Addictive Learning Technology Ltd Q2 FY2025 Concall Summary

Key Takeaways

• Growth accelerating, not flat: Revenue has moved from ₹5-6 crore to ₹10 crore per month, with a path to ₹15 crore by year-end; H2 will exceed H1.
• International is the margin and growth engine: Same course sells for ₹50,000-70,000 in India vs ₹2 lakh in the US, and international traction is now material enough to lift consolidated margins.
• Sales engine fixed after a self-inflicted wound: Directors hired from tech backgrounds disregarded established sales culture, costing two months of sales growth; the problem is identified and resolved.
• Trump policy is a central thesis, not a tailwind: Management expects US immigration enforcement to push SMEs toward legal skilled remote workers from India, creating a demand surge six months out.
• What to watch next quarter: Whether the January ad-spend restart converts international traction into the targeted 4-5 crore monthly run rate, and whether the ₹120 crore full-year revenue target stays within reach.

Revenue Trajectory & Targets

• Monthly run rate climbing: Revenue started the year at ₹5-6 crore per month, now hitting ₹10 crore, and management sees a path to ₹15 crore by year-end. H2 is expected to be larger than H1.
• ₹120 crore full-year target still alive: Management is "trying very hard" to achieve ₹120 crore for the current fiscal year and says "it seems it is still possible," while acknowledging it could come in lower or higher. Profit doubling is the minimum commitment and is "very much on track."
• ₹450 crore is an ambition, not a promise: Management describes it as a natural target achievable in the next three financial years but explicitly declined to commit to FY28, saying "I don't want to give any confidence to you that we will achieve 450 crore by 28."
• The 100-crore-per-month figure is a market-size estimate, not a target: Management pushed back firmly on analyst references to a 100-crore-per-month goal, clarifying it was a SOM (specifically obtainable market) calculation with no timeline attached.

Ramanuj Mukherjee: "No, we did not say that. So let's be clear. So I know this is getting a little complicated people keep saying that, you know, like we say X and people add X plus y. And they say you said this in a call. No, we didn't say we'll achieve 100 crore per month."

International Expansion

• Pricing arbitrage drives margin improvement: A course sold for ₹50,000-70,000 in India commands ₹2 lakh in the US, and international sales growth over the last six months has lifted consolidated margins without any conscious margin-maximization effort.
• Two near-term brakes on international growth: Black Friday through year-end pushed ad costs to 3x-4x normal levels, so management held spending for January when ROIs improve. Operational friction, including a three-month struggle to open a Canadian bank account and find a UK BNPL partner, added further drag.
• January restart is the catalyst: Management plans to resume international ad spending in January and believes the 4-5 crore monthly international revenue target would already be achieved but for these temporary headwinds.
• New geographies gaining traction: Nigeria showed "huge traction" in the last 14 days; South Africa and the Philippines are also in early stages. Subsidiaries are incorporated in the US, UK, and Canada.
• Trump immigration policy as demand driver: Management's thesis is that undocumented skilled immigrants are leaving the US under Trump policies, and US SMEs, which employ 80% of the workforce, will need legal alternatives, creating "huge" demand for skilled Indian remote workers six months down the line.

Ramanuj Mukherjee: "If I am selling a course for 50,000 60,000 - 70,000 in India, and I'm able to sell the same course for 2 lakh in US. Why should I not sell it in the US."

Sales Engine & Auto Funnels

• Sales team setback cost two months of growth: Management hired directors from a tech background who disregarded the company's established sales culture and processes, causing a slowdown. It took two months to identify and fix the problem, and the sales team is now back on track growing revenue directly.
• October-November underperformance: The last two months did not deliver the results management hoped for from the sales team; overall sales numbers were good but could have been better. This was underperformance versus expectations, not an absolute revenue loss.
• Auto funnels finally working after six years: After six years of attempts, auto funnels are now delivering "great results" in India and internationally. A new "community funnel" innovation is also performing well, and management plans to launch an entirely separate brand built solely on auto funnels.
• Sales hiring model keeps costs low: The company hires salespeople in India who previously worked in BPOs doing sales for target countries, plus some hires in the Philippines for US sales, rather than hiring in the expensive target markets themselves.

Ramanuj Mukherjee: "We had hired some directors from a tech background, who, you know, disregarded our established sales culture sales processes, and that was slow down. We caught it and fixed it. It took us 2 months to like identify, and fix it. But we lost 2 months of sales academic growth from that."

Product & Course Portfolio

• Brand consolidation under SkillArbitrage: The Data is Good brand has been phased out; all products, including data science courses, are now sold under SkillArbitrage, which is "doing really well" after launching many new courses. Revenue split across LawSikho, SkillArbitrage, and Data is Good shifts monthly depending on what is selling.
• New course launches expanding the addressable market: In the last three months, the company launched an Android App Development course, a nursing course, a school teacher migration course, and a support & operations course, all seeing "huge traction." A solicitor qualification exam course launched in the UK, Malaysia, and South Africa drew "overwhelming response" in the UK.
• Canned courses for US business owners: Management identified 19 areas and launched the first: a \$100 one-time course on solving review problems for local businesses like salons, medical services, restaurants, and hotels. These courses double as a funnel for services export, feeding into a virtual assistant offering.
• Course creation follows a demand-supply gap model: Management identifies markets with high demand and low supply, then builds courses to fill the gap. Examples include training Indian tax professionals to become IRS enrolled agents and an Android development course driven by high demand and low customer acquisition cost.
• Content piracy is a known risk with a legal defense: Management acknowledged that course content can be pirated but said a legal team rapidly takes down infringing material, sues, and gets content removed. The real value, they argue, is not in the content alone but in feedback, placement support, and client handling.

Ramanuj Mukherjee: "You will not get the result. Even if you get access to all the videos, all the Pdfs. You will not get the results you for that. You still have to put in the effort, and the real result comes from practicing right. And you need coaches and guidance for that."

Strategic Bets: Universities, JVs & Services Export

• Two university acquisitions in sight: Management has identified one target in the US at approximately \$200,000 and another in the UK at approximately \$1.5-2 million. Acquiring a for-profit university, which is permitted in the US unlike India, would allow the company to offer MBA, Master of Science, and LLM degrees.
• JV model in Southeast Asia avoids cash outlay: After visiting 20 legal-tech and tech startups in Southeast Asia, management is proposing joint ventures where it gives 10-20% equity to local partners in exchange for access to Indian, US, and UK markets, rather than spending cash on acquisitions.
• Services export is the near-term priority: A dedicated team is currently doing ₹10-15 lakh per month, with a goal of reaching ₹1-2 crore per month. Management expects the impact to be visible in the current half-yearly results.
• Manpower export is 1.5-2 years away: No progress has been made yet; management may need to acquire a team or build one internally. It is not in the next six-month plan, and the timeline depends partly on students clearing qualifying exams.
• B2B corporate business deliberately avoided: Management consciously decided not to pursue GCCs and large corporate clients, citing excessive executive time requirements, poor return on resources, and unreasonable client terms. One example: BlackRock demanded non-disclosure of the client relationship. Such deals are now sent to competitors.

Ramanuj Mukherjee: "Imagine we are able to give a recognized degree in the Us. Can be a total game changer for our business model and total different, you know, a capacity to pay."

Margins, Capital Allocation & Governance

• Growth prioritized over margin expansion: Management sees significant scope for margin improvement as the business scales but is explicitly choosing to prioritize growth, calling margin maximization "not a strategical decision for us at this time."
• Warrant funds still pending SEBI approval: The company is waiting for in-principle approval from SEBI, which has raised questions that are being answered. Separately, management reversed a plan to increase promoter stake from 60% to 69% after top investors showed interest following a press release, deciding not to strain personal savings.
• No further equity dilution planned near-term: Management raised money via warrants just before the US election as a precaution; that concern did not materialize, so there is no incentive to raise now. Dilution might be considered if market cap reaches ₹2,000-3,000 crore a few years down the line and equity infusion is needed for a specific business line.
• No dividend policy: Management stated plainly there is no dividend policy and cannot promise anything on that front.
• GDPR compliance is a work in progress: The company is not currently selling in Germany due to GDPR requirements and wants to improve privacy compliance more broadly.

Ramanuj Mukherjee: "I think we are a very small company with a very large growth ahead of us, and I want to prioritize growth rather than margin expansion. It's not a plan of it's not a strategical decision for us to maximize our margin at this time rather than that I would like to grow the business faster."

Guidance & Commitments

Key Metrics