Nazara Technologies Q4 FY26 earnings call

Nazara Technologies reported a strong FY26, with revenue reaching INR 1,829 crores, a 13% year-on-year increase, and EBITDA growing by 66% to INR 255 crores. The company's EBITDA margin expanded to 13.9% for the full year, with Q4 FY26 showing a robust 19.5% margin. Cash generation also strengthened significantly, with pre-tax operating cash flows growing 81% year-on-year to INR 213 crores.

FY26 marked a pivotal year for Nazara, as gaming's contribution to EBITDA surged from 56% in FY25 to 90% in FY26, reflecting a strengthened focus on high-margin, globally diversified gaming. The company aims to accelerate both revenue and EBITDA growth in FY27, leveraging its Centers of Excellence playbook and AI-native capabilities. This strategic shift is expected to drive organic growth and further margin expansion across its portfolio.

Nazara completed the acquisition of Bluetile and BestPlay, significantly expanding its casual gaming scale and AI-native development capabilities. Bluetile alone reported INR 1,460 crores in revenue and INR 254 crores in EBITDA for CY25. This acquisition, pending Spanish FDI approval, is expected to be consolidated from Q1 FY27 and is projected to double Nazara's EBITDA on a pro forma basis.

NODWIN Gaming demonstrated a significant turnaround, moving from a loss of INR 14 crores in FY25 to a profit of INR 21 crores in FY26, with Q4 EBITDA at INR 4 crores. Despite this, NODWIN recorded a goodwill write-off of INR 50 crores related to OML assets (NH7 Weekender). NODWIN is actively seeking to raise $100-200 million independently through a mix of primary and secondary funding, with plans for an IPO in the near future.

The AdTech segment experienced a sequential decline in Q4 FY26, although it grew 32% year-on-year for FY26. Management attributed the Q4 decline to a conscious strategic shift towards tech-driven DSP businesses and challenging market conditions in the UK, particularly in the new homes market. The company is re-investing in its product-driven offerings and expects growth to resume in FY27 as it focuses on higher-margin opportunities.

Mobile gaming revenue grew 38% year-on-year to INR 713 crores, with EBITDA growing 33% to INR 137 crores, driven by improved LiveOps and user acquisition. Kiddopia returned to subscriber growth, and Animal Jam expanded its margins. PC and console publishing delivered strong profitability with FY26 revenue of INR 261 crores and EBITDA of INR 101 crores (39% margin). Offline gaming (Smaaash and Funky Monkeys) also contributed with INR 99 crores revenue and INR 27 crores EBITDA.

Nazara's investments in Centers of Excellence (COE) and AI capabilities are beginning to yield results, particularly in Kiddopia's subscriber growth. AI is being leveraged across various gaming functions, from development and user acquisition to data analytics and user engagement. The integration of Bluetile's AI-native capabilities is expected to further enhance the platform's overall efficiency and growth potential in FY27.