Nazara Technologies Limited — Q3 FY26 earnings call

Call held 4 Feb 2026

Management summary

Nazara Technologies reported a mixed Q3 FY26, with overall revenue declining due to NODWIN's deconsolidation, but EBITDA and margins significantly improved driven by a focus on higher-margin IP-based gaming. Key segments like Gaming and Offline Gaming showed strong profitability, and Kiddopia returned to subscriber growth. Strategic investments and new game launches are expected to drive future growth, though some associate losses impacted overall profitability.

Highlights

  • Q3 FY26 EBITDA increased 29.4% to INR67.8 crore, with margins expanding to 16.7% as the company refocused on higher-margin IP-based gaming.

  • 9M FY26 revenue grew 29.7% year-on-year to INR1,431.2 crore, while EBITDA increased 73% year-on-year to INR177.2 crore with overall margins expanding to 12.4%.

  • Gaming segment Q3 FY26 revenue grew 66% year-on-year to INR257 crore and EBITDA grew 87% year-on-year to INR64.2 crore, resulting in a 25% EBITDA margin.

  • Kiddopia achieved a much-awaited resumption in subscriber growth in Q3 FY26, supported by coordinated COE efforts.

  • NODWIN, an associate company, delivered strong Q3 FY26 operational performance and profitability with revenue up 58% YoY to INR261 crore and EBITDA reaching INR40 crore.

Concerns

  • Q3 FY26 revenue was lower by 24.1% to INR406 crore, primarily due to the deconsolidation of NODWIN Esports business.

  • Kiddopia's margins dipped in Q3 FY26 due to increased user acquisition spend, though management views this as a healthy sign for future growth.

  • Marketing spend for Love Island in December impacted Q3 FY26 EBITDA in the near term.

  • Sportskeeda's Q3 FY26 costs were down 32% YoY, but traffic declined due to a Google Core update in FY25, impacting revenue.

  • Moonshine (PokerBaazi) incurred an operating loss of INR30 crore in Q3 FY26, offsetting gains from NODWIN.

Key financials

2 periods

Headline

  • Revenue
    ₹406 Cr
    YoY -24.1%
  • EBITDA
    ₹67.8 Cr
    YoY +29.4%
  • EBITDA Margin
    16.7%

9M

  • FY26 Revenue
    ₹1,431.2 Cr
    YoY +29.7%
  • FY26 EBITDA
    ₹177.2 Cr
    YoY +73%
  • FY26 EBITDA Margin
    12.4%

What they filed

Q1 FY27: revenue down 14.0%, net profit down 260.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue319 535 520 499 526 +65%406 −24%398 −23%429 −14%
EBITDA24 37 29 23 -164 −783%68 +84%44 +52%-38 −265%
Net profit16 14 4 51 -34 −312%9 −36%56 +1300%-82 −261%
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

  • Gaming Segment
    ₹257 Cr Q3 FY26 Revenue₹64.2 Cr Q3 FY26 EBITDA25% Q3 FY26 EBITDA Margin₹793.8 Cr 9M FY26 Revenue₹188 Cr 9M FY26 EBITDA23.8% 9M FY26 EBITDA Margin
  • Mobile Gaming
    ₹534.7 Cr 9M FY26 Revenue₹99.2 Cr 9M FY26 EBITDA
  • Offline Gaming
    36% Q3 FY26 EBITDA Margin₹24.3 Cr Smaaash Q3 FY26 Revenue₹7.1 Cr Smaaash Q3 FY26 EBITDA₹6.1 Cr Funky Monkey Q3 FY26 Revenue₹3.7 Cr Funky Monkey Q3 FY26 EBITDA
  • Adtech
    86% 9M FY26 Revenue Growth95% 9M FY26 EBITDA Growth-22% Q3 FY26 Revenue Growth26% Q3 FY26 EBITDA Growth
  • NODWIN (Associate)
    ₹261 Cr Q3 FY26 Revenue₹40 Cr Q3 FY26 EBITDA

Capital allocation

high confidence
  • M&A nCore Games Acquisition · Integrated

    Investment in local gaming ecosystem; publishing FAU-G game.

    Minority position taken; call to monetize or take larger stakes in future.

    So I believe that's a game that Nazara is already publishing. The game is on a good track in terms of the KPIs, early KPIs we are seeing with the quality and the feedback of customers we are getting. So we've taken this call to have a minority position.
  • M&A Rusk Media Acquisition · Integrated

    Investment in local gaming ecosystem.

    Minority position taken; call to monetize or take larger stakes in future.

    So, I think, some of these investments you've seen in the past also like Stan, Rusk, in this time nCore are with an intent to invest in the local gaming ecosystem and create a network and ecosystem for Nazara that we can continue to exploit as the market grows.
  • M&A NODWIN Esports Divestment · Integrated

    Deconsolidation of NODWIN Esports business, particularly Freaks 4U, which was a drag on profitability.

    Deconsolidation led to lower Q3 FY26 revenue but improved overall EBITDA and margins.

    In Q3 FY '26, Nazara delivered revenues of INR406 crore, which were lower by 24.1%, primarily due to the deconsolidation of our NODWIN Esports business. However, our EBITDA came in at INR67.8 crore, which was up 29.4% during the same period and our margins expanded to 16.7% as the company refocused on its higher-margin IP-based gaming business.
  • M&A Moonshine (PokerBaazi) Investment · Ongoing

    Associate investment in real money gaming.

    Operating loss of INR30 crore in Q3 FY26, offsetting NODWIN gains.

    So you have the share of associate of profit coming from NODWIN, but that is completely offset by incurred loss of Moonshine, which is PokerBaazi. They have an operating loss of INR30 crore for the quarter. So we are 46% of that is offsetting the NODWIN gains.
  • Liquidity Cash ₹700 Cr Net cash includes subsidiaries.
    In terms of the cash question that you have, we have a net cash of approximately INR700 crore in our books at this point of time, including our subsidiaries.

Guidance & targets

Profitability

  • Kiddopia User Acquisition Payback Period Profitability · 2 years · High confidence 100% in two years
    As long as we are able to achieve that, we will maximize our spends for growth.

    — Nitish Mittersain

  • Offline Business (Smaaash & Funky) EBITDA Margin Profitability · steady state · High confidence 25-30%
    So in a steady state, we are looking at 25% to 30% EBITDA margin coming in with a typical breakeven point of 18 to 24 months in the offline business, both for Smaaash and Funky.

    — Shreyes Menon

Margin

  • Offline Gaming (Funky Monkey) EBITDA Margin Margin · steady-state basis · High confidence 35-40%
    I think on a steady-state basis, 35-40% is what we should project.

    — Nitish Mittersain

  • Overall EBITDA Margin Margin · coming year (2-3 quarters) · Medium confidence beyond 20%
    Eventually, the margin should rise to beyond 20% is what we are working towards. I think in the coming year, maybe in two, three quarters, we should get there.

    — Nitish Mittersain

Capacity

  • Funky Monkey Centers in India Capacity · next couple of years · Low confidence 100 centers
    If I were to zoom out, I think over the next couple of years, can we get to 100 Funky Monkey centers in India, we surely can.

    — Nitish Mittersain

Product Launch

  • Curve Games New Titles Product Launch · FY27 and FY28 · High confidence 5-6 new titles
    And we have signed five or six new titles since we were acquired, and they will start to appear through FY '27 and FY '28.

    — Stuart Dinsey

  • WildWorks Go Slinky Go Public Release Product Launch · end of Q1 FY27 · High confidence public release
    We are very excited about an alpha release of Slinky. This is Go Slinky Go, which is a hyper-casual game in the likes of MONOPOLY GO! It has been received so well by those that we have done some beta alpha testing with so far. We'll go to a public release in by the end of the first quarter of FY '27.

    — Jeff Amis

Breakeven

  • Offline Business (Smaaash & Funky) Breakeven Point Breakeven · per center · High confidence 18 to 24 months
    So in a steady state, we are looking at 25% to 30% EBITDA margin coming in with a typical breakeven point of 18 to 24 months in the offline business, both for Smaaash and Funky.

    — Shreyes Menon

What to watch in Q4 FY26

Kiddopia Subscriber Growth & Margin Recovery

next quarter
Current Subscriber growth resumed, but margins dipped due to UA spend.
Target Continued subscriber growth and margin expansion.

Why it matters

Kiddopia is a key IP; sustained growth and margin recovery are crucial for overall profitability.

Kiddopia returned to subscriber growth in Q3 FY '26 after several quarters, supported by the coordinated COE efforts with the management team and unlocked multiple levers of growth.

Risks & concerns

  • Revenue decline due to deconsolidation of NODWIN Esports

    medium

    Q3 FY26 revenue was lower by 24.1% primarily due to the deconsolidation of NODWIN Esports, but this was a strategic move to improve margins.

    Management acknowledged

  • Losses from associate companies offsetting gains

    medium

    An operating loss of INR30 crore from Moonshine (PokerBaazi) in Q3 FY26 offset the profit contribution from NODWIN.

    Analyst acknowledged

  • Traffic decline in Sportskeeda due to Google algorithm updates

    medium

    Sportskeeda experienced a decline in traffic due to a Google Core update in FY25, leading to cost realignment and focus on other initiatives like CricRocket.

    Management acknowledged

  • Short-term margin impact from increased marketing spend

    low

    Marketing spend for Love Island in December impacted Q3 FY26 EBITDA, but benefits are expected to translate into higher revenues in subsequent months.

    Management acknowledged

Q&A highlights

8 direct
Kiddopia margin dip and stickiness of acquired customers Direct
So this is, I would say, the drop in margins is actually a very healthy sign in this particular case because we are acquiring more users that are profitable for us. And over the years in the coming quarters, you will see revenue growth that will make up for the short-term margin erosion. Kiddopia usually has a two years LTV that we see.

Clarifies that the margin dip in Kiddopia is a strategic investment in user acquisition for long-term revenue growth, not a sign of weakness.

Asked by Sachin Dixit

Offline gaming seasonality and sustainable margins Direct
I think on a steady-state basis, 35-40% is what we should project. But we are doing actually that, right? We have an intent to really expand the number of centers. But because it's launching new centers is operationally heavy, we want to make sure we are well geared to do that before we really scale.

Provides a clear benchmark for sustainable EBITDA margins in the offline gaming segment and explains the strategy for expansion.

Asked by Sachin Dixit

Investments in nCore Games and Rusk Media Direct
So, I think, some of these investments you've seen in the past also like Stan, Rusk, in this time nCore are with an intent to invest in the local gaming ecosystem and create a network and ecosystem for Nazara that we can continue to exploit as the market grows.

Explains the strategic rationale behind minority investments in Indian gaming ecosystem players, aiming to leverage growth in the domestic market.

Asked by Sachin Dixit

NODWIN business turnaround and specific IPs Direct
I think the core business of NODWIN was always doing well, has always been doing well for a very long time. It is the reason why we are such a dominant in the world and one of the top three companies in the world. What clouded us in the last one year was this attempt that we had done to go ahead and build a European business in Germany specifically that didn't work out.

Clarifies that NODWIN's core business was strong, and the turnaround is due to shedding loss-making European ventures and focusing on profitable IPs like Counter-Strike World Championship.

Asked by Jinesh Joshi

NODWIN associate profit not reflecting in P&L due to Moonshine loss Direct
So you have the share of associate of profit coming from NODWIN, but that is completely offset by incurred loss of Moonshine, which is PokerBaazi. They have an operating loss of INR30 crore for the quarter. So we are 46% of that is offsetting the NODWIN gains.

Explains why NODWIN's strong performance isn't fully visible in Nazara's P&L, highlighting the drag from the PokerBaazi associate.

Asked by Pranav Mashruwala

Sportskeeda growth post Google update changes Direct
Yes, there has been a decline in Sportskeeda pertaining to the March core update that came in FY '25. And since then, we've seen a decline in traffic. Now this is a normal phenomenon, to be honest, which happens across all the publishers.

Acknowledges the impact of Google updates on Sportskeeda's traffic and revenue, outlining cost realignment efforts and diversification into other initiatives like CricRocket.

Asked by Kunal Bajaj

Fusebox seasonality and impact of on-air shows Direct
Yes, sure. Thank you for the question. So, yes, with Fusebox Games being all linked to TV show IPs, we definitely do see seasonality effects, but more specifically somewhat in the organic, but more specifically in our user acquisition. So when the TV shows are on and also depending on how well the TV shows do.

Confirms seasonality in Fusebox Games due to its linkage with TV show IPs and explains how user acquisition costs fluctuate based on show popularity and virality.

Asked by Kunal Bajaj

Overall growth drivers and margin improvement for FY27 Direct
One is our portfolio of Fusebox games where we are doing IP licensing, right? Most of the revenues that you see in the current year, FY '26 have come from only one game, which is Love Island. However, in the last six, nine months after we've acquired the business, we work closely with the team to launch many more well-known games, including Big Boss in India, Big Brother globally.

Provides specific examples of future growth drivers like new IP launches for Fusebox Games (Big Boss, Big Brother) and the continued growth of Kiddopia and offline gaming.

Asked by Bhavik

3 min read 6 chapters

Detailed narrative

Q3 & 9M FY26 Financial Performance Overview

Nazara Technologies reported Q3 FY26 revenues of INR406 crore, a 24.1% decrease year-on-year, primarily due to the deconsolidation of NODWIN Esports. Despite this, EBITDA grew by 29.4% to INR67.8 crore, with margins expanding to 16.7%, reflecting a strategic shift towards higher-margin IP-based gaming. For the nine months ended FY26, revenue increased by 29.7% year-on-year to INR1,431.2 crore, and EBITDA saw a substantial 73% rise to INR177.2 crore, with overall margins reaching 12.4%.

Gaming Segment Growth and Kiddopia's Revival

The core Gaming segment demonstrated robust growth in Q3 FY26, with revenue increasing 66% year-on-year to INR257 crore and EBITDA surging 87% year-on-year to INR64.2 crore, achieving a 25% EBITDA margin. Mobile gaming, a key component, saw its 9M FY26 revenue grow 48% year-on-year to INR534.7 crore and EBITDA by 43% to INR99.2 crore. Notably, Kiddopia returned to subscriber growth in Q3 FY26, a result of coordinated efforts from Nazara's centers of excellence in user acquisition, data analytics, growth, and product optimization.

Offline Gaming Expansion and Profitability

The offline gaming portfolio reported healthy profitability with a 36% EBITDA margin in Q3 FY26. Smaaash contributed INR24.3 crore in revenue and INR7.1 crore in EBITDA, while Funky Monkey generated INR6.1 crore in revenue and INR3.7 crore in EBITDA. Funky Monkey is expanding rapidly, with one to two new centers launching monthly, aiming for 100 centers in India within the next couple of years. The Smaaash Experience 2.0 revamp is progressing, with a relaunch expected in a couple of quarters, targeting 25-30% steady-state EBITDA margins and an 18-24 month breakeven period per center.

Adtech and NODWIN Performance

Adtech delivered stronger growth and improving profitability in 9M FY26, with revenue up 86% year-on-year and EBITDA up 95% year-on-year. In Q3 FY26, Adtech EBITDA increased 26% year-on-year, despite a 22% revenue decline, attributed to a reduced focus on low-margin non-tech managed services. Associate company NODWIN delivered strong Q3 FY26 results, with revenue up 58% year-on-year to INR261 crore and EBITDA reaching INR40 crore, driven by marquee executions and new IPs like the Counter-Strike World Championship.

Strategic Investments and Future Growth Drivers

Nazara continues to make strategic minority investments in the Indian gaming ecosystem, including nCore Games and Rusk Media, to build a network for future exploitation as the market grows. New platforms are being explored, with Animal Jam soft-launched on Roblox. Fusebox Games is set to launch new well-known IPs like Big Boss and Big Brother, and WildWorks is preparing for the public release of its new hyper-casual game, Go Slinky Go, by the end of Q1 FY27. These initiatives, alongside Curve Games' upcoming 5-6 new titles in FY27-FY28, are expected to drive significant growth.

Capital Allocation and Liquidity

The company maintains a strong liquidity position with approximately INR700 crore in net cash on its books, including subsidiaries. This capital is earmarked for organic growth where required and for additional strategic M&A, particularly targeting gaming studios. The deconsolidation of Freaks 4U from NODWIN and the operating loss of INR30 crore from the Moonshine (PokerBaazi) associate in Q3 FY26 were noted as factors impacting overall reported profitability, with efforts underway to reduce these drags.

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

More Media, Entertainment & Publication earnings calls