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Dolat Capital Report
Affle India Ltd. reported revenue grew by 6.1% QoQ (our estimate: 6.8%), growing 10.8% YoY. Conversions (volume) were up 4.9% QoQ, and stood at 67.8 million, while cost per converted user was flat at Rs 51.
Growth was led by developing markets while developed market saw decline both QoQ/YoY basis due to cuts in certain client budgets.
Operating profit margin were up 148bps QoQ to 17.8% (our estimate:18%), led by improved Inventory and data cost from 62% of revenue in Q2 to 60.7% in Q3 (as it optimised the customer pool with better pricing/margins), and just 4% increase in employee cost.
Resembling Q2, Affle continued to see macro headwindsin developed markets (~20% of revenue). Management shared that part revenue was foregone due to greater focus on profitable and price resilient volumes.
Affle has demonstrated strong resilience despite privacy related impact on iOS devices and geopolitical headwinds, thus we remain confident on Affle's ability to deliver consistent high growth of 25% plus compound annual growth rate over medium-to-long term basis.
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