Nazara Technologies, a leading player in the gaming industry, has disclosed its financial performance for the fourth quarter of the fiscal year 2023-24 (FY24), revealing a sharp decline in consolidated net profit and operating revenue.
Profit Plunge: Key Financial Highlights
The company’s consolidated net profit plummeted by a staggering 98% to INR 18 Lakh in Q4 FY24, compared to INR 9.4 Cr in the corresponding quarter of the previous year. This significant decline is also evident sequentially, with the company’s profit shrinking from INR 29.5 Cr in Q3 FY24.
Nazara attributed part of this decline to charges incurred during Q4, including INR 11.37 Cr due to goodwill impairments and INR 10.56 Cr related to intangible assets within the gaming segment.
Revenue Downturn Across Verticals
Operating revenue witnessed a notable decline of 8% year-on-year (YoY), amounting to INR 266.2 Cr in Q4 FY24, compared to INR 289.3 Cr in the same period a year ago. Sequentially, this represented a substantial 17% decrease from INR 320.4 Cr in Q3 FY24.
The company’s gaming vertical experienced a contraction, with revenue declining by 17% YoY to INR 91.03 Cr. Similarly, the adtech vertical saw a downturn, with revenue declining by 29% YoY to INR 7.49 Cr in Q4 FY24.
However, amidst these declines, the esports vertical emerged as a bright spot, witnessing a growth in revenue to INR 148.17 Cr, marking a 6% increase YoY.
Strategic Outlook and Growth Initiatives
Despite the challenging financial performance, Nazara remains optimistic about its future prospects. Nitish Mittersain, the founder, CEO, and joint MD of Nazara Technologies, highlighted key initiatives undertaken in FY24 that are expected to yield results in the coming year. These include the launch of a new publishing platform, game launches through existing studios, IP partnerships, and a robust M&A pipeline.
Looking ahead to FY25, Nazara anticipates accelerated growth in both revenue and EBITDA. With substantial cash reserves and a strong M&A pipeline, the company is well-positioned to capitalize on growth opportunities and enhance its growth trajectory.
Expense Management and Financial Prudence
In Q4 FY24, total expenditure declined by 9.4% to INR 237 Cr, reflecting Nazara’s commitment to financial prudence. Content and server expenses constituted the largest portion of expenditure, followed by employee benefit expenses and advertising/marketing expenses.
In conclusion, Nazara Technologies’ Q4 financial results underscore the challenges faced by the company amid evolving market dynamics. However, with a strategic outlook and focused initiatives, Nazara aims to navigate these challenges and emerge stronger in the dynamic gaming landscape.
