AFFLE - Affle (India) Limited Share Price

In the Q1 FY2026 earnings conference call, management provided an optimistic outlook, emphasizing a goal of achieving a 10X decadal growth. They reported a record revenue of INR 6,207 million for the quarter, representing a growth of 19.5% year-on-year. EBITDA reached INR 1,397 million, reflecting a 33.7% increase year-on-year, and a PAT of INR 1,055 million, up 21.8% year-on-year. The CPCU business achieved 107 million conversions at an average CPCU rate of INR 58.0, contributing to a CPCU revenue increase of 19.8% year-on-year.

Key forward-looking points include:

1. Continued emphasis on integrating AI solutions, highlighted by the rollout of Opticks AI into their platform, aimed at driving hyper-personalized advertising and improved conversion rates.
2. A medium-term aspirational EBITDA margin target of approximately 23%, with sustained margin expansion driven by operational efficiencies, intelligent platform scaling, and enhanced automation.
3. Development of a robust patent portfolio, with the recent grant of a patent on advertisement fraud detection strengthening their technological capabilities.
4. Confidence in maintaining a 20% organic growth trajectory for FY2026, despite macroeconomic challenges, and the expectation of being able to surpass this growth based on ongoing positive trends.
5. Geographic diversification contributes to resilience, with Emerging Markets and Developed Markets growing at rates of 18.1% and 23.3% respectively.

Management underscored their commitment to disciplined financial management and operational efficiency, positioning Affle 3i for sustainable growth amidst potential geopolitical and economic headwinds.

Earnings Call Q&A Summary

1. Karan Taurani: "What is the management aspiring as a band for EBITDA margins?"
I clarified our medium-term target of achieving around a 23% EBITDA margin. We are focused on overall efficiency and AI adoption across all functions. This consistent productivity drive will further enhance margins. We'll see continued expansion as we optimize our operations, and our intent is to enhance our strategic moat through product innovation, which will also support margin improvement.

2. Anmol Garg: "Are we charging for OpticksAI or is it complementary?"
OpticksAI is integrated within our consumer platform stack, and we charge customers based on conversions. The CPCU model remains intact, and we are focused on delivering hyper-personalized experiences to drive better conversions. Recently, we achieved a CPCU rate of INR 58 for 107 million conversions, indicating our pricing model is enhancing as volume grows.

3. Anmol Garg: "What should we expect for margin expansion going forward?"
We anticipate broad-based margin expansion across all business units and geographies. Each unit has defined EBITDA targets, and we aim for operational efficiencies regardless of market location. Targeting margins uniformly prevents over-reliance on specific markets for growth, ensuring a balanced approach.

4. Arun Prasath: "Which industry categories are performing well?"
We observed strong momentum in categories E and G without significant slowdowns. Categories F and H also show resilience. Due to macroeconomic factors, some budgets may shift between quarters, but overall growth trends across geographies remain strong.

5. Vijit Jain: "How does our Apple certification impact new business?"
Becoming an Apple-certified partner enhances our credibility and trust with advertisers. It's a recognition of our stellar track record and allows us to charge better rates and retain clients more effectively, ultimately improving our growth potential and competitive edge.

6. Arun Prasath: "Is there any risk to our gross margins?"
I believe our revenue model is robust. The digital ecosystem is expanding, with increased comfort in online transactions leading to a willingness to pay for quality conversions. Hence, we anticipate maintaining healthy gross margins despite market changes.

7. Rahul Jain: "What are the sustainable aspects of our operational savings?"
Some savings are likely sustainable due to the Equalization Levy benefits, while others are discretionary. While expenses may fluctuate, we aim to keep overall operational efficiency in check and aligned with our previous quarters.

8. Ashwin Mehta: "Can you share insights on acquisition plans?"
We are actively evaluating potential acquisitions but will only proceed with the right candidate at the right price. We see current macroeconomic conditions potentially offering favorable pricing opportunities, enabling us to enhance our portfolio without pushing for unnecessary growth.

These are the major questions and detailed responses from the Q&A session of the Affle earnings call.