SUMMARY
Nazara Technologies’ revenue from operations surged nearly 70% to INR 314.8 Cr in Q3 FY23
Revenue from gamified early learning vertical soared 70% to INR 80.4 Cr, led largely by Kiddopia and recently-acquired Wildworks
Total expenses shot up by nearly 78% to INR 297.8 Cr in Q3 FY23
Gaming unicorn Nazara Technologies on Tuesday (January 24) reported a 31% rise in its consolidated net profit to INR 22.4 Cr in the third quarter of financial year 2022-23 (FY23) from INR 17.1 Cr in the year-ago quarter on the back of a strong growth across business segments.
Revenue from operations surged nearly 70% to INR 314.8 Cr in Q3 FY23 from INR 185.8 Cr in the December quarter of previous year. Income from other avenues also nearly tripled to INR 11.5 Cr from INR 4 Cr in Q3 FY22.
While the esports vertical accounted for 49% of the revenue during the quarter under review, gamified elearning and adtech verticals contributed 24% and 14% to the revenue, respectively. While the unicorn generated 42% of its total revenue from India, North America accounted for 39% of the total revenue.
The company’s gamified early learning platform Kiddopia saw its average revenue per user (ARPU) grow marginally to $6.8 in Q3 FY23 from $6.7 in Q3 FY22. Number of subscribers fell 5% YoY to 3.10 Lakh by the end of December 2022 quarter.
Overall, revenue from gamified early learning vertical soared 70% year-on-year (YoY) to INR 80.4 Cr in the quarter under review, led largely by Kiddopia and recently-acquired Wildworks. On similar lines, revenue from esports vertical surged 40% to INR 152.5 Cr from INR 109.3 Cr in Q3 FY22. Revenue from freemium apps rose 23% YoY to INR 7 Cr in the quarter ended December 2022, while income from real-money gaming segment surged 41% to INR 15.1 Cr.
Nazara’s esports subsidiary Nodwin Gaming’s revenue jumped 53% to INR 111.4 Cr in Q3FY23. The numbers were led by growth in revenues from offline events such as Dreamhack, NH7 weekender and the creation of new international intellectual properties (IPs).
The unicorn’s sports news and publishing platformSportsKeeda saw a revenue growth of 26% to INR 356 Cr in Q3 FY23, led by growth in the US market. Besides, monthly active users (MAUs) saw a 28% yearly growth in the month of December 2022.
Meanwhile, total expenses shot up nearly 78% YoY to INR 297.8 Cr from INR 167.4 Cr in Q3 FY22. Of these, costs related to content, events and web servers accounted for the biggest chunk of expenditure at INR 130.3 Cr, while marketing activities cost the gaming unicorn INR 56.3 Cr in Q3 FY23.
Employee benefit costs stood at INR 43.6 Cr in the period under review as against INR 26.4 Cr in Q3 FY22.
Nazara Technologies’ earnings before interest, tax, depreciation and amortisation (EBITDA) rose marginally to INR 30.6 Cr from INR 30.3 Cr in Q3 FY22. However, EBITDA margin contracted to 9.7% from 16.3% in the corresponding quarter of the previous year.
“We continue to have an excellent year, with 80% YoY revenue growth in 9M FY23, and 22% PAT growth in the same period. All our five business verticals did well this quarter. We continue to invest for future growth across our businesses,” said Nazara joint managing director and CEO Nitish Mittersain.
The gaming unicorn reported a profit after tax of INR 55.8 Cr in the first three quarters of FY23, up nearly 22% from INR 45.9 Cr during the same period of previous financial year. Nazara Technologies also raked up INR 801.7 Cr in consolidated revenue from operations in the nine-month period ended December 2022, up 80% from INR 446.6 Cr during the corresponding period last year.
“Particularly in this quarter, it is heartening to see our flagship product for young children “Kiddopia” come back onto a growth path as well as our recent acquisition Datawrkz deliver strong organic growth of around 55% YoY,” Mittersain added.
Since announcing acquisition of a 55% stake in Datawrkz in January last year, Nazara Technologies has seen good growth in the adtech platform. In the nine-month period ended December 2022, Datawrkz’s revenue grew 55% to INR 118.2 Cr from INR 76.4 Cr in the corresponding period of the previous fiscal year. The company also said that it retained 69 of its existing clients post the consolidation and added 31 new clients during the period.
The December quarter saw major developments at the gaming unicorn. While Nazara completed the acquisition of an additional 5.71% equity stake in Sportskeeda, Manish Agarwal also stepped down as the CEO of the company in December last year. The company also appointed Sudhir Kamath as the new Chief Operating Officer (COO) of the company in October last year.
Shares of Nazara Technologies ended 3% higher at INR 611.30 on the BSE on Tuesday. The company released its financial results post market hours.
