, and now increasingly also in healthcare, we are seeing some real competitive advantages of our, you know, verticalized approach and direct-to-advertisers approach. It will be hard for competitors to respond to that because a lot of them are not on CPCU business model, as you already know, and a lot of them are also not directly, deeply integrated with the advertiser's first-party data. So I think that makes a big difference. In terms of the wall gardens, I would say on AI side, the automation tools that the wall gardens are providing, I think that's definitely helping them. You can see it from the results. And that's across the board trend that you would see that, you know, in ad tech, AI will be a clear tailwind, whether it is the Wall Gardens, whether it is Apple, whether it is the other competitors. And the main question is that who will capture more of this, you know, increasingly expanded AI-oriented digital ecosystem? And I think on that, our approach is very clear, direct to advertisers, first-party integration. CPCU business model and deep verticalization to ensure that there's a premium integration that is provided that's not easily comparable or replaceable with any other competitor. So that's how I would look at the competitive landscape. In terms of our own, you know, technology evolution with Optics AI, Nico AI, we are seeing adoption across our customers, and they're clearly seeing value addition happening both on the iOS side of things and Android ecosystem. We're also seeing it going beyond mobile to CTV, and we are seeing very, very good impact overall of how AI is being implemented. One very key differentiation that I would like to highlight for everybody's benefit is that as more and more agentic AI, you know, tools come around the Internet across, you know, industries, across different business cases. And even as more and more consumers start having more and more agentic AI, what's going to be super important in digital advertising is what we define as human versus non-human filtration. It has to be very clear to our advertisers, and technology platforms have a duty to show that, hey, if we are showing an ad, we are actually able to filter out whether this was a human engagement or whether this was an agentic or non-human engagement. You will notice that Apple has been talking about this ever since, you know, pre-IPO days of 2017 when we've filed several patents to distinguish between human versus machine activity. And this is an area where we've got several patents granted over many years. And this time, with the advent of agentic AI and the, let's say, explosion of AI-generated apps or contents in the Internet, This particular intellectual property or, you know, proposition or capability of Apple's 3i consumer platform stack is becoming an outstanding differentiator as we talk to the advertisers, right? So how do we filter out human versus non-human traffic? And this problem statement is something that Apple has got some unique modes around it, and I think the competitors are not responding to this bit as much. So all the competitors, whatever you hear, AI is about automation or generating, you know, content, but very few people are talking about technology where they can. Filter out whether this is an engagement from a human or a non-human, and I think this is an area where Afton is very differentiated.

So, one follow-up to this. So, you talked about filtering the human versus non-human traffic, but in terms of targeting the non-human traffic for conversions, how would things work differently versus how they have been when we are targeting humans?

So, You see, when an advertiser would spend budgets, you know, let's talk five years from now, I mean, today I think it's still very early and, you know, Agentech will evolve over the next five years. The advertisers would most certainly want to make sure that a big part of their budget is spent to actually deliver on human engagements and driving conversions directly with humans. And there would be a smaller part of the budget, but they would also say that, okay, use that to influence authentic AI agents that are acting on behalf of the humans, the consumers. There will always be this bigger challenge. Okay, so let's put it into three buckets. A big part of the ad spend will go to target humans. We are addressing that very well. Another smaller part, but a meaningful part, would go towards targeting the AI agents, which are authenticated and are, let's say, assisting the humans or the consumers. And we must absolutely ensure that there is no loss of budget or engagement to the noisy, non-authenticated AI agents. There will be tons of those which are pretending to be Ashwin or Anuj or, you know, and are what we call as digital fraud, right? So there will be a huge need for filtering that out while clearly having this technology differentiation that we have and the IT that we have will come to our advantage. But this will be an evolving trend over the next five years, and like I said, we have a competitive moat and we are ahead of the curve versus what most of the competitors are talking or demonstrating in their roadmaps at the moment. Thank you very much.

Thanks for the answers.

Ikra, you can take the next questions.

Thank you. Next question is from the line of Aydan Prasad from Aibindus Park. Please go ahead.

Yeah, good morning. Thanks for the opportunity. Anuj, my first question is on gross margins. You see, last seven, eight quarters, we are continuously seeing a reduction in the margins from a percentage perspective. While I see positive in this because we are able to deliver absolute growth in the growth, both gross margins and EBITDA margins, my question is that This gross margin reduction, is it because we are responding to the competition, or is it because of the vertical exchange, or is it the conscious decision? And if it is a conscious decision, how much of this would you say that has contributed to our growth, and where this leads to in terms of, you know, future? In future, there is only limited way you can do this. Your thoughts on this, please.

Thanks. I think we are very range-bound. I think within our unit economic model, we are very disciplined in how we execute this. First of all, no investor should see any particular surprises in terms of how we execute. We should be very predictable, dependable in terms of how we continue to grow our CPCU pricing, how we continue to grow our overall volumes of conversions, and keep the data inventory costs at a sensible level and a calibrated level. So this is an overall long-term view that I can give to you. In the short term, in the, let's say, last several quarters, you would see that we have been calibrating and investing towards launching more verticals in more geographies, going deeper in our verticalization approach direct to advertisers, and also emphasizing on premium positioning for the Apple platform. Why is it a premium? Because it is targeting higher-value lifetime users. To get to those higher-value lifetime users, you have to target premium device models, premium touchpoints on those device models. You've got to go to CTV. You've got to go to, you know, more, let's say, Hi. You have to find the high lifetime value users for the advertisers. That involves deeper investments, and I use the word investment, not expense, but, you know, accounting-wise, of course, everything is expensed out in data inventory costs. Deeper investment to build audience intelligence and advertiser intelligence that is verticalized and highly, you know, integrated with the first-party data intelligence of our platforms. And I think this area of investment has been a conscious decision. Having said that, It doesn't take away from the overall sensibility of our unit economic model, and therefore, you've seen overall expansion and growth in a sensible manner. So it should stay range-bound, and there's still a long runway for growth, you know, delivering 20%-plus growth over the next five years is our goal, and therefore, verticalization, going towards the premium positioning, more premium positioning, more first-party data integrations, and these areas of investments across developed markets, We are clearly under-calibrated at the moment. There's a long runway for growth. So we are investing in that area, and that's what you're seeing in terms of the margin profile. But, you know, over a period of time, we would think that... Even this particular aspect would lead to further improvement, and we should see better margins and, you know, even more stronger bottom-line performance.

So, one clarification on this, 39% to 36% of 250 bids reduction in the gross margin, largely if it can be attributed to the investments, how long does it take to these investments to pay off? I mean, how long this can we can get back to, say, 38%, 38% kind of our margins? Is there any timeline you are operating with or just tell your videos?

I think about a year. We should be able to achieve the level of verticalization and the level of intel that we need to develop across, you know, all the key geographies. And hopefully around that time onwards, we should see another year of bringing it back to, you know, higher, better levels of, you know, where we don't need to invest as much.

My second question is on AI. In the era of, you know, abundant intelligence and inexpensive intelligence, there are two things one can happen. One, what we have built over, say, last several years or almost a decade, someone with a really resourceful competition can probably build it in a shorter period of time. So, either it can lead to consolidation or it can encourage new players. How do you see this playing out, at least in the medium time? Do you see first consolidation and then the new players, or to first encourage new players, which will lead to a consolidation later?

So, first of all, it's, you know, we are a very strong business to business platform, right? We are deeply integrated with the advertisers whose, you know, data integrations and apps integrations is a non-trivial matter. To do it across industry verticals, across geographies with our very broad-based and diversified presence takes a lot of time. It's not as simple as, okay, let's launch an AI model and get done. So you need to go and do the contracts with these advertisers across all these central verticals, across geographies, integrate the apps and the data layers, and then you can start training an AI model on that. This is not something that's readily available that you go on the internet and you crawl around and you have built intelligence. This is not the kind of intelligence we are talking about. The kind of audience intelligence and the advertiser intelligence we are talking about. It's deeply verticalized, and this Intel requires You know, a fairly long execution period to get to. So for new entrants, it's going to be really hard. For the existing incumbent players, they will have to compete with Apple to get to that depth of verticalized data integration and processing in Intel to go on a CPCU business model from where they are today, which is still very much on impressions and clicks. So changing your business model, changing the technology stack, going and convincing advertisers for a deeper integration. Let's take an example. Let's say a company like... Trade Desk, which is doing, you know, it's a demand-side platform focused on, you know, serving ad agencies as partners. So the transition, and they're not necessarily, you know, focused on, nor talking about, nor investing at the moment on the CPCU business model. So for them to, let's say, start transitioning to CPCU business model, going direct to advertisers, integrating deeply on the first-party data of the apps of the advertisers, It's going to be a massive transition, so incumbent organizations will find it challenging, and new entrants would also find it challenging. So I wouldn't say that it is low-cost AI. It is deep, verticalized, premium, advertised in an audience intel, which is not readily available, where you can't just say, okay, I've taken a cloud connection internet, and now I've become intelligent. It doesn't work like that.

Thank you. Next question is from the line of Bridget Chain from Citigroup. Please go ahead.

Hi, thanks for the opportunity. Anuj, I have two questions. One, you know, with this, you know, with this fundraise that you've announced, and I know in the past you've said that you look at the trading 12 months operating profit as a benchmark or something. For an M&A activity. So, my question first is, are we looking at somewhere around, you know, $200 million is the ticket size? I understand it can go up and down, but is that the general ballpark? And the related question, have you kind of narrowed focus on the kind of asset you want to acquire there as well? That's my first question, and then I'll come back with the second.

I would give the answer to the second question first, because in the last earnings call also I had mentioned that, you know, we have evaluated several companies, more than 10, and then we've shortlisted about four, where we are doing deeper due diligence, we are doing deeper assessments, as well as negotiations. I wouldn't want to give any color to the size of the transaction because there are a few transactions that we're talking about, very, very small transactions. I don't want to confuse your analysis on that. There are some larger ones, small, mid-sized, and larger ones, and we may do more than one in terms of how we execute for the rest of this financial year. So I would say stay tuned as and when we are closer to and have a definite announcement on it, we will be very proactive in explaining our approach and strategy. But it is important to also note that given the ambition of the organization and the kind of shortlisted pipeline of the opportunities that we are actively engaged with, it is now prudent. It is now the right time. For the company to be ready with the necessary capital and seriousness to send the right message even to the boards of the selling organizations to know that we are serious, we are here, and that we have the necessary financial resources to execute in the very short term if it is needed. But we will, like I said, we will take our own time. There's no pressure to act like today or tomorrow, but we are making sure that we execute at the right terms, at the right price, with the right target company. So we will be very patient, very calibrated, and we will bring the right transaction to unlock value for our shareholders.

That's very helpful. Thank you. The second question is, you know, in your earlier remarks, Anuj, you said a couple of times that in this next phase of growth in advertising, it will be direct to advertisers and first-party data integration and so on. And I know that there's been some recent tensions between ad agencies and some, not you guys, but some other DSPs as well. So is that, you know, is that a nod to that? Do you see the whole structure of industry kind of changing post-AI? Is that a nod to that? And related question to that, I suppose, is if you can give me a color on, you know, what your current footprint is in terms of, you know, your active SDK integration that you have with app publishers and how that has trended over the last one.

Right. So maybe what I can tell you is that in terms of the industry trend, all I'm saying is that you have to be closer to your customer. And if you look at our earnings slide, there's one particular slide that gives the entire Apple 3i consumer platform stack details, you know, one slide that tells you how we are direct to advertiser by design. And there we call AI as advertiser intelligence. And not just that, we call it verticalized AI, which is verticalized advertiser intelligence. And then on the other side, we're talking about AI as an audience intelligence, where we have 4 billion consumers, devices that we are able to reach out, and therefore we are profiling or processing audience intelligence at scale. And that is highly personalized to deliver personalized recommendation. There's vernacular intel, creative optimization, all of those things. The kind of scale and premium verticalization that we're talking about, this is the model that we're talking about. We are saying this is what we believe in. Now, there are a few pathways to go to the advertiser, and for us, 75% of our pathway is direct with the advertiser. There's no other company involved in between. 25% plus of the revenue is through large ad agency group partners, but even there, our tech stack is directly integrated with the end advertiser's app, you know, because we are driving CPCO business model, so our business model requires that even if there is an agency or a partner in between, we would still need to integrate with the end advertiser directly. It's a necessary requirement. That's what I'm emphasizing about. I think the role of ad agencies, you know, will continue to be relevant. It will change. It will evolve. It will become, you know, a lot more efficient or perhaps even higher value roles and functions that they could play. So I wouldn't really opine on their future. But all I'm saying is that for a tech staff like ours. We need to connect and be deeply integrated with the advertiser. So that's the main emphasis point there. In terms of the SDK footprint, you know, our direct-to-consumer conversions approach of the business. Allows us several pathways of working. So on that slide, you will see the supply-side integrations, the OEM and operator integrations, there is even Wall Gardens integrations, and we are working on the mobile device, we are working on the CTV devices, the connected household devices, and also on digital out-of-home. I mean, of course, that's a very small part of our sort of business, but we are looking at the consumer journey as an end-to-end connected journey. We work with a lot of the SDK partners as well. Our own SDK is also doing well, and one of the areas of the footprint expansion is that, going deeper with those publishers, because once you have the kind of advertiser demand that we command in the market today with the verticalized integrations, that is unique advertiser's demand. So, all the publisher side of the ecosystem, we are able to absolutely work with and, you know, find deep next to it. So, maybe I'll just leave it at that, but the footprint is expanding. Today, our footprint, not of the SDK alone, but across all the channels that we have to reach out to the consumer conversions directly, has over 4 billion connected devices footprint, and that's not insignificant.

Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the council, kindly limit your questions to two per participant. Should you have a follow-up question, please reach out to me. The next question is from the line of Adil Khan from ICICI Prudential Life Insurance. Please go ahead.

Yeah, hi, sir. Congratulations on a great set of numbers. I have a couple of questions. Firstly, when it comes to acquisition, like you mentioned that you've gone down to four entities. What kind of capabilities are we looking for in these companies? And secondly, if you could give us a timeline.

Thanks, Adil, for your question. In terms of capabilities, our focus is to, you know, take on direct access to a lot more advertisers and, you know, sales force out there with certain levels of initial integrations that they may have already done with those customers and advertisers and developed markets or even globally. And then... We are assessing them whether those integrations and relationships can be tapped on by Apple to really bring a transformative life to our strategy to go and take that acquired company and make it the verticalized, first-party, data-integrated, direct-to-advertiser platform that we're talking about here. So, again, the target is to get to a larger base of customers. And have a sales team with ready relationships, have a tech stack with some ready integrations, and then to transform it and enhance it to the playbook of Apple, which is to make it a much more premium platform versus the way it is operating at the moment, and to enhance its competitive mode using Apple's approach and strategy as well as our technology. So that's what we're looking at. The goal is to strengthen ourselves even more in developed markets and be much more verticalized both with the advertiser verticals as well as at an ecosystem level right from the advertiser to the consumer platform, the consumer conversions. How can we go fully simplifying and unifying the ecosystem from the advertisers to consumer conversions? And that's our strategy and approach. In terms of the timeline, you know, I think we are working, there's a realistic chance that we may, you know, conclude a meaningfully sized transaction within this year itself. And I say year, I'm not meaning the whole financial year, but within this calendar year. And these transactions do take time because, you know, we're talking about, you know, the full due diligence process, the negotiation, the conclusion of the governance processes around it. And once we are closer to the definitive agreements and dates, we will certainly provide the clearer timeline. But for now, I think it should be reasonable to say that within this year, calendar year, we should see a transaction locally of a meaningful size.

Perfect, sir. Thank you so much.

Thank you. Next question is from the line of Viviar Shmehta from Invesco, India. Please go ahead.

So, with respect to the gross margins, what the investment we are doing, can you give some context as to how much more investments are pending? And when should we expect these investments to taper off? That's the first question. Second one is, given how the market is shifting within

AdTech, do you think this is the right time to enter into the HST space in a meaningful way? That's it.

Thanks for your questions. I think I've already given some guidance on this answer on gross margins that we are investing with a very clear, purpose-driven strategy, which is to be deeply verticalized, be a premium platform that has intelligence across key geographic regions and key industry verticals, and that requires the right kind of investment. Going to lifetime value, high lifetime value consumer conversions, that kind of premium positioning requires certain investment and intelligence building, and we are doing that really well at scale. I did mention that it will take about a year more, and then we will start seeing greater benefits of that in the second year and hopefully improving the margin percentages and the financials progressively. With respect to your, you know, second question regarding SSPs, our view is very straightforward. We see, you know, these terminologies where... An organization is just playing on the SSP side, or companies that are only playing on the SSP side. For those who don't understand this terminology, there are companies that only focus on the supply side. My opinion is not very strongly in favor of that. My view is that anybody who's in, let's say, provision of technology for advertising has to find a way to be very close to the advertiser, very close to the customer. Going for deeper integrations with the advertisers and the customers in order to ensure that you can serve their interests well, and you have to have a direct-to-consumer conversions business model in order to absolutely, you know, ensure that you're delivering ROI to the advertiser versus just playing a very point solution at one end of the ecosystem, saying only supply side. I think those platforms will be commoditized and will be very, very hard for them to compete in the market. So even if we do any acquisitions of our strategy is very clear, we are looking for, you know, finding a larger customer base, a larger sales force that can serve that customer base, and a tech stack that already has some preliminary integrations. And then how can we expand that into our, you know, overall premium philosophy and transformation towards a verticalized, integrated platform, going direct to advertisers, direct to consumer conversion. And therefore, our play as Apple is always going to be an end-to-end platform. They will never see us gravitate, you know, as a fine solution on one side of the ecosystem, distant from the end customer who's paying, which is the advertiser.

That's helpful, thanks.

Thank you. Next question is from the line of Anmohan Garh from Dam Capital. Please go ahead.

Yeah, hi. Thanks for the opportunity. A couple of things that I wanted to understand. One thing that I wanted to understand is that in case we acquire something, can we look to operate at different models like, you know, cost per impression or cost per click or would we want to convert that company to the CPCU model itself?

Our endeavor would be to convert and transform over a period of time, but not doing it in an abnormal or, you know, not in the natural course of business. So, you know, if you notice that in our previous acquisitions that we did in year 2020 to 2023, We acquired companies that were not naturally on a CPCU business model. They were not, even on a unit economic model, they were not profitable. They were just barely breaking even. And we have transformed all of those business into, you know, now a CPCU business model. But it takes time. It takes effort. Our goal would be to make sure that when we acquire, first of all, any business that we acquire, the valuation and the financial sensibility has to be very, very conservative, very, very prudent. We are putting our hard-earned money into, you know, instead of building, we are making a decision to buy. So we will be very sensible, value-driven, and conservative in terms of the valuation. In terms of what we acquire, it should give us a clear and a meaningful starting point, a bigger base as a starting point, on which we can then ensure that we can grow the Apple CPCU business and platforms on that base in those markets. So let's say we do an acquisition and, you know, that target entity has a base of customers, a sales team, let's say, in developed markets, North America and Europe. And soon after that, we will change those sales teams to take, you know, our products and propositions on top of that to upsell, to cross-sell those deeper CPC conversion use cases to those customers. And naturally, over a period of time, we would see, hopefully, that their own, you know, the acquired business as we had it before, over the first year, second year, possibly by the third year, will be fully transformed to the CPCU or more premium positioning that we have with the advertisers.

Very helpful, Anuj. And in continuation to this, you have spoken about that CPE is a clear growth area into the industry.

So just wanted to understand like how CPCU model will work in the CPE type of engagement or largely that would work on our impression kind of a model.

So the CPC model can work on, you know, CTV engagement, can work on digital out-of-home engagement, can work on mobile, and I think the answer is very simple. If you have the intention to deliver ROI, All it requires is to back that intention with executional action to go deeply integrate with the advertiser. So, for example, if somebody sees an ad on the CTV, and that person, let's say, engages with that ad in many different ways that can be done. We have a lot of unique ways that that can be done. For example, you have your mobile phone. You can, you know, straightaway scan a QR code or maybe not even that. There could be some other ways. You look at the mobile phone, it can, you know, create some complementing experiences on it, and we can create re-engagement and repeat conversion possibilities on the mobile device. When the user is out there at digital out-of-home in a shopping mall or something like that, we can again create those kind of engagements that can drive either on your mobile device, straight away you go, and you can do a conversion or a transaction with the advertiser's app, or in a physical mall situation, you can actually have a footfall driven there. Now, to do the, let's say, conversion-related business model, The fundamental insight is that the conversion has to happen inside the advertiser's environment, right? So whether it is the advertiser's app or whether it is the advertiser's storefront or whether it is the physical storefront, these are the places where the conversion event would happen. And therefore, Apple has to have deep first-party data integration with the advertisers to ensure that we are achieving that. And that's how we do it. CTV is an important part of the journey. What we have to think about it is not just, not the screen. We are a consumer platform. And consumer platform, the consumer is on multiple screen touchpoints. The app mobile, this is a very big and a very important touchpoint for us. CTV, which is the households, connected households, very important touchpoint for us. We are closing the loop overall with a very small but an important use case, which is to say that the brands also want to drive conversions on their physical tour. So, you know, digital out-of-home is also another area that we would look at, but I would say it would suffice to say that over 90% focus is on in-app, mobile, and CTV at this moment, and a very, very small percentage would focus on digital out-of-home.

Understood, understood. And if I can take one more.

I'm sorry to interrupt, Mr. Gersh, please rejoin with me for more questions.

Okay, sure, thanks.

Thank you. Next question is from the line of Havdi Goyal from New Zealand Mutual Fund. Please go ahead.

Hello. Thanks for your opportunity, sir. Sir, just one question from my end. Given the current geopolitical situation and some signs of recessions coming in, are we seeing the global brands are tightening their marketing budget? And how can we see its impact on AFL per se? Are brands shifting from general branding towards a higher ROI model of CPCU? Thank you, sir.

Thanks, Hardy, for the question. You know, I have been leading Apple for 21 years, and we have seen several financial crises, several, you know, crises in the journey of 21 years. And I've been an entrepreneur for more than 30, so I've, you know, seen, you know, a fair bit of that. We have built Apple's business model for resilience and for fundamental, deeply integrated modes with the customer and aligning our... You know, entire existence with the, you know, for the benefit of the customer. I think this kind of alignment is very dependable, very trustable, and especially when times get tough, it becomes very important. So when times get tough, as they are, and have many times in the past, we are of the clear view that the CPCU business model is going to be resilient, is in fact going to be the go-to business model for the advertisers because the businesses don't, when recession happens, it's not that businesses stop. Businesses find it harder to make revenue. And in that time, they want to spend their advertising dollar with great prudence and careful measures to say that if I'm spending this ad money, I better get ROI. I think it is common sense, but we have seen it repeated number of times that all budgets get tighter. And when budgets get tighter, when the going gets tough for everyone, only the tough really can get going. And this business model is a resilient business model. It is a tough business model. And I think we have anchored ourselves on it for this very reason. And when we were going public... In 2018, 2019, and I was on the roadshows, people were asking, are you sure, you know, you're ready to go public? I said, yes, I think this business model, I can deliver to the public market investors a resilient, dependable, and durable, long-lasting, you know, success pattern. Last quarter was a tough quarter geopolitically. Right? Jan, Feb, March, 2026. It was a tough quarter. And it was a quarter without the benefit of festive seasonality. Typically, in advertising businesses anywhere in the world, you will find that their highest quarter is October, November, December. Because of Diwali, because of Christmas, school holidays, and shopping. Without the advantage or the tailwinds of the festive quarter, with the headwinds of geopolitical issues, Jan, Feb, March was very resilient for us. We were able to grow at least the top line better than and even a bit better than the last quarter. I mean, in terms of fundamental performance, CPCU business in a very small snapshot of the last quarter has already shown you resilience. I think if I was an advertiser and the economy was in a tough place, I would gravitate to CPC business model much faster than they are otherwise doing.

Thank you, sir, and all the best for the future.

Thank you. A reminder to all the participants, please restrict yourselves to one question only. We will take our next question from the line of Swapneel from JM Financial. Please go ahead.

Hi, thanks for the opportunity.

My question is regarding the warrants issue.

So, first of all, I would like to understand the cap structure of your Apple Holdings Limited. And a related question to that is basically where is Apple Holdings getting the money from to invest in Apple India? And lastly, why a warrants route instead of a QIP? Thank you.

I'll take this question. This is a call for Apple 3i limiters and not an air call for Apple holding 7 limiters. However, the second question of yours is why I warrant and why not iniquity? We already have a substantial amount of cash. When we are on a negotiation on the pricing with the target companies, there is a requirement to show the strength on the capital, and if you need to take some leverages, you need to build up the capital, throw up, right? So, we don't, as we said that, we will take some time to close the acquisition in this current year. We wanted to throw up the... The availability of, or certainty of availability of the cash on the table. Right? If you can, do you have any follow-up question on this? But what is the source of funding of Apple Holdings? If any notification comes from Apple Holdings to us, we will definitely disclose it to the stock exchange.

Got it.

Thank you.

Thank you. Next question is from the line of Pavish Parikh from 3631 Capital. Please go ahead.

Hi, Dean. Thanks for the opportunity and congratulations on a steady set of numbers. Kapil, a couple of bookkeeping questions. Are other expenses declined 3% in F26 after rising about 40% in F25?

Would you attribute this entire decline to moderation and business promotion expenses?

Or is there some other efficiency driving this? And how do we look at movement and other expenses going forward? And could you also explain the movement and other income? It declined about 17% in F26.

Is this all treasury related or is there something more to this?

Thank you for the question. Largely, it is the decline or the moderation in the business promotion expenses. There is no linear spending on the business promotion expenses. Generally, Q2 is the highest spending quarter. For us, and some mqr also, where we showed up hours in marketing efforts as we participate in various events or we do five meetings at a larger scale. So these are the quarters where we spend largely. So the moderation is largely on account of the marketing spends. The other efficiencies are definitely there, but the significance is just one idea to call out.

Sure, on the other income.

The other income is part of the treasury operations as we have been keeping our borrowings. There is been some amount of reduction in the cash on that extent, but however, we have been accumulating cash. Largely, the decline has been on account of exchange gains over this quarter and during this year, and large part of our expenses, which come in terms of the data inventory costs for employees outside India, these are the exchange expenses which we are booking in this year. Understood. Sure. Secondly, on the cash flow, I'm sorry, it interrupts.

Kavish, one question at a time, please.

Sure.

Thank you. Next question is from the line of Samarth Patel from Equator Securities.

So, if you are talking about the call, you have to keep your call.

As there is no response from the current participant, we will take our next question from the line of Onkar Gurgaet Bari from Shree Investment. Please go ahead.

So as I mentioned that 20% growth for the next five years is what you can do, but you have guided for around 10x of the revenue in the next 10 years that would... That would want you to grow somewhere around 26% CHR. So all of that remaining portion would come from inorganic growth. And like in the generation of the AI, don't you think the growth can be with the tailwind of AI, the growth can be much more than the 20% which you have projected for the organic friend? Or is the base effect catching here?

No, there's no base effect catching here. I think it's a sensible sort of growth calibration at the moment to look at modeling our company for organic growth of over 20%. And with the clear and deep understanding that even if we go ahead and do any inorganic transactions, our goal would be that the combined entity. The combined entity must be deeply growth-oriented and should average towards the 20% growth in the near to medium term, with a very clear emphasis of the bottom line efficiencies of the organization, delivering close to 23% to 25% EBITDA over a period of time. Which is where you can see the trend lines last year to this year. Our EBITDA has gone up in the mid-2022, 22 to 23 percent, and our goal is to constantly move the notch up. This is a sensible level of growth for the industry that we are in and for the tailwinds of AI that we are already factoring in. Can it grow faster? Well, there is a possibility to calibrate it like that, but then that would be, I would say, not as profitable growth in terms of just going for top-line growth, getting the numbers from all kinds of advertisers. Not every pocket or segment of advertising on digital is as profitable as the ones that we are focused on. So I think we calibrate ourselves. To deliver premium conversions for, you know, those verticals where we think that we can make the right kind of outcomes. And many a times, there are sales orders that our customers send to us through our sales teams that, you know, we would even decline. If we think that those campaigns are not, you know, appropriate or will not lead to the right kind of profitable, sensible outcomes, we would not necessarily take every revenue on board. So what we are talking about is high-quality revenue, predictable, sensible, you know, calibration for the kind of growth that we're talking about. And getting to 10x growth, you know, it's a committed plan, and we are on track to getting there.

Thank you. Next question is from the line of Planesha from Karen Capital. Please go ahead.

Hi, thank you for taking my question. So my question is regarding an EdTech team, an EdTech ecosystem, another EdTech player who has partnered with LLM for advertising pilots on ChartGPT, which went live in the past 20 years. I believe that it is also in the US, Australia, and Canada.

So whether we are also conducting some

pilot experiments on this stage, and if yes, what are the learnings which we have?

Thanks. Well, yes, definitely we are doing our own integrations, doing our own experimentations around it. But what I can guide you towards and what I would want you to think about is that see these LLM platforms as, you know, like an ecosystem level place. So you would see that very soon these platforms would have, you know, like app stores and different apps using their LLMs to, you know, launch, you know, unique specific products and services for. For the end consumers and other businesses. And I think what will happen here is that you're not just integrating. It's like, you know, you don't have to necessarily integrate only with Apple and Google as long as there are, let's say, there will be millions of apps. AI-generated apps, human-generated apps, websites that will use these LLM platforms to go on. So our goal is to work at an ecosystem level with the end-user touchpoints, which are these apps that will be powered for running on top of these LLM platforms to create the... So think of it as a new sort of, in our categories, EFGH, in the category G. Soon you will hear from us, we'll talk about Gen AI apps. As a vertical or as a, you know, category of advertisers, the new age and AI apps, which will also need to do two things. One, they need to find the consumer so that, you know, they'll use their app. And B, in order to do that, they'll spend, you know, ad budgets on a CPCU model with us. Secondly, they also want to make money from advertising because not all these new Gen AI apps will be paid for by consumer subscriptions. Okay, so they need ad revenue. So they will work and integrate with a platform like ours. So working with the underlying LLM platforms is, you know, one level of experimentation, but the real takeoff and the value and the scale is in the, you know, visualization of this entire ecosystem being fully ready and prepared for that, you know, advent of GNI apps and sites, wanting ads, wanting to do advertising. And I think that's what Apple is prepared and ready for. And I think we are in a good place there. Okay. That was helpful, sir. Thank you.

Thank you. Next question is from the line of Sanjay Ladha from Baishin Research. Please go ahead.

Yeah, hi, sir. Thank you for the opportunity. Sir, I wanted to understand the customer revenue cycle, meaning, you know, what is the repeat customer percentage for one year, three year, and five year? And why I'm asking is, are you able to increase wallet share with existing customer, or is it one-time sales for one particular time? Do the three-year and five-year customers still work with us?

Yes, absolutely. So, you know, the growth for us is anchored on, you know, a few ways you can look at it. Existing customers spending more in existing markets. Existing customers spending new budgets with us. In new markets where they were not working with us before, because we're a global platform, so we always calibrate and we go to our existing customers and say, hey, you're working with us in all these markets, look, we have these case studies with you. But we are also working in other geographies where some of those customers may have presence, so we will then take them with us to those new geographies and extract budgets from them for that. Then, we have a sales team, a marketing team that's constantly looking for new logos, new customers across all our industry verticals, both in existing markets, as well as we are constantly expanding and saying, let's launch and look for new customers and logos in the new markets where we are a little under-calibrated, for example, in developed markets. So, we do see broad-based growth and expansion coming on our customer base. And there are several customers who have been working with us for over decades. Now, we have a 21-year journey in the company, and, you know, definitely there is a lot of dependence on existing, as well as in a good, healthy mix of new logos coming on board across existing and new markets.

Sir, can you share any repeat customers with us?

Names?

Okay, I think what I can tell you is that for the last…

Kapil, could you take that question?

Hello? Yeah. We will not be able to disclose that kind of detail of the information, please.

If I can squeeze one more than that.

I'm sorry to interrupt, Sanjay. Please. Thank you. We will take our next question.

Sanjay, what I would recommend is reading the case studies that we are highlighting. You know, we disclose so many case studies, so many awards that we are winning for our customers, for ourselves, the work that we do for them. That should give you a very good understanding of our verticalized approach and how we serve our customers. And, you know, the short answer is not a one-time engagement. It is, you know, cyclical to the extent that it's year-on-year, budget-to-budget. And, you know, in India, it's Diwali to Diwali and so on. I think how the advertising budgets are planned for the year, we calibrate that together and then we execute through the corridors with our customers. Let's go to the next question, please.

Thank you. Next question is from the line of Lokesh Mane from Wilder Capital. Please go ahead.

Yes. Hi. Good morning, Anuj and Kapil and team. Am I audible? Hello.

Yes, Lokesh, yeah.

Great, great. Anuj, you briefly touched upon digital OOH, and, you know, my understanding is that, you know, this segment in the advertising world has seen a subdued growth in the offline side. So just to take some bit from your foresight and your experience in this industry, what you saw in 2019 and yesterday happening in 2025, are you seeing something develop in the digital OOH space because mobile and how difficult conversions will be because mobile and CTD are more personalized device versus a digital OOH, which is a public device. So if you can share some details on that, how you are seeing, you know, foreseeing things in the next three to five years.

Thanks for that question, Lokesh. If you see our platform's definition, it doesn't say that it is a mobile advertising company. It doesn't say that we are a CTV advertising company or a digital auto. Many of the competitors do that, by the way. You can say, somebody will say we are a mobile advertising company. Somebody will say we are a CTV focus. Somebody will say we are a Facebook company, Google company. I mean, they're very destination specific. Whereas what is Apple defined as? You're a consumer-centric, consumer platform company. So, where is our focus? It's on the 4 billion consumer-connected devices that we are reaching out to. Now, those 4 billion consumers, let's say, if you're focused on the consumer, you would say that, okay, first and foremost, we should be... On the consumer's mobile. It's very important, right? Because if you don't have that touchpoint, then, you know, it doesn't make sense, right? Next is you would say, let's go from the mobile to the connected household. There's a CTV screen there. Can we do something there that will enhance the probability of conversion?

Hmm.

Third, you say that, okay, should we limit Apple to just delivering conversions for our advertisers online, which means the user is converting on the mobile phone, on the in-app, or on the, you know, app of the advertiser, or on the app of a marketplace? Is that all that we should do? The advertiser also has physical, you know, stores and footprints. They also have their online store, their apps. Why should we not? Say that, okay, when this consumer goes out of their home or out of their office, the mobile is always carried with them. And when they're out of the home and out of the office, can we capture that incremental budget on the consumer's journey? And only from that angle alone, the digital out-of-home comes into play as saying that, okay, the mobile is there because if you are on digital out-of-home, can we make it from a, let's say, a screen that everybody is ignoring and walking by to an engagement screen with a mobile phone where you actually drive a conversion or drive a football that can be track measured? And only to that extent, we are interested in making sure that we don't lose our consumer's journey. So as long as they have their mobile phone with them, any other connected device that they come in proximity with, we should have an ability to drive the probability of conversion of that consumer for that advertiser. And as a consumer-centric platform, we are saying we are going to go where the consumer goes, and therefore these devices become important only in that context. So digital out-of-home will be a small part, but it could be an interesting one to do to drive what we call, you know, retail, online to offline football driving. And there are many advertisers who are absolutely keen to do that, especially for their high lifetime value users, like, you know, those users who would buy from the brand online, and also when they see a store, they want to walk in there. So I think those are the kind of lifetime value users that we are converting for our advertisers, and in that context, it fits in. It's not the emphasis point.

Great, great. That's it from my side. Thank you so much for that insight.

Thank you. Next question is from the line of Arun Trasad from Avengers Park. Please go ahead.

Thanks for the follow-up opportunity. Anush, my one question is on our LTV. You spoke about how LTV is what is important for us to track. In an inflationary scenario, does your customer's LTV also go up in line with the inflation, or does it track higher than the inflation? And if so, does eventually the CAC budget also catch us up with the revised LTV and which may potentially benefit us if the inflation remains higher in the longer run?

That's a very deep and a very broad-based question on economics across various industry verticals that Apple is deeply focused on. But I think the short answer is that as the GDP or the, you know, the disposable income of the consumers go up. I think their ability to spend that on the advertiser's goods and services broadly should go up, right? So inflation, actually, one makes things expensive for the consumer, and that potentially could, you know, impact their disposable income. But let's say in growing economies over, you know, over a long period of time, one would expect that the purchasing power is improving, you know, and as the economy grows, the... We would see that the CPCU rates would grow, and that's what we have seen at least in the last 10 years, right? Across industry verticals, we are seeing the CPCU part of the ecosystem, the pricing. We're able to grow our volume of business. We're also able to increase our pricing, and that's why we are in a very privileged position as a business. Um, in the, when I talk about LTV, I'm just saying that not all consumer conversions are the same, right? So, you know, my dad's driver in Lucknow may also be using an old version of his iPhone, and my dad is also using an iPhone. But let's say, from the same car from the same destination, two people are ordering food online, you know, I would think that the value of my dad's conversion would be much higher for our advertisers than his driver's conversion, right? So I think that's the distinction we're making. How can we go and drive more premium, higher lifetime value conversions for advertisers and tell them that when you work with Apple, you're working with a premium platform that's algorithm is trained to find the highest ROI for you in driving conversions for you. And I think that's what we are trying to aspire towards and consistently pushing for. And that fundamentally will move the CPCU much higher and the margin profile much higher over time. And that's the kind of... audience and advertiser intel that we are verticalizing for, that we are investing in, which is what I was talking earlier when they say, hey, your gross margin is being invested into data and inventory costs. I said, absolutely, because we are verticalizing towards premium inventories and driving towards that greater possibility ahead.

No, I understand that. What I'm asking is, of course, we are moving up the ladder from lower LTV to higher LTV customer. What I'm asking is, the LTV at each cohort level also goes up once inflation settles at the higher level. That is the classification I would like to see.

I wish I could answer it linked to inflation, but I would basically say that the last 10 years trend is showing that the CPCU rate is going up. And I think that is just simply a function of how the economy is growing and how the consumer spending power is growing.

Just a very brief answer on this, Arun. We model at 2% long-term average inflation rates as we do a long-term planning. Inflation is definitely out there in the economies, across geographies, across economies. On average, we built in about 2% inflation on a larger basis, on a long-term basis. So it's a function of normal economics.

One bookkeeping question for you, Kapil. I'm sorry to interrupt.

Thank you. Ladies and gentlemen, we will take that as a last question. I would now like to have the contact over to the management of Lozikovic.

Thank you very much for being on the call today, and we look forward to a very, very strong performance going forward into FY27. The tailwinds are strong, the foundation is strong, and we're optimistic and bullish on how we will navigate all the challenges ahead, both organically as well as inorganically. We're looking forward to a fantastic year. Thank you. Thank you.

Thank you very much. On behalf of Ambit Capital, that concludes your conference. Thank you all for joining us today, and you may now deskanika.