Nazara Technologies Ltd Q4 FY2025 Concall Summary

Key Takeaways

• Record EBITDA, gaming focus sharpens: FY25 delivered the highest-ever annual EBITDA of INR 153.5 crores on revenues of INR 1,624 crores, with gaming EBITDA margins at 20% and a stated intent to double down on core gaming investments in FY26.
• Nodwin’s small EBITDA loss masks a profitable core: The loss was driven by two identifiable aberrations: a last-minute NH7 Weekender cancellation and a lag in Freaks4U profitability, while the core Live, eSports, and Media businesses remain extremely profitable.
• Kiddopia’s turnaround is showing early proof: Cost per trial dropped 20%, monthly pricing rose to $12.99 with good acceptance, annual activations climbed from 30% to 40%, and licensed IP launches from Moonbug and Mattel are working, setting up FY26 as the declared turnaround year.
• PokerBaazi is absorbing GST to build brand and market share: The company is not passing the 28% GST on deposits to end users, instead optimizing deposit-to-gross-revenue ratios and spending aggressively on IPL and Shark Tank to grow the poker market, a strategy that made Q4 EBITDA negative but produced the best-ever revenue month in March 2025.
• What to watch next quarter: Whether Kiddopia’s early metrics convert into sustained revenue growth, the pace of Nodwin’s return to consolidated EBITDA positivity, and the initial financials and synergy plans for Smaaash once control is obtained in June.

Gaming Segment Performance

• Segment-level strength: Q4 FY25 Gaming segment revenue grew 72% and EBITDA grew 111%, with an EBITDA margin of 21.4%; full-year FY25 segment revenue grew 27% and EBITDA by 27%, with a 19.9% margin.
• Fusebox growth and margin trade-off: Higher user-acquisition spend in Q4 drove strong top-line growth at the cost of a temporary margin dip, with those investments expected to fuel growth in FY26, boosted by new game launches starting with Big Brother and Bigg Boss.
• Animal Jam live-ops engine: Growth was driven by strong engagement with premium features like Wishing Coins, super boxes, and themed content, demonstrating the effectiveness of the live-ops and monetization strategy; a new casual game aimed at cross-generational appeal is in development.
• Kiddopia margin and IP strategy: Delivered a strong 22.8% EBITDA margin in FY25 and launched branded mini games through licensing deals with Moonbug (Little Angel) and Mattel (Barbie), with a Hasbro partnership for PJ Masks content set to launch later this year.
• Commission cost jump is structural, not concerning: The increase in commission costs to INR 61 crores is due to the addition of Fusebox, a much larger business, and is not solely attributable to Kiddopia or early learning.
• App store commissions as margin lever: Management has an internal mandate to push downwards on app store commissions, and any reduction, combined with AI improving content velocity at the same cost, should lead to future margin expansion in core gaming businesses.

Nitish Mittersain: "In FY '25, we delivered our highest ever annual EBITDA of INR 153.5 crores on revenues of INR 1,624 crores with a PAT of INR 62.5 crores. Our gaming EBITDA margins stood at 20% as well as generated healthy operating cash, reinforcing our intent to focus on core gaming business going ahead."

Nodwin: Losses, Diversification, and the Path to Profitability

• The loss is two identifiable hits, not a structural problem: The EBITDA loss was predominantly because of the NH7 Pune cancellation and EBITDA hits at Freaks4U; diversification and integration helped absorb most of those impacts, and the core Live, eSports, and Media businesses remain extremely profitable.
• A one-time impairment and provisioning: Proactive measures are in play for a one-time impairment of INR 15 crores on OCD investments in Q4 FY25, and additional loans worth about INR 25 crores will be provisioned based on recoverability.
• Experimentation is the cost of future IP supply: Nodwin runs many small experiments (INR 20–85 lakh) that lose money, with only the big successes like Comic Con becoming visible; this is necessary to generate a future supply of successful IPs, and management accepts that failures are inherent to the model.
• Comic Con expansion is a near-term growth driver: Comic Con is expanding from 8 cities to double digits this year and will expand internationally to multiple markets.
• Endemol/Banijay partnership adds scale: A big partnership with Endemol/Banijay will expand Playground into multiple languages in India and co-develop properties into other languages across the world.
• Freaks4U turnaround is a stated priority: Management is focused on turning around Freaks4U into a core EBITDA-positive engine going forward, and Nodwin will continue to raise additional capital to fuel its growth.

Akshat Rathee: "I often like to say Nodwin is a big ship that we fly and sometimes we don't know, which engine gets hit every year, either a game gets banned or something bad happens, but the diversification and the integration has helped us go ahead and not to get hit as badly as we could have."

PokerBaazi: GST Absorption, Brand Building, and Market Leadership

• GST is absorbed, not passed through: The company is absorbing the 28% GST on deposits rather than passing it to end users, which reduces gross before it reaches net; the strategy is to optimize the deposit-to-gross-revenue ratio, which improved from 33% to 57% post the new GST regime.
• March 2025 was the best-ever revenue month: Driven by NPS 2025, IPL, a Shark Tank campaign, and increased mid-to-high-stake engagement, strengthening both monetization and top-funnel growth for FY26.
• Q4 EBITDA was negative by design: The loss was because of spends on Shark Tank and IPL, which fall in Q1 FY26; the team is aggressively using the current market situation to build the brand, and profitability moves are seasonal depending on spend and opportunity.
• Take-rate movement is a mix shift, not a price increase: GGR growth exceeded GTV growth not because the take rate increased, but because smaller-stakes and mid-stakes table traffic increased, where the service fee percentage is higher, so the blended rate rose due to traffic mix shift.
• The ecosystem play is the long-term growth lever: The focus is on building the poker ecosystem through Watch (Poker TV app), Learn (PokerBaazi school app), Analyze (Poker shorts tool), and Glorify (IPs like National Poker Series and Indian Poker Master); as category leader, PokerBaazi will be the first to benefit once the market grows further.
• Only pending tax issue is the industry-wide retrospective GST case: This is currently being heard in the Supreme Court; no other tax issue is pending at PokerBaazi.

Puneet Singh: "Brand building becomes even more important post the new GST regime because at scale, we need to reduce our marketing spends to achieve higher EBITDA margins."

Kiddopia Turnaround: Early Proof Points

• The four-year effort is showing measurable results: After acquiring 100% ownership, growth strategies are delivering: cost per trial dropped 20%, the monthly pricing increase to $12.99 was well accepted, and annual activations rose to 40% from 30%.
• Licensed IP strategy is working: Launches of Little Angel from Moonbug and Barbie from Mattel are showing good early results, and a new partnership with Hasbro will introduce PJ Masks themed content later this year.
• Full ownership enables faster execution: Taking full ownership of Kiddopia created fungible cash flows that enable faster strategic execution on the turnaround.

Nitish Mittersain: "I agree that the last 4 years have been a lot of, I would say, efforts without measurable results, but we continue to feel optimistic that FY ’26 will be the year of turnaround for Kiddopia."

Capital Allocation, M&A, and Global Ambition

• FY26 capital allocation is focused on core gaming: Nazara will double down capital investments toward acquiring established gaming IPs, good teams, decent revenue scale, and existing profitability; it is not taking other initiatives directly in the skill-based RMG space.
• Curve Games was bought post-cleanup: The business bloated during COVID and revenues came off post-pandemic, but the required optimization and cleanup was already completed before Nazara’s acquisition; the focus now is on getting the right games and pushing them for positive growth, using Curve’s own cash flow to reinvest.
• Curve as a bridge for Indian developers: Nazara plans to use Curve’s global publishing reach to scale Indian-developed PC games, with success measured over 2–3 years by jointly negotiating a good funnel of games and seeing breakouts from that funnel.
• Smaaash control and synergy plans are imminent: Nazara will get control of Smaaash in June; the first priority is to get the business up to speed after 2–3 years in NCLT, then drive synergies by using the large online user base to drive offline traffic and partnering with large ecosystem players. Specific financials will be shared next quarter or the quarter after.
• Global expansion is framed as a time-limited opportunity: Management believes the brand, playbook, and attractive valuations in global markets are present now and will not last forever, so Nazara must act on global expansion simultaneously with its domestic priorities.
• Depreciation and amortization are non-cash acquisition artifacts: Because Nazara is acquisitive, it brings on intangibles through acquisitions, leading to non-cash amortization that makes PAT look lower; cash flow is much higher than reported PAT.

Nitish Mittersain: "I think this time will not present itself to us forever. And therefore, we must act on it simultaneously."

Ad-Tech and Other Businesses

• Datawrkz shift to profitable lines: Performance reflects a successful shift toward more profitable business lines in its independent active operations.
• Space and Time acquisition: Datawrkz, through its UK subsidiary, acquired 100% of Space and Time for an equity value of GBP 0.48 crore (INR 52.3 crores) in October 2024; current intent is to focus on integrating this acquisition, with opportunistic reviews of further ad-tech acquisitions if they arise.
• Vizibl.ai is a self-serve ad-tech platform: Nazara has a 100% self-serve platform where anyone can log in and pay as they go, democratizing ad-tech for smaller customers; pricing is a percentage of the advertising budget placed, and the platform currently allows impression purchases with internal algorithms optimizing toward clicks or conversions.
• Funky Monkeys and offline gaming entry: Nazara acquired 60% of Funky Monkeys, a leading indoor play center for kids aged 2–14 in tier-1 Indian cities; flat growth in FY25 was due to temporary closures in Gujarat, partially offset by gains in Chembur and Bandra, and FY26 will prioritize expansion, center revamps, and enhanced marketing.
• Absolute Sports IP acquisitions: Signed definitive agreements in May 2025 to acquire TJRWrestling.net and ITRWrestling.com in an all-cash deal valued at $1.25 million (approximately INR 10.5 crores).

Guidance & Commitments

Key Metrics