Gentlemen, good day, and welcome to Affle (India) Limited third quarter and 9 months ended FY 2023 earnings conference call hosted by Ambit Capital. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashwin Mehta from Ambit Capital. Thank you. Over to you, sir. Thank you, Michelle. Good morning, everyone. On behalf of Ambit Capital, we welcome you all to the Q3 and nine-month FY 2023 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 the Managing Director and Chief Executive Officer of the company, and Mr. Kapil Bhutani, who is the Chief Financial and Operations Officer of the company. Before we begin 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 26 of the company's Q3 earnings presentation for a detailed disclaimer. I now hand it over to 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. We achieved robust growth in nine months FY 2023 to close the period with revenue and PAT almost at par with previous full year, while we clearly surpassed the previous full year EBITDA by 4%. We reported this quarter with the highest quarterly revenue and profitability run rate, highest CPC revenue and user conversions. Sequentially, Affle delivered revenue growth of 6.1% and a PAT growth of 17.6% quarter on quarter in Q3 FY 2023. We achieved revenue CAGR of 58.5% in Q3 over the last 3-year period, much ahead of the industry's growth trends. Our CPC business noted a strong momentum, delivering 67.8 million user conversions during the quarter at an INR 51 CPC rate. Overall, our CPC for Q3 increased by 14% year-on-year. CPC revenue for Q3 increased by 14% year-on-year, ahead of the total revenue growth of 10.8% year-on-year. Our CPC business continues to be resilient and underlines the long-term sustainable business momentum. In terms of the nine months of FY 2023, we achieved revenue growth of 40.6% year-on-year, PAT growth of 20% year-on-year, and this growth was largely well balanced across the three quarters. Despite the ongoing global headwinds that have clearly impacted businesses globally, our strong anchoring on India and other global emerging markets has enabled us to perform well. Our growth for India and global emerging markets was approximately 23% year-on-year. Our unique CPC business model and focused execution on higher profitability and productivity underpinned our margin expansion on both quarter-on-quarter and year-on-year basis. However, macro headwinds continued to impact our business in developed markets in U.S. and in Europe. As also guided in the previous quarter, to mitigate this short-term impact in developed markets, we realigned our execution strategy and operating resources to focus on improving our platform-level buy string and profitability, as well as maximizing our strategic partnerships. We have consistently holding our ground on quality of revenue, CPC pricing, and our market position of being a high ROI verticalized business for the advertisers. We are focused on driving deeper consumer conversions for our customers, drawing significant moat for us from our Affle 2.0 strategy. We deliver a broad-based growth across our top industry verticals in category C, X, G, and H. This has strengthened our moat, and our direct customer contributions to that 71.8% of our revenue in nine months for FY 2023. To reiterate our strength of delivering unique consumer experiences, we have in total shared 18 case studies in our earnings presentation over the last 6 quarters. These were focused on some of our key industry verticals, including e-commerce, edtech, entertainment, finance and banking, FMCG, food tech, health tech, and so on. Continuing on our sharing our happy customer success stories, this time we have included three unique case studies focused on the first one being, Tata Neu, the super app in India, driving greater consumer adoption for online transactions in India. Here we delivered 2.3 times quarter-on-quarter growth in conversions. The second case study is from a banking app, a Bank Jago app in Indonesia, again, focused on joining the race for essential financial services. Here the distinction... by the way, here we gained 2.5x quarter-on-quarter in terms of conversions. Now, what I'm trying to emphasize with these two case studies or to indicate to you is that these are actually supported by either traditional large conglomerates owning and getting into digital or traditional financial services like banking and essential services-Delivering to greater consumer adoption on digital, and therefore there is little or no dependence for such customers on, let's say, new funding or venture capital funding or, you know, what's happening with products. The third case study that we shared here is of TapNation. This is for hyper-casual gaming. This is a very fast-growing and globally resilient vertical driving user growth across geographies, including in U.S. For Tap Nation itself, we delivered 1.5 million user conversions in the last quarter and got them to be the number one app in the Android app store in the U.S. I think these are very important sort of qualitative indicators of what Affle is focused on and how we are building our trajectory for greater growth and possibilities, not only in emerging markets, but also finding those emerging verticals in developed markets where we can accelerate and create a high margin growth, sustainable growth possibility. We therefore remain confident of the long-term business prospects, and we continue to invest in our organic growth operations to drive sustainable growth. We are also actively evaluating inorganic opportunities with calibrated focus on higher bottom line growth for FY 2023 and beyond, with greater emphasis on high growth industry verticals. Our strategy is absolutely clear. It is looking at high growth but also sustainable bottom line expansion, and that's something that I believe we have talked about very clearly, not just for organic growth this time, but also given these market situations. We feel we can apply inorganic growth without compromising on the margin expansion even within the first year of that possibility. Affle continues to also be recognized as an industry thought leader, and as a testament to that, we were awarded the Momentum Leader for the demand-side platform and were included in the high performance categories in the prestigious G2 Winter Reports 2023. Recently, our platforms also won seven more awards, including awards at India GDP Plus 2023, as well as awards at the Mobexx Awards 2022 organized by Adgully. With that, I now hand over our discussion to our CFO, Kapil Bhutani, to discuss the finances. Thank you, and over to you, Kapil. Thank you, Anuj. Wishing everyone a good day and hope all of you are keeping safe and well. Continuing our growth momentum, quarter three revenues to that INR 376.1 crores, that is INR 303,761 million, a growth of 6.1% quarter-on-quarter and 10.8% year-on-year. We had a significant group revenue growth of over 10% in India and emerging markets on a sequential basis and approximately 23% growth year-on-year. Except for developed markets, which anyways has a lower contribution for us on a consolidated basis, our business across global emerging markets remained resilient with our with an overall bottom line growth momentum and margin expansion. Our nine-month revenue stood at 10,781 million, which is INR 1,078 crores, a robust 40.6% year-on-year. We recorded highest quarterly EBITDA of 804 million, which is INR 80.4 crores, which was higher by 21.4% of our revenue, an increase of 11.1% quarter-on-quarter and 18.7% year-on-year. In terms of OpEx, inventory and data cost was at 60.7% of our revenue from operations in Q3, an expansion of 138 basis points sequentially. Driven by our conscious effort of focusing on higher margin revenue, our employee benefit expenses on quarter increased sequentially by around 4% based on appraisals in few geographies and as a percentage of revenue in line with our previous quarters. Our normalized pro-profit after tax for quarter three FY23 was INR 690 million, that is INR 69 crores, an increase of 17.6% quarter-on-quarter and 14.8% year-on-year. Normalized PAT for nine months FY23 stood at INR 1,829 million, that is INR 182.9 crores, an increase of 40% year-on-year. Please refer to our slide four and five of the earnings presentation. Our effective tax rate is slightly higher this quarter, as it is inching towards long-term higher tax rates on account of lower deferred tax assets of acquired businesses. We remain focused on working capital management and our cash from operations and collection efforts have been robust. We have an extremely prudent customer profile, as such, there are no material changes in our collection risk. Affle is very diversified in with regards to markets served, tech use cases, platforms, customers, publishers, and has reasonable cash in hand. We remain constant, confident of long-term business prospect to invest further in our business and stand committed to deliver long-term sustainable growth. With this, I end the presentation. Let's please open the floor for questions. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handouts while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. While the question queue assembles, I'll go ahead with one question for Anuj. Anuj, international markets, especially U.S., has been a drag for us. What are we seeing from a customer decision-making perspective? How close do you think are we to bottoming out? Given our smaller scale and capabilities, where do you see the opportunities to outperform this market? Thanks for that question. I think it's very important for all our stakeholders to understand that, you know, Affle is not only anchored deeply on India, but also as global emerging markets contributing together with India, almost 80% of our revenues. Yes, the developed markets contribution is smaller for us. Our presence in developed markets is also relatively small, right? But those are very large addressable markets. Even though those markets are feeling the headwinds at the moment, we are relatively small. I mean, we have a few customers there and a few verticals, and, you know, if those customers are holding back budgets or anything like that, we will see some of those headwinds impacted, which has clearly been the case. We, in fact, quantified it for H1 this year. You know, clearly we can see that, we grew 23% in, you know, India and global emerging markets. Clearly, you know, the developed markets were not doing so fantastically well for this quarter. I think the outlook for 2023, calendar year 23 and, mentioned in 2024 is actually quite positive in my opinion. The reason why it's positive is because, one, I just came back from the U.S., in fact, I'm not yet over from my jet lag. I have looked at what's happening with that market and more from an internal perspective, right? I mean, you can say how much of this loss was, you know, or this slowdown and headwinds is attributed to external factors. What else can we do internally, right? What can we calibrate so that we can accelerate faster, more sharply ahead in some of the verticals? I found certain areas where I know these are low-hanging fruits. You know, we do these three, four things right in the next, you know, few months or quarters, and we'll start seeing, you know, a more broad-based, you know, growth emerging for us because our base is very small in developed markets and, you know, the addressable market is still very large. I think, yes, external factors are there and they've impacted us. Let's say we're well geared up and I know a very clear action plan that we need to do over there. Let's see how it turns out. I have a feeling that, you know, within the next couple of quarters, we will turn the situation around. It should be easy for us because of what we mentioned, I mean, differentiated proposition. You know, we know what we need to... We just need to execute to the new ground realities and I think we're calibrating well towards it. Thanks, Anuj. Just one follow-up. We also saw the margins in the international markets go up despite the revenues being flattish for us. From an investment perspective to tap these opportunities, how are we looking at that? See with, you know, it's counterintuitive. When you think that there are headwinds, a lot of times people would say, "Okay, to go ahead, we need to drop our pricing or margin." A lot of people think like that. When revenue is not coming easily, one, you know, very straight reaction is that, okay, let's, you know, do something like that. In Affle's case, in fact, we follow the very contrarian strategy. In fact, I've been commenting on that quite deeply before as well. I said, look, we'll focus on profitability. We'll focus on margin expansion. I mean, when the headwinds are already there's only, you know, there is only so much that you can drive forward. At least let's make sure that how much ever we drive, we maximize and strengthen our moat and our position, right, hold our ground well. What we did in this time is that we told our sales team and our customers that, "Look, the number of conversions that we are bringing into the market are quality deep funnel consumer conversions." Now. There are enough takers for it, okay? We were not going for volume. We were not saying that, "Hey, give me a volume budget," or, you know, "I want to, you know, get INR 400 crore of revenue in this quarter." There was no emphasis on volume of revenue. It was only quality of revenue. Pricing is held. We knew we had enough quality conversions to sell, and we knew we had enough advertisers to give us a good price for the budget. We had conviction in that. We held our ground, we kept that focus, and we said, "Look, we have only this many conversions. If you take it, if you cannot pay the price, don't worry, we have other advertisers who will take it," right? We are able to hold our ground, so we're able to hold our pricing. If you see the contribution of India versus international, almost 65%, 35%, right, in favor of international. The CPC rate typically would have seen some fluctuation. In our case, we have been able to actually improve our CPC rate in this time, which is counterintuitive, right? I mean, saying that most people would think that, you know, recession or, you know, these kind of headwinds would mean pricing comes down. You know, if you emphasize on quality and you know, put a scarcity premium and say that, "Look, we have enough advertisers to buy, and I'm not looking for volume," right? I was not pushing for, "Hey, you know, give me another few million dollars of budget." We were not scrambling like that. Given that context, we were able to hold our pricing, actually improve our pricing, and that has reflected in the margins, not only in international, but also in emerging markets internationally as well as in India. That strategy has actually helped us, and we are able to hold our ground and not commoditize. When the markets actually improve, I mean, you know, we should be able to definitely defend our pricing and margin then, you know, if you're able to defend it in these tough times. With that philosophy, I think it has held us in good stead. Thanks, Anuj, for your detailed answers. Well understood. Thank you. Operator, can we, take the questions? Thank you. Sure. Ladies and gentlemen, in order to ensure that the management will be able to answer questions from all participants, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. We have the next question from the line of Abhishek Bhandari from Nomura Capital. Please go ahead. Thank you for the opportunity. Anuj, I just had one small question on your non-CPCU business. While it is not material, but you know, that part of the business, seems to be, you know, declining, maybe at least for last two quarters. Historically, it has grown at a pace lower than CPCU, given our focus. If you could clarify what's happening on that part of the business? Also, can I collaborate that the increase in margin also has to do with a falling contribution of non-CPCU? I think the like you qualified in your question, first of all, it's not material. I mean, the CPCU business is bulk of our business. It's very natural that, you know, it's, you know, when times are tough and, you know, selling is hard, you sell what you can sell at the best price and margin and go out there and make that happen. I think the CPCU business is clearly resilient. I mean, you know, we want to anchor ourselves as a, you know, differentiated business model, ROI-driven, verticalized for advertisers, going deeper funnel, verticalized, higher value conversions, and so on, so forth. I think the emphasis is clear. You know, you work on... When times get tough, I guess you work on your strengths rather than on your, you know, areas of, let's say, opportunity only, right? I think we're maximizing on our strengths. The non-CPCU business continues to remain a great opportunity for massive expansion going forward, whether it's online to offline conversions, whether it is, you know, driving newer use cases or even, you know, platform as a service, like, you know, coming up with those kind of self-serve mechanisms of licensing or enabling technology. There are many opportunities there for us, and those opportunities continue to remain as long-term opportunities. I think in these situations, we had to choose and say that, "Look, we have this much execution bandwidth, and let's maximize on where we can extract our greater, you know, profitability, better pricing, and so on." I think that's just an execution choice. I don't think we should read into it as, is the opportunity in non-CPCU, more shrinking? I don't think that's the correct way to look at it. Yeah. Mr. Bhandari, any further questions? No, I'm done. Thank you. Thank you. The next question is from the line of Mayank Babla from ENAM Asset Management Company. Please go ahead. Hi. Thank you for taking my question. My first question is regarding the growth in the quarter, specifically in Q3. You know, 11% Y-o-Y growth is, you know, much below than the sort of 25% annual growth that you're foreseeing in this industry, specifically in the CPCU business. What is attributing to this, you know, lower growth? I mean, even though we have a higher exposure to India and emerging markets and lower to the developed. Has there been any delayed decision-making on the client's end? Or if you could give, you know, throw some light on this. All right. Actually, I earlier tried to answer this question already, in terms of the mix of growth, right? When we look at Affle's business, maybe let's see it as three buckets. One, India, where we grew approximately 23%. In other global emerging markets, where combined with India also the growth is in the similar range of 23% year-on-year. Then developed markets, where 80% of our business, which is India and other global emerging markets, have actually shown reasonable consistency in terms of its long-term growth trend, which is what you were talking about, the 25%. I think it's within that range given a little bit of a larger base in Q3 last year because the festive season didn't have the headwinds as strongly as the festive season this time had headwinds. It's not exactly comparable. Even with that, delivering 23% growth in India and other global emerging markets, I think is. I would take it as a great performance. Very happy with our teams focused on emerging markets. Going to developed markets. Clearly, we saw that in the developed markets there was a contraction, and the contraction is on a small base. We have a small base of customers there. If some of those customers who are existing customers are holding back budgets or, you know, stopping some activity for some time, then there is obviously an impact. We saw an impact in the developed markets largely localized into a few verticals, a few customer accounts in U.S. And Europe. Is that something to become nervous about with respect to, you know, rest of 2023 or rest of 2024? The answer is no. As I just mentioned earlier, I've just back from a trip to the U.S., I am in touch with the ground realities. I know that how we can do certain improvements in our execution with internal optimization, as well as because our base is small, you know, as we win a few more customers and broaden that base because the addressable market is very, very large. Even if that market is having headwinds. Ladies and gentlemen, the line of Mr. Anuj Khanna Sohum has been disconnected. Kindly stay connected while we try to reconnect him. Ladies and gentlemen, thank you for your patience. The line for Mr. Anuj Khanna Sohum has been connected. Over to you, sir. Well, thank you. Sorry for that interruption. I was just saying that the developed market, the addressable market is still large, and all we'll do is have a smarter execution strategy. There are certain emerging verticals where we believe that we'll continue to find resilient budgets and growth, and our differentiated pitch will help us to win more customers. You know, we have our action plans in place, and I'm reasonably confident that we'll show meaningful results in the next couple of quarters. I mean, the way to look at it is like 80% of the business is absolutely on track. Yes, in U.S. and Europe markets there is some contraction, and I think we are having action plans to neutralize that going forward. I hope that answers your question. Yeah. Yeah, that does. My second question is to Kapil, sir, regarding the margins. Great execution on margins. Congratulations. Just if you could, you know, if we could attribute this to, say, good execution in the acquisitions like Jampp, or this is purely out of better cost control in the rest well organic business. If you could explain that please. Yeah. The margins are overall have been improved under the strategy to work with the clients to improve our CPC business, which is which has a higher margin profile. As well as, we have been focusing on customers that Anuj has said that we have been prioritizing the conversions to customers who are paying better to us, and we basically can command a better CPC rate. It has been a conscious strategy to improve our margin in this quarter. Sure. Are you giving out still, what sort of margins is Jampp doing or where we can take it offline? Generally the, if you see the profile, overall we have increased our margin by about 1.4%, that is 138 basis points. Mm-hmm. If you see the breakup, India is under 100 basis points and rest of the world is over 100 basis points, right? There is clear synergies coming in from the markets which are facing headwinds. We have been trying to work on the CPC rates to hold on to margins and improve our performance on the margins. The focus has been on bottom line margins in this quarter. Sure. Sure. Thank you so much, and best of luck with it. Thank you. The next question is from the line of Anika Mittal from Invest Research. Please go ahead. Hello. Am I audible? Yes, please proceed. Yes, you are. Okay. My first question is, can you spend some two minutes on explaining company structure as a whole? What I'm asking about is the organizational structure as a whole, holding as well as the 3D structure. Company structure. I hope I understand your question correctly. We are a listed company in India, and we have subsidiaries around the world. We have material subsidiaries in Singapore, which is Apption International, 100% owned. All other subsidiaries are 100% owned except for I think Appnext Singapore, where we have a minority ownership, where there's a definitive agreement to buy the rest from the promoters who joined our company through the acquisition. Yeah. I think that the company structure is to be answered like that. Is there any specific question that you have around it which you would like us to elaborate on? Otherwise, it's basically the India company has all the global business under it. It has subsidiaries internationally, which are 100% owned or to be 100% owned. Basically, I wanted to understand the relationship of parent and subsidiary tier structure. I couldn't understand your. ... your holding company. Sorry. What I'm asking about. The holding company. Holding company structure. You're talking about the promoter group. You're talking about the promoter company in Singapore. Sorry, I didn't understand the question. That's correct. Sorry, I think the line is not clear at all, and I'm not sure if you're asking about. The structure question can be taken on side. I would request that the structure question can be taken on side. This is focused on an earnings presentation. Can we take this opportunity we can focus on this quarter's earnings, and if you have any questions, yeah. Miss Mittal- You can send your questions. Okay, Miss Mittal, may I request you to please rejoin the queue? Your voice is not clear, ma'am. Ma'am, just one question. Oh, okay. If I can proceed. Yes. Company is not paying any dividend while company is growing at more than 35% in top line. What is the company's rationale for not distributing the dividend? Ma'am, we are a fast-growing company. Yeah, I'll let you handle it, Kapil. We are a fast-growing company and it is imperative for us to look at the capital allocation with respect to how we're creating value for the shareholder in the long term. We are always deliberating. We're not close to any possibility and, you know, at the right time we'll take the right decision. As a board of directors, looking at it from how to maximize value for the shareholders. If applying that capital for organic and organic growth is the way to create greater value for the shareholders, we would do that with prudence, with careful calibration in a very bottom-line sensible way, making sure that we are always capital efficient. If we have surplus capital, which is not needed to fund the organic and inorganic growth plans of the company, we would certainly distribute dividend in that scenario. That's how I would like to answer it. Kapil, if you have anything more, you can please add on. Yeah. just wanted to make one point. We have been, we have stated this at our roadshows at the time of listing, that the company has made a policy that for the first five-year listing we will not be distributing for the dividends and we will focus on growth and deploying capital for growth. Thank you, sir. The next question is on the line of Arya Sen from Franklin Templeton. Please go ahead. Yeah. Hi, thanks for the opportunity. I just wanted to check, you know, last quarter you had given a guidance of 10% growth on second half versus first half. Now, based on these numbers, in order to achieve that, I think, you will have to show QoQ growth next quarter as well. Any update on that guidance or are you sticking to it, or any clarity on that? Yeah, I think the, I think the guidance has largely held us in good stead with respect to, let's say, India as well as other emerging markets where the growth has been, you know, significant, from even sequential basis, the trend lines have been meaningful. Even if you look at it from a CPCU business perspective, I think we have shown, you know, quite a good resilient growth. Therefore, I think the, you know, it was not really a guidance because we don't really, you know, go into that specific. I think it was more an industry outlook, which I had answered, that I expect that the industry should deliver that kind of an outcome for an overall scenario. In our case, more specifically, I think, as I said earlier to some of the other stakeholders who are asking questions, that we were not really pushing for, you know, top-line maximization. Like, let's say if there was a campaign coming in, an advertiser giving us a campaign for, I don't know, $20,000, at a lower CPCU rate, and in some cases we would, you know, in some quarters, we actually take up those campaigns and we say, "Okay, we will bring the advertiser up along the way." You know? Like, you can have, like, a few million dollars worth of campaigns which are maybe not as high margin or high value in terms of pricing, but we take it and we say, "Okay, you know, we'll pull them up, you know, along the way." I think in this particular quarter, our emphasis was very clear on productivity, on pricing, on profitability. In many of those cases, we were so strict about it that, no, I think we are, we are not going to compromise on this. It's, it was completely okay to not have that kind of revenue. Yeah. Also because some of the smaller, I don't know, campaigns or customers, you know, they could be, you know, later quality of revenue collection, kind of thing. We just want to make sure that we're working with, you know, our larger customers, larger accounts, which will be resilient, more profitable, better pricing and better volume, and that's how we chose to execute. I hope that is consistent with what you heard from us before. Sure. I mean, just to clarify, I mean, typically we have seen a sequential decline in the March quarter. Most likely that is likely to remain, right? There's no reason to believe this time would be any different. I think there is. It should be more flattish than. I mean, I think that the kind of decline you'll see, and the reason for that decline used to be not because that there's something wrong in Q4, I think it was always because Q3 was where the advertisers had exhausted most of the budgets. Now, when the festive season has, you know, headwinds in front of it and economic recession clouds on top of it, the advertisers are also more, like, balancing and flattening it out just to spend a little bit more in, you know, Q3. You know, typically, I think in this case we will see a more balanced Q3 to Q4 versus a, you know, usual kind of a thing. That because the Q3 was not as exhaustive in terms of the advertiser spend. I think Q3 to Q4 should be more flattish than otherwise. Yeah. Sure. Sure. You know, on the outlook for India and EMs, which are continuing to do quite well, you know, what's the outlook there? Are you seeing any further, I mean, any improvement there, or is it sort of continues to be similar? Can there be risk there next year? What's the outlook on that part? I can tell you one thing. From a competitive mode standpoint, Affle is in a very strong and a happy place. A lot of our competitors, big ones, small ones, first of all, they're not calibrated on India and emerging markets, so they are in developed markets where the headwinds are stronger and the business conditions are harsher at the moment. Our competition is getting weaker. In terms of India and emerging markets, our competitive mode is actually quite strong. I have no reason to believe that if what we have delivered in 2022, we should be able to at least deliver that kind of growth and, you know, hopefully a much better as we go along and execute in 2023, I mean, in terms of calendar year. So I am, you know, I mean, given the macroeconomic situation you know, nobody wants to hear an absolutely, you know, unqualified bullish statement, but if I could make one, I would say India and emerging markets will hold us in good stead. If we get our act together with some of the execution plans that I have put in place after my recent visit to the U.S. at least, I think we should be doing, you know, we will be surprising, you know, our, stakeholders with a resilient continued, growth performance going forward. Sure. Sure. Thanks. That's all from my side. Thanks. Bye. Thank you. The next question is from the line of Pranav from ASK Investment Managers. Please go ahead. Yeah, hi. Am I audible? Yes, please proceed. Yeah. Is it possible to share the breakup of the converted users between India and outside India for this quarter and last year? I wish it was. It's not at the moment because we believe it's comparatively sensitive information to reveal our CPCU average pricing for India as well as other markets. Having said that, I think qualitatively speaking, I can tell you that India is one of the most difficult markets in terms of unit economics. The fact that we are running successfully with bottom line, you know, good margins and, you know, sustainable growth performance, it should give you a lot of confidence that, you know, if Affle with its capabilities over these years can do well in India, then it is able to do better in other emerging markets like Indonesia, Africa or other Southeast Asian emerging markets first, and then follow it into LATAM. I think this is a good thing because the CPCU pricing is better in other emerging markets than it is in India. Of course, in developed markets, it's, you know, multiple times better. Overall, I can give you this level of detail and insight at the moment. As and when we feel that we are competitively safe enough to reveal more details about our pricing across markets and verticals, we will certainly keep you informed. Yeah. Sure. Just to follow up on that, based on your previous commentary, so pricing was the sole reason, why our CPCU rates have remained flattish on a year-on-year basis despite the SKU increasing towards the Indian geography. Is pricing the sole reason for that? Better pricing? See, when our revenue, used to be a 50/50. Sorry to interrupt. We are not able to hear you, sir. Mr. Anuj Khanna, sir? Sir, we are not able to hear you. Mr. Bhutani, sir? Just check whether he is on call or not. Sure. He's connected, sir, but we are not able to hear him. Sir, do you want to take this question? Can you dial him again? Yes, sir, I'll do that. Sir, in the meanwhile, do you want to take this question? Sorry, can you hear me? I'm still speaking. What happened? Yes, sir. Uh. Sir, we were not able to hear you. Kindly continue now. We can hear you clearly now. Okay. All right. I'm not sure what the reason was. Basically, what I was saying is that even in these times, we are able to make sure that we can keep our pricing intact and still deliver meaningful growth across India and emerging markets. Yes, it was linked to pricing. Even in the past, I think India versus international, I think we have shown how the CPCU has progressed with the mix of business. Yeah. Sure. Thank you, sir. Thank you. The next question is from the line of Hitesh Malla from Greenberg India Advisors. Please go ahead. Yeah. Hi. Am I audible all right? Yes. Yeah. Please proceed. Anuj, I just had one question for you. Wanted to get your view on the recent upgrades to the Google Play policy for India. You know, how do you think it'll impact the industry as a whole? How should we, you know, quantify the potential benefit to Apple given your strong OEM relationships? Yeah. I mean, thanks for that question. I think this is super important for the ecosystem in, you know, all emerging markets around the world. Can you still hear me well? I'm just getting a very low network for some reason. Hello? Yeah, Anuj, we can hear you. Okay, great. Yeah, I think it's very important for the industry to have a fair playing field, you know, for especially when we have ecosystem players that can have disproportionate control and, you know, and they are the, you know, the empires of the match and they're also playing the match, right? I think in those kind of situations in any industry, it is important to have some balancing factors coming in. We are, you know, quite happy to see that the Indian ecosystem is, you know, standing out towards that. Having said that, I think Google has a playbook. I mean, they have seen this across many geographies, and it will be an ongoing process. It's not going to be as simple as that, but, you know, there's a certain order that has come. I think it's too early to take sides or to start celebrating one way or the other. I think it's going to be a long drawn process, but the end goal of any efficient, marketplace or a, you know, business dynamic or a healthy business to happen is to have a fair balance in the playing field. I think that's a good thing for the industry and, for us as Affle, I think, you know, we were able to negotiate our growth quite well when Google was dominating unchecked. Now that they are being checked, I think it should still be a meaningful play for us. You know, I'm not calibrating my business plans around what happens to Google. You know, I mean, independent of whether they are kept in check or they are not, I think Apple has a resilient growth plan. Other than that, for an overall ecosystem level, I'm actually quite happy to see what's happening. One step at a time, but a long, long way to go. Understood. Just a quick follow-up on that. Is it possible to, you know, give us some rough idea of the scale of your OEM business? How big would that be with respect to the overall company? I'm not at liberty to give that breakup at the moment, but I can tell you that, you know, one of the clear areas of emphasis is how do we, you know, maximize ecosystem level strategic partnerships, right? We talk about our strategies, and typically we talk a lot more about the two V's, you know, in the Affle 2.0 strategy. The two V's is, you know, verticalization as well as, you know, both for advertisers and the industry sort of level and vernacular. We also talk about the two O's, which is operators and OEM partnerships and so on. We think that the operators and OEMs are very important players in the ecosystem and that we can absolutely partner with them and aid them to navigate through this journey, you know. And we would treat them more like a publisher partner with whom we can gain a symbiotic, you know, relationship in the ecosystem. We see a lot of value in that collaboration across emerging markets especially, and also actually in developed markets progressively. Can I quantify that and give that to you right away? No, but it's an area of consistent growth and value add for us. Okay. Thank you. Thank you. The next question is from the line of Arun Prasad from Edelweiss. Please go ahead. The current participant has left the queue. We move on to the next question, which is from the line of Rahul Jain from Dolat Capital. Please go ahead. Yeah. Hi. thanks for the opportunity. just to, you know, ask Sanjay in terms your comment, regarding this, India and emerging growing at 23%. If I do my, basic math, it implies that there's a 20% kind of a decline in the, international, developing, market. First a clarification on that aspect. Right. Conversation is suggesting. Just one thing there. I think the terminology that you might have confused some of the people. The growth that we are seeing for our business in India is also consistent with the growth that we are seeing up to almost one percentage point. It's almost uncanny how similarly India and the global emerging markets is behaving for us, right? Where we are seeing almost, you know, 23% year-on-year growth. Then the terminology used is that other developed markets, right, the international developed markets, by and large these countries like U.S. and Europe in that, where we have a smaller base, smaller base of customers, and it's a very large addressable market. Now, when you have, let's say, I don't know, let's say 20 customers or 30 customers in the U.S. market specifically, and if some of them used to be non-pressured and so on, all factors we publish, you would see a certain contraction. That's what we have seen. We have actually quantified that for H1 in our previous earnings call, that if not for that, we would have delivered even more fantastic outcomes. I think that's how we are looking at it. I've explained it. Sorry to interrupt, sir. I think Yeah. Sorry to interrupt, sir. We couldn't hear your last line. Your voice is fluctuating and it wasn't clear. Can you repeat your last line, sir? No, I was able to get through, so that's fine. I'm not sure which line. Sir. Yeah, yeah. Anuj. It was okay for me. I could make it out. Through your telecom system. I'm seeing a full network here. I'm not sure when you're able to hear and when you're not. Shall we. Sure, sir. I'll let you know, sir. Sir, please continue. Yeah. Anuj, secondly. I think I just want to get that rule. Yeah. Yeah. Go ahead, please. Yeah. Sorry. Secondly, for this part of my question, with the kind of growth that you're seeing in different market and the kind of mix you may have, is there a new aspirational margin that we should keep in our mind now, or is there a number that we should chase specific? Look, I think we've, you know, we should definitely look at Affle as a company that is not only looking for a certain healthy level of growth. Right. But for us, growth comes almost in the same breath with margin expansion, with sensible bottom line execution. We don't limit ourselves with EBITDA and PAT. I think we are very granularly focused on cash flows, and we have, you know, shown that consistently as a company. I mean, and this is not something that has become new to us because we have gone public and because of the market dynamics. For the last 10 years, this is the DNA of our company. We have always grown like that. We've been capital efficient, we have been cash flow efficient, we have been bottom-line centric and so on and so forth. One of the things that we have always done in the, at least in the last three years, is that we have done inorganic growth, and we've gone and bought those companies which were breaking even, and they averaged us down in terms of our margins, right? Now we've reached a level where, you know, we are at a 20%+ in terms of EBITDA, you know, 17% odd in PAT, and I think that's a very healthy place to be in. Now, of course, as we continue to scale up, we are a set live business model. Revenues would hopefully grow and continue to grow. Cost will also grow but not grow as much, and therefore there should be margin expansion on a consistent basis. Also to give you a better sense of it, is that we are saying that if we do any M&A now, and we are in discussions, which, you know, there's no secret anymore that we are actively in the market. We think in 2023 we will find the right pricing to buy already meaningfully profitable companies, which we then can unlock greater growth with for them and for us as a combined strategic unit. We don't think that now onwards, when we do M&A, at least in 2023, that should not average us down in terms of our margins, right? Yes, it is reasonable to see us defending our margin position over time and expanding it. If we take a 2-3 years view to this, I'm reasonably confident that, you know, there is enough merit in our business to defend and expand the margins, step at a time. Can I give you a number right now? Please bear me that. I'm not at liberty to give forward guidance at that granularity. No, no. This, this is good enough. Thank you. Thank you so much. Best of luck for the timing. Thank you. The next question is from the line of Karan Taurani from Elara Capital. Please go ahead. Hi. Thanks for taking my question. Two questions from my side. One is, you know, any kind of shift within the business models or the offerings that you have. I think, you know, the growth in the last 2-3 years has been driven by a lot of these companies going for customer acquisition, and that's one of your larger revenue contributors, right, in terms of getting more users for a particular app. The second one is, of course, you know, increasing frequency for the existing user. Any kind of shift that you've seen, you know, right from just about customer addition towards, you know, increasing frequency and what kind of an impact this has, you know, on your margins or your revenue growth? I think the, at least in emerging markets, the emphasis is very clear for us, and the emphasis is on new users, new customer acquisition. You know, and that is true because the demand from the advertisers is always going to be to get to the next 100 million, the next 200 million that are coming in India and other global emerging markets around the world, right? You can see in the case studies that we also share consistently, I mean, they're looking for more user acquisition. They're looking for more mind share and more market share and expansion. New entrants are coming in, right? A lot of traditional companies which are, you know. On one side, you know, people are looking at, oh, okay, the startups and the funding and all that kind of situation. You know, how many large traditional conglomerates or every other business which is out there is going digital. When they go digital, and if they are consumer focused, they need that, you know, reach, right? How do we get them? Even larger established digital companies, I would say, let's say, you know, even Google, Facebook, Apple, or, you know, any of Amazon. I mean, all of these companies who have, you know, tons of technology and digital capabilities and data insights, even when they come to emerging markets and they want to get to the next 200 million people, they also need to do digital advertising. I think for us, there is enough big budgets to expect from enough large enterprise customers. At the same time, we are very carefully also picking on, you know, those, larger, let's say, newer age companies that are reasonably well-funded, where we know that we can, you know, continue to work with them for many years and at least get our collections eventually. We do a real risk managed way of working on this. User acquisition in emerging markets will continue to be key driver, and the definition of those use cases is also evolving, like from mobile to offline, you know, where we go into driving footfall, the user acquisition and transactions there and so on. Having said that, in developed markets, you know, we also see an opportunity to help them where the users have already been onboarded for certain customers, but drive repeat conversions. Ladies and gentlemen, the connection for Mr. Anuj Khanna Sohum has been disconnected. Kindly stay connected while we try to reconnect him. Ladies and gentlemen, thank you for your patience. The line from Mr. Anuj Khanna Sohum has been connected. Over to you, sir. My sincere apologies, everyone. I'm really not sure. My network is perfectly fine, but I keep getting dropped out. I know if I answered the last question well, because I kept talking and, was it a fair enough answer for you? Yeah. Yeah. Am I audible? Hello. Yes. Yes, you are. Right. That is fine. You're getting The point here is we're trying to make is that the dependence on new user acquisition remains to be high. The next question to follow up on this was that a lot of these companies right now, you know, the commerce companies and the fintech and the gaming and the new age companies, a lot of these companies actually spend a large chunk of their advertising money on digital. I think within digital they were spending a more chunk of ad spends actually coming towards the new user acquisition part, which I think is now kind of dropping, and they are now trying to focus on profitability, which is why they're trying to cut ad spends on new user acquisition. They're basically doing more ad spends on repeat user and conversion. It's just connecting the dots, I think. Is there a bigger negative impact for a player like Affle, you know, because of these kind of reasons? I think one is these new age companies or internet or commerce companies rather have gotten digital ad share of close to 60%, 70%. When times were good last year, you know, they were spending big amount of budgets over there. What is the broader impact in terms of budget cuts? I understand that 23% growth is what you expect in the emerging markets, and this factors in the negative impact. Can things go worse from this end? Sir, when people focus on profitability, as you rightly said, then if there are two ways to gain the profit. One is that you're getting a repeat conversion from an existing user, and secondly, by getting a new conversion from a new user. Typically, out of these two choices, if I tell you I'll get you INR 10 of sale from your existing customer, and I get you INR 10 of sale from a new customer, which one would you prefer? It is easier, I'm telling you to sell that, okay, I want the revenue from the new customer because the existing one I might anyways get this month or next month. The new customer, I don't want to lose it to a competition. As far as Affle's business model is concerned, it is ROI linked for the advertiser. It is a no-brainer for the advertiser to work with Affle to drive conversions. Affle also delivers conversions for existing user conversions. As far as that, when I told you my earlier answer, it's not that Affle's preference is that because my product only works well. It's not like that. Mm-hmm. My product works for all the use case scenarios. New user conversion, repeat user conversion, online to offline conversion, Connected TV conversion. Our technology stack is allowing us to go deep as well as wide. Mm-hmm. What I was telling you was that this is the advertiser sentiment. You were right that the advertiser is focused on more profitability and ROI. They are being more careful with where they are spending their digital budgets. They want, "Give me ROI, otherwise I'm not going to spend." That is helping us more and more because we are cost per converted user, ROI linked business model. Whether it is a conversion from a new user first time or a repeat user online second time, or whether it is online to offline conversion from a new or repeat, all three use cases Affle has been supporting prior to our going public, and we continue to support those. I was only telling you where the industry trend is still, and not whether Affle is more on this side and less on that side. Affle is able to address all of those use cases. If my customer wants to spend 80% budget on repeat, I can do that. If they want to spend 80% on new user acquisition, I can do that. I was giving you my outlook that the advertisers are still spending and saying, "Hey, Affle, if you can get me that conversion from a used user, please get that first. If you can't get it from a new user, okay, fine, then get it from a repeat user also. Right. What are the kind of margins, I mean, how margins are different for both these segments for Affle as a company? I think for us, we are reasonably, you know, balanced on that. I think it's not dramatically different in terms of margin because I mean, technically, I have a chance of charging more for new user acquisition, right? While it is a new user for the advertiser who has got the conversion for Affle's platform working across thousands of advertiser apps promoted with us, chances are that user has already converted with through Affle's platform before. Actually, technically, if you think about it, everything that Affle might be doing is a repeat conversion, right? I mean, from an Affle platform perspective, but for a certain advertiser, it might be a new user. Does that make any sense? Yeah. Yeah. There's just one small thing on this, so- Mr. Taurani, I'm sorry to interrupt, sir. I would request you to rejoin the queue, sir. There are many other participants who are waiting for their turn. Sure. Sure. Thank you, sir. The next question is from the line of Arun Prasad from Edelweiss. Please go ahead. Thank you for the opportunity. My line got cut off earlier. Anuj, just wanted to get a clarification. We say that we have very less base from the developed markets. We are mostly towards the emerging markets internationally also. It's still puzzling that our international business has grown only by around 6% on a Y-o-Y basis. Can you just give us outlook qualitatively on the each country in which operating under the international portfolio, how it is there and how did they perform, and what is the kind of outlook that you are expecting in calendar year 2023? Yeah. All right. Sure. Sure. I can explain it again. You can look at our business as India contributing 30%-35% of our revenue. Look at other global emerging markets, let's call them EMs, contributing another, let's say, 45% or so of our revenue, 45%-50%. We can say developed markets, DMs, contributing roughly approximately 20% of our revenue. India and emerging markets is approximately 80% of our revenue. Right? On that, we are delivering consistent growth. India is, as you know, already 20%. What are India other emerging markets we're talking about? We're talking about countries like Indonesia. We're talking about countries like Thailand, Malaysia, Philippines, Vietnam and so on in Southeast Asia, African emerging markets, as well as Latin American markets. When we look at emerging markets on a broad basis like that, and we've seen that the growth is actually quite in tandem with how we are seeing India's growth. In developed markets, where we have a smaller base. When you say international, right? For international for us then becomes 65%, of which around 45% is emerging markets and 20% is developed markets. If the developed markets see a contraction and the emerging markets see a 23% growth, they are neutralizing each other. Net-net, we are still growing, right? With margin expansion, with pricing being defended, and therefore you are seeing a much more positive, you know, outcome for our company in terms of how we have performed in the last year. Because from a bottom-line perspective, we have seen margin expansion. From a top-line growth perspective, we have continued to see strong resilient growth in 80% of our business. Where there is impact, we have a clear action plan with a very hands-on, clear leadership on the ground to go and execute and solve it. This is how we see it. In developed markets, our base is small. The contribution of developed markets to us is small, but the addressable market is very large. Even if that market is shrinking next year or next two years, it is still a very large addressable market for a small base. We need to execute into that market to find our growth, and we will certainly, you know, give you updates on that in the next couple of quarters on how we are doing that. Just, you know, just to get it clarified. You are saying that out of the international pack, the emerging markets continue to grow at 20%, because the developed markets are kind of declined, that's how the weighted average number 6% is coming. Is this what I'm hearing? That is absolutely right. When you look at developed markets is contracting, you have to see it on a small base, few customers and some of those customers have held back their spends of their budgets because of the, you know, economic factors that we are seeing. Therefore, I mean, it's not something that I am losing my sleep over. If I was, I would have sensitized our investors about it. Thank you, sir. The next question is from the line of Anmol Garg from DAM Capital. Please go ahead. Hi, thanks for the opportunity. I have two questions. Firstly, our data and inventory costs as a percentage of revenue have reduced somewhat drastically in the last couple of quarters. Any particular reason for the same? Also, what can be a sustainable number that we can expect of, from our data and inventory costs? Can it remain in the 60% range or it can go downwards further? That's our first question. Well, thanks for that question. I think the way you have to look at it is that the ratio of data and inventory to the revenue is actually anchored out of the fact that we are able to command a more meaningful pricing with respect to the CPCU rates, one. On the data and inventory costs, of course, we are not allowing that to go up. I think the incremental benefit of the CPCU rate pricing and making sure efficiencies at the data and inventory cost has helped us. Secondly, we have focused on quality revenue, which Kapil also mentioned that certain advertisers, if they are, they come in with smaller budgets, smaller rates and in an expansionary mindset, one would say, "Okay, let's take it on, and we will slowly scale them up and improve the pricing as we go along." In the current state of mind, we didn't want to compromise pricing. We took a very stiff call in terms of execution, and therefore we would say no to some of that. When that happens, you would see margin expansion as well. In terms of any guidance on that going forward, I think I would say that from a modeling perspective, it would be somewhere within that range. I'm not suggesting that, you know, please go and see every other quarter, we'll have a few percentage points there. Overall, in terms of, let's say, EBITDA or tax, our goal would be to consistently look for, you know, overall margin expansion. You know, whether it is on data and inventory costs or whether it is on OpEx, we expect that should not grow on a combined basis as much as we will grow our revenue. The revenue growth should be at a higher level, therefore, we will see margin expansion at the bottom line. Can I give you a specific number straight off the bat on how to model it? Not explicitly so, but it should be in that range, you know, where we are looking at the data inventory cost to be in the 60 plus minus, you know, more plus than minus, but yeah, in that range. Yeah. Yeah. Thanks, Anuj, for this. Just secondly, my question on acquisitions. We were earlier stating that we are looking for acquisition which is relatively sizable one. Can you talk a bit more on that and when can we expect it to close also, from which geography are we expecting to close this acquisition? I think it will be maybe taking it too far to maybe reveal our cards on it, because, you know, I'm sure that those who we are talking to and negotiating with are also listening or will tune in to listen to our earnings call, so I don't want to give them any reason to negotiate better with us. What I can definitely tell you is that, this is a good time for Affle to be a buyer in the market. And we will find very value-driven, appropriate, sort of transactions which will be complementing and symbiotic with us, you know, in 2023. Without giving any reference to clear timelines, in terms of transaction size, I can tell you that these transactions would be in the range of, you know, I mean, the kind of transactions that we've already done before. You know, when we bought MediaSmart, it was relatively smaller, but so were we. Then we bought Appnext, and we had already grown in size, then we bought Jampp. I mean, as a proportion to our own size at that time when we bought these companies, I mean, we are going to look at a similar proportion and scale. We're not changing the playbook on size or strategic fitment theory. The only place where we have clearly communicated that we have changed the playbook is that instead of after acquiring a breaking even company and waiting for year one, two, three to turn it to a higher profitability, which we have already done in MediaSmart and Appnext, we are looking at in 2023, there is a clear. Sir, you are not audible. Anuj, sir, you are not audible, sir. Hi. Yeah, I'm on. I can continue and. Yes. Give the answer on that, we have in our earlier call also mentioned this, that we are looking at inorganic. Our announcement after the board meeting in December was also stating that. We will update as and when the negotiations or we have closed on anything. Sure. Thanks, Anuj and Kapil. This is really helpful. Thank you. The next question- All right. Sorry. This is a record-breaking earnings call. I have been kicked out of the call for the fourth time, I think. Sorry about that, everyone. The next question is from the line of Najman Issa from Sumitomo Mitsui DS. I would request Mr. Issa to restrict his question to one, please. kindly proceed, sir. Thanks. Maybe, as requested, just one question. If you could share a bit more color in terms of the Because of change of mix towards, you know, slightly less India versus India at what, 50% two years ago compared to today, can you share a bit of trend in terms of the acquisition cost side, percentage-wise versus the per conversion, how much has it come up or has it reduced? You mean the cost of traffic acquisition, or? Yes. I think from my own note, the cost of traffic acquisition two years ago about 60%. I just interested to see how has it trend since then, and also how much-. Yeah. Change of mix would, you know, affect these numbers as well. I think I expect the data and the inventory cost, which is, you know, traffic acquisition cost plus the cost of all the processing of data and the cloud computing related to that and so on and so forth, to be in that range. You know, I think it will be ±60%-65%. When we invest more into, let's say, going deeper into rural or, you know, trying to calibrate intel around the next sort of frontier of users and markets, we would typically in some cases invest more. In certain scenarios, we can pull back. I think the trends have been quite consistent overall. What I am also seeing now is that, for the same amount of money that we spend, we are able to listen more, let's say, deeply or widely in terms of connecting with the inventory and the scale. It is no longer, just looking at, you know, individual specific targeting. We're looking at more contextual intel. When you listen more widely, you build certain deeper contextual capabilities of, you know, what's happening across verticals, across different segments and cohorts of, you know, different categories of users. I think our intel is much broader and wider, and it is deeper because of the verticalization strategy that we have. We can drive more efficiencies as we go along at will. In many cases, we are also seeing that the first-party data that is coming from our partners, where we work with them as a technology partner to deliver outcomes for them, is also becoming a very positive trend. That leads to more efficiencies as we go along. Thank you, sir. As that was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you, sir. All right. Well, thank you so much for joining the call today. I wish all of you a very successful rest of the year 2023 and a great financial year 2024 ahead. I assure you that Affle will continue to deliver resilient and, you know, growth-oriented and bottom-line sensible performance. I look forward to having our next conversation in a few months. Thank you. Thank you, sir. On behalf of... Yes, sir. Please continue. No, I'm just saying thank you, everyone. Thank you, sir. On behalf of Ambit Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.