Onmobile Global Ltd (NSE: ONMOBILE) Q1 2026 Earnings Call dated Aug. 14, 2025
Corporate Participants:
Unidentified Speaker
Francois-Charles Sirois — Executive Chairman and Chief Executive Officer
Bikram Sherawat — President and Chief Operating Officer
Radhika Venugopal — Global Chief Financial Officer
Pratik Jagtap — Investor Relation Practice, E&Y LLP
Analysts:
Unidentified Participant
Deepak Poddar — Analyst
Slade Alexander — Analyst
Mithun Aswath — Analyst
Presentation:
Pratik Jagtap — Investor Relation Practice, E&Y LLP
Good day and welcome to Q1FY26 earnings call of On Mobile Global Limited representing the management today we have FC Executive Chairman and CEO Radhika Venugopal Global CFO Vikram Serawat, President and CEO. The call will start with brief update about the overall performance during the quarter by fc. Radhika will update on financials and then Vikram will share insights on operations. After that we will open the floor for Q and A session. I would like to mention that some of the statements made in today’s call may be forward looking in nature and may involve risks and uncertainties that we see.
For such list and considerations please refer to the earnings presentation On Mobile Global undertakes no obligation to publicly revise any forward looking statement to reflect future or likely events or circumstances. Having said that, I now hand it over to the fc. Over to you fc.
Francois-Charles Sirois — Executive Chairman and Chief Executive Officer
Thank you, thank you all for joining this quarter call. Good quarter. Quite happy. You know last year we discussed the importance of signing, you know, important contracts. This meeting is being recorded this quarter we had both, you know, the traditional business growing and we signed also important contracts with Busmo which was our enterprise connect service which is now renamed Buzzmo as a global product. So first big contract signed and as you can see the results, you know mobile Entertainment business up 13%. It’s good because it’s been many quarters that it’s been dragging us so to have this push, you know, as we said, you know it was stabilized, we felt the traditional business was stabilized.
Now at least it’s back on growth. So that’s, that’s a good one for this quarter. Second of all, the number of subscribers on gaming still growing. So that’s, that’s great. We have some sales also coming on the gaming platform so that’s, that’s also great. As I shared with you last quarter, we really focus on profitability and cashing in some assets that we have on our balance sheet. So you saw our cash position increase. We have other assets on the balance sheet that I see that we can capture and transform into cash. We also have an operating budget where we want every single quarter to be cash flow positive, generating cash every single quarter from this point.
So we’re past the stage where gaming is needing a lot of money. Gaming is making money and mobile entertainment is as usual making money but now with growth and as you can see it has an impact on our path, has an impact on our cash and at least it gives us a good position to be able to look at opportunities differently now. But the focus for the coming quarters is really cash generation. One thing that you notice I’m sure is the Diosphere revenues. We’ve decided to be precautious and defer the revenues on Diosphere. We have a fundamental issue with their software so it’s one thing to book revenues, another thing to make profit and it’s another thing to have operational issues with software obviously.
So we really need to sit down with Diosphere and align with this and to be precautious as you can see to be cautious we decided to defer the revenues so but as you can see didn’t have any impact on our profitability to this I’m going to pass it to Bikram and Radhika for for. The finance so Bikram
Bikram Sherawat — President and Chief Operating Officer
thanks FC good afternoon everybody. I’m very pleased that our FY26 has started on a strong note. We are actually growing in our key business. FC spoke about profitability, we are improving our profitability. When I talk about sales, we are building a pipeline that gives us confidence for the coming year. Our focus going forward is actually driving sustained growth of our mobile entertainment business and rapid scaling of our gaming business and we are going to enhance our margins through this diversified revenues which come from both of these streams specifically on mobile entertainment where we have grown by 13% right? We have delivered a solid progress.
This has been supported by new greenfield deployments in our Tones business. We have renewed our large customers on our Tones on multi year contracts and we have had positive developments where our business operations focus across key markets has helped us increase revenues. Revenues grew strongly over Q4 and our tones base stands at around 57 million right now. While we did experience a deal closure of one service for Tones closer to home, we still achieved a healthy expansion of our user base. Despite this and other regulatory challenges, our diversified portfolio and reach helps us maintain the momentum and we continue to adapt and adjust our approach in the markets where we need to focus beyond the current ones.
Right? The same is demonstrated in our effort in the direction of License deal. FC just mentioned about one key deal as I outlined in the last quarter also license deals are a large lever of profitability and yes, we have had one key win in Q1 for our enterprise communication offering Basmo. It actually reflects a very big milestone in on mobile’s history. It’s a five year deal with a Middle east operator and we are having multiple more opportunities which are in the discussion for this line of product coming to gaming. Gaming continues to be a growth engine.
Our subscriber base crossed 12 million growing double digit and it’s up to around 58, 59% from last year, right? The total gaming ARPU has grown steadily since last quarter with ONMO ARPU consistently leading the way. Gaming subscription has grown by 25.2% on the year and it reflects strength of our content mix and our proposition as preferred to gaming partners for telcos. We touched upon and we showcased about the gaming platform and our discussions with telcos. We are expanding this offering and it’s going to evolve into a full blown gaming and digital content landscape which is powered by tech and there are many active engagements which are underway with Tier one telcos.
In fact, we’ve got one win already for our gaming platform. Looking ahead, we continue to focus on mobile entertainment. We will deepen our gaming monetization, take our products to new GEOs and focus on securing multi year recurring revenue streams on licensing as well. With a strong start in Q1 and a healthy pipeline, we believe FY26 is going to be the year for faster growth and stronger profitability. Thank you. I’ll hand it over to Radhika who will take us through the finances.
Radhika Venugopal — Global Chief Financial Officer
Thank you Vikram. Good evening and thank you for joining us. I’ll cover the Quarter 1 Performance Quarter 1 FY26 Performance now in Quarter 1 FY26 Revenue was recorded at 127.6 crores which is an increase of 1.2% year on year and up by 10.2% quarter on quarter. Excluding Theosphere revenues which we deferred, EBITDA improved to 6.5 crores which at a margin of 5.2% and this is 7x year on year. Profit after tax came in at 15.6 crores. Gross margin expanded to 54.4% versus 51.1% in the current in the last year same quarter. Reflecting the mix and cost discipline, gaming continues to be a growth engine.
Gaming subscribers reached 12.04 million growing at 58% year on year and 13% quarter on quarter. Gaming subscription revenue was at 31.7 crores up by 25.2% year on year. In June gaming subscription on a monthly run rate basis reached USD 1.3 million. Within mobile entertainment segment revenue was at 95.6 crores which is up 13% quarter on quarter and we closed the quarter with a gross cash of 108.6 crores reflecting positive operating cash flows and statutory refunds. Operating discipline remains a focus. Our costs people cost was 26.9 crores which was down 9.7% quarter on quarter and 6.6%.
YoY marketing was at 24 crores which is down 1.5% quarter on quarter and up by 5.6% year on year based on the subscription revenue growth. Other opex was at 10.67 crores which is down 14.4% on a quarter on quarter basis. Our day sales outstanding stood at 106 days. As a matter of prudence, we have deferred revenue recognition from Diosphere contract while we work with a partner to address software restriction concerns that affect SLAs. This does not change our commitment to quality of earnings and risk management. Our priorities are clear which is profitable growth, higher operating cash flows, disciplined cash capital allocation and relentless execution.
So we are executing a two pronged growth plan. Scaling subscriptions and monetizing gaming platform. On profitability, we are focused on operating leverage. The step up in gross margin and the reduction in OPEX sequentially are trends which we intend to sustain. While reinvesting selectively in growth capital allocation will remain prudent. With 108.6 crores in gross cash. We will prioritize working capital discipline, business scale up and product innovation. We will choose quality of revenues over speed. As always, quarter one demonstrates resilient top line, expanding margins and strong cash. With accelerating subscription momentum, a scalable platform and trusted telco partnerships, we remain confident in delivering growth and discipline through FY26.
Thank you and I look forward to your questions. Over to you, Pratik.
Questions and Answers:
Pratik Jagtap
Thank you. Fc Vikram and Radhika. So participants, those who have any questions, they can raise their hands and then I will give opportunity to ask the question. So we have a first question from the line of Deepak Podar. You can unmute yourself. Yes, you are audible now. You can go ahead.
Deepak Poddar
Thank you very much for this opportunity and public call. So first of all we just wanted to understand. In this first quarter our revenue mix from gaming was 25 as compared to fourth quarter it was 47%. So. So on an absolute basis that means that our gaming revenue has declined quarter on quarter.
Francois-Charles Sirois
All right, Keep in mind we’ve. We’ve deferred the revenues from the sphere, right. Which was considered as gaming. So this is
Deepak Poddar
how much was the. How much is the impact of this Diosphere contract.
Francois-Charles Sirois
Through this exact impact?
Radhika Venugopal
Yeah, it is 43 crores.
Deepak Poddar
Okay, so 43 crores revenue ideally would have come in first quarter if this would not have been deferred.
Francois-Charles Sirois
Yes.
Deepak Poddar
Okay, so how do we see that going forward to come back? What is the future.
Francois-Charles Sirois
On dsphere?
Deepak Poddar
Yes, yes, yes.
Francois-Charles Sirois
I mean honestly we really have to have a deep discussion with our partner here and realign. You know, this is why we defer the revenues as prudence. You know, they have very big customers. We can do very big business. But, but you know, we have to assess on the other front the issues that we have today. And it needs to make sense. Right. You know, money is not just, you know, one piece of the equation. You need to be able to operate in a decent manner. And, and right now this is why we, we’ve deferred and we can’t answer more to your question because that’s, we, we really have to line up with our partner here and make sure that we can fix this situation.
Deepak Poddar
But there is a possibility that in future this revenue doesn’t come at all. I mean, is that a possibility?
Francois-Charles Sirois
Also there’s a possibility we decide not to, not, not to continue, you know, in this modus operandi because it does create issues and there’s a possibility that we onboard, you know, their big customers and that we continue. So that’s, you know, this is the situation right now.
Deepak Poddar
So, so now on the back of assuming this dual sphere contract doesn’t come through. And so earlier we were, I think earlier we were guiding for about 50 growth in our gaming revenue to, I mean last year it was around close to 207 cross. So 50%. So how, how should we look at this guidance right now in terms of gaming revenue growth?
Francois-Charles Sirois
Putting aside the sphere, I still see, you know, the gaming subscription business as we’ve given. Right. We, we target to be at 2 million a month US by end of March, you know, in 2026, you know, so in the next eight, you know, nine months, 10 months we will be uh, you know, at a, at the run rate of basically 24 million a year. And now you know, if you take the 1.33, we’re basically at 16 million a year. So, so on subscription revenues, right. So I really see the subscription revenues growing from 16 to 24 which is 50% growth.
Deepak Poddar
So on an average maybe this year we might like look at 20 million kind of a number.
Francois-Charles Sirois
Yeah, exactly. If you take the average between 16 run rate and, and going to 24. Yes, around that.
Deepak Poddar
Around 181. 180. 190 cross and contracting what we did about 207 and, and what sort of margins one should expect in, in the, in the gaming.
Francois-Charles Sirois
This revenue margin is really increasing. You know, just, just to highlight, you know, the marketing cost that we had last year. Right. We mentioned it a Lot. Right. Because we activate so many accounts, it was really costly to launch a new account, you know, start the marketing. So our cost of marketing was very high. Now if you look year over year, right, our marketing grew by 5%, but the revenues grew by 25%. So this is because we optimize the marketing, right? I really view that from this point we can optimize the marketing more so that the, the growth that’s coming is bringing way more profit than, than what we have as a base.
You know, we, we still target a good 25 EBITDA margin on gaming. And I don’t see why it should not be at least that amount.
Deepak Poddar
25% EBITDA margin. And this, this is something which we can achieve this year itself or this year it will be difficult because of smaller scale.
Francois-Charles Sirois
Honestly now we’re still, we’re still deploying new customers, right? We’re still optimizing. So I’m saying, you know, within the next 12, 12 to 18 months, that this is the target.
Deepak Poddar
Next 12 to 18 months. And what is our EBITDA margin currently in the scaling? I mean this 30, 31 and 32 crores revenue that we did in first quarter. What was the EBITDA margin we, we saw in first quarter in gaming?
Francois-Charles Sirois
Gaming was break even, Break even, Break.
Deepak Poddar
Even at, at 32 crores kind of a revenue.
Francois-Charles Sirois
Keep in mind, we’re investing still in new gaming products, right? We’re still developing the gaming platform. We still have, you know, many aspects to it. So you know, all this development right now is covered in our operation. We don’t capitalize.
Deepak Poddar
Okay, okay.
Francois-Charles Sirois
You know, you know, when we built onmo three years ago, right. We, we invested a lot of money that went into capital utilization. So now the advantage, two things that happen, right? So now our revenue base is obviously bigger for all the gaming service and everything that we build, we reuse for our new service. So the additional development, although it’s costing a bit of money, is nothing compared to the investment that we had to do to build our gaming infrastructure. And now the critical mass is attained so that we still grow and make the investment in gaming and start making profits.
So now we’re basically breaking in on gaming and all the next phase of growth is going to be profitable.
Deepak Poddar
I got it. And on the traditional business side, mobile entertainment, now that we have seen growth and some new contracts are coming through. So what sort of growth target we have for this year?
Francois-Charles Sirois
FY26 as a whole, you know, it was 5%. You know, we grew this quarter at 13 you know, it’s a, it’s a, you know, license. It’s both. Right. The base business that grew a bit and a, you know, this new, new contract with basmo, this new contract is license based. So obviously it’s more lucrative than just the base business we have as Bikram was mentioning. Right. We’ve put a lot of efforts on our sales team to really push big contracts. We have a lot of big contracts in the pipe. So now our expectations that every quarter we have a good line of contracts that adds to our core business and these contracts have a bit more margin than what we have in the core business.
Deepak Poddar
So. So, yeah, so, so what’s the growth range we are looking at in the, in the school by entertainment?
Francois-Charles Sirois
I, I would say 5% for now it could be higher than 5. But for now just to be conservative on a yearly basis we aim at 5%.
Deepak Poddar
Okay, so that’s very conservative.
Francois-Charles Sirois
Right?
Deepak Poddar
I mean 5% growth that you.
Francois-Charles Sirois
Of course now we just did 13. Right. But you know, we have to quarter.
Deepak Poddar
And quarter, quarter and quarter growth. What’s your yui growth in this first quarter of mobile entertainment?
Francois-Charles Sirois
No, it’s actually, you know, so erratica. We’re down, right.
Radhika Venugopal
Year over year, 4.9% down year only.
Deepak Poddar
So, so 4.9 we are down. So in that terms the run rate we are down, I mean on the.
Francois-Charles Sirois
Last 12 months, but the next 12 months we’re going to be up 5 at least.
Deepak Poddar
Okay. Okay, now I understand. And what, what sort of, this is my last question. What sort of margin range we are expecting in the traditional business?
Francois-Charles Sirois
Well, traditional business always been running at a 15, 18 EBITDA margin. Now that was on a stable or declining base. Right. It’s very tough to make profit when you decline. Right. You’re just eating up your profit because it’s always like the, the contract, the most lucrative one that you lose. So you know, it’s just to be honest with you, with a good growth of 5, 10% that could, that could go back also in the 2020 5%. But for now the target is 15 to 18% on traditional.
Deepak Poddar
Okay. Okay, that’s very helpful. I wish you all the very best. Thank you so much.
Francois-Charles Sirois
Thank you.
Pratik Jagtap
Thank you, Deepak. So participants, anyone have any questions they can raise their hands? Slade, you can unmute yourself and ask a question.
Francois-Charles Sirois
Yeah. Hi. Thanks. Firstly, good evening. So I just wanted to follow up on an investment that had been made earlier. So the startup, the Chingari investment, y’ all had mentioned last time that now this is kind of a write off. It’s just a pure VC play. So how much do you expect to recover from this investment? Firstly and also going forward now with the cash balance, Are you looking at any kind of investments in startups or anything? Because I think initially that QIP that had been talked about, half of it was also for M and A kind of purposes and half was for the capex.
So I understand the QIP has been put on hold for now, but you all were intending to look at some acquisitions, right? So I just wanted to know if that is still on the table.
Francois-Charles Sirois
Yeah, thanks for this slide. Yes, Shingari, clearly, as I said last time, it still remains right? It was, you know, we had some synergies that we thought we could have with onmo. There’s no synergies. We are in discussion with them and with potential buyers to sell our investment. It’s not closed yet. Hopefully, you know, in the coming quarters we’ll be able to dispose of our investment. Our target is to at least get the value that we have on books today. So the value that we have today on books should be that, that’s, that’s part of the assets.
When I say we have assets on books that we want to convert into cash, that’s one of the assets that I want to remove from our book and make. It’s going to stay in our books, obviously, but in the cash section, not in the investment section. Investment in startups, to be honest with you, you know, my, my, you know, my view is we’re not a venture capital, it needs to have a lot of synergies. So, you know, my view of M and A is not buying a startup. My view of M and A is buying a company that’s been out there for multiple years that’s making profit and that we together could make even more profit because they’re synergies.
Right. So that’s the kind of M and A I see that we could do. Obviously having a positive cash position and the possibility to do a QIP to finance the acquisition helps. Raising debt is always a bit difficult on a global level because, you know, most enterprise that we deal with, you know, we deal in multiple countries in Africa and Asia and other, you know, countries where it’s a bit difficult to raise debt. So it’s probably equity. So to have a cash position that’s, that’s healthy and being able to do a QIP to do an M and A is something, you know, that, that would make it feasible.
Now we just have to make sure that we find the Right. Acquisition and that it makes sense and that the risk is reduced by buying them, not increased. Right. So it’s all a question of risk management. But yes, it’s still a possibility that we in the next 12, 18 months close on an NMNA that could be significant.
Slade Alexander
Okay, thank you.
Francois-Charles Sirois
Thank you.
Pratik Jagtap
Thank you. Slade participants. Those who want to ask question they can raise their hands.
Francois-Charles Sirois
No other questions
Pratik Jagtap
as of now, none.
Francois-Charles Sirois
Simple results, eh? That’s good. Doesn’t bring questions when it’s simple.
Pratik Jagtap
There is one question in a chat box from Dharam Kumar. So he’s asking can you show some of your products?
Francois-Charles Sirois
Yeah. And thanks. You know, I had promised this, you know that we would show. Actually we have a new product that I want to show you. But you know, we’re waiting, we’re negotiating right now with some key operators and we want at least to have, you know, one sign before we show, you know, our future product. What we’re going to try to do is, you know, the next meeting, I’m not going to wait the quarter because next quarter is actually November. We have the AGM that’s coming up on the 23rd of, I think it’s the 23rd of September.
So at the AGM we’ll use the opportunity to showcase the products, the gaming platform that we have in our, you know, updates on UNMO and CA so that you can see the products and hopefully if we can sign a term sheet with one of our key customer on the new product, we’ll be able to show them of the new product also. So thanks for your patience. I know I’d said that you know, we would showcase the products but let’s wait another month for the AGM to do so And I promise on the AGM we’ll showcase some products.
Pratik Jagtap
Anyone has any question. Okay, so there are two questions now in chat box. First one is can you from Tarun, can you buy. Can you bifurcate. How can cash. How cash has increased this year, this quarter.
Francois-Charles Sirois
Radhika, you want to comment on this?
Radhika Venugopal
So around 62 crores was pertaining to. 60 crores was pertaining to income tax refund. The rest from operating cash flows.
Pratik Jagtap
Hope that answers your question, Tarun. The second question is from Arun Kumar. Are you exploring any new opportunities outside of gaming and traditional mobile entertainment business?
Francois-Charles Sirois
To be honest with you, I’ve looked at many opportunities but I like to focus. I really think that you know already by serving the operators on both mobile entertainment which can be large because you know, in mobile entertainment we have our communication platform also buzzmo right. And Game eyes which is touching. A bit of gaming but a bit of you know, SaaS based engagement. So when we add this plus the tones business, plus the you know, news videos business plus all of gaming I think honestly I think we, we are well diversified and that’s uh, you know the key is really to capture the gaming market.
Uh, as you can see the gaming market is really big. We have huge opportunities. All the operators in the world needs a gaming strategy. If you look in the App Store, 60 plus percent of the revenues in the app Store Google and Apple is gaming. So that’s a huge opportunity for mobile operators and we see it right. The more we pitch gaming the more business we get. So again our subscription revenues going up is one thing. The gaming platform that we start selling as a license but also capturing part of the in app purchase and the advertising Also you know 50% of the mobile gaming revenues is advertising and we were not doing any advertising.
So now we’re starting to push advertising also in gaming. So to be honest I think we have enough business lines. So no, I’m not planning to add anything from this point.
Pratik Jagtap
So there is next question in the chat box from Tarun. Can you explain in detail about DSphere contract and it is a such big revenue component.
Francois-Charles Sirois
It’s a big revenue component because you know they were, they are, you know we have a deal where they actually leverage on our global network, right? So all the global networks we have, they get access in each pop. They can, you know, they have servers and they can deploy their software. And this is the exact problem, right? Because you know we give them access to all the global network that we have which is basically a sunk cost for us to operate. You know we have you know, a global network and that’s what we realized, you know, talking to DSphere that we could actually monetize this.
Now again, that’s what I’m saying. Monetization is one thing, you know, profitability is another thing. And software, the way the software operates is something totally different, right? Software operation. And right now we’re in a situation that’s kind of awkward, right where their software is being deployed globally on our servers and that caused problems that we need to address with them. So that’s why as you can see we’ve deferred the revenues until we can really solve the problems we have with DSphere.
Pratik Jagtap
So the next follow up for that is what happens if doesn’t go through.
Francois-Charles Sirois
To be honest guys, I, I really believe in synergies, right? We’ve done this not just to make money, right? We’ve done this because there were synergies with gaming and that’s why we booked them in the gaming revenues the way it is right now we don’t see synergies again I see problem, I don’t see synergies. So I need to address the problem and make sure we see the synergies, right? So, so if there’s no synergies with gaming there’s no point for us to, to, to really, you know, go deeper. So we really need to understand that component which was the initial component why we, we’ve done that deal.
So I mean if it’s not there, to be honest with you, we have so many opportunities in gaming. Focus is key, right? We can’t just do everything. So let’s, let’s focus and, and that kind of revenues will get and I’m not worried with the new products that we’re talking to operators right now. This is the kind of revenues we have anyways elsewhere. So it’s, you know, I’m not feeling like we’re losing anything here. So.
Pratik Jagtap
So there are two more questions in the chat box. So from Mithunaswat, he is asking what was the reason for the share fall in the kyok revenues? Also when we. When will be the gaming business become a significant part of business so margins become meaningful? Also cash went up QQ sharply. Is it sustainable or a blip?
Francois-Charles Sirois
Okay, let me address the first point, right? The only reason that the revenues went down quarter on quarter is because we deferred the dsphere revenues. You know, putting aside the DSphere revenues we grew 10 quarter on quarter. That’s the first point. So that’s actually growth. Just that we deferred the dsphere revenues. The cash as you can see there was a great increase. I still see an increase on monetizing assets that we have on our balance sheet. As I was mentioning earlier, we have the investment in Gary, we have other assets on our balance sheet and we have a policy in this year’s budget now that gaming is breakeven and that all the additional growth is actually bringing profit.
The traditional business was making profit and with growth is bringing more profit. We have a budget where every single month or every quarter for us the cash position will grow. So it grew quite a bit in this quarter. So I mean I’m not expecting this kind of growth every quarter. Although if we do monetize our position with, with Shingari it will grow again by pretty much the same amount. So that but you know, in the next quarters, yes, this cash position will grow. That’s, that’s the goal. And our, and the profitability or the cash position that we have every.
On the operation will grow. What was the question in between? Sorry, I missed one there.
Mithun Aswath
So yeah, it was basically when will the gaming business become a significant part of the overall revenue so that your margins will expand and become meaningful.
Francois-Charles Sirois
So as planned, right. You know, we finished last year as you, as you remember. Right, right. We invested 35 million U.S. right. In, in ONMO. So a lot of investment was into CapEx. So the capitalization was there. This year we stopped capitalizing. All the development that we’re doing is within the current P and L. So there’s no confusion, right? There’s no, oh, we, we did that much profit. But we capitalize all this and the cash rate position is going down. That’s why you see the cash position going up. That’s why you see the pad going up and the actual gaming business is big enough to absorb all the development we’re doing.
Right. So basically right now at. We’re on a run rate, as I was saying earlier, of. Of 16 million US. Sorry, I like to work on the US it helps me a bit. So 16 million US we still plan to grow by March, April next year to 2 million a month, which is a run rate of 24. So all this growth from 16 to 24 is very lucrative because it goes on top. And all the development right now is paid in the current 16 bays. Right. So all our costs are covered. So right now we’re break even on gaming and the profitability that’s coming along is mostly profitable.
All the growth coming along profitable. And the entertainment business was profitable and is even more profitable with growth. Right. So if you ask me, when do we start seeing big, big growth in gaming and profitability? Obviously in the next 12 to 18 months. That’s where I think we’re going to be able to Show a good 25% EBITDA margin.
Pratik Jagtap
So we have next question from the sled. Sled even unmute yourself and ask your question.
Slade Alexander
Yeah, so just a quick confirmation. So last time on the previous call you had mentioned you’re given a guidance of 300 million USD, right. In the next few years. So I just wanted to confirm, do you still feel that way? Are we still going to achieve that? Are we on track for that? Because it seemed a bit optimistic. So I just wanted to confirm that it’s still on.
Francois-Charles Sirois
So I’d said between the Next three to five years. Right. Just to be clear. Right. I didn’t see, I think the question was, you know, how do you see the long term vision right on this? Right. And I said, you know, in five years, yes, we can do probably 300 million. I still feel this way, right. Because the market on gaming is huge. Now a question is how do we take that market? Right. And one discussion that we had on the board, the board was yesterday, is how much risk we want to do, how much investment we want to do.
Right. The gaming market is a market where the gaming players today are making a lot of money and they’re very difficult to talk to because we’re not really considered as a gaming player per se yet. Now we’re growing. Right. So how much money and how fast we want to go? And in some cases, I love to go fast. The reality is that, you know, trying to go too fast will just. We’re going to waste more money and we’re not going to capture the revenues. Right. So we have to take the good pace and I think we’re on the good pace right now.
And then we’ll grow from this point for sure. You know, my aspirations within five years, yes, we could capture 300 million. I agree with you. It’s a, it’s a, it’s a big number. But keep in mind that, you know, the gaming, the key gaming players today are making huge amount of money and the key here is to. It’s not us alone. Right. If it be just on mobile, I’d say yeah, it’s a bit tricky. It’s, it’s the strategy that we have that we sign an operator. Each operator in itself is quite big. Gaming for them is quite big.
And when we offer them the gaming, all the revenues they make in gaming goes, you know, a big portion of it through our P and L. So if we do the strategy right here, yes, I believe we can do 300 million of revenues because we’ll be basically managing all of gaming for an operator into 100 operators. Right. There’s no reason that in the next five years we don’t have the same 100 operators that we have today fully integrated with a gaming platform. And that all the gaming revenues that they capture is through our platform. And a big part of these revenues is booked on, on our balance sheet.
Right. So. So this is why I still believe this is feasible.
Slade Alexander
Got it. Thank you.
Pratik Jagtap
Thank you. Slay. We have another question in the chat box from Arun Kumar. So he’s asking, in a previous call you mentioned about licensing the infrastructure that on mobile has created over the last decade with telcos for AI and ML purposes in countries where big players like Google AWS don’t have much presence. Can you expand a bit more on that and if that strategy is going to bring new revenue stream?
Francois-Charles Sirois
Yeah, that was just to be clear, that’s the contract we did with DSphere and that was the diosphere technology enabling AI at very low cost on servers. This is why I was mentioning earlier that we had to defer the Diosphere revenues because their software is bringing other type of problems that we did not anticipate. And for now if we don’t see the synergies with gaming and it brings more problems than solutions, then that’s what we have to address. So for now I can’t answer the question because we really need to sit down with Diosphere and address this problem.
But yes, Dsphere has very big customer in AI and gaming running and the technology, the premise was to be able to run on the same gaming server, AI based solution, you know, using different resources and maximizing the actual hardware so that on the same hardware your cost goes down because while you do gaming you can actually do AI and you reduce the cost of operating a gaming server. But you can understand that this nice vision works in theory, in practice, different story. So now we have to address this with our partner.
Pratik Jagtap
Thank you. So we have the next question from Mithun Aswath. Mithun, you can ask your question.
Mithun Aswath
Yeah, hi. The question for you, Francois. Obviously, you know, we’ve seen ups and downs in the company over the last few years, but now we seem to be on some sort of trajectory. Obviously maybe the market is not reflecting that because it may have lost patience or whatever. I’m just trying to think from you as a promoter of this company, you know, the market cap is hardly, you know, 500 crores or so. Would you want to do some sort of buyback or would you want to buy a creeping stake in this company at these levels? Is there any thought of doing that?
Francois-Charles Sirois
To be honest with you, you know, I’ve looked at, you know, in the years I’ve been, I’ve been chair on this, on this company for 11 years now, right? So I looked at every single alternative, including, just to be clear, you know, privatization, you know, seven years back I was like, you know, we should privatize the company at this price. It’s ridiculous, right? You know, for many reasons there’s always a problem, it’s very complex to do so. So you know, we, we basically have 50%, 48% of the company for, for now. You know, my vision is not to increase that.
Would I like to have a partner on board? Certainly do. I think we can get a partner on board with our vision on gaming. Certainly. Can this partner buy, you know, back to your point, a big part of, you know, the company and be partnered with us? It’s feasible now to do so. I need to, I need a bit more time, right. To finish the gaming strategy. Right. You know, and you’re right. You know, we’ve been having some ups and downs. You know, the onmost story we really wanted to go D2C if you remember when we launched it, we launched it in India first with a nice ad.
Cost was up to the roof on marketing. You know, we realized really quickly it was not a good strategy. We realigned now I think, you know, we really pushed the ONMO story. It took us a bit more time on marketing to be honest, to optimize the marketing. You know, like every business, we underestimate the time it takes to establish a new business. You know, you cannot do a new business in 18 months. Right. It takes a good three years. And that basically that’s what we have. Right. We’re three, four years into our gaming strategy and you know, it took us two years to build the initial pillars, three years to, you know, really optimize the, the gaming for challenge arena, the gaming, the, the marketing for onmo.
Now to be honest, if I benchmark, you know, our current revenues, we start from scratch in gaming. Our current revenues at 16 going to 24. If you look in gaming companies, there’s not that many mobile gaming companies that start at zero after three years. It’s like 16 million revenues going to 24. And actually as I was mentioning on the other call, there’s other players in the industry that are value that more than on mobile and they have in gaming revenues less than half of our revenues. But yeah, I mean if I look at the stock market and I compare to Nazara, right.
I mean it’s almost like, it’s almost like the bitcoin. Right. I’m not a fervent suppress. No, the bitcoin price for me just doesn’t make any sense. And Nazara’s multiple is for me the same thing as bitcoin. Right. So yes, you can, you can. Should do. I believe in the stock value at this current price. Yeah, for me it’s very, the low, low mark. But again I don’t control the stock price and I’m not gonna Manipulate our stock price either. So the stock is whatever you shareholder feel it is and hopefully, you know, with the deployment of our gaming strategy, more and more investors in India will like the story and start buying the stock. Right. But yeah, I agree with you. We had a couple of up and downs like any story and you know, now we’re, you know, for me it’s important to have a very good operation, very steady and you know, as you can see now we’re online with cash.
And that’s why, you know, it could be very easy to say, oh wow, we have huge opportunities in gaming. Let’s put money there, there and there. We’re very prudent on where we put our money. Right. So for me, increasing cash position is key and we’re going to be prudent and from this point on just grow the business and grow gaming. So I hope that answers your question.
Mithun Aswath
Yeah, just an added question. Yeah. I think in India the only guys who really succeeded are these. Cricket, sort of not betting. I don’t know what you want to call those apps and maybe. Yeah, yeah, yeah. Is there some thought of entering that space? Because that seems to be where, you know, a lot of, you know, money has been made. By those incumbents. Obviously a lot of spend as well. Yeah.
Francois-Charles Sirois
So just to refresh your memory, when we launch Unmo, we had real money gaming into onmo because. Exactly that point. Right. Because, you know, a lot of players were making money, a lot of money, you know, with real money gaming in India. And, and we tried to do a social gaming with money, to be honest with you, we wasted a year and a half and we wasted at least 5 to 10 million, you know, on real money gaming. And the reason is very simple. As soon as you put one rupee that you can win, you get a hundred.
Hackster trying to take that one rupee and you could have. It was unimaginable, the number of people frauding the system, trying to hack this, hack this, hack this to win one rupee and the whole team instead of doing all the social features and having a very strong platform, which we have now, you know, because we had that one rupee that you could win, right. Or 10 rupees or. It was crazy. It was, it’s, you know, we, to a point, after nine months we said timeout, that’s it. No more real money gaming. It’s just like it just wasted all our energy, you know, in the wrong direction.
Plus, keep in mind that a lot of the game developers don’t want to be in real money Gaming. So we wanted a platform that game developers could hop on. And it was like oh no, there’s real money gaming we’re not hopping on. And a lot of operators do support real money gaming but a lot of them don’t. Right. So it add a. A very bad connectivization. So even if we wanted to just do it half and, and, and for fun it we could not. So that’s why we’re not reentering the real money gaming sector at all.
Mithun Aswath
Thanks.
Francois-Charles Sirois
Thank you.
Pratik Jagtap
Thank you. M. So we have next follow up question from the Deepak P. Deepak, you can ask your question.
Deepak Poddar
Yeah. Okay, great. So thank you very much sir. Once again I’m just wanting to understand on the, on the gaming division let’s say if you do average of $20 million this year. So at 32 crores kind of a revenue we are breaking even quite 170 to 180 crores kind of a revenue which would be average 45 crores per quarter kind of a run rate. So what sort of, what sort of EBITDA margin we can see at 170, 180 crores. Given we are in the investment mode and you’re targeting 25 maybe next 12 to 18 months.
But at these levels what sort of EBITDA margin one can do?
Francois-Charles Sirois
Radhika, do you remember what we have in the, in the plans around 10%, maybe 5, 10% in a total, right?
Deepak Poddar
Yeah. In gaming revenue 170 to 180 crores revenue. So what are the EBITDA margin we can see same the current day
Francois-Charles Sirois
radic. Am I wrong with 10? Is that the number?
Radhika Venugopal
Yes, it will be upwards of 10%.
Deepak Poddar
It will be upwards of 10. Okay, okay, I got it. And secondly on traditional business I mean given this first quarter 32 crores break even. So, so the remaining revenue that is that we are left with is around 93 crores. That is traditional business revenue. And there the EBITDA margin I’m getting at 6.7%. Right. So. So how come we are getting the 15 to 18? Because at this revenue we are, we are getting around six and a half point seven percent kind of EBITDA margin. Your traditional business. So this 15 to 18 EBITDA margin that you said they are not able. To understand
Francois-Charles Sirois
is the contributing margin, right? Per. Per product line. Below the line we have the head office cost, the global cost, the shared costs.
Radhika Venugopal
The allocations are not included in that. What you see as EBITDA in the reported results is after allocating all the corporate Cost, common costs. What we are talking about when we talk about the separate segments of gaming and traditional business it is a contribution margin before allocation of common or general admin expenses.
Deepak Poddar
So we are talking about gross mark.
Radhika Venugopal
No it’s not gross margin. Gross margin is only after deducting the direct cost but contribute. When I talk about contribution margin it is after deducting marketing expenses the expenses pertaining to the manpower who are working on that particular project etc. But what is excluded is the general corporate expenses and admin expenses like because the rent of the office or any legal and professional charges which are general. The statutory audit fees which is general. All these costs, common costs of running the business is not interested.
Deepak Poddar
Okay so when we said 10 gaming margins and 15 to 18 traditional margin we are talking about contributions. So. And what is the annual this fixed cost we are talking about that gets subtracted separately from the number.
Radhika Venugopal
So we are trying to. It comes to around. On a quarterly basis it comes to around 10 to 12 crores. So it keeps fluctuating depending on the optimization measures. Etc. What we do this is only on the OPEX and there is corporate manpower almost the common people who are working etc which will be around 5, 6 crores of cost. So these costs are separate and it’s not allocated to any P. It’s allocated to P. L But it doesn’t come about the contribution margin but total.
Deepak Poddar
Total this. I mean so. So what gets subtracted from this contribution after we arrive at this contribution?
Radhika Venugopal
It’s all the legal costs. Professional, legal and professional charges, statutory audit charges, statutory audit costs, rentals and other office running expenses. Travel costs which are pertaining to general travel costs etc. All these costs get deducted from the. Contribution
Deepak Poddar
plus the people cost. The corporate people.
Radhika Venugopal
Only corporate people. Yes.
Deepak Poddar
Yeah. So. So that amounts to about 10 to 12 crores plus 5 to 6 crores. So around 15 to 18 crores per per quarter.
Francois-Charles Sirois
And Deepak just to tell you, you know because every year I look at the entire list of cost and. And this year, you know just in this quarter we reduced it by 14% quarter on quarter. So we’re really looking at cost reductions on every front. A bit like you, I don’t want to. All these costs for me, you know it’s just. It’s the cost of doing business as we say here. But you know there’s a lot of them that we’re trying to optimize here.
Deepak Poddar
Okay, fair enough. But as it stands around 15 to 18 crores of this cost comes per quarter.
Radhika Venugopal
Around 15 to. Yeah. 15 to 16 crores and please keep in mind it’s, it’s across the globe. And these also include international locations and countries where your compliance costs and other legal costs may be quite high to run the business over there.
Deepak Poddar
No, no, fair enough, not a problem. I mean it’s just that I’m trying to arrive at a number. So this 15 to 16 crores quarterly gets subtracted from whatever contribution profit we get. I mean my understanding is. Okay, okay, that’s very clear. And that’s it for mine. Thank you.
Francois-Charles Sirois
Thank you.
Pratik Jagtap
Thank you. Deepak. We have next follow up question from Mithun Aswad. Mithun, you can.
Mithun Aswath
Yeah, yeah. I just wanted to understand. You’ve done about 31 crores in gaming revenue this quarter and you mentioned that $12 million. Run. Oh, what is the kind of guidance you have for FY26?
Francois-Charles Sirois
FY26. The guidance around, you know, as I was saying, you know we should finish the year, start the next year at around 2 million a month. So that’s the run rate right from, from, so now we’re at 16 in June going to 24 basically. So the average is going to be between 18 and, and 20 million of revenues this year.
Mithun Aswath
Right. And, and at that 20 million dollar mark what is the kind of margins we would make on the gaming business? Just the gaming business.
Francois-Charles Sirois
Yeah. And keep in mind it’s not optimized for an operation that stays at 20 because we’re going at 24. But we’re also growing and the same operation team is actually working on the gaming platform and other gaming services. So just keep that in mind. Right. So it’s about a 10% margin, I’d say at the 20 average for the year, 10%. That’s why I’m saying over the next 12 to 18 months it should be 25.
Mithun Aswath
Right. And just one last one. Is there any thought of raising capital or doing, do you need capital at this stage to expand or are you working within the means that you have right now?
Francois-Charles Sirois
Right now we’re operating with a vision of, you know, I think we have a very good gaming team. All the gaming development is paid by the current gaming operation and for now there’s no plans to raise money. Although I had plans to raise money on gaming. And the reason for it is that I want us to, instead of running, I want us to, you know, go step by step and if necessary then raise the money. But you know, we need to make sure that the, the return on investment makes sense. One point though is that I, I, you know, initially, you know we have as you know, ONMO Inc.
Is based in the US right? So our goal was to raise money in the US Tax wise. A bit complicated because to raise money in UNMO Inc. We need to have all the revenues under ANMO Inc. It’s very tough to raise money into a subsidiary that doesn’t have the revenues. Right. And, and On Mobile Global is public in India and is a global. You know, we have global 40 entities in the world where you know, for tax reason we need to have entities everywhere in the world. So the gaming revenues is everywhere in the world.
So it just makes it a bit more complex to do a VC type of investment raising money in the US like we wanted to do. So that’s just the reality of the business. Right. So I mean the good news is that everything is centralized under OGL Public in India. So if we need to raise money, it will most probably be innogl. Right. For gaming.
Mithun Aswath
This one last one, you, you mentioned you have cash of about 100 crores right now. What are these other assets that you can monetize in the current year to increase the cash balance?
Francois-Charles Sirois
Shingari. The Shingari investment that we have. Okay, sell our position. That’s going to have a, a nice bump up on our cash every quarter. We’re going to make money so that’s going to have a nice small bump on our cash. But still we make money instead of, you know, using money which is different than the last five years. So that, that has an impact. And we have other assets on the balance sheet here and there that we can monetize also. So that will have a small impact also.
Mithun Aswath
How big would that Chingari investment be now?
Francois-Charles Sirois
In our books we have. How much do we have, Redika in our books? In rupees 60 crores. So that’s the target 60.
Deepak Poddar
Got it.
Mithun Aswath
Thank you.
Francois-Charles Sirois
Thank you.
Pratik Jagtap
Thank you, Mithun. So we have one more question in the chat box from Arun Kumar. So he was, he’s asking, we also had a target two years back to complete deployments of gaming solutions with 200 global operators by 2025. Is that still on plan or. The focus now is to optimize the current accounts before moving to new without putting the timeline.
Francois-Charles Sirois
Yeah. So it became rapidly a mess. And I’m just really open with all of you here. You know, you go from, you know, in gaming, right? We started at zero, right. So we started at zero, went up to 40, rapidly went up to 80. Now we’re at 120 plus deployed. Right. And when I say mess is that we Realize that the marketing that we’re doing in each region is different. It’s not like a global marketing campaign going in 120 operators going to 200. It’s 120 different campaigns going in each country, in each operator, which needs to be optimized individually.
And that’s where honestly in the last two years that’s where it took us more time and that’s where we set timeout. Instead of adding going to 200, let’s make sure we make money in these 120. Once we make money on the 120, then we can expand a bit more. Now, as you can see, the cost of marketing has been reduced. I think we can make way more revenues for each operator that we have today in the 120. Are we going to add from 120? Yes. Can we get to 200? We can. I’m just taking more time instead of running on sales and onboarding more operators and then we’re stuck on the marketing operation that’s done difficult to really grow the revenues within each operator where we’re already deployed because it’s not just the marketing cost.
Right. We have a cost of deployment of the solution also. So it was like cost, cost, cost. So that’s why we built up so much cost in the past and that’s why now it’s profitable. Because you know, we’re going, you know, more slowly on boarding new operators but making sure that the current operators are making money. So that’s. So that’s the situation.
Pratik Jagtap
Thank you fc. So we have another question. We’ll take it as a last one. So is Tarunit saying you can raise big Money in India? SMEs are raising big money. You should do something to bring investor confidence. Plus adding to that, it’s saying we have been waiting for three months for the demo now and it is again postponed.
Francois-Charles Sirois
I know, I know and I really look forward to show you that demo. You know, again, unfortunately, to be honest with you, if we’d not be public, I would pop the demo right away. But unfortunately it’s a public company and whatever I show you have to make sure that everybody can see it. We have to make sure that we have onboarded at least one customer before I can show you the demo. It is taking a bit more time than planned as usual. I’m sorry about that. Hopefully we can show you the demo at the AGM in one month.
Pratik Jagtap
So there is last question. We can take it from the chat from Mithun. So just he just want to understand Vodafone was a client. Any chance of adding them back?
Francois-Charles Sirois
Actually VI is a customer, you know Bikram. You want to answer this question?
Bikram Sherawat
Yeah, I’ll do that. Vodafone we are working on multiple fronts currently as well. So FC mentioned on gaming, one of the largest ad based gaming services which we are running in the world. We are running with Vodafone India. We are powering their tones business. In fact we have launched in the last quarter a bundle pack. The 199 plan in Vodafone now sells ring back tones by default. They are adding more content catalog to that and we are planning to go. We have half a million subscribers. They are using that already. We plan to go to a million by December and there are discussions ongoing to expand our footprint from couple of other mobile entertainment services which we are working with Vodafone.
Pratik Jagtap
Thank you Vikram. So we will take this as a last question and I will hand it over to FC for the closing comments.
Francois-Charles Sirois
Thank you all. Thank you all for the many questions. Thank you for joining again. You know I see a lot of positive developments in the company so. So I look forward to the next call but I also look forward to the AGM to be able to show at least some of our products and hopefully the new one also. So thank you all for joining and see you at the annual general meeting. Thank you.
Pratik Jagtap
Thank you everyone and thank you for joining the call.