Nazara Technologies has declared a net profit of Rs 23.6 crore for the quarter ending 30 June, 2024, up 12.9 per cent from the Rs 20.9 crore profit reported in the same quarter the previous year. The increase in profitability is mostly due to strong success in the esports sector, despite a decline in gaming revenues and persistent losses in the ad-tech business.
The company's operating revenue fell slightly to Rs 250 crore, down 1.7 per cent year on year from Rs 254.4 crore. This decrease in revenue is associated with a large dip in the gaming vertical's quarterly income. EBITDA decreased by 24.7 per cent year on year, falling to Rs 24.9 crore from Rs 33.1 crore in Q1-FY24.
Founder Nitish Mittersain emphasised the company's strategy focus on developing through acquisitions and organic growth. "In FY24, our team focused on developing a healthy pipeline of prospects. As we enter FY25, we are deliberately allocating our financial reserves to purchase firms that are consistent with our long-term growth strategy," Mittersain remarked. The corporation has set aside USD 100 million for mergers and acquisitions over the next two years to support its growth objectives.
Nazara Technologies operates in three main areas, namely, gaming, esports and advertising. The esports vertical, driven by Nodwin Gaming and Sportskeeda, generated Rs 131.9 crore in revenue during the quarter, representing a 12 per cent rise year on year. Nodwin Gaming experienced a 3 per cent revenue increase, while Sportskeeda's income increased by 33 per cent to Rs 60.9 crore.
In contrast, the gaming segment had difficulty, with revenues falling to Rs 92.8 crore, a 15 per cent decrease from the previous year. The Kiddopia company, which is part of the gaming section, saw its revenue fall 14.9 per cent to Rs 49 crore. Despite this, Animal Jam's income climbed by 7 per cent, reaching Rs 23.6 crore. The adtech area also struggled, with sales declining 7 per cent to Rs 25.7 crore and losses rising to Rs 2.62 crore. Nazara Technologies has shifted its ad-tech strategy from low-margin to high-margin clients.
In terms of acquisitions, Nazara Technologies recently raised its interest in Paper Boat Apps and Nextwave Multimedia to 100 per cent, as well as acquiring Fusebox Games for Rs 228 crore. Nodwin Gaming intends to purchase a majority stake in Germany-based esports company Freaks 4U Gaming. The corporation is also growing its gaming presence with new partnerships and product launches, like as the upcoming FAU-G: Domination game.
Geographically, North America accounted for 44 per cent of Nazara's income, followed by India (33 per cent) and the rest of the globe (23 per cent).
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