Ladies and gentlemen, good day and welcome to the Affle India Limited second quarter and half year ended FY 2022 earnings conference call hosted by Prabhudas Lilladher. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Aniket Pande from Prabhudas Lilladher. Thank you, and over to you, sir. Thank you, Janice. Good morning, everyone. On behalf of Prabhudas Lilladher, we welcome you all to Q2 and H1 FY 2022 conference call of Affle India Limited. I take this opportunity to welcome the management of Affle India Limited, represented by Mr. Anuj Khanna Sohum, who is Chairman, Managing Director, and Chief Executive Officer of the company, and Mr. Kapil Bhutani, who is Chief Financial and Operations Officer of the company. Before we begin with the discussion, I would like to remind you that some of the statements made in today's conference call may be forward-looking in nature and may involve some risks and uncertainties. Kindly refer to slide 21 of company's earnings presentation for a detailed disclaimer. I will now hand over the call to Mr. Anuj Khanna Sohum for his opening remarks. Thanks, and over to you, Anuj. Thank you. Good morning, everyone, and thank you for joining the call today. I trust all of you are keeping in good health. Affle delivered a landmark performance anchored on our entrepreneurial culture, tech innovation, and continuous execution focused on sustainable value creation, powered by our Affle 2.0 strategy. We concluded the quarter with highest revenue, highest conversions, highest CPC rate, and highest EBITDA and PAT to date. We delivered revenue growth of approximately 104% year-on-year and 80% quarter-on-quarter this quarter, and achieved Q2 revenue CAGR of 65.7% over the last three-year period, much ahead of the industry growth trends. Our CPC business noted a strong momentum, delivering 48.7 million conversions during the quarter, an increase of 73.3% year-on-year at an INR 51 CPC rate. Our growth is broad-based across our top industry verticals and from both India and international markets. Powered by our ROI-linked CPC business model and unique position in the industry, we continue to grow as a preferred mobile marketing company across global emerging markets and beyond. Our India and international contribution, historically balanced at about 50/50 each, has now shifted in favor of international on account of our successful integration of Jampp and our efforts to build local on-ground presence in newer international markets. The contribution stood at about 66% international and 34% India in this quarter. Our focused execution on Affle 2.0 strategy has enabled us to drive deeper verticalization for our advertisers across the EFGH industry verticals. This has strengthened our moat, and our direct customer contribution has grown to 74% of our revenue in H1 FY 2022 versus 57% in FY 2020. Our consumer platform propositions, tech IP portfolio, and all our organic and inorganic investments are performing well in terms of profitable growth momentum, and we continue to establish new thought leadership benchmarks in our industry globally. We won 81 recognitions across categories and geographies in the recent AppsFlyer Performance Index. Affle's Appnext platform was recognized as the number one non-self-reporting network platform globally on retention index for Android in the non-gaming category. Affle's Jampp platform was rated among the top 10 platforms globally on the SKAN Index Power Ranking for iOS. Our consistent focus on R&D and tech IP creation has consistently delivered value to our customers and partners. We are thrilled to be granted 3 recent patent grants in the U.S., taking our total U.S. patents granted to 6 as on date. With 14 other patents filed and pending across jurisdictions, having many applications and use cases for the future. I'm incredibly proud that Affle, for the third consecutive time, won the coveted Enabling Technology Company of the Year at the MMA SMARTIES India 2021, and this was organized by the Mobile Marketing Association. This is significant win, and this came together with 7 top campaign awards for Affle's innovative mobile marketing and advertising campaigns. To ensure deeper understanding and appreciation of Affle's consumer platform use cases, we have included 3 additional case studies in our earnings presentation, showcasing the power of our platforms to deliver consumer conversions and drive value for our customers. With the fundamental shift happening in consumers' lifespans towards mobile screens and connected devices, we remain optimistic of the global market opportunity, and we continue our investments to enhance our market penetration. With that, I now hand over the call and discussion to our CFO, Kapil Bhutani, to discuss the financials. Thank you. Over to you, Kapil. Thanks, Anuj. Thanks everyone for joining the call. Wishing everyone a good day, and hope you are keeping safe. Continuing our year-on-year strong growth momentum in Q2 financial year 2022, the company reported a revenue from operations of INR 2,747 million, a growth of 103.6% year-on-year. Sequentially on quarter two increased by 80%-80.2% quarter-on-quarter. We have seen growth in revenue coming across the verticals and platforms in all geographies. Our H1 revenue stood at 4,472 million, a growth of 90.1% year-on-year. Our EBITDA for the quarter stood at 552 million, an increase of 51.1% year-on-year, and 48.6% growth quarter-on-quarter. The EBITDA margin stood at 19%. Our EBITDA margin is lower than the previous period on account of business combination of Jampp business. Going ahead, we are confident of further optimizing the business model and platform of Jampp to enable margin expansion over time. We will continue to invest in our team to deepen our market penetration and then enhance our tech capabilities. We have recently floated our employee stock options scheme and granted options to key members of the tier of the group. The response from the team members is encouraging on the options granted. Our profit after tax for the quarter stood at INR 476 million, a year-over-year increase of 77.1%. Normalized profit after tax after adjusting gain on fair valuation of financial instrument was at INR 420 million, an increase of 56.3% year-over-year and 47% quarter-over-quarter. We remain focused on working capital management and continue to see robust cash flows from revenue. In this quarter, we utilized our IPO proceeds raised in 2019 for the stated purpose of working capital completely, for which we had sought an extension from our shareholders. With this, I end my presentation. Let's please open up the floor for the questions. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. While the question queue is assembled, we will start with the question and answer session from Mr. Aniket Pande. Over to you, sir. Thank you, Janice. Congrats, Anuj and Affle team on great performance. I had a couple of questions, actually. What is revenue contribution and margin profile of Jampp acquisition in this quarter? Hello? Yes, sir. Hello. Shall I repeat my question? Yeah, I'll take this question. We have about revenue contribution above 30% on the consolidated basis coming from Jampp and a PAT contribution coming about 10%, more than 10, a little more than 10% from Jampp. Okay. Sir, right now is Jampp's tech platform fully integrated into Affle's platform? Once Jampp's tech platform is fully integrated into Affle's organic platform, will there be any redundancy between Jampp's and Affle employees who are completely engaged in R&D process? Do you expect to repurpose this talent and realize some cost synergies from it? Is Manish also on call? Hello, sorry. I didn't realize that my call was muted for some reason. Anyway, I'll take that question. The integration of Jampp has been successful in the first quarter and the last basically 4 months post the acquisition was completed. We're very confident that the integrations that we have done and the plans that we had prior to the acquisition are working well. Consequently, what you see now within the Q2 itself, that not only have we managed to grow Jampp through upselling and cross-selling efforts, as well as we have managed to make it achieve a profitable contribution. When we acquired them, they were breaking even at best. Now within the first quarter, we have achieved approximately 5% profitability on Jampp business. Now, as Kapil mentioned that on revenue, the contribution is about 30%, and if that 30% of the revenue from Jampp is only achieving 5% profit and the rest of the business of Affle on an organic basis has delivered robust overall continued momentum of growth. Right. Just on an organic basis, we've seen very strong growth, almost 34% on revenues year-on-year, which is ahead of the industry growth trend. On a non-normalized tax basis, 37% year-on-year growth has been realized organically. In terms of going forward, even on the Jampp-specific call that I had after the acquisition with the investors, I had mentioned that it will take us some time before we graduate Jampp's bottom line contribution to mid-teens to, you know, almost 20%+ in the next, you know, 1.5-2.5 years. You know, I'm pretty confident that what we have done in Q2, where Jampp is at 5% profit contribution for the revenue that's powered through Jampp, we are really on a, you know, good track and trend to build on this momentum. As we continue to do the further integration of certain technology components as well as the business model enhancements, outcomes that we have as per the playbook that worked well for mediasmart and Appnext would also work well in the case of Jampp, and we are only getting better at it. Okay. I had one last question, sir. Last quarter, you had guided that Jampp is expected to be converted to 100% CPCU pricing model. Okay? Is this process complete? If not, then, is there still further scope of improving pricing per converted user per Jampp? Thank you. Yes. I think in terms of, you know, upgrading the business model, I think it is fair to say that we have educated all the customers and also done the platform level initial changes. In terms of driving the efficiencies at which that model is run, whether in terms of CPC rate pricing or with respect to the margin profile of the business, I think there is still a lot of progressive room for improvement. The way to look at it is that if Jampp is at 5% profit, performance in terms of EBITDA or, you know, bottom line, contribution, for its revenue, then our goals are very clear that within, this, financial year, with 2 more quarters to go, we hope to bring it up to, you know, high single digits, contribution. Then going forward into next year, bring it to mid-teens, and then the year after, bring it, you know, closer to 20% plus. That is the playbook that Appnext, had when we did the earlier acquisitions as well and even for Jampp. We will see, further improvement, and that improvement will come with the further optimizations, on the tech stack as well as on the business model. We think that the cultural integration, the business model integration and the initial tech integration has already worked well, and it is already showing in the results. We are very encouraged by how we have done in Q2 with respect to Jampp acquisition. Sir, does that answer your question? Mr. Pande? Yes. Thank you. We take the next question from the line of Manish Poddar from Nippon India. Please go ahead. Hi, Anuj. Thanks for doing the call and, you know, congrats on the good set of numbers. Primarily, two questions. One is, if you look at, let's say, the base business ex Jampp. Now, despite, let's say, you know, we were at roughly INR 135 crores last year, and we are now at, let's say, INR 190-195 crores this quarter. You know, but despite that, the operating leverage in the business doesn't really kick in. Probably could you help me understand, are we passing on the incremental, you know, pricing in terms to get more volumes just to get the, you know, the, this scale concept around? Yeah. Okay. Go ahead, Kapil. The margin improvements, if you see our gross margins are quite stable, despite the dip in the gross margin is reflective of the Jampp acquisition and consolidation. Otherwise our gross margins are stable, and the leverage of the efficiency which you are not seeing is getting invested in our human resource to expand our markets to broaden our growth base. We will continue to invest whatever leverages we are getting into expansion of the business. We have consistently maintained that Appnext is a growth organization, and we'll continue to invest in our processes as well as manpower to continue the growth momentum. Actually even with that, I think the fact that the normalized PAT growth on a year-over-year basis is 37%+, with respect to, you know, how we are performing, there is even with the investments in growing our presence globally and planning for deeper verticalization execution across emerging markets as well as certain developed markets and certain verticals, this strategy is working really well. We are seeing expansion in EBITDA and profit on the organic basis, even in the backdrop of very strong and consistent investment in our own organic growth and expansion. We, you know, I think the focus of the company is really on the Affle 2.0 strategy, which is to grow the business consistently for the decade ahead, you know. I think the foundations in terms of the tech stack, the acquisitions, the IP portfolio, all of these investments are working really well. Now it is being backed up further with on-ground presence and, you know, growing our teams and capabilities in those markets so that we can establish increasing market leadership across key verticals where we are very strong. It's a very consistent execution strategy, and I'm very happy with the way the team is responding and behaving. With the recent stock option, you know, plan, I think there's a lot of passion and spirit and pride with which the organization is executing. I'm pretty happy with the way the execution on the ground is panning out across geographies. Okay. That's helpful. Just one more thing. The cash on books as on date, I think is roughly about INR 550 odd crores. Can you probably help me understand, let's say, you know, how this cash pool literally would stand at the end of the year or let's say, you know, sometime next year? We would organically increasing our cash flows from operations in this 50%. If we may decide to make any further investments in expanding the business, that will be a cash out. That is, that cannot be. There cannot be future guidance on that. Positively, there will be an incremental cash flowing into the balance sheet from the operations. When is the outflow for Jampp expected? The outflow for Jampp, the initial payment, has been done in the month of June and some in July. The next batch is due in June 22. June 22? Yeah. Post that, if just to understand better, post that our cash on books should be somewhere in that INR 300-INR 350 crore bracket. The next tranche is not a heavy tranche. Next tranche is only close to about in the range of INR 8 million. Okay. That's helpful. Thank you. If I may just add. I think fundamentally, the way I want you all to look at Affle is that we have historically always funded our acquisitions through internally accrued cash flows. As we continue to grow our profitability and converting that into cash flow from operations, we will see that a lot of these payments will actually get funded through the operating cash flows on an ongoing basis. We should have a continuously good cash position and a strong balance sheet. When the right opportunity comes, we will do further investments, you know, inorganic as well as organic to deliver growth. That's how you should look at us. Thank you. The next question is from the line of Divyesh Mehta from Dolat Capital. Please go ahead. Hello, am I audible? Hello? Yes, you are. Thank you for taking my question. So my question was in terms of margins of the previously acquired businesses, right, starting from mediasmart, can you just give a rough idea of how and where they are in terms of their progress of margin improvement? Also with respect to Jampp, if our current profitability you said is around 5%, that is on EBIT level, right? Like I mentioned earlier in my discourse, every acquisition that we have done, if you look at the pattern of the acquisitions that Affle has done, we have acquired companies when they were at a breakeven level or just, you know, just at the cusp of turning towards profitability. We have a clear path that within year one brings them to a high single digit level of profitability. Within year two of the acquisition, we go to mid-teens and as high as possible. By the time it's year three, we want them to be at the same quality of unit economics that we enjoy in our organic business, you know, as well. With respect to mediasmart as well as Appnext or any prior acquisitions, whatever this you know phase the plan is to improve the bottom line contribution of these business has worked really well for us. That gave us the confidence to then continue and do a bigger transaction with Jampp and a further transaction. You know, the company that's based in North America, South America and you know much further you know and a larger transaction size was backed by the fact that you know our execution on inorganic and the track record is solid and it's inspired our confidence. Same thing we are seeing in Jampp now. Your question whether Jampp's 5% is EBIT or PAT, I would say we are looking at it on both lenses. You know, we very granularly tracking that, and it's about 5% on EBITDA and PAT both. It's not very dramatically different, but it's about 5%. You can take it as 5% EBITDA at this moment. Okay. In terms of previous acquisitions, how you have highlighted that they are well going on track. Just to quantify it in some way, again, you cannot share exact numbers, but you are looking at that mediasmart and Appnext are already above, like 10%-15% on a PAT or EBITDA level or, like I don't want an exact number. That's correct. demand side. That is correct. Both these acquisitions are now year two and we are aiming for mid to high teens in terms of contribution at the bottom line level. It's going as per plan. That's what I mentioned in our commentary, that all our organic as well as inorganic investments are performing well in terms of profitable growth momentum. The momentum, the trend lines, all of this is doing well on, you know, every granular aspect that I look at for our, you know, investments that we have done. I'm really confident that it's a broad-based growth happening across markets, across customer verticals, and our teams are well aligned to achieve those goals. The KPIs, our incentives now added with the stock options are keeping the entire organization and execution completely aligned to these goals. Okay. To confirm, what you're highlighting is that on a margin level they are somewhere between 10%-15%. That is right. One last question. In terms of your expansion in other geographies, how are we doing there? Have there been any inroads and any qualitative word on any big client entry or anything where we can see that, okay, yes, we have any qualitative commentary in terms of us getting into some big clients or something which we can see on AppsFlyer to get an idea how we are progressing on that front? Sure. I think the qualitative aspect can be seen with the fact that we are having our key platforms and tracking and consolidated achieving you know very strong recognition whether it's you know the industry indexes or whether it is the industry awards the kind of campaigns customers getting the wins and accolades consistently as well as indicated qualitatively in those case studies that we have shared. In the last earnings presentation we had shared three case studies. This time we have added three additional case studies to give you a much clearer qualitative sense of what's happening on the platform what are the capabilities that Affle has how are the customers benefiting. You know, so we are trying to ensure that you build a deeper appreciation of what is fundamentally happening at Affle, beyond just, you know, financial numbers and so on. I think there is a consistent effort from our side to ensure that our investors deeply appreciate and understand the power of our platform and how we are doing across emerging markets and not just India. You know, the Indonesia case studies were shared, Malaysia case studies were shared. I think progressively we are also looking at the planning of the analyst day, which will come soon, where we will share more insights into more markets. You know, very broad-based growth. The verticalization strategy is working and it's really strengthening our moat and building our confidence to go ahead and invest into people on-ground presence in those markets. We will only do that when we are absolutely sure. You know, when it's all our investments are done very prudently, whether they are organic or inorganic. The fact that we are investing in global expansion to those markets is a very strong indicator that things are working well, our platform is delivering, our strategies are working, and therefore we are investing to grow and scale deeper in multiple geographies. Thank you. The next question is from the line of Arun Prasath from Spark Capital. Please go ahead. Yeah. Thank you. I hope I'm audible. The first question is on the recent case filed against Google by a group of interested parties in Texas, where it is alleged that Google's Demand-Side Platform has unfair advantage and it engaged in anti-competitive practices. In the context of India, what is your current opinion on this issue? If you could elaborate a little bit on this. As a follow-up to that question, assuming that the level playing field is created as a result of this litigation, can you explain this scenario by taking us through, say, a hypothetical campaign where someone like Appnext how it can benefit from this favorable outcome? Sure. I think I will take the opportunity to share with all the members on the call that Affle has 16 years of history in this ecosystem focused exclusively on mobile marketing. Unlike other companies, I could say that we haven't really pivoted or needed to pivot. I think mobile marketing has been an anchoring focus and, you know, consistent vision of the company till now. The ecosystem has gone through tremendous changes and adaptations over these 16 years. Right from when we started, it was before Google had acquired Android, before Apple had launched anything on the iPhone, and Nokia was king and BlackBerry was cool. Affle was still doing mobile marketing. We saw a massive change with the touchscreen form factor of devices. You know, we all know that, you know, a lot of changes have happened in the ecosystem. Apple has maintained a very, very strong execution track record to maneuver through various changes and the entrepreneurial culture that we have, keeping ahead with tech innovation consistently has really helped us to maneuver through any kind of changes. In the last five to six years, we have seen data privacy coming in Europe and GDPR in Singapore, Personal Data Protection Act. In the next few years, we'll see that as well. Most recently, you know, there was nervousness around iOS 14 and related policies, and we have shown that we had the foresight to do the Jampp acquisition. We knew that there were some of the things that they and we were working on that can be leveraged in order to make a head start into the new sort of iOS 14. You'll see that our Jampp platform has consequently seen that recognition as a top 10 mobile platform on SKAN networks. What I'm trying to establish is that based on Apple's historical credentials, you can see that we have a very strong track record of maneuvering through any changes that are happening at the ecosystem level. Now, with respect to Google and Facebook, Apple's view is that we operate in an ecosystem where we are still symbiotic. We are not head-on competing or fighting against Google or Facebook. On the contrary, we in fact integrate our tech stack on Google, Facebook, so that we see it as a platform where we can find consumer audiences and drive conversions for our customers from their touch points as well. So I am very neutral to what happens exactly, whether, you know, Google and Facebook or platforms like that will see any further clipping of wings by regulation or these checks and balances of, you know, how much they have or they don't have. My long-term view is that the non-Google, Facebook part of the ecosystem will continue to grow at least at par with the total digital advertising growth, if not much better, you know, over time. That's to do with the fact that I think the advertisers have over-allocated their budgets on Google and Facebook so far, and there is a lot more complementary platforms with complementing capabilities that can drive higher ROI and value for the advertisers over time. We will see that all of these platforms will continue to grow, but the non-Google, Facebook part, in my opinion, should grow faster for multiple factors. Specific to what's happening in India, let's wait for the outcomes of you know these cases and so on, and we are equally watching it with interest and preparing ourselves for all opportunities and possibilities. That is very helpful, Anuj. But I just wanted to specifically understand how much of our currently, say, our performance or our growth rates would be different if this level playing field is already there, if you can take a wild guess? See, the way I look at it is that, you know, the average industry growth rate in India for digital should be in the range of 25%-30% CAGR for next several years to come. That is all encompassing, right? Facebook, Google, everything is in that. I believe that Affle will continue to grow better, hopefully, than the average industry growth trend. The last several years already show that. The CAGR growth of our Q2 revenue is 65.7% over last three years, you know. Even if you slice and dice into Jampp versus non-Jampp, you still will find it as a very fantastic growth trend. I think we're already doing very well. Can we continue to do as well? I'm very confident, bullish about it. Can we up it further and improve it further? Let's wait and see. You know, let's not simulate a scenario that has not happened entirely. I think even if the status quo stays, we will continue to do better than the average industry growth rate, hopefully. If the status quo shifts in favor of non-Google and Facebook, of course, we will take advantage of that. Thank you. The next question is from the line of Rishit from Nippon India. Please go ahead. Rishit, you may please go ahead with your question. As there's no response from the current participant, we take the next question from the line of Sanjay Latta from MG Investment. Please go ahead. Hello. Sir, you may- Hello. Please go ahead with your question. Very good set of numbers, sir. Just wanted to ask a question, like, in the previous interaction, you have mentioned that inventory and data cost will be in the range of 55%-58% of the sales, while in this quarter and half year, this ratio has increased. Can you throw some light on how should we look this ratio going forward, and why there is such an increase in inventory and data cost, and what are our strategy for the same going ahead? Could I take this one? We'll go with Anuj. As you would have seen in our earnings presentation, we have consolidated Jampp's business into the Affle business. It's consolidated financials. The Jampp acquisition completed, which was the deal which was done early in June until July. The margins on the Jampp business are significantly lower on the gross margins than what Affle's earn. There is an impact of 4-5 basis points coming in, overall impact is coming on only from Jampp. If I see excluding Jampp, I made this point in my earlier answer also, there is no impact on the gross margins on the non-Jampp business of the company. We have net impact increased up by 1 basis point. Sorry, 100 basis points over last year's performance on the gross margin in the organic business. Sir, how should we look going forward this ratio? In, like, suppose in coming 2-3 quarters, this ratio can be come down to 50-58%, or this will be elevated? It will not improve in the next two to three quarters. As Anuj Khanna Sohum mentioned previously also, it will improve from here. To say that it will come down to what Apple prior to Jampp acquisition in the next two to three quarters, it will not be. Yes, we will try to improve the business model to an extent that we, in, say, four to five quarters or maybe six quarters down the line, we may come down to close to what we were. Overall business that including the Jampp business. Okay. Thank you. The next question is from the line of Mayank Babla from Dalal & Broacha. Please go ahead. Sir, you may please go ahead with your question. As there's no response from the current participant, we take the next question from the line of Alisha Mahawla from Envision Capital. Please go ahead. Hi, sir. Good morning, and thank you for taking my question. Sir, I'd just like to understand that our average CPCU has been in the range of INR 40-INR 41, and this quarter it has spiked to INR 50+. Just wanted to understand the reason behind the same. Sure. Typically the CPCU rate is balanced based on the function of business contributions in India and international markets. International markets typically have a slightly higher CPCU rate compared to what we would see in India. This quarter, because our contribution from international business is higher, consequently the CPCU rate average has gone up to the level that you're seeing now. We believe that we can sustain this level of contribution. As the India and international mix stabilizes, we will see the CPCU stabilizing. As we improve the verticalization strategy across the newer markets where we are executing, we will have the ability to also improve the CPCU rate further. You know, we will provide progressive you know explanations on that as and when it happens. For now, the way we see it is that until now it was hovering at around INR 40-INR 42, and now it's gone above INR 50. The factor contributing to that is that there is a higher contribution of international business, and therefore the average is moving up at this moment. I expect it to hover around this and then improve it further progressively with our verticalization strategy and executing deeper within the international geographies. Understood. That was well explained. Just wanted to clarify that while you had mentioned earlier in the call that contribution from India and international used to be 50/50 and now is tilting in favor of international, where do we expect this mix to sort of stabilize? Like you said, you know, once verticalization and full integration of Jampp, et cetera, takes place. Are we saying it will be this 63/37 or are we saying it'll be 70/30 or any other number? It's hard to give that specifically. You know, I would certainly say that India is our home ground, it's our home market, and I would expect it to continue to contribute around 30%+ to our business. It'll be our single largest contributing market. The international business, you already know it's above 66% now. Because the number of markets and geographies that we will continue to invest further into and grow, we will see a higher addressable market size in the international business, while India will continue to, you know, you know, be anchoring market for us. A lot of our innovations and strategies are almost always first rolled out in India, whether it's the connected TV products, whether it is the connected household IPs, or whether it is the omnichannel platforms. You will see, you know, our emphasis on executing deeply in India, be it the vernacular strategy or verticalization. A lot. Our focus on India execution is disproportionately high. The teams on the ground which are looking at India, they are 100% focused only on India. The teams that are looking at other international geographies, they're also bringing market-specific execution focus in those geographies so that we can. There's no dilution of focus happening in terms of depth of execution, be it on India or Southeast Asia or Middle East, Africa or LATAM or the verticals, verticalized focus in developed markets as well. We are very clear about our execution strategy. This contribution will be a function of how, you know, business expansion continues to happen. For now, I think we can say that, you know, this it should hover in the range of 30%+ for India. Understood. Sure. My next question is with respect to converted users. We see very strong quarter-on-quarter and year-over-year growth, if you look at full-year basis or even if you look at, track it on quarterly basis. Just wanted to understand where is this growth coming from? Is this simply expanding into newer geographies? Or now that, you know, we have some proof of concept and foot in the door, we're getting more business from the same clients? Any color you can share on the same. Sure. See, the first and foremost, the macro factors in the industry will continue to be very favorable. There's a positive tailwind for, you know, growth of this business model of connected users, because more and more users, at least in emerging markets, are going on to, you know, becoming online shoppers for all kinds of lifestyle products and services across industry verticals. The consumer trend is very, very strong, and I think it's a multi-year trend. COVID has accelerated it and, you know, we need to expect that to continue. Because once people are hooked on to digital, I think it's a trend that's here and it continues to accelerate. That's one. In terms of the advertisers, the industry verticals that we are working on and the clear strategy and verticalization that we are seeing, increasingly direct advertisers working with us form 74% of our revenues. This strategy is working very well on a broad basis across, you know, the top verticals contributing over 90% of the revenues. Within those verticals, we see existing customers, new customers, and, you know, our sales teams, and we are consistently pushing for growth on those parameters. This is happening across geos. You know, it's happening for us in India. It's happening for us across international markets. What gives me great confidence is that the growth is very broad-based. It is not that suddenly one customer has become really big or one particular contract has become really big. It's a very broad-based growth coming across verticals, across geographies, from existing and new customers, and that is, you know, really sustainable in my opinion. I think the engine of growth is working and the momentum is strong. Thank you. The next question is from the line of Mayank Babla from Dalal & Broacha. Please go ahead. Hi. Thank you for taking my question. Sorry, I was on mute earlier. Congratulations on a great set of numbers. I know [Jen], Kapil, sir. Very good execution. I had three questions, primarily. One was, if you could give the categorically converted users in the organic business and what was the contribution from Jampp in the converted users this time. That was one. Okay. All right. I think the contribution for the Jampp on converted user basis is not something that, you know, we have published in our earnings report. Suffice to say that international markets, the CPCU rates are higher and the number of conversions is not so high, right? In terms of the math of it. In terms of the contribution from organic business is more than 80%, actually close to hovering close to 90%, is coming from organic business conversions and, you know, 10% and less than 20% coming from the inorganic. The focus of the company, as we go forward, will continue to be on the converted and conversion-based ROI-focused business model, as we execute and expand our business across the board. We are seeing a very strong uptake of this business model. What has really encouraged us is that we are able to execute on this business model even on certain verticals in developed markets on iOS as well. I think that is extremely encouraging and something to be looking forward to as we continue to scale and expand. Sure. Okay. Thank you for that. My second question is regarding Jampp itself. Sir, we've seen a strong growth in this quarterly run rate. While CY 2020, the annual run rate of Jampp was around $29.5 million, which roughly converts into INR 545 million. This time the contribution, as you said, was 30% of revenue, which is around INR 800 million, roughly INR 800 million. My question to you was what is this normalized growth rate, or what is the normalized run rate that we can or you know assume so that we can get a sense on the future earnings? Sure. Let me answer that qualitatively for you first, so that you can understand what is happening much better, from a ground execution perspective. Prior to the acquisition, Jampp was in a tough spot. They were not profitable, certainly not cash flow positive, and they were therefore playing on the back foot. There was COVID impact, across a lot of their markets, and key customers of theirs were, you know, down because of, COVID. You know, there's a lot of their, sort of, customers were on on-demand services, you know, food delivery, taxi delivery. You know, when things were really shut down in some of the markets, in some of the countries, they obviously had a bad time. Therefore, from a management execution mindset, it was a survival mode. Overall, you know, from a cricket analogy, playing on the back foot just to keep the wickets in hand, you know, and not really trying to score a lot of runs, you know. I think they were just on the back foot. With the acquisition, I think we have been able to bring the entrepreneurial culture on the forefront, the growth mindset, the go ahead and get the business and let. The fact that they are back in the black, you know, the cash in the bank now of the company, the baggage of dealing with conflicted interests of all kinds of investors they had in the past. All that is gone. Now, it's just Affle. There is money in the bank, and there is clarity of direction. Think of it from a very defensive play to keep the wickets to actually, you know, let's go and score. That is what has changed. I think that's when I say the cultural integration has worked well. The financial integration has worked well. I mean, we've got the audits and compliances achieved within, you know, very short span within the first quarter across geographies, and so on. The tech integration has also worked well, which is leading to, you know, better sell-through rate, better extraction of budgets from the customers, because now you're going and proposing a broader set of capabilities, and so on. Then we are consequently seeing the impact on profitability as well. I think there is growth on all fronts, including growth on team costs. We are investing. I mean, in the case of Jampp, the team has grown, and we have really shown them the growth path. Profitable growth momentum is the keyword. Continuing to grow is important. What you're seeing now is, let's say, the correct reflection of where the business should have been. If you look at calendar year 2020, had they had better funding, more clear strategy, then they would have probably done better in that year. We had analyzed all of that, and when we acquired the business, the thesis was clear that, you know, how we will turn it around by bringing additional scale, growth, better business model, better pricing efficiency, and then, you know, one step at a time, improve its profitability. Now, where it is now, I would want to focus on enhancing its profitability metrics versus just scaling with a 5% contribution on, you know, at a time back. You know, this is something the priorities are clear. Get the unit economics to a better place and, of course, continue to scale. But the priority number 1 is get the unit economics right. I'm not giving you any guidance of, you know, continuous growth momentum. If we over-deliver on that's something to celebrate. I think the focus and priority on execution is clear. Improve the unit economics and scale sensibly to internally accrue positive cash flows that are generated in the business. I think that's the best way to answer it at the moment. Thank you. Before we take the next question, a reminder to the participants, please limit your question to one per participant. You may rejoin the question queue if you have a follow-up. The next question is from the line of Ruchi Bhurde from BP Capital. Please go ahead. Congratulations to the team for the excellent set of numbers. I have questions starting with the iOS policy changes. I know this forum has discussed it a lot, but trust me, we get a lot of questions on this. Anuj, in the U.S. with the iOS policy changes, we saw a very diverse impact on the businesses of digital advertisers there, wherein the Android ecosystem benefited a lot in terms of rate increases. Did you also experience the same, any comments on that? I'll make two comments on this. One, that Affle is really strongly anchored on emerging markets, which consequently makes us very strong on Android. Secondly, the fact that we had done the acquisition of Jampp and the timing of the acquisition, if you look back, it's around the time when iOS 14 was being rolled out, and we said we want to take the opportunity head on and grow in that segment. At the back of our credentials that as Affle group, we are very strong in Android. Now, when the advertisers became shaky on, okay, what's gonna happen on iOS and so on, they were looking for partners who are very strong in Android, and we came out, "Hey, we are the, you know, strong players on emerging markets and Android. Choose us, select us." Plus we have now on ground presence in North America, where iOS 14 impact is really the strongest. We had differentiated capabilities that we rolled out for the advertisers to give them confidence on both fronts. That, hey, as an advertiser, you want to reach out to consumers broadly and drive ROI. They were shaky on iOS, where we came with some innovations and said, "Hey, we have something for you here." If they were thinking that they were shaky on iOS and they were shifting any budgets to Android, then again we stood tall and said, "Yes, Android, this is our home ground, you know, from emerging markets." I think it really worked to our advantage. This is what I was saying earlier. Whenever a change happens, which is an ecosystem level change, the organizations that have entrepreneurial agility and culture, the organizations who have tech innovation bag capabilities which are preemptive in nature, and we are always investing ahead. You know, we're not reacting that something has happened, and we quickly scramble to come up with something. We're always investing ahead. Both those combinations with clear execution focus, you know, is the way that Apple has maneuvered and made the most of this opportunity. We have benefited on Android, and we have also benefited on iOS. That is shown in the results. That's where some of the people who were underscoring and under-calibrating that said that, "Hey, this is over-performance." You know, I think this is the right level of performance based on the execution strategies we put in place. That's really great to hear. I know, I mean, we are predominantly Android. We operate in Android-dominated market. Even if you look at, I mean, sub-segment in India also, the iOS would make up, if not more, at least a low double-digit number of mix. If you look in your, you know, devices that how was your experience for the iOS devices in the last quarter? Did you see any drop in the efficacy of your platform, especially for the iOS devices or it wasn't material? I wouldn't say that the change wasn't material. I think the industry has seen that the change is material. With that material change, there are some fundamentals of our industry that won't change, right? I mean, the advertisers' budgets did not shrink. The advertisers' budgets going to digital is only increasing. Now, whether it is going to Android or iOS or it's going to Google, Facebook or not, I mean, it's all-around growth, right? In terms of advertisers wanting to spend on digital to connect with consumers. That macro trend is a pillar of strength because the demand for digital advertising from the businesses, small and large across verticals and markets is very, very strong. Next is the consumer trend. The consumer who is still using the iOS device is still a valuable consumer for The consumer is going to do conversions from the mobile phone, whether this way or that way, and the consumers are also deeply married to their devices. These two sides of the ecosystem, on one side the advertisers' budgets are there, on the other side, consumers are not leaving the train, you know. The rest of it is technical execution that, oh, this has changed. You know, you've got to adapt and make it happen. I think what we've seen is that those who are able to adapt are rising faster. Those who are not able to adapt will scramble through and adjust, hopefully in time. I think for us, you know, like I mentioned, we've benefited on both sides, on iOS as well as on Android. I'm pretty confident that we'll continue to improve and execute better going forward. The nervousness or risk around the change is behind us because we have, you know, crossed that hurdle with strong outcomes. I think that builds confidence because we're seeing customers across verticals, it's a huge booster in our own conviction of where we are headed. Thank you. The next question is from the line of Rahul Jain from Dolat Capital. Please go ahead. Yeah, hi, thanks for the opportunity and congratulations on great set of numbers. Most of my question has been answered. Just one or two thing I would like to clarify. First of all, you explained well on the Jampp, you know, what kind of outlook and thinking we should have. From a more sustainable point of view, given the kind of market it is playing and with the cultural shift that you spoke about, what are the ideal, you know, range of growth rate it should aspire for? Because the market opportunity could be a little different compared to what we have, that 25%-30% kind of a mindset at the corporate level. So any input on that would be of help. Sure. The underlying assessment for any acquisition that Affle does, and this is our internal sort of assessment, and I'm sharing that with you so that not only does it apply to Jampp or our earlier acquisitions, but also in future, if we do any acquisitions, the playbook is very clear. One, we will only acquire those businesses that we believe we can continue to build and grow with the kind of growth momentum that we expect from Affle overall, which is to beat the industry growth trend. The 25%-30% CAGR growth that we are seeing on a broad basis for digital advertising, we expect every part of our business to grow that way. That's one. Secondly, we expect to turn around the acquired businesses where they are breaking even or struggling to make them profitable over this period of time. For that, we give ourselves about 2-3 years to bring them to a high teens or, you know, 20%+ EBITDA kind of a margin performance over that period of time. So earlier you were talking about Jampp from bottom line perspective. Now you're asking about Jampp from a top line growth perspective. Let's say 1 year, give us 1 year+ to make sure the unit economics leads to a level where the growth is organically funded through profitable cash flows, and we need to solve the unit economics and priority number 1. The next priority comes where we get to the same level of CAGR growth rate for the future, which should be hopefully at least 20%, if not higher, and then grow it to 25%-30% CAGR for the longer term. Thank you. Just last one question. One from your capital that you have available, a significant part of it, so are we at a point, given the stability of, you know, in the Jampp integration process. That we are ready for a big acquisition if it comes our way. That is point one. Second, in the standalone operations in this quarter, we have seen significant jump in the inventory and data cost 25%. Is it because we might have some optimization in terms of you know booking this cost at a enterprise level in the standalone operation or is it only relevant for the standalone revenues? Thank you. Okay. I think for your first question with respect to bandwidth, whether it is financial bandwidth to pursue another acquisition or management bandwidth to pursue another acquisition, let me assure you that the acquisition of Jampp has only increased our management bandwidth and capability, not consumed or entangled it. The quality of the management team of Jampp is strong. You know, the top leadership and the depth of it is strong. The fact that we now have a very strong management team that's aligned with us for the long term in those geographies is actually a big advantage of the acquisition. Therefore, the ability for us to do any acquisition, whether in terms of financial bandwidth or in terms of management bandwidth, that is strong. Having said that, we are very, very prudent with respect to the acquisitions that we do, the investments that we do. We have learnt over time that, you know, there is, you know, doing a wise and carefully calibrated acquisition is more important than just doing wise. There is no undue pressure or stress that, "Hey, there's cash sitting there, better do something," or, "You have bandwidth, so why don't you do something?" If we find the right target, I assure you we will do it. Finding the right target has many, many factors that one has to see, and we will carefully calibrate it. There's no short-term or medium-term guidance to this. The readiness is there and the capability is there and the options are there. You know, we will choose the right time to do it. That's one. The second part of your question was, frankly, standalone and cost. I didn't quite understand. Kapil, if you have understood it, can you answer that? I will take this question. You are comparing the data inventory cost on a sequential basis in standalone. I would request you if you compare it on YOY basis, because every quarter has its own nuances and availability of the inventory and the costs associated with it. Your comparison with sequential, I would request if you can compare it with the YOY September standalone, you will find that the metrics is intact. Hello? Does that answer your question? Thank you. Before we take the next question, a reminder to the participants, please limit your question to one per participant. The next question is from the line of Sumer Choksey from IIFL Securities. Please go ahead. Yes. Thank you. Am I audible? Yes, you are. Yeah. Thank you. My commendations to you, Mr. Khanna Sohum and the rest of the team on an excellent set of numbers. I'll just limit my question to one, and it's slightly elaborate, so do bear with me. Now, this pertains to Affle's future growth narrative. So far, the company's been largely focused on, you know, visual advertising as a medium. Today, what we're seeing is advertising purely through voice-based mediums is growing as well. We see, for example, Spotify provides voice-based ads in its free version prior to song streaming. You're also seeing conversational e-commerce purchasing itself is growing extremely rapidly. Bearing this in mind, do you foresee this is a business opportunity for Affle? Is this something you all believe you all can address through your R&D capabilities? Would it be fair to say that the Affle 2.0 strategy could accommodate a third V besides verticalization and vernacular in the form of voice? This builds largely also on the back of your podcast-based IP. If you could just share some flavor on that would be great. That's a great question. Thanks for your references to our 2V strategy of Affle 2.0 as well as our voice-based podcast kitchen that we've got in the U.S. market. It's absolutely right that this is a growth opportunity for us, where we look at connected households and connected devices. Here I'm just elaborating to give you a vision and a very human sense of how consumers and all of us will behave going forward. Our households will have voice-based devices. Our wearable devices will also have voice commands. You know, we'll be changing the lights and the fan speed and the air con turn off and all that. Home automation is going to happen over the next several years. Our cars will have these capabilities and so on and so forth. While the mobile device and the connected TV device will continue to be strong visually led devices and will form a big part of the consumer experience for next 3-5 years, there will be increasing number of wearable devices, home automation connected devices that will come where the interactions would be different. Where we would be listening to it, or we will be giving visual commands to it, or when we are listening to something. For example, if you're listening to music. Now, I mean, none of us would necessarily want to, you know, interrupt that experience by having an ad playing between the songs. You know, whether you're listening to a bhajan or a Bollywood or a Hollywood or a, you know, whatever kind of music that you may love or like, we don't want a sudden out-of-context audio ad playing in between, right? There will be components of visual advertising, together with the voice-based experiences and integrated experiences will come. One of the ways to deal with it, for example, you're driving a car and you see something on the screen, you listen to something with your ears. You can't touch it? Nor do you want to interrupt by speaking into it because there's another audio playing. Using gestures to then do a command. If I'm interested in something or, yeah, I like this, just keep it for later, I'll look into it. Or using some smart gestures. I think those are the kind of use cases and consumer behavior use cases that Apple has already done research on, has a patent on that's already granted. Which I think is a clear indicator that not only are we giving lip service to future trends, we are investing into them, and we are building competitive moat on that preemptively before these become big market opportunities. The fact that we already launched our connected TV, connected household initiatives last year in India is indicative of that, because the market is clearly very, very nascent. You know, we have already launched products, investing in that. We are ahead of the curve, and we are excited about these possibilities. The next three to five years, I can assure you, visual ads is not going anywhere. It's only going to continue to grow. Voice will be nascent, small, but, you know, an exciting space. We love to be in exciting spaces. That's what we like about our industry, and we will definitely continue to see that as an opportunity and build IP in that area. Yes, the third V, you could say is voice or, you know, vernacular verticalization, voice. Of course, we already have a case study with video ads and sponsored videos. We are holistic in our thinking and our strategy. Thank you. Thank you so much for that. I'll just, you know, quickly ask one follow-up. I'm cognizant that we should be asking only one, but just, you know, with regards to your new patents, which you all did file in the USA regarding the blockchain IP for fraud detection and the podcast-based IP, do you see this bringing in revenue anytime soon, or could you give some sense on that? I want all investors to know that IP and patents, these are foundational blocks of any tech innovative company, and these are strong indicators about the future of the company. What is it that, you know, we have IP for? What are we building? What is Apple investing in? What are the directional things that are happening? You see that. Then why do we go and apply to U.S., you know? I mean, because U.S. is one market where these IPs are most valuable. I mean, this is one of the largest markets in the world, so even though we are not necessarily, you know, on the ground executing, we want to make sure our IP innovations are recognized, registered over there, because that's where it is most valuable. Of course, you know, we can then command revenue possibilities over time over there. It's lesser about immediate revenue and financially. It's more about strategic long-term sustainable growth direction of the company and reflecting the culture of the organization, you know, that we are creating. We are inventors first, then we are entrepreneurs. We invent new things, then we go and execute and commercialize it as entrepreneurs, and then we execute for scale and growth and market leadership and thought leadership. Those are the steps. The patents that we have filed, whether granted or not, are indicators of that. It is also defensive strategy where, you know, some of the larger companies who have patents, they sometimes try to muscle out or, you know, throw patent walls at, you know, companies to keep them out. We want to make sure that we can utilize that by having our own set of patent portfolios to counter that, you know, when that happens. It also works as a deterrent in case somebody goes, you know, anti-us on some patents, we can counter that back and say, "Look, on your home ground, we have all these patents, so better watch out you don't." There is forward-looking foundational strategy in the IP portfolio, and there is also defensive strategy in the IP portfolio, and we cover both grounds with what we have done. It is not just about, you know, short term, what's happening to revenue and profits with that. I think it is, it's a decade-long view for us, for Affle 2.0 strategy, and this is how you should see IP and patent-related, updates from us. Understood. Thank you so much. Thank you. Ladies and gentlemen, due to paucity of time, we take that as the last question for today. I would now like to hand the conference back to the management for their closing comments. Well, thank you so much for joining the call today. I would like to congratulate all our shareholders and also for those who are interested in evaluating Affle as an investment that, you know, this Q2 result is a landmark performance and is deeply anchored and a validation of our entrepreneurial culture, tech innovation, and continuous execution focus on the Affle 2.0 strategy. Looking forward to, you know, updating you more as we progress in the next two quarters of this financial year. All the best and take care. Thank you. Thank you. On behalf of Prabhudas Lilladher, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.