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    Affle 3i Q1 FY27 earnings call

    AFFLE
    Information Technology·10 Aug 2026
    Management Summary

    Affle 3i delivered strong Q1 FY27 results with record revenues, EBITDA, and PAT, driven by robust growth across both Emerging and Developed Markets. The company is actively integrating AdColony assets and pursuing a large inorganic acquisition to accelerate its 10x growth target. While facing headwinds in specific segments and a potential write-off related to an investment, management remains confident in its growth trajectory and margin expansion plans.

    Highlights

    5

    • Achieved 14th consecutive quarter of sequential top-line growth.

    • Recorded highest ever quarterly revenue (INR 7.47 billion), EBITDA (INR 1.68 billion), and PAT (INR 1.28 billion).

    • Revenue grew 20.4% y-o-y to INR 7.47 billion, with PAT growing 21.7% y-o-y to INR 1.28 billion.

    • EBITDA margins remained stable at 22.4%, and PAT margins improved to 16.6% (up 60 bps sequentially).

    • Strategic acquisition of AdColony assets is expected to activate 100,000 mobile apps and reach 500 million connected devices in Developed Markets this year.

    Concerns

    3

    • Certain customer segments like RMG and FinTech experienced negative impact due to regulatory and macroeconomic headwinds.

    • OCF to EBITDA conversion was relatively weak at 41% in Q1 FY27, though expected to normalize to 80-85% by Q3 FY27.

    • INR 136 crore investment in Bobble is at risk due to the company filing for bankruptcy, with management evaluating a 'decisive step' in the next few quarters.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue from Operations$7.47B+20.4%YoY
    2. 02EBITDA$1.68B+20%YoY
    3. 03EBITDA Margin22.4%+0.1%QoQ
    4. 04Profit Before Tax$1.58B+22.1%YoY
    5. 05Profit After Tax$1.28B+21.7%YoY

    Segment breakdown

    Revenue GrowthSequential GrowthShare of Revenues
    India and Global Emerging Markets20.2%4%72.2%
    Developed Markets20.7%1%27.8%
    Heatmap· 3 shared metrics

    Order Book

    low confidence

    Pipeline

    other

    Target to activate 100,000 mobile apps to reach over 500 million connected devices in Developed Markets this year through AdColony integration.

    "Affle operates on a CPCU (Cost Per Converted User) model, focusing on consumer conversions rather than traditional TCV-based order books. The company's growth is driven by direct advertiser integrations and AI-powered campaign optimization."

    Source:
    Inferred

    Capital allocation

    2
    medium confidence
    CategoryHeadline
    M&A

    AdColony assets

    acquisition · integrated

    M&A

    Larger Inorganic Acquisition

    acquisition · pending regulatory

    Guidance & targets

    8
    CategoryTargetPriority
    Revenue Growth
    Organic Growth Rate (Combined Entity)
    above 20%
    		High
    Revenue Growth
    Developed Markets Growth Rate
    at least 20%+
    		High
    Profitability
    Margin Expansion in Developed Markets
    better margin expansion
    		Medium
    Cash Flow
    OCF to PAT Ratio
    80%-85%
    		High
    M&A
    Closure of Large Inorganic Acquisition
    close the transaction
    		High
    Strategic Vision
    10x Growth Target Achievement
    10x growth
    		High
    Revenue
    Revenue Milestone
    $1 billion
    		Medium
    AdColony Integration
    Mobile App and Device Activation
    100,000 mobile app publishers and 500 million connected devices
    		High

    What to watch in Q2 FY27

    5

    OCF to PAT Ratio Normalization

    by Q3 FY27
    Current41% (Q1 FY27 OCF to EBITDA)
    Target80-85%

    Why it matters

    Indicates the company's cash generation efficiency and operational health, expected to improve significantly.

    You will see about 80%-85% OCF to PAT ratio by Q3.

    Risks & concerns

    3
    RiskSeverity

    Regulatory and Macroeconomic Headwinds

    Impacted certain customer segments like RMG and FinTech, leading to slower growth in those specific areas, though 95% of revenues still grew >25% y-o-y. — Management acknowledged

    medium

    Bobble Investment Impairment

    INR 136 crore investment in Bobble is at risk due to the company's bankruptcy filing and management issues; a decisive step will be taken in the next few quarters, and impairment will be tested after NCLT appeal. — Analyst acknowledged

    high

    Currency Volatility Impact on Margins

    Currency adjustments impacted take rates/inventory costs and gross margins in previous quarters, though the current quarter saw stable USD rates and no additional impact. — Management acknowledged

    low

    Q&A highlights

    8

    “What I was mentioning was that due to regulatory and macroeconomic headwinds, certain customer segments like, we already know RMG had an impact. Last year RMG was a contributor, this year it is not. Similarly, there were certain areas of impact we saw in FinTech and certain categories. But overall, when we normalize it, it gives me a lot of confidence and even deeper conviction, because on an adjusted basis, 95% of our revenues have actually seen over 25% growth y-o-y. I believe that is defensible.”

    Clarified specific segments impacted by headwinds but reassured that the majority of the business (95%) is still growing strongly at over 25% y-o-y.

    asked by Karan Taurani

    2 min read6 chapters

    Detailed Narrative

    01

    Robust Q1 FY27 Financial Performance

    Affle 3i reported its 14th consecutive quarter of sequential top-line growth, achieving record quarterly revenues, EBITDA, and PAT. Revenues grew 20.4% year-on-year to INR 7.47 billion, while Profit After Tax increased 21.7% year-on-year to INR 1.28 billion. EBITDA stood at INR 1.68 billion, marking a 20% year-on-year growth with stable EBITDA margins at 22.4%, demonstrating strong execution despite market headwinds🌐.

    02

    Strategic Focus on Developed Markets and AdColony Integration

    The company is intensifying its focus on Developed Markets, which grew 20.7% y-o-y and contributed 27.8% of revenues, aiming for consistent 20%+ growth. The strategic acquisition of AdColony assets is pivotal to this expansion, with plans to activate over 100,000 mobile apps and reach over 500 million connected devices in Developed Markets this year. This integration is expected to enhance the publisher ecosystem, audience intelligence, and drive margin expansion.

    03

    AI-Powered Platform Innovation and Competitive Edge

    Affle continues to invest in its AI-powered Consumer Platform Stack, launching new AI-led innovations like Niko and OpticksAI. Management highlighted the strategic importance of 'autonomous agentic intelligent connected devices' (AICDs) and 'non-human data distillation technology' as key differentiators. This focus ensures the company remains future-proofed and competitive across both Emerging and Developed Markets.

    04

    Capital Allocation for Accelerated Growth

    The company is actively pursuing a large inorganic acquisition, currently in the due diligence phase, with an aim to close by early 2027. Management emphasized that any acquisition must be accretive to the bottom line, support sensible margin profiles, and contribute to a combined organic growth rate of over 20%. This strategy is central to achieving the ambitious 10x growth target within five years, with a long-term goal of reaching $1 billion in revenue.

    05

    OCF Normalization and Bobble Investment Challenge

    Operating Cash Flow (OCF) to PAT conversion was 41% in Q1 FY27, attributed by the CFO to upfronting cash flows in the previous fiscal year. This ratio is projected to normalize to 80-85% by Q3 FY27. A significant concern emerged regarding an INR 136 crore investment in Bobble, which has filed for bankruptcy. Management is evaluating the situation, has appealed court orders, and plans to take a 'decisive step' in the next few quarters⏳, with impairment testing contingent on the NCLT appeal outcome.

    06

    Vertical Performance and Geographic Mix

    In India and Emerging Markets, categories E and F demonstrated robust performance, while category G (RMG) is in a recovery phase, and category H (healthcare, hospitality) is performing well. For Developed Markets, categories E and G are currently outperforming F and H, though all verticals show strong momentum. This diversified performance across verticals and geographies underpins the company's consistent growth.

    This is an AI-generated summary of a publicly available earnings call transcript.