Nazara Technologies Limited (NAZARA) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Nazara Technologies Ltd. Q2 FY27 Earning Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jinesh Joshi from PL Capital. Thank you. And over to you, Mr. Joshi.

Yeah, thanks, Jodhant. Good day, everyone. On behalf of PL Capital, I welcome you all to the 2QFI27 Earnings Call of Nazara Technologies Limited. We have with us the management represented by Mr. Raymond Stopper, CEO, Mr. Mithun Sacheti, Executive Director, Mr. Arun Agarwal, EFO, and Mrs. Anupriyada, Head of Corporate Development. I would now like to hand over the mic to the management for opening comments. Over to you, Raymond.

Good morning, everyone, and thank you for joining us. As you are all aware, this is my first starting call as the CEO of Nazara. And well, since day one, my priority has been to align the teams and operations while leveling up group capabilities by enhancing Nazara's central platform. And part of that has started to show throughout Q2 FY27. This quarter, as you've seen, has been a key step in Nazara's evolution into a global gaming platform. It is also the first quarter to include Bluton Best Play, consolidated from 1st of August, 2026. Q2 was a record quarter for us. Revenue was 803 crores, or highest ever, up 53% year-on-year. EBITDA grew 93% to 120 crores, and EBITDA margin expanded 311 basis points to 14.9%. Profit after tax from continuing operations was 35 crores compared to the loss of 34 crores in Q2 FY26. For H1 FY27, revenue grew 20% to 1,232 crores, and EBITDA grew 52% to 166 crores. Gaming revenue grew 122% to 656 crores at a 21.5% EBITDA margin, contributing 82% of consolidated revenue and effectively all EBITDA before corporate costs. Mobile revenue grew 167% to 550 crores, too. In their two first months, as part of Nazara, BlueZone Best Play generated revenue of 329 crores, up 49%. EBITDA grew 64% to 64 crores, driven by rapid product iterations, new markets, AI-automated user acquisition, and cross-promotion. BluePel's leadership team holds 5.8% in Zara, aligning our interests effectively with all of shareholders. Our existing gaming studios delivered organic growth of 11% in revenue and 17% EBITDA, underpinned by sustained investment in content. And WildWorks grew revenue 41% on Animal Jam contents. Kidopia grew revenue of 21%. Infusebox launched traders and a new Big Brother season. Curve grew about 27%, and EBITDA 61%, driven by Sovereign Tower, the mobile debut of Wobbly Life, and Human Fall Flat, which has surpassed 60 million players. Much more importantly, long-term, our platform is strong and is being enhanced. BlueTel's core capabilities now operate as a group center of excellence across marketing, data, products, and technology, with AI embedded in all four of them. In a single month, the marketing COE team has produced over 290 ad creators for three studios across the group, And a single AI-ready data stack is going to power analytics across the group. Every game we launch and every studio we acquire now plugs straight into these proven systems, enabling us to scale faster and more profitably. As you know, we have also expanded our leadership team. Besides myself, we're very excited to have Mithun Sakethi, founder of Carrot Lane, join us as executive director, and Arun Agarwal, former global CFO of Ness Digital Engineering, onboard guest, the chief financial officer. And with that, I will hand it over to Anupriya to discuss segmental performance. Anupriya, over to you.

Sure, sure. I just wanted to ask if, Bithun, you would like to add something here, and then I can probably cover the segmental performance.

Sure. Thanks, Anupriya. Good afternoon to everybody. Some of you might know this. I've been a non-executive director on the board of Nazara. I recently moved into the executive role as a part of the promoter group, and I want to share why it's relevant as well. My life has been focused on building businesses and working founders, obsessing about consumers. I think the new consumer is spending most amount of time in gaming, and I think Nazara provides that opportunity more than any other place right now. The current market opportunity for us and consumer trends both point towards an intersection of short-form casual gaming, along with the market of U.S. It's possibly one of the few categories in the world which is seeing the kind of growth it is right now as well. At Nazara, my role largely is going to focus on making sure that, you know, we have strategic conversations and focus on governance, which is of utmost importance for anybody who's dealing in the public domain. Arun's joined us as a CFO in this, and we're all very excited as a new management. The team transition is more or less complete now, and with Raymond leading as a CEO and Arun as a CFO, exciting times for Nazara going forward. Thank you. Over to you, Anupriya.

Thank you, Mitul. I will now cover the segmental performance. In Q2 FY27, our gaming segment revenue grew 122% year-on-year to INR 656 crores. EBITDA grew 114% to INR 141 crores, resulting in an EBITDA margin of 21.5%. Excluding BluTile and Wesley, gaming revenue grew organically by 11%, and EBITDA grew 17%. Mobile gaming revenue, including Bluetile and Best Play, grew 167% year-on-year to INR 550 crores, with EBITDA of 151% to INR 103 crores. Bitopia revenue grew 21% year-on-year as subscribers grew 5% and also increased to 7.94%, growing 8% year-on-year. EBITDA declined as Ketopia's step-up user acquisition spend to accelerate subscriber groups while keeping the economics within our target threshold. Wildbox grew revenue 41% and EBITDA 39% year-on-year on new Animal Jam content, including a monster-high theme season. Fusebook's revenue fell 4% year-on-year on lower organic installs as downloads of similar games declined globally, while EBITDA grew 7%. Fusebox launched Traders and a new Big Brother season. Love Island was the number one free role-playing game on the U.S. App Store in July. In PC and consoles, Curve revenue grew 27% year-on-year to INR 77 crores, and EBITDA grew 61% to INR 30 crores, with margin expanding from 30.8% to 38.9%. Sovereign Tower received an overwhelmingly positive response in Steam. Wobbly Life mobile launch reach number three on both App Store and Play Store genre charts. And Human Fall Flight has crossed 60 million players. Moving to offline, EBITDA grew 29% year-on-year to INR 8 crores on FAT 7 to off-INR 29 crores, with margin rising from 20.3% to 26.2%. Funky Funky opened 10 new stores in the last 12 months, with five more to open in FY27, and margins improved on record birthday revenues. As 2.0 design and rebranding is complete, it launched slightly delayed pending regulatory approvals. Within our other businesses, AdTech comprising of DataWorks in space and time delivers due to FI23 revenue of INR 124 crores and EBITDA of INR 0.8 crores. DataWorks pipeline is converting into new clients, though we expect a temporary dip in X2 as anchor client restructures and pauses ad spend. Absolute sports posted revenue of INR 23 crores and an adjusted EBIT of INR 1.7 crores, excluding pickleballs and anxiety costs and one-time expenses. Pro-Football Network revenue grew 20% year-on-year with an EBITDA margin of 17% versus negative 18% due to F26. At SportsKera, content syndication partnerships launched in Q1 are now contributing revenue, partly offsetting lower ad rates while operating costs were down 13% quarter-on-quarter. With this, I conclude my remarks and we will open the call for Q&A. Thank you.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 Aritya Kumar from AK Investments. Please go ahead.

Yeah, thanks for the opportunity. Firstly, Raymond, congratulations for taking up the PO position at Nazara. It's a very big responsibility. My first question is, I have a couple of questions. First question is, what is the focus area for us under your leadership for one year that you want to fix or you want that something needs to be streamlined like a developing team or center of excellence, whatever? So, can you just share that? What is your focus for one year that you want to fix things in Nazara?

Sure. So, I thank Blox for the question. So, we're focusing firstly on the Nazara platform. So, we have a really strong baseline to work on top of. So, the first actions we're going to take is leveling up those COEs and leadership positions from the BluTel team over to Nazara in order to enhance our marketing, data, tech, product, AI capabilities. In the future, we'll also create a new COE, an ad monetization COE, that will allow us to also enhance every single studio's ad monetization capabilities. With this, what we want to do is create a very strong but flexible platform, a platform that is informed by all studios, but is also able to share with the rest of the studios all the learnings and everything that we've gathered. So it's a never-evolving platform that keeps up to date with the standards of the industry. I think the biggest focus is going to be to align all of the studios and AI in every single list of students.

In the game part, expect any flagship product launches under your leadership for next one year, or mostly it will be on the existing games only. The majority of our focus will be to get more and more revenue share. So can you share some light here?

Sure thing. Yes, both of them, right? So, like, the teams, all our studios are launching highly quality, which have a really big audience. And second of all, keep on launching new games. You can see, for example, the Curve team improving certain, like, you hit economics in some of their past games, but also signing new IPs and consistently launching new games, right? There are many in the pipeline right now that have been launched recently. We've had several successes and others that are coming in the next month. You also have companies like Fusebox. They've found great success in Love Island. They keep on optimizing that game. And recently, this month, they just launched Traders, which has great initial metrics. So, the answer is we'll focus on to maximize our reach responsibly and in depth as much as we can.

Okay. Lastly, I have a question on, as I'm a shareholder, for a long-term vision for the company, you have grown revenues very strongly, right, in your leadership in Blue Thailand Best Play. Where do you see under your leadership for Nazara in the next five years that you would be disappointed that if you don't achieve that under your leadership for five years? So, what is the target you have for five years?

Thanks. I think, like, we need to remain, like, focused on the target, which is growing qualitatively, right? We need to ensure that each studio has the capabilities to keep on delivering games and keep on delivering growth organically through each one of these studios, and then at a central level, inorganically through further M&A. So our target is to grow quantitatively, consistently, throughout the next five years.

So what is the growth rate that we are targeting, 25% or 30%? What is that?

We're not giving exact guidance right now. As you know, I just entered the job. But what I can say is that we are consistently going to expect growth, both organically and inorganically, from both the studios and the central group.

Looking forward. Thanks.

Thank you. A reminder to all the participants that you may press star and want to ask a question. Next question is from the line of Kunal Bajaj from Choice Institutional Equities. Please go ahead.

Yeah, hi. Good afternoon. Thanks for taking my question. Firstly, Damon, congratulations on your new role. I have four questions. Starting with, can you help on explaining the new COE strategy and post-glutile consolidation? That is one. Secondly, I've seen that we have stopped giving an audience as well as break up of the offline games. So why are we doing that? Thirdly, we have seen that the Fusebox revenue have fallen around 4% on a YOY basis. This is purely on the fact of lower inorganic installs, and I believe Q1 was also kind of a weaker quarter as well. So, how we see the revenue going forward for the next two quarters? And lastly, any update on the disinvestments that we have highlighted in the last call over the non-core verticals?

Yes. Thank you very much. So, regarding the first question and the COE leadership, so the changes, the leadership at BluTel was operating at a larger scale And essentially, with tooling, operational capabilities, and AI know-how, that was being applied. So, what we decided to do is, in order to fast-track this VUE transition, essentially change that leadership and enhance it with the blue-towel existing capabilities. So, each one of these is going to bring a lot to the table. I'll give you a few examples. So, marketing, for example, is bringing to the table a fully operational, AI-ready, ad-creative production system, which has allowed us to release 290 creatives in one month across three studios in the group. This will increase exponentially as the team sets up the right tooling, the right systems with each one of the studios. The second piece, for example, in marketing is through AI, through these tools, through this scalability, being able to, from one team, manage essentially the marketing or help manage the marketing across pretty much every single gaming studio allows us to optimize FTE employees or contractors. Essentially, we are able to resume by AI and then make some marketplace available to every studio that allows us to pull out the problem. This will, like, offer growth without having a proportionate increase in FTE. Products and tech will also bring a ton of efficiencies and capabilities. On the tech side, our new AI frameworks will reduce game development cycles by a lot. Like, we're talking very high percentages. So, teams will be able to launch new games faster, develop new features faster, integrate them in their existing games, also launch new games. So that's kind of the rationale behind that COE leadership change. And, you know, we're building the teams around this. This is like now in transition, but we've gotten a hold of it, and they're pretty much deployed across all gaming studios as of today. The second question, you broke off slightly. I believe you were mentioning something about offline gaming. Could you repeat that question?

Yes. Yes, sir. So actually, I wanted to understand that we have discontinued giving not-win numbers as well as the breakup of the offline business. So any strategy behind that?

So on the offline business, essentially, our strategy is to continue to grow the different centers, right? And essentially, look at it as one single unit, because both of them are very much intertwined. So, as you know, Funky Monkeys have been really delivering both growth on the top line and bottom line. They've launched a ton of new centers. They've done really well in the centers that they've opened. And so, we expect their success to keep on delivering. On Smash 2.0, we're making really good progress in the new Smash experience. However, there's been a slight delay, so I believe it's going to be launched in the next few months. Regarding NotWin, I will defer to Anupria. Anupria, do you want to quickly jump in?

Yeah. So, in line with our focus on gaming businesses, we have started reporting. We didn't think you would not win as an update. However, it is an associated and a part of our business, and the business is growing well. A few points that I would like to cover is that the Comic-Con IP is growing very strong. Vizag is one of the cities that the Comic-Con debut, and they've seen very, very good traction. They're expanding. Their huge media strategy is playing out very well. In terms of numbers, we are seeing almost flat revenue and EBITDA growth for H1, for Nordvik, and it is because two of the IPs, IPOP stars and all that matters, have moved from Q2 to Q3. So, accounting for all of that, we'll see growth in the coming quarters as well. And I think other than that, I just also want to mention that in line with our strategy, and maybe Raven can pitch in here, we are looking at ourselves increasingly from a platform lens. So, we will also try to report our gaining businesses in a consolidated way, which allows us to make more decisions on the capital allocation prudently, focusing on businesses which are growing in a particular quarter, and we are seeing good ROAS, the ability to spend increases. Please be free to add in here where we want to talk about our platform strategy.

Yeah, so essentially, as we grow these units, right, we want to be very flexible in how we deploy capital, how we, like, grow this platform, and how we invest across the board. And I think that's a key piece of, like, this forward-looking growth, qualitative growth, right? So, as we move forward, we will like more between those. And I think your third question was around fuse box revenue. I think I can take this. So, essentially, for fuse box, yeah. So, for fuse box, as you correctly mentioned, we've seen a slight revenue decline. This has been mainly due to a decrease in slight organic installs. However, the team has done a great job in optimizing EBITDA on the other end of things. They've increased the unit economics and the user average revenue per user. This has been done through our own web shops. So instead of, like, you know, the fees that are being charged to the normal app stores now, the fees are much lower on our proprietary web shops. And also, they've optimized content and employee costs throughout the year. I think that the most important piece here for Fusebox, though, is, you know, I didn't get it fully. It was about investment in...

The next question is from the line of Priyam Shah from Trinitra Asset Managers. Please go ahead, Mr. Shah.

Hello. Hi, thank you for the opportunity and exciting times ahead for you all. So I just wanted to understand over the last two odd years, almost all of Nazara's growth has come through acquisitions, be it Fusebox, Curve, Smash, and now BluTile. And this has been in our DNA, you know, acquiring Anchor Studios and then ramping them up. And the organic base that we had went through the Poker Bazi, right, of the Nordwind sort of deconsolidation. This is the first quarter where post Poker Bazi, the portfolio is fully in the numbers, more or less, right? So this is the right sort of base to anchor on. Given our run rate of roughly 900 crore a quarter once Blutile is in for a full period, Can you just give us a three-to-four-year revenue framework, what organic growth rate the existing gaming portfolio can deliver, and from which engine? So what share of future growth will come from M&A, and what will come from organic? This is what I wanted to understand, basically a three-to-four-year sort of roadmap in terms of numbers.

Yeah, so thanks a lot for the question. So essentially our main focus is qualitative growth, as I mentioned. So I think, as you correctly pointed out, you know, this was the first quarter in some time with organic growth, and I think, you know, we want to double down on qualitative growth coming from the synergies that this platform creates. So by enhancing this platform, and make it better on the organic growth, compounding, as of now, we can't really give that future guidance. We can't just set those numbers because we are just focused on, and that's our main target, both organically. So that's what we're focused on, and that's what we'll deliver.

Sure. Thank you.

Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Samarth Patel from Aquarius. Please go ahead.

Thanks for the opportunity and congratulations, Raymond, for the new role. I had a couple of questions. So, for the blue tile and base play, if I look at the first quarter FI 27, In 2017, we had around 10.5% EBITDA margin, and the user acquisition was around 85% of our total revenue. While I look at the August and September numbers that you have given, the margins are at around 19.5%, and our advertisement and promotional spend has fallen to around 75%. So, I just wanted to understand that we have deliberately dialed down the acquisition, And does the revenue growth hold at this lower intensity of advertisement spend? And what kind of margin and spend ratio we should build from here onward? That's my first question.

Thank you very much for the question. So when it comes to gaming, and specifically mobile gaming, there's a very strong seasonality component. And you essentially need to move with that seasonality. August is, like, this quarter is the worst seasonality. So, essentially, August is pretty much the worst month in the year. So, essentially, what we do, and the team does in those cases, is adapt progressively. So, when we talk about EBITDA markets, right, when we talk about these kind of things, we need to look at the year as a whole, and we need to look at, you know, quarterly evolutions. But we should never anchor ourselves in one quarter or another in terms of EBITDA margin. The team's main mandate is qualitative growth, year-on-year qualitative growth. And that you can see with the numbers from, like, comparing these quarters, FY27, with FY26. And so the team will continue to drive that qualitative growth through the right marketing allocation. If there is a certain seasonality element to be taken into consideration, the marketing team adapts accordingly. So that's pretty much the reason behind this. You also need to understand that as we purchase current users, we're building our future cohorts, users that will play for years in our games, right? So we will deploy marketing spend whenever it makes sense, wherever it makes sense, with something in mind, which is qualitative growth.

Well understood. But can you help us understand what kind of revenue growth we can expect from BlueTel and Best Play from here onwards? The margin aspect is well understood, but any sort of guidance that you can provide on the revenue growth side? Okay.

So, again, we're focusing on that wealth quality of growth, right, and we intend to deliver year-on-year growth throughout the next years. You know, we won't commit to any specific guidance, but as I mentioned, right, both BlueTown and Best Play are also receiving a lot of information and a lot of capabilities from the rest of Nazara, too. So we expect this to be a bi-directional relationship with Nazara, in which Pluton Best Play will also incorporate a lot of good practices and a lot of tools that the rest of the teams are using in order to further our growth.

Understood. That was really helpful. Now, my second question is on Fusebox. If I look, and we touched upon this, Fusebox revenue fell around 4% on a year-on-year basis and slightly lower organic installs. So now with Traders Live and I think Big Brother season also starting from September, when do you expect Fusebox to return to growth? And any flavor that you can give around Traders cohort and how it is monetizing against, let's say, Love Island's cohorts?

Thanks for the question. Essentially, here, we're not going to give any specific timeline on any of this because it doesn't really make sense. But what I can definitely say is the team is doing the right things. They've launched traders, and they're also preparing several new seasons. They're shortening the content cycles, so the amount of time they need to release new content, also the amount of time they need to release new games. And the forward-looking strategy, essentially, we're going to keep on signing IPs and keep on signing games, right, with a growing speed and capacity in both content and game launches. So Traders itself is looking pretty good. So the initial numbers put some of these cohorts. They're the most loyal cohorts, of course, because they're coming from our other games. But, like, I believe it's, you know, a 2x of what Love Island is seeing, or even more on nuclear, correct me if I'm wrong.

Yeah, 3x, yes.

3x, yes. So essentially we're seeing very good initial metrics, very good retention, very good pair retention. And day one payer percentages are extremely healthy. So, of course, this is the initial cohort, so we need to now pretty much expand marketing operations and ensure that the game reaches the right audiences.

And if I may just add a few things here, especially for FuseWorks. So we have a very steady cadence of seasons across our IPs, right? Now that we have four IPs, and we have around seven seasons planned for this 2026. Four have already been delivered, and then two are live now, as you mentioned, Big Brother, and as well as a new season of Traders is being launched. There's Love Island also live. So in all the content talent, so Cubebox is extremely busy, also driven by their own process optimization, which allows them to create content faster. And as Evan mentioned, Traders is a great success that we are seeing early this, But we are excited about it, and we will step up UAN content investment as and when we are seeing. So we will see temporary bips on revenue depending on the seasonality of content. But there is strong effort going on on both long-term and short-term basis for delivering growth profitably.

Understood. That was really helpful, man. Now on wide work, for this particular quarter, we have seen very strong revenue growth. And I think Animal Jam's public release was supposed to be on Roblox by end of first quarter of FY27. And then I think we had also planned for launch of SlinkyGo in second quarter FY27. So have both of these been completed and what are they contributing currently in terms of revenue?

So Wildworks has seen a very strong content launch in this quarter. Kitsune, which they have launched, have both the highest daily revenues in Games Lifeline. Monster High integration also supported this revenue, along with Mythical Jam, Toner Hunt, and New Pets. So, going forward, as Raymond mentioned, Wildbox will benefit from that AI creative ads engine and the IAC prioritization framework that we are working towards. In terms of the newer best, the two newer bests on Roblox and Ghost Linky Group, Roblox, the traction that we saw didn't meet our bar yet. So, we have shelved the game for now. On Ghost Linky Go, the early soft launch retention metrics are not strong enough, but we are doing several iterations and features which are underway through October and November, and we will scale this once the KPI is clear our green light gates. And it's the same discipline that we spoke about. We will put Q&A and capital behind titles where data supports us, and we will continue to look at launching Code Link Ego once the KPIs meet our threshold requirements. Raymond, please feel free to add.

I believe you summarized it correctly, yes.

Thank you. I mean, just one last bookkeeping question, if I may. If I just look at the share of laws from associates, It was around 23 crores this quarter. So this was entirely driven by Nordwind. And if that's the case, I mean, what has been Nordwind's growth this particular quarter and any countries and listing timeline that you can help us with?

So Nordwind reported an EBITDA loss in this quarter, in this X-1, because of which you have seen the impact. Plus, they have also taken an impairment on a Turkish company, Pabrishmi, that was invested in, because of which there is a loss at the CVT level. Yes, right. The loss mentioned in Azara books is due to that Nordwind consolidation. Yeah. Arun, please feel free to add in case you want to.

No, you covered it well. It's because of Nordwind. The whole loss is because of Nordwind. And as Anupia mentioned, they have done the impairment of their Turkish assets, which is causing this number to be higher. Operationally, also there's a loss, but that's not that high number. So this looks higher only because of that one time. Otherwise, on an operational basis, the numbers are quite flattish.

And just to add on the fundraising plan for Norwin, Norwin is looking at a free IPO round as well as getting itself for IPO that we're all excited about. So, the efforts are still on, as you would imagine that IPO timelines take time. So, efforts are on on that, as Norventina mentioned earlier.

Thank you so much for providing me the opportunity. That's it for me.

Thank you. The next question is from the line of Rahul from Daulat Capital. Please go ahead.

Mr. Rahul, please go ahead. Mr. Rahul, please unmute yourself and go ahead.

Since there is no reply from the line of Mr. Rahul, I will promote next, that is Rishi Moody from Moody Advisory. Please go ahead.

Hello, Adobu.

Are you here, Adobu?

Can you hear me?

I can hear you, I can hear you.

Alright, so I am new to the company, so excuse me, the question is a bit late. But from what I understand, I think a previous participant also pointed out, and I will just add my thing to it. So, we've grown inorganically. Now, two issues with this that I have is, first is we've grown somewhat where I don't see a synergy between our acquisitions. We've grown offline. Then we have SportsKeda in the US, which is an online media article writing platform. And then we have our gaming. So, I'm not seeing a clear strategy. If you could help me understand what's the strategy there behind doing various seemingly unconnected things. Second, I want to understand is the industry, right? So when you say we're going to keep accelerating acquisition of IP, from my understanding, and if I compare it to, say, a music label industry, right, the IP life of a gaming seems quite less versus, say, The IP life of the music. While we are not paying extremely high valuations, but we are not realizing a terminal value for these acquisitions, in my opinion. So can you just help me understand how your thought processes around acquisitions, what you see as the terminal value for these gaming-led IP acquisitions, and how are we trying to improve the lifetime value for these games or the studios that we acquire?

So, thanks for the question. So, the first thing regarding the strategy, as we've discussed, our main focus is gaming. In gaming, we have three pillars. We have mobile, we have PC console, and we have offline gaming. The total addressable market in gaming is over $200 billion. So there's great opportunities in each one of these segments. Beyond that, there are a few other companies that are under the group. These, obviously, were setting up for success and trying to work towards increasing their capabilities through also some of the COEs and trying to enhance their operations to increase revenue and EBITDA. But ultimately, you know, we're open for a strategic exit at some point. So essentially, they're not core to the company's, like, future strategy. As we've discussed several times, our main focus and goal is to become a global mobile gaming platform. And these companies represent a very minor share of revenue in EBITDA. In fact, in Q2, as we mentioned, 82% of revenue and 100% of EBITDA pre-corporate costs came from the gaming segment. To the second question regarding IP, essentially, IP licensing deals are not short-term. Um, they, they respond to the user and audience, uh, pretty much, um, ladies

and gentlemen, Mr. Raymond's line has been disconnected. Just give me a moment.

Yeah, while you try to, uh, connect him back, I will take that question.

Um, yeah, so, uh, so, uh, just before you answer that question, I didn't mean the IP life as in the legal life of it. I meant the useful life of it, so in that context, yeah.

Thank you for the clarification. So our gaming business is very diversified, and our portfolio has a mix of games which addresses different genres of gaming as well as the user profile. Some of our games are extremely long in tenure in the sense that, for example, We have just celebrated the 10th anniversary for that game. Animal Jam has been around for a really long time. So, our diversified business model, which has IPs with a very, very longer lifespan or shorter lifespan where people churn out, it is a diversified gaming platform, which provides, because of its diversification and the nature of IP, allows us to grow over time. So, I think our valuation consideration when we are buying the businesses are also taking into consideration on what is life of the IP that we see, or for that matter, life of the game engine, right? For example, we acquired Fusebox, a very solid game engine, which started with one IP in the past, but we have layered on further and more IPs, and we will continue to diversify into different IPs. So, when we acquire businesses, we think of longer-term growth and profitability of the platform, team, or the IT.

Okay, all right. If you would allow me just one more question. So, Mitul, I just wanted to ask this question to you. You know, given your past track record with Carrot Lane and, like, just in general, any cross-learnings or any, like, If you would have to replicate the success of Carrot Lane at Nazara, what, like, something from Carrot Lane or people, like, I'm just trying to understand what you're trying to build here with Nazara now in your second stint.

I think, thank you for the question. I think the principles of building a business are certainly what you can repeat across businesses. You stay true to the problem and stay focused on the problem. You stay agile to solve for what you're doing. And you really look, I mean, the goal has to be to solve for the consumer. As long as our eyes are on the consumer and we've built the COEs to sort of keep solving across all of this, I think we're strategically well-placed to go after this opportunity. There's nothing that's short-term. Some of the questions that you're asking are valid, and we are going to grapple with those as well also. That's the honest answer. We don't have – everything is not sorted, but I understand you have to go wide before you go narrow. I think now we have the scale to go narrow and really go after the business. 80% of our business now comes from gaming. That's where we're going to focus and sort of keep building on that part of it. The platform is built by the team before us and really the right time for us to scale on this with all the extraordinary talent that we've put together.

Great. Looking forward to attracting this. Thank you. That's it from my end. Thank you.

Thank you. The next question comes from the line of Nathik from NV Alpha Fund. Please go ahead.

Thanks for taking the question. Sir, I have only one question. I just wanted to understand this transaction, the acquisition that we've done, what sort of payment is already made, what sort of it is yet to be made.

I can take this up. So, it's approximate the value at which we have bought it is $303,000, of which 85.5 has been already paid. The balance will be paid in three branches. One will go in October. Other two will go between December and March. October payment is already funded with the share issuance, which has been done and informed through the exchange. So that money is ready to go out in October. For other two payments, we are looking for debt. So there is a conversation which is happening with multiple bankers at this point of time. And those will get converted. So, approximately $100 million is what we are trying to raise as a debt, and balance will be funded through internal accruals.

So, you mentioned three out of $386 million is already paid. Then what part is, you know, via share issuance?

Yeah, so out of $303 million, $85.5 million is already paid. $77 million will go in October, which has been raised through issuance of shares, which Neiman and Tim has invested, and he spoke about it at the beginning of the call. So, this 77 and 86 is done. For balance, 100 million will be taken as a debt. We are in conversation with multiple bankers and it is at the very closest stage. And for the balance remaining will be a few million dollars that will be funded through internal accrues.

Thank you. The next question is from the line of Nikhil Gupta from Bayou Capital. Please go ahead.

Thank you for the opportunity. My first question is with respect to our Glutine and Best Play segment. So, can you provide the split of advertisement, revenue, and the in-app purchases, the split of the revenue among these two particular segments? And how many games currently we have as of now? And do we want to scale it up going forward in terms of our qualitative growth?

Yes. So, currently, the revenue share stands roughly at about, like, mostly the vast majority is in-app advertising. So, depending on the game, depending on the specific cardinality, but I'd say it's about 95% to 96% in-app advertising, and the rest is in-app purchases. This, however, will change in the future as we ramp up or release games that are more IAP-heavy. Regarding new games, yes, of course. Right now, we are scoping new games to launch. We launched a game about two to three weeks ago called Wildoku, which is now being technically tested, And we'll know about its numbers shortly. And throughout the next year, you know, we have definitely a few releases planned within the Bhutan aspect.

The next question is on balance sheet. How are we planning to reduce the burden on balance sheet? I think previously we have communicated that we may try to disinvest some of our investments in Norway and also some non-core assets of Absolute and APEC. So, any color, how we are thinking in terms of doing that. And in addition, what will be our acquisition strategy going forward, maybe this financial year and next financial year?

So, I'll take the first question and you can take the other one. So, our focus is very clear. Anything which is non-core, we are looking out in the market. Obviously, it is a process which will be followed. But the focus is very clear. Gaming is where we want to double down, and anything which is non-gaming, we will deconsolidate and keep monetizing it as the time goes by.

Have we reached to some additional stages, additional conversations, and any of our efforts?

It's a process. We have to take some time, and we'll come back at the right time to inform as it moves to a stage where this needs to be communicated.

So, I'll also add, all of these businesses are also profitable in their own right, right? So, there is no urgent need. Of course, if we are able to find the right value and right home for these businesses, we would like to monetize that. But it's not a distress sale or anything that we, or a timeline, a hard timeline that we have committed internally to. We will opportunistically look at options and send in our balance sheet should an opportunity come along.

Thank you. In regards to the second question, yeah, yeah, yeah, he's good.

Yes, apologies, yes. Thanks for that question. So, we're very, again, as we've been discussing, right, the main focus for the company is going to be quality of growth, both organic and inorganic. Regarding inorganic, we're, of course, right now focusing on Lutel's acquisition and the integration of the new COE, so there's a lot of work to be done internally. However, we're still reviewing M&A opportunities on a consistent basis. M&A is not something that's a faucet you can turn on and off. So we want to make sure that we are evaluating every opportunity. We are not aggressively pursuing inorganic as of now, and we're focusing on that Lutal integration, new COE transition. However, if the right opportunity comes along our way, we are willing to take a look and we're willing to evaluate. In the mid to long term, we will for sure evaluate inorganic growth once again. And, of course, it has to be an acquisition target that fits our thesis, our gaming thesis, together with a target that either can pretty much grow and take a lot from our Nazara central platform or can lend a lot of capabilities to it to further enhance the...

That makes sense. Thank you so much. That was for my sake.

Thank you. The next question is from the line of Nandan, who is an individual investor. Please go ahead.

You're audible.

You're audible. You're audible.

Hello. First of all, many congratulations to the new management and really exciting time. My question is to Raymond, as Nazara scales up, how do you see the balance between India and international markets evolving? I mean, when will the primary focus be, say, for the next three to five years? And, say, which of these markets do you see offering greater growth potential in terms of scale and profitability?

That's a great question. So, India has the largest population in the world. So, as new users come and become digitally active, right, we're gaining pretty much like potential addressable audience by the year. So in the short to midterm, however, India still has to develop a lot of the mobile unit economics that other parts of the world have developed. So from our perspective, we focus on both. We focus on India through many of our companies that are actually sitting in India and targeting Indian users, but also not leaving out other, say, digitally active markets like the US, Europe, and so on. So, our strategy is short to midterm, like combine those two with a little bit more of a heavier investment in, say, U.S. and Europe. However, really maintaining a stronghold in India and in the mid to long term, as India develops those unit economics further and includes more digitally active users to the market, And we will, of course, have a great standing to target all that potential user base. So we're pretty much balancing the current addressable market between those two. But mid to long term, India will have a huge, like increasingly acquisitive addressable market that we will have a unique advantage to address against every other gaming company.

Thank you very much. Best of luck.

Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I now hand the conference over to management for closing comments.

Hi.

Well, thanks a lot, everyone, for joining, and thanks for your questions. So, as we mentioned previously, we were extremely excited about the new leadership transition, everything that's going on in every echelon in the company. So, of course, we really appreciate you all joining, and a big shout-out to also the previous leadership and management team for making this transition possible. So, thanks all once again, and we'll see you and hear from you soon.

Thank you. On behalf of PL Capital, that concludes this conference. Thank you for joining us, and you may not disconnect your lines.