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Yaap Digital Ltd — Q4 FY26 earnings call

Call held 8 Jun 2026

Management summary

Yaap Digital Limited reported strong financial performance for H2 and full FY26, driven by significant growth in income and profitability. The strategic acquisition of Gozoop bolstered capabilities and client base. While the company outlined ambitious growth and market share targets, concerns were noted regarding negative operating cash flow and increased debtors' days due to extended client credit terms.

Highlights

  • H2 FY26 Total income grew by 29.4% YoY to INR138.56 crores.

  • H2 FY26 EBITDA increased by 132.18% to INR27.25 crores, with net profit growing 129.15% to INR19 crores.

  • Full FY26 Total income reached INR183.73 crores (up 22.23% YoY), EBITDA INR31.74 crores (up 89.11% YoY), and net profit INR22 crores (up 97.95% YoY).

  • Successfully acquired Gozoop, adding over 100 new client relationships and the HAWK online reputation management platform.

  • High customer retention with 70% recurring business and an average client relationship tenure of over three years.

Concerns

  • Operating cash flow was negative in H2 FY26 despite PAT growth, attributed to larger credit terms to clients.

  • Debtors' days almost doubled YoY to approximately 150 days.

Key financials

2 periods

H2

  • FY26 Total Income
    ₹138.56 Cr
    YoY +29.4%
  • FY26 EBITDA
    ₹27.25 Cr
    YoY +132.2%
  • FY26 Net Profit
    ₹19 Cr
    YoY +129.2%

FY26

  • Total Income
    ₹183.73 Cr
    YoY +22.2%
  • EBITDA
    ₹31.74 Cr
    YoY +89.1%
  • Net Profit
    ₹22 Cr
    YoY +98%

What they filed

₹ Cr · quarterly
Line itemQ4 FY25Q2 FY26Q4 FY26
Revenue106 90 136
EBITDA11 12 24
Net profit8 9 19
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.

Capital allocation

high confidence
  • M&A Gozoop Acquisition · Closed · Consideration ₹[object Object] (mixed)

    To build India's first homegrown digital marketing network, add 100+ clients, strengthen Mumbai base, and integrate the HAWK online reputation management platform.

    Acquired 60.1% or 60.2% stake at 8x EBITDA multiple, with 80% cash and 20% equity in the first tranche. Overall outflow was approximately INR35 crores.

    Yes, so the Gozoop acquisition is structured across three years. It was done at a 8x multiple of EBITDA. It's a 80% cash, 20% equity in the first tranche where we acquired 60.1% or 60.2% -- basically 60% plus. The overall outflow was to the tune of about INR35-odd crores.

Guidance & targets

Revenue

  • Revenue Growth Revenue · year-on-year · High confidence 25-30%
    So this 25% to 30% growth we can expect year-on-year? Yes.

    — Atul Hegde

Market Share

  • Addressable Market Share Market Share · next 3 years · High confidence 2%
    We have given ourselves a goal for the next 3 years. We want to be at least about 2% of the overall addressable market.

    — Atul Hegde

Profitability

  • H2 EBITDA Margin Profitability · going ahead · High confidence 18% (give or take 1-2%)
    Pretty much, pretty much sustainable, give or take a 1% or 2%.

    — Atul Hegde

  • Overall Financial Year Margins Profitability · going ahead · High confidence Sustainable
    I think overall financial year margins are sustainable.

    — Atul Hegde

Cash Flow

  • EBITDA to Operating Cash Flow Conversion Cash Flow · going ahead · High confidence 60-70%
    I think it should be anywhere between 60% to 70% going ahead.

    — Atul Hegde

Client Management

  • Client Retention Client Management · last three to four years · High confidence 60%
    we operate pretty much on about 60%-odd of retention in the last three to four years.

    — Atul Hegde

  • Average Client Relationship Tenure Client Management · High confidence 3 years plus
    So average client relationship is about three years plus

    — Atul Hegde

Geographic Expansion

  • Presence in Non-Metro Cities (India) Geographic Expansion · next three years · Medium confidence Expanded presence
    We will also be looking at presence in some of the non-metro cities in India in the next three years.

    — Atul Hegde

  • Acquisitions in GCC Geographic Expansion · Medium confidence Actively looking for growth via acquisitions
    So yes, we are actively looking for growth via acquisitions in the GCC.

    — Atul Hegde

Market context

  • Acquisitions in AI/Creator Economy M&A · this financial year (FY27) · High confidence At least one acquisition
    No, there's no immediate timeline, but we would definitely look at one acquisition in this financial year at least.

    — Atul Hegde

What to watch in Q1 FY27

Operating Cash Flow Improvement

Current financial year (FY27)
Current Negative (H2 FY26)
Target Positive / Significantly increasing

Why it matters

Indicates better working capital management and improved cash generation from operations, crucial for funding growth.

I see the operating cash flow increasing significantly in this current financial year.

Risks & concerns

  • Negative Operating Cash Flow

    medium

    Operating cash flow was negative despite PAT growth, attributed to extended credit terms to larger clients.

    Analyst acknowledged

  • Increased Debtors' Days

    medium

    Debtors' days almost doubled YoY to approximately 150 days, impacting working capital efficiency.

    Analyst acknowledged

  • Competition from Foreign Players

    low

    The Indian advertising sector is dominated by foreign players, but management views this as an opportunity for independent Indian companies like YAAP.

    Management acknowledged

Q&A highlights

6 direct
Seasonality and H1/H2 Revenue Mix Direct
H2 is primarily the advertising season in the country... Almost 60% to 65% spends in the category happen in H2... Going ahead, we feel that this percentage will be more balanced. We will get a sense when we close this coming year with the acquisition of Gozoop, where the business is spread across the 12 months because most of them is retainer-led.

Clarifies the historical revenue seasonality and management's expectation for a more balanced H1/H2 split in the future due to strategic acquisitions.

Asked by Disha

Sustainability of H2 EBITDA Margins Direct
Pretty much, pretty much sustainable, give or take a 1% or 2%. As I said, it is a function of the third D in our business, which is primarily media... If a set of clients are investing more in content creation and influencer marketing, the margins are higher. If the investments are more in the third D, then the margins are lower.

Confirms the sustainability of the strong H2 margins, linking it to the mix of services provided to clients.

Asked by Disha

Customer Stickiness and Retention Direct
our customer retention has been fairly high compared to industry standards. And primarily, it is because, we have three services, the three Ds, and majority of our customers buy more than more than one service. So they're typically buying two or three of services from us.

Explains the underlying drivers of customer loyalty, highlighting the cross-selling of multiple services as a key factor.

Asked by Disha

Gozoop Acquisition Cost and Strategic Rationale Direct
It was done at a 8x multiple of EBITDA. It's a 80% cash, 20% equity in the first tranche where we acquired 60.1% or 60.2%... The overall outflow was to the tune of about INR35-odd crores... It gives us addition to about 100-and-odd clients... 50% of Gozoop's revenues comes from HAWK, which is a state-of-the-art online reputation management platform.

Provides specific financial details of the acquisition and elaborates on the strategic benefits, including client additions and technology integration.

Asked by Vinod

Future Acquisition Strategy Direct
Yes, we are looking for anything that is AI tech-led in the creator economy space. This is something of, you know it's the fastest growing segment in digital marketing today... No, there's no immediate timeline, but we would definitely look at one acquisition in this financial year at least.

Outlines the company's M&A focus on AI-driven solutions within the creator economy, indicating a clear strategic direction for future growth.

Asked by Vinod

Monetization of AI Initiatives Direct
For us at YAAP, AI is integral part of what our services are. So we are integrating AI into our three Ds and into HAWK... AI gives us the ability to scale without increasing our headcount. AI gives us the ability to go deeper into analytics, and that is really the core of any marketing.

Addresses concerns about AI monetization by explaining how AI is embedded into existing services to drive efficiency and deeper insights, rather than being a standalone, unproven venture.

Asked by Yash Rathore

Operating Cash Flow vs. PAT Discrepancy Partial
I think one of the biggest reason has been some of our larger clients, you know, we've been giving them larger credit terms, but the so also with some of our larger vendors, we manage better credit terms. All of the growth, if you see, we are at H2 company in terms of our -- majority of our business happens in H2. So, I see the operating cash flow increasing significantly in this current financial year.

Explains the reason for negative operating cash flow (extended credit to clients) and provides forward-looking commentary on expected improvement.

Asked by Vinod

Increase in Debtors' Days Partial
to actually the right picture to look at is on both sides, since typically, we would get credit from our vendors and then we pass it on to clients. So, the ideal way to look at is what is the net difference, and that is something that we've pretty much maintained across... I see this number pretty much being at that range of maybe 10% down.

Addresses the concern about increased debtors' days by framing it in the context of overall working capital management and indicates an expectation for future improvement.

Asked by Priyank Kothri

2 min read 6 chapters

Detailed narrative

Strong Financial Performance in H2 and Full FY26

Yaap Digital Limited delivered robust financial results for H2 FY26, with total income growing 29.4% year-on-year to INR138.56 crores. EBITDA saw a significant increase of 132.18% to INR27.25 crores, and net profit surged 129.15% to INR19 crores. For the full financial year 2026, total income reached INR183.73 crores, marking a 22.23% year-on-year growth. EBITDA for FY26 increased by 89.11% to INR31.74 crores, and net profit grew 97.95% to INR22 crores, making FY26 a record year for the company.

Strategic Acquisition of Gozoop and Market Expansion

A major highlight of FY26 was the strategic acquisition of Gozoop, a respected digital marketing company. The deal was structured at an 8x EBITDA multiple, with an overall outflow of approximately INR35 crores for a 60.1% stake, comprising 80% cash and 20% equity in the first tranche. This acquisition significantly enhanced Yaap's capabilities, added over 100 new client relationships, strengthened its presence in Mumbai, and integrated the HAWK online reputation management platform, which contributes 50% of Gozoop's revenues.

Ambitious Growth Strategy and Market Share Targets

Yaap has set an ambitious goal to achieve a 2% market share of the overall addressable digital marketing market within the next three years. The total Indian advertising market is estimated at INR2 lakh crores, with digital accounting for 60% and Yaap's addressable market being 50% of that digital segment. The company aims for a year-on-year revenue growth rate of 25% to 30%, maintaining a robust growth trajectory similar to previous years.

AI Integration and Focus on Creator Economy

A core component of Yaap's growth strategy is the deeper integration of AI across its 'three Ds' (Design, Discovery, Distribution) and the HAWK platform. Management believes AI will enable the company to scale operations without a proportional increase in headcount and facilitate deeper data analytics. Yaap is actively seeking AI tech-led acquisitions within the rapidly growing creator economy space, targeting at least one such acquisition in the current financial year (FY27).

Seasonality, Margins, and Working Capital Management

Historically, H2 contributes 60-65% of Yaap's revenue due to the advertising season, with BFSI spends heavily concentrated in this period. Management anticipates a more balanced H1/H2 revenue mix going forward, with H1 FY27 potentially contributing 35-40%. H2 EBITDA margins of approximately 18% are considered sustainable, with overall financial year margins also expected to be maintained. However, operating cash flow was negative in H2 FY26 due to extended credit terms to clients, and debtors' days increased to around 150 days, though management expects a 10% reduction as the business grows.

Client Stickiness and Retention

Yaap boasts high customer retention, with 70% of its business being recurring and an average client relationship tenure exceeding three years. This stickiness is attributed to clients typically engaging with multiple services from Yaap's integrated 'three Ds' offerings. The company focuses on cross-selling and ensuring existing clients grow their business with Yaap by 15-20% year-on-year, alongside acquiring new clients.

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