Elara Capital, in its analysis of global technology company Affle, said that it's India revenue growth continued to remain strong with growth of 19% YoY (22% YoY average growth in the last 3 quarters) despite of volatile ad environment. Contributions are expected from developed markets to increase sequentially in this quarter due to the acquisition of YouAppi and the realignment of market strategy and changes made by the promoter. Here is the complete statement:
Affle reported revenue growth of 17.0% YoY with organic revenue growth of 4.3% YoY. The total revenue growth is expected to be higher in the coming quarters since only 2 months of YouAppi’s financials were included in Q1. India revenue growth continued to remain strong with growth of 19% YoY (22% YoY average growth in the last 3 quarters) despite of volatile ad environment; the international business grew 16.1% YoY, largely due to the acquisition of YouAppi and continued momentum in the emerging market. The organic revenue of the international markets declined 2.1% YoY but grew 2.2% QoQ.
We expect the contribution from developed markets to increase sequentially in this quarter due to 1) acquisition of YouAppi and 2) realignment of market strategy and changes made by the promoter. There has been a negative impact of ~140bps in the EBITDA margin due to consolidation of YouAppi’s financials (YouAppi has an EBITDA margin of ~8%), excluding which the margin grew 85bp YoY. Affle’s business continues to remain resilient due to its conversion and ROI linked strategy.
Highlights
- Affle India reported revenue of INR 4,066mn in Q1FY24, a growth of 14.3% QoQ & 17.0% YoY. The revenue growth was broad-based coming from both CPCU business and non-CPCU business, across India & International markets.
- In Q1FY24, revenue from India stood at INR 1,249mn (30.7% of revenue, up 19.0% YoY) and international revenue stood at INR 2,815mn (69.3% of revenue, up 16.1% YoY). India growth was broad-based coming across top industry verticals and CPCU business continued to witness strong market traction whereas International business increased due to robust growth in emerging markets, continued on-ground efforts & realigned market strategy for developed markets, combined with the acquisition of YouAppi.
- For the quarter, enterprise platform revenue stood at INR 24mn (0.6% of revenue, up 0.3% YoY) whereas consumer platform revenue stood at INR 4,041mn (99.4% of revenue, up 17.1% YoY).
- EBITDA for the quarter stood at INR 781mn, up 13.2% QoQ & 13.8% YoY led by revenue growth partially offset by increase in data & inventory cost (up 14.8% QoQ & 12.9% YoY), increase in employee cost (up 13.9% QoQ & 30.3% YoY) and increase in other expenses (up 13.6% QoQ & 52.0% YoY). Although data & inventory cost as % of revenue decreased 222 bp YoY (61.1% of revenue in Q1FY24 vs 63.3% in Q1FY23). EBITDA margin stood at 19.2%, down 18 bp QoQ & 55 bp YoY mainly due to lower EBITDA margin of YouAppi.
- PAT for the quarter stood at INR 662mn, up 6.1% QoQ & 20.3% YoY led by revenue growth, increase in other income (up 31.3% YoY) and decrease in income tax (down 56.6% YoY) partially offset by increase in D&A cost (up 55.2% YoY) and increase in finance cost (up 58.0% YoY).
- Converted users in the CPCU business stood at 68.7mn (up 11.0% YoY) during the quarter. CPCU rate stood at INR 55 (up 5.6% YoY).
Exhibit 1: Quarterly financials of Affle
|
(INR mn)
|
Q1FY24
|
Elara E
|
Diff (%)
|
Q4FY23
|
QoQ(%)
|
Q1FY23
|
YoY(%)
|
|
Revenue
|
4,066
|
3,730
|
9.0
|
3,558
|
14.3
|
3,475
|
17.0
|
|
EBITDA
|
781
|
699
|
11.7
|
690
|
13.2
|
687
|
13.8
|
|
Pre-Tax Profit
|
701
|
708
|
-1.0
|
699
|
0.3
|
647
|
8.3
|
|
Net Profit
|
662
|
623
|
6.3
|
624
|
6.1
|
550
|
20.3
|
|
EPS (Rs)
|
5.0
|
5
|
6.3
|
4.7
|
6.1
|
4.1
|
20.3
|
|
Margins (%)
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
19.2
|
18.7
|
|
19.4
|
|
19.8
|
|
|
Net Margin
|
16.3
|
16.7
|
|
17.5
|
|
15.8
|
|
Source: Company, Elara Securities Research
