Affle 3i LimitedQ1 FY27 Results & Financial Update

Developed Markets account for a disproportionately high share of global ad budgets, where Affle deals with 5x higher value per activity and lower volume relative to Emerging Markets.

Unlike competitors selling commoditized inventory at specific touchpoints, Affle operates a consumer-centric platform spanning mobile, CTV, and autonomous agentic intelligent connected devices (AICDs).

Auditors and management noted no reliable basis yet for a permanent impairment on the INR 136 crore Bobble investment while NCLT appeal proceedings are ongoing.

Larger inorganic M&A target due diligence is underway via third-party advisors, with a targeted closing by early 2027.

India and Emerging Markets grew by 20.2% y-o-y (contributing 72.2% of revenue), while Developed Markets grew by 20.7% y-o-y (contributing 27.8% of revenue).

Direct customer contributions reached around 79% of revenue in Q1 FY2027, compared to 74% for the entirety of FY2026.

Leveraging AdColony technology and brand assets through normal business development and SDK integrations without incurring dramatic new capital expenditure.

Aiming to activate over 100,000 mobile apps to reach over 500 million connected devices in Developed Markets during the year.

Average CPCU rate stands above INR 60, with some benefits passed to advertisers due to currency adjustments impacting short-term margins slightly.

Inventory and Data costs stood at 63.2% of revenue from operations; employee costs rose 3.4% sequentially due to annual appraisals and bonuses; other expenses stood at 5.6% of revenue.

OCF to PAT conversion was lower in Q1 FY2027 due to upfronting of collections near the end of FY2026 (where full year OCF to PAT reached 110%); management expects OCF to PAT to normalize to 80%-85% by Q3.

Management reaffirmed consistent execution on medium-term guidance, pointing to 25%+ organic growth in 95% of its business and targeting 20%+ combined growth organically and inorganically toward its 10x vision.

Management clarified that normalised organic growth excluding challenged segments like RMG is above 25% y-o-y, and gross margins are expected to see better expansion within the financial year as Developed Market scale increases.

Anuj Khanna Sohum explained that AdColony assets were acquired at a fraction of past valuations ($400M valuation in 2020-21) and are being integrated organically, while highlighting Affle's focus on advanced agentic AI and human vs non-human data distillation IP.

Management noted that CTV conversion-first strategies (such as QR codes) are driving strong consumer engagement across cross-screen capabilities, and Developed Market unit economics remain favorable despite lower activity volume.

Management reported no negative impact from slowing global smartphone replacement cycles due to rising consumer time spent on devices, and explained that Q1 OCF softness is a seasonal normalization following high March collections.

Management reiterated confidence in maintaining 20%+ consistent growth in Developed Markets backed by strong verticalization and the AdColony brand accelerator for SDK integrations.

Management affirmed that the 10x decadal target remains on track to be achieved in approximately 5 years through a combination of ~20% organic growth and accretive M&A targeting $1 billion in revenue.

Management stated that 100% of business involves direct technology integration with advertisers regardless of billing channels, and ranked vertical performance as robust in categories E and F, recovering in G (RMG), and strong in H (healthcare/hospitality).

The U.S. remains the primary strategic focus for Developed Market organic and inorganic growth across all verticals due to its market size.

Kapil Bhutani and Anuj Khanna Sohum confirmed that accounting impairment testing for the INR 136 crore Bobble investment will occur once NCLT appeals are decided, while legal actions are being taken against management mismanagement.