Affle (India) Earnings Call for Q3FY25

Awards silver award in Ai and ml category at the Madi 2024 best use of martech at India digital award and multiple other awards at MMA Smart's ASAC finally as also discussed in the last quarters earnings call to strengthen our governance we have been on boarding new independent directors progressively since last year as part of the transition plan for some of the directors who are completing their term this year we aim to further augment our culture of tech Innovations and entrepreneurial leadership with even deeper commitment towards consistent execution and attainment of our long-term 10x growth goals

with that I now hand over the discussion to our CFO cap bani to discuss the financials thank you and over to you k Mr bhani please go ahead Mr bani please go ahead hello can you hear me now yes sir please go ahead okay thank you ano good morning and hope all of you are keeping safe and well we have continued to raise our performance bar to conclude quter three of financial year 25 with highest ever quarterly Revenue the p and cpcu conion in order 3 Financial year 25 we have delivered Consolidated revenue of 6,17

million with a robust growth of 20.6% year on year led by broad-based business growth across key industry vertical and in India and international markets it also marks our seventh conservative quarter for sequential growth with 10.8% quarter on quarter increase in Revenue this highlights our ability to build success of each previous quarter as we continue to execute our strategic initiatives effectively across our business STS in quarter three on a stand on basis India Revenue grew by 34.7% year on year while on adjusted basis India growth was about 19.8% year on year we delivered strong growth in

operating profit with our Eva increasing by 35.9% year on-ear and 15.9% quarter on quarter this resulted in a beta of rupees 1,314 million reflecting a margin of 21.8% of the revenue compared to 19.4% margin in Q3 last year as guided in our previous call we continue to calibrate our performance calibrate our platform offerings on premium inventories touch points and deeper ecosystem level partnership despite these ongoing curations a unified Apple 2.0 consumer platform stack continues to provide us operational efficiencies across our Tech platform resulting in further decrease in our inventory and data cost which stood at

30.3% of our Revenue this quarter ver 61.1% in the previous quarter sequen our employe cost increased by 1.5% on quarter on quarter but declines by 6.5% year on year as a past investments in Human Resources coupled with integrated team strategies continue to provide us efficiencies over last four quarters th normalizing our human resource cost other expenses stood at 8.3% of the Revenue versus 7.6% in the previous quarter of in previous quarter quter two increasingly uh primally on account of ongoing investments in business promotion activities to further capitalize on emerging opportunities across markets and maintain our

growth momentum ahead we continue uh to deliver higher profits before tax we achieved a profit before tax of rupees 1,2 37 million in this quarter with an increase of 48.4% year on year and 9% sequentially a profit after tax for the quarters was 1,2 million marking an increase of 30.5% year on year and 8.9% sequentially our operating cash flow for 9 months period was 2,837 Million we continue to prioritize efficient working capital at as such there were no material changes in collection business our robust financial performance supported by healthy balance sheet and strong cash flow

generation has further cemented our competitive positions in that tech industry with performance advertising on the rise we are well positioned to seize emerging opportunities driving sustained growth and continued success through fi25 and Beyond with this I end our presentation let's open the floor for questions thank you sir we will now begin with the question and answer session anyone who wishes to ask a question may press star n one on their Touchstone telephone if you wish to remove yourself from the question Q you may press star n two participants are requested to use handsets while asking

a question ladies and gentlemen we will wait for a moment while the question Q assembles the first question comes from the line of Rahul Jen from do Capital markets private limited please go ahead yeah hi thanks for the opportunity and congrats on strong execution uh my question pertains to uh how you see the environment uh both on the developed Market side and the uh Emerging Market side uh the question specifically uh wants to highlight how the U holiday season uh for retail space has played out because our commentary that we are hearing from the ITP

is that this has been a very strong uh quarter and it was a strong holiday season uh similarly in India there is lot of consumption theme Buzz right now after the budget announcement so we saw very strong uh Q4 in the previous quarter so does a first of all what is your view on both the side of the economic front and secondly how does that should shape up the seasonality for Q4 this time uh versus last time thank you uh thank you for your question uh first of all I think in terms of the overall

trend lines we can see from our commentary and uh discussion that it is a allr broad based growth momentum that we have seen for many many quarters for many many years in our company and this U this year is no different but you know what you see here is that in this year we also seeing a lot of operating efficiencies uh coming into play and that's because of the successful uh Integrations and strategies that we put in place as well as uh you know our very good adoption of VAR Technologies across the board um you

know helping our customers to get higher Roi and Ro so that we can defend our prices so while the volume is going up the business is growing we are able to also increase our pricing and I think that is showing the strength and the premium nature of our business and that applies across vertical across markets be India emerging markets and even in developed markets and I think that um momentum should definitely support our trajectories of course in any advertising business there is some seasonality and if you look at the Historical record of our company they've

always seen Q3 being the highest quarter and Q4 being flattish or you know sometimes a little bit lower than Q3 but given where we are today our goal is to you know stay inspired what we did last year was We Beat uh Q3 uh even though it was still flaish but we beat Q3 and that was a long-term Trend that we we could beat so yes regality plays an effect in Q3 but we have an overall growth momentum Sy that is also helping us right so when we go ahead and we get more budgets from

our advertisers it's not only about seasonality then it's about delivering performance giving them Roi R and that becomes a strong case for you know winning new customers getting more budgets from existing customers so we are hoping that Q4 will continue to be you know in line with what we have seen with Q3 and hopefully uh you know extracting more bottom line efficiencies as we execute so we are optimistic and you know I think it's not only about Q4 but also I think going forward right into the next financial years ahead our commitment to delivering long-term

10x growth kind of goals that we have set for our company is is intact the thesis is intact and we are we are very confident that we are on the right trajectory sure sure thank you that's very assuring um that's it from my side thank you thank you so much the next question comes from the line of vijit Jen from City Bank please go ahead yeahi thanks for the opportunity Anu uh so if you can talk broadly about you know how the overall you know ads ecosystem uh you know outside the big guys has changed

over the course of last one year any interest from your side in acquiring any supply side platforms for businesses uh now that it's been about 2 years since you acquired an integrated U um and I asked that question because I keep seeing uh you know all these commentaries which suggests that having more first party data or having more end to endend offerings uh is attracting a lot of uh you know ad dollars especially in the DM markets do you see that overall playing out how do you see that playing out and if you can give

a you know overview from your Vantage Point that will be very helpful sure well first of all Apple if you look at you know since pre IPO till date whatever you know published information we have always given to all our investors one of our key uh sort of uh unique aspects is that we offer a unified platform it's an endtoend unified platform and where we make a very specific point that we are unifying and simplifying and otherwise fragmented and complicated digital ecosystems what are we offering to our veres and endtoend driven Roi driven conversion with

consumers which includes not just the demand side also the supply side and all the other uh technology components that go within the system to deliver the end conversion so as a platform we are clearly a unified end to end platform and of course we have had greater emphasis from of course the revenue comes from the advertisers to the demand side platform typically get uh you know a lot of attention but when you when you talk about you know look at our whole structure the Apple 2.0 consumer platform stack that is an end to end platform

and this is a complete platform should we still look for an acquisition whether on demand side or on supply side well that depends on many factors now we wait for the typically if you look at all our Acquisitions have had long gation period you may have seen a lot of Acquisitions done since I but we a very selective we always wait for the right time we look at the targets carefully we integrate them fully maximize them fully and then we look at what's next so you know we are going to be careful in terms of

what we do in terms of Acquisitions next but there is no particular Gap in terms of our existing platforms capabilities or the comprehensive endtoend capabilities that our platform today offers into the market we also talked about you know that maybe in developed markets is slightly different I think the um the fundamental thesis is the same uh when we are going out and executing in developed markets we are looking at premium touch points we're looking at you know CTV iOS devices giving the CPC Le conversion model differentiating verticalization of our platforms and going into different industry

vertical serving those customers with Roi oriented outcomes and that I think is holding us in good stad also the customers are looking at uh learning from us right we're a thought leader in the market so we're going out there and sharing with them how we can deal with the new age gen AI use cases whether it is in you know creatives creation content creation or even on governance you know how do you fight you know digital fraud where you know gen could be used in a good way could some people some actors out there could

use it in a bad way now apple is not only creating pents but also creating use cases demonstrating that we are through responsible adoption of AI so all of these factors when you put that together we have a very strong competitive mode and a competitive Advantage as we go out and execute and this is not something that we are now pivoting towards we have always maintained this position of our platform since uh since a very long time and I mean all the UDR HPS or the you know draft presentations of Road shows since that time

talking 2018 since that time till now we're in 2025 we are consistently talking about an end to endend uh platform and these capabilities are inherent in our approach to the market I hope that answers your question and you know the uh specific you know thought that in your mind where whether we looking to acquire any Supply site platform particularly yeah sure thanks my second question is you know just on the employee cost side uh you know uh I I believe the expectation at least I had here was there was going to be wage hikes uh

in some geographies but I see that the employee costs are down 7% Yi so if you can just explain uh is that just you know ongoing integration efficiencies and those kinds of things or is there more to it absolutely so so you know this uh when you look at last year into this year we have completed the full integration of all platforms and across markets we have unified the teams the entities and so on so forth so there are some efficiencies that have come from there of course people have got appraisals and so on that's

why you see sequentially our cost has gone up and we do take care of our teams very very well we also have a comprehensive stock option plan which many people are beneficiaries of so overall we have a comprehensive structure the team is super motivated aligned and U you know we also enhancing the internal operating efficiencies because almost all the teams and departments are leveraging the you know not just the assistance but the Automation and the autonomy that we are deriving from using gen capabilities internally so we are able to do a lot more a lot

faster with the same number of people so people can get paid more they can be even more productive you know we don't need to increase our Workforce dramatically so we can keep grow growing our revenues and our productivity without increasing headcount and and I think that you will continue to see especially in Tech platform driven scalable companies and businesses so we we are certainly one and we are realizing the full power of it it's it's it's quite a fantastic thing to have happened to us and we are unlocking new use cases and new ways to

drive even higher productivity so everybody is like way more productive and therefore that leads to employee satisfaction and the value creation correct thanks those were my questions I'll jump back into the que thank you the next question comes from the line of swapnil p p from jml please go ahead hi uh thanks for the opportunity uh my questions mainly growth related and I will start off with your Emerging Markets growth uh my back of the analysis says that there has been some tapering of growth in other Emerging Markets uh in this particular quarter uh just

want to understand uh you know is there any particular uh reason for that or is it macro related I mean uh it would be great if you can just uh help us understand how how does your growth Stack Up versus the underlying market growth in uh other emerging markets and uh slightly uh you know followup to that a similar analysis to your 19% 19.8% growth in India for this quarter verus the broader digital at Tech market growth in the country thanks right first of all I think I'm very satisfied with the broad-based growth and performance

of our company uh I think the emphasis for us this year uh consistently has been on uh deriving not just growth but growth together with deeper profitability pricing and so on and so forth so it is it is not just to be seen in one dimension of growth it has to be seen as premium growth premium conversions Better Price conversions better profitability and so on and so forth so we are choosing the business that we want to do in order to achieve the growth that we have while attaining all of those metric points leading all

the way down to cash flow right so when we work across Emerging Markets it's extremely important to know how are you pricing because the customers generally the willingness to pay for a customer or you know and and how promptly they eventually pay to us all of these factors in terms of our customers we have a very disciplined execution so a sales team can bring an order but until we go through the uh you know check on all of the fronts uh whether the pricing is right whether the um you know payment terms are right and

so on so forth and we make sure all of that is taken care of then we on board the business or a campaign and I think that uh I'm very satisfied about because that shows disciplined sustainable cash flow positive and profitable growth for our company and that's what we are achieving across markets and this discipline is very important because our company is running across so many countries around the world and therefore the process to ensure that we are achieving each of these metrics well and therefore ing sustainable sensible growth is what you are seeing in

the results there is no other factor to that so if we um uh you know look at it one quarter to another I think you should probably do the analysis back of the envelope even on a broader sense and you would find that it is sustainable sensible growth and there is no uh real trend of tapering off or any particular concern on that front so I as a CEO I can tell you I don't have that concern that he we have any area of tapering of growth I think it's sensible execution that I'm pushing for

in the campany and the same goes for India I think in India as well we are you know always making sure that just because our business volumes are growing there should be no customer coming out and saying can I get a discount or can I get a lower pricing and so on we keep it very competitive very premium and that sort of approach okay uh I get your point on the sustainable profitability Improvement as well while pushing for grow which is I think very evident on your gross margin uh you have been able to maintain

or slightly through the gross margins uh but uh if I were to just extrapolate that you know uh uh will are you suggesting by any chance that gross margins will keep on improving hence forth where we are close to around 39% right now should we see that Improvement going ahead uh and in that and if uh and in part of that uh you are okay with you know slightly less growth versus the broader market growth no I wouldn't say that I mean we are a very aggressive company we're not saying Less on anything it's not

always a trade-off you can get see we have a business plan of achieving you know long-term 10x growth for our company and on that business plan you have to calibrate and say you know how much uh growth and what parameters so for each of those parameters Revenue growth margin percentage the operating efficiencies profit cash flow we are monitoring all of those metrics in an integrated fashion right and therefore it is very important for us to make sure that we must achieve all of them it's not just one of them and it's not that okay let's

go for margin and okay let's go let let's go for lesser Revenue no it's not like that I think we can get full of it but we need to be positioning ourselves right I mean if we position ourselves for let's go for right kind of customers who will will continue to increase their spends who will pay us well who themselves make enough Roi from those consumer transactions that they don't mind paying us what we ask for earning for ourselves but that's where we are going right so give them premium conversions High lifetime value uh consumer

conversions and then you can extract uh you know the right kind of margin the right kind of execution and internal efficiency has come into place so we are looking at it holistically I don't think it's a necessary tradeoff so far we have not reach that place in terms of tradeoffs so we have a plan we stick to that plan and if we are achieving that plan with all metrics achieved that's I think you know the outcome we look for in every every result that we aiming for got it much for opportunity and all the best

please go ahead uh good morning uh everyone and uh thanks for the opportunity uh Anu my first question continues with the previous participants discussion uh so what I read what I what I inferred was that in in in Emerging Markets you don't have probably there are some pockets of uh uh challenges in collecting money and hence you let go of those business or CHS not to take the business and hence uh that is the the in markets are kind of growth is lower than the developed markets is this a right take away from uh from

your explanation no I don't think that is correct I think what what is the right way to understand what I said earlier is to say that we are not looking at it only at one dimension so what we are saying is that you know there many kinds of organizational cultures all right some companies were sales ring right anybody brings an order okay let's just take it on even if it means there is lesser margin or even if it means you know people think will solve the problem later on Apple's culture is not ractive right while

we have sufficient cash we have you know sufficient position to take that it's the DNA of the company the DNA of the company is saying that we will look at all the metrics to be achieved successfully in all campaigns and all markets across all customers and I think that dis execution should not be seen as oh um there is a uh you know a certain element of risk let me give you a very simple example at any given moment when let's say you are using your device and we can show you one ad okay now

to you as a consumer we will show you say one ad at any one given moment which AD should we show the decision making algorithm that is working on this is saying what is the probability of getting the conversion from this person one and therefore let's show a particular Advertiser that but then you would also look at which Advertiser is bidding at a higher price for that moment and if we get a higher price um is that going to translate to higher margin if it translates to higher margin we we also eventually get the collection

so the whole risk management algorithm from first consumer decision making to conversion decision making to profitability and margin and cash flow decis is all seated as part of the algorithm decision making which is made in Split settings right so when there is a Moment of Truth where you are on your device you're using an app the algorithm that's working behind is doing all of this calculation in every split moment of decision making right so it's not like cap and an are sitting there and just saying okay let's not take this and take that even if

we let's say take all the business on board and without putting the necessary checks and balances the technology stack as well as the DNA of the organization will insist because even the sales people they earn commissions only on collections so even the sales person is going to check themselves the algorithm they check so this is a sensible sustainable profitable growth plan and execution DNA of the company that's all that I'm saying now I'm not sure why you would want to interpret it as a trade off the same let's say revenue or collections or something this

is the algorithm this is the DNA of the company does that answer your question Arun hello Arun are you there please unmute yourself in case if you've muted yourself am I audible now yes yeah uh an thanks that's a very broad explanation uh but I'm I just wanted to uh double click on the uh the disparity in the mean SL better growth in DM versus em is there any single driver that you would like to point out say certain verticles doing well or or certain geography is doing well which is not doing well probably in

EM markets or that kind of a say that in terms of the organizational emphasis you would have seen that you know we were uh last year last year turning around different of markets and therefore there is a certain momentum that it creates right in terms of where are you attending more Market events where are you investing uh a bit more sort of efforts in terms of thought leadership and so on and I think it's it's just a case of organizational momentum I don't think it has to be read into anything we are we are constantly

calibrating towards maximizing growth in all regions but there could be an effect of uh you know the fact that we were so deeply focused on turning around North America we're seeing a natural momentum carryover effect of that and and I think that should that should continue I wouldn't read into it as you know that that there is any weakness in one or there is any you know unique uh carved out strength in any vertical in developed markets but you know what I'm seeing it is Broad based growth across all markets and to me the trend

lines look fairly sensible on a broad basis yeah yeah understood understood my second question is on our Acquisitions fast acquisition especially J and UF um now uh would you say that in terms of what you can control and what you can do you have done completely all all that I'm sure you would have done that but in terms of output do you think in terms of say margins or profitability levels do you think we have reached the levels satisfactory to you or is it still some way to catch up from the rest of the portfolio

I would say I'm very satisfied with what we have done so far in integrating turn around I mean Acquisitions is uh uh you know it's not always straightforward but the kind of um uh you know conviction with which we have done the integration plans and the outcomes that we have seen I would say that our team has done a fantastic job of making sure that each of our acquired businesses has been integrated properly of course there were many many challenges but also in terms of margin expansion you know optimizing for greater growth or you know

cross selling upselling opportunities the technology stack efficiencies I'm very satisfied with what we' have done and I wouldn't change uh you know too much in terms of what we're looking out as outcomes but U going forward I think there are some new opportunities of you know greater scalability uh better efficiencies going forward and we are still working progress on that as an organization so we will keep on tapping into that and hopefully deliver you know better results as we along uh just that uh uh in terms of profitability Gap do you think still you can

uh close the gap or this is the kind of a state level for those acquired platforms like J and U I think they are still you know I think the integration is complete so now I would no longer go and look at it on a peace me basis that okay let's optimize this or that because once you integrate everything over a period of 3 to 5 years it becomes uh uh harder to separate it out and measure it or optimize it like that but at an holistic so let's say one whole cash flow generating unit

there are efficiencies to be extracted and that is to do with you know various things that I already talked about in my commentary that we are working on and optimizing and making sure that we can be even more efficient than we have been I'm very happy with where we are but there are certain initiatives that are still underway that would extract better efficiencies going forward finally I can squeeze in one bookkeeping question for capil capil just can you uh uh give what is the proportion of our Revenue coming from uh invoice which is fully invoiced

and build and received in US dollars or the currencies which are dated to the US Dollars uh can you clarify the question um proportion of Revenue build build and received in US dollars or or or currency is to to us doar so the international market business or non India business is in prominant in USD including in Emerging Markets we we build it in USD yes yes yes most of our entities work on accepting India work on USB as our functional currency so roughly 23 of our revenue is billion US doar yes um you can say

that 23 of that can be that can be approximate but yes we because our cost of operation is also in USD right the majority of it and yeah it's naturally yeah so so cost and revenue both on USD means on at a margin level any USD uh uh that is rupe depreciation should help us at a margin level not at the top the cost as I mentioned while answering the first question our cost of mentry and data cost are also in USD prly so my revenues are 60% on 60% on USD then 70% of my

cost is on USD right and that's naturally the HED is that so uh there is no major exchange gains or losses which we confront yes thank you much thank you all the best thank you the next question comes from the line of Deepak from sundaram mutual fund please go ahead yeah thank you congratulation on good result and Crossing 100 million user so if I look at your CPC rate now this is the highest CPC rate we have delivered in this quarter and we have indicated that in the past also that as we go more premium

this is likely to inch up further which is showing in the numbers and those those come at the premium cost as well but if I look at your inventory cost per conver user it has largely remained flattish Q2 to Q3 so we have managed it very well so wanted to understand how did we do that means is it because we're doing more OEM level Partnerships where we are able to negotiate better ad placements or is it less to do with experimenting with marketing campaigns what is that which is helping us maintain our inventory cost uh

lower but our CPC going higher I would attribute that completely to you know the strength of of our platform an algorithm and not to some oneof here or there partnership or cases or any particular category of um execution end of the day when the when our platform operates it looks at uh consumer conversions um you know without being biased by you know a particular you know category of inventory but at the same time I think the optimization because we're talking about billions and you know millions of data points being processed and you know decisions being

made on the Fly and you know the the only reason for us to do that efficiently is like you know targeting premium consumers but also know that premium consumers means that you you know can't bombard them with ads you just want to make sure that you show the minimum amount of ads to get the maximum number of conv conversions and that's the job of the algorithm and um I think we're doing it well okay uh so second question is to capil Sir so what I could see is that whatever cost we are saving on the

inventory fund we're investing back into the business uh that's why other expenses is kind of elevated because 20% Q growth understand that because Q3 is a seasonally strong quarter for us so going ahead means what could we see the quarterly run rate of this other expenses will it come down because it was more to do with seasonality uh as mentioned in our previous calls we have been focusing on joing lot of events right from right from you can say last five quarters and you will have seen increase in this line item steadily right we expect

that this line item to stabilize or grow a little as a focus to reach out to or convince the customers uh is going to be uh uh there for the next four quarters right we want to get into the customers with more understanding of how to get more roas or Roi from the uh campaigns they run with us and how to compare us with other clients other vendors okay then sir what is I mean what would be our then margin Target let's say going forward in f26 so uh as previously mentioned that our medium-term targets

were that we are looking at at to stabilize at around 23% in medium term and uh uh PBT uh and uh p p to be around 17 to 18% in medium term okay thank you so much thank you medium term doesn't mean not C it just means that you know over the course of the business growth plans of the company we will obviously keep inching up as we go along thank you the next question just one line if you if you will see uh last three quarters of last year and this three quarters this line

This is where our emphasis is to reach out to and educate more clients on our business out we are delivering better than other other competitors of house noted thank you the next question comes from the line of loesh manik from FM Capital please go ahead yeah hi good morning cap and Anu am I audible hello yes you are thanks yeah firstly an congratulations for being reappointed chairman and MD and CEO for the next 10 years uh we hope we'll have the similar Journey with youve seen in the last six years as well and maybe more

uh one of my question one was uh on the Facebook coming out with Advantage Plus uh now it seem the trend where they are you know in enabling their own users or their own advertisers to optimize their campaign uh does this you know become a competitive threat for us in the sense that uh you know they've been prone to not share data but through AI they can solve that problem for advertisers do you see that as a threat in the long term with the ball Garden look I think the um the fact that each of

these platforms have to you know adapt to you know the needs of the advertisers seeking higher Roi higher Ro act and to to to open up a bit more I think that that is a good trend line and that's the trend line that will help us a lot more because still a lot of the advertisers have the inertia of sending for Impressions and clicks versus going for deeper funel conversions or paying for deeper funnel conversions so I think this is a positive trend line and as far as the advertisers budgets are concerned I mean so

far at least in the last two decades we have seen that the advertisers budgets have been year marked separately for you know some of the wall Gardens and then you know a separate bucket for dealing with the non wall Gardens and we' have seen that the spends on the non-wall garden side you know the thesis is clear that it should grow more you know because the advertisers are over calibrated on how much they being spending on Facebook or Google and so on so forth so I see that going forward the balance of power will shift

and uh as the advertisers become better uh aware of what's out there as well as with you know Automation and Ai and so on so forth we would see a greater amount of budget spends moving out from the organizational inertia because advertisers to they have big teams just working on Google big teams is just working on meta or Facebook so a lot of times the budget allocation is because of the internal organization structure that we have these big teams we have to give them that budget you know so I think over the next few years

we will see a transformation there where budgets will balance out more in favor of the non wall Gardens platforms and we think that we will be significant beneficiaries of that uh I don't see a threat with respect to what uh meta is doing at the moment what we see instead is an opportunity that we could go to the advertisers and educate them and say hey open it up open up the budget and let's see let let the optimization algorithms dictate where where the end goal will lead to better performance now let me give you one

inside if you talk to the teenagers today I think most of them would tell you that they're not using Facebook corre and that's a challenge that I think Facebook needs to do at least in the markets where I have the connect or even in my own family I see nobody Facebook is a very I think our generation kind of a usage pattern but I think the youth is not on it that's a problem right because the advertisers know that they would go after this particular segment if you look at Emerging Markets where there are new

rural to Urban you know users who are you know new smartphone users who are emerging uh in India in Indonesia or Africa or Brazil and all of these markets again those guys are not having that Affinity that hey I'm going to go to social media and post something in Facebook right so I think the trend lines are shifting and a lot of the government regulations you know clipping the power of some of these bigger platforms for various reasons regulatory or otherwise is actually trends that are working to our advantage so you know I'm not seeing

it as a threat at the moment at all understood but even from the point of view you know these tools basically enable the inter team of advertisers to become more competitive versus you you know where you have that edge today to deliver better Roi based on your text act from an enabler point of view from for these wall Gardens to enable the internal team does just increase the competition for you between the advertisers internal team and you to allocate budgets uh not exactly so we also give our platforms and tools to those advertisers and and

the teams and we are also educating them say hey you it's competitive bidding right so for example Advertiser a is competing with Advertiser B to drive conversions on Apple's platform and so those teams have the tools and the ability to say I want to bid higher because I want higher volume otherwise somehow they're not getting enough conversions from Apple's platform if they don't bid high enough and that's how we are able to maintain our premium pricing right because it is we have thousand advertisers campaigns at any given time and we have to show one ad

you know and so so I think for the uh for a platform like ours we also empower the advertisers and we we believe that this is uh this is not um uh a scenario where the internal teams you know should not be empowered we in fact believe that our tools should be more and more like Self Serve and so on and then they have to bid a and optimize for how much conversions they're looking for right so in it's comparative bidding if they price themselves for conversion too low Apple's platform and algorithm will not serve

out their ad campaign because the other advertisers are willing to bit higher and get it so I think it is very competitive and we as a company have always gone out and empowered our customers right 75% of our revenue is direct with customers 25% or is through agency platforms and so on so we are very much advocating that the you know the AG gencies as well as the advertisers their teams need to be empowered educated given the tools to you know um to real time see what's happening in their campaigns with full transparency and then

in terms of the model they have to you know if they want higher volume they to pay more you know and that's how we are um keeping it aligned so I don't I don't see that as a thread and the kind of users that Facebook can convert for these advertisers versus the kind of users that we can convert for these adver n okaying conversions so how are we preparing for that and how soon this emerge as one more mode of conversion uh thanks for asking that question I think for benefit of everybody else let me

be a bit more descriptive I think what is being said is that you know when we talk about you know fra entities we fundamentally you know in the past would simplify it and say that these are nonhuman entities and forward there will be a new entity which is let's say authenticated uh Bots or agents acting on behalf of entities which could be organizations could be individuals and some of those entities might also do some conversions for example your fridge might be empowered to you know place an order for certain groceries up to a certain price

limit based on a refrigerator home agent which is acting on a delegated behalf where it says okay it's 1,000 rupees every week you can spend on you know buying groceries now how do you sort of see whether that is an authentic agent is a non-human interaction and so on I think the wild visualization of the future all of us can do but in terms of adoption curve uh let me tell you you that the adoption of AI and the adoption of such intelligent agents is today faster than the adoption that we saw of internet and

the adoption that we saw of PS PRI right if you look at the Technology Innovation landscape and in that you see how quickly were personal computers adopted how quickly you know in organizations everybody must have a personal computer how quickly everybody must have a smartphone to how everybody should be connected to Internet and now the adoption curve of AI or geni by n consumers right is clearly faster than all of what we have seen in the technology world so these possibilities are real and they will certainly happen and we are if you look at our

patent portfolio you know how we are talking about verticalized specialized agents conversational agents switching off context from one to the other uh how do we take care of fraud in these kind of context where you know there could be impersonalization right where some somebody is acting you know you have an agent other agent is acting as if it's your all these complexities will certainly come in and we have to the largest extent build build that into a road map of it's already indicated in the IP portfolio some of the patients already granted as I talked

about earlier but we are clearly on that path and keeping us future proved and Future Ready sure and just one book a question from CLE what was the intangible capitalization for the mon period I so it's uh about 12 million in the 9 months uh yeah we in line for last three quarters okay okay thanks couple and all the best question comes from the line of chak karia from ashika institutional equities please go ahead sh please go ahead with your question and un yourself so I have just one question this uh the pace of development

and innovation in AI is moving at rapid scale so do you think any way it will impact our business model model going forward the way cost of is falling in developing llm and eii that we have witnessed in past one month so your thought on S uh there are two three um of aspects to looking at we look at technology progression so there is technology progression at the fundamental scientific level right where people are still building the underlying layers of science to power Ai and initially the cost of doing that is very high and then

every incremental change the cost becomes lesser and lesser and lesser what we've seen with Computing earlier those computers were very expensive to make and then became cheaper and cheaper and cheaper more power inside the hands of the consumer at a much more affordable cost right so I think the from core scientific uh progression to what we call Applied thingss right so once we once it goes into application Level and you start seeing more and more applications coming and see so those becomes more byze more usable um uh and and even a lay man I mean

any anybody can start sort of using that now so that's sort of one dimension of the technology curve that we talking about and that's linked to the earlier question from Ashan as well the second part of it is in terms of a business model I think the business model that we are offering is a very fundamental business business model the fundamental business model meaning that we are taking the risk off the table from our advertises while giving them full power transparency um trackability as well as you know their ability to decide their budget and prising

but we are taking the risk factors out of them in the sense that once they get a conversion that's when they pay so for example when Ashwi as what if there is a fraudulent conversion right so when there's a fraudulent conversion that the chances of a uh uh of a non-authentic bot paying on behalf of you to deliver something to you you know is um is highly highly unlikely but if it does happen as far as our Advertiser is concerned they would only pay when they receive right the ROI so I think the the point

that I'm making is that we are taking the risk of the table from our Advertiser side and therefore ability to command premium pricing conversion leg pricing take the owners of Technology Innovation dealing with that uh in comprehensive ways is is a defensible and long-term business model right when you do outcome Le pricing that is actually the hly holy gra of business right where you're telling somebody you get that x value then you pay me a proportionate justifiable appropriate value from it and I think that is a very very strong business model and I think that

the business model will hold good uh going forward especially when the complexities and Technology go up the need for a tech platform like aest in between to bridge that to simplify that and to unify that for the advertisers while keeping them deris and saying you pay when you make money is um I believe defensible but I will still you know watch it closely and if along the way we see that um any fine tuning is required to to to the business model then we will keep the market and the state holders proactively informed but at

the moment I think our business model is robust defensible it is based on financial fundamentals that shouldn't change and uh the need for our Tech stack and platform and to deris the advertisers is only going to increase right the complexities are going to increase there the need for a tech platform like a and therefore the dependence of advertisers on a platform like a and willingness to pay for it uh all of that should only become better going forward in my opinion but Let's uh let's wait and see how the world unold there thank you Al

very much thank you participants please restrict yourselves to one question due to time constraints the next question comes from the line of R from ieth please go ahead uh hello sir good morning uh so most of my questions are answered my only question was on the tax uh taxation rate so going forward what should we assume hi U so we have been uh consistently saying that our long-term tax P would be in the range of 19% uh plus minus few basis point on a long-term basis got it got it thank you that's it me thank

you the next question comes from the line of onar gur gur from Shri Investments please go ahead yes hello my question was regarding uh actually a followup to the earlier questions asked about taping of growth if you see the percentage growth it has been coming off uh even though you mentioned that you are choosing the growth uh which is favoring operational efficiency so just wanted a thought on that because earlier it was around say 28 30% last quarter it was around 24 25% this quarter is closer to 20% so just wanted thought on that and

your guidance on that I think I'm first of all very satisfied with the kind of growth that you have seen and it is exceeding the growth uh guide guidance or you know uh targets that we had defined for ourselves uh whether it is our internal business plans which are approved by the board or whether it is you know the commentary that we have shared with the with our investors and stakeholders so I think that is uh that is something that is showing that we're in control of what's Happening we are able to realistically predict the

trajectory and to deliver on that and the fact that we have exceeded on all those expectations whether it's on Revenue growth or on profitability growth or on cash flows and so on I think uh it's it's a very very clear Trend towards sustainable long-term road so our base of business has on but we are still in a very very big addressable market and for many many years ahead I think we can see this kind of a broad-based all round sensible sustainable profitable cash flow positive growth for our company um if you are feeling that it

is tapering off um you know and you're feeling that it's not not sufficient uh I I would request you to recalibrate that based on what you have heard today okay so you mentioned that 20 % upwards of 20% kind of growth with expanding margin on a medium-term basis yes absolutely I mean that's how I think we should be modeled if you're modeling us look at it as a long-term basis um model us towards the direction of 10x growth for the company and consistent long-term sensible execution balance execution in terms of Revenue growth and you know

defending margins improving operating efficiencies and delivering better than Revenue growth on bottom line growth right that's who we are and that's what we will deliver okay thanks a lot thank you thank you ladies and gentlemen that was the last question for today I would now like to hand the conference over to the management for the closing comments thank you everyone for joining the call today and um I hope uh this conversation continues and I look forward to our next called which will the end of this particular this financial year and we hope that um you

know the emerging technology Trends as well as the commentary and the case studies that we're providing is building a deeper understanding and appreciation for the fundamental mode and the the business model that we have so so this is uh been a good discussion I wish all of you well and I look forward to the next opportunity to present to you thank you ladies and gentlemen on behalf of of do Capital private markets private limited that concludes this conference you may now disconnect your lines