Affle 3i (AFFLE) Q4 19/20 earnings summary

Executive summary

• FY2019-20 revenue from operations grew 33.8% YoY and PAT rose 34.2%; growth came from existing and new customers, across geographies and verticals. COVID-19 marginally affected growth momentum in late Q4.

• The mobile advertising model focuses on cost per converted user (CPCU), with 72.3mn converted users and reach across 2.1bn+ connected devices during FY20.

Financial highlights

• Consolidated revenue from contracts with customers was Rs. 3,337.83mn, up 33.8% YoY; total revenue was Rs. 3,398.71mn, up 36.1% YoY.

• PAT rose 34.2% YoY to Rs. 655.17mn; PBT increased 32.5% to Rs. 792.25mn and PAT margin was 19.3%.

• Adjusted EBITDA was Rs. 888.27mn, up 26.3% YoY, with a 26.6% margin versus 28.2%; adjusted EBIT was Rs. 754.96mn, up 25.4%, with a 22.6% margin.

• Adjusted EBITDA and EBIT exclude Rs. 9.37mn of creditors written back; reported other income was Rs. 60.88mn, including that write-back and Rs. 51.51mn primarily from bank-deposit interest.

• Operating cash flow was Rs. 730.30mn, up 52.8% YoY; diluted EPS was Rs. 26.13 versus Rs. 20.10.

Outlook and guidance

• Affle 2.0 priorities include India leadership, verticalized AI, vernacular deep learning and an omnichannel connected ecosystem; strategy also targets voice, video, vernacular and verticalization.

• Management expected enhanced scale as markets reopened from June 2020, citing the digital shift and COVID-resilient verticals that generated over 74% of FY20 revenue and over 76% in Q4.

• The growth opportunity was linked to rising mobile-first adoption, connected-device expansion and advertisers increasing digital engagement and conversion activity.