Nazara Q3 consolidated revenue up 42% to Rs 185.8 crore

Gaming and sports media company Nazara Technologies' consolidated revenue for the third quarter ended 31st December 2021 has increased 42% to Rs 185.8 crore from Rs 130.4 crore. The company's expenses have jumped to Rs 155.6 crore from Rs 103.1 crore.

EBITDA for the quarter was up 11% to Rs 30.2 crore from Rs 27.3 crore, while the EBITDA margin stood at 16.3% in Q3 FY22 vs 20.9% in Q3 FY21. The company’s net profit has dropped 17% to Rs 14.8 crore from Rs 17.9 crore.

For the nine months period, Nazara declared revenue of Rs 446.6 crore compared to Rs 330.8 crore, a growth of 35% on a YoY basis. Its 9MFY22 EBIDTA surged by 141% to Rs 79.7 crore as compared to Rs 33.1 crore in 9MFY21. The net profit zoomed 355% to Rs 42.8 crore from Rs 9.4 crore.

Commenting on the performance, Nazara Technologies Group CEO Manish Agarwal said, "Overall, we are pleased with our growth in strategic areas of focus while maintaining healthy profitability and cash flows. We have witnessed 75% YoY growth in the esports segment for 9MFY22 led by strong growth in revenue across all sub-segments in Nodwin and SportsKeeda. The addition of original IPs such as NH7 Weekender and expansion of our esports business into the Middle East via our acquisition of Publishme has further accelerated the growth momentum.

"Nazara’s strategy of having a diversified portfolio across business segments in gaming continues to provide us with a stable and strong platform on which we can continue to build future growth and success. Nazara continues to remain committed to building multiple growth levers across gamified learning, freemium, esports, and skill-based real money gaming via growth in its current portfolio and the addition of more offerings in the ‘Friends of Nazara’ network through strategic M&A."

The company has noted that eSports is one of the fastest-growing segments with a surge in revenue and EBITDA. Revenue from the e-sports segment surged 89% to 109.3 crore while EBITDA was up 52% to Rs 24.2 crore. It also stated that Nodwin and SportsKeeda are on a strong growth trajectory and integration of OML business into Nodwin and expansion into the Middle East via Publishme is giving further flip to the growth momentum in this segment.

Revenue from gamified early learning segment, which comprises Kiddopia Apps, increased merely 1% to Rs 47.2 crore. The company said that the revenue accounting policy has moved to daily amortisation of revenue leading to a one-time Rs 6.1 crore reduction of revenues in Q3 FY22 in Gamified Early Learning segment. EBITDA from the segment was down 27% to Rs 6.1 crore.

The company has also said that Kiddopia saw an increase in active subscribers by 3,039 paying subscribers to a total of 327,738 subscribers at the end of Q3. The negative impact of Apple IDFA privacy policy changes on marketing spends has been stabilised and QoQ spends are now increasing, Nazara said.

The revenue from the Real Money Gaming (RMG) segment has risen 95% to Rs 10.7 crore. The company reported an operating profit of Rs 10 lakh versus an operating loss of Rs 2.2 crore. The company said that its RMG segment is first to integrate HalaPlay and OpenPlay into one common tech platform and then going forward continue to look at building the segment through consolidation.

Telco subscription revenue declined 10% to Rs 12.9 crore while the operating profit from the segment stood at Rs 1.1 crore against an operating loss of Rs 50 lakh. The company said that the drop in revenue was mainly due to a decline in revenue from Indian business while revenue from the Non-Indian geographies has remained flat YoY. "As a part of our strategy, we are engaging with different telcos. However, this segment is not a growth driver for Nazara," it added.

Nazara saw an 8% decline in revenue from the Freemium segment to Rs 5.7 crore. Operating profit from the Freemium segment rose 17% to Rs 1.4 crore. The company said that the World Cricket Championship (WCC) game continues to be the largest mobile simulation cricket game. It is also exploring levers of growth in web 2.0 as well as web 3.0 to scale revenues of this segment. The company revealed that it is also looking at strategic M&A to add more IPs to this portfolio.