AFFLE (INDIA) LIMITED Concall Summary Date: 25 May 2024

FINANCIAL HIGHLIGHTS

• During the quarter, the company witnessed robust market opportunity as advertisers steadily accelerated their digital spending resulting in a broad-based growth in their CPCU (Cost Per Converted User) business in global emerging markets and a successful turnaround in the developed markets.

• During the quarter, the growth in revenue from India & Emerging markets was ~28% YoY. However, developed markets expanded by 105% YoY.

• In Q4 FY24, the company witnessed a revenue growth of 15% YoY in India.

• The other expenses increased by ~89% YoY & ~20% QoQ to ₹40 crore, on account of higher sales and marketing costs to support developed market growth during the quarter.

• The organic growth for the company was ~18.5% YoY in Q4 FY24.

• Data and inventory cost stood at ₹1,125 crore comprising 61.1% of revenue in FY24. The company is calibrating its platform to premium inventory touchpoints.

BUSINESS HIGHLIGHTS

• The overall market tailwind continued to be intact anchored on the accelerated consumer adoption of the digital and an enhanced organizational shift towards digitally enabled processes.

• They are witnessing strong market opportunities as advertisers are consistently increasing their digital spending.

• During the quarter, the company witnessed broad-based growth across verticals & geographies.

• During FY24, 76% of the revenue contribution amounting to ₹1,407 crore was from direct customers.

• Their strong anchoring across India and global emerging markets continued to be resilient and it contributed ~73% of the revenue in FY24.

• In FY24, the CPCU model contributed 95% of revenue while the remaining 5% came from Non-CPCU.

• The company has been pushing more for a CPCU-based business model to new customers as reflected in Q4 FY24 which constituted ~100% of the CPCU-based revenue.

• The CPCU business revenue stood at ₹1,759 crore in FY24, a growth of 33% YoY. Converted users and average CPCU were 31.3 crore and ₹56.2, respectively.

• Average CPCU grew by 10% on a YoY basis in FY24.

• Conversions recorded a YoY growth of 22% during the year while the 5-year CAGR for the same was 54.5%.

UPDATES

• The company filed 15 new patents, during the quarter. These patents power futuristic use cases of interaction, training, integration of Gen AI, etc.

• They are calibrating carefully to ensure that it does not have any over-dependence on any specific vertical.

FUTURE OUTLOOK

• The management guided the effective tax rate to gradually inch upwards from current levels of 9% in FY24.

• As long as consumer trends like smartphone usage and connected TV remain intact, they expect the business to grow at 20% in the long term.