This article first appeared on GuruFocus .
Release Date: November 03, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Affle 3i Ltd ( BOM:542752 ) reported its highest ever quarterly revenue, EBITDA, and profit after tax, showcasing strong financial performance.
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The company achieved a revenue growth of 19.1% year on year, driven by higher productivity and continuous innovation.
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Affle 3i Ltd expanded its EBITDA margin by 172 basis points year on year, marking the sixth consecutive quarter of margin expansion.
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The company's CPCU business drove 109 million conversions, contributing significantly to its revenue growth.
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Affle 3i Ltd was granted two new patents in the United States, enhancing its competitive edge in ad fraud detection and user engagement optimization.
Negative Points
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The company faced challenges due to the RMG issue in India, which impacted its quarterly performance.
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There was a rollover of budgets from Q2 to Q3 from some customers in the United States, indicating potential uncertainties in budget allocations.
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Affle 3i Ltd's non-CPCU revenue saw a resurgence, which may indicate a deviation from its core CPCU focus.
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The company experienced a sharp increase in depreciation and amortization expenses, impacting its financials.
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Despite strong growth, the company slightly missed its historical 20% revenue growth target for the last three quarters.
Q & A Highlights
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Warning! GuruFocus has detected 4 Warning Signs with BOM:542752.
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Q: Can you elaborate on the impact of the RMG issue and how it affected your growth in India? A: The RMG issue did impact us this quarter, but it was offset by increased demand due to the early Diwali season. Advertisers increased their campaign budgets in September, which neutralized the RMG impact. We expect some carry-forward effects as the RMG issue continues, but we are confident about Q3 due to a strong pipeline and increased sales efforts in other verticals. - Anuj Khanna Soham, CEO
Q: How are you managing the rollover of budgets from Q2 to Q3 in developed markets? A: We haven't seen budget reductions due to tariffs, but advertisers are shifting budgets to Q3, the festive quarter, for better optimization. This is a risk-managed calibration, and we expect a stronger performance in developed markets in Q3 compared to Q2. - Anuj Khanna Soham, CEO
Q: Can you explain the increase in non-CPCU revenue this quarter? A: Non-CPCU revenue includes licensing deals and branding campaigns where customers haven't yet shared deeper conversion details. These are initial engagements that we aim to convert into CPCU business over time. - Anuj Khanna Soham, CEO
Q: What is the impact of provisioning on your margins, and is the current margin level sustainable? A: The provisioning impacted about 0.5% of our PBT. Despite this, we achieved margin improvements through operational efficiencies and cost rationalization. We believe these margin levels are sustainable in the medium term. - Kapil Bhutani, CFO
Q: How do you view the potential for inorganic growth and M&A opportunities? A: We are evaluating around 10 companies for potential acquisitions, focusing on those that align with our business and valuation criteria. We aim to pursue acquisitions that can be transformed into higher growth or margin profiles, maintaining our strategic focus on the consumer platform business. - Anuj Khanna Soham, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
