Affle (India) Ltd (AFFLE) Q4 FY23 Earnings Concall Transcript

Affle (India) Ltd (NSE: AFFLE) Q4 FY23 earnings concall dated May. 15, 2023

Corporate Participants:

Anuj Khanna Sohum — Founder and Chief Executive Officer

Kapil Bhutani — Chief Financial and Operations Officer

Analysts:

Rahul Jain — Vice President – Dolat Capital Market Private Ltd.

Karan Taurani — Elara Capital — Analyst

Mayank Babla — Enam AMC — Analyst

Vikrant Gupta — ICICI Prudential Life Insurance Company Limited — Analyst

Arun Prasath — Spark Capital Advisors Private Limited — Analyst

Anmol Garg — DAM Capital Advisors Limited — Analyst

Swapnil Potdukhe — JM Financial Ltd — Analyst

Roshan Chutkey — ICICI Prudential Mutual Fund — Analyst

Ashwin Mehta — Ambit Capital Private Limited — Analyst

Onkar Ghugardare — Shree Investments — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Affle India Limited Q4 and 12-Month Financial Year 2023 Earnings Conference Call hosted by Dolat 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. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Rahul Jain from Dolat Capital. Thank you, and over to you, sir.

Rahul Jain — Vice President – Dolat Capital Market Private Ltd.

Thank you, Viko. Good morning, everyone. On behalf of Dolat Capital, we welcome you all to the Q4 and 12-month fiscal ’23 conference call of Affle India Limited.

I take this opportunity to welcome the management of Affle India Limited, represented by Mr. Anuj Khanna Sohum, who is Managing Director and Chief Executive Officer of the company, and Mr. Kapil Bhutani, who is Chief Financial and Operations Officer of the company.

Before we begin the discussion, I would like to remind you that some of the statements made in today’s conference call may be forward-looking in nature and may involve some risks and uncertainties. Kindly refer to slide 28 of the company’s Q4 earning presentation for a detailed disclaimer on that.

I will now hand over the call to Mr. Anuj Khanna Sohum for his opening remarks. Thanks, 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.

Affle continued its track record to conclude FY 2023 as a landmark year, having delivered over 5x growth in top line and profitability over the last five financial years. It was an exciting year, marked with several important milestones and well supported by our focus on enhancing the quality of revenue, bottom line fundamentals, by further scaling our tech platforms and ecosystem level partnerships. I am pleased that despite the global headwinds that have impacted businesses globally, Affle delivered robust growth for the year.

Powered by our ROI-linked CPCU business model, our consumer platform delivered 256.8 million converted users, crossing the 250 million mark for the first time and our CPCU revenue increased by 35.3% year-on-year. Our cash from operations increased at a CAGR of 52.8% since FY 2019. We are stronger than ever before and we are committed to deliver sustainable growth over this decade.

Speaking of Q4 performance, Affle delivered revenue growth of 12.9% year-on-year with meaningful margin expansion, resulting in greater year-on-year growth in EBITDA of 22.1%. We achieved a revenue CAGR of 64.4% in Q4 over the last three-year period, much ahead of the industry growth trends. Our CPCU business continued to be resilient, delivering 62.5 million conversions during the quarter at INR51.2 CPCU rate.

Our strong anchoring on India and other emerging markets enabled us to perform well with 20% year-on-year growth in Q4. Our differentiated market position as a consumer-centric and ROI-driven platform for advertisers has helped us further enhance our productivity and CPCU pricing. This resulted in a steady CPCU rate, leading to year-on-year margin expansion and a strong competitive market leadership position across emerging markets. Our FY 2024 outlook for India and emerging markets remains optimistic and in line with our continued growth trends. However, macro headwinds continue to impact our business in developed markets in Q4 FY 2023 in a few verticals like fintech and entertainment. To mitigate this short-term impact and to accelerate success on the existing pipeline of opportunities in developed markets, we have actioned a multi-pronged 360-degree turnaround plans with decisive steps taken immediately in Q1 FY 2024 around people partnerships, products, and platforms, and that will yield immediate measurable outcomes in FY 2024.

First, we have reorganized our people teams that were focused on developed markets to ensure that these teams are aligned to upsell and cross-sell all our platform use cases on CPCU business model and not be limited by any one platform. In line with our hands-on entrepreneurial culture, I will directly lead the developed market- focused business units in FY ’24. Accordingly, the reporting structure of teams and operating resources have been realigned with attractive incentives linked to attainment of aggressive turnaround growth plans across all key emerging verticals in all our developed markets.

Second, we have realigned our strategic partnerships and execution strategies with deeper focus on products and platform lock-ins for multi-year growth focus on higher value conversions with multi-million dollar contracts with select supply side partners, OEMs, and operator partners across these markets.

Third, we have recently introduced all our CPCU use cases on our CTV, connected TV product with household sync capability. These integrations are now completed with the leading mobile measurement platforms to strengthen our competitive advantage as the only CPCU model-based CTV platform for advertisers. This should result in greater growth of our higher value CTV plus CPCU proposition from Q2 onwards.

Fourth, our first-mover advantage on Apple iOS SKAN advertising products is further fortified as we have successfully rolled out Apple’s App Store related multiple touchpoints and thus providing our advertisers with the most differentiated and ROI-driven use cases on iOS SKAN and Apple’s App Store. We are also working on App Store related touchpoints with other OEMs and operators on Android as well. Now, these initiatives are expected to drive greater growth for our CPCU business across all markets immediately from Q2 onwards in this financial year.

Fifth, we have recalibrated our inorganic growth plan towards acquiring deeper access to customers’ first-party data in high-growth verticals such as gaming with key execution strategy to deepen all our use cases of CPCU business to unlock the highest lifetime value of consumer conversions for our advertisers.

Our growth action plans for developed markets, as outlined above this now, are already in execution under my direct leadership, and by Q1 itself, the internal reorg would be completed. The new contracts and integrations with strategic partners would be completed. The key product initiatives across CTV and OEM app stores will be scaled up with deeper focus on emerging verticals and the turnaround impact of these initiatives will show in our operating results from Q2 onwards. We will continue investing in our organic growth operations, augmenting our OEM and operator partnerships with some of the largest global brands as well as actively evaluating inorganic opportunities with greater emphasis on higher-growth industry verticals like gaming. This will fortify our mot and ensure sustained meaningful growth with further uptick coming along the next few quarters this year as well as beyond.

To re-isolate our strength of delivering unique consumer experiences, we had in total shared 21 case studies in our earnings presentation over the last seven quarters. These were focused on some of our key industry verticals, including e-commerce, adtech, entertainment, finance and banking, FMCG, foodtech, gaming, health tech and retail. Continuing to share our customer success story, this time we have also included three case studies which are focused on health tech, whereby we are looking at driving greater consumer adoption of online health, diagnostics and well being services in India. We have also shared a gaming-related case study, which is a fast-growing vertical driving user growth across geographies. We’ve also shared the insurance super app focused on growing the reach and adoption of essential financial services.

Now, these case studies demonstrate our ability to provide innovative solutions and drive outstanding results for the advertisers globally. Affle continues to be recognized as an industry thought leader, and as a testament to that, we were awarded the Best Use of Programmatic Advertising at the Indian Digital Awards organized by the IAMAI.

We were ranked amongst the top media sources globally to deliver ROI on Apple iOS SKAN campaigns in the Singular ROI Index 2023. We also won five awards at Digixx 2023 across various high-impact categories such as technology, programmatic and performance marketing and more, as well as one award in geo-targeting category at MMA Asia-Pac 2022.

With that, I now hand over this discussion to our CFO Kapil Bhutani to discuss the financials with you. Thank you and over to you, Kapil.

Kapil Bhutani — Chief Financial and Operations Officer

Thank you, Anuj. Wishing everyone a good day and hope all of you are keeping safe and well.

Continuing our growth momentum, we concluded FY ’23 with a revenue of INR14,340 million, a robust growth of 32.6% year-on-year and quarter four financial year 23 revenue stood at INR3,558 million, a growth of 12.9% year-on-year. We delivered a revenue growth of 20% year-on-year in India as well as emerging markets. Except for developed markets, which anyway had a lower contribution for us on a consolidated basis, our business across global emerging markets remained resilient with an overall bottom line growth momentum and margin expansion year-on-year.

During the quarter, India contributed 34.7%, while international revenues contributed about 65.3% of our revenue. We recorded an EBITDA of INR2,930 million for the full year, an increase of 37.2% year-on-year. And for the quarter four, we had a INR716 million as EBITDA with an increase of 22.1% year-on-year. As you are aware, our quarter three in any year is the highest quarter due to seasonality. However, the cost of operations in quarter four remained broadly at par with quarter three.

In terms of OpEx, our inventory and data cost stood at 60.8% of revenue from operations in this quarter. This is in line with Q3, while we witnessed a significant margin improvement from Q4 last year. Our employee cost during the quarter remained relatively stable sequentially while our other operating expenses increased by about INR18.3 million, largely on account of annual audit fees or other professional services.

PAT on full year stood at INR2,453 million, an increase of 33.8% year-on-year, while the Q4 PAT stood at INR624 million, an increase of 18.4% Y-o-Y on a normalized basis. Just to remind that last year, in Q4, we recorded a gain on fair valuation on financial instruments of INR162 million net of tax. Please refer to slides four and five of our earning presentation for detailed looking on the same.

Our effective taxes were lower this quarter on account of recognition of deferred tax assets of a subsidiary. We remain focused on working capital management, continued to see a robust cash flow from operations. Our collections were robust and the ratio of our cash flow from operations and profit from tax stood at 106% for the financial year ’23. We have been extremely prudent in our customer profile, and as such, there were no material changes in the collection risk. We remain confident for our long-term business prospect, invest further in our business, and stand committed to deliver long-term sustainable growth.

With this, I end our presentation. Let’s open the floor for questions.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen, the first question is from the line of Mr. Rahul Jain from Dolat Capital. Please go ahead.

Rahul Jain — Vice President – Dolat Capital Market Private Ltd.

Yeah. Hi, thanks for the opportunity. The commentary has been improving selectively for some of the global peers in this quarterly earnings. So would appreciate if you could share a bit more on what you are witnessing across your key markets like India, Southeast Asia, and our developed markets.

Secondly, if you could share that how the newer avenues such as connected TV that you talked about would have a bearing on our key metrics such as CPCU costing or margin in general.

And finally, last bit from my side would be that to your comment on this inorganic strategy wherein you are looking towards strengthening first-party data, so any more color here would be helpful. Is it like we’re getting into the publishing side or any more input there would be helpful. That would be great. Thank you.

Anuj Khanna Sohum — Founder and Chief Executive Officer

All right. Well, thank you, Rahul, for your questions. Well, definitely I would say that if India market or emerging markets for us globally, we are no longer seeing the kind of headwinds, the economic headwinds that were very strong in the last financial year. Even though we performed with quite a lot of resilience in the 20%, 25% growth range for India and emerging markets globally even in FY 2023, in FY 2024, our outlook remains optimistic and positive with respect to India and emerging markets, which is already 81% plus of our business at the moment. So I think we are in a very strong footing there. I mean, our confidence and conviction is even more because in the last financial year, we were able to deal with those headwinds and still deliver an honorable level of growth. So I think going forward, in FY ’24, our confidence is high that we can continue to maintain that level of growth in 20%, 25% organic growth range.

In terms of developed markets, I think I’ve already given a fairly detailed commentary about how we are looking at focusing and doubling down on certain differentiations that we have created in our product lines, like for example, the CTV combining it with CPCU to go for even higher margin, higher value conversions as well as iOS, as most of us know, is a higher margin play. And within iOS, we already had a first-mover advantage on the SKAN changes that happened in 2021, but we have actually further enhanced our differentiation by adding into their certain touchpoints on the Apple App Store where we’re combining that for the advertisers, and this is, again, the impact from margin perspective or the CPCU rate perspective should be going into a more higher value and higher margin segments both CTV plus CPCU as well as Apple’s SKAN and Apple App Store plus CPCU. I think these are very positive initiatives that we have undertaken. This will help us not only in developed markets, but these same initiatives would be actually a great first-mover advantage for us in emerging markets. So I see very positive trend lines there, and I am very optimistic about it.

In terms of your question on the inorganic growth plans, so I did mention very clearly that we are looking at more first-party data of the advertisers coming. So no, we are not shifting to, let’s say, becoming more on the publisher side. We are doubling down on our CPCU business, but we’re saying we need to go deeper on certain verticals, and we believe that gaming is one such vertical where the advertisers who are also game publishers, they have deep first-party data and how we plan to work closely with them with deeper product integrations and so on and bringing all our use cases with those customers, So any inorganic growth acquisition that we’re looking at right now is actually focused on these very specific capabilities that we are evaluating, and we have been evaluating this for the last four to five months, and we are continuing to be carefully calibrated until we are absolutely sure. So yes, we are looking at more deeper verticalization focus and gaining first-party deeper integrations with these advertisers in verticals like the gaming vertical.

So I hope I covered all four aspects of your questions.

Rahul Jain — Vice President – Dolat Capital Market Private Ltd.

Yes. Perfect. That’s it from my side. Thank you and best of luck.

Anuj Khanna Sohum — Founder and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is from the line of Karan Taurani from Elara Capital. Please go ahead.

Karan Taurani — Elara Capital — Analyst

Hi, thanks for your opportunity. My question was around two things. One is, if you could give us some kind of indication around the growth rates in US, UK markets and the other emerging nations, just to get a sense in terms of what is the quantum of decline that US, UK is facing right now and how much time do you think this would be take to come back on track?

Anuj Khanna Sohum — Founder and Chief Executive Officer

Thanks. I think in terms of growth rates for the overall industry sense, I think we are still very, very optimistic that the long-term tailwinds of digital continue to be very, very strong. In fact, in our earnings presentation, we have included some specific slides towards that to see, if you look at some of the markets like developed markets, including, let’s say, markets like China and so on, you find that the digital spends in these markets have already gone to much higher levels. Like in China, digital spends as a percentage of total advertising spend was around 80%. In US and Europe, that number is somewhere between 65% to 75%. So overall, if you look at this, digital spends have gone up substantially, whereas in India, Indonesia, Africa, LatAm, basically emerging markets, these numbers are still under-calibrated. So these long-term growth trends for at least our India and global emerging markets, business continues to be very, very strong, and therefore there is no reason for us at Affle to not be looking at at least 20% to 25% organic growth from these markets over a period of this financial year.

Now, with respect to developed markets, the addressable market is very large and we have only a much smaller sort of footprint in the developed markets. And so last year, what we saw was a scenario where our footprint was small, and yet, because of the macro factors, some of the customers in FinTech and some of the customers in entertainment category were impacted. Now with the initiatives that I have outlined, I am actually reading this directly hands-on. So therefore I can give you even further clarity and conviction that Q2 onwards this year, we will see a turnaround situation because of the very clear and very concise action plans that have already been put in place and most of them will come to a conclusion within this quarter as well. So the decisions have been made, the actions are being taken. And I am directly leading this with the teams reporting to me on a daily basis.

So making sure that we absolutely go for a winning turnaround position from Q2 onwards in developed markets. And once we achieve that, you would absolutely see that this financial year, we will come back to the same kind of growth trends that we were always having guidances for, and we will continue to provide that kind of an outlook going forward as well because there is a huge addressable market in developed markets, and we’re just scratching the surface, but our products are differentiated, our platform propositions are compelling, and we’re just making sure that we provide the right kind of entrepreneurial drive that is needed to enter these markets and create a meaningful impact. So I’m feeling confident that we will see a very strong turnaround for developed markets within this year itself, but Q2 and Q3 onwards if I want to drive for the October, November, December quarter. So all these initiatives are taken in the conclusive footing now in this quarter. Q2, we would ramp up; Q3, we’d be ready to tap into the growth.

Karan Taurani — Elara Capital — Analyst

Got it. Thanks for these insights. The second question would be around this developed markets. So obviously the macro environment is one very big reason, but is this Apple privacy policy also kind of having an impact? Because what we hear is that converts are down there, data costs are going up. So what is the kind of disruption that we are seeing in developed markets today? And it is also a very big reason for the growth businesses are probably seeing a decline?

Anuj Khanna Sohum — Founder and Chief Executive Officer

See, the disruption related to iOS happened in 2021. We are in 2023 now and we have already sailed through. In fact I gave my comments earlier, that on SKAN network, we’re doubling down and fortifying our first-mover advantage of having embraced these changes. Right? So we had very little baggage, our iOS exposure has been very low before. So I see iOS as a growth area for us because our product is complete, our product is differentiated, and we are able to demonstrate CPCU based business model on SKAN iOS solutions to the advertisers, we are able to bring in unique propositions with the Apple App Store related touchpoints and so on. So I think what we are offering is unique, what we are offering is competitive and compelling. Hence the privacy-related issues, we have already navigated that to bring these solutions already to market. And so I don’t think that that is any kind of concern.

On the contrary, because of these resources, we have the ability to tell the advertisers that when you’re working on iOS, the consumers are more premium, the challenges are addressed by our products, and therefore you’ve got to pay more. So I think the ability to charge a higher CPCU rate, the ability to extract better margin on this particular segment will actually work to our advantage versus to a disadvantage. And I think we’ve already demonstrated that in the last few years and we are now going to double down on that with respect to bringing iOS because in developed markets, iOS is 50% of the market share with respect to number of devices or the advertising spends going on iOS versus Android, whereas, as you would know, in emerging markets, it’s over 90% Android. So I think there is a very clear direction that we are taking that iOS is the growth proposition both in developed markets and a high-margin growth proposition even for emerging markets. And I think this will be a growth segment for us as we execute as well.

Kapil Bhutani — Chief Financial and Operations Officer

Right. And just one last if I may squeeze in, so I mean, you have been —

Operator

Sorry to interrupt, Mr. Karan. May we request that you return to the question queue for more of questions?

Karan Taurani — Elara Capital — Analyst

Yeah, I’ll join the queue. No worries.

Operator

As there are several participants waiting for their turn. Thank you. Our next question is from the line of Mayank Babla from Enam AMC. Please go ahead.

Mayank Babla — Enam AMC — Analyst

Good morning and thank you for taking my question. Sir, I had just one question around the changes in or the new contracts that you are rolling out with clients that you announced in your speech. So could you give us a little more detail about what parameters or key deliverables that have been changed in the context of your clients that gives you so much confidence for a quick turnaround in the next one or two quarters itself?

Anuj Khanna Sohum — Founder and Chief Executive Officer

Right. So this is still getting concluded as we thought, but I think the broad parameters are that working with these supply side partners and OEMs and operators to lock in some of their touchpoints with the consumers pretty much exclusively with respect to how they work with Affle’s platforms and do a deeper integration together with them both on their first-party data, both on the touchpoints with those consumers and ensuring that we have a longer-term lock-in and relationship with them for, let’s say, two years, three years in certain cases longer. And I think that’s the nature of the dynamics of these contracts. Where we’re trying to go to them is saying that we are the partner, which has end-to-end consumer platform propositions and initiatives, and when they work with us, there could be at least some of the key strategic touchpoints on those devices, be it the App Store, be it certain other, let’s say, important touchpoints. And as we make any material, let’s say, contract changes, we’ll also be disclosing and announcing that, right?

So some of those contract changes are not yet material to go into any regulatory disclosures, but then some of them are. And once those contracts are signed, we will also proactively make sure that our investors and yourselves are informed about them so that you would know how to calibrate that forward. We are already working with all of these partners for many years. Now what we are doing is, just locking in deeper relationships at the highest levels in these companies and trying to do longer-term contracts, and it gives them a certain predictable path of revenue, but actually, for us, it becomes a much stronger competitive differentiation, and a higher margin ability to go and deliver it into the market. So then it will also help us with getting longer-term contracts with the advertisers and the agencies once we have a very strong strategic partnership based anchoring.

So that’s the kind of direction that I’m taking, and I am already directly in touch with most of the leadership of our partners and we are on high final stages of conclusion. Some of the contracts have already been concluded, but they are not — and they are more like proof of concepts and they are not material for us to go and make any specific disclosures, but there are some material ones, which we are also working on, which are on final stages and we will announce them as they conclude.

Mayank Babla — Enam AMC — Analyst

Sure. Thank you so much. And my last question was on the international revenues. This time, I believe the YoY growth was only around 9%. So could you highlight which geographies specifically where there are headwinds?

Anuj Khanna Sohum — Founder and Chief Executive Officer

Sure. I think I did already mention in my comments, that India as well as global emerging markets. We within this quarter Q4 also saw over 20% year-on-year growth, and therefore consequently, if the overall growth is lesser, it implies that the developed markets continue to see the headwinds, and I mentioned two verticals, fintech and entertainment. These two verticals shrunk for us in developed markets in this quarter, even in the previous quarter, and this is where the headwind impacts have been.

So if we take it on a consolidated basis, India and emerging markets clearly is showing great resilience. Even with all the kinds of headwinds that were there, we are still in that range of 20%, 25% organic growth, whereas in developed markets, where we were under-calibrated, we have not been as strong to respond to the headwinds and we have seen the impact and shrinking in the developed markets in some of the verticals.

To solve for it, I have given clarity with what are the turnaround action plans that have already been put in place, and I have a lot of conviction and clarity on what needs to be done. I am hands-on involved and leading this and turning this around. And I am confident therefore that we will see clear measurable outcomes on this from Q2 onwards being ready for the festive quarter, October, November, December, Q3, which is typically our highest quarter. I want to make sure that we are all guns blazing on all of these initiatives, maximizing the advertiser budgets in our favor in developed markets. So that’s the color that I can give to you. So which markets are included in those developed markets, it’s primarily US and Europe. These are the two sort of bigger contributors within our developed markets. And yeah, this is where we are making sure that we put in the focus and turn it around. We have a right to play, our products are strong and differentiated.

We just need to make sure that we do smart execution on the ground. And for that, the appropriate teams are already wired with the right incentive structures. And when they report to me, there is a lot more, let’s say, hustle in the process. So we are definitely bringing in a lot of action on the ground and I am pretty confident that the pipeline is already there and we will be seeing conversions starting from Q2 onwards.

Mayank Babla — Enam AMC — Analyst

Great. Best of luck for the future. Thanks.

Anuj Khanna Sohum — Founder and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is from the line of Vikrant Gupta from ICICI Pru Life. Please go ahead.

Vikrant Gupta — ICICI Prudential Life Insurance Company Limited — Analyst

Hi, good morning. Thanks for the opportunity. I had mainly a question on the inorganic growth plans that you outlined. Could you talk a little bit more in detail about what sort of geographical exposure we’re looking for? Would this largely be on the emerging markets again, gaming acquisition that you’re talking about? And second, are we largely looking at acquiring some sort of a demand side platform here?

Anuj Khanna Sohum — Founder and Chief Executive Officer

Thank you for that question. The fact that we haven’t announced any transaction yet, there will be a limit to what level of clarity I can go into and I also don’t want to give negotiating levers to those targets that we are negotiating with or evaluating for the last six months. So I think we just wanted to be conscious of that, and I hope you’d appreciate it. But yes, broadly what we are looking at is our core strategy has been verticalization, and in that verticalization strategy, we have already enumerated what are those verticals that we are focused on. Gaming as a vertical for us, as a whole group across developed markets, emerging markets is under-calibrated. Now in emerging markets, gaming is still an upcoming vertical. It’s not that ad guys are spending huge amounts of money in gaming at the moment in the emerging markets, but we expect in the next three to five years, gaming will also be a very, very strong vertical in emerging markets.

In the developed markets, in advertising and digital advertising, gaming is actually one of the largest verticals for most of our peers, which are listed companies. And most of them, gaming would be like north of 50%, or in some cases, even 80% of the revenue, whereas for Affle as a group, gaming is less than 10% of our revenue. So therefore we think that doubling down and verticalizing on gaming would be strategic for us. And what are we looking for when we look at these target companies? Do they have the right quality of customer integrations? Do they have deep data integrations with those customers? And if the answer is yes, then we see a great opportunity for Affle in the rest of our core platforms and propositions to be upsold and integrated with those existing customers of the target companies. And so the strategy is much more, how do we zoom in with laser focus in a particular vertical, grow into those customer accounts by upselling all of Affle’s propositions on CPCU business model basis, and therefore expand the lifetime value of those consumers for those customers. So we’re looking at new user conversions, repeat user conversions, using connected TVs, cross-device conversions, and so on and so forth, and these kinds of capabilities that Affle’s platforms have inherently. We just want to shorten the time to market.

If we do this organically, it may take us three years because the gaming customers do deep integrations with these platforms and the switching cost is higher. So for us to gain a stronger footing straight off the bat of a meaningful size into these verticals, inorganic is a very sensible way to do it. And currently, the valuation of most companies in this space, because of the headwinds of macroeconomic factors are actually quite sensibly priced. So we are evaluating a few targets. We have been actually evaluating for the last six months and we have a very long courtship period then deciding whether to proceed or not. And yeah, I think within this year, we should have at least one such transaction.

So yes, it will still be CPCU business-led, it will be verticalized into high-growth verticals where we are bullish globally, which — gaming is one of them, and it will still be on the demand side because we are basically doubling down in having the same core CPCU segment as the main segment of the company. We are not, let’s say, diversifying yet because I think we are still small and we need to get much more market share globally before we look at, let’s say, maybe diversifying to other possibilities. So at the moment, it’s same CPCU verticalization as a strategy, gain access to customers, so if we can upsell and cross-sell our other propositions and that’s really the thesis.

Vikrant Gupta — ICICI Prudential Life Insurance Company Limited — Analyst

Understood. So clearly your customers are looking to spend, are looking to advertise more on the gaming side and that part of the spend is something that you are —

Kapil Bhutani — Chief Financial and Operations Officer

It is not about our customers are looking to spend on the gaming side. It is the gaming customers we are looking to expand our portfolio base.

Vikrant Gupta — ICICI Prudential Life Insurance Company Limited — Analyst

Okay, understood. And just one final one. Sorry. So what sort of margin expansion are we looking for going into fiscal ’24? Because we had guided for getting a required entity maybe mid-teen sort of a margin. I think the FY ’22 numbers were closer to 7% to 8%. So where are we in FY ’23 and where we do think we will be in FY ’24?

Kapil Bhutani — Chief Financial and Operations Officer

Okay. So almost all the acquired entities over the last three years. In this financial year, they will actually complete three years with us with respect to, let’s say, Appnext and Mediasmart. And I think we’ve already brought them to the mid-teens kind of margin level performance, bottom line performance. Jampp is still completing — next month is going to complete second year with us, and Jampp is way more focused on developed markets and therefore we going in leading the developed markets directly and making sure that we are integrating all our use cases and proposition across our platforms and pushing back the developed markets customers with differentiation and aggression is something that is happening now, which is, by the time we complete this financial year, we would have almost reached the end of the third year for Jampp as well. And I think this is really the case of lifting the margin profile of the company at least basically north of 20% EBITDA in this financial year across all the quarters and inching it up, like even if you look at last year’s numbers for us, we had seen a margin expansion on EBITDA by about a percentage point. And I think going forward as well, our goal would be to see how we can improve it meaningfully a step at a time.

And even I want to give you some comfort around any inorganic transactions that we do are no longer playing the playbook of three years for that. We have learned, we have understood how to do these acquisitions and we have learned over three years of integration, and we have now levers on the hand. In case we do another inorganic transaction this year, we will ensure that in FY 2024, it’s already, within year one, contributing mid-teens in terms of EBITDA performance. So I would not see any significant, let’s say, averaging down. So from an organic perspective, on a standalone perspective, for a lot of our businesses, our margin profile would be close to 25% EBITDA, but then factoring in that Jampp is still to complete three years and we do a new acquisition that’s still in the mid teens, the average would still come down to, let’s say, north of 20% EBITDA, but still margin expansion on a year-on-year basis. So we are very carefully calibrating this and making sure that not only our margin profile is showing a clear trend towards margin expansion, but also, as you know, we are very careful with respect to how we are doing on our cash flows because that is the only way to fund some of these acquisitions and [Technical Issues]. So I think you will find the discipline of bottom line performance, margin expansion to be sensibly placed and we’re not going to do something which averages our margin performance down. That’s not going to happen. Yeah.

Vikrant Gupta — ICICI Prudential Life Insurance Company Limited — Analyst

Okay. Thank you.

Operator

Thank you. Our next question is from the line of Arun Prasath from Avendus Spark. Please go ahead.

Arun Prasath — Spark Capital Advisors Private Limited — Analyst

Thank you for the opportunity. Anuj, just you spoke about the categories, which let you down in this year, namely fintech and entertainment. Can I request you to also talk about the categories, which helped you to sustain the momentum, top three, top four categories which helped you to sustain the momentum during this year? And what do you think the risk in these categories falling off the radar? And if it happens, which other category do you think which can come back and replace this so that our momentum is continued there in the emerging market? That’s my first question.

Anuj Khanna Sohum — Founder and Chief Executive Officer

Interestingly, the fintech and entertainment impact was in developed markets, the negative impact, whereas in emerging market actually, fintech did quite well. Entertainment did quite well. So when I look at it on an overall basis, there were some balancing happening there, but that was more emerging markets-led. I think in developed markets, fintech and entertainment was impacted. We were still resilient in gaming. We were still resilient in foodtech. We were still resilient in e-commerce. So e-commerce, foodtech, gaming, and even adtech. I think these four verticals were still resilient for us in developed markets.

Whereas in emerging markets, we saw overall across-the-board growth across all our verticals and that was quite heartening because there were times where fintech was a bit in trouble in some of the quarters, adtech was in a bit of trouble at the beginning of the financial year FY 2023. But over the course of the year, we are seeing broad-based growth across all verticals in emerging markets.

In developed markets, like I said, fintech and entertainment, we saw some of the customers shrink or suddenly have immediate stops in budgets. I think we could have done better in terms of execution by upselling, cross-selling our other products and services, but because our presence in those markets was still under-calibrated and the leadership was not as confident of doing the rest of Affle businesses in those markets. So I think therefore making those changes, bringing in the conviction and pushing forward our products, our integrated proposition in developed markets, we will, I think, bounce back quite strongly even in fintech and entertainment because these are very large verticals and large addressable markets in developed markets, and our numbers are so small in developed markets, but we cannot be on the back foot.

So I’m pretty confident that this financial year, we will see a bounce-back across verticals in developed markets, and in emerging markets, like I said, we’ve already entered the year with a good kind of growth run rate in emerging markets, so we should be fine there. Yeah, but the focus is very clear. I think keep it verticalized, keep our product proposition differentiated, keep our business model compelling, and the execution then becomes simple because we were selling something that’s compelling and we were selling it in such a verticalized way that those advertisers in those verticals will find it a compelling proposition and the rest of it is platform-based scalable execution. So I’m really leading the sales teams with a very strong hustle to make sure that we maximize or make good for any gaps or headwinds that we saw in FY ’23, so make it good in FY ’24.

Arun Prasath — Spark Capital Advisors Private Limited — Analyst

Yeah, understood, Anuj. Thanks. And my second question is on the gaming. You gave quite a bit of color on the gaming, and we also spoke about in developed markets, you also have much higher revenue coming from the gaming, but those who are the players who also help these gaming developers to develop the game from the scratch, are we looking to add this kind of a capability through our strategic initiations? Because that is quite a very, very elaborate set of skill additions to the organization.

Anuj Khanna Sohum — Founder and Chief Executive Officer

No. What I was talking about was not gaming publishers. I was talking about people who are running mobile marketing and aspects of demand side platform companies, and they are very comparable to what Affle’s platforms are capable of doing, except for that they are so deeply focused on gaming, whether it’s relationships with the CXOs or the product integrations that they have already down with these gaming customers, [Indecipherable] the stickiness. So if we go to, let’s say, win a gaming customer by default, they would say they are too much anchoring on the existing partners to be switching. All we are looking for is an inorganic entry point to gaming, which would gain access to these gaming customers and integrations of a meaningful size and scale and add it to our portfolio by default so that we have a highway on which the rest of our platforms can drive in and up-sell and cross-sell and therefore create actually organic growth on top of these inorganic acquisitions of these customer portfolios. So we are looking at these kind of ways to accelerate our market share into gaming, buy our way into at a good starting point on which we can then expand on to by upselling our own platforms and capabilities there.

So that’s what we’re looking for. We are not looking to create a new diversification or going into publication or some other things. We are staying true to our course. This is what we do well. We are a consumer platform. We are a CPCU business model based consumer platform that is doing new user acquisitions, the feed conversions, CTV-based conversions, online to offline conversions and connected devices overall, and this is where the use case is still the same. We just want access to those gaming customers that have already done some integrations at data and platform levels with the target companies that we are looking at right now. And once we do such a transaction, our goal is to upsell and cross-sell our core platforms into that, so giving us stronger footing and market share into the gaming vertical and not just waiting for the long sales cycle that is involved in the gaming onboarding of customers.

Arun Prasath — Spark Capital Advisors Private Limited — Analyst

And Anuj, will this result in some saving in the —

Operator

Mr. Arun, may we request that you return to the question queue for follow-up questions as we have other participants —

Arun Prasath — Spark Capital Advisors Private Limited — Analyst

Sure. Thank you.

Operator

Our next question is from the line of Anmol Garg from DAM Capital. Please go ahead.

Anmol Garg — DAM Capital Advisors Limited — Analyst

Yeah. Hi, thanks for the opportunity. So I had a couple of questions. Firstly, Anuj, you were talking about the margin expansion going ahead in next year. So can we expect the margin expansion to come from operating leverage or do you also think that you can structurally bring down the data and inventory cost further? Because it has come down from 63% to 60% now. Can we bring it down further or will it be through employee expense and other expenses based on the operating leverage?

Anuj Khanna Sohum — Founder and Chief Executive Officer

Yeah, looking at more scaling our business and growing our business with a growth mindset, so we will continue to invest in data and inventory costs. We will continue to invest in our operating expenses as well to ensure that we are supporting this growth path because we are not just looking at one quarter, next quarter, this financial. We are looking at the decade ahead. There’s still seven more years to go till 2030 and I have a lot to deliver there based on what we are looking to achieve for our company long term. So therefore we continue to do the right areas of investments.

Having said that, the way the margin expansion is calibrated to date, some of our organic businesses are already at the 25% of EBITDA level. Some of the acquired companies have already reached close to 18% to 20% EBITDA level. Some of them are still at the teen margin contribution. So when we look at the blended sort of results on EBIDTA, you are saying about 20% EBITDA. So when we plan our business for, let’s say, FY 2024, we’re just looking at scaling up revenue, scaling up our margins by going into higher value segments. So how do I improve the CPCU pricing? How do I make sure that we’re selling highly differentiated products propositions with our business model, which is already very unique, and with that, gaining deeper access into the market as a differentiated [Indecipherable] versus competitors.

So we’ve gone higher up in the value chain versus being commoditized. So I think defending pricing for me is important. Then the operating decision in terms of how much we invest in gaming, deeper quality access to data and inventory and so on and so forth. There are some levers there for us to optimize. But I would say that we’re looking at a natural progression where one step at a time, the acquired businesses should move closer to the 20% EBITDA level. If we acquire [Indecipherable] business, within one year, making sure it is in the 15% to 20% EBITDA range and so on and so forth, and therefore also getting to a predictable path that, okay, if we were 20% EBITDA in FY ’23,then we aim for 20%, 22% in FY 2024. Those are the kind of, let’s say, one step-at-a-time scenario, but are we looking at dramatically shifting straightaway to 25%? The answer is no, but there is a clear path to doing that one step at a time over the next few years.

Anmol Garg — DAM Capital Advisors Limited — Analyst

Thanks, Anuj, for the detailed answer. Just the last one from my side. If you can highlight what percentage of our revenue comes from US and Europe? And within that, are we dealing with few large clients or there are a number of a couple of smaller clients over there where we hope to scale up?

Anuj Khanna Sohum — Founder and Chief Executive Officer

That’s a great question. So in terms of our overall business, India and global emerging markets is already at 81% of our total revenue. So the developed market contribution is about 19% today, and it’s a small base because the developed markets, the total addressable market is very large.

Now on that small model, we have existing customers and partners already where we can go and upsell and cross-sell better. So if we can gain more budgets from there and that is an area of growth for us, and we do have a meaningful number of customers. We are well-known in these markets. I mean, it’s not that we are a new player in that sense. I mean, yes, we are perhaps a lot more known in India and emerging markets globally because we are clearly anchored as an emerging market focused player on Android.

But let’s say, after the 2021 change in iOS, which actually leveled the playing field for the incumbents there, it gave us a good sort of entry point to get in the developed markets and talk about our propositions in a differentiated way both for iOS as well as for Android. So I’m seeing a very, very good sort of opportunity for us to scale up in developed markets, and we have a meaningful number of customers in developed markets, I would say, at this moment, maybe around 30 to 40 customers contributing meaningfully across verticals, and we are looking at — growing that number substantially, making it double, triple from here in terms of where we are going. So yeah, I think there is a healthy base to start from and there’s a good market position for us to start from with the differentiated product propositions, good case studies across these developed markets and then calibrate it up and make sure that it is coming back to the kind of growth trends that we’re looking at so that we can deliver 20% to 25% growth in FY 2024 on organic business.

Anmol Garg — DAM Capital Advisors Limited — Analyst

Thanks Anuj for answering my questions. Good luck going ahead.

Operator

Thank you. Our next question is from the line of Swapnil Potdukhe from JMFL. Please go ahead.

Swapnil Potdukhe — JM Financial Ltd — Analyst

Yeah. Hi, thanks for the opportunity. So my first question is on emerging markets since we have heard a lot on these developed market growth rates. I just wanted to understand like, the growth rates in these emerging markets, we earlier used to say it, the industry is growing at around 25% to 30%. Now, for the last two quarters, if I were to look at, you have grown 23%, now 20%. Why are we underperforming the industry growth rate? That is the first question I would like to understand.

Anuj Khanna Sohum — Founder and Chief Executive Officer

I think the answer to that is that the last couple quarters is a unique situation where the market is behaving to whole kinds of macroeconomic headwinds and sometimes the customers are conservative, sometimes they are parking budgets for the festive season, to the next quarter, to the next financial year, and so on and so forth. And I think that could be perhaps an explanation and the explanation is not that, hey, Affle is underperforming, and I’m pretty confident that what we are delivering is still at par at least, if not ahead of what the industry has seen. And at least most of our competitors, they are either firing people, or they are cutting down on costs, they are not performing particularly fantastic whereas we are doing all our appraisals, we have 50 positions open for hiring at this moment and the company is absolutely growing.

I think the conduct of our company is a sensible conduct where we are not only defending our pricing in tough macroeconomic headwind situations. We are not commoditizing our position in the market and we are not succumbing to, hey, please give us budgets even if the pricing and margin is low. No, we are not doing that. We are choosing who we work with and we are doubling down on our investments in organic growth areas. So I don’t see any sign of, let’s say, weakness in the performance that we deliver, at least in our mindset, in terms of our confidence as an organization.

As I said in my comments, we are at the strongest position than ever before in terms of how we are performing, whether it’s our margin profile, whether it’s our cash flows and growth position, the product, the team. I think we are in a very strong mindset going into FY 2024. So I wouldn’t see a defensive or we grow only 20% or 23%. You’ve got to see it as an overall year’s performance versus seeing it as one quarters here or there. And overall year wise, 35% growth in the financial year year-on-year on CPCU business is by any stretch of imagination, a very strong growth performance. 37% year-on-year growth in EBITDA. That is a very strong performance. Of course, one or two quarters, we have also demonstrated that, yeah, 20% growth in India and emerging markets, given how the macro factors were and how the clients were shifting budgets from one quarter to the next quarter.

It’s not that the budgets have disappeared. It’s that people are sometimes being more careful. And I think we’ve got to respect that. That hasn’t changed the long-term trends of what is the calibration of digital advertising growth, has Affle’s products become less competitive? The answer is no. I think we have a very strong position in India and other emerging markets, and as I go ahead and maybe hopefully talk about some of the contracts that we are trying to strategically close and align for the long term, you would know that, hey, we are still the partner of choice, not only for the advertisers, but for the entire ecosystem.

Swapnil Potdukhe — JM Financial Ltd — Analyst

Right. So just to slightly extend that point, how do you see growth panning out in FY ’24 for these markets specifically? Would the 20% growth trajectory continue or should we look at a slightly higher number?

Anuj Khanna Sohum — Founder and Chief Executive Officer

See, I think whenever we have a backdrop of a year like FY 2023 and the starting point that we have, it is sensible to be conservative, and therefore, on that basis, I’d say the 20% to 25% overall growth for Affle across all our business in FY ’24 organically is a sensible plan that we have already made and we are executing to it. Can we do more than that? Possibly.

With inorganic, if we do and complete any transaction this year, obviously, the growth would be higher. And our goal would be to sensibly calibrate overall organic plus inorganic north of 35%. Now, how much of that will come from because organic did better or inorganic worked out better, let’s see. I think let’s take it a step at a time. But in terms of organic growth, we should definitely calibrate 20% to 25%, given the backdrop of FY 2023. And then I hope we change the discourse on that for FY 2025 by actually creating a different backdrop in FY 2024, but I think it has to be seen in the context of where we are coming from and where we are headed. And we are respecting that and giving you an industry trend as well as what to expect to happen in this year.

Operator

Thank you. Mr. Swapnil, may we request you to return to the question queue for follow-up questions? Thank you. Our next question is from the line of Mr. Roshan Chutkey from ICICI Prudential Mutual Fund. Please go ahead.

Roshan Chutkey — ICICI Prudential Mutual Fund — Analyst

Yeah. Just a basic question, sir. If ad budgets get cut, say, in a particular vertical like entertainment, then CPC budgets should go down whereas CPCU should actually improve, right because you’re paying only on converted user in times like this. Is it because — is that right? And if not, are you a marginal player in the developed markets and therefore you are losing out to other adtech platforms? How should one think about it?

Anuj Khanna Sohum — Founder and Chief Executive Officer

I think in developed markets, we were under-calibrated, and I wouldn’t call it a marginal player, but I would say under-calibrated where one of our platforms was sort of doing more in developed markets and the others were very busy growing in emerging markets. And we had not, let’s say, put as much emphasis or direct leadership involvement for developed markets because we are clearly an emerging market-focused company and will continue to remain that way, given that 80% plus of the revenue is within emerging markets.

Having said that, in developed markets, when a particular customer reduces budgets or says that they’re going to stop marketing for one quarter and recalibrate what happens in the next quarter, some of them might be a major reaction, stop everything. It’s not a case of rational decision-making. They are probably going to, I don’t know, firing people or the whole marketing department is changing, and when they recalibrate, they might hold that for a short-term period. That’s why we always qualify it and we say that these are short-term impacts, which happened in the last few quarters in some of the verticals in developed markets for some of the customers.

Now because our base was small in those markets, when, a, let’s say, a few of the customers hold back budgets for a few quarters, you don’t have sufficient feet on the ground or sufficient pipeline to make that good from others because the base was small. So therefore, we saw an impact. We are absolutely and aggressively solving for it by broadening our addressable market, by coming up with strategies of how to win bigger, better customers fast and broadening the base across certain key emerging verticals in developed markets. So I did outline the five action points that are getting action as we talked this quarter, and that I am directly leading that effort. And I hope to see Q2 to start showing some trends, which may then be maximized fully in the most important quarter, which is Q3 and of course, in Q4.

Does that answer your question?

Roshan Chutkey — ICICI Prudential Mutual Fund — Analyst

Yeah. Thank you so much.

Operator

Thank you. Our next question is from the line of Ashwin Mehta from Ambit Capital Private Limited. Please go ahead.

Ashwin Mehta — Ambit Capital Private Limited — Analyst

Hi, thanks for the opportunity. So Anuj, in terms of our CTV offering, which we are putting more emphasis on, which are the countries that we initially focus on? Any indications that we can give in terms of initial traction there? And secondly, how does the CPCU rates compare there like-for-like versus our consumer platform?

Anuj Khanna Sohum — Founder and Chief Executive Officer

Ashwin, could you clarify which products are you talking about, the CTV products or are you talking about the —

Ashwin Mehta — Ambit Capital Private Limited — Analyst

Sorry, the CTV product. Connected TV product.

Anuj Khanna Sohum — Founder and Chief Executive Officer

Yeah. Okay. So see, on connected TV, most of what is happening is that the linear TV’s budgets are shifting to connected TV, I mean, more and more so. And this is, of course, a much bigger addressable market in US and Europe, but it is also a very strong theme in emerging markets, including in India as well as other emerging markets around the world. So when we talk about the CTV proposition, most of the times, the advertisers are still used to paying for it and pay for impressions or pay for the activity or viewership kind of models. What we are bringing is a differentiation where we are saying, hey, we will charge on the CPCU business model and we have done that for our own CTV product and roll that out starting from this quarter because we are going to the advertisers and bringing them a differentiated CTV proposition together with the combination of a CPCU business model and being the only differentiated platform that’s doing that. So I think that gives us a room to play, a room to enter into winning budgets for these customers with a differentiated proposition.

Now, CTV, on CPCU business model basis, in our calibration, the higher value business, I will want to wait for the results to come so that we can give you more detailed commentary on that, but I would expect that our CPCU rates, because of not only the CTV plus CPCU business, but also the iOS SKAN as well as the Apple App Store related propositions that we are rolling out, these are all higher value propositions.

Now, within developed markets, as we recalibrate and go for these propositions, anyways the CPCU rate is higher in developed markets. Within developed markets, these are the most premium segment. So in terms of understanding Affle’s strategy for developed markets, we are not going there and saying, hey, we are coming from India, from emerging markets, and you know what, we have a cheaper proposition. We are actually going there and say, we have a more premium proposition, which is more compelling and ROI linked. So our goal is to go to the highest segment because we are small. So if we have only 10 people on the ground, do I want to go and play at the lower end of the segment or at the highest end of the segment? And because I am leading it directly, I think we have a right to go and convince our advertisers who treat us as a premium, most premium proposition and therefore going at CTV-CPCU, iOS and Apple App Store CPCU. These are the propositions we are pushing in the market.

So I would expect a positive impact on our CPCU rates and our margin profile from these contributions as well. And what this also means is when you’re going for the premium, you don’t need an army of people. I don’t need 100 people to solve this. I just need 10 smart people who can work with me, and I’ll create examples of how to turn this around by focusing on the premium segment in certain verticals.

Ashwin Mehta — Ambit Capital Private Limited — Analyst

Fair. And just one follow-up. So we’ve had pretty stable CPCU rates despite the fact that our DM portfolio has seen declines. So would it be fair to assume there have been increases in CPCU rates in the emerging markets? And ideally with better growth in DMs as you get into the next year plus some of these propositions, the CPCU rate should be higher as you go along?

Anuj Khanna Sohum — Founder and Chief Executive Officer

So yes, I think the CPCU rate, like I said that when the times get tough, there are two ways the companies would respond. One way is that, hey, we are only getting, let’s say [Technical Issues] investors ask, we are only getting 20% to 25% growth. So some people would take the question and say, no, no, no. I need to show 25% to 30% revenue growth. Let’s reduce pricing. Affle, and my philosophy is very, very clear. We want to be seen as a differentiated platform, a premium platform and playing in premium segment. So no dropping of pricing. If you want to play harder, and it’s okay if it is 20% to 25% revenue growth, but let’s make sure that the CPCU and margin expansion is happening and our market position continues to be differentiated. We don’t become commoditized.

And I think that’s what you’re seeing here as well. So yes, when the headwinds came in, we said, don’t worry about revenue growth. Make sure margin is expanding, make sure pricing is intact, go position yourself as a differentiated player, whereas our competitors are firing people, are dropping the prices. So I think there is a very different strategy at play here, and I am able to therefore build pride, organizational pride and confidence within our company that we are here for the long-term for sustainable growth and we’re not trying to make any short-term shortcuts to impress anyone in one quarter or the other. And I think that builds confidence in the team that yes, we are a publicly listed company, but we are still making long-term sustainable growth dreads and we are not getting nervous about any short-term headwinds, because we think we are here for the long term. I’m building the company for this decade and well beyond. So there is no reason to shortchange our pricing or to take pressure on that. So yes, we are improving our CPCU pricing, we are improving our margins, and most importantly, we are improving our conviction and confidence in our organization that our products are superior and our market position is strong.

Operator

Thank you. Due to time constraints, we are limiting to one question only. Our question is from the line of Onkar Ghugardare from Shree Investments. Please go ahead.

Onkar Ghugardare — Shree Investments — Analyst

Yeah. The initiatives which you have taken for the higher growth in the developed markets and margin expansion, just wanted to know that the benefits of that would be coming from — you said that from Q2 onwards. So the benefits of that would be short-lived for quarters or like they are therefore structural, there will be there for the next couple of years?

Anuj Khanna Sohum — Founder and Chief Executive Officer

It will be structural. It will be starting to show because I am taking charge of the team, I’m directly reporting to a lot of the management there on a regular basis. I’m pushing in, going into customer meetings and so on and so forth, pushing our teams to get the right events. And all of that is happening right now within this quarter. So with any situation, let’s say, one statement to make is, have we bottomed out in any adverse trends that were there in developed markets? The answer is yes. Why have we bottomed out? Because the CEO himself is putting a hand addressing this is it. From here, we turn around and how do we turn around and what do we see? We start seeing the trends in Q2. And I will report to you with the Q2 results as and when that come. Of course, we still have the Q1 results in between.

And Q1 FY 2023, the developed market was at its peak, and then from Q2, Q3, Q4, it’s starting to slide down because of the headwinds that were there. And now we have stopped that trend. It as been worsening that trend in Q1 with certain structural changes that we have already outlined for you. In Q2, we had seen measurable outcomes of that so that we can maximize the biggest quarter of our financial year because of seasonality. October, November, December is what we will be running for to be back in the driver seat of taking it to the upswing that one deserves. And I think that’s how I would address it. But these are not for one or two quarters. We’re not doing any short-term band-aid fixes. We are working on our product strategy, our partnership strategy, our people organization, and lifting it up the way one should in these times. So I am excited about it and I am very convinced and it is structural, it should be there for multiple — it should help us for many years to come.

Onkar Ghugardare — Shree Investments — Analyst

And just a small question. Just wanted to know what would be the CPCU rate — or like structurally for the acquisition you would be doing. It would be less accretive or like —

Anuj Khanna Sohum — Founder and Chief Executive Officer

Of course, it is. I mean, like I said, any actions that we are taking today, whether organic or inorganic, is to go more premium, to go more higher in the value chain and therefore — and with bottom line sensibility. So whether it’s organic or inorganic, I am very clear about the direction and the promise to the investors that over the next several years, you will see higher quality revenue, higher quality margin, and you would see a stronger market position for Affle in terms of its product positioning both on iOS and Android.

Operator

Thank you. Due to time constraints, that was the last question of the question-and-answer session. I would now like to hand over the conference to the management of Affle India Limited for closing comments.

Anuj Khanna Sohum — Founder and Chief Executive Officer

All right. Well, thank you. Well, I want to say that your company is now 18 years old. I founded Affle in April 2005 in Singapore. It’s been 18 years since I’ve been at the helm. And I see it as a young adult, which has a long way to grow into a great corporate citizen. And I hope that not only do we deliver great value creation for our shareholders, but rank very highly on good governance standards for the company. So I think with that, please stay tuned, please keep believing, and one step at a time, you would see much greater outcomes as we execute this year and beyond. Thank you.

Kapil Bhutani — Chief Financial and Operations Officer

Thank you.

Operator

[Operator Closing Remarks]