Nazara Technologies is expecting its revenue and operating profit or EBITDA to accelerate in the coming quarters due to seasonality and due to the company’s decision to defer key esports launches to benefit from the upcoming opportunities.
For the June quarter, Nazara Technologies reported a 14 percent year-on-year growth in its overall topline. This was the second successive decline in revenue for the company on a sequential basis. In fact, the 14 percent revenue growth reported by the company in the June quarter is the slowest for the company since its listing.
Nazara’s gaming revenue grew by 24 percent, while the E-sports business grew by 15.2 percent year-on-year. The E-sports business contributes nearly 46 percent to the overall topline. Key IPs were deferred to the September quarter to take advantage of the market opportnity. Reveune from this IP will reflect in the upcoming quarters, including the Septemeber one.
The GST Council decided to levy a 28 percent tax rate on full value of real money games. Nazara said that this contributes only 4.7 percent of the revenue and 0.5 percent of the operating profit in the June quarter. “This may provide Nazara with a consolidation opportunity as regulatory clarity emerges,” the company said.
Among the company’s other businesses, the Ad Tech revenue declined by 16 percent on a year-on-year basis. The company said that it has been focusing on higher-margin businesses and expanding its client base simultaneously to minimise the dependency on a few customers. It attributed the revenue drop in the June quarter to the loss of one large, low margin client. However, it is confident of revenue and EBITDA growth to pick-up again from the December quarter.
