Please note that this conference is being recorded, and I'll hand the conference over to Mr. Pradyut Ganesh from ICICI Securities. Thank you, and over to you, sir.
On behalf of ICICI Securities, I would like to welcome all of you to Q4 FY 2024 earnings call of Matrimony.com. From the company, we have Mr. Murugavel Janakiraman, MD and CEO, and Mr. Sushanth Pai, the CFO. Over to you, Mr. Janakiraman, for his opening remarks.
Thanks so much. Good evening, everyone. I'm happy to start that in FY 2024 we have crossed a significant milestone of over 1 million paid subscriptions. Also, including other income, our revenue crossed high-end of growth for the first time. This is an outcome of our focus initiatives on segmentation and customer-centric methods in enhancing the product. Coming to Q4, on a consolidated basis, we achieved a billing of approx of INR 121.2 crores, a growth of 4.3% quarter-over-quarter and 0.2% year-on-year. Revenue at INR 109.2 crores, a growth of 1.7% quarter-over-quarter and 4.1% year-on-year. For the full year, we achieved a billing of INR 479 crores, a growth of 4.6%. Revenue at INR 481.4 crores, a growth of 5.6%. The key highlight for the matchmaking business in Q4 are as follows.
In Q4, the billing was at INR 119.2 crores, a growth of 4.7% quarter-over-quarter and 1.4% year-on-year. Revenue at INR 107.7 crores, INR 117.7 crores, growth of 2.6% quarter-over-quarter and 5.5% year-on-year. For the full year, revenue was at INR 472.4 crores, growth of 5.9%. We added 2.7 lakh paid subscriptions during the quarter, a growth of 2.1% quarter-over-quarter and 2.9% year-on-year. We added 10 lakh and 74,000 paid subscriptions during the year, which was a growth of 8%. The average transaction value, ATV, for the matchmaking business grew by 2.4% quarter-over-quarter and declined by 1.4% year-on-year in line with our customer acquisition strategy. For the full year, ATV declined by 2.5%. In Q4, you may know that we had an issue with Google.
All our matchmaking apps were removed from the Play Store for almost four or five days, and then we were able to get the apps back on the Play Store thanks to the intervention of the government. It also caused some disruption in terms of downloads and the marketing expense had gone up. Now, things have been streamlined. We are back to the level where it was year-on-year. In spite of the disruption we had in terms of business for one week, still we managed to achieve the growth, and you could achieve the profit better than the corresponding quarter last year. Now, coming to the marriage services business, the billing was INR 1.96 crores, a decline of 7.5% quarter-over-quarter and 41.4% year-on-year. Revenue was INR 1.56 crores, a decline of 34.2% quarter-over-quarter and 47.6% year-on-year.
Basically, we are taking step two to achieve the breakthrough in the business. The reason for the decline was account of the changes what you are doing to get the business to achieve profitability at the end of the year. For the full year, billing was INR 8.7 crores, a decline of 21.1%, and revenue was INR 9 crores, a decline of 7.7%. Loss in the quarter was INR 2.4 crores as compared to losses of INR 3.2 crores in Q4 of FY 2023. For the full year, the losses were at INR 10.3 crores as compared to the losses of INR 13 crores in FY 2023. We hope to achieve the breakthrough by the end of FY 2025 in the wedding services business. On the billing and revenue outlook for Q1, matchmaking and wedding service revenue will be at a similar level of Q4.
We have launched MeraLuv.com, an exclusive dating app for Indian-Americans, and we have planned to launch Luv.com in the next couple of months, an app for serious matchmaking space to address the next-generation segment. However, this will take some time for us to achieve revenue. Probably sometime in FY 2025, it will start contributing revenue. We intend to keep it free for some time. As a first in the segment, we have launched Elite Matrimony kiosks at the airport across three Indian cities such as Chennai, Bangalore, and Delhi. The expertise initiative will provide added visibility and increase attraction for Elite services. Let me now pass on to Sushanth to comment on the key property highlights.
Thanks, Murugavel. Good evening, everyone. EBITDA margin for the matchmaking business in Q4 is at 19.1% as compared to 18.9% in Q3 and 21.1% a year ago. For the full year, EBITDA margin for matchmaking was at 20.9% as compared to 21.4% in FY 2023. Marketing expenses for matchmaking in Q4 are at INR 47.9 crores as compared to INR 45.5 crores in Q3 and INR 45.3 crores a year ago. Marketing expenses for the full year were INR 182.5 crores as compared to INR 178.3 crores in FY 2023. Excluding marketing expenses, our margins in matchmaking are stable at 60% in FY 2024 as compared to 61% in FY 2023. On a consolidated basis, our EBITDA margins in Q4 are at 14.2% as compared to 14.3% in Q3 and 15% a year ago.
For the full year, EBITDA is at INR 73.5 crores, which is 15.2% margin as compared to INR 75 crores, which is 16.2% margin in FY23, a decline of 2%. Tax rate in the quarter is at 23.7% as compared to 22.8% in Q3, and for the full year, it is 23.4% as compared to 16.6% in FY 2023. You would have observed last year in FY 2023, we had a lower tax rate. This was due to the lower tax on realized gains on mutual funds, which were redeemed to fund the buyback amount in FY 20023. Profit after tax is at INR 11.7 crores, a growth of 5.6% quarter-on-quarter and 2.9% year-on-year. Share of profit for Astro-Vision our associate company is INR 7.7 lakhs.
PAT for the full year is INR 49.6 crores, which is a 10.3% margin as compared to INR 46.7 crores, which is a 10.1% margin FY 2023, which is a growth of 6.2%. If not for the disputed Google service fee, which we have provided, our PAT margins would have been better by about 300 basis points. Also, if you recollect, we also had the profit on sale of land in FY 2023 as a one-time profit of INR 5.8 crores, which was not there in FY 2024. So considering all of this, I think we've done reasonably well in profits for the year if not for the Google service fee and also the one-time sale of land, which was in FY 2023. So cash balance is at INR 358 crores. ROCE is 15.5%. On the outlook for Q1 margins, we expect the PAT to improve slightly in Q1 from Q4 levels.
Other announcements for the quarter: the Board of Directors at its meeting held today has recommended a final dividend of 100%, which is INR 5 per equity share of par value of INR 5 each, subject to the approval of the shareholders. I would like to end with a customary safe harbor statement. Certain statements during this call could be forward-looking statements on our business. These involve a number of risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. We do not undertake to update any such forward-looking statements that may be made from time to time by or on behalf of the company unless it is required by law. We can now open the floor for Q&A.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchscreen 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 Rushabh Shah from BugleRock PMS. Please go ahead.
Yeah, hi. Thank you for the opportunity. Am I audible?
Hello, Rushabh?
Am I audible, sir?
Sorry to interrupt you, sir. May I request you to use the handset, please?
Yeah. Am I audible now?
Yes, sir.
Yeah. Sir, a couple of questions from my side. Sir, can I get an answer on how big is this market of online marriages, and what could it be in the next, let's say, five to six years?
Okay. Okay. What are the other questions?
Sir, other questions are: What could be the key entry barrier and key risks for your business, sir?
Okay. These are questions?
One more question is: since online marriages have yet to enter into Tier 2, 3, 4 cities, what are your plans to cater to that group of people since it's the majority of the people in India?
No, no. Sorry. I'm not getting that question. What are the third questions?
Sir, the third question is: since the online marriages have yet to enter into Tier 2, 3, 4 cities, what are your plans to cater to that group of people since that's the majority of the people in India?
Okay. Thank you. We expect, at this point in time, online matrimony, which is among the organized players, to be around probably INR 1,000 crores. So we are around INR 500 crores put together other players and small players. When I'm talking about online matrimony per se, I'm not including dating and other categories. So when the matrimony may be around there are a lot of small players. We are around INR 1,000 crores. So we've been growing around the CAGR around maybe around 7%-10% last five years. So we expect a similar kind of trend may continue. Okay. That's on the outlook for the matrimony business. When it comes to the second question, what are the entry barriers? It's very easy to launch a matrimony product. Launching it is easy. But the challenge is to acquire a customer.
I think that's a challenge that many people face throughout the day. That's one of the reasons many people who have tried to enter in this segment and failed to make a significant mark is not launching a product. Because why would someone want to create a profile in Matrimony group sites? Because we have a large profile, and no chance of someone getting married. And that led to the success that I want publicity. Today, a large part of our customer acquisition, the profiles are organic. Even the profile what you get through Google also, in a way, in terms of our brand, people are coming through Google as a platform. So what you are able to achieve is the organic acquisition that's contributing to the growth and profitability. It's very difficult for the players to acquire the profile. It's not about a product launch.
It's about acquiring the profile. It's a challenge for the people. That's a very strong entry barrier that people want to get into this segment. Okay? Because we have established players on, again, Matrimony.com being a strong player in most of the markets. So another risk about what is the risk we see in the matrimony business? So matrimony business per se, we are not seeing any key risk in all those things. However, in the long term, we have to see whether any changing consumer preferences, anything will have an impact on the new members coming to online matrimony. That's something we will keep an eye on, which we don't see because culturally, matrimony is not as India as a country. We still have a matrimony equity very, very strong and continuing to grow. However, there is a segment of users. They may prefer a serious relationship group.
That's the reason we are intending to launch Luv.com the next couple of months or so. That's something. So with it, actually, as a company, we have a product for all categories. If that's what you ask in terms of Tier 2, Tier 3, you may know that we have launched a product called Jodii, focusing this segment to target the people who are non-degree holders because many of our people are non-degree holders in Tier 2, Tier 3. Now we have Jodii, which is completely a it's a very simple product, free for females, and targeting a non-diploma sorry, targeting diploma plus two and below non-degree holders. So basically, we have various products to target various segments. So that way, as a company, we sort of see the opportunity and try to serve that segment of opportunity through the different product offering or exclusive product.
Okay. Last question, the online marriages into the Tier 2, 3, 4 cities?
Yeah. That's what I said. Jodii. Jodii is a product to cater to the large number of people in Tier 2 , Tier 3 . We were non-degree holders in the I mean, Indian language. So that's the product Jodii is focused on. And getting the support adopted, Jodii, we have been promoting it, and the product is free for females also.
Okay. Thank you, sir. I'll join back in the queue.
Thank you. The next question is from the line of Aryan Sanghvi, an individual investor. Please go ahead.
Yes, sir. My question was that the marketing expenses have been around INR 186 crores just to generate an EBITDA of INR 72 crores. So is it ideal to spend so much on marketing expenses if people reduce the marketing expenses? So your EBITDA margin would be better. And sort of the second question is, I wanted to know what the status of the Google case is. Are we still keeping the provision, and are we going to keep the provision?
Status of the Google case?
Yeah, yeah.
Provision?
Yeah, yeah.
So in terms of marketing expense, today, marketing spend is at an elevated level because of the increased competitor spend in the various markets. If you see that the category spend on a competitor intensity goes down, then we may obviously reduce the marketing spend. That will increase our EBITDA margin. At this point of time, we see that marketing is going to be at similar levels. We don't see any reduction in marketing because still the marketing spend or competitor intensity is still at a higher level. That's on the marketing spend. With respect to Google, there are things that are going on at various forums, be it the CCI, be it the Supreme Court. And so also, the government is also planning to come in with a digital competition law. There are various things at this point in time.
Various things are happening at this point in time. We also sort of changed the business model to overcome this challenge. Yeah. At this point in time, we don't have any provision with respect to Google.
Yeah. I think, just to add, for the last year, we have made a provision based on a best estimate basis, based on what we consider is based on the Developer Distribution Agreement. We have already made a provision for last year.
Okay, sir. Thank you.
Thank you. The next question is from the line of Sidharth Srikumar from iThought Financial Consulting LLP. Please go ahead.
Hello. Thanks for the opportunity. I have two questions. One is, for FY 2024, what is the provision with regards to Google Developer Service in amount?
See, the Google case is a very sensitive case, and there are various dimensions involved in this case. So we are not disclosing the exact amount on that case. However, I've given you an indication saying that our profitability margins at a PAT level would have been higher by about 300 basis points, if not for the Google service fee, disputed fee.
Understand. So the next question I have is with regards to Jodii, the new product that you launched. Approximately, what is the revenue for FY 2024 that this platform has done?
Actually, we are not sharing the individual breakup of the businesses. And so yeah. But in terms of Jodii, we are getting more profiles, and so we are also marketing. We see some traction and growth on the segment.
Okay. So you are seeing traction in that product since it's launched?
Yeah.
Okay. Fine.
It's still a small part of our revenue. For competitive reasons, we are not sharing that detail.
Okay. Fine. Thanks.
Thank you. The next question is from the line of Ankur Jain, an individual investor. Please go ahead.
Yeah. Hi. Good evening, sir. Thank you for taking my questions. The first question which I have is about the provision that you have made for the Google case. And Mr. Sushanth just mentioned that it is on a best estimate basis that you have provided for it. So I was slightly confused about it. Is it the provision that you have made, is it on the best estimate done by the company, or is it mandated by the high court judgment which said that 4% of the sales have to be provided?
Yeah. Yeah. The estimate is based on what we believe is under the agreement which is disputed. The high court only gave an interim judgment to deposit some money to Google, which was at 4%, which we have done whenever they raise the invoice. However, the agreement says something else. Therefore, based on that agreement, we have made a best estimate basis that is internal. It is not based on the high court judgment.
Oh, okay. Thank you. The second question is about the same Google case that when we read the Google guidelines about the revenue share which they ask the companies to share, they mention 15% or 30%. There are a couple of categories, and two categories are 15% or 30%. It is dependent on the subscription model of the company. Where does Matrimony fall out of those two categories?
The 30% is mainly for the gaming companies. The non-gaming companies, it's around 15%. So there are three models. One is the Google billing payment system. Then include that model that you pay 15%. Then you use your own third-party billing options. You have to pay 11%. The third option is that it cannot even allow you to get payments from customers through the app. There are multiple options. So what we are seeing is that the people implementing all these options, they also have other revenue impact as well. So with respect to your question on 15%, where Matrimony comes into? Matrimony comes into the 15% category if you have to go with the GPBS option. However, if you implement a user choice billing, that's one of the options where you pay 11% to Google. So that's the way it works.
Okay. Thanks. And about some of the initiatives, you mentioned about Jodii that it is getting traction. Could you also share some qualitative thoughts on the Elite Matrimony where you set up the kiosk on the three airports and also on the wedding services business? Because we were expecting that wedding services business would achieve break-even sooner. But now, it is postponed by another four quarters. So what's the qualitative thoughts on these two things, Elite Matrimony and wedding services?
So Elite Matrimony, obviously, India as a country is growing, and the number of external affiliate people also are growing. We found airport is a good place to create a brand for Elite Matrimony. And it's all new initiatives. We're just setting up this kiosk and hoping to get a better visibility among the elite people who are traveling. So again, they're all very new. It's all the last few months. So we believe it's a good place to target the elite people. So for our Elite project, we have a better understanding of the whole kiosk and the attractions going to come because of setting up kiosks in the airports. That's Elite Matrimony. In terms of wedding services, yes. Definitely, we developed a plan that we want to achieve a break-even before the end of FY 2024.
However, some of our things did not go the way we thought about it. So we have done some restructuring. And so we see definitely that it's going to optimize the cost. And with the changes what we are making, yes, we could be able to we believe that we could be able to achieve a break-even in this year because, yes, last year was a plan but did not happen. Yeah. Yeah. We are also looking at some we launched, by the way, newest now WeddingBazaar.com. We also intend to launch a newest now Mandap.com sometime next week also. I mean, everything two weeks. So we are making some product changes.
We are also looking at some kind of offering which helps us to have a better traction in terms of some of the areas and also some offering which will help customers choose our services compared to what they are currently choosing right now.
Okay. Thanks a lot. I'll join back the queue.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Sanchita Sood from RoboCapital. Please go ahead.
Hi. Good evening, sir. My question was, are we still on track to achieve our INR 1,000 crore top-line guidance for the next five years?
Yeah. Definitely. That's the thing. We want to get that, okay? So trying with new initiatives. We are doing our own. We are intending to launch a new initiative called Luv. And we are also looking at launching we launched MeraLuv. It's within the Indian-American. So some of the things, we are also looking at launching an astrology service as well. So a lot of the initiatives are in the works. So we are also working with trying new things. So we hope that combination of all these factors and some of the pricing also, we hope that we can be able to get to that number. That's the goal. That's the number we want to chase.
Okay. And sir, if you could provide us any revenue visibility for FY 2025 and FY 2026, how will Luv.com and MeraLuv what kind of revenue can they provide us in FY 2026 and FY 2025?
No. At this point in time, we want the product to maybe first one year. We may not even monitor for a couple of quarters because we want to get the users and get their traction before you monitor it also. So for this year, we don't see any revenue coming. If at all anything, maybe some revenue will come in maybe quarter four of this year. So at this point in time, we can assume that revenue coming from these businesses is all investment for a couple of years down from now. At least some revenue will come next year, definitely. But it's very interesting for the future.
Okay. All right. Thank you, sir, and all the best. Thank you.
Thank you. The next follow-up question is from the line of Rushabh Shah from BugleRock PMS. Please go ahead.
Yeah. Thanks for the follow-up. Sir, I have a question that there have been many ups and downs in your business. So what were your key learnings from the past failures, and how do you tackle the situation and move on?
Sorry. I think if you can, sorry. Can you please repeat again? There's some past failures in order to learn from past failures. What is the other part of the question, please?
No, sir, I think there have been many ups and downs in your business. So when you had your past failures, what were the key learnings from it, and how did you tackle the situation and move on?
So it's more of every failure we see is a learning opportunity. So I think we look at we don't see the failure. We look at what our learning opportunities. As a company, we are never averse to taking a tough decision when the situation warrants. So I can go back to the early days when we entered, we went to the franchise route, we realized that franchise is probably not the model for a matching business considering we are not offering a product in the service category. There are a lot of emotions involved and personal touch required. So that led to the change of closing the franchise or buying the franchise, launch our own outlets. So at one point, we had more outlets. When we cut down the outlets, we realized that the model was not appropriate.
So every time you do something failure, look at what are the learning opportunities. So many things went in our favor . Many things did not go. So that way, I wouldn't say one single thing but one thing I would say that, yeah, definitely, the challenges were not some more challenges. Helped us to run more efficient and operation. So I would say nothing in specific things. It's more of various learning over the last two decades and helped us to become what we are. But we try to always try to be humble and be open. And now that we know it all, we are always open to learn, open to change, open to try it out. But we want to keep the energy and enthusiasm of being entrepreneurial, trying new things, figuring out.
I think it's more of that culture we want Matrimony to continue to have and continue to do. So we'll use those things to drive the growth.
Okay. So my second question is, do you see that going further down the road, then this online marriage market becoming a two-player market that a second player acquires a third player?
See, internet, let's say, I think that's well, there are many other players. But normally, the two players out there, the large share of the market are now online. Number three. Number two, all very small. If you look at any online, it's always the case now on those things. So I think that's sort of thing now. We look at that. Normally, number three player, number four, a lot less than 10% market share. I think that's the way it has been in most of the online categories. Yeah. The other players will be there, but number one, number two are the large.
Okay. My last question, how has been the transition like before?
What? Sorry?
How has been the transition? Four to five years back, more people were subscribing towards the basic packages. Now, has the subscription moved towards premium packages?
No. There are various packages. Most of the people tend to choose three-month packages. I think that's a normal thing. So that's continuing going to be that's the case, yeah. It's continuing to stay the same.
Just to follow up on that, sir, in the premium packages, since that is a greater ARPU business for us, what are your plans? What are your strategies so that more people subscribe towards the premium packages?
You're talking about personal services that are assisted and the Elite and all?
Sorry?
You meant the personal services that are premium packages? You mean the premium packages meant personal services like assisted matching services?
Hello? Hello?
Yeah. Did you mean that when you asked that premium packages, did you mean personal services or just trying to understand the question?
No. At the moment, my question is, sir. Sorry. I'm still questioning Mark. Rushabh, can you just kind of repeat? The question is about because we have a package like a personal services package. So the question is, what are the strategies to try the personal services package or what is it?
My question is, many people were subscribing more towards the basic packages. How has the transition been? More people subscribing towards the premium packages? What are your plans and strategies so that people subscribe more towards the premium packages since that is a greater ARPU business for us?
Yeah. So yeah. Basically, we have the online package. There is a personal service package. The personal service package are more like 4x of the sort of or more than 3x of the online packages. So basically, yeah, the strategy has always been segmenting and offering the right product to the right customer. It's an ongoing journey, Rushabh. We continue to segment, continue to help people to choose the right package. It's the thing. Yeah. We continue to do the product improvement, continue to suggest to members what are the right packages to use. It's an ongoing journey. I mean, it's part of our core strategies to help members choose the right packages, the better packages. So I believe we definitely benefited from choosing the personal service packages, good for members, good for us as well.
We also improved our offering so that people see benefits in the premium packages so that more people go for this offer. We continue to do so, yeah. Okay. Yeah. Can you move on to the next one?
Yeah. Can you. Can you move to the next question, please?
Thank you, Ankur. Ladies and gentlemen, you may press star and one to ask a question. Thank you. The next question is from the line of Pulkit Singhal from Dalmus Capital Management. Please go ahead.
Thank you for the opportunity. I have three questions. One is, have we experimented with an advertisement model? There have been a lot of companies which have started off with subscription. Eventually, advertisement has kind of taken off in a major way. We seem to have a good amount of free subscribers out there. They are a very targeted set of people, subscribers, who would be very good candidates and customers for jewelry companies or, for instance, wedding wear companies and a lot of those things. So I'm just wondering, why haven't we yet started off an ad model?
Okay. Yeah. Yeah. Yeah. What about that question? Yeah. Is it?
No. You can take it one by one a bit. If that's okay.
Yeah. Sure. Sure. Yeah. The thing is that so far as the experience matters, when you do know well, definitely that we have large number of users, working users. The free users will convert at some point of time. So what happens when the people are coming for the matchmaking, we don't want to bombard them with the advertisements. So while you may get some incremental revenue, that may come in the way of the customer experience. That may come in the way of converting those users. And you use some of the promotion things to communicate, "Why should you go for premium membership?" You also use this position to communicate some of the things members need to do because they want people don't give all the information. Things like they need to add photos or need to do the ID verifications or maybe do the adding astrology.
Basically, it's completely nudge a customer to take certain steps so that they can get fully engaged and see the value in the product, and that they're going for a paid subscription. So basically, we want to trade off some revenue that may come in the way of customer experience that also contributes to the subscription revenue. So it's a kind of consolidation. And while you have some spots in all those things which are non-intrusive to get people in the wedding service sorry, people in the wedding business to advertise and all those things, but we always see that the advertisement on the matching platform is more a brand building because people are seriously into the platform in terms of people experiencing so many clicks to unlock other advertising platforms there that the people visit the platform more casually in nature and all those things.
So they may tend to click banners and advertisements, which may not be the case on matchmaking platform because people are seriously engaged. So it's a good for brand building for people in wedding services while you have some spots, but there's not a very primary focus. We don't want that getting compromised in the way of customer experience subscription. So that way, we can sort of select you about these advertisement spots and promotion offers. Yeah.
So to that extent, I mean, Facebook, also, there are a lot of advertisement. There is PVR Cinemas, who does a lot of advertisement. It does affect customer experience, but then it has still grown much larger than that. So my sense is there are enough and more examples of companies where customer experience might have been impacted, but ad reviews and experience have not really impacted them so much that you're fearing that it might. So you might want to just look at it again because there was a certain thought process five years ago. I understand it was there. But now, a lot of things have changed in this aspect of advertisement, and a lot of ways of placements of ads are also there so that it does not necessarily affect the customer experience to that great extent.
So I would request the management to relook at this for the simple reason that now, our subscription revenue seems to have tapered off. It's a different point when you're actually growing at double-digit, and we are worried about this. So it makes sense. But we are growing at mid-single digits for the last five years. And if you're not going to experiment with an ad-based model, then how do we get confident that the next five years, you'll do double-digit growth which you're adding to?
So we have to think it through because, as I told you, well, I appreciate your suggestion and all those things. I mean, is there any way of without compromising the subscription revenue, whether you're able to get some advertisement revenue? We'll definitely look into it.
Right. Second question was on the margin. So you said that if you had grown 5%-6% revenues this year, and you claim that if the Google provision would not have been there, the ad margin would have been 300 basis points higher. Now, given that the Google provision is already in the base this year, why would, I mean, next year be any different? If you are doing a 5%-6%, should we not expect a similar ad margin increase of 300 basis points? Or is next year very different?
The thing is that we are also looking at investing in the new initiatives. We spoke about Luv.com. So some other initiatives, they may not need a significant revenue. So it's more like we are launching new initiatives like Luv.com, MeraLuv. They're investing because of the initiatives. So if you look at excluding those initiatives, yeah, the profit will definitely increase. We have to see within overall, but then now, we are looking at short-term investment of these initiatives. So basically, yeah, the increase in the what are the on account of not having Google thing, some of these things may go into the new initiatives. So next year, I believe we will start growing the profit. But since the new initiative is coming up, that may have some bit of marketing go within these new initiatives.
Okay. But you had given the guidance that the A&P spend would be similar to this year. So when you talk about investments in new initiatives, is that more to do with A&P spend, I mean, or some other line items which are not capturing?
No. They're all invested in new initiatives, mainly because on account of investing in new initiatives.
All right. Okay. Thank you.
Thank you. The next question is from the line of Rushabh Shah from BugleRock PMS. Please go ahead.
Thanks for the opportunity. Sir, do you have any of the matrimonial sites which operate at a global level? Do you think globally can be a huge opportunity site for us going forward?
So matrimony is more like the Indian subcontinent. We do not think that matrimony is in the global market. Globally, it's a dating market. So it's a completely different vendor, the matrimony market. So it's a very, very matrimony market. It's a very big Indian subcontinent. So anyway, it's operating in a different form. That's what it is. It's dating in the Western world, so.
Okay. And sir.
Unfortunately, we are talking about the opportunity in nearby countries that is Bangladesh or Sri Lanka. We already have some other brands. Again, these are very early stages.
Yes. Yes. And sir, how difficult would it be for a new company to make a company like Matrimony by leveraging the skills of AI and matchmaking services? Would it be able to take the market share of Matrimony not immediately, but over the years?
Well, it's a very big challenge. I think the advantage of Matrimony has been strong brand equity. Most of the profits are organic. We are well-intuited in the data language-wise, community-wise, physical presence. The number of marriages, millions of people got married, two decades of the service. So there are a lot of brand equity into things, not just the product or thing and all this. That way, we don't see that someone's going to get into this thing and going to take over the matrimony market. So I believe we are taking steps to further grow and all this. I'm not seeing that way in some global companies getting into matrimony. It's not. Even in India. Also, understanding your cultural nuances is a bit it's a combination of the brand equity, network effects, understand cultural nuances, grown presence.
We know we have almost so many matrimony sites. All these factors would make it difficult for anybody to make any significant improvement in the strategy.
Okay. Thank you. And sir, have you tried to see this as an opportunity to tie up with these big event planners and scale up your wedding services business?
Yeah. Yeah. Yeah. We have wedding planners use our platform. So the thing is that we want to operate as a platform player rather than getting into doing the event by ourselves because even. So I think that's the model we are trying to do. There are some challenges which we are trying to overcome. But yeah, definitely, we have worked with various wedding service providers, including photographer, makeup artist, wedding planner, etc.
My last question is, so in the last four to five years, what has been a major chunk of our business? Is it the renewals or mainly the first-time payments, the first-time subscriptions? And what proportion do you expect to increase going further?
The thing is that the business is a combination of both first-time payment renewal. We have a very good renewal trade that's been sort of healthy. Because not everyone can find a life partner within three months, so they continue to use our platform. Those things are the very healthy trends. We do not see any changes happening on those trends. Continue to grow, yeah. We need to look at the three levers with the country talk and matchmaking business: increasing profile, increasing conversion, and driving the output. These are three levers. We continue to work on driving all these levers.
Okay. Okay. Thank you so much, sir. Thank you so much for answering my questions.
Thank you. The next follow-up question is from the line of Ankur Jain, an individual investor. Please go ahead.
Yes. Sir, my question is about this note in the results that you mentioned that the company changed its business model. And you also mentioned in your remarks also. So could you just help me understand better what exactly was the business or accounting model before the ads were released? And then what do you mean when you mentioned that the company has changed its business model?
See, basically, so we look at the Google billing. If you are only an online data service, sir, you are forced to use one of the Google billing payment systems. If you are offering a one-to-one service with some bit of human element involved, then you don't qualify under the digital services that, you know, too, are not compelled to use a Google billing payment system. We made a product enhancement that all our packages come with some other additional benefits offered by the people. So that way, we don't qualify to be part of the digital services. We are not compelled to use a Google billing payment system. So they're more of we are providing additional services, additional offerings to our customers. Yeah. Those are the changes.
Okay. So this is a change which has been made post the delisting of the app from Google Play Store?
It was done post that. Yeah. It took some time to make all those changes. Yeah. Yeah. We've done post that one. We made the product changes. We've done that. Yeah. Post that one, yeah.
Okay. So now, does that mean that with this changed business model and if this stands the scrutiny of the litigation which is going on, then you may not have to lose to Google this money that you have to pay, the commissions that you have to pay to Google?
Yes.
You may be completely out of that?
Yes.
Okay. Thanks a lot, sir.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you so much. Thanks for the interest. I look forward to continuing back to this.
Thank you all. I look forward to speaking with you in the quarter. If you have any questions, do write to us. Thank you.
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.