Nazara Technologies Ltd (NSE: NAZARA) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Nitish Mittersain — Joint Managing Director and Chief Executive Officer
Anupriya Sinha Das — Head of Corporate Development
Karandeep Singh — Group Chief Financial Officer
Ajay Pratap Singh — Chief Executive Officer
Senthil Govinda — Chief Executive Officer and Founder
Analysts:
Jinesh Joshi — Analyst
Deep Shah — Analyst
Abhishek Kumar — Analyst
Unidentified Participant
Bhavik Shah — Analyst
Keval Shah — Analyst
Prakash Kapadia — Analyst
Presentation:
Operator
Ladies afternoon, ladies and gentlemen, good day and welcome to the Q3 FY ’25 Earnings Conference Call of Nazara Technologies Limited hosted by PL 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 assessions during the conference call, please signal an operator by pressing the star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Jinesh Joshi from PL Capital. Thank you, and over to you, sir.
Jinesh Joshi — Analyst
Yeah, good morning, everyone. On behalf of PL Capital, I welcome you all to the Q3 FY ’25 earnings call of Nazara Technologies. We have with us the management represented by Mr Nitish, CEO and JMD; Mr Sudhir, COO; Mr Rakesh Shah, Group CFO; Mr Goganzan, CEO and Founder DataWorks; Mr Ajay Singh, CEO, Absolute Sports; Mr Karandeep Singh, Group CFO of Nordwin Gaming; Ms Darth, Head of Corporate Development; and Mr Harit Shah, who is part of the IR team.
I would now like to hand over the call to the management for opening remarks. Over to you, Nitisher.
Nitish Mittersain — Joint Managing Director and Chief Executive Officer
Thank you thank you. Good morning, everyone. In Q3 FY ’25, we have achieved our highest-ever quarterly revenue and EBITDA, reflecting the strength of our diversified portfolio. Revenues came in at INR54.7 crores with 67% year-on-year growth and our EBITDA was at INR52.4 crores with a 39% growth, PAT from continuing operations of INR13.7 crores post a one-time impairment of brand scale innovations, equity investment.
For nine months FY ’25, we reported revenues of INR1,103.7 crores and with EBITDA of INR102.4 crores and a PAT of INR55.4 crores respectively. Our core gaming segment particularly stood out in this quarter with a 53% revenue growth, fueled by our strategic acquisition of FuelSpox games as well as fairly strong performance by some of our existing games such as Animal Jam. Also one large growth factor going-forward for us, we’ve been making some good progress with the recent licensing agreements and upcoming integrations of popular entertainment IPs, which will enhance our user growth and engagement going-forward.
The recent collaboration by Cadopia with Mattel for the globally renowned IP of Barbie and with Moombag Entertainment for Little Angel will strengthen engagement among our young audiences. But we have also made partnerships with well-known franchises, including Big Brother globally as well as Big Boss in India, which we will launch in seven or eight languages that will allow our interactive story gaming business to scale.
We have also started acquiring popular gaming IPs. Recently, we announced Cats, Crash,, TurboStars and King of Thieves. These games are very popular IPs globally and we have directly acquired them in Nazara Technologies Limited, which will also be published by Nazara. Therefore ensuring revenue and profit from these accrued directly to the listed entity.
We intend to further scale this model in coming quarters and think this can be quite accretive for us. To support our continued expansion, we have placed a preferential placement with a — of INR495 crores to Aksana Estage LLP led by Mr Arpit Kandelwal and Mr Mithoun Sacheti, Founder of. These capital infusions combined with Nazara’s strong cash results provide the company with financial flexibility to pursue further acquisitions as well as boost organic growth to drive long-term value-creation. It’s important to understand that at this point of time, the opportunity at the global stage is very attractive for us and these acquisitions will tend to be very EPS accretive as we go-ahead and execute them.
With a strong foundation, a clear vision and an experienced team, we are well-positioned to build a truly globally respected gaming company from India.
With that, I now hand over the call to Anupriya for further business highlights. Thank you, and over to Anupriya.
Anupriya Sinha Das — Head of Corporate Development
Thank you, Nitish. Good morning, everyone. As we — as you are aware, Nazara operates through three business segments, gaming, esports and adtech. We are well-diversified among — across demographic, geography and business models. In Q3 FY ’25, the gaming segment accounted for 29% of revenues and contributed 56% of EBITDA, while the eSports segment contributed 43% of revenues and 32% of EBITDA. For the nine-month period, gaming contributed to 33% of revenues and 55% of EBITDA, whereas eSports accounted for 49% of revenue and 37% of EBITDA.
Accounted for the remaining share in both the periods. Moving to the gaming segment, Moon, the parent company of is reported as an associate and is not consolidated in the books of Nazara. The key operating metrics of remain healthy with gross gaming revenue up 67% year-on-year, gross trading — traded value up 52% and gross deposits up 48% year-on-year in Q3 FY ’25.
Nine months revenue for Moon Technologies was INR357.3 crores with an EBITDA of INR1 — with an EBITDA loss of INR26.9 crores. The company reported revenues of INR151.3 crores and an EBITDA of INR18.3 crores in Q3 FY ’25. The Q3 FY ’25 revenue for Kidopia are moving to business, the Q3 FY ’25 revenue was INR47.6 crores and EBITDA of INR12 crores and the EBITDA margin stood at a healthy 25.2%.
As mentioned, Kiropia has entered into a licensing agreement with Moonburg, which is Moonburg Entertainment owner of the popular IP Little Engine to integrate Little Engine into Kidopia and has also signed a licensing agreement with Mattel for integration of Babi-related content into Kidopia. Integration of these popular brands can aid stickiness in subscribers along with driving organic users at a lower-cost, which has the potential to drive further revenue and margin in the coming quarters.
Please note that Nazara has filed the scheme of agreement with the arrangement with the stock exchanges for the amalgamation of paperboard Apps Private Limited with Nazara and the appointed date of scheme would be 1st October 2024. Moving to FuseBox. For Q3 FY ’25, FuseBox reported revenues of INR59.4 crores with an EBITDA of INR12.6 crores, implying a healthy EBITDA margin of 21.2%. In the same-period, the revenues grew by 132%.
Fuels has been reporting strong performance with key financial and operating metrics witnessing a healthy improvement, including the daily active users and active players. The studio recently signed agreements to acquire rights to produce new games based on the popular TV show Big Boss and Big Brother and these are expected to launch in 2025, the calendar year.
Animal Jam. The product metrics for retention, engagement and monetization of users continue to be healthy at Animal Jam. The revenue grew by a healthy 14% year-on-year in Q3 FY ’25, while EBITDA grew by 55%. Q3 has traditionally been a seasonally high quarter for Animal Jam, which was witnessed again this quarter led by a strong performance during the Halloween and Christmas season. A partnership between Slinky and Animal Jam has been signed in January 25, while continues to explore integration of popular IPs to drive greater organic user acquisition.
Moving to OpenPlay, the operator of classic runny business. Gross gaming revenue stood at INR15.7 crores, while the net revenue stood at around INR5.1 crores. Despite the higher share of GST in this quarter, which impacted the net revenue, EBITDA reached breakeven in Q3 FY ’25, making a significant financial improvement compared to last year. The cost optimization and operational efficiencies have yielded this positive financial impact.
Moving to our eSports segment. ESports segment grew by 20.1% in Q3 FY ’25 with an EBITDA margin of 8.4%. Q3 FY ’25 grew by 23% year-on-year. However, the like-for-like revenue growth was much stronger at 48% year-on-year, excluding revenue from, which was deconsolidated from the business in February 2024 on 3rd February 2024. In nine months FY ’25, the year-on-year revenue excluding wings grew by 57%. This growth is led by proprietary IT and live events such as Playground, Season 4, Snapdag and Pro Series, Dream Hack and Comic-Con.
Nordwin continued to make strategic acquisitions in this quarter, including Trinity Gaming, which is an influencer management company, ASK Gaming, a content management company, Stars added an IPL even portfolio. Q3 EBITDA was impacted due to cancellation of the NH7 weekender event in Pune in December. NH7 is planned to be held now in March ’25 with some of the artists agreeing to join and sponsor being supportive of the same.
Continues to invest in multiple assets worldwide in emerging markets while focusing on organic growth, thereby expanding its share of international revenue. The international revenue stood at 48% of total revenue in Q3 FY ’25 and 45% in nine-month period.
Moving to Sports. Sports continues to maintain its ranking among top-10 US sports news websites. The absolute group — Sports group grew its revenue and EBITDA by 13% and 5% in Q3 FY ’25 with corresponding figures for nine months being 19% and 11% respectively. The core Sportra business continues to grow well with revenue and EBITDA increasing by 21% and 31%, respectively in Q3 FY ’25.
However, overall revenue and EBITDA were impacted due to a subdued performance of PFN, the Pro Football network. While Pro Football network declined year-on-year in nine months FY ’25 and Q3 FY ’25, there are early signs of recovery with December ’24 revenue being higher year-on-year and the month witnessing the highest-ever revenue month till post-acquisition.
Central, another business acquired by saw a robust performance with Q3 FY ’25 revenue at 101% of the pre-acquisition annual revenue. Moving to segment. DataWork through its subsidiary DataWorks Operations UK acquired 100% stake in Space entire media for an equity value of 4.8 million GBP in October ’25, equivalent to around INR52.3 crores in October ’24, sorry. Since then, the business has been consolidated in the books of Nazara.
Our data books on a standalone basis posted revenue growth of 38% year-on-year with EBITDA margin of 14.1% in Q3 FY ’25 as efforts that were made in the previous quarter led to shift less previous quarters to shift towards more profitable business size in DataWork independent business are wearing fruit. The continue — the company will be continuing its investment in sales and marketing to sustain the growth witnessed in Q3 FY ’25.
Post the acquisition of S&T, efforts are in handy for speed integration of the company to the. With this, I conclude my remarks and we will now open for Q&A.
I request Nitish Sudhir and the rest of the management team to join me for the session.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from theline of Deep Shah from B&K Securities. Please go-ahead.
Deep Shah
Yeah, hi, good morning. Thanks for the opportunity. So thanks for the detailed split about the numbers and segmented EBITDA, that is quite useful. But within that, say, in the Nord win segment, because before you acquired and even now, even after the acquisition, Nodwin could still be the outsider, which makes disproportionate money for us. So I wanted to understand that site — site 3 in detail.
One is, I understand the INR8 crores loss which was of NH7 weekender, but otherwise, we’ve not seen this business become profitable. So one question would be that, what is that inflection point you believe or probably the inflection point is way ahead in the future where you see that we’ll keep on investing before we start making money. Second, over the last year also, we’ve seen a few acquisitions, though they might be small in individuality, in total, they might build-up. On-top of my mind, we have for you, we have, which I believe would not be — would not be there in the last quarter. So if you could give some idea about how numbers are without those acquisitions, that would be useful. That’s my fourth question on Nodwin. I’ll ask the same question later. Thank you.
Nitish Mittersain
Yeah, sure. I’ll answer it at a high-level myself, this is Nitish, and then I’ll call on Karan Deep, who is the CFO of Nodwin to get into more details. So I think as we maintained right from a Nazara overall perspective, we’ve always seen as a large growth driver for us at a macro trend of and they have also now expanded their horizons to capture the attention of the youths out in addition to esports in adjacent areas that they have been active in. So I believe that the company continues to build market leadership. It continues to build moats around its you know, business this whole attention of youth, live events, et-cetera, are going to be very valuable in an economy like India.
And I think is extremely well-positioned, which is why from our perspective, even if Nordwin is not generating a lot of profits for us in the short-term, we are supportive of them to continue to build — build it out over the next couple of years before we focus on the profitability.
Karan, if you can step-in and just answer some of the more details will be helpful.
Karandeep Singh
Sure,. Thank you for this question. I think just to baseline, the numbers as far as Q3 is concerned and you’ve called out the NH7 cancellation was the reason for the loss. So — and if you were to remove that cancellation cost, we get to the breakeven. If you add to that, the opportunity of the profit that we’ve lost on the NS7, it would have made the quarter three profitable for Nordwin. Having said that, I think Nordwin has always invested in growth. That’s what Mrish has called out, whether it was in the IPs that we are building or in the emerging markets that we are increasing our footprint.
Last I was calculating with the acquisitions that we’ve done, you know, the kind of footprint we have is almost across 20 countries, which include markets in Africa, includes market in the Central Europe, etc., which are very youth-centric markets and that’s our mission in terms of driving the engagement with the youth, which is what drives the brands and the publishers. But as we kind of tenure and mature on our IPs, we will definitely see the profitability kind of come through as we settle down in terms of our integration of the acquisitions.
And as the footprint gets a lot more settled down and we operate as a more cohesive unit with all the acquisitions and all the footprint, I think the profitability should come through. So that’s a quick answer on that. In terms of the growth numbers, which you’ve called out while Anupria had fall down, you know about off the that you’ve seen on a YTD basis in terms of the growth, about 20% is from organic and about 38% is because of the inorganic acquisition. But again, please remember that in the last year’s numbers, there was NS7. If I remove the NSM from the last day’s numbers, the organic growth will go much beyond 20% will be probably 25%, 26%..
Deep Shah
Okay, understood. Thank you. Maybe I’ll take a few details — details offline. The second question is on — is on these partnership. So we’ve seen this animal Jam do spectacularly well. Yes, there is some seasonality, but we’ve seen margins improve there significantly. So what I wanted to understand is, should we expect such kind of here as this platform scales up? And how do these partnerships actually work when it comes to say IPs for say properties like BitBoss or Big Brother. Is there upfront fee involved, is it payment basis number of downloads? If you could give some idea and then the arena, will that work independently of bots? I heard you mentioned something that win level, but will those developers work together so how are we thinking, say, from this proposition as a owner of mobile games?
Nitish Mittersain
Okay. Sure. This is. I will take that question. So I think Animal Jam for us as an IP has continued to sustain its revenues and profitability post-acquisition and we are quite happy with the performance of that business. Now we are starting to expand the product portfolio with the team, given that it’s a very experienced team. We have recently-acquired another license for Slinky and the team will start working on that game. It has already started working on that game, which is released later in the year. So we believe that now we can build animal Jam across different platforms, different IPs, increase the brand partnership over there. So I think now that this Animal Jam game itself has shown that it’s sustainable, there’s a lot more growth we can build-on this.
This particular quarter, of course, I must call-out there was — there was — while the overall profitability has grown, it’s also little exaggerated because of some one-time income that we got of about $300,000. So if you adjust for that, you would still see fairly good growth in margins as well as, I think about a 14% growth in revenue. Coming to your question on IP licensing and brand partnerships, till now most of our games, whether it is, whether it is Animal Jam, have been completely based on 100% original content. And the business model really runs in terms of also a lot of dependency on our ability to spend money to acquired users.
But over the last year or two as we are talking to many companies, we are seeing some companies have quite successfully worked around user acquisition challenges by working with popular IP because popular IP, let’s take, for example, in the case of Kidopia, let’s say right these IPs are well-known for their fan base and tend to generate organic downloads which are in a way free of cost for us and therefore also help in our advertising our pick-through rates improve, so our cost of acquisition decreases, user engagement improves a bit.
So overall, we believe that by integrating some of these IPs into the games, we would benefit in multiple ways. How these IP licensing partnerships are usually structured are, there are certain minimum guarantees involved. And beyond the minimum guarantee, we would share a certain percentage of revenue the utilization of that IP.
So net-net, our expectation is that even with the IP licensing cost, if you were to compare that to what we spend on user acquisition, it would still be a lot more profitable for us. So I think that’s the direction we are going. Even with Big Boss or with Big Brother Global launch, we’ve already seen Love Island as a game do extremely well and we are hoping to repeat that success with some of these new IPs. I hope that answers your question.
Deep Shah
Yeah, this is helpful. Thanks,. If I could squeeze in one more question. On sports data for the last couple of quarters has been seen slowing growth. So anything material to call-out there? Because it has growing quite well even on an organic basis before that, whilst we’ve maintained margins this quarter, anything specific there or it just transient? Yeah. So I’ll again share a high-level view, but I’d love to call Ajay, who is the CEO of Sports to give a more detailed insight. So from my perspective, core business has continued to grow well. I think at a overall numbers perspective, it’s slightly slowed down because of challenges we faced with Pro Football network. But like Anupiya mentioned earlier in the commentary, so we are already starting to see that recover. So we are not very concerned or worried about that. I think we’ve also seen some of the recent acquisitions play-out extremely well, although on a relatively small-scale. Ajay will maybe share a bit on Soap Central and how that has done. So Ajay, I’ll pass this over to you and why don’t you give some context?
Ajay Pratap Singh
Yeah, sure. Thanks,. Our, to be honest, organically has been growing really well, both in terms of user base, in terms of yield per user. If you see this quarter, there were a couple of challenges that mentioned that one. Pro football network, we saw some dip for a couple of quarters because of Google Court updates and pro football network was caught up — wrongly caught up in that. However, that said, December month was one of the best months for pro football network in terms of overall revenue and January also is looking really, really good for us.
Last year, if you see in Q3, we had Cricket World Cup, which contributed to good revenue numbers and EBITDA for sports. Unfortunately, this was not here — this was not there in this quarter. That said, I think the playbook is working really well, both in pro football network and also the recent acquisitions that we did, Soap Central. So on Sope Central, when we acquired Soap Central, just some numbers that Soap Central was doing somewhere around INR5.15 crores in 12 months that we acquired. And in just October, November and December quarters, we surpassed that number. So the paybook that we have created on has shown good results. We are pretty confident that will continue to grow both organically and via playbook replication.
Deep Shah
Perfect. Thank you. Thank you so much and all the best.
Nitish Mittersain
Thank you.
Abhishek Kumar
Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star N1 to ask a question. The next question is from the line of Abhishek Kumar from JM Financial. Please go-ahead. Yeah, hi, good morning. Thanks for taking my question. I have three specific questions. First on Kidopia. The cost per trial seems to have jumped quite significantly on a Q-o-Q basis. I mean, it looks like things are getting from bad to worse, especially on the traditional user acquisition channel. I was just doing some numbers from 1Q ’22, you know, CPD has increased by 60%, while our ARPU has increased just by, I think, 9%, 10%. So while I understand that we are doing some intervention on the IP partnership, et-cetera, but what is happening on the traditional side because my understanding is this will still remain a significant channel for user acquisition going-forward. Any color here would be useful. Thank you.
Nitish Mittersain
Sure. This is Nitish. Good question. I think we’ve taken full control of this business in the recent months. It’s been I think three or four months and there’s a lot of work we have done to get better grip on data or underlying LTV, et-cetera, trying to add new user acquisition channels. And I think some of that is starting to play-out. So while December, particularly, it was the heightened CPT was caused by, I would say, a larger spike in December. I think with some of our implementations, you’re going to see a much, much-improved quarter — Q4 numbers. So we’re feeling fairly comfortable that not only will we sustain what we have had, we will actually improve on it Q4 onwards. So I think leaving aside the new IP partnerships, et-cetera, just from the business-as-usual, you should see much better metrics starting Q4.
Abhishek Kumar
Okay. Second question is on space and time. You know, there seems to be some change in accounting here from gross net revenue, we are now doing a mix of gross and net revenue that — what that has done is that has resulted in a significant increase in revenue run-rate, but at the same time shrunk the margins significantly. In fact, your margin seems to be tracking below last year’s EBITDA margin number. So how should we — first, what is the rationale of, you know going with this accounting? And second, how should we look at the margin profile now going-forward in this business.
Nitish Mittersain
Yeah. Sure. So to be honest, our preference in this business was to report the revenue as per net. However, basis accounting and the advice received by our auditors, you know, we had to take a blended accounting, which we have also explained in the presentation. It is a note at the bottom of that slide, which explains how and why it is accounted for. So I think certain contracts are being accounted at gross and certain contracts are being accounted at net on the basis of the nature of that particular contract depending on what is the risk-on space and time. So I think that is how it is accounted. And therefore, you are absolutely right. The revenues have increased and the margins have shrunk. That said, it’s early days for space and time.
I think there’s a lot of integration to be done. And we believe as an integration is done, overall margins will increase. You’ve already seen DataWorks in this quarter has recovered extremely well. In the last year, DataWorks were struggling, but we were quite confident that it’s on the right track and the standalone numbers of DataWorks also reflect that. Santil, who is the founder of DataWorks and also the CEO is on the call today. So maybe Santil, you can add to this.
Senthil Govinda
Yeah, absolutely, Nitesh. So I think Nitish correctly points out that this is more than anything else, it is the counting treatment that we are following. Maybe to drill one-level deeper into what is being reported at cross versus reported at net, there are certain direct publisher relationships where pay some time directly works with the publisher in order to buy inventory for delivering campaigns on behalf of brands that they work with. In those cases, the revenue is accounted at a net basis where they’re working with players such as Meta or Google or LinkedIn and so on, the revenue would be reported on a gross basis, right? And again, this is based on advice given to us by our audit partner.
Now having said that, in terms of space and time itself and what we can expect going-forward. So start with the core principle, space and time is and is a marketing agency, right? So it’s running advertising campaigns on behalf of its clients. As part of this, and given that it is obviously a very people-centric business, there are costs that are associated with it and therefore, their margin profile tends to be lower given that Space and Time itself is in the UK, which is a higher-cost geography.
So going-forward, what we are expecting in this acquisition is first that we will be integrating a lot of the technology that DataWorks has spent time and invested to build over the last many years, we’ll be starting to deploy that in space and time, which should improve the collective margin profile of the Group — DataWorks Group overall.
And separately, we will also have over the course of time, more of a blended people approach between the UK and India, which as we go along, let’s say, over a period of maybe one to two years, we will see that also contributes to having their SG&A, their indirect costs come down as a percentage of their gross margin. So overall, I expect that the margin profile will improve over-time. But these are the basic reasons why we are in the current situation and what time spread for the future.
Nitish Mittersain
Yeah. Thank you,. And just to clarify, there is no change in accounting. This is how it has again.
Abhishek Kumar
Yeah, okay. One last question is on-brand scale. We have taken a write-off and we also mentioned in one of the notes that there is a INR35 crores of loans and debentures, which will be provisioned. So if you could just please remind us what is the total investment that we did, including the debts and advances and how much of it — I mean, this percentage seems — I mean the overall write-off if that INR35 crores also comes through seems high. So just trying to understand what is it as a percentage of overall investment that we did.
Nitish Mittersain
So overall investments as Nazarom
Abhishek Kumar
Into brand scale.
Nitish Mittersain
No, when you say percentage, do you mean percentage
Abhishek Kumar
— write-off as a percentage of initial investments?
Nitish Mittersain
It would be — we’ve done about — so the equity investment right now we’ve written-off is about INR15 crore INR60 crores, which was the entire outstanding value of our equity investment, but some of it would have been amortized, etc, right? And the balance is INR35 crores. So it’s about 35% of the total outstanding.
Abhishek Kumar
Okay. And why are we — this year?
Nitish Mittersain
Basically the total equity investment has been impaired in our books.
Abhishek Kumar
Okay. And so — and is there a — I mean, we don’t see any possibility of recovering this amount, which we have advanced to them. I mean, what’s the reason for providing for this now?
Nitish Mittersain
So the — we do see some potential of recovery, whether it’s through inventory, whether it’s through some person who purchases the brand, et-cetera, which we want to work-over the next couple of quarters. We took a conservative view to do the equity impairment given the state of that business.
Abhishek Kumar
I was more referring to the loans that we are planning to provision for.
Nitish Mittersain
Yeah, we haven’t provisioned yet, right, because we do see some potential to recover. But we have just again, Nazara generally tends to have a conservative approach and we like to transparently disclose any potential bad news, which is why we put it in just as a potential future exposure in the company.
Abhishek Kumar
Okay, sure. Thank you and all the best.
Nitish Mittersain
Thank you.
Operator
Thank you. The next question is from the line of Prem Sharma from Mirania Enterprises. Please go-ahead.
Nitish Mittersain
Hello.
Unidentified Participant
Yeah, hi. Hi, good morning and thank you for giving a chance. I have two questions. One is, how is the — how does one-go about value IT for this company when you acquire IPs and when you acquire organizations that have multiple ITs, how do you value them? And the next question is about acquiring a majority space in. What is the reason going-forward for? Thank you.
Nitish Mittersain
I could understand your first question. I couldn’t understand the second one. Maybe I’ll answer the first one and then we can address the second one. So when you say valuing IPs, are you referring to the games that we bought from Zeptro Labs recently? Or are you referring to IP? Yeah. Okay. So basically we are looking at multiple things. One is how popular those games have been, what are the App Store ratings, downloads, current user base, current revenue trends and current profitability trends that we’re looking at. Point number-one. Point number two, what we feel we can do after taking over those games, can we expand that business and we scale it through multiple improving live ops, et-cetera? And third is, usually these deals or these transactions are based on our EBITDA multiple within a fair-value range that we are willing to pay to purchase these assets.
Unidentified Participant
Okay. And what about IP of like? How do are you doing?
Nitish Mittersain
Sorry, your voice is not very clear. Can you repeat that?
Operator
Mister, can you please use your handset and speak?
Abhishek Kumar
Okay hello, yeah, it seems. Am I audible now?
Nitish Mittersain
Yeah, much better.
Unidentified Participant
Yeah, I was asking how do you value IP for this organisations like Sty?
Nitish Mittersain
You mean to say how do we value the acquisition price?
Unidentified Participant
Yeah, because Sty Ladder also has IT right?
Nitish Mittersain
Yeah, yeah, yeah. Karan, why don’t you take that?
Karandeep Singh
Yeah. So Starladder is — we obviously put an enterprise value on the company. It has revenues generated from both a combination of its IP as well as from other businesses that it gets. So it’s an enterprise value, sir, that we — that we put from an acquisition point-of-view. And then you know, the IP, then from an accounting point-of-view purchase price accounting point-of-view, there is a value and all of that is done. But what you see in terms of the announcement we’ve done in terms of the acquisition, it’s the enterprise value, not specific to the IP.
Unidentified Participant
Okay. So no specific weight is given to IPs for such organizations, right?
Karandeep Singh
Yes, absolutely. I mean, the potential of the IP is pretty strong. So obviously, when we look at it and we obviously look at the account — the projections on how the business is going to shape out, both on the IP side and the non-IP side and accordingly, the acquisition gets accounted for between IT and other ways of looking at other assets, which is goodwill, which is certain assets that we acquire as part of the going concern?
Unidentified Participant
Okay. Thank you. And the other question was about Wealth acquiring a majority stake in Zara, what would be the vision? What’s the vision going-forward on?
Nitish Mittersain
Yeah. So at this point of time, Lutus has not acquired a majority stake. The Plutis plus combined have crossed a 25% threshold, which has triggered an open offer of an additional 26%. But depending on how that open offer is subscribed to, will be the final shareholding of this combined. As we already disclosed, and also Mr Mithon Sacheti will join in as co-promoters in the company. In terms of their — in terms of the existing business management, nothing changes. The existing management remains completely in control of the business. And we will have support from as well as Mr Sacheti as we need and as they can provide. But overall, I would just like to comment on that. I think it’s a big vindication for us to have our largest shareholder cross-over the line and join us hand-in-hand as well as you know as celebrated entrepreneur like Mr Matsun Sacheti join us, we feel very validated by that.
Unidentified Participant
Okay. Thank you so much,.
Operator
Thank you. The next question is from the line of Bhavik Shah from Emkay Ventures. Please go-ahead.
Bhavik Shah
Yeah, hello, sir. I just wanted to understand how do we see Okar going ahead? Like this quarter we see returning EBITDA-positive again. So like what has changed, I’d say last two quarters where you were doing EBITDA loss and this quarter we turned positive? And how do we see the numbers here going-forward?
Nitish Mittersain
, this is about Poker, right?
Bhavik Shah
Yeah.
Nitish Mittersain
Look, I think Poker is the dominant poker platform in India by far the leader. And therefore, it’s very clear that at this point of time, they have to double down on creating a brand and creating a very large moat, which is very defensible on an ongoing basis. So the entire focus is going to be on growing their gross revenue as gross revenue, when I say I’m talking about the GGR, which is gross gaming revenue, which is the rig that they take and establishing a very large brand. A bulk of the marketing costs are going into brand-building, sponsorship, for example, they are one of the largest sponsors of Shark Tank, they’re sponsoring IPL, etc.
So I think depending on quarter-on-quarter, their brand spends depending on what’s — where they are advertising, right? For example, in Q4, IPL is in March. So there may be a large brand spend coming up in Q4. That’s what you will see the movement in the EBITDA. The core business is very profitable. At this point of time, it’s the brand spends that move the EBITDA up and out and you will continue to see that in the next few quarters.
Bhavik Shah
Okay. So basically, we we’ll continue to invest in marketing, maybe have some losses. But this quarter, so we have a lower marketing spend and we see our EBITDA-positive, right?
Nitish Mittersain
Yes, correct. That shows you the underlying strength of the business of its ability to generate cash, it’s important to understand that is spending less on performance marketing or direct user acquisition and a lot more on-brand building. And therefore, as the brand gets built even larger, we believe that will become a very large moat for the company.
Bhavik Shah
Understood, sir. Thank you so much.
Operator
Thank you. The next question is from the line of Yashita Banka from Ratna Bali. Please go-ahead.
Unidentified Participant
I wanted to know that after doing something
Operator
I’m sorry to interrupt, your voice is coming very low. Could you speak a bit louder?
Unidentified Participant
Am I audible now?
Operator
No, I’m still the same.
Unidentified Participant
Is it better now?
Operator
Can you come closer to the mic and speak, please?
Unidentified Participant
Yeah, am I audible now?
Operator
Yeah, far better. Thank you.
Unidentified Participant
Yeah. I just wanted to know that after doing so many acquisitions and raising so much cash-in the last six to eight months, what EBITDA guidance are we looking at for the next three to five years?
Nitish Mittersain
At this point of time, we’ll stick with our FY ’27 EBITDA guidelines of INR, INR300 crores and we believe we are firmly on-track to achieve that.
Unidentified Participant
But don’t we see any increase in this guidance since we’ve done so many acquisitions and we are consolidating everything to the parent level?
Nitish Mittersain
Yeah. Well, we obviously make our best effort to beat our projections. But at this point of time, we’re not prepared to give a fresh guidance.
Unidentified Participant
Okay. Thank you so much.
Operator
The next question is from the line of Ramanuj Chandak, an Individual Investor. Please go-ahead.
Unidentified Participant
Hello, am I audible, sir?
Operator
Oh, yes, please go-ahead.
Unidentified Participant
Am I audible? Hello.
Operator
Yeah, sir.
Unidentified Participant
My question is regarding broader perspective at the industry level. We have seen right from 2022, the gaming industry as well as startups are facing a funding winter, not just USA, but other countries also. So do you see Nazara getting affected by that in any manner? And my second question is regarding. Is it better for Nazara that you develop games in India, sell it in other countries or develop it worldwide and bring that to India? What would you prefer?
Nitish Mittersain
Sorry, can you repeat your first question, please? We have seen right from 2022 due to-high interest rates, currently world is facing a funding winter for startups as well as for gaming industry. So let’s assume if this goes on for a long-time, is Nazara affected by that? No, it’s a fantastic opportunity for us because we are able to acquire — we are able to acquire assets at very attractive prices, which is going to be very accretive for us and reduces risk of these acquisitions significantly.
Unidentified Participant
So I mean, if other gaming companies are facing funding problem, is Nazara for funds or will we also face some problems?
Nitish Mittersain
I mean we’ve demonstrated in the last year or so that we’ve been able to quite successfully raise capital. And therefore, I was mentioning earlier that I think we are uniquely poised to take advantage of the opportunities globally, which is also why we’ve been aggressive in terms of fundraise. Even though I understand that investors don’t like dilution, the reality is that it’s highly-accretive at an EPS level at this point of time. And we are not playing an arbitrage game.
We are very clear that we are getting attractive assets, which we will build-on and grow over a period of time, sustain these assets and grow them. For example, Animal Jam, we acquired two years back and that is sustained and growing. The transaction is fairly recent, but we’re quite confident of building on-top of it, right, with that one game that they have Love Island. Since then partnered with Brother with Poss, we’re doing a couple of other games.
So I think our strategy of avoiding the zero to one, which is takes a lot of time to build-out and then trying to scale these assets after acquiring them at a low-value should pay very rich dividends in the next couple of years.
Unidentified Participant
So currently, how is the market in US and Europe for gaining, sir? Are they able to raise funds in US and Europe?
Nitish Mittersain
Yes. I think it’s been a difficult environment for multiple reasons. And it’s a long answer, but I’ll try and-answer it a bit quickly. Basically, you know, when COVID hit a lot of the gaming companies in Europe and the US saw large spikes in their revenue. Alongside that, there was a significant drop-in interest rates. So a lot of these companies were acquired or raised capital at high valuations. You know, funding was cheap and the business was booming.
Post-COVID or post-COVID normalization happened as well as this whole Apple IDFA issue hit gaming companies worldwide. And therefore, the revenues kind of fell off the glyph, which have now stabilized over the last year, 18 months or so. And I think some of these Apple IDF issues and all are also starting to normalize, ad agencies have kind of tweaked their models to work for it. So I think a lot of these companies are coming out of it. Also, on the other hand, a lot of acquirers in Europe and US bought these companies at higher valuations, raising the large amount of debt and now they are trying to solve for that. So all these situation creates, I think a very good opportunity for a company like Nazara that has an established playbook has at this point of time has been able to raise capital and can go in and acquire these assets, which is why we’ve been very active — actively not only building a large deal pipeline, we’ve been very active in the conferences in happening in Europe and US we’re sponsoring at GTC this year, which is the largest gaming conference that happens in March in San Francisco. So I think 2025 will remain a very good opportunity for Nazara to pick-up very high-quality assets at very attractive prices.
Unidentified Participant
And my second question is regarding, do you find it cheaper to develop games in India, sell it worldwide or acquire games worldwide and bring that to what is your preference?
Nitish Mittersain
I think we would do both of it. But through Nazara Publishing, we are definitely looking at bringing high-quality games and partnering with high-quality game developers for the Indian market because we believe that from a growth perspective, India will be a large gaming growth story, although the base is small today. If you take a five years view, gaming in India would grow, people would pay for high-quality games. And if we are publishing these games providing strong local support to global developers through local live ops, etc., localized marketing, that would be a win-win for everyone. So we will surely do that. We already have Nazara Publishing that is working on it.
At the same time, our Prime Minister has himself set a clear vision that you know, building games in India for the world is a big opportunity that developers should do. And as India’s only digital gaming company, that’s a call to action we are very serious about and that will involve obviously developing games in India, investing in local studios and building for the world.
Unidentified Participant
Sir, my last question is regarding the gaming talent in India. We have seen that all major tech companies have either reduced hiring or in fact, many have fired their employees. So do you see Indian software moving towards gaming or is it still difficult to find payment tech developers in India? What’s the current scenario going to be?
Nitish Mittersain
You’re talking of gaming talent in India for developing games for the world. Sorry, your voice is breaking. Your voice is breaking a bit.
Unidentified Participant
I mean, does India has sufficient gaming talent that we can develop gains in India or should we even in future rely on other countries?
Nitish Mittersain
I think hybrid way of working is the — today the best solution. So I’ll give you an example. You know with few games that we acquired, there’s about 30 people, 35 people, great people working in UK and they are the core of the business really have you know the real grip on how that particular genre of gaming works. I think if we were to do it from scratch in India, we would find it difficult. But the way we’ve built a hybrid strategy is for all the new games that is making like Big Brother, Big Boss, et-cetera, while the core team kind of oversees the game design, the game narrative, etc., and how the production quality is coming. A lot of the actual development is now starting to happen, the engineering is starting to happen in India. And therefore, this hybrid model, I think is a great way at least for Nazara to work and to take advantage of both worlds, the high design skill-set in international markets, the great engineering, quality assurance, etc talent available in India.
Unidentified Participant
Thank you. Thank you for taking question.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star N1. The next question is from the line of Nikhil, an Individual Investor. Please go-ahead.
Unidentified Participant
Thank you for the opportunity. Sir, my first question is around, can you please give an update on Smash Games? I think it’s a bit some time that we have bidded for it. And if there is no update, is there any tentative timeline we can know something?
Nitish Mittersain
Yeah. Well, it is — we were the successful bidders for it or the shortlisted bidders for it. However, there are delays at the NCLT approval process and we have been following-up on the same and we hope that in the next quarter or so, we should be able to close and take control of the company.
Unidentified Participant
Okay. And one last question. I think there were some headlines around Nazara partnering with state governments on adding e-commerce to our gaming studios. So can you please comment on that thing, thing what’s going on?
Nitish Mittersain
Yeah. Yeah. I think what you’re referring to is the G-commerce play. What we are trying to — what we are trying to figure out to see one challenge in the Indian gaming market outside of the real-money gaming is that monetization through in-app purchase is still a small propensity, small percentage of players are having the propensity to pay for in-app purchases and revenues through advertising is quite a bit struggle because the ECPMs are low, the fill rates are low, etc. Therefore, the whole idea is that how can we create alternate monetization models that could provide game developers in India a better way to monetize.
And one thing we felt was that if you could integrate e-commerce within the gaming environment. Since Indians are already very used to, you know, shopping online, etc., if we can target the right offers to the right consumers, perhaps the fees that we can earn through affiliate, et-cetera would be higher than the advertising. We are in advanced stages right now of a pilot with ONDC. We are hoping to launch that pilot within Q4 before March. It will take us maybe another quarter or two try and iterate that before we can come back to you with how this experiment has worked out. But generally, I feel is something that could be a great innovation out of India for the Indian market also, but for the world. So that’s something we are attempting at this point of time.
Unidentified Participant
Right. Thank you so much.
Operator
The next question is from the line of Kival Shah from Standard Charter. Please go-ahead.
Keval Shah
Yeah, hi. Thanks for the opportunity. Sir, my first question is on freaks for you. Not much information is given in the presentation. Can you help me — help with some basic numbers like what would be the revenue profitability? Is it profitable right now? Is it being consolidated right now? And what would be the outlook for this upcoming year for for you because I believe it was a mid-ticket acquisition from Nazara.
Nitish Mittersain
Yeah, sure. Karan, can you take that one, please?
Karandeep Singh
Sure. So we don’t break-out the numbers of separately, but I can tell you that the business, which is our venture into the — into the German and the European market has playing out beautifully because the brands who straddle across the European market, the Asian markets, the China market and they’re keen to kind of promote and through the gaming community in that part of the world, we are able to leverage that. Per se is going through its turnaround, just to kind of call that out. We are very cautiously optimistic that this we will — and we are helping them through the turnaround journey. And that’s the only thing I would say at this point of time, but there is a strong collaboration between the Asia and the China side, which is where we have the front-end and a lot of the brands kind of pushing the marketing dollars into that — into Europe where we have a beachhead in terms of freaks helping to grow that business?
Keval Shah
Okay. Thanks. How is overall e-sports landscape in the European markets basically? So for emerging markets, it is growing very well, but can you throw some light like how is the industry doing over there.
Karandeep Singh
Yeah, no, absolutely. So I think esports is you know there are mass there are big events which are happening. You know there’s a counter strike, you know event which doing, which is gonna be in Hungary at the end of this year we are are. We are gunning for that. So that’s a big event which is scheduled the mobile markets, which is the and the PUBGs, they are exploring into markets which is beyond the shores of Asia and Middle-East and getting into the central Europe, which is why our presence and in less than one year since we’ve been present in the CIS countries, we’ve done an event for in PUBG in Uzbekistan and we expect to kind of explore more with them. So Tencent obviously counts in margin as a preferred partner. And with that point-of-view and given our strength in the mobile gaming side of the capabilities that we’ve built, we should be able to partner and grow in the European side with them as — and other markets — other emerging markets, including Africa.
Keval Shah
Okay. And is there any path to profitability like any target internally that should become profitable?
Karandeep Singh
Yeah. So like I said, in the earlier questions, I think we’ve been investing in growth and the growth has been first-in the IP side, some of the IPs like the BGMS, which ran the third season, the playground which ran the fourth season, the SPS, which has had a fantastic success. I think we are getting to that stage where the IPs which were invested for will become a lot more profitable. So that is one angle of growth that we should be able to see play-out.
The other is obviously the emerging markets like I just called out. We’ve been investing in having presence and footprint in these markets as more-and-more brands and publishers, given the youth and given the audience over there and the general consumption patterns that increase, we are going to piggyback on that. So combination of these two and the capability stack that Nordwin has built with the acquisitions, whether recently with the talent management, with Trinity and the content distribution and creation with ASK. I think we are now going to be definitely piloting and expanding our global delivery platform. We’ve done this once, which is through the ESports World Cup where combination of the team — teams of Freaks in Germany and the teams in India kind of collaborated to deliver you know a great outcome for the eSports team in — which ran the eSports World Cup out of Saudi. I think with our footprint, with our teams based in Turkey, in the Middle-East, in India, in parts of Europe, we are going to drive the global delivery idea, which I’m sure you all of you are very familiar with, which is the ITIT world has done and that’s another lever of profitability for us.
Keval Shah
Sure. Thanks. And my last question is on — there was some plan of launching a new beta game under Animal Jam, I believe. So is there any progress or update on that? Hello, am I audible?
Nitish Mittersain
Sorry, can you repeat that please?
Keval Shah
Yeah. So there was some new game that we were planning to launch under Animal Jam, I believe there was a Beta game launch which was planned this year. So is there any update on that front?
Nitish Mittersain
Are you talking about the Skinky game that I just spoke about or something else?
Keval Shah
So just for clarity, the isn’t a new IP addition or it’s a new game under this division.
Nitish Mittersain
T’s Skinky is an IP that we’ve licensed and we are going to launch a new game on that. But it’s early days. So we probably have an MVP, which is a initial beta version out in maybe for six, seven months, then we will see how that performs. And if that performs well, we will mainstream it. So I think from a revenue impact perspective, we are probably looking at next year versus anything in the next one or two quarters.
Keval Shah
So there will be new PITA game launch on based on this IP itself.
Nitish Mittersain
Correct.
Keval Shah
Got it. Okay. Thanks. That’s from my side. Thank you.
Operator
Thank you. Ladies and gentlemen, this will be our last question. It’s from the line of Prakash Kapadia from Spark PMS. Please go-ahead.
Prakash Kapadia
Yeah. Thanks, sir. Just one question. I think you mentioned around 3 billion EBITDA for ’27, right?
Nitish Mittersain
Yes, the target right.
Prakash Kapadia
And that would assume just current businesses or it could imply inorganic also as of now, whatever we are focusing on or it could include some inorganic opportunities?
Nitish Mittersain
No, I mean, while we’ve not really broken it up through organic or inorganic, as you know, Nazara continues to be acquisitive and I’m sure from now to 2027, we will do additional acquisitions. But we’re also quite confident that the existing businesses will continue to grow well and continue to build-on the profitability that we are delivering today.
Prakash Kapadia
Thank you. Okay. Fine. Thanks, sir.
Nitish Mittersain
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today’s conference call. I now hand the conference over to the management for their closing comments.
Nitish Mittersain
Sure. Thank you, everyone, for joining the call. I think over the past few months, we have taken important initiatives to fortify our position and lay a strong foundation for future growth of the company. We remain committed to making robust in the Indian and global gaming and e-sports ecosystem. Thank you very much for your continued support. And if you have any further clarifications, we request you to get-in touch with our IR team. Have a good day.
Operator
Thank you. On behalf of PL Capital, that concludes this conference. Thank you for joining us and you may now disconnect your lines.