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    Affle 3i

    AFFLEGood
    Information Technology·2 Feb 2026
    Management Summary

    Affle 3i delivered a record-breaking Q3 FY26, surpassing the ₹7 Billion quarterly revenue milestone driven by its AI-powered Consumer Platform Stack. Despite regulatory headwinds in the Indian Real Money Gaming (RMG) sector, the company maintained robust growth through deeper verticalization and expansion in Connected TV (CTV) and iOS segments. Management is aggressively investing in international markets, which has temporarily elevated inventory costs but is expected to fuel the 'Affle 3i 10x' growth vision.

    Highlights

    8

    • Quarterly revenue surpassed the ₹7 Billion mark, reaching ₹7.17 Billion (up 19.2% YoY)

    • Highest-ever quarterly EBITDA of ₹1.63 Billion with a margin of 22.7%

    • PAT grew 19.1% YoY to ₹1.19 Billion, marking the highest-ever quarterly profit

    • CPCU business delivered 119.7 million conversions at a record CPCU rate of ₹59.6

    • India and Global Emerging Markets contributed 73.9% of revenue, growing 19.8% YoY

    • Inventory and data costs rose to 62.4% of revenue, with ~10% of this cost cited as long-term investment

    • Management provided a clear M&A roadmap with major transactions planned for 2026, 2028, and 2030

    • 9M FY2026 OCF to PAT stood at 75.8%, with a full-year target of 85-95%

    What Changed3

    vs Q4 FY26

    Guidance items6 → 5 (-1)Risks discussed3 → 4 (+1)Q&A highlights8 → 3 (-5)
    Key financials

    Metrics

    6

    Periods

    2

    Headline

    5
    • Revenue
      $7.17B
      YoY+19.2%QoQ+10.9%
    • EBITDA
      $1.63B
      YoY+24.1%QoQ+11.6%
    • EBITDA Margin
      22.7%
    • PAT
      $1.19B
      YoY+19.1%QoQ+8%
    • CPCU Rate
      ₹59.6
      YoY+3.1%

    9M

    1
    • OCF to PAT
      75.8%

    Segment breakdown

    Revenue ContributionYoY Growth
    India & Global Emerging Markets73.9%19.8%
    Developed Markets26.1%17.8%
    Heatmap· 2 shared metrics

    Guidance & targets

    5
    CategoryTargetPriority
    Revenue
    Revenue Growth (Modeling)
    18-20%
    		High
    Margin
    EBITDA Growth (Modeling)
    23-25%
    		High
    Other
    Combined Growth KPI (Revenue % + EBITDA %)
    45%
    		High
    Other
    OCF to PAT Ratio
    85-95%
    		Medium
    Other
    Inorganic Transactions
    1 major deal
    		Medium

    Risks & concerns

    4
    RiskSeverity

    Elevated Inventory and Data Costs

    Costs jumped to 62.4% of revenue; management claims 10% is 'investment' but this pressures gross margins in the near term. — Analyst acknowledged

    medium

    Regulatory Impact (RMG in India)

    The ban on Real Money Gaming resulted in a ₹10-12 crore revenue loss compared to the previous year's base. — Both acknowledged

    medium

    Geopolitical Instability

    Concerns regarding Israeli war and Ukraine war; management insists they are cloud-based and resilient with diversified tech teams. — Analyst downplayed

    low

    Working Capital and Collection Days

    Temporary increase in collection days from agencies due to periodic audits impacted 9M OCF-to-PAT (75.8% vs target >80%). — Management acknowledged

    medium

    Q&A highlights

    3

    “at least or around 10% of our data and inventory cost is investing into the future or it is looking at a broader view of what we can do with our verticalization and profiling.”

    Explains that the recent spike in inventory costs (62.4%) is a deliberate investment in data intelligence for international markets rather than just a cost of sales.

    asked by Shobit Singhal, Anand Rathi

    2 min read5 chapters

    Detailed Narrative

    01

    Record Financial Performance and Milestone Achievement

    Affle 3i achieved a significant milestone in Q3 FY26 by surpassing the ₹7 Billion quarterly revenue mark, ending at ₹7.17 Billion. This represents a 19.2% YoY growth, supported by the highest-ever quarterly EBITDA of ₹1.63 Billion and PAT of ₹1.19 Billion. The company's CPCU business remains the primary driver, contributing ₹7.14 Billion in revenue with a record CPCU rate of ₹59.6, reflecting increased advertiser willingness to pay for premium conversions.

    02

    Strategic Investment in Verticalization and Data

    Inventory and data costs rose to 62.4% of revenue this quarter, up from the historical 60-61% range. Management clarified that approximately 10% of these costs are strategic investments in 'verticalization'—building deep data intelligence for specific industries like healthcare and fintech in international markets. This investment is intended to fuel future revenue growth and margin expansion by enabling more precise user targeting and higher-value conversions.

    03

    Inorganic Growth Strategy Re-ignited

    After a three-year pause in major acquisitions, Affle 3i has announced a structured M&A roadmap. The company has narrowed a pool of 12 potential targets down to four and expects to close one 'meaningfully sized' transaction in 2026. This will be followed by planned major deals in 2028 and 2030, with the goal of acquiring established sales teams and customer relationships in developed markets to accelerate organic cross-selling of Affle's tech stack.

    04

    Resilience in India Despite RMG Headwinds

    The India business grew 20.6% YoY on a standalone basis, despite a ₹10-12 crore revenue hit from the Real Money Gaming (RMG) regulatory changes. Growth was bolstered by strong performance in E-commerce, EdTech, and Fintech, as well as a successful pivot toward premium iOS-led conversions and Connected TV (CTV). Management highlighted CTV as a key growth pillar, allowing them to capture traditional TV advertising budgets through a digital CPCU model.

    05

    AI Innovation and Operational Efficiency

    The company is deepening the role of AI through 'Niko,' its next-generation agentic AI optimization engine. This automation has allowed employee benefit expenses to remain flat sequentially despite wage hikes, as AI tools expand the productivity of 'Afflers' by an estimated 50%. This operational leverage is central to management's goal of ensuring EBITDA growth consistently outpaces revenue growth.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.