Affle (India) Ltd (NSE: AFFLE) Q4 2025 Earnings Call dated May. 12, 2025
Corporate Participants:
Unidentified Speaker
Mr. Anuj Khanna Sohum — Managing Director and Chief Executive Officer
Anuj Khanna Sohum — Founder and Chief Executive Officer
Anuj Khanna Sohum — Founder and Chief Executive Officer
Kapil Bhutani — Chief Financial and Operations Officer
Mr. Anuj Khanna Sohum — Managing Director and Chief Executive Officer
Kapil Mohan Bhutani, — Chief Financial and Operations Officer
Kapil Mohan Bhutani, — Chief Financial and Operations Officer
Analysts:
Unidentified Participant
Anmol Garg — Analyst
Deep Shah — Analyst
Lokesh Manik — Analyst
Vijit Jain — Analyst
Arun prasad — Analyst
Samad Patel — Analyst
Deepak — Analyst
Presentation:
operator
Ladies and gentlemen, you have been connected for Apple 3i limited conference call. Please stay connected, we will begin shortly. Ladies and gentlemen, you have been connected for Apple 3i Limited conference call. Please stay connected, we will begin shortly. SA.
operator
Ladies and gentlemen, good day and welcome to Apple 3i Limited Q4 and FY25 earnings conference call hosted by DAM Capital. 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 presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Start then zero on your touch tone phone. Please note this conference is being recorded. I now hand the conference over to Mr. Anmol Garg from Tam Capital. Thank you. And over to you sir.
Anmol Garg — Analyst
Thank you Manav Good morning everyone. On behalf of TAM Capital we welcome you all to Q4 and 12 month FY25 conference call of Apple 3i Limited. I take this opportunity to welcome the management of Apple 3i Limited represented by Mr. Anuj Khanna Soam who is the Chairperson MD and the CEO of the company and Mr. Kapil Bhutani who is the Chief Financial Officer of the company. So before we begin the discussion, I would like to remind you that some of the statement made from today’s conference call may be forward looking in nature and may involve some risk and uncertainties.
Kindly refer to the slide 26 of the company’s earning presentation for a detailed disclaimer. I’ll now hand over the call to Mr. Anuj Khanna swam for his opening remarks. Thank you and over to you Anuj.
Anuj Khanna Sohum — Founder and Chief Executive Officer
Good morning everyone and thank you for joining the call today. I trust all of you are keeping in good health. It is with immense Pride that on 4-5-2025 Apple stepped into its third decade of transformational growth as Apple 3i Limited. This represents our forward looking vision anchored on three core pillars of innovation, impact and intelligence. Our Apple 3i strategy is powered by the third eye, the augmented authentic actionable Apple intelligence embedded across our Apple III consumer platform stack. We envision to scale our impact exponentially, unlocking intelligent use cases for advertisers and expand our addressable market multiple times while achieving hyper contextual personalization for consumers and enhanced productivity for our teams.
Over the last seven years since we filed our DRHP in 2018, we have achieved over 13x growth in both top line and profitability and have delivered remarkable value creation for all our stakeholders. In FY 2025 we achieved revenue growth of 23% year on year PAT growth of 28.5% year on year and our CPCU revenue increased by 28.3% year on year. As global digital spend continues to rise, the shift towards performance centric advertising is becoming even more pronounced, unlocking robust growth opportunity across all our key verticals and markets. With a solid foundation of over two decades behind us, we are aiming for 20% plus growth in FY2026 and we will pursue a midterm 10x growth target in Q4 FY 2025.
We exceeded our performance target and achieved our highest quarterly revenue run rate, highest EBITDA PAC and CPCU conversions till date. We delivered revenues of Rupees 6023 million, a growth of 19% year on year. Our focused execution on higher productivity and continuous innovation enabled us to achieve highest ever EBITDA of Rupees 1,340 Million and a record 289 basis points EBITDA margin expansion on a year on year basis. We also achieved highest ever PAT of Rupees 1,031 million, a growth of 17.8% year on year. Our CPCU business delivered 104 million conversions at a CPCU rate of Rupees 57.8 and we earned CPCU revenues of Rupees 6,700 million, an increase of 19.2% year on year.
It must be noted that Q3 is generally the highest quarter for advertising budget and Q4 typically sees a sequential dip of between 5 to 10% after the peak of the festive quarter. However, in Q4 FY 2024 we had an atypical quarter. We beat the seasonality trend for the first time. Now viewed in this context of seasonality and atypical Q4FY 2024, India and global emerging markets were resilient in Q4FY 2025 and on an adjusted basis contributed 71.1% of our revenues in Q4FY25 representing 15.9% year on year growth versus the atypical Q4 of FY 2024. Our adjusted performance trend is along the sustainable 20% year on year growth trajectory across India and global emerging markets.
In Q4 FY 2025 we once again managed to beat the overall seasonality trend and our overall performance was achieved with the outperformance in developed markets. On an adjusted basis, our developed markets outperformed and achieved 9.7% sequential growth in Q4 and contributed 28.9% of our revenues in Q4.25 representing 27.3% year on year growth Our overall growth is accelerated particularly through our aggressive sales efforts across all regions resulting in consistent addition of new accounts and logos. Our consistent trajectory highlights the strength of our business model and the expanding relevance of our platforms. As we penetrate deeper across high growth verities, we are unlocking new avenues of expansion across all markets and strengthening our position as a trusted results driven partner operating locally across all key regions and closely aligned with the evolving needs of digital advertisers.
We remain committed to investing in the next generation technologies that enhance the efficiency efficacy of conversion driven marketing while fortifying our AI powered consumer platform stack. We are proud to have recently received a new patent grant in both US and India marking our 13th patent grant to date further enhancing our comprehensive tech IP portfolio. The patent titled Method and System for Application Installation and Detection of fraud in Advertisement augments our fraud detection capabilities underscores our dedication to delivering transparent high impact user conversions for advertisers globally. Additionally, we received another patent grant in India which was already granted to us in the US before for method and system for application, installation and interaction During a broadcast this quarter we have included three customer proof case studies in our presentation.
The first case study highlights our unique AI powered capabilities in scaling the acquisition of high lifetime value premium iOS users the second case study highlights our success in making urban mobility more efficient in developed markets with use of hyper relevant automated creative strategy to achieve high roi and the third case study focuses on the E commerce and shopping vertical enabling deep funnel conversions focused on repeat purchases in global emerging markets. Apple continues to be recognized as a tech thought leader in the industry and we became the first company to present 100 live AI agents at the Bombay Stock Exchange on 8th April 2025 and we registered the adjudicated records for both the Asia and the India Book of Records.
Further, our platform was recognized as a top growth partner for both Android and iOS across 10 categories and a top ROI driving partner in single year’s ROI Index 2025 as well as we won multiple awards at E4M Tech and at ET Brand Equity Digiplus Awards lastly and also as discussed last quarter to strengthen our governance, we have been onboarding new independent directors progressively since last year as part of the planned transition for the directors completing their term in 2025. This process continued in the current board meeting with an approval to appoint two new independent directors and thus we have a total of five new independent directors added in the recent times.
We remain steadfast in our commitment to uphold best in class governance practices and ensuring a strong, diverse and independent Board to guide our continued growth and the Apple 3 I had Origin with that. I now hand over the discussion to our CFO Kapil Bhutani to discuss the financials. Thank you and over to you Kapil.
Kapil Bhutani — Chief Financial and Operations Officer
Thank you Anuj. Good morning and hope all of you are keeping safe and well. We concluded financial year 2025 on a strong road, delivering an all around performance with a robust growth in all four quarters for the full year. On a consolidated basis we achieved revenue of Rs 22,663 million representing 23.0% year on year increase. This was driven by broad based momentum across key industry verticals across both India and international markets. In financial year 2025, Ariberta stood at rupees 4832 million registering 34.2% year on year growth with a margin of 21.3%. It demonstrated our combined continued focus on profitable and efficient growth.
We achieved operating cash flow of Rupees 4260 million, registering a strong 62.4% year on year growth. This significant increase reflects our strong operational execution and sustained focus on cash generation. We recorded that for the financial year 25 at 3819 million, an increase of 28.5% on year on year basis despite an increase in our ETR. Speaking on quarter four on consolidated basis, revenue stood at 6023 million to register a robust year on year growth of 19% this quarter. While we witnessed usual seasonality in India and emerging market combined, we maintained our India revenue run rate broadly at par with what we achieved in quarter three.
On both standalone basis and on adjusted basis we recorded a return of 1,340 million and increased by a robust 36.7% year on year and 2% quarter on quarter. Our EBITDA margin improved to 22.2% of the revenues, up from 19.4% margin in quarter four last year. Coming to OPEC quarter quarter, our inventory and Data cost was 6.6% showing a marginal improvement over quarter four last year driven by operation efficiency. Our employee cost increased by 1.3% sequentially but declined 2.9% year on year. It was driven primarily by investment in past investments in integrated teams and strategies as well as adoption of intelligent automation and AI supported workflows.
These measures have contributed to more scalable operations and helped normalize human cost. Our expenses stood at 7.5% of our revenues and declined by 44.7 million on quarter on quarter basis. This was primarily driven by higher business promotion activities in Quarter three which saw a natural trend shaping in this quarter. We achieved profit before tax of 1,239 million during the quarter, an increase of 23.7% year on year. Our profit after tax to that 1021 million, marking an increase of 17.8% year on year and 2.8% all quarter. On quarter margin improved to 16.6% of the total revenues, up from 16.4% for a year for last year.
We continue to prioritize efficient working capital management and as such there was no material change in our collection risk. Building on our proven track record of innovation and impactful execution, strengthened by our strategic initiative and robust financial position, we remain confident in our ability to capitalize on the emerging market opportunities. We are well positioned to sustain our strong business momentum through FY26 and beyond. With this, I end the presentation. Let’s be opening the floor for questions.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to withdraw yourself from the question queue, you may press. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we have a first question from the line of Anmol Garg from DAM Capital. Please go ahead.
Anmol Garg
Yeah, thanks for the opportunity. Couple of questions. Firstly Anuj, it’s impressive to see that in a seasonally weak quarter we have maintained similar revenue run rate as last quarter. So wanted to understand that what has led to the strong growth in the developed markets during the quarter. And secondly you said that we can do 20% plus growth in FY26 as well. So would this be again more accelerated by developed markets or do you think that both India and developed markets will grow in line?
Anuj Khanna Sohum
Thanks thanks Elmol for your question. I think I did highlight in my commentary that this is definitely something like it’s atypical for a company focused on advertising to do at PAR or better Q4 versus Q3. Now we believe that our performance across India global emerging markets have been in line with the expectations. So there is some seasonality effect for sure. I mean Diwali, New Year, Christmas, all of that in October, November, December definitely gives the boost to the consumer sentiment spending and therefore the advertisers target a lot more budget there. But we are also not, you know, we know that that is coming.
So as an aggressive company we’re always trying to beat that trend. Now in a 20 year history the only time we managed to beat that was in FY24 this year what we saw is that, you know, we were actually not expecting to beat it, but we were obviously seeing some very positive trends of the momentum that we had built last year in terms of pushing for greater sales and greater opportunities in the North America region and developed markets in general. And we saw that momentum carry us through not only with existing customers, but also in terms of winning new customers and continuing the growth momentum.
And of course the base and developed markets is relatively smaller. For us it was easier to tide over the pullback effect of the seasonality. Now this is just 1/4, but when I say we look at it on an adjusted basis, India global emerging market developed markets and we try and understand our trends, normalizing it to any anomalies or atypical behavior in the last year, we see that there is a consistent pattern that we can absolutely sustainably aim for 20% growth in FY26 and not calibrating it one way or the other in favor of more in favor of developed markets or India emerging markets.
We believe that in all our regions and verticals we will be pushing for this kind of growth across the organization. And our plans and budgets for FY26 are made with that thesis in mind. So I don’t want to balance in favor of one or the other. We want to see broad based growth and we are working hard towards that. We believe we can achieve it.
Anmol Garg
Understood. Anu, just to clarify this 20% growth is organic, right?
Anuj Khanna Sohum
Oh yes we are. We may consider, you know, selective and carefully picked acquisition targets through this year. But what we are talking about right now is organic.
Anmol Garg
Understood. And the second question is for Kapil wanted to understand that for FY25 we have seen a lot of rationalization in our employee expenses. Now going ahead, do you think that we are still a tailwind from employee expenses or we can get some leverage from the data inventory cost as well.
Kapil Bhutani
So as stated in the previous also we maintain that our expenses in prior to because of the investment in the human resource cost and we have drawn efficiencies in the current year. Having said that, we also have been maintaining that increase in human cost would be like a step ladder investing at times and then leveraging the efficiencies. So yeah, that is in the current year we don’t expect feel like that will be a steep increase in the human resource cost maintain the current level of expenses.
Anmol Garg
So Kabil, would that mean that margins should be flattish for the year?
Anmol Garg
So we have been maintaining that we will be pushing for EBITDA margins increase a Few basis point every year.
Anmol Garg
Understood, Understood. Sure. I’ll get back in the queue.
operator
Thank you. We have our next question from the line of Deep Shah from BNK Securities. Please go ahead.
Deep Shah
Yeah. Hi sir. Good morning. Thanks for the opportunity. So the patent that we’ve announced, so if it would just help to explain a bit better on roles. So we already had an M5 platform and this one is also to do with some of the audit checks or the fraud checks. We could have to understand better what is this and how is it different? How does it help us that that would be useful?
Anuj Khanna Sohum
Sure. Well, that’s a great question. When we build our technology roadmaps, we always ring fence it with patents and protection of our ip, right? So you rightly pointed out. We have the MFAT platform, which is our tool that is doing predictive analytics to catch any fraudulent behavior in the entire ecosystem. And we intend to do that rather diligently. Throughout our history we have been always working on that dimension. Now this is an important aspect of technology and therefore many, many years ago we had filed the patent to protect our IP in this area. And typically, you know, the patent process, the granting of the patents, from filing to all the checks and balances that it goes through, it takes several years for a patent to be granted, especially in the US office and also in the India office, the patent office.
So having won those patents now is a validation of the fact that we have competitive mode, we have differentiated technology, we were early movers here. We were the first ones to conceptualize these aspects of tech innovation. And therefore winning the patent in the US and the Indian market to very important market strategically for us is a very important validation. And also strengthening our intellectual property portfolio that we have, does it mean that we will suddenly start making more revenues or whether we will now start hiring lawyers and start charging all the ecosystem to say, hey, we had this patent and start giving us royalties.
I think it is premature to take that dimension at the moment. But I think it is very important to know that we have a very robust patent portfolio, about 36 unique patents which hopefully will give us protection across various jurisdictions and close to 45 plus patents across different jurisdictions. But in terms of the unique patents, we have got 13 granted already, 36 in total, five. And it should build confidence of our investors that, you know, these are all real innovations which are creating real intellectual property mode for the company. I hope that answers the question and it is just the timing of it.
So when the conceptualization of the roadmap happens, there are a few dimensions to look at, there is, you know, product development, there is also intellectual property mode development with patents being an important tool in that. Thank you.
Deep Shah
So, thanks for your response. So generally, I don’t know if maybe if you can give a quantifier answer here, but generally in your experience, what has been that duration between say we conceptualizing something to a patent being granted to be able to monetize it in a way that puts it in a much superior position? Like if you could maybe quantify this if it’s possible.
Anuj Khanna Sohum
It is, it is not something to be quantified. It is actually all working in tandem at all points in time. So while the product is there and the innovation is there, of course the market and the customers recognize that. Right? Because they see that, okay, no other competitor is supposedly bringing these kind of tools or capabilities or demonstrating it to the customer. So you start winning business and monetization advantage straight away. You start building a reputation for yourself straight away. Now, you know, filing a patent doesn’t necessarily mean that, you know, you will get it, right.
So to get it eventually validates it and strengthens the market thought leadership position for the company and that wins confidence of customers and their ability to trust us with their data, with their business. Knowing that this is an honorable stakeholder in this ecosystem and to the extent that this ecosystem has any areas that need to be cleaned up, then Apple and its technology as a responsible citizen in this ecosystem is bringing honor and appropriateness to how we conduct ourselves. Now this will also help us as we go along in areas of data privacy or in AI.
So building trust over two decades and building thought leadership with intellectual property and consistent innovation is what we are demonstrating. So how do I quantify that? A lot of our revenues here is because customers trust our company. Why do they trust our company is because of all of these credentials and therefore it’s all in tandem and it is always adding to the strength of the company.
Deep Shah
Right. This is very useful. Thank you so much.
operator
Thank you. We have our next question from the line off. Lokesh Manik from Vellum Capital. Please go ahead. Sorry to interrupt, Mr. Lokesh. Can you please be a little louder?
Lokesh Manik
Yeah. Is it better now?
Anuj Khanna Sohum
Yeah, yeah, yeah. Good morning to the team. Just a couple of clarifications. One is on the employee expense front. All the couple did mention that coming from the previous year investments. Just wanted to understand that, you know, is it a part of the QIP and the preferential issue in the sense that had we not had these money raised, we would have expensed through the pnl rather than creating intangible assets, the cost efficiencies that we are seeing of about 200 books would not be maintained. This is just from a view to understand whether this is structured in nature and we can assume employee cost at 10% per sales going forward.
That was one second was I’ve observed that revenue from the core verticals E and G H they have gone up now from 90%. Today you’re seeing is 100%. At the same time there’s been a fall in the non CPCU revenue. So is there any correlation? There can be.
Anuj Khanna Sohum
Thanks Lokesh for your questions. Allow me to take them regarding employee expense. While Kapil did provide the insight that FY24 was higher due to the investments being made and you know, the acquisitions being done and in FY25 we had already given guidance that we will create strategic integrations and efficiencies across all our business units and making sure that we achieve that outcome. So what you’re seeing now FY24 versus 25 is an expected path. It has nothing to do with the QIP or preference issue or going through PNL or anything else. It was supposed to happen.
It would have happened independent of any QIP or anything like that. Now also I would like to mention that we are an organization that is an asset tech platform, scalable system organization and in terms of using technology and technology automation for all our operations around the world is absolutely important criteria for all the management of the organization. So using augmented authentic actionable intelligence, automation, embedding it across every role and every function of the company is something that we do with a lot of energy and focus. We continue to see this kind of efficiencies unfolding. So we are talking about 20% growth in terms of our business, in terms of revenues and so on.
But we are also saying that our cost will not increase in the same proportion because we don’t need to have 20% more workforce in order to make 20% more revenue. It’s a tech platform based organization with a lot of automation backing it up and this will continue to yield greater efficiencies on the bottom line as we go along. Regarding your question on EFGH and the non CPCU business since many years ago, even pre IPO road shows, I’d always maintained that the non CPCU business is waiting to become cpcu, right? So the non CPCU business is now increasingly becoming CPCU business because those customers that were working with us on non CPCU basis gone back to them and said look, this is our main line of business.
And we want you here. Even if somebody is doing, let’s say branding campaigns, we are still going to them and saying, let’s make it more ROI oriented, more performance oriented and measurable to the extent that we have. We have been one of the first people in the market, especially in the US and also in India and other emerging markets to bring performance linked roi, linked CTV advertising, connecting it to households looking at finished devices with a unique perspective. So I think the emphasis here is strategic in nature and having one clear sort of CPCU business which is a consistent business.
So any acquisitions that we are doing, anything that we are doing in our business, we are doubling down, tripling down on this business. We see a long, long Runway for consistent growth here and a very large addressable market for many years to come. So like we’re not trying to diversify or we’re not trying to find another segment. We are saying, look, we are already diversified in the sense that the CPCU business across industry verticals, across geographies, so we are delivering broad based growth and possibilities. But the CPCU business is where we are anchored.
Lokesh Manik
Just last one, if I could screen. Netflix is talking about opening up their platform in general. You know, we’ve done something similar with Amazon in Amazon India here. So are you targeting that account activity or Windows? We have from.
Anuj Khanna Sohum
This is a very strong indicator of confidence that established businesses, content platforms like Netflix, where they have paying subscribers after they have achieved a certain level of growth, they realize that the only way to get long term consistent growth on their user numbers and revenues is to unlock the advertising business model, which essentially means that instead of the user paying, let the user enjoy some content, but instead get an ad funded model. This is again proving the robustness and the long term resilience of our business model. Netflix to us in this scenario would be a publisher would be a partner with whom we’ll be able to work with to say that hey, we have a lot of advertisers.
75% of our revenue is direct from advertisers. And for those advertisers, maybe our platform could be buying certain impressions of clicks on Netflix by showing ads of our advertisers to the users of Netflix. So then Netflix would become a form of a publisher or an inventory source which we can work with either directly by partnering with them or through other intermediaries in the ecosystem. So we see this as a positive dimension where we are going to see more unique inventory coming into the market and more possibilities to do consumer engagement, to do Drive conversions. So this is actually all rather positive and you know, we will cross the bridge one step at a time.
Lokesh Manik
Are we in any discussion with them?
Anuj Khanna Sohum
I think it’s too early to comment. It would be, it would be fair to say that it will be a natural course of business. Either they will reach out to us or we already in discussions directly or it is, you know, as long as they’re doing any meaningful activity in the markets may be at present, I am absolutely sure there will be some form of business.
Lokesh Manik
Great. That’s it from my side. Thank you so much.
operator
Thank you, sir. Yeah. My next question from the line of Vijit Jain from Citigroup, please go ahead.
Vijit Jain
Hi, thank you. My first question is on, you know, these developments are on antitrust ruling on Google from a broader market perspective. You know, would really appreciate your thoughts on how do you think this could change the ad industry in general if something comes out of it? That’s my first question. And related to the developed markets, I suppose, you know, I know you have, you know, relatively small base in US and it’s also very domain specific, slightly, slightly more gaming centric than other industries in general. So how do you think, let’s say a mild recession scenario in US plays out for you given your exposure to that market? Thank you.
And then I’ll just follow up with a question with Kapil.
Kapil Bhutani
Thank you. All right. Well, from a regulatory standpoint, antitrust ruling is just one dimension of the kind of rulings that, you know, these large walled gardens are needing to deal with. You will see all kinds of clipping of wings, if I may call that from the regulators to keep a check and balance on some of these large industry players who are dealing with a lot of data, they’re dealing with a lot of market share and their practices with respect to competition. I’ve always maintained that the ad tech industry has over calibrated on the level of spending that the advertisers are doing on the walled gardens.
And I expect that to become more broad based in favor of the non Google, non meta and non walled garden platforms as we go along and as some of their competitive practices come under check through such rulings and regulations. So I would just keep it to that and I would let time unfold and tell that. But on a broad basis I’m very much clued in and we are watching what’s happening and I think this is all working towards a fair outcome in the longer term for every player in the ecosystem. And eventual beneficiaries would be the consumers and the Advertisers, with respect to your question on developed markets, I would like to address it by first and foremost clarifying that Apple is a unique company, different from most other listed ad tech companies.
Why? Because they are deeply and heavily calibrated on the US market and they are deeply calibrated on the gaming vertical. Look at any of the ad tech companies historically, even any Indian ones that may have focused on North America as a big market. They become one dimensional North America gaming, North America gaming, all their talent is focused on that. Apple is unique. Apple is deeply focused on global emerging markets, of course, anchored out of the advantages we have derived from India and therefore taking those advantages to other emerging markets, be it in Southeast Asia, Latin American markets or Africa, Middle east and all of these regions, we are taking that advantage and growing.
Now those advantages come in very, very comparatively handy for us as we enter it into developed markets. Now we are broad based in terms of verticals, right? We are not as heavily calibrated on gaming as the other competitors are who are 80, 90% gaming companies and now starting to think how should they do E commerce or non gaming verticals. Whereas Apple has fundamentally been a broad based focused on verticalization across EFG edge categories even in US right now we are focused on gaming as well as non gaming verticals for our customers and fintech, E commerce and some of the case studies that we keep sharing consistently in our earnings reports already indicative of that.
So we are fairly broad based. Now the U.S. as you know, is a very, very large addressable market and we are clearly very small. So even and we are differentiated with our CPCU business model and bringing in certain unique experiences and capabilities from emerging markets, I think it makes us very very competitive in that market. So given our base is small, the addressable market is very large. I don’t think a recession in the US which is again speculative as and when it will happen, we’ll navigate it. But when it happens, I think the advertisers they would be wanting to put their budgets to a CPC performance rolling model and we with our smaller base will go and fight out aggressively, selling hard to make sure that we continue to grow even in a scenario where it leads to some kind of a recession.
So I’m fairly optimistic and I feel that we are in a very privileged position given the way we have balanced our business across verticals and across geographies.
Vijit Jain
Got it. Thanks Anush. Anush, just a follow up on the India business. If I look at the I note the seasonality comment and I can see that in the numbers as well? Well, on a QQ basis but if I look at the India and EM business on a YOY basis, you know, the last three quarters growth has somewhat slowed from on a yy basis from 25% to 20 to now 16. So any comments on that? I know you’ve already guided to, you know, you know, 20% plus goes for FY26. But what is driving this deceleration in the last two, three quarters?
Anuj Khanna Sohum
I wouldn’t call it, you know, I wouldn’t see it as a deceleration frankly. I mean I’m very, very comfortable with the way our team is executing and the way the market is responding to us across India and emerging markets. And regarding 20%, it’s always been, you know, consistent in the last few years in terms of our guidance and Even this quarter 16% I’ve already explained that last year Q4 was higher and it was atypical for it to be like that. So when we normalize it and adjust it and see what is happening in the market, we are actually finding that our growth trends are sustainable at 20% plus and we should be anchored on that.
And that’s why I’ve given you all of that clarification. And where is it coming from? It’s coming from existing customers. We have very good coverage of existing customers. We’re also active selling and aggressive selling happening to new customers, opening, unlocking new use cases and innovations that we consistently bring to the market. So therefore getting to 20% I think is a reasonable and real expectation.
Vijit Jain
Thanks. My last question, just on the other expensive side to couple I guess last quarter I think you did call out 3Q has seasonal business promotion spendings and I think some of that came off in 4Q. But broadly speaking, if you could talk about what is the steady state for business promotion spend for you as you look ahead and what that number was for FY25 because we obviously don’t have the annual report yet. If you can share that. Thank you.
Anuj Khanna Sohum
You can take the current year expense and other income as the normal for us. But a full year basis, not on quarter to quarter basis because seasonality on spending on the events happen at different times. Events in marketing does not happen on a quarterly basis on the same pace. They are spread out in different quarters. Generally in quarter three the marketing spends are higher and yes this was called out in the previous call also and going forward also we are saying we will be looking at increasing the spend in the marketing side that mark to the tune of the increase in the Revenue.
Anuj Khanna Sohum
Right. So if I look at the. Yeah, yeah, sorry, please go ahead.
Vijit Jain
I said you should look at the expense items in on a full year basis because.
Anuj Khanna Sohum
Right. So when I see the F24 numbers, right. I think business promotions was about 2.8% of revenues for F24. Could you share the number for F25, what this number was? That will give me a sense of how to think about that part. See, basically our target is to spend about 3, 3 and a half percent on the upper side and 2% on the lower side for the marketing and promotion expenses.
Vijit Jain
Correct. Thank you so much.
Anuj Khanna Sohum
The broad range of how we plan for it.
Vijit Jain
Understood. Thank you.
operator
Thank you. We have our next question from line of Arun Prasad from having this park. Please go ahead.
Arun prasad
Good morning everyone. Thanks for the opportunity. My question continues on this gaining vertical. So ever since we acquired uap, the growth delivered by the EM markets have been higher than the developed markets, is higher than the EM markets. So this kind of gives us a sense that gaming has played a huge role, which is what you have also. But does it also mean that in the emerging markets the gaming is either not such a big vertical or we are yet to use the full might of the UIPRT platform in the emerging markets and that gives us some kind of a growth potential going forward.
Is it the right way to think about it?
Anuj Khanna Sohum
Yes, it is the right way to think about it. That in developed markets gaming is a much bigger, you know, vertical versus in the emerging markets. That is definitely one of the ways to think about it. Having said that, in the developed markets the non gaming verticals are also very large addressable markets and they are underserved because most of the incumbent players have gravitated to gaming because that is such a big vertical there that everybody starts fighting that battle and starts wanting to play that tournament with their best talents and capabilities. And I would say that the non gaming verticals are underserved and a bit neglected by the incumbent competitors in the developed market.
So when Apple goes into developed markets, we are seeing a better sort of competitive advantage for us when we go into non gaming verticals. And of course with the acquisition of uapi, we’ve got some more strengths in gaming with them and we have integrated that into our core propositions and we are taking that to market rather aggressively and India, other global emerging market as well as individual markets as one sort of integrated proposition focused on gaming. So I wouldn’t, I would leave it to the market forces to define. But I think what, what I want you and our investors to focus on is that Apple as a platform is verticalized into many many verticals classified in efgs.
Category gaming is one of our verticals. It is a very important vertical and it is the most sort of competitively fought for vertical as far as developed markets are concerned. And the incumbent players are concerned who also are now starting to see how can they go beyond non gaming. Starting to, you know, calibrate their tech stack and algorithm for non gaming which I think is an advantage for us because we are naturally addressing it. Overall.
Arun prasad
Any possibility that what is our exposure to the gaining vertical overall at. This point of time?
Anuj Khanna Sohum
I think we at this moment do not, you know, go and break the contribution of the categories of ehdh. But I would say it is fairly balanced. Categories E, F and G are all, you know, reasonably balanced. And in category H which is Healthcare hospitality, we are seeing know it’s catching up as well. Overall I would say category E, F and G are all strong and robust sort of categories of verticals for us.
Arun prasad
On safety as in gaming will be our largest critical. Say that again please. Safe to assume that gaming will be our largest critical among all this.
Anuj Khanna Sohum
I think it would be almost at par with category E which is E Commerce, Entertainment, Education and degree G would be almost at par with that. I think it will be hard to say in some quarters that would, you know, one would be more than the other. But it is, it is all fairly broad based and balanced out. We are not over calibrating one way or the other but we are definitely pushing hard now. You know, things could change as we push harder in developed markets and we could win some really large customers in gaming and numbers could change.
I mean developed markets could can create that kind of imbalance potentially. But at the moment the way we execute we are having sales teams which are focused on different customer accounts and verticals. And so we do see a broad based growth coming along. But it is possible we may going forward see some really massive wins and sudden upsides. But we will talk about it when that happens.
Anuj Khanna Sohum
Secondly, on the business development, business development makes sense once again. So ensure that we are attending all the events globally and there are only finite number of events. So I’m just curious why our BD expense as a percentage of revenue should be continues to be pegged to the revenue. I would assume at some point of time it will flatten out.
Arun prasad
Just help us understand how to think about it.
Anuj Khanna Sohum
Sure, there are many ways in which business development happens. So events are not only industry events that we attend but also create industry Events of our own in key markets, right. Where we work with partners, curate our own events and call certain customers and so on. So the format of business development has evolved from doing one is to one selling and knocking at people’s offices and doing meetings. That also happens. But I think the industry has evolved over time to, you know, curate events where there are multiple speakers, customers and there is a big like there’s a forum so that people are looking for either traveling into for that event for a day or two and so on, so forth.
So industry events is one. Doing our own events is another dimension. Doing events for a select group of customers. Not everything would become like public. So they are private events and then there are events which are industry, everybody knows about it. And then there are private events that we are doing in smaller forums. So it is something that we would like to peg it closer to the revenue because this is a tool that we give to all our regions and sales heads and the general managers, managers for each of the markets to achieve the revenue.
Right. We’re pushing them to go and sell more and get existing customers, new customers into these events and create the right forums to establish not just winning of business but also establishing thought leadership of what we are doing going forward.
Arun prasad
Okay, understood. My one bookkeeping question to Kapil. Kapil. If you see our net working capital in FY25 as largely remained flat as compared to 24 despite revenue growing 23 percentage. Is there any one off or we have to. We can. We can safely assume that this is a way forward where working capital requirements will continue to be on a decreasing on a daily basis.
Kapil Bhutani
I still hold our own position that we require a 30 days working capital. Though we are working about 10 days working capital at the moment. But yes, our business modeling is at the model. But we continue to exceed our performance on the cash management and client management and we hope to do that going forward also.
Arun prasad
So what happened in 25 where we had some exceptional performance on the working capital side? So there was. The better days have reduced on certain clients we have been able to negotiate better terms with.
Anuj Khanna Sohum
Okay, so. So that will be. That is interrupt.
Arun prasad
Sir, may please request you to Egypt. Thank you very much. We have our next question from the line of Rahul Jain from Dollar Capital. Please go ahead. Yes, Rahul, can you speak a little louder?
Anuj Khanna Sohum
Yeah, yeah. Thanks for the opportunity. My first question is, you know, with web traffic moving away to AI tools instead of mobile desktop browser, will that impact us in some manner?
Arun prasad
Sorry, can you clarify? Traffic is moving from mobile to. AI tools.
Anuj Khanna Sohum
All right. Well, I think at the moment, if you look at the overall ecosystem, I would say there’s a tremendous amount of increase in devices, connected devices expected globally. So, you know, today our reach is over 3 billion connected devices. We are aiming for realistically looking at how that will reach to about 10 billion connected devices over the course of this decade. And we see that there’s a huge amount of human traffic increase right in terms of the amount of time that is being spent online. And that goes to of course went from the browser and search to app stores and apps.
Now there’s another dimension of AI tools related traffic. Now we are already having quite a number of patents as well as innovative use cases on how our use cases are evolving with intelligent use cases, not only using AI tools to serve our business more efficiently and better, but also to see how we are integrating the experience. Experience where you’re dealing with a consumer directly, you’re dealing with an AI agent of the consumer. For example, I believe that going forward all of us would have a just like you have a personal email id, you have a professional email id, similarly you’ll have a personal AI agent and you’ll have a professional AI agent which is work related.
And we will be dealing with all of these kind of interfaces. One is direct to the consumer, another is dealing with the agent of the consumer and making sure that these engagements lead to monetizable conversions eventually. Because let’s assume that the eventual consumer has a conversion of a transaction with an advertiser has to happen with an eventual consumer. But there is going to be another authenticated AI agent of the consumer who will be making certain decisions. For example, in your household, your fridge might decide to buy groceries based on a certain pattern that you may assign to it.
We have use cases that we’re building towards that it’s not necessarily an issue of supply or inventory. I think it is an issue of how do we attribute conversions which may happen from authenticated AI agents acting on behalf of the consumer. And when that is established, I believe that the use cases that we already envisaging, envisioning, trying and building and testing in our product will keep us in good stead. But the ecosystem is evolving. But if you are just looking at modeling our business, the first thing to model is how many connected devices will increase in the ecosystem.
Will that lead to more volume and more value of conversions happening online on mobile? And if the answer to all of that is yes, we believe that we will have an increasing growth rate with advertiser spend for Conversion growing on our platform. And we will be finding a way to make sure that we navigate not only direct to consumer conversions, but also driving conversions through their AI agents. And at all points in time, one of the earlier conversations about these fraud detection, identity detection, it is going to be very important because we will also have a lot of fraudulent AI agents and tools out there.
So, you know, all the IP that we have built around fraud detection and management will become even more relevant. So the need for a tech Stack like the Apple 3i consumer platform tech stack will only increase for the ecosystem because the ecosystem will have more complexities to deal with. Both on the good use cases where you have not only the human traffic, but authenticated credible human assigned agents acting on their behalf, a kind of traffic, but you will also have a lot of fraudulent AI kind of traffic as well. And therefore a tool and a platform which is automated to deal with all of these complex scenarios is going to become even more essential for the advertisers than it is today.
I’m feeling pretty safe about the moat and the relevance of what we are building going forward. And we’ll deal with these use cases competently.
Arun prasad
Right, right, thank you. I understand the potential and all that.
Anuj Khanna Sohum
Basically. Just to slightly clarify, if the answer changes accordingly, was that as the traffic moves from a browser to mobility, similarly when it moves from within mobility to AI, does the ecosystem on the ad exchanger backend would change? If that does not change, then I can understand your situation.
Arun prasad
And secondly, on the optics AI, how much of that we have, as you explained in your event, how much savings it’s bringing on the content creation side, that would be helpful, thank you.
Anuj Khanna Sohum
Thank you very much for asking those questions. Again, we think that most of the AI traffic will happen on mobile. Okay. At the moment, right. The other devices, other connected devices, variables or other embedded chips and so on, I think it’ll still take to become mainstream. For now, a lot of the traffic would still be on mobile. And therefore the fundamentals of that engagement should be seen as an authenticated AI traffic on behalf of the consumer should be treated as no different from the consumer itself. So that’s how we see it at the moment. And so I see no major sort of disruption on how we will measure conversions attributed back to that consumer, whether it is through their AI agent or directly by them.
I think that conversion attribution will eventually go back to the consumer. So I don’t see any fundamental change there with respect to optics AI. Well, we as a company have always been receiving creatives from the advertisers, right? So we don’t go and start making video ads or we don’t start making banner ads. We receive creatives based on the brand effects of the advertisers. And what we do to them is to enhance them, augment them, authenticate them, ensure that those creatives are working, are being targeted to the right users at the right time. And if we find that some of the creatives are working well in one consumer segment context, but it’s not working well in another, then we would work with the advertisers in the past, in the cycle of going back to them, giving them feedback that your creative is not okay, can we have better creatives? Can we have more creatives that has now become automated with optics AI.
So the brand has to give us very little and with that very little that the brand tells us with some of the creatives that they give us with optics AI, we can create many, many more creatives that are contextually hyper personalized to the consumer segments that we are reaching out to. Right? So whether it is vernacular personalization or it is other forms of cultural contextual personalization, that is what optics AI is doing. So there was no cost to us at the beginning and now when we run optics AI again, it is a fairly scaled tech platform and the incremental cost to our tech infrastructure is not dramatic.
I mean we are doing it efficiently and it is part of doing the business. And the ROI on how we run the conversion link campaigns justify running it as part of our data and inventory cost. So it is not going to change the dynamics dramatically but will help to improve the performance and the value perception of our platform to the advertisers as well as the personalized hyper contextual personalization to consumers will make advertising appear more like engaging content and recommendations to the consumers versus annoying ads.
Arun prasad
Got it. Thanks for the color. Thank you so much.
operator
Thank you. Ladies and gentlemen, due to the time limitation, we request you to stick to two questions only. I repeat, due to time constraint, please limit yourself to only two questions. We have our next participant from the line of Samad Patel from IQRS Security. Please go ahead.
Samad Patel
Thanks for providing me the opportunity. My first question is how has the. Mix between new customer acquisition versus retargeting. Has evolved especially in India, emerging market and developed market this financial year.
Anuj Khanna Sohum
Thanks for that question. When we run our business as a consumer platform for driving conversions, we look at each conversion with the value of that conversion. And our goal is to make sure that our advertisers are appreciating the value of the conversion, therefore paying us. Now, typically, the conversion cycle works. Of course, the user might do a first conversion with an advertiser. But essentially, if you look at the case study that we shared, we emphasized today in one of the case studies that we are saying we’re looking for high lifetime value consumers conversions for the advertising.
Now what does that mean when we get a conversion for an advertiser? They would not only say, okay, what was the value of the transaction that happened? What was the conversion? They’re seeing what kind of a user, what kind of a consumer has Apple brought to them. If it is an iPhone user which has a higher lifetime value, the willingness to pay goes up. If it is a high value iPhone user, they are also looking at how many repeat transactions can they get from that user to quantify that lifetime value. Does Apple earn its money? We are charging for conversion, right? Whether it’s the first conversion or the repeat conversion, we are charging for each conversion along the way and we are going to the advertiser and justifying, hey, look, we brought you this consumer.
If it is a first time conversion, we, you know, work out the story in a certain way. If it is a repeat conversion, we are telling you, hey, we are defending because this is such a competitive market and whether it’s E commerce or entertainment, all the consumers are, they’re not loyal to just one app or customer, you know, advertiser that they work with, they are working with two or three. I’m pretty sure on your device you are having all the E commerce apps, you have all the entertainment apps. So even though you are an existing customer to that advertiser, they are constantly conscious that they may lose you to a competitor.
You can buy from an E commerce site A or a B. So therefore we don’t create a massive distinction here with respect to balancing it out. And in our case, we have driven close to 400 million conversions in the last financial year. Now, I would say it’s a fair balance of about 50, 50% when I see it from the advertiser’s lens. How many are new conversions versus how many are repeat conversions? But as far as we are concerned as a platform, all of those 400 million conversions, chances are that we have already done some conversion with those users in the previous year or during the course of the year for either an advertiser A or a B.
So a lot of it is repeat conversions as far as our platform is concerned, whether it is from one advertiser to another. I hope I have not given you an overly complex answer, but from an advertiser’s lens I would say that in emerging markets there is still much more pushing for new user acquisition and in developed markets I think the balance is, you know, a lot of times in favor of repeat engagements of the existing customers. It depends on the maturity level of the advertiser and how much are they spending for new market share versus defending their existing base of customers.
Thank you very much Anuj for that flavor. That is really helpful. My second question is if you can help contextualize the 4Q growth across India, emerging market, Exof India and developed market and what would you attribute as the biggest driver in each of this region? You’re asking only about Q4 or for the full year? Yeah, yeah. For quantitative, in Q4 I would say in developed markets we saw broad based growth coming from existing customers, new customers, new user acquisition, repeat. I mean across the board it was good execution and momentum. We’re carrying through the momentum of what we had done throughout for the last one and a half, two years in emerging markets.
I think most of the emerging markets we saw the seasonality trend where hey, the budgets have been especially in Latam, typically you would find in Brazil and these markets, October, November, December, across businesses, not only advertising businesses, across businesses, October, November, December is. And then Jan, Feb, March is generally the lowest quarter for the whole year. And this is quite consistent in Latin America, in Southeast Asia and in India we found it more resilient. We could push for at least there were seasonality trends. But because we’re also selling to new customers and we’re also finding more growth.
Right? We’re not just dependent upon the customers that we had in October, November, December. So yes, existing customers would have seen seasonality, but we are pushing for new customer sales and therefore getting more. So in India we were able to neutralize the impact. In other emerging markets we saw that even selling to new customers in January was harder because they just somehow all exhausted by having done a lot in October, November, December or it’s just maybe a cultural thing. In developed markets we sold consistent momentum leading to great growth, beating the seasonality trend. So that’s how the results came.
And overall we’re happy that we had a second time, second consecutive year where Q4 is at least at par with Q3. And this is as the CEO of the company and as an industry experienced entrepreneur, this is not normal. All right. This is, this is actually very good. But I’m sensitizing you for your modeling going forward. Please always keep the seasonality impact from Q3 to Q4, that is prudent, that’s the right thing to do and that’s how we do our business planning. If we beat it, that’s great. But we don’t expect to beat it generally.
Samad Patel
That is really helpful. Thanks for picking up the questions.
operator
Thank you. We have a last question for today from line of Deepak from Sundaram Mutual Funds. Please go ahead.
Deepak
Thanks. Am I audible?
Anuj Khanna Sohum
Yes, Deepak.
Deepak
Yeah. So I just had one question. So since Apple is a cash generating company and right now we have more than 1300 crore worth of cash on our balance sheet, I just wanted to understand means how do we plan to, let’s say, utilize this in the next year or in the next one or two years, do we expect any kind of buybacks or it will be more linked to any acquisitive opportunity that you might see so that you won’t want to save it for those purposes, just some flavor on the capital deployment.
Anuj Khanna Sohum
Thanks Deepak for that question. We are an aggressive growth oriented company which is looking for sensible, consistent long term growth. And that’s very, very clear to us. Every asset of the company, whether it’s an intellectual asset or a financial asset, will be deployed to its fullest capacity to maximize sensible, long term, profitable cash flow, positive growth. I’m super proud that our company, you know, in my commentary I only commented on, you know, the P and L metrics but I think my CFO commented also on the cash flow metrics. And seeing over 60% growth in cash flow from operations versus previous year is something to be deeply proud of.
And I really think that our company is doing exceptionally well not only with, of course deploying the cash towards greater growth in the business, but also through the business that we are doing. We are a very disciplined unit about how we generate cash and I think that is beyond any accounting standards. Cash is cash. There’s only one way to report it because it exists and I think that is super important to drive home. And your question is valid at the moment. We are looking to deploy every single asset of the company, cash included, towards delivering greater growth because we are on a 10x growth plan in the medium term and we would be working really hard and making every asset of ours work really hard to achieve that.
Deepak
Thank you.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir.
Anuj Khanna Sohum
Well, thank you very much. And this is a very meaningful year for us because it’s our first year of the third decade and the last month was. It was the first month of our third decade. And I want to assure you that we have put in a tremendous amount of energy to propel ourselves towards the 10x growth that we are eyeing for in the medium term. And we are strengthening the foundations of the company like never before. We are building greater sense of pride, purpose, and ensuring that the entire organization is aligned towards this goal and believing in that every step of the way.
So with that, stay tuned and we look forward to your continued support and to the next earnings call. Thank you.
operator
Thank you very much, sir. On behalf of DAM Capital, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.