Affle 3i — Q3 FY26 earnings call

Call held 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

  • 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%

Key financials

2 periods

Headline

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

9M

  • OCF to PAT
    75.8%

What they filed

Q1 FY27: revenue up 20.3%, net profit up 20.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue543 602 602 621 647 +19%717 +19%724 +20%747 +20%
EBITDA113 131 134 140 146 +29%163 +24%161 +20%168 +20%
Net profit92 100 103 106 111 +21%119 +19%120 +17%128 +21%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentRevenue ContributionYoY Growth
India & Global Emerging Markets73.9%19.8%
Developed Markets26.1%17.8%

Guidance & targets

Revenue

  • Revenue Growth (Modeling) Revenue · FY26 · High confidence 18-20%
    If you are modeling our company for growth, modeling it for around 18% to 20% revenue growth... would be sensible.

    — Anuj Khanna Sohum, CEO

Margin

  • EBITDA Growth (Modeling) Margin · FY26 · High confidence 23-25%
    around 23% to 25% EBITDA percentage growth would be sensible.

    — Anuj Khanna Sohum, CEO

Other

  • Combined Growth KPI (Revenue % + EBITDA %) Other · Annual · High confidence 45%
    We are looking at a formula where the revenue growth on a y-o-y basis plus percentage EBITDA growth on a y-o-y basis combined has to be around 45%.

    — Anuj Khanna Sohum, CEO

  • OCF to PAT Ratio Other · FY26 · Medium confidence 85-95%

    Previously 90-100% → 85-95%

    We believe that we will be achieving in the range of around 85%-95% OCF for this year also.

    — Kapil Bhutani, CFO

  • Inorganic Transactions Other · 2026 · Medium confidence 1 major deal
    we are seeing that we will do one meaningfully sized transaction in 2026. We will do one more hopefully in 2028 and one more in 2030.

    — Anuj Khanna Sohum, CEO

Risks & concerns

  • Elevated Inventory and Data Costs

    medium

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

    Analyst acknowledged

  • Regulatory Impact (RMG in India)

    medium

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

    Both acknowledged

  • Working Capital and Collection Days

    medium

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

    Management acknowledged

  • Geopolitical Instability

    low

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

    Analyst downplayed

Q&A highlights

3 direct
Gross Margin Compression and Inventory Costs Direct
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

Impact of Real Money Gaming (RMG) Ban in India Direct
You can assume about INR 10 crores to INR 12 crores of revenue on the base effect for the Q3 of the last year, which has not occurred in this quarter.

Quantifies the specific revenue headwind from the RMG regulatory changes, showing the underlying growth in other India verticals was even stronger than reported.

Asked by Anand Trivedi, Nepean Capital

Inorganic Acquisition Playbook and Pipeline Direct
We have narrowed that pool down to now four companies and we are doing active due diligence assessments... We will do one meaningfully sized transaction in 2026.

Provides a concrete timeline for M&A activity after a three-year hiatus, signaling a shift back to inorganic growth to accelerate the 'Affle 3i' vision.

Asked by Siddharth Misra, Fidelity International

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.
View original transcript

More Information Technology earnings calls