Nazara Technologies Ltd Q3 FY2025 Concall Summary

Key Takeaways

• Acquisition-led quarter, organic mixed: Gaming revenue surged on the Fusebox Games consolidation, while NODWIN grew ~20% organically (9M) and core Sportskeeda held at 21% revenue growth, but Pro Football Network and Kiddopia CPT spikes dragged on pockets of the portfolio.
• NODWIN nears profitability, then NH7 hit: The eSports segment would have been break-even or profitable this quarter absent the cancelled NH7 Weekender; management is backing it to keep building for a couple more years before a profitability focus.
• IP licensing is the new user-acquisition math: Kiddopia signed Barbie and Little Angel, Fusebox signed Bigg Boss and Big Brother, and Nazara bought four gaming IPs outright, betting that licensing costs beat performance marketing spend.
• The balance sheet is being weaponized for a buyer’s market: A ₹495 crore preferential placement plus strong cash reserves fund a pipeline of what management calls “very EPS-attractive” global acquisitions, exploiting a funding winter that has forced distressed sellers.
• What to watch next quarter: Whether the Kiddopia CPT spike reverses as promised, the G-commerce pilot launches on ONDC before March, and any closure of the long-delayed Smaaash Games acquisition.

The Acquisition Flywheel in a Funding Winter

• Global distress, local advantage: High interest rates, post-COVID normalization and Apple IDFA-driven revenue declines have forced many gaming companies that overpaid with debt into distress, creating what management calls a “fantastic opportunity” to buy assets at very attractive, low-risk prices.
• Fusebox Games: Acquired and immediately partnered with Big Brother and Bigg Boss reality TV IPs; multiple other games are in development.
• NODWIN’s capability stack: Strategic acquisitions of Trinity Gaming (talent management), AFK Gaming (content distribution) and StarLadder (IP and event production) have built a global delivery platform that already delivered a Tencent PUBG event in Uzbekistan and is gunning for the eSports World Cup in Hungary.
• Datawrkz add-on: Acquired 100% of Space & Time Media in October 2024; integration is underway with a blended UK-India people model expected to bring SG&A down as a percentage of gross margin over one to two years.
• Smaaash Games: Management hopes to close and take control “in the next quarter or so,” with delays attributed to the NCLT approval process.
• The 2025 call: Management expects the year to remain a very good opportunity to pick up high-quality assets at attractive prices, and the preferential placement capital provides flexibility to act.

Nitish Mittersain: “No, it's a fantastic opportunity for us, no? Because 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.”

NODWIN: Building a Global eSports Platform

• Organic growth engine: 9MFY25 growth was ~20% organic and ~38% inorganic; stripping out the prior-year NH7 contribution, organic growth would have been 25–26%.
• The NH7 impact: Q3 EBITDA was hit by the cancellation of the NH7 Weekender in Pune in December 2024. Without that cancellation cost, NODWIN would have reached break-even; including the lost profit from NH7, the quarter would have been profitable. The event is now planned for March 2025 with artist and sponsor support.
• IP and live events driving scale: Playground Season 4, Snapdragon Pro Series, Dreamhack and Comic Con (integrated as one event) all performed strongly. Invested IPs like BGMS Season 3 are reaching a stage where they will become more profitable.
• Global delivery model emerging: Teams across Turkey, the Middle East, India and parts of Europe are being stitched into a delivery platform modelled on IT/ITES. The eSports World Cup in Saudi demonstrated successful collaboration between Freaks (Germany) and India teams. [15–16]
• Tencent relationship expanding: NODWIN is now a preferred partner, executing a PUBG event in Uzbekistan within a year of entering the CIS region, and exploring Central Europe next.
• Profitability is a medium-term goal: Management is explicitly supportive of NODWIN continuing to build out over the next couple of years before focusing on profitability, with the global delivery platform seen as another lever when the time comes.

Nitish Mittersain: “Even if NODWIN is not generating a lot of profits for us in the short-term, we are supportive of them to continue to build it out over the next couple of years before we focus on the profitability.”

IP Licensing as a User-Acquisition Strategy

• Kiddopia’s big-brand bets: Signed licensing agreements with Moonbug Entertainment for Little Angel IP and with Mattel for Barbie-branded content. Management expects these integrations to aid subscriber stickiness and drive organic user acquisition at lower cost than performance marketing.
• Fusebox taps reality TV: Signed agreements to produce new games based on Bigg Boss and Big Brother, expected to launch in 2025 across seven or eight languages.
• Nazara becomes a publisher: Acquired four gaming IPs outright (CATS, Crash Arena, TurboStars, King of Thieves) to be published directly by Nazara Technologies Limited, with intent to scale this IP-acquisition model further in coming quarters.
• The unit-economics logic: Even with the IP licensing cost, management’s expectation is that it will be “a lot more profitable” than equivalent spend on user acquisition.
• Animal Jam expansion: A partnership agreement with Slinky was signed in January 2025; a new game on the licensed IP is in early development, with an MVP or beta version expected in six to seven months and revenue impact likely next year.

Nitish Mittersain: “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.”

Portfolio Health Check: The Hits and the Drags

• Animal Jam: Seasonally strong Q3 driven by Halloween and Christmas; margins improved partly due to a one-time income of USD 300,000, but even adjusted for that, margin growth was fairly good. The asset has sustained and grown over two years of ownership.
• Sportskeeda and the PFN drag: Core Sportskeeda grew revenue 21% and EBITDA 31%, but the overall group was weighed down by subdued Pro Football Network performance following Google Code updates. PFN recovered to its highest-ever revenue month post-acquisition in December 2024, with January also looking strong.
• SoapCentral: Q3FY25 revenue hit 101% of its pre-acquisition annual revenue, reflecting strong post-acquisition scale-up.
• Datawrkz recovery: A shift toward more profitable business lines is bearing fruit; standalone revenue grew 38% YoY with a 14.1% EBITDA margin. Investment in sales and marketing will continue to sustain the growth.
• Kiddopia CPT spike: A heightened cost-per-thousand-impressions spike in December hit the quarter; management expects much improved Q4 numbers and feels comfortable that business-as-usual metrics will sustain and improve starting Q4.
• PokerBaazi demonstrates cash generation: The dominant Indian poker platform turned EBITDA-positive this quarter, driven by lower marketing spend. The core business is very profitable; EBITDA swings are a function of brand-spend timing (e.g., IPL in Q4 may cause a large spend). Focus remains on growing GGR and brand building via Shark Tank and IPL sponsorships. [11–12]
• Freaks 4U turnaround: The business is in a turnaround journey; management is cautiously optimistic, citing strong collaboration between Asia/China (where brands push marketing dollars) and Europe (where Freaks provides a beachhead). Numbers were not disclosed.

Capital, Control and the Promoter Group

• Preferential placement: ₹495 crores placed to Aksana Estates LLP, led by Arpit Khandelwal and Mithun Sacheti (founder of CaratLane). Combined with existing cash reserves, this provides financial flexibility for acquisitions and organic growth.
• Plutus Wealth and Mithun Sacheti cross 25%: This triggered an open offer for an additional 26%. They will join as co-promoters, but existing business management remains completely in control.
• Paper Boat Apps amalgamation: A Scheme of Arrangement has been filed with stock exchanges, with an appointed date of October 1, 2024, to amalgamate Paper Boat Apps Pvt Ltd into Nazara.
• Brand Scale loan exposure: Management sees some potential for recovery of the ₹35 crores in loans but has not provisioned yet; it is disclosed as a potential future exposure. [9–10]

Nitish Mittersain: “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, a celebrated entrepreneur like Mr. Mithun Sacheti join us. We feel very validated by that.”

Guidance & Commitments

Key Metrics