💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from contracts with customers grew 23.0% YoY to INR 22,663.08 million in FY2024-25. Standalone revenue, representing the core Indian operations, grew 26.2% YoY to INR 7,143.86 million. In Q2 FY2026, revenue from operations grew 19.1% YoY to INR 5,411 million.

Geographic Revenue Split

While specific regional percentages are not disclosed, the company highlights growth across broad-based industry verticals and markets, with specific mentions of the India market (impacted by RMG vertical) and developed markets (impacted by budget shifts).

Profitability Margins

Profit After Tax (PAT) margin for Q2 FY2026 stood at 16.5%, an improvement of 40 basis points from 16.1% in Q2 FY2025. For H1 FY2026, PAT margins expanded by 53 basis points. FY2024-25 consolidated PAT margin was approximately 16.8% based on PAT of INR 3,818.69 million.

EBITDA Margin

EBITDA margin stood at 22.6% in Q2 FY2026, marking the 6th consecutive quarter of EBITDA margin expansion. EBITDA grew 28.9% YoY in Q2 FY2026 and 31.2% YoY in H1 FY2026 to reach INR 2,858 million.

Capital Expenditure

The company generated cash flows from operations of INR 4,259.91 million in FY2024-25, a 62.4% increase YoY. Specific planned Capex figures are not disclosed, but the company opted not to pay dividends to reinvest profits for growth and expansion.

Credit Rating & Borrowing

Total consolidated debt was INR 772.16 million as of March 31, 2025, with no new borrowings undertaken during the year. The company maintains a high liquidity position with cash and bank balances of INR 14,182.33 million.

⚙️ Operational Drivers

Raw Materials

Inventory and Data Costs represent the primary 'raw material' for the digital platform, accounting for 60.8% of revenue in FY2024-25 and 61.2% of revenue in Q2 FY2026.

Capacity Expansion

The company operates as a tech platform; capacity is driven by workforce (618 employees as of March 31, 2025) and intelligent automation. No physical MT/MW capacity metrics apply.

Raw Material Costs

Inventory and data costs were INR 13,793.14 million in FY2024-25, a 22.6% increase YoY, which is slightly lower than the 23.0% revenue growth, indicating improved algorithmic efficiency.

Manufacturing Efficiency

Efficiency is measured by the ability to increase CPCU (Cost Per Converted User) pricing while maintaining stable Opex. Employee costs in Q2 FY2026 grew only 3.7% sequentially, lower than topline growth, due to automation.

Logistics & Distribution

Not applicable; distribution is digital via the Consumer Platform.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Affle targets 20% YoY growth by positioning itself as a premium platform focusing on high-value CPCU (Cost Per Converted User) conversions rather than low-margin volume. Growth is driven by broad-based momentum across industry verticals, market expansion in developed regions, and strategic investments like the INR 7.98 million investment in Talent Unlimited Online Services.

Products & Services

Consumer Platform (CPCU-based advertising), brand awareness campaigns, and digital conversion services for mobile advertisers.

Brand Portfolio

Affle, Affle 3i Limited.

New Products/Services

Brand awareness campaigns (non-CPCU business) are being scaled to generate additional revenue through the existing Consumer Platform.

Market Expansion

Expansion is targeted in developed markets and premium advertiser segments to drive higher unit economics.

Strategic Alliances

Strategic investment in Talent Unlimited Online Services Private Limited (INR 7.98 million) for equity and preference shares.

🌍 External Factors

Industry Trends

The industry is shifting toward high-value user acquisition and premium conversions. Affle is positioned as a margin-sensitive, bottom-line aggressive player in this 20% growth market.

Competitive Landscape

Competes with other digital advertising platforms but differentiates by 'saying no' to low-margin business to protect its premium moat.

Competitive Moat

Moat is built on proprietary algorithms that drive data/inventory cost efficiencies and a premium positioning that allows for higher CPCU rates. This is sustainable due to the high switching costs for advertisers seeking guaranteed conversion outcomes.

Macro Economic Sensitivity

Sensitive to global economic conditions and festive seasonality, which can shift advertising budgets between quarters (e.g., Q2 to Q3).

Consumer Behavior

Shift toward mobile-first consumption and high-lifetime-value user engagement is driving demand for Affle's conversion-led model.

Geopolitical Risks

Risks include political instability and legal restrictions on raising capital or acquiring companies outside India.

⚖️ Regulatory & Governance

Industry Regulations

Impacted by digital advertising regulations and specific vertical restrictions, such as the RMG (Real Money Gaming) regulations in India which affected receivable provisions.

Environmental Compliance

Not disclosed as a material cost for this digital services company.

Taxation Policy Impact

Effective tax rate is reflected in the difference between PBT (INR 4,676.37 million) and PAT (INR 3,818.69 million) for FY2024-25.

Legal Contingencies

The company reported no pending complaints for resolution as of March 31, 2025. No specific high-value court cases were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Potential for 0.5% revenue impact from RMG collection risks and fluctuations in earnings due to the seasonality of advertising spend.

Geographic Concentration Risk

Standalone operations (primarily India) contribute approximately 31.5% of consolidated revenue (INR 7,143.86 million of INR 22,663.08 million).

Third Party Dependencies

Dependent on third-party inventory and data providers, representing 60.8% of the cost structure.

Technology Obsolescence Risk

Mitigated by continuous investment in intelligent automation and algorithm updates to maintain conversion efficiency.

Credit & Counterparty Risk

Credit risk is specifically noted in the RMG vertical in India; however, overall trade receivables decreased by 5.9% YoY despite revenue growth, indicating strong general credit management.