Affle — Important Notes from Conference Call for Q4FY23

Affle, a digital advertising and marketing company, concluded FY2023 with impressive results, achieving over 5X growth in revenue and profitability over the past five years. Despite global challenges, Affle delivered robust growth, driven by its ROI-linked CPCU (Cost Per Converted User) business model. The company’s Consumer Platform surpassed 250 million converted users for the first time, with 256.8 million users in total. CPCU revenue increased by 35.3% year-on-year, and Cash from Operations saw a compound annual growth rate of 52.8% since FY2019.

In Q4 FY2023, Affle achieved a revenue growth of 12.9% YoY and experienced meaningful margin expansion, resulting in a 22.1% YoY growth in EBITDA. The company maintained a strong market position in emerging markets, with a 20% YoY growth in Q4. However, macroeconomic headwinds affected the business in developed markets, particularly in verticals such as Fintech and Entertainment.

To address these challenges, Affle implemented a multi-pronged 360-degree turnaround plan for FY2024. The plan involves reorganizing teams and resources to align with the CPCU business model, realigning strategic partnerships to focus on higher-value conversions, introducing CPCU use cases on connected TV (CTV) platforms, leveraging Apple’s iOS SKAN advertising product, and acquiring deeper access to first-party customer data in high-growth verticals like gaming.

The company aims to fortify its position by investing in organic growth operations, expanding OEM and operator partnerships, and exploring inorganic opportunities in high-growth verticals such as gaming. Affle has been sharing case studies to demonstrate its ability to provide innovative solutions and drive outstanding results across various industry verticals. The company has received recognition for its achievements, including being awarded the Best Use of Programmatic Advertising at the Indian Digital Awards and ranking among the top media sources for delivering ROI on Apple iOS SKAN campaigns in the Singular ROI Index 2023.

Affle’s outlook for FY2024 remains optimistic, with a focus on sustainable growth and the expectation of turnaround results from Q2 onwards. By executing its turnaround plan, the company aims to strengthen its market leadership position and drive continued growth in India, emerging markets, and beyond.

Affle concluded FY2023 with strong revenue growth of 32.6% YoY, reaching Rs. 14,340 million. In Q4 FY23, revenue stood at Rs. 3,558 million, a growth of 12.9% YoY. The company experienced a resilient bottom-line growth and margin expansion in global emerging markets, while developed markets had a lower contribution. India and international markets contributed 34.7% and 65.3% to revenue, respectively. EBITDA for the full year was Rs. 2,930 million, a 37.2% YoY increase. Profit after tax (PAT) for the full year was Rs. 2,453 million, up 33.8% YoY. Cash flow from operations remained robust, with a strong focus on working capital management. The company remains confident in its long-term prospects and committed to delivering sustainable growth.