Nazara Technologies Ltd (NAZARA) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Nazara Technologies Limited Q2 FY '27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jinesh Joshi from PL Capital. Thank you, and over to you, Mr. Joshi.
Jinesh Joshi (PL Capital): Yeah, thanks, Siddhant. Good day, everyone. On behalf of PL Capital, I welcome you all to the 2Q FY '27 earnings call of Nazara Technologies Limited. We have with us the management represented by Mr. Raymond Stauffer, CEO; Mr. Mithun Sacheti, Executive Director; Mr. Arun Agarwal, CFO; and Mrs. Anupriya Das, Head of Corporate Development. I would now like to hand over the mic to the management for opening comments. Over to you, Raymond.
Raymond Stauffer (Nazara Technologies Ltd): Good morning, everyone, and thank you for joining us. As you are all aware, this is my first earnings call as the CEO of Nazara. And well, since day one, my priority has been to align the teams and operations while leveling up group capabilities by enhancing Nazara's central platform. And part of that has started to show throughout Q2 FY '27. This quarter, as you've seen, has been a key step in Nazara's evolution into a global gaming platform. It is also the first quarter to include Deltatre and Bestplay consolidated from 1st of August 2026. Q2 was a record quarter for us. Revenue was 803 crores, our highest ever, up 53% year-on-year. EBITDA grew 93% to 120 crores, and EBITDA margin expanded 311 basis points to 14.9%. Profit after tax from continuing operations was 35 crores compared with a loss of 34 crores in Q2 FY '26. For H1 FY '27, revenue grew 20% to 1,232 crores, and EBITDA grew 52% to 166 crores. Gaming revenue grew 122% to 656 crores at a 21.5% EBITDA margin, contributing 82% of consolidated revenue and effectively all EBITDA before corporate cost. Mobile revenue grew 167% to 550 crores too. In their two first months as part of Nazara, Deltatre and Bestplay generated revenue of 329 crores, up 49%. EBITDA grew 64% to 64 crores, driven by rapid product iterations, new markets, AI-automated user acquisition, and cross-promotion. Deltatre's leadership team holds 5.8% in Nazara, aligning our interests effectively with all of shareholders. Our existing gaming studios delivered organic growth of 11% in revenue and 17% in EBITDA, underpinned by a sustained investment in content. WildWorks grew revenue 41% on Animal Jam content, Kiddopia grew revenue 21%, Fusebox launched Traitors and new and a new Big Brother season. Curve grew about 27% and EBITDA 61% driven by Sovereign Tower, the mobile debut of Wobbly Life and Human Fall Flat, which has surpassed 60 million players. Much more importantly, our long-term our platform is strong and is being enhanced. Deltatre's core capabilities now operate as group Centers of Excellence across marketing, data, products, and technology, with AI embedded in all four of them. In a single month, the marketing COE team has produced over 290 ad creatives for three studios across the group, and a single AI-ready data stack is going to power analytics across the group. Every game we launch and every studio we acquire now plugs straight into these proven systems, enabling us to scale faster and more profitably. As you know, we have also expanded our leadership team. Besides myself, we are very excited to have Mithun Sacheti,
Mithun Sacheti (Nazara Technologies Ltd): after on the board of Nazara. Recently moved into the executive role as a part of the promoter group, and I want to share why it's relevant, as well. my life has been focused on building businesses and working with founders obsessing about consumers. I think the new consumer is most is spending most amount of time in gaming, and I think Nazara provides that opportunity more than any other place right now. The current market opportunity for us and consumer trends both point towards an intersection of short-form casual gaming along as along with the market of US. It's possibly one of the few categories in the world which is seeing the kind of growth it is right now, as well. At Nazara, my role largely is going to focus on making sure that, you know, we have strategic conversations and focus on governance, which is of utmost importance for anybody who's dealing in the public domain. Arun joined us as a CFO in this and we're all very excited as a new management. The team transition is more or less complete now, and with Raymond leading as a CEO and Arun as a CFO, it's exciting times for Nazara going forward. Thank you. Over to you, Anupriya.
Anupriya Das (Nazara Technologies Ltd): Thank you, Mitul. I will now cover the segmental performance. In Q2 FY27, our gaming segment revenue grew 122% year-on-year to INR656 crores. EBITDA grew 114% to INR141 crores, resulting in an EBITDA margin of 21.5%. Excluding Blue Tile and Bestplay, gaming revenue grew organically by 11% and EBITDA grew 17%. Mobile gaming revenue including Blue Tile and Bestplay grew 167% year-on-year to INR550 crores with EBITDA up 151% to INR103 crores. Kiddopia revenue grew 21% year-on-year as subscribers grew rose 5% and ARPU increased to 7.94 growing 8% year-on-year. EBITDA declined as Kiddopia stepped up user acquisition spend to accelerate subscriber growth while keeping unit economics within our target thresholds. WildWorks grew revenue 41% and EBITDA 39% year-on-year on new Animal Jam content, including a Monster High-themed season. Fusebox reven- revenue fell 4% year-on-year on lower organic installs as downloads of similar games declined globally, while EBITDA grew 7%. Fusebox launched Traitors and a new Big Brother season. Love Island was the number one free role-playing playing game on the US App Store in July. In PC and console, Curve revenue grew 27% year-on-year to INR77 crores and EBITDA grew 61% to INR30 crores, with margin expanding from 30.8% to 38.9%. Sovereign Tower received an overwhelmingly positive response on Steam, Wobbly Life's mobile launch reached number three on both App Store and Play Store's genre charts, and Human Fall Flat has crossed 60 million players. Moving to offline gaming, EBITDA grew 29% year-on-year to INR8 crores on flat revenue of INR29 crores, with margin rising from 20.3% to 26.2%. Funky Monkey opened new 10 new stores in the last 12 months with five more to open in FY27, and margins improved on record birthday revenues. S2.0 design and rebranding is complete, with launch slightly delayed pending regulatory approvals. Within our other businesses, adtech comprising of Datawrkz and Space and Time delivered Q2 FY27 revenue of INR124 crores and EBITDA of INR0.8 crores. Datawrkz pipeline is converting into new clients, though we expect a temporary dip in H2 as an anchor client restructures and pauses ad spend. Absolute Sports post- posted revenue of INR23 crores and an adjusted EBITDA of INR1.7 crores, excluding pickleball franchise costs and one-time expenses. Pro Football Network's revenue grew 20% year-on-year with an EBITDA margin of 17% versus negative 8 18% in Q2 FY26. At Sportskeeda, content syndication partnerships launched in Q1 are now contributing revenue, partly offsetting lower ad rates, while operating costs were down 13% quarter-on-quarter. With this, I conclude my remarks, and we will open the call for Q&A. Thank you.
Moderator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator: The first question is from the line of Aditya Kumar from A.K. Investments. Please go ahead.
Aditya Kumar (A.K. Investments): Yeah, thanks for the opportunity. Firstly, Raymond, congratulations for taking up the CEO position at Nazara. It's a very big responsibility. My first question is I have a couple of questions. First question is what is the focus area for us under your leadership for 1 year that you want to fix or you want that somethings needs to be streamlined like developing team or center of excellence, whatever? So, can you just share that what is your focus for 1 year that you want to fix things in Nazara?
Raymond Stauffer (Nazara Technologies Ltd): Sure. So, thanks a lot for the question. So, we're focusing firstly on the Nazara platform, so we have a really strong base line to work on top of. So, we're going to the first actions we're going to take is leveling up those COEs in leadership positions from the BU team over to Nazara in order to enhance our marketing, data, tech, product, AI capabilities. In the future, we'll also create a new COE, and add monetization COE that will allow us to also enhance every single studios and monetization capabilities. With this, what we want to do is create a very strong, but flexible platform. A platform that is informed by all studios, but is also able to share with the rest of the studios, all learnings, and everything that we've gathered. So, it's a never-evolving platform that keeps up to date with the standards of the industry. I think the biggest focus is going to be to align operations, set a deliverable bar, and introduce AI in every single this one of the studios through the COEs. So, in a year's time, what we need to achieve is an AI-operated company group, and set of studios, that could feed into and from those that central platform. Of course, this is all and the main focus of this, as we discussed, and as it has been previously laid out, is gaming. And so, that is where most of our efforts are going to go into.
Aditya Kumar (A.K. Investments): Okay. Okay, great. Sounds good to hear. And on the gaming part, should we expect any flagship product launches under your leadership for next 1 year, or mostly it will be on the existing games only as majority of our focus will be to get more and more revenue share? So, can you shed some light here? Yeah.
93 more turns of this transcript: log in to Stocksigma to read the full call.