Good afternoon, ladies and gentlemen. Welcome to the Urban Company Limited Q2 and H1 FY26 earnings conference call. 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 management's remarks. Please note that this call is being recorded. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. I now hand the conference over to Ms. Garima Mishra from Kotak Securities. Thank you, and over to you, ma'am.
Thank you, Rutuja. Good evening, everyone. It is indeed a great pleasure to host Urban Company's first earnings call after its stellar listing. Joining us today to discuss earnings for the second quarter and half-year ended 30th September 2025 are Mr. Abhiraj Singh Bhal, Co-founder and CEO, and Mr. Abhay Mathur, CFO. The results and investor presentation have been uploaded to the stock exchanges and are available on the company's investor relations website. Before we begin, I'd like to remind you that certain statements made on this call may be forward-looking in nature and should be viewed in conjunction with the risk factors disclosed in the company's filings. With that, I'll now hand the call over to Abhiraj to share the key highlights of the quarter.
Thank you very much, Garima. Good evening, everyone, and thank you for joining us today. Before we get into the numbers, I want to begin by expressing my gratitude to all shareholders for the trust that they have placed in Urban Company through our recently concluded IPO. We are humbled by the response from both institutional and retail investors. We see this not as a recognition of where we are today, but as a belief in the potential of what lies ahead. Thank you once again for your faith and support. We will strive every day to remain worthy of it. Let me start by saying that Urban Company is still at the very beginning of its journey. The opportunity before us is vast. The Indian home services market remains unorganized and fragmented, with less than 1% online penetration.
Over the next decade, our ambition is to build a trusted home platform that becomes the backbone of urban living. Our goal is to deliver reliable, high-quality services, be it in daily housekeeping, beauty, plumbing, AC service, or more. Beyond services, we want to offer end-to-end solutions that simplify life for millions of homeowners. New initiatives such as Native, where we offer water purifiers and smart electronic door locks, and Revamp, our wall decor solutions, are in line with this broader vision. The full picture may not be visible today, but we believe with these steps over time, Urban Company will evolve into a true home platform. Let's now get into the numbers and the quarter gone by. Net transaction value for this quarter grew 31% year-on-year to reach INR 1,030 crores.
On a like-to-like basis, this is a 34% year-on-year growth if I exclude the impact of Saudi Arabia deconsolidation, which we did on the 1st of January, 2025, moving it to a 50/50 JV. Revenue from operations grew 37% year-on-year to reach INR 380 crores. On the same like-to-like basis, this is a 44% year-on-year growth, excluding the impact of KSA deconsolidation. Core India services business remained profitable with Adjusted EBITDA of INR 18 crores, or 2.4% of NTV. International operations in UAE and Singapore achieved Adjusted EBITDA break-even in this quarter. Our new business segment, InstaHealth, is scaling rapidly, and in a matter of a few months from launch, it has reached 4.7 lakh orders in October, but it did incur an Adjusted EBITDA loss of INR 44 crores.
The overall business reported an adjusted EBITDA loss of INR 35 crores for the quarter, primarily due to the loss of INR 44 crores in InstaHealth. Excluding InstaHealth, the business delivered an adjusted EBITDA profit of INR 10 crores, marking a year-on-year improvement of INR 15 crores. If I look back at this quarter, the business has delivered strong, broad-based growth across all segments. Excluding InstaHealth, Urban Company remained profitable at an adjusted EBITDA level. However, on a consolidated basis, the business moved from profitability to a loss due to upfront investments in scaling InstaHealth. We recognize that these investments impact short-term profitability, but the opportunity in InstaHealth is both significant and immediate. The category has seen strong customer adoption, high repeat usage, and holds strategic long-term importance for Urban Company.
We remain focused on delivering exceptional customer experiences and cementing market leadership in this category, a direction we believe is firmly in the best long-term interest of our shareholders. Let me now take a few minutes to unpack the performance of each segment. Our India consumer services business, excluding InstaHealth, continued to show steady momentum, with 19% NTV growth year-on-year and 24% revenue growth. This growth was driven by new user acquisition, consistent retention, and healthy traction in our core service categories like cleaning, beauty, and repairs. We also launched our new wall decor solution called Revamp, which is seeing encouraging early traction. Our customer experience remains best in class, with an average rating of 4.8 out of 5 across categories, a metric we are proud of. Adjusted EBITDA stood at INR 18 crores for this segment, with margins declining modestly from 3.1% to 2.4% year-on-year.
This decline is a result of deliberate investments we have made in training, audit, customer support, new user acquisition led by brand marketing, investments towards faster fulfillment, and investments in technology and AI. As a recap, between FY23 and FY25, our core India services business saw margin improvement by 13 percentage points as a percentage of NTV, moving from - 9.7% to + 3.3% in FY25. This was a result of steady revenue growth and disciplined cost control. As a management team, we felt that FY26 should mark a period of reinvestment, investments we believe are essential to build a long-term compounding core. It is our considered view that the India consumer services business, excluding InstaHealth, will eventually reach a steady-state Adjusted EBITDA margin of 9%-10% of net transaction value.
Coming to Native, our connected home solutions vertical, we saw rapid growth, with NTV up 164% year-on-year to reach INR 97 crores and revenue up 179% year-on-year to reach INR 75 crores. Our water purifiers and electronic door locks have received strong market response. Customers appreciate their robust design, low maintenance, and seamless integration with the Urban Company app for monitoring and servicing. While we did see some demand pull forward due to an early festive season in this quarter, Native's fundamentals remained strong, and margin has also improved meaningfully from negative 30% of NTV same period last year to negative 9% of NTV. The business is on a clear path to profitability. Native's strong performance has been underpinned by good product design, a strong consumer proposition, and also the dependable Urban Company service network.
As the business scales, we expect growth to remain healthy but moderate relative to prior periods, reflecting both a higher base and our emphasis on profitable growth. In our international operations spanning UAE and Singapore, we saw robust performance, with NTV up 73% year-on-year and revenue up 66% year-on-year. The combined business achieved Adjusted EBITDA break-even this quarter, an important milestone. Growth was driven by improved customer retention, new user acquisition, higher repeat usage, and also better operating leverage. We continue to monitor this performance closely, but it is a strong signal that our international playbook is scaling well. And finally, InstaHealth, our newest vertical and one that we are especially excited by. Launched earlier this year, InstaHealth offers daily housekeeping services, a high-frequency, high-engagement use case that we believe strengthens our platform score. Just within eight months of launch, it has scaled to roughly 4.7 lakh monthly orders.
This growth has come despite limited city and geographic coverage, underscoring the category's massive potential. While it is not a like-for-like comparison, our India consumer services business reached similar scale in approximately four and a half years since the start of its operations. The early signs are very encouraging. Retention and repeat rates are trending strongly. However, we do understand that steady-state behavior will take some time to mature. We are consciously investing in building a high-quality supply base, training, onboarding, early earning support, and network densification. All of these investments have resulted in an adjusted EBITDA loss of INR 44 crores for this quarter for InstaHealth. We see InstaHealth as a long-term investment, one that deepens customer engagement with our app, improves the frequency of usage, and also expands our overall brand.
Just as beauty and cleaning verticals evolve into strong profit pools over time, we expect InstaHealth to follow a similar trajectory with scale and efficiency. Stepping back, since this is the first earnings call, I want to highlight three simple principles which will guide our execution going forward. First, we will always keep the customer at the center of every decision. Second, we will continue to invest in service partner enablement, as we believe that happy service partners lead to happy customers. And third, we will uphold the highest standards of governance and transparency. Before we open to Q&A, I want to highlight one last but important point, which is our long-term North Star metric, the one that we will truly optimize for in the long run, which is free cash flow per share. Thank you once again for your continued support and confidence in our journey.
I will now hand over back to the moderator to start the 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 the 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 Manish Adukia from Goldman Sachs. Please go ahead.
Hi, good evening. Thank you for taking my questions, Abhiraj and team. Many congratulations on your listing. Happy Diwali to you, and really appreciate the detailed shareholder letter with all the additional details. I have quite a few questions, so please feel free to cut me off whenever you want me to go back in the queue so I'll just start with the India consumer services business, where NTV growth right now is stagnant about 20%, excluding the InstaHealth business. As you think about the next three to five years, one, do you see this growth as sustainable, or do you think there are more upside or downside risks versus this number? And second, between the user growth and the spend per user, which one do you see as a bigger driver of growth so that's my first question, and I have a few follow-ups.
Thank you, Manish, for your question. Happy Diwali to you as well. Manish, we fundamentally believe that the India consumer services business has a long growth trajectory ahead of it. Online penetration continues to remain very, very low, as I mentioned earlier, sub 1%, and that is one of the reasons why we have stepped up investments this year to set up the business well for long-term growth. We believe it has many years of high-quality growth ahead of it, and it has been growing well for the last few years. Our primary goal will be to focus on user-led growth and volume-led growth.
Thank you. Thank you for clarifying. And you mentioned that FY26 will be a year of investment. So does that mean that margins again start expanding next year? And how much do you think margins could deteriorate this year before they start expanding again? And maybe a related question, when you say steady-state margins of 9%-10% of NTV, again, in your definition, how far in the future is that steady-state?
Manish, we do believe that this year is an important year of reinvestment. These reinvestments are happening across the board in India core, whether it's in training, audits, ramping up new user acquisition, our teams, technology, faster fulfillment, which is an important focus area for us, etc. While quarter on quarter, there will be some movement in the margins, we encourage the investor community and the analyst community to look at margins on an annual basis. We believe on an annual basis, it will be similar to FY25, FY26. Post that, we would like to continue profitable growth. We don't want to give a timeline yet for reaching the steady state, but be rest assured that we have our eyes very firmly on margin improvement and profitable growth and eventually reaching there in the medium term.
Thank you for that. My second set of questions is on InstaHealth. Can you maybe help us understand how is InstaHealth different versus some of the other products that you had launched in the past, like, I don't know, Cooks, etc., for example, which did not work? I know you talked about early product traction being very strong, but when I look at the numbers disclosed by you today, the discounts are as high as the overall net transaction value. So are you able to share with us some data that have you seen any evidence of customers in the last eight months where you've pulled discounts and the demand traction is still strong?
So if you can just maybe help us understand your expectation of the long-term traction of InstaHealth and how does that compare with some of the other products that did not work and the similarities or dissimilarities versus those products?
Manish, it's still an early business. It's been only about eight months since we've launched it. So we are also learning a lot here. I would say the early traction is very encouraging. We have looked at micro markets where discounting is not as deep, and the customer retention and repeat rates are fairly healthy in those micro markets as well. Across the board, InstaHealth's retention and repeat and frequency is very, very encouraging. However, this is early data, and it will take time to mature. So we are tracking it closely.
The only thing I'll say is that it is perhaps the most exciting new business initiative that we have launched in a while and is, in order of magnitude, more exciting and more encouraging for us than anything we've done in the past, which is why you can clearly see that we are doubling down on it and are committed to it. We will continue to watch, and we will continue to learn, and at any point in time, if we feel that there's new data points that are coming up that either require us to double down on the investments or moderate them, then we will be prudent in taking those calls accordingly.
Very clear. Just maybe one or two last follow-up questions on InstaHealth. You mentioned that free cash flow is a very important metric that you will optimize for in the long term. InstaHealth today, of course, has a lower AOV compared to your core services business and a lower take rate, and in the early stages, it is requiring investment. Now, as we think about a long time period, let's say five years or seven years from now, do you think, while InstaHealth, of course, helps engagement of the overall app and helps drive order volumes, do you also foresee InstaHealth as becoming meaningful or substantial to your overall India free cash flow? When I say substantial, I mean, let's say anywhere between 15%-20% or higher of your India free cash flow.
Do you think it'll more be like a synergistic product which drives traffic on the core business and drives volumes, which from a free cash flow perspective may not be a very substantial product? So your thoughts there, please.
That's a good question, Manish. I think it's still early to comment on the steady-state unit economics of this category. I think the P&L is rapidly evolving, and it depends on a bunch of key metrics such as average order value, partner utilization, training spends per partner, and all of these are evolving as we speak on a monthly basis, not just a quarterly basis. I think it's very much our goal to make sure that every dollar spent here is well utilized and the ROI is high. Our primary goal here today is to maximize growth and cement market leadership. That is something that we are not going to compromise. So I would say in this phase of building, which is the next few quarters, that remains our goal.
Needless to say, in the long term, any business vertical that we do has to eventually reach sustainability, has to reach a sustainable level, and contribute to the overall core free cash flow per share. InstaHealth will be no exception to that rule.
Thank you for that. Just my last question before I jump back in the queue. I think over the last decade, you faced significant competition, especially in the early part of your journey, but in the recent year, it's been fairly benign with most of your competitors almost going out of the way. Now, it looks like InstaHealth may be slightly different, where competitors have raised some capital. They have been a little aggressive. Can you maybe remind us as to why competition was not able to do well in the past compared to your core services business? And again, if there are any similarities or dissimilarities versus InstaHealth. And again, maybe a related question, does it at all make any sense to do anything inorganic in InstaHealth, or do you think organic is the right way to build this business?
Manish, it's a good question, and it goes back a little bit into our philosophy of building. We have always focused on what is right for the customer and the service professional. 99% of our energy and bandwidth goes into solving for those two constituents. We do watch competition from time to time, and we do learn from competition. And we've seen various cycles, not just in the early periods. Across the last decade, we've seen various cycles of competition entering and competition intensity increasing. So it's nothing new for us. We look at it and we learn from them, but we keep our eyes focused on the customer and the service professional. Particular to InstaHealth as a category, our sense based on a few media reports, etc., is that we are off to a good start and we have clear market leadership. But the category is early and evolving.
We would like to continue to deliver great customer experiences and firmly cement this market leadership just as we have in our core services business.
Great. Thank you so much for answering all my questions. Really appreciate it. I'll jump back in the queue.
Thank you,
The next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead.
Hi. Thanks for taking my question and very good set of disclosures and detailed shareholder status. Thanks for that. So my first question is on your interesting disclosure.
I'm so sorry to interrupt you, Gaurav. Can you please speak a bit louder? You are not that clearly audible.
Am I audible better?
Yes, now it's better. Please go ahead.
Thank you. So my first question is on the interesting disclosure that you've made on the number of hours which has been steadily going up per service professional per month. I think it's a good proxy of utilization. But what should be the right base to understand where are we in this journey? And also, when you look at from a density point of view, the number of people that you have per service micro market, what is the right density to reach to over long term where you think this utilization metric can move up substantially?
Yes, that's a good question, Gaurav. And as you rightly said, the monetized active hours on the platform per service professional per month has been steadily growing from 59 hours per month in FY22 to 83 in FY25. In our RHP, we had also shown that if we cut this by various cohorts of service professionals, then the top 10% are reaching almost 135-140 hours, and the top 5% are reaching 150 hours. And that is largely a function of densification. Those service partners and those cohorts represent our most dense micro markets. In H1, FY26, this number has further increased to 89. So there is consistent improvement in utilization as a function of densification. As we densify micro markets, our service professionals spend less time waiting for jobs or traveling between jobs and more time inside consumers' homes.
We think this trend should continue for the foreseeable future. We are still early in the utilization journey. As I mentioned, in the top 5% of micro markets, this number is almost 1.8-1.9x of the platform average. So there is plenty of headroom for growth here.
Got it. My second question is on Native, alluded to exciting product roadmap ahead of us in the shareholders' letter. So if you could help us to get a peek into what could be these categories, or is it more to increase the breadth of products in the same categories?
Yes, it's the latter. I think we have been working on a set of innovative product launches in water purifiers and smart electronic door locks. At the right time, these products will get launched, and we'll let you know. But it's within the same categories.
Okay. Last question is on InstaHealth segment. What would be an ideal AOV point which helps us to arrive at a break-even situation? Would that be driven by utilization, more number of hours? Would that be driven by adding more services on that or more breadth of services on that? Just trying to understand the kind of a theoretical break-even point for that.
Yeah. At the cost of sounding slightly repetitive, I would have to say that it is still early, Gaurav. We are also learning. And definitely, the AOVs have to go up higher. That's clear. The discounting has to reduce. Network densification will be also very important. And our focus will be that InstaHealth in and of itself needs to see improving margins, improving unit economics, and eventually, in and of itself, have a path to adjusted EBITDA break-even. But it's still very early for us to have a clear view on what stable-state unit economics look like and stable-state AOVs look like. It's also competitive, so there is an evolving picture here. But be rest assured, as and when we learn more and we know more, we will definitely disclose that to help investors make a smarter decision around this.
Thank you. All the best. I'll fall back into.
Thank you. The next question is from the line of Sachin Dixit from JM Financial. Please go ahead.
Hi, I'm Lashin Team. Congratulations on the great listing. I had a few questions. To start with, my first question was on the international side, right? There was a pleasingly surprising growth that you delivered there. You have highlighted in the shareholder letter that some part of it came thanks to the beauty zone. What do you think of this growth going forward? How sustainable it is? Noon, obviously, is more of a UAE and KSA-based entity. What is happening in Singapore? If you can put it simply as is.
Yeah. Sachin, if I understood your question correctly, you said the growth in UAE and Singapore looks very robust, and we've had a tie-up with Noon. How sustainable is this growth? Noon is obviously limited to UAE. There was some disturbance in the lines. I'm hoping the question is correct.
Right. Yeah. Then pose the question. Yeah.
Yeah. So look, I think the Noon partnership is early, and the contribution towards growth is limited right now. There is some contribution from the Noon partnership towards growth, but much of this growth is actually organic in UAE, driven by new user acquisition, solid repeat rates. And we already operate a high-frequency cleaning service there, which is similar to InstaHealth in India. The same is true for Singapore as well. In terms of sustainability of the growth, it's hard to predict the future. We would not like to give any future guidance. As base grows, typically, growth rates can become a little more moderated. Our focus is also on profitable growth. So I think we'll wait and watch. I think the business has just broken even on an Adjusted EBITDA level. We'll wait and watch and see how things evolve.
But those two markets are still very much early in their journey. They have a lot of potential. Penetration rates are very, very low, similar to India. And we do believe that in the long term, there's a long growth runway in both UAE as well as Singapore. And also, from a profitability standpoint, it has similar contribution margins to the India business. Not exactly the same, but similar. And therefore, we believe that these two businesses could also get to similar levels of Adjusted EBITDA in the long term.
Right. So that's good. Is there a seasonality? Just a quick follow-up. Is there a seasonality in international businesses for you, or it's largely still a penetration story in this sense?
No major seasonality to call out.
Understood. Understood. Sure. Moving on to Native, right? You have been alluding to having a product roadmap. I just wanted to understand because we're in there, right? So when you think of a new product, right, are you thinking from a servicing angle, right? Products where servicing is a key component, or you are thinking more from a user engagement angle? The reason why I ask this question is that between, let's say, your door locks and water purifier, I think both seem to be operating in either of these range. Both are not overlapping, so that's where I need some color.
Yeah. So look, I think let me talk about both these products briefly. Water purifiers, we firmly felt that there was a big gap in the market. Users were looking for durable, high-quality, low-serviceability products, which was not serviced by some of the existing brands. And that was the primary reason to get into that category. We felt strongly that we could innovate and launch a product that is new-age, that does not require much servicing or maintenance, and that is also connected back to the Urban Company app. So transparently discloses for you filter life, water usage, etc., juxtaposed with the opacity that the water purifier industry had operated with earlier. Smart electronic door locks is a smaller growing segment, again, connected back to the Urban Company app, so allows the user to stay engaged.
I think both these products, we saw one, clear market opportunity, two, clear ability to launch a differentiated offering for the end consumer, and three, a clear ability to have a connectedness back with the Urban Company app and own the consumer journey throughout the usage lifecycle. Those three principles are what we applied to get into these two products. We believe there's adequate headroom for growth in these two products, so we want to stay focused on these two for now.
Understood. My third and last question is on InstaHealth, right? So there have been recent media reports that one of your peers has raised another round of funding and is also venturing into new categories. I know you have said that you are still in the early stage and will evaluate. Just wanted to understand if there is any sort of plan to venture outside of the pure play InstaHealth sort of a category to something similar to what the competition is doing. Asking again because you've been highlighting that you will want to continue to be the market leader. So would you be there where the competition is there?
So our very clear priority whenever we look at any new service segment or doubling down on an existing service segment is to focus on the customer and the service professional. It is a very clear belief that we have that solving for those two constituents leads to long-term growth. To that extent, we always look at competition. We look at what they're doing. We learn from them. But our core strategy is not impacted by competitive action. It is impacted by our own first principles view on what is right for the customer and what is right for the service professional. At this point in time, we believe the opportunity in daily housekeeping is very large, very deep, and we're only getting started. Our focus is to densify our current micro markets, launch newer micro markets, and firmly cement our market leadership.
We will look at other adjacent categories at the right time as well. Nothing to announce today. But we keep doing experiments, and we look at other interesting adjacent opportunities. But independently, and if they fit into our view of what is right for the consumer, the service partner, and are they long-term aligned to our strategy in InstaHealth, we will launch them at the right time.
Understood. Thank you, Avilash, and all the best for doing it.
Thank you, Sachin.
Thank you. The next question is from the line of Vishal Biraia from Bandhan AMC. Please go ahead.
Hi. Very good, guys. Could you explain a bit more on the increase in salaries and things pertaining to the India services business except Insta? Because on a quarter-on-quarter basis, we want to get on the business, there seems to be a significant increase that led to the drop in EBITDA. So could you explain some of these heads?
Yes. I'll start, and maybe Abhay can add a bit more color to it. Fundamentally, Vishal, if you look at our India core services, salaries, and wage bill for the last three financial years from FY23 to FY25, it had remained more or less flat on an absolute level, while the business grew meaningfully in that period. We did feel that it was time to invest in certain areas such as training, audits, our internal team capabilities, as well as technology and AI. And consequently, we made these investments starting in FY26. Broadly, those are the investments that you see in that header. We think these investments are important to set up the India core for long-term compounding and long-term growth. We believe that penetration rates in India continue to remain very, very low, online penetration, and therefore, it's important to set up the business well.
Consequently, we made these investments. Anything you want to add to that, Abhay?
Just as Avilash mentioned, that we are guiding towards 9%-10% of NTV as Adjusted EBITDA for this business coming from operating level. We will look at all of our cost lines with that lens going forward as well.
Okay. So basically, the increase in cost that we have seen for the quarter and for the last quarter, as well, this will be a structural decision. This will pertain to the next.
Sorry, Vishal. I think we lost you for a bit. But if I understood your question.
It's nothing like a one-off, so here. Sorry.
Okay. So if I understood your question correctly, Vishal, you're saying the increase in investments that we have made, this is a structural investment and not a one-off. Is that correct?
Yeah.
Right. So yes, you are right. If you look at the India consumer services P&L except InstaHealth, there has been a clear increase in some of the cost areas such as salaries and employee benefits, also customer marketing, also G&A, which includes our training centers, compared to the same period last year, breaking the trend of flat costs over the last three financial years. This is a structural investment that we have made to set up India consumer services for long-term growth. Now, we believe that we should not look at these line items on a quarter-on-quarter basis, but it's definitely important to look at margins on an annual basis. We believe this financial year, we are in investment mode, but we will still end up at similar adjusted EBITDA margins as a percentage of NTV in FY26 vis-à-vis FY25.
Post that, we are cognizant that margin expansion has to happen in this business if we have to eventually reach the 9%-10% Adjusted EBITDA guidance that we have given for the long term. We're cognizant that these investments cannot be made perpetually and margins cannot remain flat perpetually. That's not lost on us. So FY26, we've made these investments to make sure that we are setting up this business for long-term success. Adjusted EBITDA margins as a percentage of NTV should remain more or less similar to FY25 levels on an annual basis. FY27 onwards, we should start seeing margin improvement.
Sure. Thank you. And one last question on the amount of investments that we should see happening in InstaHealth and Native in the medium term in the next, say, two, three years, four years?
Yes. That's a good question, Vishal. I'll start with Native first. We have a slightly more clearer picture of the P&L and how it's evolving. I think Native is progressing well. I think margins are improving. And while we don't want to commit to a firm timeline of adjusted EBITDA break-even for Native, we believe that we are moving well in that direction, and the losses are behind us. On InstaHealth, it's a little bit of the opposite. Very early, only eight months in, P&L is evolving. Unit economics are evolving. Focus today is growth and market leadership. We will be very, very firmly keeping one eye on costs, making sure that every dollar we invest has high ROI.
As and when the unit economics picture becomes more clear to us and it becomes more clear to us what is the pathway for sustainable break-even, we will come back to the investor community with the clearer guidance on timeline as well as capital deployment.
Thank you.
Thank you. The next question is from the line of Sugreet Patil from Eyesight FinTrade Private Limited. Please go ahead.
Good evening, Sugreet. I have a forward-looking question. As more platforms enter the home service space, what is Urban Company doing to build a strong edge, not just by adding more services, but by creating something deeper that makes the platform hard to replace?
Yes. That's a good question, Sugreet. Sugreet, we are still very early in the journey of online penetration and organization of the home services industry. As I mentioned earlier, less than 1% online penetration exists today. Our view is that in the long term, what will help us differentiate and continue to be relevant for the consumer and continue to grow the overall pie of online penetration, where other platforms will also come in and aid that journey, is one, very, very firm focus on customer experience, both in terms of service delivery, where we have to invest in extensive training of our service professionals, very, very careful selection, very careful onboarding, be a very firm focus on tooling, equipment, products used, and the SOPs in every single service. Our SOP manuals are very detailed. They run into hundreds of pages for many categories.
see faster fulfillment rates with network densification for every category in every micro-market. Our availability and fulfillment improve, and we have strong grievance redressal, customer support, and warranty programs. These four pillars together help us differentiate in terms of customer experience. Equally importantly, it is important that service professionals see us as the highest earnings platform, which is a direct function of the density in our micro-markets and the utilization rates. And as you have seen from our disclosures, those utilization rates have been consistently improving, so it's very important that we remain very competitive from an earnings standpoint for our service professionals vis-à-vis any other platform out there.
That's why we constantly, transparently also disclose the high earnings on our platform and also continue to offer non-monetary benefits for retention, such as free life, accidental and health insurance, scholarship for kids, and other enablement programs such as Project Udaan, which is a mobility program for our women's service partners. Three, we are a full-stack platform across 60+ services and more than 500 micro-markets in our 47 cities in India. Consumers have the opportunity to avail not one or two, but multiple services and see us as an umbrella home services platform. That trust that we have built and the brand that we have built over the years, we do believe is a strong moat as well. These are the pillars on which we will continue to invest and continue to compound. Yes, there will be other players who will also enter.
I believe that the overall size of the pie is very large, and together, it will continue to grow.
Okay. Great. My final question is on margins and cost planning. As you scale and improve customer experience, how are you making sure the company stays efficient, and which cost levers do you think will help protect margins over the next few quarters?
Sugreet, hi. This is Abhay. So if you see our P&L, the main reason why we improve margins is operating leverage and our fixed costs while improving and maintaining customer experience. So as we drive revenue growth, we will look to make sure that our fixed costs grow at a lower pace in the revenue while investing in the right areas on customer experience. We've done that in the past. As Avilash mentioned, our margins have improved over the last three years, and we will endeavor to continue doing that in the future as well.
Okay. Thank you for the guidance, and I wish the entire team the best of luck for Q3.
Thank you.
Thank you.
Thank you. The next question is from the line of Aditya Joshi from DSP Mutual Fund. Please go ahead.
Good evening, gentlemen. Thanks a lot for the questions, and thanks for the disclosures. My first question is with respect to the InstaHealth. Sir, you have seen a kind of growth rate in the last eight months, 500,000 kind of orders in total. Can you please share some kind of consumer trends? What kind of consumer behavior are you seeing here? And any subscription model or similar thoughts planned here? And customer stickiness in this particular service?
Yes. We've seen very encouraging consumer behavior in a short period of time. Customer stickiness and retention is strong. Customer repeat rates are also strong. Predominant use case is amongst middle-class households, particularly women consumers. Whenever their regular house help is on leave, both planned and unplanned leave, they look at InstaHealth as a replacement use case. And it helps that the service is instantaneous, particularly for the unplanned occasions. Interestingly, we are also seeing a smaller cohort of customers using this as a more default use case for their daily housekeeping services. These consumer trends and consumer behavior patterns are evolving and very early. We are also learning and tweaking our propositions to make sure that we are serving our customers well.
Got it. Thanks a lot for that. Next question is with respect to the international business. What's the strategy there, and how do you spot a new market? Any plans to get into new markets, or you'll penetrate more in the existing ones only? And anything on the competition in this market?
Yes. So in terms of the international business, we have a presence in UAE and Singapore through wholly-owned subsidiaries. We've been present in the UAE for the last seven years and in Singapore for the last six years. Both markets are large, yet under-penetrated, characterized by high demand density, improving online penetration, and sufficient availability of service professionals. Over the last six, seven years in both these markets, we have refined our operating model while staying focused on building a full-stack business with exceptional customer experience similar to India. We think these businesses are now maturing well, and they continue to grow at a healthy clip. Together, they have broken even, which is very, very encouraging. Of course, we will wait and watch, and we will continue to invest in profitable growth in both these markets.
In the Kingdom of Saudi Arabia, we have entered into a 50/50 JV with SMASCO, one of their oldest and largest manpower management companies, which is a listed company and a very reputable company, starting 1st of January 2025, and we consolidated that business from a revenue recognition standpoint, but we remain excited about the potential of that market as well. Again, very similar trends to UAE. We are not planning to enter any new international markets. We aim to achieve profitable and sustainable growth in our current international markets, and of course, management's time and resources will be fully focused on growing the India business and the existing international markets for the foreseeable future.
Got it. Got it. Thanks a lot for that again. Lastly, from my side, what kind of steady-state EBITDA margins can we expect in Native business?
That would still be early to talk about. I think our first priority is to get Native to an Adjusted EBITDA break-even. I would like to call out that we believe in the long term that our margins in Native should be better than the margins of traditional OEMs. There are specific reasons for that. One, a meaningful percentage of the sales comes from our own channels, which is our app as well as our service network. And two, we are leveraging our existing service ecosystem to serve customers and not recreating a new service ecosystem. And that service ecosystem gets better utilized through Native orders. So both of these are structural advantages in the P&L. We also believe our products are very well designed, very robust, and consequently, over time, just as they have in the last couple of years, they should enjoy pricing power.
All of these should translate into good long-term margins for us. As and when we have better visibility on steady state margins, we will come back and report that to all of you. Right now, the focus is on growth and continuing to improve margins to eventually get Native to an Adjusted EBITDA break-even.
Got it. Thanks a lot for answering all my queries. I wish you all the best for the remaining of the years.
Thank you.
Thank you.
The next question is from the line of Garima Mishra from Kotak Securities Limited. Please go ahead.
Yeah. Thank you for that. First question. For the core India services business, what is the seasonality you typically witness, and which quarters are thus the highest and lowest in terms of both NTV and margins?
Great question, Garima. We definitely see a step-up in NTV growth and revenue growth in the April, May, June quarter, driven by the summer, where a lot of our services, particularly air conditioner servicing and repair, as well as electricians and other services, take a step jump. The rest of the quarters remain similar. On a quarterly level, there is not a lot of variation. There is some uptick in October month as well because of Diwali, but limited, and OND is not substantially different from JAS quarter, so from a growth perspective, the clear seasonality to call out is in the AMJ quarter. From a margin standpoint, again, I would like to iterate that we would request the investor community and the analyst community to look at our margins on an annual basis rather than a quarter-on-quarter basis because there would be movements from a quarter-on-quarter basis.
For example, to invest in the growth of AMJ quarter, we might do marketing in the Jan-Feb-March quarter. Our annual appraisals happen in January, etc., etc. So there are multiple moving items in the cost structure, and therefore, my humble submission would be to look at margins on an annual basis and look at margin expansion on an annual basis in our core India services business, Exhibit Standard.
Very clear. Thank you. Next question. What customer overlap are you witnessing between the UC app and, or let's say, your UC core services and InstaHealth consumers? And do you envisage the need for a separate app for InstaHealth?
We see reasonably good and strong customer overlap. And we think both the segments are catering to the middle-class Indian consumer who is upwardly mobile, living in urban cities, and wants high-quality services at their doorstep and is pressed for time and looking for convenience and quality. So to that extent, these are not dramatically different consumer segments that we are targeting. In fact, it is the same household, which is why we also believe that InstaHealth will make the platform more relevant for the middle-class Indian urban household.
Got it. And last question. How different is the service partner onboarding process for your core India business versus InstaHealth? And given there are many companies which are launching similar businesses, how easy or difficult are you finding to ramp up supply of partners on the InstaHealth platform?
Garima, we have an uncompromising, time-tested, strong operational playbook on service partner onboarding. Most of our service professionals come through referral or word of mouth. Post that, they go through a very stringent selection process, multiple rounds of screening and interviews. We want to make sure that, particularly for intent and customer centricity, but also for skill, we are onboarding the right people. Post that, service professionals go through a systematic training, which is applicable both for InstaHealth as well as our core services business, and after that, they go through a shadowing process for a few days, and then we also monitor and handhold them for the first few weeks on the platform to make sure that their ratings are at a certain threshold. On an ongoing basis as well, they are measured on ratings, on-time fulfillment, and adoption and adherence to our SOPs.
All of these guidelines and all of these approaches to building are consistent across InstaHealth and our core services business in India. This is an operationally intensive business where you have to build this out across hundreds of micro-markets in tens of cities. And we have been fine-tuning this playbook category by category over the last decade. That playbook is what we have implemented clearly in InstaHealth as well, which in our view has led us to rapidly scale to clear market leadership in this segment. It's still early days. We will continue to focus on cementing that market leadership, on making sure that best service professionals are onboarded and retained on the platform. And we continue to invest in their training and their well-being.
Very clear. And maybe I'll squeeze in one last one here. For the InstaHealth platform, is there any sort of investment amount you have in mind over what this number could potentially be over, let's say, the next two to three years? Thank you.
Yeah. And sorry, I think I missed answering one of your earlier questions on do we foresee a separate app for InstaHealth? Not at this stage. But if we do in the future, we'll let you know. Again, on the total investment quantum, I would say it's early for us to put a number out there. We are learning. It's a young business, only eight months old. The unit economics are evolving. And any number we put today would be premature. So we don't want to put a guidance that we don't have firm confidence on. That being said, please be rest assured that we are very, very focused on making sure that every dollar of investment that is going in here gives us high ROI. We understand that these investments are meaningful and have moved us as a company from a profitable company to a loss-making company.
That's not lost on us at all. We are hard at work to bring back that original level of profitability and to continue the journey profitably. This opportunity is here and now. It is immediate, and it is very meaningful and very strategic to us. In our view, it is the right thing in the long-term interest of our shareholders. We have demonstrated in the last 10 years that we've been good custodians of capital in our journey as a private company. For the longest time, we've had nearly $200 million on our balance sheet, and we hadn't spent it. So that ethos will continue even as we build InstaHealth. We will make sure that every dollar goes a long way in creating long-term shareholder value.
Noted. Abhiraj, thank you so much and wish you the best.
Thank you, Garima.
Thank you. The next question is from the line of Aryan from Groww Mutual Fund. Please go ahead.
Yeah. Hi. Thank you for the opportunities. So my first question is on InstaHealth. In which areas or micro-markets are we currently operating in?
We are operating in a few cities today, the top cities, essentially, Delhi, Bangalore, Bombay, and select micro-markets of Pune and Hyderabad, and I think select micro-markets of Kolkata as well. Again, in these cities, we don't have complete city coverage. We are going micro-market by micro-market. We are learning from our core services platform where we believe that adoption will be high in the early days, and focusing on a micro-market by micro-market rollout.
Okay. As we expand into more micro-markets, do we anticipate the losses to go up for this financial year at least?
We would not like to give a guidance at this point in time on the loss trajectory of InstaHealth. I would reiterate that the long-term potential of this category is very meaningful. We are very cognizant that the losses are meaningful, and we will make sure that every dollar invested goes a long way in terms of the ROI potential.
Okay. And my second question is on the JV in KSA. When can we expect break-even there?
Hi. This is Abhay. So we've been in that JV since the beginning of this year. I think it's early days yet for the JV to break even. We are seeing strong growth, and we see a market which is two to three times the size of UAE. There is a strong demand for our services across cleaning and other categories. And we are building that market in partnership with our JV partners, SMASCO. So with their manpower management and training skills and our technology, we believe that there is growth left in that country. So yeah, we will invest in that market sometime.
Okay. That's it from my side. Thank you for answering the question.
Thank you. The next question is from the line of Manish Poddar from Invesco Asset Management. Please go ahead.
Yeah. Hi, Abhiraj. Just two questions. First is, when you're looking at the business internally, do you all look at this business, let's say?
We lost the line for the current participant. We'll move to the next question, which is from the line of Awais from Sundaram. Please go ahead.
Hi, team. Am I audible?
Yes.
Yes, you are.
Loud and clear. Yeah. Thank you for taking my question. So my core question is on your India services business. It will be helpful if you talk a bit more on the service provider onboarding and all the costs associated with that because even if I see from quarter one to quarter two where a large part of the InstaHealth addition has happened, we have seen a sizable chunk of providers coming in. So I just wanted to get some sense on that. And secondly, even from a point-to-point basis, we have seen around 3,800 kind of addition on service provider side. So is this a function of new cluster addition, or what would be some interesting details on this? That would be helpful. Understood.
If I understood your question correctly, Awais, you said that in the core India services business outside of InstaHealth, how are we seeing service partner onboarding and what goes into service partner onboarding and onboarding costs? Is that correct?
Right. Right. Right.
Yeah. So look, I think service partner onboarding continues to happen in core India services. We have a structured process. Typically, most service professionals come through referral or word of mouth. After that, they go through a systematic selection process, and then there is systematic training. In the RHP, we did disclose for FY25 the average cost of onboarding of a single service professional in the India core services business, which is in the line of around INR 65,000-INR 75,000 depending upon the category per partner onboarded. And we continue to see similar numbers in the India core services business in FY26 as well. Nothing has meaningfully changed there. So I think the focus will remain on onboarding the right type of service professionals who are aligned with the platform's ethos, with the customer centricity, and investing in their training because we see long-term ROI on this.
Also want to highlight that particularly in the India core services business, we are also seeing better utilization of service professionals. And that's a trend that we've called out in the shareholders' letter. And consequently, the absolute count of active service professionals on a year-on-year basis may not move linearly with NTV and revenue because some of the growth is also addressed through better service professional utilization.
Yeah. Just a follow-up to it, Amit. We have the net addition number for your service providers from 24 to 25. Would it be okay to help us with the gross additions for the same time period?
Not at this stage, but we have made a note of your request. We'll internally deliberate, and if we feel it's a useful metric for the broader investor community to understand our business better, at the right time, we'll disclose it.
Thank you for taking my questions. I'm all the best.
Thank you, Awais.
Thank you. The next question is from the line of Manish Poddar from Invesco Asset Management. Please go ahead.
Yeah. Hi. Audible now?
Yes, Manish. Very much. Please go ahead.
Yeah. Yeah. So yeah, thanks. I just had two small ones. So the first thing is when you're looking at the business internally, do you look at QoQ or do you look at YOI generally for the services part?
YOI.
YOI Okay. And the second piece was I've gone through the shareholder's letter, the shareholders' letter. Pardon me if I missed something. So I'm just trying to understand. Let's say, have you mentioned anywhere, let's say, services per customer as a metric just to understand how is the adoption of multiple services increasing at the household level, let's say, on a quarterly basis?
No. That metric, Manish, has not been disclosed at this stage. If I'm getting your question correctly, you mean different service categories adopted by a single household in a time period?
Right.
Yes. We have not mentioned that metric at this stage. There was a cohort view that we had given in the RHP up until FY25 of category adoption, and at the right time, we feel that a refresh of that cohort view is needed. We will provide that to the market.
So effectively, when you all are also looking at the metric internally, you all are looking at absolute number of users getting added and, let's say, price per blended AOV when you take as blended number of services, not really the third metric as, let's say, service per user as a metric. I'm just trying to think because if that's a relevant metric for you internally, it will help us to better appreciate the business when we are analyzing the business. I'm just trying to think from that lens.
Yeah. Point noted, Manish. We've made a note of it, and we'll reflect internally deliberately. We certainly look at category adoption as a metric. It's an important input into the LTV of the user, and we look at multiple other metrics, which we may not necessarily disclose, but I've made a note of your point and your request, and we'll internally deliberate and, if needed, look at whether we want to add it or not in future disclosures.
Yeah. Sure. Sure. Sure. Sounds good. Thank you so much.
Thank you, Manish.
Thank you. Thank you. The next question is from the line of Jaideep Mukhariya from Ascent Capital. Please go ahead.
Hi, Abhiraj. Congrats on a good set of numbers, so since you alluded to this when some other participant asked you about the spikes in terms of the core India consumer business that the company witnesses, which is either in the summer season or in the festive season which just went by, just wanted to color on how did the India core consumer business perform in the last month because you've given quite a good color in terms of how InstaHealth and Native have been giving preference. We wanted to get a sense of how are our core businesses performing, and I have a follow-up, which I'll ask once you probably address this one.
Yeah, so thank you for the question. Yes, you're right. There are two spikes that we see, one in the summer, which is meaningful, and a smaller festive spike around Diwali and related festivals in India. Let me start by first talking about the summer because those are disclosed numbers. I think this year, the summer was muted. We had unseasonal monsoons and rains. It was a relatively cooler summer. And as a result, our categories around aircon, electrician, etc., did not see the kind of uptake that we would have hoped for, which is why NTV growth in the India core services business in the first quarter of this financial year was in the 10-11% range year-on-year. That growth has bounced back. It was a one-time impact. That growth has bounced back this quarter to 19%. Vis-à-vis Diwali, not being in a position to give details today.
Certainly, when we have the Q3 results come out sometime early next year, that picture will become much more clear.
Sure. Just one more follow-up here. In terms of the India core consumer businesses, since there are quite a few categories that we are working in, if you could just help elaborate or give some color into the subcategories in terms of their growth, etc., for us to appreciate the future potential and the nuances around each of these categories because the India consumer business itself is quite large, and that is the profit pool, as I understand, of the company.
Yes. Another good question, and let me tell you the major categories and the subcategories within it that we are excited by and that we see potential in, so let's start with deep cleaning. It's a relatively big category for us. Here, we look at deep cleaning of bathrooms, sofas, carpets, kitchens, and the full home and various parts of the home. Consumers utilize this not very frequently. It's not a high-frequency use case, but on occasions, such as around festivals, around guests coming over, move-in, move-out use cases, and every once in a while when they feel that this need is there, so that's a very large and growing vertical for us with several subcategories. We then look at repairs as a big vertical, which includes both handyman repairs, electricians, plumbers, and carpenters, as well as appliance repair, AC, and all other varieties of appliances.
A growing vertical essential to good living and maintenance of your home. Again, a vertical that we are quite excited by in terms of its future potential. A vertical where faster fulfillment is an important focus area for us. The beauty vertical has historically been very important for us. This has several sub-verticals: salon services, both skin and hair for women, men's haircut and grooming services, as well as massage therapy for men and women. This is a large vertical for us and has been seeing good traction over the last few years and continues to see that this financial year as well. The proposition is solid, which is that instead of stepping out and going outside to get the service, you can get the service within the four walls of your home, and we believe that is a long-term trend.
Consumers want convenience, and consumption is shifting towards your home. And that trend will continue to play out in the beauty services vertical as well. And finally, we have painting and Revamp, where we look at wall decorative solutions, both wall painting as well as wall paneling and decorative solutions. This is a relatively smaller but growing vertical for us and also of importance strategically.
So Abhiraj, is the growth and the salience of these subcategories within the India consumer business broadly in a similar ballpark, or is there some skew that probably we need to factor in our numbers?
So there are certainly certain verticals and certain sub-verticals that grow faster than the others, but all of them are growing well and in line with our expectations internally. And in our view, all of them have very, very strong headroom for growth. Even our highest penetrated sub-vertical in our most penetrated city would have adequate headroom for growth. So directionally, long term, we are excited by all of these verticals.
Sure. Abhiraj, that's excellent. Thank you so much.
Thank you. The next question is from the line of Pallavi from Sameeksha Capital. Please go ahead.
Yes. Thank you for taking my question. I wanted to understand in terms of what's the number of employees we have in InstaHealth, and are they on our roles, any of them on our roles itself, and is it a fixed-cost business for us?
Yes. So InstaHealth, like our core India services business, operates on a gig worker model. They are not our employees. They are gig workers who get paid out on a per-job basis. And there may be some minimum guarantees and early earnings commitment that we do as we densify the network. But fundamentally, it is a gig model similar to the rest of our India core services business. The specific number of active service partners in InstaHealth is a metric at this stage we haven't disclosed. But at the right time, if that's a metric that we feel will help investors understand the business better, we will consider disclosing it.
Is it a part of the total service proportions right now, or?
Yes, very much. So in the consolidated number that you see for active service professionals, InstaHealth is also part of it.
Right. And my second question was in regard to your total number of employees. What would that number be? It's around 1,400, including the subsidiaries. And any of the minimum guarantees, are they included in the employee expense? I mean, the minimum guarantee for service partners, yeah.
The line on staff, we've not disclosed the employee count specifically in these financials. We have disclosed that number in our RHP. Second, to your question on minimum guarantee and its classification in our P&L, it is not included in employee cost. It actually lies above our contribution profit, so if you see the line of the other semi-variable expenses, we've got a note over there that explains what is the composition of the expense line and minimum guarantee sits over there.
What would be the total number of employees, including the subsidiaries? It was 1,400 in June.
Abhay just mentioned that we have not disclosed that number in the shareholders' letter, so we will not be in a position to disclose it today. Thank you.
All right. Thank you.
Thank you.
Thank you. The next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead.
Hi. Thanks for taking my question again. I was just curious to understand the adoption of new categories like wall decor, painting, which are typically low-frequency and high AOV categories. How do you compare the complexity of building this vis-à-vis other categories that you have? Because my understanding is that as product AOV increases, the probability of differentiation also increases. And given that the frequency itself is low, measuring the repeat rate itself is challenging to understand if that differentiation is happening or not. Thank you.
Yeah, so Gaurav, that's a good question. You're absolutely right that the AOVs are much higher than the platform average, and therefore, even if the consumer transacts in one of these categories once in a five-year period, it substantially improves the lifetime value of that user. Disintermediation, in our view, is not a difficult problem to solve here, especially given that it's a one-time use case. We track the sort of delivered percentage of these bookings that we get, how many of them are fulfilled, and that gives us a fairly good sense of where de-intimidation is, and we have not seen it to be a major challenge at all, but the bigger challenge is exactly what you've articulated, which is the complexity in delivering a high AOV job.
And as a result, we've been sharply focused for a few years now only on walls and haven't ventured outside of walls. So we started with simple wall paintings, and then we slowly and steadily went into adjacencies of your wall, whether it's seepage solutions, wall paneling, and related polishing, etc. But we've remained focused only on walls and servicing your walls because we believe that's a very large space. In fact, if you look at OEMs in the product categories for your home, paint OEMs represent among the largest spends. The reason is painting is a very, very large percentage of the total home interior and home renovation spend. We want to stay focused on walls and wall improvement and continue to build depth and expertise there to make sure we do justice to our consumer proposition.
Got it, and last question on how do you think about the potential number of cities that these services would be amenable for in terms of future, from a future perspective, beyond the top 50 cities? Would it be like top 150 cities? Would it be like top 100 cities? Thank you.
Yeah. Good question, Gaurav. So in India today, we are in about 47 cities. I would like to highlight that we would not have complete micro-market coverage or category coverage even within these cities. And we had shown a two-by-two of categories and micro-markets in our RHP, where the theoretical maximum was about 30,000, roughly 60 categories into 500 micro-markets in the current 47 cities. And we had shown that we had only been able to populate about 10,000-11,000 of that 30,000. So there's a long way to go even within these 47 cities, not just in terms of coverage of categories and micro-markets, but also going deeper into those micro-markets. So that will be our first and highest priority. We will slowly and in a calibrated fashion add more cities as well over the next few years.
We don't think they are relevant from an immediate growth standpoint, but from a long-term potential standpoint, we certainly think the top 100 to 200 cities have potential. Hard to say exactly whether it's 100 or 150 or 200, but yes, we definitely see a market in the top 100 to 200 cities over the long term.
Thank you and all the best.
Thank you, Gaurav.
Thank you. The next question is from the line of Leena Mehta from Trident Capital Investments. Please go ahead.
Hi. Good evening. Thank you for taking my question. I just wanted to ask that on an average, what is the growth?
I'm sorry to interrupt you, Ms. Leena. We are unable to hear you, ma'am. Can you please speak a bit louder?
Am I audible now?
Yes, you are. Please go ahead.
Yeah. So thank you for taking my question. So I wanted to ask on an average, what is the gross margin the company is making while selling the products to the service providers?
Leena, hi. This is Abhay. So I'll call out a couple of things. One, we see the total business as one. So between services and products, we see the business as one because our services will not be successful unless we supply high-quality products. So we measure performance and profitability together. Second, just to tell you, gross margins in this business, when we do measure them, have always been profitable. And the product of the business separately also is profitable.
Okay. And if I want to have a service-type metric, like metrics based on the services, like average product time per service time?
Sorry, yeah, this is Abhay Mathur. I thought I'll just jump in to help you there. If you look at our management view, management P&L, we've given a management view internally how we look at it. We've given revenues from products B to B to C. And you can see that that figure for Q2 FY26 is about INR 54 crores. And interestingly, we've also mentioned cost of products B to B to C at INR 39 crores. So that actually is the reason to show this is to actually call out the gross profit per segment. So one can actually literally look at gross profit by services, B to B to C products, and Native. And here, we've seen, depending upon the category of product, anywhere ranging from blended average of about 25%-30%.
In certain private labels, it could be higher, but that's the range, and it's computable from the management view that we've provided.
Okay. Okay. Sure. Thank you. Another question I want to ask is, do we have a data on the service-level metrics, like average product spend per service type? There are different types of services. So if I want to have a service-level metric, unit economics for the service level, so what are the revenue per service type and the expenses and the product expenses and customer acquisition cost? So unit-level economics based on the service categories?
Yes. Yes. That's a good question, Leena. In our RHP, we have shown the walk of the unit economics at a service level from what the consumer pays, then removing GST, removing the payout to the service professional, what is the take rate to work on company, how much do we earn through other means such as platform fees, subscriptions, etc., and then we've also shown what our direct costs are, and therefore, what is the contribution in the final adjusted unit level. So that's one view, which is evident in the RHP. It's a waterfall diagram that you can refer to. Also, we have shown for a service professional, the individual unit economics, and this is as part of something we call the Partner Earnings Index, which we've been publishing transparently since 2021. A version of that is also there in the RHP.
It talks about, for the average partner, what is the gross earnings, what is the commissions, fee, day-to-day, etc., and therefore, what is the net earnings, and then looks at travel costs and product costs per service professional, and then finally, it has that net take-home earnings. I don't have the figures.
I have definitely looked at all those things, but just wanted to have a view on the service-level metrics at different categories of services which are more profitable and where your focus is more on?
Understood. So right now, we have not given a category-level breakdown of these two. We've only given a blended average in the RHP for our core services business in India. And made a note of your request, and we will look at it and deliberate internally. And if we feel it's a useful metric at the right time, we will disclose it.
Okay. Okay. Sure. Thank you. Thank you so much for taking my question.
Thank you, Leena.
Thank you.
The next question is from the line of Arvind Koripaka from IME Portfolio Managers LLP. Please go ahead.
Hi. I'm audible? .
Yes. Please go ahead, Arvind.
Yeah. Hi. Thanks for the opportunity and congrats on the listing. Quick question on InstaHealth. I know it's still early days, but have there any been instances of platform leakage given the high frequency nature of the service?
Arvind, at this point in time, nothing substantial to call out, particularly because for most of our consumers, this is a replacement use case, and often, those replacements happen last minute, so by definition, it's hard for the consumer. The proposition is strong. Let me put it that way, but it's something for us to track, especially as consumer behavior evolves, as more and more consumers start defaulting to this use case, and as pricing moves towards more steady-state AOVs. This is certainly something that we will be vigilantly tracking, and in line with how we think about the core India consumer services business, our focus will be on value addition on both sides to solve for disintermediation, if any, rather than preventing disintermediation. We don't believe preventing disintermediation is sustainable.
No matter how many checks and balances you put in, if service professionals and consumers want to bypass the platform, they will find innovative ways to do so. Only sustainable way is that both customers and service professionals believe that going through the platform is more valuable. For customers, that is a function of trust. That is a function of immediate availability. That is a function of knowing that there is adequate grievance redressal and customer protection programs in place, and also lock-in programs. And for the service professional, there is fundamentally a belief that by working on the platform, I can maximize my earnings because of the higher pricing power that the platform accords to me and also the better utilization that the platform delivers for me vis-à-vis me being on my own.
And also, the platform is taking care of my non-monetary benefits such as social security schemes, training, soft loans, etc. In InstaHealth, in particular, our service professionals are very, very concerned about their safety and health. And we have invested in safety features, which you can see on the app. So all of these things and more are ways to create value for both sides of the marketplace so that they choose to go through the marketplace. And that, we believe, is a sustainable way forward to solve the disintermediation problem.
Sure. Sure. That was helpful. The second one is around the model itself. Now, when we study the home services platforms that have been around or failed over the past decade or so, most of them have taken the pure marketplace approach. However, UC has done a fantastic job in almost a hybrid services company and a marketplace sort of a thing. So there's a high touchpoint with the service partner. Is that the bottleneck in terms of growth for us, given the fact that we need to onboard partners and train them for a period of time, equip them, and ensure that the quality is right out there? Is that the biggest bottleneck in terms of our growth?
Arvind, I look at it slightly differently. I think our full-stack marketplace model, which controls the experience end-to-end for the end consumer and also empowers service professionals deeply across training, tooling, technology, and better livelihood and better earnings, is the only sustainable long-term compounding growth model in this category. That is my individual view. It may not deliver very short-term high growth rates like an asset-light model, but it is a durable compounding model that can grow much faster than the industry over a long period of time because it underpins on creating trust for consumers and service professionals alike, which is the bedrock of home services.
Perfect. Perfect. That's about it from my end. Thanks for the opportunity.
Thank you, Arvind.
Thank you. The next question is from the line of Deepak Shah from Nirmal Bang Institutional Equities. Please go ahead.
Hi. Thanks for the opportunity. I just have one question. You mentioned that during AMJ quarter, you have some dependencies on the summer relevant services. Now, if you can help us understanding your broad thoughts on diversifying your dependencies from those kinds of services given the uncertainty around monsoon and all that we have seen, what that number would be, say, this year and how we are trying to reduce our dependency from those kinds of services to maintain kind of steady state of revenue during those quarters? So this is just one question I have. Yeah.
Very good question, Deepak. Deepak, over the years, we have been diversifying our service portfolio and our overall revenue pools to reduce dependency on the summer categories in the AMJ quarter. We had disclosed in the RHP that summer categories in the AMJ quarter had contributed about 24.5%, if I'm not mistaken, to the overall revenue. Now, while it was a very impacted summer due to unseasonal rains and relatively cooler weather, and all summer-friendly categories, particularly in consumer durables, etc., had taken a meaningful hit. Because of our diversification across different revenue pools, different lines of businesses, not just within India consumer services, but also native, international, etc., and now increasingly InstaHealth, at the time, it was not meaningful, our overall revenue in AMJ for the consolidated business grew 31% year-on-year vis-à-vis the same period last year.
That itself is a good sign of the diversification that we've been doing, and that will continue to happen to reduce the dependency in the summer quarter on summer-friendly categories.
Thank you. That's helpful. Thank you. And all the best for the quarters.
Thank you, Deepak.
Thank you. Ladies and gentlemen, that was the last question for today. With that, we would like to close the call here. Thank you, members of the management, and thank you all the participants for joining Urban Company's results call. You may now disconnect your lines.
Thank you.