In FY24, Ad Tech emerged as a significant segment, contributing 9% to the company’s total revenue, indicating a new approach to the company’s business model. Gaming and sports media solutions company Nazara has three core segments: gaming, Esports, and Ad Tech. Through this diversification strategy, the company has been positioned to post better financial results irrespective of the market situation. Here, we are talking about Ad tech contributes 9% to Nazara Technologies revenues in FY24.
Here, we are talking about Ad tech contributes 9% to Nazara Technologies revenues in FY24:
Financial Statement of Nazara Technologies
According to Nazara Technologies’ consolidated financial statement, the company’s overall revenue for FY24 was INR 1,138 crores, with a growth rate of 4.3% year-on-year. The Company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 16 percent. 5%, touching INR 128 crores. This growth was underpinned by a better EBITDA margin that increased by 110 basis points to 11.2%. Net profits from continuing operations increased by 41% on a YoY basis to INR 89.5 crores, which indicates significant operational effectiveness and adequate cost controls.
Gaming Revenue Generation
The Gaming segment of Gamified Early Learning, Skill-Based Real Money Gaming, Freemium, and Telco Supplements contributed 36% of total revenues and 53% of EBITDA. Nevertheless, segmental revenue remained relatively stable against the prior year, and the segment achieved an EBITDA increase of 13% with margins of 19. 9%. Kiddopia remained the most profitable product by recording a 57% yoy growth in EBITDA even though its Q4 revenue dipped by 12%.
Esports Revenue Generation
Esports, Nazara’s biggest revenue generator, accounted for 55% of the total revenue and 41% of EBITDA. The segment highlighted year-on-year growth in revenue by 19% and in EBITDA by 51% through successful acquisitions and partnerships. Some of the significant acquisitions include Comic Con India and Pro Football Network, which have elevated the company’s reach in the Esports and youth media verticals, respectively.
Ad Tech Revenue Significance
The Ad Tech segment significantly repositioned for higher-margin client and product business in FY24. This pivot led to a fall in revenue from INR 153 crores for FY23 to INR 104 crores for FY24; however, gross margins increased from 19% to 27%. The company’s product differentiation and aggressive marketing strategies, especially in the United States, should pay off in FY25.
Acquisitive Nature of Nazara Technologies
The acquisitive nature of Nazara Technologies is also reflected in its most significant round of funding so far, INR 950 crores, which resulted in a net cash position of roughly INR 1,450 crores. CEO and Joint Managing Director Nitish Mittersain outlined several vital activities, such as new game releases, IP creation, and a solid pipeline of M&A, that would form the basis for further growth. The company has predicted higher revenue and EBITDA growth rates for FY25 and considerable effects from Q2 onwards.
Future Endeavors
Nitish Mittersain said he believes that reasonable cash reserves and viable M&A prospects will make further expansion of Nazara possible. The company plans to achieve a minimum EBITDA of INR 300 crores by FY27 through the right mix of M&A and capital allocation to strategic segments.
Conclusion
Being involved in the gaming, esports, and ad tech space and having implemented ambitious revenue growth strategies, the prospects of Nazara Technologies look promising. The contribution of only 9% by Ad Tech in FY24 also indicates that the segment could be a significant revenue generator. The future looks bright for Nazara as it diversifies and grows its business as the digital entertainment and media industry evolves.
