Affle India Limited Q4 FY24 Earnings Conference Call, hosted by Elara Securities Private Limited. 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 the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Taurani from Elara Securities Private Limited. Thank you, and over to you, sir.
Thank you, Lizann. Hi, everyone. Good morning. On behalf of Elara team, we welcome you all to Q4 and 12-month FY 2024 conference call of Affle India Limited. I take this opportunity to welcome the management of Affle India Limited, represented by Mr. Anuj Khanna Sohum, who is the Managing Director and Chief Executive Officer of the company, and Mr. Kapil Bhutani, who is the Chief Financial and Operations Officer of the company. Before we begin with the discussion, I would like to remind you that some of the statements made in today's conference call may be forward-looking in nature and may involve some risks and uncertainties. Kindly refer to slide 24 of company's Q4 earnings presentation for a detailed disclaimer. I will now hand over the call to Mr. Anuj Khanna Sohum for his opening remarks. Thanks, and over to you, Anuj.
Very good morning, everyone, and thank you for joining the call today. I trust all of you are keeping in good health. Growth thrives in the face of challenges. Q4 FY 2024 marked a landmark period for Affle, as we achieved record growth on both year-over-year and sequential basis to convincingly cross the INR 500 crore mark in quarterly revenue run rate. Defining the historical pattern, where Q3 is the highest quarter for us in any financial year, Q4 FY 2024 has surpassed this cyclical trend by inching above sequentially. This underscores the strength of our strategic initiatives, committed leadership, and the strong business momentum. We have concluded FY 2024 on a strong note with our accomplishments demonstrating our resilience and a clear indicator of our long-term potential. Let me highlight some of the key achievements of FY 2024.
As confirmed in the previous call, we have delivered a decisive and timely turnaround in developed markets anchored on our determined execution, with increased investments in sales and marketing and business promotion and our hands-on entrepreneurial leadership. We have fully integrated all our tech platforms, including that of YouAppi, the business integration of which was successfully achieved within the first year itself. Our strategic mode is stronger than ever before, with our unified Affle 2.0 Consumer Platform Stack for all DSP platforms, fully integrated and powered by Affle's ConvergeAI Supply Cloud to drive deeper consumer engagements and premium conversions at scale. We have enhanced our product capabilities and invested in new product use cases, as well as ecosystem-level partnerships, to unlock premium propositions and touchpoints for advertisers across connected devices, including CTV, SKAN, iOS App Store, and other OEM app stores.
We have successfully implemented GenAI-powered use cases on our consumer platform stack to strengthen our two V's vernacular, verticalization strategy to drive greater innovation as well as operating efficiencies. Our GenAI-powered multilingual keyword recommendation engine has delivered success for our customers across all key industry verticals. We have further expanded our tech IP, harnessing next-gen technologies in a responsible manner, particularly in AI, by filing 15 new GenAI patent claims as well as receiving one U.S. patent grant that was previously filed to unlock competitive advantage and to augment our market position. Additionally, we have started FY 2025 with significant momentum, having recently secured one patent grant in the U.S. and one in India, and this brings our total IP portfolio to 36 patents, with nine patents now granted.
With over 5x growth delivered in top line and profitability over the last five financial years, powered by our unique ROI-linked CPCU business model, we are poised to further accelerate our growth trajectory in FY 2025 with gradual increase in profitability margins. Speaking of Q4 FY 2024 numbers, we delivered revenue of INR 5,062 million, a growth of 42.3% year-on-year. We continue to enhance our consumer-centric platform offerings, progressively delivering stronger than ever quarterly EBITDA of INR 990 million and PAT of INR 875 million.
Our CPCU business delivered about 88.4 million conversions during the quarter at a CPCU rate of INR 57, and that helped us achieve CPCU revenue of INR 5,038 million, an increase of 57.4% year-on-year and 5.5% quarter-on-quarter. We are experiencing a strong market opportunity as advertisers are consistently increasing their digital spending. This trend is driven by widespread adoption of our CPCU model across our customer base and its application to premium use cases, further solidifying overall value proposition and enhancing our market position. In terms of the full year performance, we achieved revenue growth of 28.5% year-on-year, and PAT growth of 21.2% year-on-year.
Overall, for FY 2024, our CPCU revenue increased by 33.6% year-on-year and has grown at a CAGR of about 56% in the last five-year period. Our strong anchoring across India, global emerging markets continues to be resilient, and it contributed 72.9% to our quarterly revenues. In Q4, our growth in India and emerging markets combined was about 28% year-on-year. Our broad-based growth across diversified verticals reinforces our confidence in the sustained market dynamics in India and global emerging markets. Speaking of developed markets, we have significantly strengthened our foundation through our integrated consumer platform propositions, realigned strategies, and confidence in our teams to continue to drive success moving forward. In Q4, our overall growth in developed markets was about 105% year-on-year, and it contributed 27.1% to our quarterly revenue.
Continue to share our customer success stories. This time, we have included three case studies, which are focused on Fintech in India, gaming as a global emerging vertical using CTV, and ride-hailing business in emerging markets. Our Affle2.0 Consumer Platform Stack continues to be recognized in the industry as a top performer, and we recently won top rankings in the Singular ROI Index 2024 for our SKAN iOS performance. We also won three prestigious recognitions as the Best Ad Tech Company of the Year, Best CTV Ad Tech Platform, and Most Outstanding Programmatic Platform of the Year for mobile advertising at the Indian Digital Awards 2024. With that, I now hand over the discussion to our CFO, Kapil Bhutani, to discuss the financials. Thank you, and over to you, Kapil.
Thank you, Anuj. Wishing everyone a good day and hope all of you are keeping safe and well. We concluded quarter four of 2024 on a strong note and delivered a revenue from operations of INR 5,062 million. That is INR 506.2 crores overall. On an overall consolidated basis, INR 1,557 million, that is INR 155.7 crores on a year-on-year basis. On a consolidated basis, our revenue growth stood at 42.3% year-on-year and 1.5% quarter-on-quarter. This sequential growth is a pleasant change to see quarter four an inch above quarter three, surpassing our cyclic trend as well as we crossed 5,000 million, that is 500 crores quarterly revenue run rate for the first time.
It is, it was a broad-based growth in the advertising spend anchored on our CPCU model coming across, various markets. During the quarter, India and emerging markets contributed to 72.9% of the, of our revenues, while developed markets contributed about 27.1% to, of our revenues. Our finance, our finance, revenue for the financial year 2024 stood at INR 18,448 million, that is INR 1,842.8 crore, a robust growth of 28.5% on year-on-year basis. Our business continued to be in a high growth momentum with integrated platforms and product population, leveraging on evolving digital ecosystem. This helped us to achieve highest ever quarterly EBITDA of INR 990 million, that is INR 99 crore, in quarter 4 2024.
A growth of 38.2% on year-on-year basis and 2.4% on quarter-on-quarter. EBITDA margin stood at 19.5%. Our EBITDA for the financial year 2024 stood at INR 3,600 million, that is INR 361.1 crores, an increase of 23.2% Y- on- Y, and EBITDA margin stood at 19.6%. In terms of OpEx, our inventory and data costs stood at 61% of our revenue from operations this quarter, which was almost in line with quarter four previous year, while witnessing a margin improvement sequentially despite our ongoing platform validations to various premium inventories and touchpoints and deeper ecosystem-level partnerships.
Our other expenses stood at 7.8% of revenue and, and increased an increase by INR 65 million, that is INR 6.5 crores, on quarter-over-quarter basis, mainly on account of continued investment in higher sales and marketing and trade event participations, which was also highlighted in the previous quarter. Our employee benefit expenses for the quarter largely remained flat on sequential basis. We achieved a profit before tax of INR 1,002 million, that is INR 100.2 crores, in this quarter. Our profit after tax for the quarter stood at INR 875 million, that is INR 87.5 crores, an increase of 42.2% on year-over-year basis and 13.9% on quarter-over-quarter basis. Despite an increase in effective tax rate this quarter, our tax rate is expected to gradually inch up.
We remain focused on our working capital management and have been very exclusive, and have been extremely prudent in customer profile as there are no material changes in our plan.
... So, in our collection risk, our operating cash flow to PAT ratio stood at 88%. Looking ahead, we remain confident of long-term business process to invest further in our business and stand committed to deliver long-term sustainable growth. With this, I end my presentation. Let's open the floor for questions.
Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question may please press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Karan Taurani from Elara Securities. Please go ahead.
Hi. Thanks. So congrats, you know, for a very great quarter as far as growth is concerned and also as to the profitability. The first question was, you know, on developed markets, right? So you've been indicating that developed markets have seen strong traction. So if you can, you know, kind of, break this up, you know, for us in terms of the organic revenue growth that we have seen for the developed markets. And going ahead, what is the kind of traction, what is the kind of growth rates we can expect, and what are the kind of verticals that are contributing for this kind of growth? Thanks.
Thanks for that question. I think, with respect to organic, inorganic, I, I know this is always, you know, the emphasis point. I think just wanted to share that in the U.S. market, we have undertaken a very clear process of making sure that we are fully integrated as a premium platform, focused on those verticals that we think we will find growth, long-term, sustainable, profitable growth in the U.S. market. And we have already combined, or we are already in the process of combining the, even the entities of YouAppi and Jampp, the U.S. entities which we had in the U.S., as well as the operations, the sales process and so on. I think that, that is taking effect fully at this moment.
Now, when we look at organic growth of our company, and we look at it in the context of, you know, the acquired companies and so on, in this particular sense in the quarter Q4, at an overall level, not just like developed markets emerging, like overall consolidated level, I would say that the organic growth of our company has achieved year-on-year about 18.5% organic growth in this quarter, and that is after taking into account, you know, the global impact. Now, most of the impact of this was, I would say in the international markets, developed as well as certain emerging markets context. The sequential basis of looking at the number is actually perhaps more important, because in Q3, typically October, November, December is our peak quarter, right?
Q3 to Q4 is comparable because, you know, there's no organic, inorganic adjustment. I mean, the entire business situation was the same. Typically, Q3 is the peak quarter, and Q4 would be, you know, a slight dip. In Q3 to Q4, I think we have seen a sequential, you know, favorable impact overall, and I think we are seeing that the Q4 trend, even across international markets, was, you know, keeping in line with the Q3 trends. So the growth momentum is there for us, and I would safely say to all our investors that we have fully recovered and bounced back from all the complications that we were feeling and facing with respect to rebuilding Jampp, dealing with the complications of, you know, turning around Jampp. We have fully integrated all the acquired companies.
We have also successfully fully integrated YouAppi, and the synergies of that are more or less already being seen in the Q4 results and would be even better realized as we go into FY 2025. So within the next few quarters of FY 2025, you would find more and more synergies emerging from how all of these platforms are now completely integrated to the Affle Converge AI supply cloud. And that is having a very, very positive impact in the way we are able to expand scale, drive premium conversions to our advertisers. So I'm very bullish about the way we have integrated, and going forward, like April, May, June this current quarter, 2 months have almost already passed, and we are already enjoying the benefits of this integrated approach of running our company.
Right. Any verticals you point out, maybe, in emerging nations and developed markets, which are doing extremely well? Because there are certain verticals which could be under pressure. Anything on the vertical standing standpoint, yeah.
Thankfully, in Q4, I would say that, you know, all the pressure points have been neutralized and balanced out. You know, we are seeing broad-based growth across verticals, across all markets, and, you know, we are calibrating carefully to ensure that we are not having any overdependence on any specific vertical. I think our goal is to keep it very, very broad-based as much as possible across geographies and verticals. So at the moment, I have no pressure point to report to you that, you know, we are feeling any stress or pressure in any particular vertical. In fact, we are seeing positive momentum everywhere at the moment.
Right. Thank you. That's helpful. Thanks.
Thank you. We'll move on to the next question. That is from the line of Anmol Garg from DAM Capital. Please go ahead.
Yeah, hi, hi, Anuj. Thanks for the opportunity, and congratulations on strong sequential growth in our seasonally weak quarter. Just had a couple of questions. Firstly, going ahead in FY 2025, now, as you are indicating that most of the complications are over, would it be right to assume that the company can grow 20% plus again for the foreseeable future?
Well, I have always, you know, I said it very clearly that I measure our team internally, as well as I measure my own performance internally at, you know, at that kind of a benchmark, where at least, from a bottom line perspective, you know, whether it is, you know, cash flow, whether it's profit after tax, I wouldn't settle for anything less than 20%. So in terms of revenue growth, I think it should also be in, in line with that. I would always be pushing for that. Having said that, given the backdrop of, you know, how things have been last year, I think it should be easier to do this year than last year. So if you just look at the run rate that we have in Q4, which is typically our weak quarter, right?
So I think that's important to take note of that. So there is no one-off event which has, you know, helped us to look better in this Q4. What we have delivered is a broad-based, all-round, sensibly calibrated growth, which we will definitely be able to defend and improve upon as we execute into FY 2025. So it's a simple math. You look at INR 506 crore, you know, give it some sequential uptrend and compare it to H1, you would naturally see that the math will add up. That H1 FY 2025, if we defend our Q4 run rate and do a little bit better, you would see that the math would land up in that zone of numbers that you're seeking for me to confirm. But, I mean, I leave that to you in terms of modeling.
Long term, as long as, you know, I think the consumers are still using smartphone devices and connected TV, as long as that consumer trend is intact, I would expect nothing less than, you know, a 20%+ growth from our company.
Sure. Secondly, wanted to understand for a non-CPCU business part, so in 4Q, it's almost non-existent now. So just wanted to understand if we have deliberately reduced the work over here in the business and what's the outlook over here?
Our focus has always been, you know, I've been pushing my entire organization and team, and in fact, incentivizing the team members to say, every order that comes, let's make sure every product, every use case, and every vertical, push for CPCU business models. That is our differentiation. That is how we stand. If you notice, a few quarters earlier in the earnings call, I mentioned that even our CTV product is now being, you know, blended with the CPCU business model pushed into the market. So I think we have found that to be our anchoring transition, and I've given a deadline to our team that, you know, starting calendar year 2024, January on, we have to push really hard in that direction, and we have been successful in doing it. I'm very happy with that outcome.
In fact, you have to see it as a CPCU business is like the single cash-generating unit as a company. Yeah.
Sure. Last question from my side. So as we are seeing more synergies coming in YouAppi and Jampp business, particularly in developed markets, so can we expect that going ahead, as more synergies play out, we can see some margin increase going ahead?
Yeah, absolutely. See, when we acquired Jampp, one of our thesis was to enter into, you know, Latin America markets, North America markets, go into gaming, and Jampp was struggling to, to kind of achieve those goals. In order to, you know, augment that and to solve it, we had to take some decisive steps last year, and one of the steps was absolutely to acquire YouAppi and see how we can, create those, you know, objectives and get to those growth targets that we have as an organization at the console level. And Affle has done fantastically well in that execution. I think this year I'm super proud of how we have, you know, integrated, this whole go-to-market approach. At the same time, I think rebuilding Jampp.
Now, synergies-wise, there are two areas of operating synergies that, you know, we will be working towards, and I have commented in my script earlier. One, the ConvergeAI supply cloud, which is like the Affle, let's say, core engines and platforms, which are essentially making sure that all our DSPs have clean supply. Clean meaning, you know, there should be no bot traffic and all these, a lot of patterns that we have got. You know, how do we filter out the not so good traffic and really have clean access to the consumers and target premium consumers on premium inventory? So this efficiency we are bringing to our, you know, all our integrated platforms. The second area is compliance.
You know, making sure that we are dealing with data privacy, we are dealing with all of those aspects, and providing that baseline level of compliance as well as clean premium scale-up in terms of the traffic. So this is leading to great outcomes because all the platforms are leveraging the same sort of central you know platform capabilities, and that is helping us in dropping you know certain areas of cost and optimizing the margins or even going more premium. Maybe the cost is the same, but we can charge more to the advertisers. We can go and inch up our pricing. So I think those synergies are now starting to show in our numbers, and I am feeling the power of it in you know in the execution.
I think, that's why we have also said that progressively we will see some incremental improvements in profitability as we execute and scale from here onwards.... Sure, Anuj, that's helpful. Thanks for answering.
Thank you. The next question is on the line of Rahul from Dolat Capital. Please go ahead.
Yeah, hi. Thanks for the opportunity. First question for Anuj. You know, I know you said growth is very broad-based, but is it possible to attribute it in some manner, such as, let's say, is it more client logo win? Is it revival in spend from some of the troubled clients, such as the fintech in U.S. or RNG in India? Any flavor for this quarter, and in generally demand environment across key market would be of great help. Thanks.
Thanks for that question. I'll give this answer in three dimensions to you. Let's look at India. In India, we are seeing the, you know, more broad-based bounce back across verticals. We are no longer feeling, you know, overdependence on real, you know, gaming or real money gaming. We have, we've broadened our approach towards that, so I think that, that effect is waning off. In terms of emerging markets, global emerging markets out beyond India, I think we are... You know, we never had any issues, so, you know, we are doing fine there. But what we are benefiting from is that we are selling more integrated product propositions, right?
So we are going and winning new logos and customers, but we are winning it in a competitive advantage of that we are bringing an integrated suite of, you know, capabilities of our products. So a lot more upselling and cross-selling is happening, you know, with, with the way we are approaching the market. So I think that's really working well for us in, you know, markets like Brazil, Southeast Asia, Middle East, Africa, and so on. We are also, in terms of the developed markets, I think there, I've already commented earlier that, you know, we are going out there, again, in an integrated approach and finding positive outcomes. But there is less pressure now on the fintech, because fintech and vertical was under pressure for most part of last year.
But I think in this last quarter, we have seen budgets coming back from those customers who had scaled back before. So there is an all-round favorable impact. So the pressure points have been relieved. The strategic integrations of our products and platforms coming together are being realized across markets. So when you see existing customers, you say there's a lot more upselling and cross-selling happening. When you look at new customers, we are winning better in the verticals that were under pressure, as well as, you know, the integrated propositions is a competitive mode versus, you know, our competitors don't have all these integrated platforms in their capabilities. So I think it is definitely helping us get budgets on these basis. Yeah.
Thanks. And just one question for Kapil. Given the fact that our organic growth is back to 20%+, is it safer to assume we may get operating leverage of nearly 70-100 basis points year on? And any specific reason for the jump in the unbilled revenue you could highlight?
So I'll answer your second question first. There is no specific reason for the contract assets or the unbilled to grow up. If you compare it from the last year, the turnover or the revenues from UAP have added in, so that is one reason. Second reason is, the developed markets billing, either for Jampp and UAP, were being done on the thirty-first of the last month, which has now been changed into the first or the second of the next month. So the dating of the invoice has changed, and that is in line with our SOPs and RCMs. So that has brought in, on the cutoff date, a higher unbilled versus the previous year opening, right?
With regards to the efficiencies on the organic growth, as we have mentioned, that we are working for the premium inventories, so we are striving there also. So it is, it cannot be assumed that it will be 100 basis points. Yes, there will be some efforts to notch it up, but yes, we are spending a lot of efforts to grow our inventory base on the premium inventories also.
Understood. Understood. Thanks for the color, and-
I think, sorry to interrupt you there, but, the GenAI-related efficiencies that we are also seeing. You know, so GenAI is helping in two dimensions. One is innovation, okay? Clearly bringing new use cases and power of GenAI to make, you know, our advertisers get better ROI. The second area is that it's improving efficiencies. Efficiencies means we can do the same things faster, better, and with less manpower involvement, and so on and so forth. So whether it is coding, whether it is testing, whether it is creating creatives, whether it is creating data science, decision making or reports, many things are getting automated inside the office. So we are embracing GenAI like, you know, like a full embrace on the innovation on the product side, as well as on operating efficiency. So there will be definite positive impact on the margin.
Let's not quantify it and take a forward forecast or basis points, but let us execute and deliver the numbers, and you'll see the trend as it emerges. But let's not nail it down into some specific number forecast. But I'm pretty optimistic that we, you know, we are, we are seeing efficiencies for sure.
Yes, that's helpful. Congratulations on achieving the milestone. Thank you.
Thank you. The next question is on the line of Swapnil from JM Financial. Please go ahead.
Hi, thanks for the opportunity, and congratulations on a good set of numbers. So the first question is on the breakup of your revenue growth across India and other emerging markets. I know you have given the combined number, but it will be helpful if you can break it down and help us understand you know, separately. Any particular reason why you have changed the reporting structure you know, with respect to growth in these markets? That would be my first question.
Okay. In terms of year-on-year growth in India, we have seen over 15% year-on-year growth. And in the rest of the markets, we have already provided that. If you see India and emerging markets on a combined basis, that's over 28%, and in developed markets, over 100%. I think the emphasis now is that the India's core business is actually not just applicable, I mean, just from an India lens, but what is happening is that the advantages that we have of our business in India in terms of data, in terms of data science capabilities, product, processes, efficiencies, dealing with the mass sort of volumes that we are dealing with in terms of, you know, the Indian consumer and how, you know, tens and thousands of servers are running to process that efficiency.
The same efficiencies are absolutely replicable across all other global emerging markets that we are running into, where the pricing is always under pressure, the number of users is very high. The data science algorithms are also finding that what we do in India is actually finding great success in terms of how we apply it directly into the other emerging markets. So we see that as an important sort of segment, that emerging markets globally are behaving in a certain pattern. And what we are doing, of course, it's anchored on to India. And India's anchoring, and how we report India is super important. It is anyways, as a listed company, India standalone is being reported and consolidated is being reported.
But from a growth perspective, we are seeing that India and emerging markets is one segment, and let's take out the developed markets and, you know, see how we are going to ramp up there, bringing it back into the focus versus blending it as, as one. I think it was important to see it in that lens. So I hope I've answered your question. And yes, it is all around growth, and I'm very happy with what we are achieving. It was super important to exit FY 2024 with this kind of a growth momentum, where organically, overall constant basis, we are seeing 18.5% growth year-on-year, which is very positive, and I hope to improve it an inch further as we execute into the rest of this financial year.
Got it, Anuj. The second question is with respect to, I mean, the continuation of that a bit. The other emerging markets growth seems to be significantly higher over the last 2-3 quarters. In fact, if I'm right, it would be more than 30%-35% kind of a number. Now, what kind of confidence we have that this growth will continue in FY 2025 as well, given that the base itself would be, would have changed? And any particular verticals within these other emerging markets that are doing significantly better than others?
Other question is with respect to Developed Markets as well, wherein there has been stupendous growth in those markets as well. Any particular things that you're doing differently this time around, which is helping you penetrate the customers in those markets? Because there is a significant competition in those markets already. So what is helping us, you know, penetrate the customers? Some examples could be-
Yeah, I understand that. So, so in terms of other emerging markets, I would say that we have seen a consistent pattern of growth all along. And what is helped... And there was no particular pressure point that, oh, there is a problem in this vertical or that vertical. Unlike in India, there was either an edTech had an issue, then, you know, there was challenges in gaming vertical and so on and so forth. There were different moments of challenges coming in different verticals in India. Then there was in developed markets, there were similar, you know, challenges coming across certain verticals and issues. But I think in other emerging markets, we were fortunate that there was no such, you know, stress point at any moment.
And now it is, of course, benefiting overall from the fact that we are doing all the integrated propositions, and we are able to do upselling and cross-selling of those propositions. So therefore, there's a broad-based growth, both on existing customers and new customers. And regarding developed markets, already answered that question earlier. So if you have any specific clarification on that, I'm happy to clarify.
No, what I meant in the developed markets is like, what exactly is helping you win more revenues from those customers, which otherwise would have been working with some of our competition earlier?
So what's helping us there is, in one, that customers we already had in fintech before, who had pulled back quite a bit because of their own industry dynamics, those are coming back. Those budgets are coming back. So that is one factor, right? That the stress point has been reduced. Second is we are also pushing our gaming as well as non-gaming products in an integrated fashion. Like I mentioned, that we are creating synergies of how we can push certain use cases in an integrated way in the North America market. That is helping. And third is execution. Our base is so small. Our base in developed markets is, you know... Actually, our base is overall quite small, even if I see other emerging markets.
So it's not a scenario where one has to think that, okay, you know, we execute well on the ground, sharply on the ground, with the right kind of sales, marketing, positioning. Our product definitely has the ability to deliver and be competitive versus those competitors out there. So how to win business out of them is just about sales execution. That's why you would see that last three, last whole financial year, we have invested disproportionately more money in sales and marketing efforts. And I think that has yielded results. I mean, first you start investing, then you build a pipeline, and if your product and merits are good, you will convert those pipelines. So that's what is happening. Just sensible execution on the ground.
Got it, Anuj. And just one quick question for-
Mr. Swapnil, may we request that you return to the question queue? There are participants waiting for their turn. Thank you. We'll move on to the next question that is on the line of Mayank Babla from Enam AMC. Please go ahead.
Hi. Thank you for taking my question. Am I audible?
Yes, sir. Please proceed.
Yes. Congratulations on a great set of numbers, and a great exit to FY 2024, despite the seasonal, you know, weakness. Anuj, my question is to you that, you know, you mentioned earlier in the call that there were no one-offs, one-off events in this quarter, and also the integrations are coming through nicely for you. So in the future, can we see, you know, the seasonality in Q4 disappearing in the foreseeable future?
No, I wouldn't say that. I would say that this Q4 is a better outcome because of, you know, several unresolved things getting fully resolved as of... I mean, I think I made that statement last time also, that, you know, like, by the end of Q3, I think a lot of the, you know, the challenges were already overcome. And I was keeping fingers crossed that, you know, my assessment be right, and then, you know, we'll show it in Q4, and we have shown it in Q4, and I think that's how we should look at it. I think the fact that Q3, October, November, December, has always been higher than Q4, it's more of a function of advertising industry and budgets. You know, the consumers are in a happier state.
It's festive moment, you know, so the advertisers are also spending, and the consumer is also spending more, right? So there is a clear correlation there. So I would expect that trend to continue. And, but at the same time, this Q4 is not a one-off, in the sense that this is the new base. This is the new base where we are at, and on this base we will be able to continue to build up from, right? So what you're seeing here is that, oh, this is not an exceptional Q4. It is a normalized, three-months result that we are seeing, and this is the base on which the business will continue to build forward, right?
But as you go and model FY 2025, you would say, okay, Q1 should have some sequential growth, Q2 should have some sequential growth, Q3 should have that better spike that used to happen each year, and then Q4, if FY 2025, I would still model it slightly lower than Q3 FY 2025. Does that make sense?
Got it. Got it. My second question to you is, you know, wanted to understand from you, what is your, you know, vision or strategy with all the patents that Affle has won? I mean, how do you plan to monetize them, or is there any, you know, aspiration there?
The patents are, you know, monetizable in many ways. The constructive way of monetizing is to be innovative, put it into your products, those, you know, patent concepts, and go and make money, you know, by selling to the advertisers and telling your advertisers that we are the inventors of this, and therefore we deserve it, and the others are, you know, copycats or also me, and that, you know, they, they can't actually provide you that. So a lot of big companies respect that, okay? A lot of big companies would respect that and say that you are the inventor, so, you know, we will work with you, because using another company's product which may have patent infringement issues later on, who wants to get into those mess, you know?
So I think the, so the best way to monetize is by taking that, first mover advantage back into your products and taking it to market and winning. The other way of monetizing is to go and become, you know, You know, go and issue notices to all your competitors and say: Start paying me royalty because, you know, you're trying to use this particular, invention that is assigned to us in this patent, right? So I think those, those, I think, are, also, approaches, which so far Affle has not undertaken. We are winning business on the merits of our products versus trying to, you know, go after the industry and say, "Hey, this is our patent, start paying us royalty." So we haven't exercised that option yet.
Someday, maybe we'll look into that, and I think it is much more prevalent in U.S., these kind of things, you know, so I'll look into it maybe in FY 2026. But for now, the patent is an indicator of the future readiness of our company, of our products, our mindsets, and it is also a great opportunity for us to, you know, reinforce areas of future invention. So in GenAI, when there will be more companies and products doing many things, and we'll have the patents, you know, in those areas, I think we will have some clear advantages, whether in terms of acquiring those companies or investing in those companies. So we will use it to our advantage at the appropriate time. But, you know, I think it's been core to our philosophy.
Whenever we work in a certain direction, we would compensate with innovation.
Got it. Got it. Okay, thanks. Best of luck for the future, and hope, you know, you drive higher and higher growth. Thanks.
Thank you. Thank you.
Thank you. The next question is on the line for Arun Prasath from Avendus Spark. Please go ahead.
Hi. Good morning. Thanks for the opportunity. Anuj, I think the UAP performance, I think it looks very good. I think when we entered, when we had it last year and compared to that kind of has doubled, it looks like. If that is the case, I know our gaming exposure to our gaming is very small. It's a very big market, but is it something that is, you know, how we are, can we, can we double this? Can we grow in this space, in this, in this vertical? And what is our right to win?
Now, we are seeing URP closely for last 12 months, and why we can sustain this group, if you can add some color please.
Yeah. A few things I want to share there. One, URP has achieved for us what we once thought Jampp would achieve for us, and I think we have achieved the right level of integration points. One of the things that we have also seen with URP is that we have been able to enhance the, you know, upsell opportunity, where the CTV initiatives of our company that were built organically by our company over time, have now been fully integrated with URP as well as Jampp. And we are able to integrate these platforms and use cases in a way where, combining that with the CPCU business model, we are creating a right to win, a greater right to win.
You know, so the differentiation is on the product, the differentiation is on the business model, and of course, you have to still execute well on the ground, right? So I think all of these things combined, plus the GenAI innovations that we are doing, we are really lifting up the differentiation and the moat of all our, all of our companies by combining the power of the use cases across our platforms. And we have already seen success stories on that. So if you see the case study that we have shared this time, it's a gaming case study, gaming customer, but on CTV. You know, and CTV was not something that Jampp and YouAppi or any of these platforms were doing before. So when we have built it over time internally, right?
Across these platforms, and then we are able to augment these use cases to create success. So upselling to existing customers of YouAppi, Affle's products and propositions, as well as, you know, bringing new differentiations to these platforms so they can compete better in the market, I think that's something we've done exceptionally well, and we feel like that we really know how to play this game, right? I mean, earlier, during COVID times, when we were doing acquisitions, we were already conservative, and we were guiding three years to integrate, right? And we actually took that time as well, because we were figuring things out. But I think now our confidence is so high. We have seen the good cases, we have seen the not so good cases.
We know how to manage it and fix it and deal with it, and while communicating transparently with all stakeholders like yourselves, we just want to make sure that in URP we have again demonstrated, see, we have learned it, we have done it well, and it's making an impact. So, I'm very positive about how our company is shaping up to take on FY 2025 convincingly.
So, Anuj, is it fair to say that, given where CTV is, how growing it is and how big an opportunity you have in gaming, is it fair to assume that you yourselves will be disappointed if you don't sustain this kind of a space in URP?
I think you have to, you know, go beyond this. I've been saying it very clearly, that it is one integrated cash-generating unit, one integrated platform. You can have different... I mean, you know, I'm seeing it as one integrated body with many limbs, and those limbs are all being integrated to the one common central converged AI supply cloud of Affle. And now that is how you receive it. So you would say that, okay, there is one DSP that's focused on gaming. There's another DSP focused on CTV. But this is all working in an integrated fashion across one sort of central system, and I think that's super important to see. And it is not going to be a one-trick pony, that, okay, is this one doing well or that? There's no such cross-platform hedging, you know, that is necessary.
It's really an overall market. So an overall market, we have a right to... And by the way, if I break it up like that, I think we will not have the competitive moat that we enjoy today. When we integrated the way we have integrated it, that was always the plan. That is how it was supposed to be done, and I am glad to report that we have achieved it. Okay? Today, every single acquired platform is fully integrated as one cash-generating unit within the Affle group, powered by our Affle ConvergeAI supply cloud, and we are doing well. And these platforms, I dare say, wouldn't have done as well if not for these integrations. Had we not put in the CTV, had we not put in our supply efficiencies to deal with it or introduce certain mechanisms, I don't think we'd be doing that well.
So now is the time to say, is the market, is the overall advertising budget of the advertisers going to support our growth plans? The answer is yes. We are seeing growth in advertising budgets in some of these emerging areas. Our advertisers are coming to us and saying, "Hey, show us what we can do in CTV." And it is not about just CTV, it is integrated, right? Saying: "What can we do in the consumer journey? How can we leverage some of these innovations and drive better consumer conversions?" End of the day, what an advertiser wants is to engage with their right quality of consumer and to convert with them.
Now, whether you touch them on a mobile or a CTV or other variable computing, or you use GenAI, whether you deal with them on a vernacular context of, you know, trying to convert, whether you're using video or are you using, you know, a banner, you know, those kind of things are what we need to absolutely integrate, and all our platforms are able to do those integrations to bring conversions to the advertisers. We are seeing budgets across verticals, across our markets, and I think our—it's also a blessing. Our base is still small. You know, I think Affle has a long, long runway of growth ahead. Our base is still small, whether in developed markets, other emerging markets, or even in India. There is room for a lot of growth.
Right, Anuj. I think very interesting. You have... the way you have put together-
Mr. Arun?
No, I'm just doing a follow-up question. That's okay. I didn't get to the second question.
Okay, sure. So please proceed.
Yeah. No, Anuj, you have, you are, you are saying you have integrated very well, you have greater resources and, bigger team, more, proficient team as compared to, say, what was then, what was there within five years. So, so you have all the, levers to grow, and then you have a bigger market. You are, you, yeah, Affle is too small at this point of time in overall scheme of things. So given all this, isn't, the, we, we growing at the industry level, slightly higher is, it is given. So, but what will... What are the specific challenges that you are seeing so that you can grow at much bigger than the industry? Because you have all components in place with you right now.
So what are the specific challenges that you are facing today, in, say, doing growth or doing a growth, profitable growth?
When you say industry growth, you have to see that not all ad revenue in the industry is worth 20% EBITDA. Not all, not all revenue is equal. So when the industry growth metrics is reported, it's only reported on revenue. Correct? That's how much ad spend increased. But some of that ad spend, I would reject that budget completely and say, well, the pricing, the way those guys are asking for it and whoever is chasing for it, that business I don't want to do, because that business will give us nothing. You know, there's no... You can't, there's no margin, there's no profitability. So there is, you have to choose the battles that you will fight. If you look at our commentary, what are we saying to you?
We are saying that Affle is not just going for growth, it is going for cash flow positive, bottom line sensible, high margin, premium, profitable growth. Now, when you add all of that together, then you'd say that, okay, which segment should we be playing in? Which vertical should we be playing in? Should I be going for more iOS? Should I be going for more, you know, SKAN and iOS? Should we be going for OEM app stores? Premium. Kapil also said premium inventories that we are providing. What is the meaning of premium?
You know, are we going after the, you know, so I mean, I just want to explain to you that we are going for the highest profit pool segments in our business, and then going for those with great efficiency and therefore delivering superior financial results on top line growth and bottom line sensible outcomes. That's how you have to look at it, versus saying industry average growth. Industry average profitability is also not that strong. So we want to be back and therefore going premium selective. I will choose my rate of growth and the profitability and build for sustainable, sensible growth.
So therefore, I think, as long as we are operating in that sensible range of about 20%+ growth, I think that is a good, healthy place to be in our industry.
Thanks. Thanks, Anuj. Thank you very much. All the best.
Thank you. The next question is on the line of Moez from Ambit. Please go ahead.
Yeah, hi. Good morning, and thank you for taking my question. My first question was that, you know, in previous quarters, you'd called out some slowdown in real money gaming in India. So what has changed incrementally, which is, you know, in this quarter, and what's your outlook on this sector moving forward?
Thanks for that question. I think in terms of any... Whenever there is any major change, you know, where suddenly an unexpected change comes and then everybody has a major reaction, there will be a period of time within which that reaction will get digested, normalized, and, you know, things will get a little bit better. I wouldn't say real money gaming has bounced back fully, and that it's back to its past glory. There is still some impact, but I have gone, and Affle has gone beyond that. We are not interested in just talking real money gaming, because Affle is way more than that. It's just one vertical in one market, and yes, it was a big exposure point, but I think we have gone beyond that.
I'm no longer going back to that discourse anymore, and I'm saying that we will grow in India on a broad basis. Real money contributes more, great, but you know, I'm not channelizing or keeping a baggage of that in our minds and our execution going forward, nor in my discourse. So yes, real money gaming, there's still some room for it to bounce back, become better, but our solution to that is the same. What is the issue with real money gaming? There is, the cost of doing that business has gone up. The incentive for the consumers to maybe necessarily play those games has gone down because they can't make enough. There is taxes. So the only way to do is go to more premium base of users.
Now, if you go to more premium base of users, those have bigger lifetime value contributions to the advertisers, then they can afford to spend, right? So I think the solution to most of what we are talking about from a strategic point of view is play in the premium segment, go higher up in the value chain, go on CPCU business model, price higher, get higher ROI to the advertisers, that's the name of the game. And that's exactly what we're doing. We are going on iOS platform in a big way. We are, you know, of course, programmatic, CTV, we are going for innovations in GenAI, we are going for CTCU business model. All of these are indicators of going more premium for higher ROI customers. And then similarly, on the supply side, we are saying we're going to target more.
So, I think just see the trend line that we're talking about. It solves not only for Real Money Gaming, but most of the challenges in the industry.
All right. Thanks. Thanks for that. My next question was on your average CPCU rate. So now, you know, with your focus on targeting more premium customers, is it fair to say that your average CPCU rates would go up in the future, or and how would that split be between, say, the developed and emerging markets?
The pricing is always a sensitive topic, and to command a higher price, you have to first demonstrate higher value, right?
Right.
So the way it works is that as you go more premium, you will show... We'll be able to show to the advertisers that when they're working with us, they're getting higher value, and consequently, hey, you know, we should command better pricing, you know? So I think... And how to command better pricing, we have to deliver that higher value and create competition for that among many advertisers. All of them coming to our platform and bidding and saying, "You want more volume on our platform, you're going to pay the higher price." So there is a gestation period. So first you invest in the innovations to go premium, deliver that value, proof of the pudding, get enough competition in the market, then influence the pricing.
So I think there is, that whole process is underway, and you will see that inching up, you know, as we go along. I think there is room for revenue growth, there is room for pricing improvement, there's room for margin improvement and efficiencies. I am optimistic.
Okay, thanks.
Thank you. We'll move on to the next question. Start off on the line of Rishit Parikh from Nippon India Mutual Fund. Please go ahead.
Hi. Hi, Anuj. Thanks for taking my question. Congratulations on a decent quarter. I have just a couple of questions, right? One, starting with-
Sorry to interrupt, Mr. Parikh. Sir, your audio is not clear. Can you use a handset now while you're speaking?
Sure, let me try and do that.
Thank you, sir.
Hi, is this better?
So much better. Thank you.
Thank you. So just a couple of questions, right? One, how are we splitting responsibilities, given that we've had some changes in the U.S. market, right? The Indian market especially. So where you've taken up responsibilities, but now obviously you've got India and emerging market, which is also growing fairly well, right? So just sort of help me understand, you know, on, you know, how the management responsibilities split up. Are you sort of relocated or, I mean, how are we looking at that business?
See, today, in my opinion, and I've said it many times, I think, perhaps, in interactions even with you, that Affle is still a very, in my opinion, is still a small company. I mean, 600 people is not a very large company. And in my view, it's a, it's a 19-year-old company where in the last 12 months, I think I would have been to every single office of Affle, right from Argentina to U.S., to Japan, to Korea, to, you know, Southeast Asian offices, of course, India every other time, Israel, including pre as well as during and post-war and so on, to Spain. I mean, yes, it may seem like we are all over the place, but we are still a small company.
All of the 600 people in the company, I would have either already met or, you know, known with great proximity. But this is not only about me. What I'm saying is that we have a very big management team for the 600 people. If you go to our website, you look at the management team profile of our company, right? The Chief Revenue Officer, the Chief Operating Platforms Officer, the Chief Architect of the platform, you know, the Chief Strategy Officer. All of these people, a lot of them have been with the company for 17-18 years. Many of them been with the company for 10+ years. Seasoned players who know what we're doing inside out.
I mean, they can come on this call and pretty much do the earnings call as if Anuj is doing that. So there is this level of wavelength match that has happened over so many years, right? And then you have the next line of leaders who are already strong professionals, which we have acquired through UAP, which we acquired within MediaSmart, which we acquired within AppNext. And that bunch of people are the non-entrepreneurs, the professionals who are CXO-level people in those companies, haven't made much money from the exits. They are in it for the stock options that Affle India has given to them. They believe that, "Hey, we're going to grow 5x in the next four years of their vesting schedule," because they've seen the last five years.
We've already grown 5x in terms of at least our revenues and profitability. So they are seeing that, okay, hey, this is a team that knows how to execute. Next five years, if they stay together with us, they'll... So there is a lot of incentive alignment, and I would say there's at least a good 20-25 people who are CXO VP-level people in this company of only 600 people. So each of those, you know - And, and I think, like I said, it's we don't have a management bandwidth issue at the moment. I'm still picking up my children from school and helping them to bed in the night, and there is a balance of life while, you know, I have to admit, I mean, I love doing what we do at Affle.
There's a common joke in the family that I love Affle more than the family. But other than that, I think we are a young team. We are ready to work hard and fight it out, and we are a strong team, a big enough team, and we feel that our potential within the management team to lead this to, you know, 3x-4x growth from here and still be the leadership team without making any dramatic leadership changes or upgrades is possible. I don't see us growing too much in the employee base. So if we are 600-odd people strong, to grow 3x, 4x from here, I mean, I don't think I'm needing that many more employees. It's going to be a test.
In fact, with GenAI capabilities, the way we're implementing it-
Correct.
I don't think we have to grow the employee base too much.
Yeah. Correct. No, that makes sense. The second question is on DM, right? There's an interesting... Now, look, it's 27% of our revenue base, right? But on an absolute number, it's still much smaller, considering the size of the market that we are operating in, right? So just sort of help me understand that, like, from the capabilities, what is your strategy, let's say from a 3- to 5-year perspective in this business? Are you sort of targeting niches? What is the kind of competition that we typically run into? And then are you sort of, from a growth perspective, outlook perspective, are you sort of being a little more conservative because that business in my mind can grow multi-folds, right? And it's your India EM is already growing 20% on an aggregate basis, right?
So, I mean, this should have helped me sort of put that puzzle in the DM piece in a little more perspective around 3-5 year strategy.
I have been advised by all our top, you know, institutional investors, say, "Anuj, you are too aggressive and bullish all the time." I say, "Well, that's who I am. I mean, that's how I lead my role as a CEO, as an entrepreneur." The advice is, you know, underpromise and overdeliver, and by no stretch of imagination am I saying that, you know, 20% + growth is, you know, undercalibration. All I'm saying is that when we are looking for growth, we are looking for sensibly calibrated growth. Rishit, there's a lot of revenue in this market. I mean, if you tell me just, you know, grow the top line with, you know, without worrying about-
Correct.
-the bottom line too much. Yeah, I mean, the, that game, I could have played even 10 years ago. We have built this company on the DNA of profitability, cash flow, positive, sensible execution. Let's make sure, and also only when those customers are going to be around for next 3-4 years, and where we can inch upwards, right? And deliver better outcomes. So I think the, the philosophy of running the business that way is actually something I would never trade off for anything else, and I think that has been a huge advantage for our company on, especially in the context of being a publicly listed company, because we were always building Affle the same way. So I wouldn't change that for anything. Can we get a lot more growth? The answer is yes. Can we get it now, this year, this...
Sure, we can. But, I don't want to grow in a way that is not sensible. So we will pick our battles, we'll pick and focus and grow sensibly. If we overdeliver on that, that would be cause to celebrate, but I would take advice of the institutional investors who said, you know, "Underpromise, overdeliver."
No, so, look, that's understood. What I'm trying to understand is that, look, you've got gaming, you've got a couple of verticals today, right? So that 3-5 year strategy is what I was looking for. Then, look, how do you sort of penetrate into customers? What is your strategy of, you know, expanding slowly and strategically across some of these customers? So I get the profitable part, which is something that you highlighted earlier in the call as well, so.
That's right. So, so I think I was just commenting on your last comment that, you know, are we undercalibrating at 20% growth? And I'm saying, no. I'm just being, you know, let's say, balanced about it. Having said that, let me also put it this way, that our strategy is already very crystallized. Vernacular, verticalization, adopting GenAI capabilities for greater innovation and efficiency, integrating all of these platforms and use cases, offering a full suite of services to the advertisers, right, from mobile to CTV to wearables. Give them something that they cannot refuse in a business model with CPC pricing and say, "Hey, when you are successful, when you get ROI, pay us. You're not successful? Don't pay us. But give us your budgets for, you know, across the board, budgets." You know, TV budgets are going to CTV. Let's fight for that.
You know, mobile is already continuing to grow. Let's get greater ROI and make the consumer-centric CPC business model. So you know our business model, you know our vernacular verticalization strategy, how we're putting GenAI together. You know how we are executing deeply with a committed team in India, not letting that defocus for anything under the sun. Yet, having local teams in Southeast Asia, Middle East, Africa, Latin American markets, also looking at CIS markets, you know, going forward, looking at North America. All of these places need to have Europe or even in Japan, our team is doing so well in Japan. So I think the focus is local execution, and for those local teams, let's power them with the resources for the highest level of market share win in those markets, right?
Verticalization is an important execution strategy because we can start small. You know, we don't have to go and say, let's attack all 10 verticals in every market that we are in. So when we open North America or Japan market or when we go into Spain or U.K., we're looking at it, which are the verticals that we can go in and shoot for, like a sniper? Have a small team, have a small sales team there, 5, 10 people, and then let's go and win against competition on the merits of our product and integrated proposition. That's a very simple strategy. I'm not sure how else to paint it, but, you know, we, we are not going with some massive attack on let's go North America and hire 100 people. You know, that's not how I have ever executed.
So we'd always do incremental movements. But very strong incremental movement, backed with, you know, great team members and, you know, winning at the back of product and giving the heat to the competition one step at a time. That's how we like to do. So nothing dramatically different from what you have already seen.
Got it. No, that's helpful. Thank you.
Thank you. The next question is on the line of Arushi Shah from Sushil Finance Services. Please go ahead.
Hello? Hello. Yeah.
Hello.
Am I audible? Yeah, am I audible?
Yes, you are.
Yeah. Hi, thank you for taking my question. I wanted to know, you know, we've been going through, you know, multiple acquisitions that we do. So, I mean, any such acquisitions which we have in pipeline for, say, the next foreseeable future, FY 2025 and 2026, and if you could shed some light on that. And also, what is our typical ticket size for our acquisitions? And, what, you know, what... Hello?
Yes. I think I've got your question. If you don't mind, I'll answer it now.
Yeah. Please.
Okay, thank you. Regarding acquisitions, you would notice that Affle's acquisition approach has been very systematic-
Uh-huh.
Very consistent and very conservative.
Correct.
One, every acquisition we have done is in the consumer platform business.
Correct.
We are not acquiring to diversify.
Mm-hmm.
We are acquiring to integrate, consume, and-
Okay
make it into one integrated, cash-generating unit.
Mm-hmm.
So the consumer platform business... Can I request you to be on mute? Because there's a lot of noise coming from behind you.
Yeah, just a second. Just a second.
Thank you. So the consumer platform business as one single cash-generating unit is growing organically on CPCU business model. As it generates cash, we are also conservatively seeing how much cash have we generated in the last few years. We are using that as a basis to define how much of a budget or hand do we have for acquisitions. So if you look at all our past acquisitions, largely funded from cash generated from the operating cash flows of the company. And so that discipline is there, that, hey, we are not gonna go around borrowing or, you know, dramatically borrowing or going outside our means in order to do any acquisitions. So that discipline is there in terms of your question of size.
In terms of, you know, your opening remark that you said that it's more multiple acquisitions, I would say that we are consuming and growing. Let's say we wanted to enter into LATAM. Let's get a team there. Rather than hiring one by one, let's go do an acquisition. Also in North America, you can do it. You can achieve faster movement through acquisitions. You can think of it as actually hiring, acquiring customers, acquiring teams of people that are functional, and then doing it conservatively, meaning sensible valuations.
Mm-hmm.
-sensible size of the deals, and realistic expectations to integrate it together so that we can expand the margins using the power of our integrated Converge supply cloud capabilities. And I think these are the methods that are already proven, tested, and we are confident of. Going forward, will we do any acquisitions? I think time will tell. We are keeping ourselves resource-ready and capable in order to do it. But we are very selective. So if something fits into... And we are also very experienced now with all dimensions of it, whether it is in acquisitions in Israel or Spain or Latin America, US. I think we have covered significant ground and experience to understand the various challenges and dynamics, so we will be very carefully calibrated. If the right opportunity emerges, we will guide you towards that.
But at the moment, you know, can I tell you that, yeah, we're gonna do one this year and one next year? There's no such prediction or clarity I can give to you.
So, what would be the approximate investment amount for, you know, the acquisitions which you're doing, say, this year and next year? And are you looking at a typical rate of return, you know, to integrate with your growth rate, in good?
Ma'am, first of all, that question has an assumption that we are doing an acquisition, and therefore-
Okay.
-it assumes that I will give a budget. I will give neither. So, one, that we are not forecasting that we will do any. If we do, you know, there's no budget range that I can give to you, but let me give you some clarification.
Mm.
Historically, our largest transaction was around $40 million-$45 million. Right?
Okay.
If you calibrate that on, is that equal to, you know, the kind of EBITDA levels that we are doing in those periods of time, in the trailing 12 months of run rate, I think-
Mm-hmm.
We typically see that, you know, can be paid off from one years of EBITDA work.
Mm-hmm.
You know, I think that's how we typically calibrate.
Okay.
We're not gonna outsize our deal transaction. It's not like we're gonna buy a billion-dollar company and say, "Let's create some complicated merger structure." That's not my mindset, and-
Right.
You know, I don't see that happening. So it'll be more bite-sized, and if it adds incremental value, great. If it doesn't, we should be able to either digest it and integrate it or reject it, but it should not impact our ability to, I mean, it should not fundamentally change us in any way.
Thank you. Ladies and gentlemen, that's the last question. I now hand the conference over to the management for the closing remarks.
Well, thank you very much, everyone, for taking time on a Saturday. I know we typically do our earnings calls on Monday, but this time I appreciate you all taking the time out on the weekend. I wish you and your families a happy weekend and a healthy rest of the financial year ahead, and I hope to see you soon. Thank you.
Thank you, members of the management team. Ladies and gentlemen, on behalf of Elara Securities Private Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Bye.