OnMobile Global Limited (ONMOBILE) Q1 2027 Earnings Call Transcript

Good evening, everyone, and welcome to Q1-FI27 Earnings Call of OnMobile Global Ltd. Representing the management today, we have FC, Executive Chairman and CEO, Radhika Vinugopal, Full-time Director and CFO, Bikram Shiravar, President and COO. The call will start with brief update about the overall performance during the quarter by FC. Then Bikram will share insights on operations. And then Radhika will update on financials. After that, we will open the floor for Q&A session. Before we start, I would like to mention that some of the statements made in today's call may be forward looking in nature and may involve risks and uncertainties that we face. For such lists and considerations, please refer to the earnings presentation. OnMobile Global undertakes no obligation to publicly revise any forward looking statement to reflect future or likely improvements or circumstances. Having said that, I now hand over the floor to FC over to you.

Thank you. Thank you, Pratik. Thank you all for joining. Exciting quarter on the Unmo Plus side. We launched on 26th of June, four days in the last days of the quarter. As you know, we have planned to launch earlier. We were actually ready earlier. Unfortunately, Flipkart, for many marketing reasons, preferred to push out the date. So obviously, when your partner wants to push out, we have to push out. But as you can see, we were live. The first thing I must say, you know, when we went live was call center. I was present in the office with the team. And the big question was, you know, will people be able to activate the service in 60 seconds as we promised? And what kind of problems people will have? To our very big surprise, there was no activation issue. Everybody were able to activate. The calls in the call center were more on the actual gameplay and some challenges on the TV adjustment because we stream in 1080 and some TVs are a bit smaller, but that's a very small percentage of subscribers. Overall, really, really satisfied with the quality of product. We're expecting to have a good product, but right now the stats that we have is fantastic. The service works better than we had expected. If we look at what kind of users that use the service... And, and usage, you know, we shared in the deck, the... The information. And just as a side note, normally we would not share these stats with the markets. You know, for strategic reason, we would not share this to have any competitors look at, you know, how the service is performing. Obviously, we're a public company and I want to share this information with you so that you at least confirm that, you know, we have a good service. I know you can buy the box and use it. You can see the comments also that we have great comments. But I think it's very important that we see, that we can show you with real data what is the performance today of the actual platform. So those that we shared in the deck here, we're not going to share on a quarterly basis for a strategic reason again. We're going to make sure to, you know, we want to make sure to share it with you. But let's just go on the next slide. I just want to share, you know, the actual age group. First of all, age group is really a sweet spot, 25-34. 82% are under 35 years old, so, you know, very interesting demographic, very the core of what we want. The approach of the system to be able to use the controller and service on multiple devices, in average, people use on 2.3 devices, meaning a lot of people use it on three devices. As you can see, a number of sessions here on desktops, 44%, TV, 31% of sessions, mobile, lots of sessions on mobile also, and tablets a bit less than what it is, but, you know, obviously people prefer the big screen. Very interesting stat is that 75% of users have used more than five games, 45% use more than 10 games, so usage really high. If we can see also the hours used, and that's the most important stat.

Recording in progress.

70 minutes per subscriber is very high. It's higher than what we planned. It's twice the top PC median, top 10% PC median. Very, very high. As you can see, stickiness on daily average users, on monthly average users, we're 1.3 times X the industry. Retention D7 versus D30 today, we're at 2.7 times the industry. So, all this to say, and all I want you to realize is that we have a good product, and this is, you know, we can do all the tests in the world. We can get the best gamers to confirm that we have in lab the best thing in the world. Till you're out in the market and the market tells you that this is a good product, you have nothing, right? So it's a very big step forward that we took going live. As you can see, 226 cities logged in across India. So this is not just a Bangalore, Mumbai, Delhi. It's across the country. So we have across the country people connecting and again, you know, using the service and really liking the service everywhere. So, what happened until then, right? Now that we're live, I must say that we have a lot of interest by lots of groups. We're in discussions right now with advanced discussions with very big retailer groups across India. You know, they confirm also from a retail perspective that this kind of product, it does not exist in the retail world, right? There's cloud gaming providers that are very big, as you know, as we know, we're competing with trillion-dollar companies here. So they're in the cloud. In stores, this product category doesn't exist with the controller that we have. As we can see, they can sync up your service on multiple devices. At this price point, it doesn't exist. So lots of interest from very big groups to be in stores. We're right now negotiating and planning to be in stores by Duvali this season. So we have to be ready by October. So lots of work right now on how many stores, where do we plan to have promoters. The motto's a bit different, right? You need people in stores to promote your service. How many boxes per store? So all this planning is right now being done, contrary to another service where, you know, obviously you can sell software. We need, we have that box. We need the box to be produced and be shipped out in all these stores. So that's exactly what we're doing right now. So, that's what I wanted to share with you. You know, from our expertise, what we see, we have a 12 to 18-month lead time in the market from competition to wanting to actually look at what we're doing and decide to enter the market like we're doing. We want to use this in good essence. The feedback we're getting from retailers, a new category in India, we're getting the same feedback here in Spain from retailers in Spain where they already sell consoles in Spain. And they see this as a new product category also. Even top gamers in Spain look at this on the retail side and so it's got a very interesting potential here. So we're going on both sides. We're really pushing to be able to be in stores again by October, November, December here in Spain while we do it in India. So it's a dual market approach right now. And really the retail world is different than the operator world. Bikram will talk a bit about the operator discussions that are now really enthusiastic after this feedback, but it's very different because we control our destiny, right? And we see it right away. Retailers are very open to push our product and be moving very, very fast compared to what we see in the carrier business. Now that we talk about carrier business and the results, as you see, right, we have the core of the business is carrier business today. The focus has been really on profitability. Profitability is key for many reasons, for both service, right, mobile gaming and the mobile entertainment and communication. We need profitability on both sides to be able to use the cash into the OnnoPlus launch. We have to take difficult decision on the team side. We have to do a small restructuring and let go some team members to increase profitability on the business. As you can see, you know, in the core business, we're at 20% for off-to-been-tee in the range of 20%. We're going to push to go in the 25% range on the mobile, entertainment, and communication side. As we grow, and just a side note on this, right, there was a degrowth this quarter on mobile entertainment, mostly all driven here in Europe on the video service. It's something we know. It's been going on multiple quarters going down, right? We have a new service in that category that has great potential. Already been in discussion for multiple quarters with the operator. Already did market tests, feedback tests. This is really good. So it's only a matter, again, that carriers take a lot of time to implement new services. Once you're there, you're there for a long time. So in the meantime, we unfortunately follow this downward trend while we correct on a yearly basis. When I look at this on a yearly basis, year to year, I don't see any issues. On the quarter, because we have to take some restructuring costs, you see the impact. On the mobile gaming side, it's the same. We took the decision to stop operators that don't produce the right profitability. A lot of operators, we pushed on high marketing. You saw marketing costs decrease over the years. A lot of operators had high marketing costs. We stopped the marketing. So obviously, it had an impact on revenue going down. So some operators where the profitability is not there, where we don't want to push. And we're really putting the marketing budget below the 50 mark. So that's where the profitability is, right? So we really took the decision that mobile gaming has to be profitable. It was in Q4. The range right now is to be in between 10% going to 25% EBITDA also this year for mobile gaming, and to do that, we need to have optimized marketing in most accounts. We can't carry on accounts that drive revenue but not profitability, so that's the switch that we see. We still foresee a very nice growth on mobile gaming, but it's going to be a smart growth rather than trying to push revenue over profitability. So, overall, I think it's important that we look at it on an annual basis. When we look at last year, we doubled the EBITDA. We brought the mobile gaming business to profitability. Now, we'll have a full year of profitability for both mobile gaming and mobile entertainment. So, the entire business will be profitable so that we can invest. And just as a side note, right, between Spain, which is a high gaming market with a population obviously way smaller than India, and India with a very big population and the fact that consoles are really not in households, the penetration of households is very low, that's why we have a huge opportunity. But between these two markets, there are tens of other countries that are in the same profiles of these two, which could be launched, right? So now it's going to be a decision to use our lead time advantage globally to decide how many countries we want to launch. Obviously, we have to do the retail launch properly for both India and Spain. But the big decision towards the year 2027 is which other country did we launch? I mean, in Europe, there's a lot more countries in gaming than Spain. And again, Asia and Africa, there's a lot of countries that compare to India in terms of potential for that kind of product. So lots of potential. We need to be smart on the investment in which country we go. So all this to say, that's what I have to say. I'll pass the ball to Bikram for explaining more on the business side what's happening, and then Reddick on the finance. Thank you.

Thank you, Asti. Welcome, everybody. See, what you see on the screen is all the complete product breadth of OnMobile, from our mobile entertainment and communications business to mobile gaming and the newly launched Smart Console. What I will do in the next few minutes is take you through our key updates around sales, products, where we see the business is headed, and as Asti mentioned, the core theme across each of our initiatives when we look at our lines of business, right? Let me start with sales. Since we have gone live with Onmoplus on 26th of June, the interest from potential customers have been very high. So, as a part of this flight deck also, we have explained our go-to-market and distribution strategy. We have started with D2C in India. F.C. has already mentioned that we are going to go with the retail route in the country. We are also in discussion with a few broadband operators within the country to be able to distribute our service. Beyond this, right now, as we speak internationally across the board, we are in active discussions with 20 operators or broadband providers for smart consoles, of which 10 of them are in commercial discussions. In fact, I was just checking with the team last few weeks. We are on a run rate of sending either two or three commercial proposals to our customers. Obviously, this trend won't continue because we want to close the 10 commercial discussion deals into actual closures. So, that's something which we are really bullish about and we want to go forward with. Beyond Smart Console, if you see the other platforms which are there on the slide, right, our funnel is very healthy. In entertainment and communications, we have a strong set of deals which are in play and discussions. When it comes to tones, we are in discussions with a very large operator in Middle East and North Africa region. Bazmo, we are on the verge of signing a deal. And similarly for Master Buysa and GameEyes. A good part of these deals, what we believe is we want to sign off in this financial year and try and get some revenue in this financial year as well. For the gaming and entertainment platform, we secured a new business in the last quarter, and our pipeline continues to grow. FC spoke about gaming subscription. In the last quarter, our gaming subscription business, we clearly focused on profitability. We broke even in this business in quarter three of last financial year. If you see the data points, two years back, our cost of marketing was around 65%, and we are trending below 50% right now, and we want to be even more efficient. We are using technologies like AI, etc. to become even more efficient. But in the last quarter, we were very conscious about accounts, where we need to be investing in marketing, what is the kind of return on ad spends we are getting from those accounts, and to be able to, you know, in some cases, not look at revenue alone, but look at the actual cash profit which comes into the organization. I am happy to state that our results are already showing the kind of inputs which we have given and we have started off better in Q2 and we see it improving. Moving to entertainment and comms. In the slide below, you also see that we are targeting to take the profitability and efficiency from 20% to 25% range. This is the business which is the cash cow for the company. The Tone's business remains stable. We are live across 27 customers. I have already explained that we are in active discussions with one large customer in Middle East and North Africa and two deployments in Latin America, which are going to go live in the next few months for us. Alongside this, we have taken an initiative where we are also looking at how to become even more efficient for this line of business. We have developed a completely cloud-native platform, which we will be rolling out in our existing 27 deployments over the next few many quarters. This is going to make us even more efficient on how we service this business. Buzmo, the customer engagement market is moving from simple bulk messaging towards customer journey and AI-led campaign. I have already mentioned that we are on the verge of closing another deal. We have also engaged many other customers in Africa. We are moving forward in those discussions in a very positive way. We believe that we would have a couple of more sign-ups throughout the year as we go ahead. Looking forward, the priorities are absolutely clear. Grow the margins on the legacy business. Be very, very sharp when it comes to focus on margins and profitability on those lines of business. Improve the marketing efficiency on our gaming subscription business. Be very, very clear in terms of the accounts where we will need to spend. Our smart console business, Onmoplus business has. Started off very strongly. We are seeing huge interest to be able to close significant B2B deals in this financial year, launch on retail in another market in Europe, which we mentioned Spain. We are confident that by the end of FY27, we will be in a far stronger position than we were in the previous financial year. Thank you. And I'll hand over to Radhika, who will take us through the financials.

Hi, good evening, everyone. I'll take you through the numbers for Q1. In Q1 FY27, our revenue stood at 124.1 crores, reflecting a 3.8% decline quarter-on-quarter. Despite the overall revenue softness, our gaming business continued to deliver steady growth, with our gaming revenue reaching 39.4 crores, up by 2.4% quarter-on-quarter. Our gaming subscriber base stood at 13.8 million. EBITDA was at 1.5 growth, translating into an EBITDA margin of 1.2%. This is lower as compared to the previous quarter, and this mainly on account of ONMO plus launch expenses, which were accounted in this quarter. Pat for the quarter was at a loss of 28.9 crores, and this includes a one-time severance cost of 14.1 crores, and this is associated with these restructuring programs which was undertaken by the company. Within entertainment revenues, mobile entertainment, revenues stood at 84.6 crores, reflecting a decline of 6.5% quarter-on-quarter. This quarter, we closed cash with a cash position of 135.5 crores, which was down from the previous quarter, attributed mainly due to investment in OnmoPlus and also repayment of short-term credit facilities. Operating costs, cost discipline, operating discipline remains a key focus area. In this quarter, people costs were down by 1.1% and were at 27.9 crores. Our DSO stood at 121 days. This was down by 10 days. Our Onmove Plus Smart Console launch along with our strong pipeline positions us well for the growth in the coming quarters. We remain focused on improving our profitability, sustaining EBITDA growth and stronger cash generation. As the gaming business scales, increasing operating leverage is expected to drive greater efficiency, and we remain confident in delivering sustainable growth and creating long-term value for shareholders. Thank you.

Thank you, Radhika, Bikram, and FC. We will now open the floor for Q&A session. Participants, those who have any questions, they can raise their hands and then we can take their question. Those who have any questions, they can raise their hand. So, we have the first question from the Ashish Basim. Ashish, you can ask your question. We can go ahead and ask your question.

Yeah, is my voice audible?

Yes, your voice is audible. You can ask your question.

So, see, the first question is, in gaming business, the subscription gaming revenue, Is now coming down in last two quarters. So, are we seeing some slowdown there? Because earlier we were having a plan of reaching a 2 million per month kind of revenue by March of 2026. Then now it has been deferred again going forward. So, why that revenue is getting reduced?

So, Ashish, I will take that as soon as Ashish. I mentioned it that what we. Actually looked at when we went positive in quarter three of last financial year. We've been very conscious in the last quarter in terms of where our marketing spends are going. So when we looked at all our accounts where we are live, we are currently live with more than 50 plus accounts. When we looked at what are the kind of return on ad spends which we are getting. And there are certain accounts where we were not at the efficiency where we want to be. So we have paused. We are under discussions with telcos there or changing the way we market. There are a lot of initiatives which we are undertaking in parallel to try and improve our efficiency further and also the revenue, which is basically AI in a decision making, which we see probably coming in the next few quarters. We're looking at multiple channels beyond Google. We are also looking at multiple other partners for us to reach the subscriber. In addition to that, we are also in discussion with few of our telco partners to look at organic marketing wherever applicable. So, we are looking at, and that's what we have showed in our presentation also, to improve our revenues in the upcoming quarters. At this stage, whether we will be able to reach 2 million MRR in the next 3 quarters, 3 to 4 quarters, that's what we want to go, but I can't for sure say, but we will definitely try and improve our margins there.

Sure. Thank you. The next question is, see, last quarter we had written off approximately 45 CR, which was being given to Deusfair. So, any update on that? What's a big, see, we paid this amount to Deusfair, and then we cancelled our contract, and still we need to recover this amount, or what's the, I mean. What's the update on that?

No, no, this is amount due by the Sphere, right, so for services that we rendered. Honestly, one way or the other, we have to settle in the next two quarters, right? I mean, for me, we're not going to drag this and drag this, right? So that's something we need to address now.

On the entertainment business side, see our revenues used to be 100 crores per quarter. Now it is lagging at 85 crores around. So is there, I mean, what is the management forecast for the next year? Whether we'll be able to reach that level again or it will be still, I mean, at a lower level going forward?

So, Ashish, let me say, the plan for the way we planned this year, they hope you also, we are very, very conscious on which is the new business which we are picking up on the entertainment and communication side. It has to be profitable. We should be able to quickly go to market with that. We have had businesses which we have walked away from because it was not giving us the margins or returns which we were expecting. We are under active discussions on three, four, actually four or five key deals which are significant platform deals with decent margins which we are looking at. It depends on the sales and the closure, and our endeavor is to grow that business with a healthy margin and focus on profitability. And the target on profitability, which we have mentioned, is that we want to take it from 20 to 25 percent for us.

Sure. Just last question, can you also tell how many consoles we have been able to sell till now?

No, you know, that's a very strategic – we work with POs, right? So every retailer, e-commerce or retailers that we're dealing with have POs. And strategically, for many reasons, we can't disclose, you know, how many POs we get by each retailer or in total. Also, I just want to, you know, because that's a question I get from every investor. And the problem we have also is I want you to keep in mind that we're competing against trillion-dollar companies, right? The two main competitors right now is Xbox with xCloud, right, and GeForce with NVIDIA. Both companies are trillion-dollar companies. So the last thing I want to show is for many strategic reasons, where we're selling and how much we're selling, right? So we took the decision to keep it private for now because, you know, we really view that we have a lead time of 12 to 18 months. And the last thing I want is these two to come in the market full-fledged because they see where we're going.

Sure. Okay. Thank you. Thank you so much.

Thank you.

Thank you, Ashish. We have the next question from Josh Burfi. Josh, you can ask the question.

Yes, you are welcome.

Hi, Nesli. How's it going?

Very good. Thank you.

All well. So, Vikram mentioned that 10 operators are we are in commercial discussion with. So, what is the size of the deal that we are talking about? Like, each operator will roughly add how much potential to the top line?

It depends a lot. It depends on the strategy of each operator. You know, just to give you a minimum ballpark, right, when we approach operator and now we approach it with a minimum setup in their premise, we don't take the risk on hardware, right, because we don't want to be dependent on deploying all the hardware, and then they take two years to launch a service, and this happened before with the Tone service. So right now, I mean, you know, in countries where we're not ready yet to launch retail, Well, the operators have to pay for the minimum capex. And the minimum boxes. So, you know, it's about a 50k a month minimum plan. In some other cases, you know, it can be double, three times that, depending on how much bundling they want to do and how aggressive they want to be in their market also, right? So, that's the range right now.

Understood. Regarding the unit economics that we're targeting for the virtual console, internally, what is the measure that we're having? Is it custom acquisition cost, payback period, or how should we be looking at this?

You know, Josh, I'm really cash-oriented, so when I look at it, an investment, for example, retail in India, we have a business case right now, how many retailers, what's the actual cost of marketing, performance marketing, promoters, display, in-store displays, you know, there's a lot of things that we have to pay for, right, in inventory. The goal is over a period of four years to recoup all the investment. Obviously, as we grow, we need more investment in servers, we need more investment in controller and the cash flow for controllers, and depending on the payment terms of the retailers also, right, has an impact. But overall, whatever the investment we put in, you know, obviously it starts to be cash positive after two years, three years, right? And depending on the growth, it keeps on going. But that's the view that we have, right? Cash on cash investment. Now, most of that investment can be leased. We can, you know, raise other money from lenders. It does not need to come from our equity, right? Right? So, depending on the aggressiveness of the plan, right, because we have a low-volume plan, mid-volume plan, high-volume plan, it all matters also of how much investment we're willing to put in the business, right? So, having a view that we have a lead time of 12 to 18 months, obviously, I'm more aimed towards a realistic-to-high-volume plan than a low-volume plan, but that has direct implication on how much cash we need.

Understood. Perfect. All the best. Thank you so much.

Thank you, Josh. Thank you, Josh. Participants, those who have any questions, they can raise their hand and ask the question. In the meantime, we take the question from the chat box. We have a question from Jitendra Bhuturiya. He is asking, what is the status on Chingari divestment and what is the current valuation of that investment? And what is the status on DioSphere contract? Is there any chance of revenue being booked on account of Dealsquare revenues in future?

Yeah, just to answer the question, right? It's one way or the other, we have to solve this in the next two quarters, so that, you know, we'll get back to you. For Shingeri, we did push to get the shares to be bought back. The timing is a bit off. They're really restructuring their business on growth, and they need an additional 12 months. So, unfortunately, it's a bit delayed. I would have preferred to cash in on our investment, but we'll have to wait another 12 to 18 months on that front.

Okay, the next question from his side is, any chance of any business coming from Vodacoon? Since in the last call, we had stated that talks are continuing and we are likely to get on the Vodacoon with improvement in Vodacoon turnaround, so.

Yeah, yeah, yeah. So, basically, yes, we are talking to them on two propositions. One of them is Smart Console as well. Discussions are underway. We are waiting to hear from them in terms of what their interest level is in terms of distribution of the product through their channel. If all goes well, we will be able to announce that, but it actually depends on what is the kind of commitment Vodafone is actually willing to put along with us in this business. So that's where we are. We are under discussions with them.

And further to that, here is another question. What was the need for recent borrowings of 100 crores via debenture issue at 14 percent interest? Considering the fact that we have cash of about 135 crores with us, what is the budget expenditure? Me too.

Ready to go?

Yeah, so the recent borrowing was 65 crores via defensive issue at a rate of around 13.4%. This is mainly to fund our Onmo console gaming business as well as to settle some short-term credit facilities which we have taken. So this gives us a leverage on cash and helps us to have long-term commitments for profits. So, also, this 135 crores of cash what we have with us is split across geographies, with certain places having restrictions in moving cash across. And this gives us more liquidity in terms of expansion of our business and expansion of our gaming business.

And for all investors, the more cash you have, the more borrowing you get, the more everything goes, right? So we don't want to be in a tight cash situation, especially not with the deployment of this kind of product here. So that's why we prefer to have more availabilities on multiple facilities and more partners than try to just deal tightly with the current banks or local facilities that we have, right? Obviously, we have that too, but it's important to have a good mix around the table.

So, next question from Jitendra is, what is the total requirement for CAPEX in FI 27?

Well, that's a key question which I can't answer now because it all depends on how aggressive we're going in each market. You know, as I was saying before, right, the business case we have today in India versus the business case we have in Spain and how many other countries in between we need to deploy or that we want to deploy directly, right? Which is very different, again, from the carrier business. Carrier business, carrier space, right, it rolls. This year, it's very different, right? Most of it is leased. We still need to increase our leasing capacity. But again, we have investment in content, we have investment in marketing, we have investment in retail, as I was saying, investment in promoters, in displays. So it's a totally different new business. So right now, to be honest with everybody, this business is totally different than the care business that we have. So we have two business within one right now. So, we're trying to manage the cash that we have in all this, but at one point, it's going to be important also to look at equity, how do we get partners on board to really be more aggressive if we want to take this outside of... Outside of India and Spain. Right now, we're good with our budgets for Spain and India. If we want to go more aggressive, we'll need to raise money. QIP, sorry, I see the, yeah. QIP is one option. To be honest with you guys, again, I don't like the current pricing, but at one point it doesn't matter because the upside we can get on Alamo Plus is way higher than the pricing. Would I prefer the pricing to be more, you know, in line for QIP? Yes. I still prefer to have, you know, a couple of key investors on board that would step in and say, hey, we really believe in the plan and we invest, you know, with you rather than just doing a general QIP. I think it can be a mix of both, right? So right now, that's exactly what we're assessing. We're completing the exact retail plan that we have for India, retail plan that we have in Spain. And from this, we do the total business case of what does it look like as today, what we would like to expand as other markets, how many other markets would like to expand, so how much money we really need, how much should be the fundraising. No-brainer, it should be between $5 million and $10 million fundraising. If we want to go higher, then that's another option also, right? So that's my thoughts today. But we're moving quite fast on this.

Hope that answers your question, Jitendra. So next question is from Balaji. Balaji, you can unmute yourself and ask your question.

Good morning, everyone.

Hi, am I all good?

Yes, how are you doing?

Hi, I'm good, how are you? Very good. So, I bought this product on Flipkart and I enjoyed it. It's really good. But the ratings on Flipkart also are highly positive. But whereas I follow all the reviews, and the few reviews, they just talk about the latency and all. And I guess that some users are not able to figure out how to, how to, like, Like how to solve the issue. But some users are mentioning in the reviews that they are able to solve the issue and they can find out. So that's why I feel that once you launch it in the retail section,

like the store people will be there to guide the users and the word of

mouth will be better and people in the city side should use it more where there will be more like a Wi-Fi connection. It should be faster compared to towns. Okay, so I feel that the retail will be a good game changer and the store in charge will help the users in any way if possible because it's something different from any PS5 or any wired connection. This is something different and some users will still have doubts and they'll be playing a big part, I guess, than only online. So I feel it will be a bit helpful.

Yeah, Balaji, thanks for that. And, you know, all the low ratings we got, we are personally calling them to see how we solve the issue. Most of them, as you said, is latency or connectivity issue, which is honestly, in most cases, out of our control, or they have a bad connection. But in very, very few cases, as you saw, right, in over 200 cities across India, people are happy. So it's more a matter of how you make sure that the user has a good connection because the service we have and the servers, and we'll deploy more servers in other locations to cover anything, but it's not going to be a latency issue. It's going to be a connectivity issue. As you well, Wright said also, right, to, you know, right now it's very tough. Somebody buys online, gets a video, and by himself has to activate and everything, right? Very different than when you get the in-store support. Also, Our model is based on quantity. We need to have that retail quantity because, you know, it averages out also the usage on our server. Right now, all those connecting online have higher usage, higher gameplay, as you can see, and from the cloud-based perspective, our costs. Actually, our price plan is half the cost of the competitors right now. Very big difference, you know, and we have a service that's, you know, from my point of view, probably better, but at least equivalent to these big competitors. Now, the only way to maintain this, and that's already part of the plan, is to go retail where you have a general usage across the board. But yes, thank you for that feedback, Balaji.

Thank you. Thank you very much, and I'm wishing all the best. Thanks.

Thank you, Balaji. We have next question from DIA Jain in the chat box. What sort of revenue growth and margins do we see achievable in this year and next coming year?

Um... And I'm assuming that's for Onmo Plus, right? The rest of the business, we give a lot of guidance on mobile growing and entertainment, stopping the degrowth, right, and being able to at least grow by 2% to 5% eventually a year. That's what should be the legacy business. The Onmo Plus, right, it's really a matter of how much investment we're willing to do. That's what we're discussing right now, and I was saying advanced discussion with very big retail groups, right? And, you know, the decision that we take, how many stores do we go all out? Do we take our time? I think from an investment perspective, although we have a 12- to 18-month window, we have to be careful on how we do invest, right? It's not just like you turn the switch on and you're live in thousands of stores, you know, in two months. So, you know, I think it's very important, as we were saying, to have the right learnings from retail also And the right persons in stores, like the promoter selling the box, when you've got the right guys, the right training, and the right process, right? So we have different volumes, low, realistic, high volumes. It comes with a lot of different investment, the scope of investment. So that's one thing I want to discuss with private investors also and see how much the risk we're willing to take depends on how much investors are willing to join us and support us, right? From my point of view, I think it's really an opportunity that we have, and I was mentioning in the annual report that the market for this is in millions of boxes, right? Not in hundreds of thousands. So how do we get into that scope, right? That's the key here. So in how many markets do we do this, right? Do we just focus on India and Spain, or do we go? Everywhere. So, the revenue range is quite high at $50 a box, right? Or $75 a box when you take the 12-month pack. So, I hope that answered your question. I know I'm generic, but for now, I can't say more than that.

Thank you. So, next question, a follow-up one from Arshis. Any plans of going to D2C for mobile gaming, and how do we compete with Xbox, considering the strong library?

Let me just take the Xbox question, right? I am subscribed to Xbox here in Spain. We have a fantastic library. It costs me 21 Euros per month. The app that they have is, you know, there's some latency, there's latency problems. So, you know, if I look in comparable products, you know, normally you don't even have the right to compete with that kind of companies, right? Two years back, five years back, it wasn't possible. I mean, Google tried to compete five years back to not make it. Two years back, we could not do it. Now we can, right? Now we have the right to compete. And as you can see, we have a product that actually competes with trillion-dollar companies. So you're right. On the catalog side, it's very important. That's why we have the Steam keys also. We have a big part of the Steam catalog, and we're adding a lot of games that are missing right now because they're running on Windows. We're adding the servers also. So we'll be adding a lot of games on Steam. I think at the end, you know, we'll have our essential Game Pass will be comparable to what, you know, obviously Microsoft's Microsoft, right? It's never going to be as good as Microsoft, but it's going to be good enough for the market segment that we have, the price that we have, right? We have to consider this also, right? Game Pass is very expensive unless you're willing to pay $15, $20 a month. Very big difference with, you know, our $399 a month that we have today. 399 today, you know, nobody's there, right? And we're there with games and with a fantastic service. Again, the only reason we can do this is because we expect to sell a lot of boxes retail so that we average out the cost and that we can deploy server across the countries, not just in India, but every country we'll be in. We need to have multiple server points where we expect quality of service to be impeccable. That's the motto that we have, right? My customer service and the ad-quality service has to be a maximum. Just to give you a thought, you know, to activate my xCloud service, you know, it took me, you know, we say 60 seconds to activate the box. Actually, you can do it in 35 seconds if you know what you're doing. It took me about 20 minutes to activate my TV with the xCloud service because it linked to my laptop, then it asked me to my Microsoft Authenticator. I mean, it's a mess. I don't even know why they do this, right? So, from a pure service point of view, I really think we have a very high-end quality service right now. Quality of content, we're trying to do direct deals also with some key specific deals, games. As we know, most people will play, you know, there's only a few games that really count. We'll try to make sure that we get them in Steam, and if not, we'll try to strike a key good deals also. Eventually, I'd like to be able to sell this box with a key game on it, especially in Europe, that's the demand. And even, you know, in India, it'd be great to have, you know, one key AAA title that comes with the box. So that's the kind of negotiation we're trying to do now. But, you know, right now, at the price point we are, the quality of service that we have. We are competing. It's not a question of how can we compete. We are competing, and we are in advance. Could they have done that before? Yeah, of course. They didn't do it, right? Are they going to do it? It all depends on their planning, right? Hopefully, they take a lot of time, and we have a lot of time to gain a lot of market share, not just in India, but across Africa, Asia, and again, even in Europe here.

Hope that answers your question, Ashish. The next follow-up question from Jithirindra is, it seems that we are stuck with Chingari investment badly, and this investment plan has now been pushed to next 12 to 18 months. Have we made any provision of this value that state investment has? I could not find the state provision in any disclosure. As per accounting standards, in case of change in values of investment, we need to consider provision. When was the last assessment of valuation done for Chingari since known provision made? Is the value of investment remains intact?

Right now, the value of investment is intact, right, Eka?

Yes, so we did the latest valuation as on 31st of March, 2026, and the valuation remains intact as per the certified value. We will do a reassessment in the current year, by the close of this year, and take into account any cautioning that may be required.

Keep in mind, also, we're in press shares, right, where we have priority also on liquidation priority. But, yes, I agree. You know, the word stuck is, of course, right, I would have preferred to be out already. So, in some sense, we're stuck, but the value is still there, right? We just have to be a bit more patient.

The next follow-up question is from Ashish Vaseen. Ashish, you can unmute yourself and ask the question.

Yeah, so FC, we have gone D2C model for console. I mean, is there any plan for mobile gaming as well to get some synergies since we are spending on the brand, and would that also be a possibility?

Yeah, thanks for bringing it up, right? I mean, yes, we could easily take the Onmo app, right, that we have today with carriers and actually put it in the App Store. As you can see, the Onmo Plus is in the App Store, right, and all the TVs also. We could certainly do the same with Onmo. It was the plan to do the app on it. Right now, it's more a matter of priority, right? We've really put our focus on Onmo Plus, and the focus on mobile gaming right now is profitability. It's a different way. You know, when you market in the App Store, yes, there are in-app purchases, but you need to get an engaged subscriber first, so the cost of acquisition of a subscriber in the App Store. It's equivalent to the cost of a paying subscriber that we do right now with Operator, right? So it's a different model. Is the app good enough to do it? For sure. Could we monetize on it? For sure. Would I prefer to do it with partners? Yes. So it's only a matter of priority to say, okay, can we find a partner that could actually manage this side of the business and take the Onmo Mobile app, D2C? But that's ongoing discussion that we've had for the last year, right, and it's really a question of priority.

Thank you.

Thank you. Thank you, Ashish.

And the follow-up question from Leah is, any plans to enter US market?

The U.S. market, for sure. We need to do it differently. Retail is the same, right? That's part of the market. When I say, aside from Spain and India, there's a lot of key markets. Obviously, the U.S. and Canada is really out there. Retail-wise, right now, there's a lot of retailers with an approach where this product does not exist in the U.S. Also, retailers selling currently consoles at the high price of the console. You know, the retailers are different. You know, there's a lot of smaller retailers, there's a lot of point of sales across the U.S. that could support this product where they're not selling consoles today, and you get a lot of exposure because you can be in many, many stores. You know, the key is really we need to, and right now we're running while we're lining up our stuff, but we really need to align the lineup for retail in India right now in Spain. So that we're all good for October, November, December, and right starting then in January, right, is which market editor can we launch in February, March, April, right? That's the key here.

So, next one suggestion from Balaji, he is suggesting to ah GTFI as a triple A game for combining with the essential parts for better visibility from customers.

Yeah, you know, it's on top of the list. The team will, you know, will be pushing to meet with them. The price now has reduced of GTA V because they're going to launch GTA VI. Actually, a lot of our users, the majority of users are playing GTA V today, you know, on Anmo+. So, yeah, the challenge is, you know, right now, talking to anybody at Take-Two or Rockstar, they're 100% into GTA VI. It's very tough to get attention time from them. But yes, thank you for the suggestion, that's actually our number one. That we could bundle. Thank you.

So, participants who has any questions, they can answer and ask questions. So, there is one more follow-up from Ashish. Severance amount of 14.1 crore is too high considering overall quarterly salaries is 22 crore, which team have downsized.

We have to... Yeah, go ahead, Ryukam, please.

So, Ashish, severance cost of 14.1 crore is a combination for both India and international. In some of the international countries, severance cost can be as high as 2 years of salary. So, that seems to be high, but this number should not be compared with the quarterly salaries. It's on an annual basis. This 14.1 crore is for the full year.

And if I can just add a small comment, right, I mean, here in Spain, right, in America, we don't, I mean, we have guidelines, right, but we don't, we're not, in Spain, it's, you know, to let go somebody is very complicated, so then you keep them, and then you just end up, you know, with some people, executive levels that, you know, are not with the. The kind of business that we're at now, right? So, you end up that, you know, you have to make the tough call to say, I like the person, but it's not in line with our long-term objective, and now we're stuck with a big package, but, I mean, prefer to have the package now than to keep the same discussion every year and keeping, you know, too many people. So, that's the kind of call that we have to make. They're more long-term business call than short-term because, obviously, short-term in the quarter makes a disaster. That's why I'm saying, you know, we're more looking at the business on the profitability on the year-to-year basis than the quarterly basis because, obviously, that's… So, we did a lot of restructuring, you know, from key executives that, unfortunately, we had to let go.

Thank you. We have the follow-up question from Dia Jain. When can we expect to be PAT positive on a console basis?

That question, I really need to look into how aggressive we are in launching new markets with Unmo because, you know, the cascade now, you know, as you can see right away in EBITDA, right, you have the launch costs and we'll have other costs in the coming quarters, obviously, for retail. So as we launch market and tax directly our EBITDA and the depreciation also increases because we're putting more leasing on servers, increasing the leasing. So that includes, so depreciation goes up and EBITDA goes down, so obviously it has an impact on that. So that, you know, that question for the next 12 to 18 months is really how much markets we want to deploy here.

Thank you. So, we have a question from Shailesh Kumar. Where do we see quarterly manpower cost to stabilize? And what has been the launch cost of Onmo console in Q1 FY27?

Yeah, we're not, I mean, guys, we're not going to start sharing how much cost this quarter in Anmo Plus, right? We're going to keep it all together for now. So, and, you know, manpower cost, for the view we have now is to maintain it, but to be honest with you, we need to grow more manpower in Anmo Plus. Has to, right? Right now, I mean, we have a fantastic team that got the product there. Every market now that we grow, we need people to manage these markets, right? Although we're trying to manage a lot with partners, which I really want to use, you know, wholesalers in each country and all this, rather than managing directly each retail outlet. But either way, we will need more people on Enmo Plus, right? So on the traditional business, we're good. It's on the UnmoPlus business that we'll need to grow.

So, it's a combination of both exit of employees as well as hiring for the new business, and this will remain at the range of 20 to 22% of the revenues. However, there could be more hiring on the new business part.

Thank you. We have a follow-up question from Jitendra. Hope you take up the QIP instead of aggressive borrowings at high interest, since QIP is pending. Awaiting Right Valuation, and there is no definition of Right Valuation.

Yeah, I mean, if we look at industry benchmark, with what we have, valuation should be higher. But, you know, for now, I agree, right? The market potential that we have for the next 15, 18 months, you know. So, whatever the pricing we have, we should raise money. Again, I think it can be a mix of QIP and strategic investors. I still think we should have lenders also and leasing, right? So, it's a mix of everything, right? We need to have good support from many partners, and that's what we're going to do.

Thank you. Participants, if you have any questions, you can raise your hand and ask questions. As there are further no questions, I would like to hand it over to FC for the closing remarks.

Thank you all. Thank you all for joining. Really look forward to next quarter. Really hope you all bought your console and tested out the product. You will see this in stores now. So next time we discuss, we'll discuss about the in-store experience, how it is and how different it is from our current business. So thank you very much and look forward for our next call.

Thank you, everyone, for joining the call, and on behalf of OnMobile Global Limited, we conclude the call. Thank you for joining. You can now leave the call.