Ladies and gentlemen, good day and welcome to Nazara Technologies Limited Q1 FY24 earnings conference call hosted by Avendus Spark. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sundar from Avendus Spark. Thank you and over to you, sir. [audio distortion]. Hi all. Greetings from Avendus Spark. We welcome you all to the 1Q FY24 conference call of Nazara Technologies Limited. The company would be represented by Mr. Nitish Mittersain, Joint Managing Director, Mr. Sudhir Kamath, Chief Operating Officer, Mr. Rakesh Shah, Group CFO, and Ms. Anupriya Sinha Das, Head of Corporate Development. Thank you and over to the management. Good morning, everyone. A very warm welcome to all of you to Nazara Technologies Q1 FY24 earnings call. This is Nitish speaking here. We have uploaded our results presentation on the exchanges and I hope all of you have had an opportunity to go through the same. We are happy to share that this is our 10th quarterly results since our IPO and we have delivered consistent year-on-year growth in revenues and profits demonstrating the stability and long-term compounding opportunity that Nazara's diversified gaming platform provides. For the first quarter of FY24, we have reported revenues of INR 254.4 crores which is up 14% year-on-year. EBITDA for the quarter increased by 10% year-on-year to INR 33.1 crores and our PAT increased to INR 20.9 crores which is up 31% year-on-year. In the gaming segment, we own several renowned IPs including Kiddopia, Animal Jam, and World Cricket Championship targeting diverse consumer demographics. In this quarter, we witnessed an impressive 24% year-on-year revenue growth and a substantial 41% year-on-year growth in EBITDA for our gaming segment with our healthy EBITDA margin of 24.6%. Our strategic focus lies in owning well-recognized IPs in gaming that cater to both the Indian home market and global audiences especially in North America. This approach enables us to build a scalable and sustainable high-margin business. The success of our games has demonstrated India's potential to create and operate games for the global market presenting us with a significant opportunity to capitalize on in the future. We remain committed to investing in and acquiring Indian and global gaming IPs and are currently in discussion with various gaming studios to further strengthen our portfolio. In esports, we saw 15% revenue growth and we anticipate further acceleration of this growth in the coming quarter especially in the NODWIN business due to key launches in Q2 and Q3 of our established IPs including the recently announced, BGMS which we have partnered with Star Sports and Rooter, DreamHack, NH7 among many others. Sportskeeda delivered exceptional performance with a 52% year-on-year growth in both revenues and margins and we look forward to a continued performance especially in Q3 and Q4 due to important sporting events coming up like the Cricket World Cup as well as NFL season that will benefit our recently acquired Pro Football Network business. The AdTech business which solely comprises Datawrkz had a muted quarter and is expected to consolidate in FY24 while we lay a foundation for FY25 and beyond. We have started leveraging Datawrkz capabilities for internal user acquisition and we are seeing very encouraging results especially in our game Animal Jam. I believe we now have the stage set for higher revenue growth in the coming quarters across all our business segments. Nazara has built a well-diversified gaming platform with an established track record of acquiring and scaling businesses post-acquisition. We have built an experienced internal M&A team that is working on creating a strong pipeline of opportunities in various segments that we operate in again with a strong focus on adding gaming IPs and teams to our platform. I understand that many of you may have questions regarding the recent regulatory and tax announcements concerning the online skill-based money gaming sector in India. As stated since our IPO, we have chosen to exercise prudence and await further clarity in this area before scaling up. This approach has been proven to be beneficial for us especially during the current turbulent situation that the sector is navigating. Now with the clarity starting to emerge, there may be opportunities for Nazara to seize in the coming days especially as the business model including our RMG segment resets and aligns with the new policies and regulatory framework. We'll closely monitor these developments and remain prepared to take action accordingly. Feel free to ask me more detailed questions during the Q&A around this topic. Finally, as you know, we have also taken an enabling resolution from our board, and now seeking shareholder approval for a fundraise of up to INR 750 crores. We intend to raise these funds at an appropriate time and we'll keep you posted as we progress on this front. I would now like to hand over the call to Anupriya, Head of our Corporate Development, to give some highlights of our performance in this quarter. Thank you very much and over to you, Anupriya. Thank you, Nitish. Good morning, everyone. Thank you for joining us today. I'll cover the segmental performance our Nitish mentioned, starting with our gaming segment which includes gamified early learning, real money gaming, freemium, and telco subsegments. This segment contributed to 43% of revenue and grew by 24% year-on-year in the first quarter. The EBITDA margin for this business is as low as 24.6%. If you look at Kiddopia, the revenue grew by 10% year-on-year for the Kiddopia business while EBITDA increased to INR 16.1 crore from INR 9.7 crore in Q1 FY 2023 resulting in an EBITDA margin increase from 18.4%- 28% in Q1 FY 2024. During the quarter, there was a technical issue with our attribution partner which temporarily disrupted our marketing campaign and led to higher cost of user acquisition. However, the issue has now been resolved and we expect normalized CAC and marketing spend going forward. Moving on to Animal Jam which we acquired in August 2022. Since acquisition, we have worked on multiple things. First and foremost improving the analytics backend to get actionable insights as well as improved cadence for content updates. In addition, we have optimized the non-core cost which has led to improvements in EBITDA margin from 11.6% in Q4 FY23 to 22.5% in Q1 FY24. Datawrkz has been worked with Animal Jam for driving and optimizing the user acquisition spend. In the next phase of growth, we are looking to further scale up the user acquisition spend while maintaining profitability. Moving to World Cricket Championship, we are working on revamping the franchise. Christopher Franklin has co-joined WCC as the CEO. Has over 12 years of experience in game design and studio leadership across Glu Mobile, EA among others. Chris is working on several product and growth initiatives to set the stage for growth in the coming quarters. Moving to OpenPlay, Q1 FY24 revenues and EBITDA from Classic Rummy were INR 11.2 crores and INR 0.2 crores of EBITDA respectively. As you're aware, Tamil Nadu banned all real money games which included skill-based real money games like rummy in April 2023. Tamil Nadu contributed to 20% of revenues and active player base in FY23 and Q1 FY24 performance saw an impact due to the same. Reactivating our skill-based RMG business contributed to 4.7% of revenues and 0.5% of EBITDA in Q1 FY24. Nazara's pragmatic approach and limited exposure to this segment have minimized impact to our consolidated financial performance. To the extent required, as Nitish mentioned, the company will proactively take steps to mitigate any further impact. Moving to our esports segment which contributed to 46% of our total revenue and grew by 15% year-on-year. Looking at NODWIN Gaming, NODWIN Gaming reported revenues of INR 68.6 crores with an EBITDA of INR -4.8 crores in Q1 FY2024. Key IPs were deferred to Q2 FY2024 to take advantage of market opportunity of a key mobile game coming back. The revenue from this IP will reflect in upcoming quarters including Q2 FY2024. In line with the previous year, established IPs are currently planned in H2. [audio distortion] continued to scale newer IPs in this quarter which is still in the investment phase. This along with increased marketing and brand spend in the gaming accessories business ahead of the upcoming festive season had a short-term impact on Q1 FY2024. So for FY2024, we expect NODWIN Gaming to achieve healthy growth backed by an overall profitability. Moving to Sportskeeda which reported revenues of INR 46 crores, a 52% year-on-year growth, and an EBITDA of INR 16 crores, a 55% year-on-year growth in Q1 FY24. Sportskeeda is among the top 10 multisports destinations in the U.S. and ranks number two among the sports websites in India. The company caters to over 108 million monthly active users across markets. PFN, the business which was acquired by Sportskeeda in Q4 FY23, has been integrated well and is geared up for the upcoming NFL season. Our active business was acquired in April 2022. Over the last year, we've been focusing on higher-margin business clients and simultaneously expanding our client base to minimize dependency on a few customers. This has resulted in overall gross margin improvement from 18.4% in Q1 FY23 to 22.9% in Q1 FY24. There was a revenue degrowth of 16% in Q1 FY24 due to loss of one large, however low-margin contributing client. With strong emphasis on high margin and diversified client base, we expect revenue and EBITDA growth to pick up from Q3 onwards. With this, I'll close my remarks here and we'd like to open the call for Q&A. I would request Nitish, Sudhir, and Rakesh Shah to join me for the Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchscreen telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hands up while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask the question. The first question is from the line of Nitin Jain from FairView Investments. Please go ahead. Yeah. Thank you for the opportunity. Good morning. So I have two questions. First one is regarding Animal Jam. So, can you provide the numbers on what has been the revenue growth, year-on-year in this business? Because I can see quarter-on-quarter the revenues have stayed flat. And the next question is regarding Kiddopia. So, would it be possible to elaborate on the issue faced by Kiddopia business this quarter and how it has impacted subscriber growth? And the follow-up to that is, what kind of subscriber growth we can see in Q2 and Q3? And would the margins come back to the last year same quarter level? Thank you. Nitin, hi. This is Nitish. So for Animal Jam, we did not consolidate revenues in Q1 of FY23, which is why we've not given the comparison with that. However, if I were to focus on what's happening on Animal Jam, as we have also updated in the presentation, there's been a lot of backend work that has gone in in the last few months since we acquired the company to enhance our insights into the data as well as improve monetization features of the game so that our LTV CAC in that business increases significantly. On the second end, we have been working very closely with the Datawrkz team to optimize the user acquisition. And again, we presented quite some details in the presentation on how we are doing that and, you know, the benefits that we're starting to see. In the meanwhile, what we have done shortly is focused both on the cost side of operations of this business as well as, you know, optimize our margins. So you would have seen that even sequentially, you know, our margins, our EBITDA margins have increased from 11.6%- 22.5% in this quarter. And I think we should be able to at least maintain this margins going forward while we start ramping up our user acquisition and growing the overall revenues. That's on Animal Jam. On Kiddopia, we basically had an issue with Google Ad Platform where there were certain changes and that caused a temporary interruption in our ability to spend effectively. That got resolved in early June. And therefore, we think we will normalize the spends as well as, you know, the CPT or the CAC that we track in coming quarters. I expect positive impact of it in Q2. We believe that, with this normalizing, you will again see subscriber growth happening in the coming quarters. We are also experimenting now with, you know, other monetization methods, etc., to increase our overall output. I hope that answers your question. Happy to answer any follow-up questions you may have. Yeah. Just the follow-up on the margins. If we go back to our usual quarterly spends, where do we see the margins going back to? I think Kiddopia today, we should, you know, look at a 20%-23% kind of margin range because we need to kind of balance margins along with growth. So if we do get, you know, a good opportunity to scale up at costs that we are, you know, comfortable with, we'll definitely prioritize growth as well. So I think 20%-23% on a steady state is what we should look at. Perfect. That's helpful. Thank you. Thank you. Next question is from the line of Rohan Nagpal from Helios Capital Management. Please go ahead. Hi. Thanks for the opportunity. A couple of questions. One, there have been a number of acquisitions that have taken place over the last year. So would it be possible to break out the growth numbers for gaming and esports on a like-for-like or organic basis? And the second question was on Kiddopia. Your subscriber numbers have been more or less flat. So are you seeing, like, a plateau or a high plateau in terms of the subscriber rate? Or do you think there is possibility to expand this further? So yeah, those are the two questions from my end. Thank you. Hi. So, on the esports business, you know, we are seeing a steady 30%-35% organic growth, you know, on an annual basis. And I think we will continue to maintain that as, you know, many of our IPs start maturing. We will continue to see that. In addition to that, any M&A activity that we do will add to that business. And as you also know, NODWIN Gaming has recently, you know, closed a round of funding of about $28 million from existing investors as well as Sony Corporation. And you can expect to see more M&A activity on that front. On the gaming side, the only addition that was not there in the previous quarter was, sorry, the year-on-year quarter Q1 FY23 was Animal Jam. Everything else is organic for us at this point of time. your second question, unfortunately, broke up a bit. Can you just summarize the question for me, please? Yeah. I was saying, on Kiddopia, you seem to have hit a sort of wall in terms of subscriber growth. It's sort of stayed at that 300,000-310,000 number for a while. So are you seeing market saturation or are you do you see scope for sort of breaking through that into a slightly higher level? Yeah. No, sure. Of course. So just to give you the perspective, right, over the last many quarters, obviously, we had hit the plateau and actually even declined due to the Apple IDFA issue. But we took several steps which was one was doing price increases, and also getting LTV CAC that we were comfortable with to start spending more and acquiring more users. So for Q3 and Q4 of FY23, you actually saw an increase in subscriber base after a plateau for a long time. So you saw 5% growth in Q3 and 1% or 2% growth in Q4. We were expecting that momentum to continue and start growing. However, like we mentioned, Q1 FY24 saw a technical interruption, which kind of held it. But we expect that growth to continue. I don't think we are anywhere close to market saturation. There is a much larger opportunity here with Kiddopia. We've just been very disciplined on, I would say, the LTV CAC equation that we want to maintain. That said, we are working on how can we scale this, you know, much higher. The team is very much on that. Noted. Thank you. Yeah. Just, just to give you a perspective, right, in the U.S., there are 23 million kids in the 0-5 age group. Maybe a little higher if I were to expand it to the 2-7, 2-8 age group. Kiddopia has 300,000 subscribers. So there's a lot more that we can cover. Oh, yeah. That's helpful. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Balamurali Krishna from Oman Investment Advisors. Please go ahead. Hi. Good morning, Nitin. So regarding the NODWIN, could you see any margin improvements in the upcoming quarters of this financial year? So two things. One is, this quarter, you know, you saw actually a bit of loss for two reasons. One is we consciously decided to defer one key launch of ours into Q2 because of BGMI coming back. We thought we would see much more traction in Q2. And we've announced a large event, BGMS where we are partnered with Star Sports. They are going to be telecasting it live from August 4th onwards. And also OTT players that are broadcasting it. So I think that impact you will see in Q2. The second thing in Q1 was that we've, you know, spent aggressively on branding and marketing activities around the gaming accessories business Wings because Q2 and Q3 are the main peak season for them because of Diwali, etc. And we're kind of preparing for that. So you will definitely see, the margins improve in Q2, Q3, Q4 as revenues grow. You will also see, I can assure that, you know, our objective of running all our businesses in a profitable manner continues. And NODWIN will be profitable for the entire FY24. So Q1, a bit of loss is not representative for what will happen in the entire year. I think for an overall perspective, our objective in FY24 still is to press the accelerator on strategic growth, creating modes, creating an ecosystem. So we are not, gunning for very high margin expansion for FY24. I think FY25 onwards, we will be focusing on that. Yeah. That's great. And, one more thing regarding Sportskeeda. So we have good growth and, some good events are lined up in the next coming quarters. So what kind of growth we are expecting in coming quarters and, down the line to three years, what could be the growth potential in Sportskeeda, and margins, any projections, please? Yeah. So I don't have any specific numbers to share at this point of time. However, like I mentioned in my opening remarks as well, we believe that the rest of the year should be very good for Sportskeeda. And they should continue to see growth. Also, it's important to note that Sportskeeda had acquired Pro Football Network in the US. Q1 is an off-season for Pro Football Network. It starts picking up from mid of Q2. And the peak season would be Q3, Q4. So I think that along with the Cricket World Cup should really help us in the current FY24. I think for me, the bigger picture is a team that has done a fantastic, you know, execution up to this point. For expansion, I believe Sportskeeda could be a great platform to roll up many other similar properties like we have done in PFN. We are really excited to see how this integration with PFN and performance of PFN after Sportskeeda, you know, investing or taking majority stake plays out. That will kind of open up many more opportunities for us, going forward and far faster scale-up that we can do. I see. Thank you. And lastly, on Kiddopia, this margin I mean, there'll be this margin can be continued, for the next year also, this quarters and next quarters also. Is there any possibility to see any decline in margins? And, premiums yeah. Continue. Are you complete? Yeah. On our premium side, the revenue margins are very good. But is there any the revenues are a little bit consistent over the last few quarters. Yeah. So is there any possibility to see any uptake in these revenues? So on Kiddopia, I would say the 28% margin that you are seeing in this current quarter is also obviously a bit due to lower spends, right? And therefore, I would, you know, factor in normalizing of these margins as we again increase our spends to acquire more users. So, like I answered earlier, 20%-22%, 23% is the margin range we should be, you know, looking at for the entire year. Coming to the premium business, I believe if we own high-quality gaming IP, like we have already, Kiddopia, Animal Jam, World Cricket Championship, there is a lot of potential in these IPs that can be unlocked. Today, we are just monetizing the obvious, you know, ways like app purchases, advertising, and subscription. But many more opportunities can be unlocked in terms of monetizing over a period of time. So our focus is to make sure that we are, you know, building and acquiring very high-quality IP that can be built over a period of time. Gaming business in general should remain a high-margin, you know, scalable, sustainable business. And that's why we are very excited about it. Okay. Thank you. Thanks a lot, sir. Now, all the best for your future quarters, sir. Thank you. Participants, you may press star and one to answer question. Next question is from the line of Jinesh Joshi from Prabhudas Lilladher. Please go ahead. Yeah. Thanks for the opportunity. I have a question on the BGMS [audio distortion]. Can you share for what sum have we. I'm losing your audio in between. Is this better now? Yeah. Yeah. My yeah, yeah. So my question is, for what sum have we sold the digital and TV rights for BGMS? And will this IP be profitable for us? And a follow-up to this is that, apart from BGMI, which other game has this kind of a strong fandom from a viewership standpoint? And are we organizing any event surrounding it in the near future? So, as far as the BGMS deal is concerned, this is a three-season deal with Star Sports. We are in season two right now. And on the digital, we have licensed it for one season with the OTT player. The BGMS is already a profitable IP for us. We will also see it being profitable for us in Q2. We saw fantastic response in the season one that we did last year. We expect to see a much, you know, better response in this current year current season that starts on 4th of August. The second question, can you please just repeat it? Any other game apart from BGMI, which has this kind of fandom? And are we planning to organize any events around it? Yeah. I mean, we've done a lot of work around Valorant. We are starting to see that build up. Of course, BGMI is extremely popular in India. And there are, you know, other games that we are also expecting either to come back or become, you know, more popular going forward. So we are doing a lot of work around Valorant, for example, in South Asia and the World Series. The other game that is going to be released that looks promising is called Counter-Strike 2. So we'll also wait and see how that performs. Sure. And, secondly, I have a question on the ARPU of Kiddopia. So if I remember correctly, we took one price hike in June last year. And then there was another one in the month of December as well. So I understand that the benefit of a price hike will be visible over a period of time as new subscribers come in at a higher price and the old ones get weeded out. However, if I look at our ARPU over the last four to five quarters, it has been relatively stable in the band of about 6.7-6.8, despite taking two major price hikes. So, how should one think about the growth in ARPU here? Yeah. Sure. I'll ask Sudhir, our Chief Operating Officer, to answer this one. Hi. I think what we're seeing is that as the price hike was taken, and it takes a bit of time for it to build it because old users tend to continue to renew at the earlier rates. There's also a small mix change from monthly to annual subscriptions where we reduce churn. Then that locks in at a slightly lower rate. So what you're seeing is because of that, so far, the ARPU growth has been muted. But we expect that to keep building and continuing in the coming quarters. Does that answer your question? I just have one follow-up. So can you, can you just give out the breakdowns out of the [audio distortion] that we have? How much of them are on the new ARPU and how much are on the old ARPU? I don't think we've been breaking that percentage out. And I'll get back to you on that. But so far, it's still a small percentage which is on the new ARPU. Sure. One last question from my side on the RMG front. This is to Nitish. So can you share what kind of impact are you seeing in the RMG space after the GST deciding to levy a tax of about 28% on the face value? Because if I recollect in the last quarter, your average monthly activity here in Classic Rummy was about 19,000. I mean, do we anticipate a fall over here once the implementation happens? And if yes, to what extent? And secondly, will this move also lead to any kind of reduction in platform fees so as to ensure that the prize pool does not fall to a large extent? So, Jinesh, this is Nitish. I think, you know, we have an important announcement coming up on 2nd of August when the GST Council meets again to clarify certain points on the application of this tax, especially on what value is it going to get applied on? Is it going to be on, you know, entry fee or deposit, etc.? So I think once we have full clarity here, we would be in a better position to answer that. But, nevertheless, I think, you know, there is definitely going to be a reset in the economics of the skill-based real money gaming business. We have already started playing out, you know, various scenarios depending on what the clarity comes in. And you will see a reset happening here. In the short term, you may see, you know, revenue impact. But I believe that over a period of time, because clarity would have finally emerged, there will be many opportunities as well that will be thrown up. And, and, you know, we should be able to take advantage of it. I just share a, a quote, you know, "In the midst of chaos, there is always opportunity." And that's, what Nazara is going to be focused on. Sure, sir. Thank you so much. All the best. Thank you. Request to all the participants, please restrict to two questions per participant. The next question is from the line of Abhishek Kumar from JM Financial. Please go ahead. Yeah. Hi. Good morning. I think most of the questions have been answered. Just one question, again around RMG and actually around capital allocation in the backdrop of what has changed in the regulation. Nitish, how do you see that, you know, you said that, you know, there are certain clarities emerging. But in terms of capital allocation, do you see, you know, a change in your stance, incrementally? Would you be, you know, allocating more capital towards real money gaming given that the sector is undergoing significant change, at least on the unit economics of the business? And also, you know, in terms of capital allocation, you have fundraise plans, etc. And you spoke about some acquisitions lined up in the gaming side as well. Incrementally, just wanted to understand where should the focus be, you know, of Nazara, in terms of incremental capital allocation? Sure. So I think, as you know, you know, we've always been focusing across our business segments on how we can expand through, you know, the acquire and build strategy, either at the Nazara level or even at a subsidiary level now because many of our subsidiaries are generating their generating and accumulating, you know, their own cash. So, each of our subsidiaries will continue doing their own, you know, own allocation or capital allocation, which we, you know, very actively work with them. But at the Nazara level, I think two areas that we were very focused on was one was, you know, adding gaming IP, which is, you know, well-recognized and can be, you know, built out for India and local markets. So I think capital allocation on that front is going to be important for us. I think the other other segment that we were definitely looking at doing a lot more capital allocation was in the RMG sector. This current turbulence obviously has made us pause till things become much more clearer. But I have a feeling that this may actually throw up, you know, many opportunities that Nazara has been waiting for on the sidelines for a long time. So I think the next few months are going to be very interesting. We need to observe very closely. We are already in touch with all the stakeholders, you know, in the eco system. And whether organic or inorganic, once the clarity has been fully achieved, I think this will be a large potential for us to scale into. Yeah. In fact, so just to follow up here, I think I agree that this can throw up a lot of, a lot of opportunities. Just, maybe, you know, if, if things remain status quo, just your just your view on, you know, how the, the industry can adjust itself. Do you think, you know, with status quo staying, industry can actually withstand this, and survive? And, and only, you know, stronger players can stay. And therefore, we will have significant opportunities. Just your initial view. I know this is still, it's very, very early days. But what are your thoughts? Sure, sure. So, you know, firstly, unfortunately, there is still uncertainty about what the status quo is today. But I think that will be very clear by 2nd of August in the next meeting announcement. So I think we are not very far away from that. But assuming an impact of the tax, right, I think clearly this is going to impact a lot of the small players or the smaller players. And they will therefore have to consolidate if they have a chance to survive. That could be one opportunity. The larger players will also have to relook at the way they operate, their economics. Some will try and absorb some of the tax impact on behalf of, you know, the consumers. So their short-term profitability may get, you know, hurt for the next year or two as they kind of, you know, bounce back from this. But once they have stabilized it, I think the clarity will really help set a path to growth, which could be, you know, I would say, a factor of multiple, right? It could grow significantly over a three- to five-year segment. So I think that's what we are trying to look at, that how do we now, you know, we've always been on the sidelines saying we want regulatory clarity and tax clarity. Now that that is almost here, how does Nazara navigate to, you know, grow a large, scalable and sizable business here is what we are focused on. Sure. Thank you. And all the best. Thank you and welcome to all the participants. Please limit to two questions per participant. The next question is from the line of Mukul Garg from Motilal Oswal. Please go ahead. Yeah. Thanks. Hey, Nitish. Good morning. Hi. Nitish, first, on this, you know, if I look at, your investments over the last two years, you guys have pushed quite aggressively into the U.S. market. But, unfortunately, because of, you know, one other reason, you know, a lot of, U.S. properties are, you know, right now without growth, the most recent being, Animal Jam, which, I think has come down in terms of top line from about INR 30 crore, you know, earlier. What is, you know, your, kind of perception of, the opportunity, and focus which we have? You guys have, you know, done a fairly handsome job of managing profitability there, despite the lack of growth. But, you know, where do you think, you know, you would like to focus more? Is, is the agenda more on the growth side, which, clearly is more visible in the Indian market? Or, do you think, a lack of monetization limits, your opportunity here? And hence, you will keep on kind of pushing more onto developed markets where profitability can be, relatively, more achievable? [audio distortion] Good question, Mukul. So I think for us, always getting the fundamentals of the business in place is very important before we rush into scaling something. So just let's take WildWorks, as an example. I think spending the last six- seven months, getting a lot of data discipline and tools in place was very important for us because we don't like to press the accelerator if we don't have clear visibility, ahead of us of what we are doing, right? And I think that's what we are doing that whichever business we enter, we like to make sure that we are very comfortable with, each metric of the business before we press on the accelerator. So, of course, we are not buying any of these businesses, to just run them on a steady basis and increase profitability. I don't think that's the objective. We have to grow these businesses. We've just been doing a lot of plumbing work before we are able to press the accelerator there. So I do think some of these products can also be taken to emerging markets, including India. We've not focused a lot on monetizing that. I mean, Kiddopia itself is a great example, right? All our monetization comes, today, predominantly 80%+ comes from the U.S. India is a very small contributor. And we need to really find an India strategy that's going to work, something we are very actively now working on because this can open up large opportunities, which today, we are not accessing. So I think, that's how we are thinking. From an India market perspective, I believe, the IP business as well as the advertising revenue business can be scaled up. The premium business can be scaled up. We are doing, we've been doing work on, WCC, for example, for quite some time. But now, we have a new team there. We have a new CEO there who comes with a lot of gaming experience on design, especially. Chris was, you know, a lead game designer. And, we've all along said, you know, that the design needs to be right to monetize properly. So we're, again, hopeful that we'll be able to demonstrate with WCC in the quarters to come that we are able to scale it. And that can open up many more opportunities for us to kind of start pushing other games as well in the Indian market. Sure. Also, you know, just, again, talking on the RMG side, you know, do you see a potential scenario after the, you know, the, obviously, the government decision on 2nd that, you know, we might be, you know, kind of, on the exit side of the consolidation in some scenario? Or, you know, do you think there is only one way of us, you know, kind of being a buyer out there? When you say exit scenario, what do you mean? We kind of exit the real money gaming market, you know, given the adverse, you know, kind of investment dynamics there. Yeah. Sure. See, at this point of time, we don't have a view to exit the business. Like I said, we are actually looking at it as glass half full instead of half empty and having a positive view on how can we build a business here given what it presents. But depending on how the final clarity comes in, obviously, if there is, you know, a policy that we feel may make the business unviable, then we will take a prudent call as required. Understood. Thanks for taking my question. I'll get back into the queue. Yeah. Thank you. Next question is from the line of Abhishek from ICICI Securities. Please go ahead. Hi. Hi, sir. First, on the Kiddopia front, so exactly what happened, which boosted margin so much in this quarter? I understand that there was some pullback on the marketing spend, because of the issue that came up. But there must have been some other changes also, I mean, changes to the fixed cost model, which will be retained going ahead. So if you could give us some clarity on that, that would be helpful. Yeah. Sure. So did you want to take this? Yeah. Sure. Abhishek, I think it's, essentially two things. I think the bigger impact is actually, because of the marketing spend cycle back. As I said, we had a small issue. If you look at the cost structure of Kiddopia, acquisition is the biggest cost item. So a small pullback there also makes it a significant delta on, that. But as Nitish said earlier, right, we do want to, and, and as of early June, we're kind of back to normal, and spend levels will be back to normal. So, that bump is more of one-off, I would say. The, the second thing, though, is, we are experimenting with a few other, potential revenue sources there, apart from just the traditional U.S., subscription model. So once those start bearing fruit, I think, those will be sustainable, once going forward. But that's still in experiment stage. Understood. Abhishek, if I may just add a couple of things, Anupriya here. So one is, if you look at the marketing spend, right, the digital marketing spend that you look from this quarter versus the same quarter last year, they look similar. However, we were also experimenting more on the branding side at that point, which has an incremental cost, which is not reflective in the KPI sheet in particular, right? So that's the reason we're seeing a slightly lower margin on in Q1 FY23 when we compare to Q1 FY24 in spite of the same performance marketing numbers. Understood. That makes it much clearer. So, on the branding front, Nitish just mentioned that you might look at, you know, bringing those assets to India also, right? So, what would be the real investments that go into, you know, adapting such a developed market product towards India? Abhishek, there's not much, in I mean, Kiddopia is already, you know, popular in India in terms of user base. It's just that it doesn't, the LTV cap doesn't add up very well for us. So we don't spend a lot of money marketing. So I think there will be not much localization required from an India perspective in terms of the product itself. It's going to be more around product pricing, monetization, models. Do you do it more subscription, or do you do it more ad-monetized, brand-monetized? So I think those are the areas that we need to really work on rather than trying to localize the product to India, whether it's Animal Jam or, Kiddopia. Understood. So, going ahead, what kind of subscription, subscriber additions should one be building in for, Kiddopia? We don't have a specific guidance out there right now. I think we will look at incremental growth at this point of time. But we are actively seeking at how do we break out in the broad range that we are, right? How do we kind of break out to 400,000-500,000 users, subscribers is something we are still working on. Until then, I think you will see incremental growth. Okay. Fair enough. Now, just one more question on the new, let's say, celebrity endorsement which you did. I think it was with cricketer Shubman Gill, for eSports. Now, I understand Shubman Gill is pretty popular. But I did not really understand what is his connection with eSports. So if you could give some clarity on the thought process. Sure. So he specifically has come in as a brand ambassador for our gaming accessories business, which is Wings. It's an overlap between, I would say, a youth icon. And Shubman Gill is also a very active gamer himself. So I think a lot of the communication is going to be around that, leveraging him and his passion in gaming into the Wings gaming accessories business. Got it. So, I mean, is my understanding correct that you're trying to reach out an audience slightly larger than the hardcore gamers? Yes. The casual gamers also. Got it. Got it. That's all. Thanks. Thanks. Thanks for the update. Thank you. Next question is from the line of Rohan Nagpal from Helios Capital Management. Please go ahead. Thanks for the follow-up. Continuing with the theme of kind of understanding the metrics of the business, I want to go back to what you said about 30%-35% organic growth. So if I look at Q1 FY23, based on your presentation, if I add up all of the units that are included in gaming today, that adds up to about 40% of the revenue. So gaming in Q1 FY23 generated INR 89 crore in revenue. If I look at gaming in Q1 FY24, and I net out the INR 22 crore from Animal Jam, I get an INR 87.5 crore. So, is it fair to say on an organic basis that revenue's actually shrunk? So two things, right? So one is, the 30%-35% growth that we spoke about, was or I spoke about was I was alluding to the eSports business, as a question of pertaining to the eSports business. I think largely, if you look at our gaming IPs, right, you have Kiddopia. You have World Cricket Championship. You have the OpenPlay business, real money gaming business, which is Classic Rummy. And you have. Yeah. What's now, right? These are the Animal Jam business. So Kiddopia has grown 10% year-on-year. WCC has been largely flat at this point of time. And the negative impact you are seeing is on the RMG business, because the Classic Rummy business took a hit in Q1 due to the Tamil Nadu ban. Because for that particular product, you have, you know, almost, I think, about 20% of revenues come from that state, which got banned in early April. So you saw a sharp drop over there. So I think that's the current mix of the business. So you're right. It's kind of flattish on a combined basis. But we are quite hopeful with the work we are doing, we will start growing those businesses. Okay. Speaking of, the reason I asked for disaggregation on Sportskeeda as well was because in Q4 FY23, I think the revenue number was INR 28.7. This quarter, once you've included the Pro Football Network though, that number is INR 46. So, what do the numbers look like on an organic basis over here? I don't have a breakdown at this point of time. But just to give the right perspective, I think much of the growth is from organically in Q1 from Sportskeeda because you also had IPs in Q1 that took place. This is actually the lowest quarter or the lowest season for Pro Football Network. So there is some revenue contribution and zero EBITDA contribution by Pro Football Network in Q1. Abhishek, if I may just add, sorry, Sudhir, yeah? I think it's worth mentioning. Pro Football Network is a single-sport kind of site, right? So it's only around. Right. American football or what we would have called rugby in India, maybe American football, right? Mm-hmm. That's fine. That NFL, that season basically runs from September to January every year. So this quarter is completely kind of out of season for them. So this season actually had a marginal, maybe, loss on EBITDA for them. Definitely, as we said, very little revenue contribution. So most of this is organic, what you see. Is this? So this is primarily organic growth driven by IPL traffic? Not just IPL. If you look at Sportskeeda as well, more than half of the revenue now comes from the U.S. So IPL definitely is a factor. But, they have grown on other U.S. sports quite, significantly as well. And that continues to happen. Could you just give some color on, like, where that growth is coming from in the U.S.? That would be helpful because it is a sizable jump, right? Even on a quarterly basis. Let me answer that. So just to, to break it up, Abhishek, some data. So Pro Football Network did about INR 2.5 crores of revenue out of this 45-45.8 crores that we did in Q1. So as you can see, the contribution was fairly limited. Growth has come from, I think, one is our U.S. revenue, ad revenue. The eCPMs that we get have grown significantly. The monthly active user base has grown. Plus, we have direct sales that have also grown quite a bit. So I think these are the, these are the key contributors to revenue growth in this quarter. Got it. That's helpful. Thanks. Thank you. A reminder to all the participants, you may press star and one to ask the question. Next question is from the line of Nitin Jain from Fairtree Capital. Please go ahead. Yeah. Thank you for the follow-up opportunity. So, I'd like to talk about the employee expenses. So there is, been a jump of around 60% over last year. So is there any one-off here, like, if you can clarify? I think one is we've added, you know, many more teams. For example, you have the entire Pro Football team come in. And also, you have some small one-off expenses, I think, in the year. But they would not overall. So I think overall team addition and also WildWorks because the WildWorks team is in the U.S., so that entire team has also got added, I think, about 35-40 people. Those are the new additions to what would increase this admin cost, the employee cost. Okay. And, like, do we see this trend going forward as well? In terms of cost increase? Yes. Employee expense cost increase. I mean, if you were to acquire new businesses that come in with new teams, then obviously, those costs would get added on. Organically, we don't expect the team cost to increase much. Okay. Okay. And, just on the margins again, so, at the end of Q4, you know, the commentary was more in the direction of, you know, margins improving this year for the overall business. Now, if you look at the three verticals, other than gaming, the other two verticals, eSports and ad tech, they have seen a decent, you know, EBITDA margin decline. So, how do we see the profitability for the rest of the year? We are aiming for a margin that would be higher than the previous year for sure for FY24, which is on a blended basis. Again, I don't have a specific guidance at this point of time. But we expect the overall margins to be better than previous year. To be better than FY2023? Correct. Okay. Great. And the last one is on the recent regulation change on GST announcement. So, do we also see an impact on eSports because there is a profit pool involved there too? So if you could clarify. No, there is no impact whatsoever on esports, esports because there is no wagering or there is no money put in by the consumers or players. It's a taxation policy specifically for where money is put in to win money. Okay. Okay. So no impact on eSports whatsoever? Absolutely. Okay. Thank you. That helps a lot. Thank you. Ladies and gentlemen, we'll take the last question from the line of Rahul Jain from Dolat Capital. Please go ahead. Yeah. Hi. Thanks for the opportunity. Just to understand, what has happened, in this case, in this quarter from a, NODWIN business point of view and, how much of that is also pertaining to this, ban lift that happened on BGMI during the quarter and how, from a 12-month and beyond perspective, you see this business can change, provided the status quo remain in terms of, BGMI, continuing as a game in India? So in this quarter, Rahul, as I've mentioned earlier, you know, we had certain key launches like BGMS, which was accounted for in Q1 of FY23, which we kind of pushed into Q2 FY23 so that we had enough time to take advantage of BGMS, BGMI coming back and launching with that. So I think you would have seen lower growth of revenue in Q1 compared to FY23. We've grown but not as fast as you expect, NODWIN too. But that will come in Q2. And also, much of the established IPs, say, our DreamHack, NH7 Weekender, etc., will all come into Q3, Q4. So there is no positive impact of the ban lift of BGMI in Q1. You will start seeing results of that from Q2 onwards. I think from a zoomed-out perspective, as far as our eSports business is concerned, especially NODWIN, as you've seen, we've had, you know, a lot of confidence by existing, partners in that case. KRAFTON, which is the owner and developer of BGMI, has only recently reinvested in NODWIN. So they are very committed to this partnership. You've had Sony come in, you know, again, which is a great validation, for our business. So I think we're very much on the right track, building our eSports business, profitably, building some of these IPs over the next year or two should pay off, rich dividends to us. Right. Thank you. That's from us, thank you. Thank you very much. Now I'll hand the conference over to the management for closing comments. Yeah. Thank you, everyone, for joining the call. We will continue to strive hard and deliver good results in the coming quarters and stay on course to achieve profitable growth. There is a lot happening in the gaming world, a lot of new technologies coming. You have AI happening. You have Web3 happening. Virtual reality seems to be coming nearer and nearer. So it's very exciting times to be in this business. I'd like to draw inspiration from a famous quote that said that the future belongs to those who believe in the beauty of their dreams. As you know, we have embarked on a relentless pursuit of our vision, making India the gaming capital of the world. For the past two decades, Nazara has persevered with unwavering determination. Our commitment remains resolute as we continue to strive tirelessly until we transform our dream into a thriving reality. Thank you very much. Thank you very much. On behalf of Avendus Spark, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.