Good evening everyone. On behalf of B&K Securities, I would like to welcome you all to the Matrimony.com first quarter FY 2022 earnings call. We have with us today Mr. Murugavel Janakiraman, Promoter and Managing Director of Matrimony.com, and Mr. Sushanth Pai, CFO. Without further delay, I would like to hand over the call to Mr. Murugavel to provide a brief overview of the quarter gone by, and then we can move on to the Q&A session. Thank you, and over to you, sir.
Thank you very much, Deep. Good evening, everyone.
Hope everyone is able to hear me. I hope all of you are continue to stay safe and healthy. India witnessed a severe second wave of the pandemic, and many of our associates and their family members were also infected. We as a company put health and well-being of our people at the forefront. Some of the initiatives we rolled out for the people were special leave, financial assistance, reimbursement of test costs and vaccination costs, online free consultation, enhanced insurance cover, helpdesk related to COVID, webinar by doctors, et cetera. We also accelerated our CSR initiative to help the society by contributing INR 50 lakhs to the Tamil Nadu Chief Minister's Public Relief Fund and about INR 20 lakhs towards various other COVID-related initiatives.
Given this background, I'm happy to state that we overcame many challenges and we have reported a strong start for FY 2022 with a good year-on-year growth on billing and profitability. As indicated earlier, our strategic initiatives continues to yield results and our focus in product enhancement and customer experience will also enhance this growth momentum. In quarter one, on a consolidated basis, we achieved INR 105.2 crores of billing, indicating a decline of 1.4% quarter-over-quarter and a growth of 29% year-on-year. There's a slight decline on a quarter-over-quarter basis as the lockdowns did have some impact in April and May, but the momentum enhanced in June. For matchmaking, the key highlights are as follows.
In quarter one, the billing was INR 104.7 crore, a decline of 1.3% quarter-over-quarter, a growth of 29% year-on-year. Revenue at INR 104.9 crore, a growth of 4.2% quarter-over-quarter and 21.8% year-on-year. We added 2.2 lakh paid subscription during the quarter, a growth of 31.6% year-on-year. We continue to see good double-digit growth in volume and billings in North and Western market, which have high competition intensity. ATV for matchmaking business increased 1.6% quarter-over-quarter, declined 1.9% year-on-year. We continue to track the impact we create for our customers. We are happy to state that we have created about 26,485 success stories in quarter one.
Other highlights for the quarter. During the July 2021, the company has signed a definite agreement to acquire 100% stake in Boatman Tech Private Limited, promoters of ShaadiSaga.com, a s approved by its board of directors. The acquisition will be by the way of share purchase from the existing shareholders for an aggregate consideration of INR 11 crore, subject to adjustment at the time of closing. The transaction is subject to customary closing condition and regulatory approvals. We expect to close the transaction this month. Founded in 2015, ShaadiSaga is a leading player in wedding service industry with over 40,000 vendors across multiple services, catering to customers across 15 major cities in the country. Through a robust digital presence built with strong social media and the content marketing capabilities, ShaadiSaga has garnered a consistent demand of around 1 million monthly active users.
With its technology-focused approach, ShaadiSaga offers a differentiated product experience. Following this acquisition, ShaadiSaga founders will join Matrimony.com in senior leadership role. With this strategic acquisition, we'll accelerate our growth through supply enhancement and superior product capabilities. We intend to integrate ShaadiSaga product technology and social media assets with our offering, that is WeddingBazaar.com and Mandap.com. With this approach, we believe that the deal will significantly strengthen our positioning, which includes both WeddingBazaar.com and Mandap.com, and which enable both the brands become a number one wedding services brands pan-India. Now coming to the marriage services business results. Revenue was INR 0.6 crore, a growth of 19.1% year-on-year. Losses in the quarter was INR 2.1 crore as compared to INR 1.9 crore in quarter four. On the billing and revenue outlook for quarter two.
We have now delivered four consecutive quarters of year-on-year double-digit billing growth in matchmaking. We expect this momentum to continue, along with the growth in profitability. We expect that Q2 matchmaking billing and revenue to show a double-digit growth on a year-on-year basis and a single-digit growth on a quarter-on-quarter basis. Wedding services expect to grow from Q1 levels. ShaadiSaga will be consolidated post-closing of the transaction, which is expected by this month. The contribution from ShaadiSaga will be insignificant in this quarter. Let me now pass on to Sushanth to comment on the key profitability items. Sushanth, over to you.
Thanks, Muruga. Our EBITDA margin for the matchmaking business in Q1 has improved strongly to 27.7% as compared to 23.4% in Q4 and 25.1% a year ago. We are progressing well in our journey to achieve 30% EBITDA margins in due course. Marketing expenses are at INR 37.3 crores as compared to INR 38.6 crores in quarter four. The EBITDA margins have improved strongly despite salary increments given in quarter one, mainly due to reduced infra expenses due to lockdown and also revenue increase. Excluding marketing expenses, our margins in matchmaking are at 63% in quarter one as compared to 62% in quarter four and 56% a year ago. On a consolidated basis, our EBITDA margins in Q1 are at 21.6% compared to 17.7% in Qquarter four and 18.6% a year ago.
We have now crossed 20% mark even on a consolidated basis, and we expect this momentum to continue. On an absolute basis, EBITDA has grown by 27.9% quarter-on-quarter and 40.9% year-on-year. Tax rate is at 25.3% for the quarter. PAT excluding Astro, which are associate company, is at INR 14.1 crore, a growth of 39.2% quarter-on-quarter and 46.9% year-on-year, which is again a strong growth in profitability. Share of loss from Astro is INR 27 lakhs. Our free cash generation for the quarter has been robust at INR 16 crores, indicating 0.84x to EBITDA, and our cash balance is at INR 302 crores. Return on equity is at 21%.
On the outlook for Q2 margins, we expect EBITDA and PAT to show a good double-digit growth both on a quarter-on-quarter and a Y-on-Y basis. We expect this trend to continue for the remainder of the year as well. 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. Over to you, Deep, for Q&A.
Thank you, sir. Participants wanting to ask questions, kindly raise your hand from the bottom right corner of the screen. We shall then unmute your lines. Participants who've joined via the call, they could ask their questions in the Q&A and we'll take them up. We shall wait for a moment till the question queue assembles. Just another announcement. Participants who've dialed in via the call, please press star and six to ask the questions. As we wait for the question queue to build up, sir, I have a couple of questions from my end. Firstly, could you please elaborate more on ShaadiSaga acquisition? You have explained that you have changed your strategy now in the marriage services business, but how would you like to look at this acquisition, especially that it is largely for the northern market?
Thank you, Deep. ShaadiSaga acquisition, in a way, it's significant for multiple reasons. One is that, we have moved to a subscription-based business model on wedding services in the beginning of the last financial year. Also for the wedding services marketplace model, there are a couple of things that are important. One is that, the good number of listing on the supply side. While we are strong in certain parts of India, south and to certain parts of India, because these wedding services primarily started in the south. ShaadiSaga has a good presence in the north and western market. In a way, this helps us to become a strong leader in terms of listing across India, because also ShaadiSaga has built a good social media presence. They have close to 1 million visitors on a monthly basis.
We look to enhance our offerings in terms of product side, listing side. These are the benefits. Plus also in terms of product, they definitely built a differentiated product experience. We see the benefit in terms of product and also the founders have certain credibility, and they have years in this venture. The founder is joining at a senior position, wedding services, the listing and social media presence and the product, and all this will help the wedding services business to scale up. The wedding is a large business. Somehow, so far, no one made it as big in this category. Hope that with the acquisition of ShaadiSaga, we expect the wedding services business to grow on a strong basis. Our base is very small, but we expect post this integration, from Q3 onwards, we expect the wedding services to a strong uptake under the growth side.
To sum it up, the benefits on the product, social media presence, and on the listing side, plus the founder years of experience in this wedding services operation. This all will be beneficial. We're adding leadership capabilities in this space.
Right. Thank you, sir. The next question is from the line of Archit Singhal. Archit, we have unmuted you. Please go on.
Yeah. Hi, can you hear me?
Yes, Archit Singhal, I can hear you.
Congrats, team, on good set of numbers, and it's good to see the margin improvement. A couple of questions. Firstly, Sushant, if you can answer this one. Marketing spends have come down sequentially, and I think that is one of the reasons why the margins have gone up. Are you seeing a reduction in competitive intensity because of which the marketing spends have come down?
In terms of EBITDA margins, not only the marketing spends. Obviously, marketing spends have come down by INR 1 crore. That is also the reason why EBITDA margins have improved. Having said that, the competition intensity has not relented. In the sense, there is still high competition intensity. Like we told you earlier, we see how much we want to spend for the quarter depending on our trajectory of the business as well as competition intensity. We do a balance of both. Given that we had a little slower April month than what we had expected because of the intense lockdown and severe second wave that happened, that's why we sort of tweaked our marketing expenses a bit. Having said this, I think in next quarter, the marketing expenses will increase slightly from the current levels because we did tweak it in quarter one.
We may bring it slightly on the upper side in quarter two. That is not going to affect our trajectory on profitability. Like we said in the call, that the profitability will continue to increase in spite of the marketing expenses increase. The other reason why the EBITDA margin increased is also, obviously revenue increased. From a quarter-on-quarter basis also the revenue increased. The second thing that also happened was we also got some benefit because of the lockdown in terms of the offices were not running, in terms of power, in terms of rental. Certain things we got some leeway and that sort of also contributed to the EBITDA margin.
Archit, just to add to what Sushant said. It's mainly on account of the revenue. The benefits are small benefits. As Sushant said, in spite of increasing marketing spend in quarter two, we expect a double-digit growth on the revenue side and the profit continue to grow very strongly so.
Understood. On the growth, so growth has come back and if you can highlight what are the key reasons which is driving this growth. Is it the product innovation and the new categories where you are entering which is driving this growth?
It's basically our leadership team has been able to execute very well because we are continually looking at a way to increase the conversions. We see that year-on-year, the conversion has been growing very well. That we expect that momentum to continue. Mainly on account of our ability to convert free members into paid members on account of multiple things. The continuous product improvements and our execution capabilities. All these factors have been contributing to the increase in growth. Also investing in some other product areas, some other newer businesses. Combination of multiple factors have been driving our growth.
Understood. Two more things from my side. Firstly, if you can highlight on the pricing per se, and in the annual report you have mentioned about NRI markets and all. Do you see going forward pricing also to improve? We are seeing the improvement in paid subscribers, but anything on pricing if you can comment?
Archit, we see that our ARPU has increased by sort of close to INR 100 when compared to Q4. We continue to tweaking and continue to drive wherever possible, try to get the better pricing possible, and wherever required, we also discount so that the customer can convert better. Basically, we look at both the things. That on one hand we try to drive the ARPU, and one hand we are also look at increase the number of paid subscription. We drive on both the fronts.
Understood. Last thing from my side. Like Muruga, you mentioned growth should be double-digit going forward also. Earlier there were comments that marketing spends would be calibrated in the same range. Fair to assume that with growth coming back in double-digits because of operating leverage, your margin should increase from these levels and should continue to increase?
As Sushant mentioned, we expect the margin to, because look at the matchmaking, the margin at now almost at 27%+ . We expect that due course touching 30% on the matchmaking side. An enterprise EBITDA margin will cross at 20%. We expect that to further move up. While the marketing spend continue to increase to drive the growth and also to take care of that increased competitive activities. However, we expect the revenue growth and billing growth to continue or the margin also to continue. Yes. As it is conclude, yes, we expect the margin to further move up from here on both on the matchmaking level as well as on the enterprise level.
Thank you.
Before we take the next question. Participants can press star and three to raise your hand. Participants joined in using the toll can press star and six to ask your question. We have a next question in the chat from the line of Mr. Khush Gosrani. Sir, he wants to ask whether the ShaadiSaga is more of an Pinterest model where you can see the listings and contact the vendors directly. What is the model? He wants to understand it better.
Yeah. The business model is a subscription business model. Basically, our revenue coming from vendors paying money to get a better visibility and increased leads from us. As far as the customers who are looking for these wedding services, they come to the portals and they reach out to the vendors who are on the wedding services platform. However, the paid vendors will get a better visibility and better leads. Business model is subscription, which is coming from the vendors in the wedding services space.
Right. We have another question in the chat box. Sir, that question is they want to understand more about your marketing spends. The question is that, how long do you think this will continue and whether these are the peak marketing levels?
It's difficult to comment, because on one hand there's definitely the competition intensity is continuing, and so we need to invest. In some other areas, obviously, we are not investing it appropriately. We need to invest. As a company, we are looking at expanding into new geographies. We're also looking at launching a new product offering. It's a combination of all these things, our geographic expansion, new product offering, and the competition intensity. With all these factors pushing us to invest on the marketing side, we expect that the marketing spend to continue. However, as Sushant said, which definitely is going to help us in the double-digit growth, even with increased marketing spend, we expect the margin to improve on both at the enterprise level and the matchmaking level. Yes, that's outlook currently.
Right. Sir, another question was on your international expansion. There was a time when we had planned to go outside India. Now, how is that plan? Do we still see a lot of scope there or we will first focus only on the northern markets before going out of India?
No, definitely, as far as the international expansion, pretty much on the cards. We expect the Bangladeshi operations to commence from before the end of this quarter. We're also working towards the launch of Sri Lankan Matrimony or the operation in Sri Lanka, hopefully before the end of quarter three. We also have a MuslimMatch.com that's a matchmaking service for the global Muslim, and it's completely currently online. As far as the physical operation is concerned, it's going to be in Bangladesh for Bangladeshi Matrimony, and for Sri Lanka, for Sri Lankan Matrimony. While we continue to look at the growing the matchmaking business India, wedding services business India, we are also looking at global opportunities also as a part of our growth strategies.
Right, sir. Participants, before we take the next question, just a reminder to press star and three to raise hands. The next questions are from Mr. Devang Bhatt. Mr. Devang, we have unmuted you. You may please ask your questions.
Hi, sir. Thank you for taking my question. Just in your paid subscriber has declined by 2.9%. Your ATV is up by 1.6%, but the matchmaking revenue is up by 4.3%. Can you explain us the difference? I also have follow-up questions, but first, if you could.
Yeah, sure.
When you look at the paid subscription, 2.9% and ATV 1.6%, right. You need to look at actually the billing, not the revenue, because the paid subscription is based on the billing number. That's how it matches. If you look at 2.9% and 1.6%, the net impact will be about 1.3%, and which is what is shown in the quarter-over-quarter basis.
Okay. what would be the breakup of matchmaking services in this quarter?
That is given, right? You're talking about billing?
The paid subscriber and ATV growth. If you could give us the growth of both of them.
Yeah. That's given. 2.9% is the decline in paid subscription.
Got it.
Right? ATV increased by 1.6%. therefore the net.
That's for billing, right?
That's on billing.
I'm talking about the revenue.
No, revenue, we don't track it like that because the ATV is based on the subscription amount that is received, and then it goes on a, we amortize it over the period of the package.
Okay.
You have to see it from the billing wise only.
Okay. Your billing is down QOQ, but what gives you the confidence of getting a higher revenue growth on a QOQ base?
Yeah. What happens is that the billing was down on a QOQ basis because quarter four, there was an impact in terms of how the revenue was shaping up in quarter one because of quarter four and quarter one. Because in quarter two, we are again seeing a particular billing and particular trajectory, that's how the revenue comes. It's like this. Revenue accounting is based on how the billing shapes up from month to month. For example, if in a particular month it is lower in the beginning of the month, then it affects more in the same quarter, or rather in that same quarter itself. Suppose the billing is high towards the third month of the quarter, then it impacts or rather you get higher revenue in the next quarter. It's like that.
Predominantly our packages are in the three-month category. Therefore, that's how the revenue shapes up.
Just to add to what Sushant said. For us, the Q1, the billing was impacted in April and May, and it bounced in the month of June. The whatever increased billing in June, we target at the bearing on the Q2. Because April, May, it was impact, and it also had a impact in the billing in the quarter one. Q2, we expect that the revenue to continue because of the billing, increased billing we saw in June. Two-third of the benefits coming in this quarter. We expect year-on-year the double-digit growth to continue.
This growth will be high single digit or a low single digit QOQ?
Hello, we're not able to hear you.
This growth will be high single digit QOQ or a low single digit QOQ? Will it continue for next quarters?
Basically, now what we have said is that our Q2 matchmaking and billing will grow double-digit on a Y-on-Y basis and a single-digit on a quarter-on-quarter basis. We are not saying whether it is high or low because we need to see how, for example, August shapes up, September shapes up, and all of that. Right now we are just leaving it at a single-digit basis. If we do very well in August, then that can improve a little more. Right? We'll have to see that.
Yeah. At this point of time, we are just kind of.
I can hear you.
At this point of time, we're saying that the year-on-year double-digit growth and profit trajectory will continue. We are at close to 50%. It can even get better on the profit side. We expect the profit to improve better and the billing and revenue to have a double-digit growth.
Your profit trajectory will be similar to this Q1 quarter, is it?
We may expect better profit also year-on-year basis.
Okay. Year-over-year basis.
Yes.
Okay. Then has your pricing stabilized? The mix that you were changing in terms of subscribers, has it stabilized now?
The pricing, the combination of different packages. We continue to figure out. As I said, there is a personalized services which are sold at higher packages. That kind of similar level or at least slightly more, depends on how we are able to convert users into various packages. We expect it be the similar range or maybe slightly get better, depends on how the quarter ends.
Thank you for that.
Very difficult to kind of put a number to it. Our strategy has been that continue to do what it takes to convert and also where it's possible to get better subscription at a right ARPU, which we'll try to do that.
Okay. Thank you for taking my question. Thank you.
Thank you.
Sir, before we get to next question. Participants on the phone, you need to press star and six. Participants on the link, press star and three to ask questions. We have one question from a toll-in user. We have unmuted your line. If you could just introduce yourself first and then ask the question.
Can you hear me?
Yeah.
Yes, we can hear you.
Yeah. This is Guru. Hi, Sushant. Hi, Muruga.
Hi, Guru.
Congratulations on a really good set of numbers.
Thank you.
Murugavel, you have alluded in the past that we want to grow double digit. When do we see a run rate of INR 500 crores? Can we see INR 500 crores on an exit this year?
Oh
In matchmaking.
Yeah. We hope we get to that number, Guru. Okay?
Yeah, if you say a quarter-on-quarter single-digit kind of growth.
We can exit on a run rate of INR 500 crores.
Yeah.
Is this possible?
Yeah, we hope that it's possible. Hope we able to get to that number, yeah.
Right. Sushant, to reach that number, do we have to spend a lot on marketing? I guess two quarters back you said that INR 40 crore is the max you want to go and today you're saying that you might have to increase that. A word on the marketing expenses?
What we are saying is, See, if you remember, we had said that marketing expenses are function of our growth trajectory and also competition intensity. We'll balance both. We had also said, you're right, that even though competition is going to spend more, we'll be in a particular range sort of a thing. You'll have to keep revisiting this. Right now, our thing is that, yes, we are now in the INR 37 crore-INR 38 crore. That will increase further in quarter two within our range that what we had said. What we will spend in Q3 and Q4, we'll again look at it at that time. Right now, it looks like that it will increase from this level onwards, but whether we want to go much beyond what we had indicated earlier, we'll take a call as we go along.
Broadly, that call is also going to be taken depending on our growth trajectory. If the growth trajectory is good, even if we increase marketing a bit, we can still keep our momentum in terms of increasing EBITDA and PAT on a quarter-on-quarter basis. Broadly, our plan is that we want to increase billing on a double-digit Y-on-Y basis, quarter-on-quarter, and also improve profitability on a double-digit Y-on-Y basis, quarter-on-quarter, even on a quarter-on-quarter basis. I think as long as we keep track of it, the marketing will be a number that we keep tweaking depending on both factors.
Right.
Yeah. Just to add to what Sushant said, there are multiple things. One is definitely the increased competitive activities. We also have the growth plans. We're also expanding to international operations and other countries. We also have the product offering. There are multiple things. We also now are looking at the wedding services also. Wedding services also will be in a similar range. There are multiple things. We expect that, as Sushant said, marketing is a function of our growth trajectory and plus competitive marketing spend. What we are looking at broadly, good double-digit growth and profit moving up strongly. These are the two things we're looking at. Top-line growth and profit growing strongly. A couple of things will be variable, depends on that, as Sushant said, our growth trajectory or growth initiatives plus what we see in the market.
Right. I have two more questions. Murugavel, I guess we ended June on a very good note. Is it because during Q4 numbers, you said that our billings would degrow much more than what we have shown. Was June a really good quarter for Match?
Yeah. Really, June, we did. I guess the momentum picked up from somewhere in the May, because when you had the analyst call, the outlook was not so good because it was a severe lockdown. The momentum picked up after that. Yes, June we delivered well. Yes. The momentum picked up in June.
June will be better than February-March, if you have to compare like that?
Yes. June is better.
Okay. Right. My last question will be after the acquisition, do we expect EBITDA loss in our wedding services business to go above the range of, say, about INR 1.5 crore-INR 2 crores on a quarterly basis?
No, we are at around INR 2 crore. It'll be in a similar range for this quarter as well. We don't see any significant increase in losses. Again, probably one quarter down the line post-integration, we also expect the billing momentum to move up in wedding services from quarter three onwards. The outlook at this point of time, the loss will be around INR 2 crore.
Okay. Great, guys, congratulations once again on a very good set of numbers.
Thank you.
Thank you so much.
Thank you. The next question is from the line of Mr. Manivannan Kannan. Mr. Kannan, we have unmuted you. If you can just ask the question, please. I guess he's maybe on mute or not available. There's another caller calling in. We have unmuted your line. If you could just introduce yourself and ask your question, please.
We are not able to hear, sir. Yeah.
Sir, your voice is not audible. We have unmuted you. If you could introduce yourself and ask your question, please. Okay, Mr. Kannan has sent his question in the chat, so I'll just ask from his behalf. The question is, in spite of three players aggressively investing money, the industry growth is tepid unlike other new-age industries which solve much lower needs. I feel it is because there is no repeat business opportunity from users. A satisfied user on other platforms will do business more, whereas a satisfied user on Matrimony will get married and churn out. The industry can't grow at a great speed. What is your view on this small opportunity, sir?
That's in terms of compared to other internet businesses. Yes, we don't have repeat users. The other internet business, yes, you are right. Once you acquire a customer, once they become a satisfied customer, they can be possibly be a lifelong customer, or probably they can transfer for a long time. Yes. In this case, Matrimony, yes, once a satisfied customer is where you have to end up losing them. That's a fact. That's the nature of the business. However, India definitely has the number of users looking at getting married and the level of online penetration definitely is improving.
Yes, there is internet competition and there are various reasons. It could be that why the thing is not moving up. One is that because the point what you already said, that the people get married and they leave the website. The number of users coming also that because today the multiple players and today people are trying to eat into each other market share. That's what's trying to happen. The number of new people coming, yes, there's been growth. It's growing at a double-digit basis. We expect that momentum to continue. Whether we're going to grow at a higher percentage, it may not be the case. The reason is that what other industry why you see the multiplier effect much stronger, because existing users are transacting again and again. In this case, while the user base is growing, but not growing at the 30%, 40%.
It can't grow at that pace. It can grow at a double-digit pace. I think industry is growing at a reasonable pace. I think that's what you can expect, the overall user base growing at probably a double-digit basis. This one growing at double-digit basis. I think that is a reasonable expectation you can have in the business. Unlike other e-commerce businesses, while you can have the existing users keep coming and buying it, plus they're also buying more services, that may not happen in this category. Yes. Is there opportunity to grow? Yes, there's opportunity to grow because the number of people looking for life partner vis-à-vis the number of people getting married. There's definitely opportunity to grow. The growth will be in user profile growth only at double-digit. Until otherwise, we come up with new innovative ways to drive the growth.
We're trying to figure out what else can be done to either increase that user base. However, it's one thing about driving that number of users coming on the platform, that's one thing. Again, the revenue is a function of what percentage of those users are going to become paid members. While today a certain percentage of users are going for a paid membership, and we continue to do product improvements and various strategies to get more people to go for paid subscription. Another way to drive the growth is, yes, one, the number of users signing up to the platform going up. Other way to drive the growth is converting more number of users going for a paid transaction. We continue to work on both these areas. While the thing is that there's a positive outlook, there's a growth momentum.
We expect the momentum continue. We expect only to further move up. Yes, there's increased competition. It's a challenge. However, as a leader in this space, we are executing very well. We are widening the gap between us and the other players. In fact, we're widening absolute revenue gap between the other players in the industry. Widening the gap, we continue to execute very well. We continue to work on the ways to get more people to go for the paid membership. Also try to get more people to sign up for the matchmaking platform. Yes, the nature of this business is not like other thing, but however, this business, in a way that we're just strongly entrenched in terms of when it comes to matchmaking. Obviously, Matrimony is definitely one of the most preferred brands. As long as humanity exists, the matchmaking will continue.
That way, this business in a way, the eternity or the longevity of this business is very high. That way, while there are some challenges, like we don't have repeat business, there are a lot of positive about it. In fact, among all the internet business paying for subscription, matchmaking is where people pay for highest number of subscription, because today people pay almost INR 5,000 for this subscription. No other digital subscription business gets this kind of ARPU. That talks about the people belief in this category and Matrimony.com. That way, there are a lot of positive around it. We continue to work on ways to increase, drive the growth. Again, more importantly, we're satisfied as a company that because it considers matchmaking as a noble service. Like how healthcare, how education, we truly believe that matchmaking is a very noble profession.
We have immense satisfaction in getting 1 million successful marriages.
Right, sir. We have a call in user back. If you could please introduce yourself and ask your question.
Hello.
Yes, you're audible. Please introduce yourself and ask your question.
Hi. Hello, this is Mohit from HDFC Securities. I basically had one question, sir. We have spoken about this in the previous calls as well regarding the increased popularity of the dating apps, right? Now, even in South being your major market. We have these regional dating apps also, which have come up and have become popular. One is, I think, by the name of Anbe. One is by the name of Arike, which targets the Malayalam community. Anbe, I think, targets the Tamil community. There's regional specific dating apps which have come up. Do you feel that this could be one of the more layer of competition for your business and it could impact the growth in paid profiles?
Mohit, as I said in the past, we don't see the dating sites or any real competition to matrimony business. Look at all the dating sites. No one even crossed $2 million of business in spite of some of the players there being in the market for more than a decade also. That's why the dating is something which has a low penetration and the user base is completely different. Their challenge are getting female audience. Even the largest datings in India not even cross $2 million revenue. You don't see dating as any significant competition to matrimony business. We also don't see that this kind of overlapping with the people looking for the matrimony. We don't see definitely any significant competition from dating services. We don't see that as a challenge.
Okay. Sir, my one more next question is with respect to pricing, right. Just a combination of various packages, right from the basic package to the premium packages. If I understand correctly, because the ARPU has shot up because of the decline in subscriber base from Q4 to Q1, and there's no major change in your pricing. Is the understanding correct on that part?
No, actually, Mohit, why the number of paid transaction dropped on account of the challenges what we faced in April, May on account of COVID lockdown. Otherwise, the billing volume would have grown compared to the earlier quarter. ARPU has nothing to do with the drop in the paid transaction. The ARPU is a function of, as you rightly said, it's the mix of various packages. It depends on which package we're able to sell in a particular quarter. The ARPU slightly increase or decreases.
Okay. Got it, sir. Thank you so much.
Sir, we have one more question in the chat. The question is regarding your employee cost. The question here is, would we see an increase in hiring now as things open up? How should we look at the employee cost line item?
See, the employee cost is around at enterprise level, around 32%. We expect it'll be at a similar level. As the revenue grows, the employee cost as a percentage may even come down because we not invest in the corresponding employee cost. That's a natural business at economy of scale, when the revenue increases, the cost, be it infrastructure cost, be it employee cost, even the marketing cost, should come down. We don't see that while we're definitely investing in certain areas. However, we don't see that employee cost is moving up. As we progress, it may even come down further.
Right. Participants, again, a reminder, if you have any questions, kindly press star and three or star and six. We wait for a moment in case there are any more questions. We have one more question from a caller. Yes, sir, you have been unmuted. If you could please introduce yourself and ask your question.
Hey. Hi, am I audible?
Yes, you are audible.
Yes, you're audible.
Hi, this is Rajesh Kothari from AlfAccurate Advisors. I just have one question that in terms of the consumer behavior in last three, four, five, six months, are you seeing any trends over there? This strong growth of 29% on YoY basis, is it just due to the low base? If I look at first quarter FY 2020, you had a INR 92 crore of billing compared to first quarter FY 2021, it was INR 82 crore. Of course, the base was very low, and therefore it is 30% growth. As we move forward, will it be more like a low double-digit kind of a growth? That's what you are guiding for?
Yes, Rajesh, last year Q1 we are severely impacted because the base was low. This quarter we had a strong double-digit growth in terms of the billing. Definitely we're looking at going forward year-on-year basis, there'll be a double-digit growth. It won't be like 29% or 30% year-on-year. We'll definitely have a double-digit growth.
Basically you are saying that INR 110 crore, INR 125 crore, that basically over a period of time, QOQ basis by fourth quarter exit rate, you can reach to what? INR 120 crore kind of thing? That's what you are looking for?
No. We'll continue to conduct our double-digit growth quarter-on-quarter. Yes. It's a work to get to that number before the end of the year. That's our commitment that we are working towards it, yeah.
Okay. To my first question that, in terms of the behavior of the consumers in last three, four, five months, any trends to understand any major difference?
We don't see anything. Nothing has changed significantly or even to some extent in the last couple of quarters or anything like that. One thing that definitely during the COVID has accelerated the digital adoption in India. More and more people are now open to online for various services. That way, not only for us, generally, there's good digital adoption taking place in India.
Okay. Fine, sir. Thank you, sir. Wish you all the best.
Thank you.
Sir, we have one more question from Mr. Sunil Tomar. He's asking, are you looking at some big matrimony player acquisition in the northern Hindi markets?
At this point of time, we are focusing on our growth, and we continue to focus on improving our product and drive the conversions. If at all any opportunities arise in the future, we'll evaluate that number.
Thank you, sir. Given there are no more questions, over to you, sir, for any closing remarks.
Thank you, Deep, and thank you everyone for participating in the conference call, and I hope everyone continue to stay safe and stay healthy and look forward to connect in the next quarter. Sushanth , is there anything you want to add?
No, nothing much. I think we've discussed everything. In case you have any questions or any specific queries, do feel free to write to me or to our IR consultants as well, Valorem Advisors. Look forward to keeping in touch. Thank you.
Yeah. Thank you once again. Appreciate your interest and participation.
Thank you, Deep.
Thank you. Thank you for joining this call. On behalf of B&K Securities, have a good evening. Thank you so much.