Gaming grows 14%, but ₹82Cr loss masks headline revenue decline

Revenue ₹428.8Cr (matches). EBITDA ₹46Cr implies 10.7% margin (unverified but plausible).

₹275Cr at 19.5% margin = ₹53.6Cr EBITDA stated as ₹54Cr. Math checks out; YoY growth unverified but stated directly.

Headline -14%; normalization claim cannot be verified from delivered result but plausible given gaming +14%.

Margin decline confirmed (17.6%→11%). Stated reason is reinvesting gains into UA. Magnitude of decline (6.6pp) suggests more than timing; defense is defensive not boastful.

PAT loss ₹82.5Cr; management attributes to ₹62Cr share of loss (mostly Moonshine writeoff) + impairments. One-off explanation plausible but masks operational pressure (headline margin compression).

Gaming segment EBITDA ₹54Cr on ₹275Cr (19.5% margin), revenue +14% YoY. Sub-segments listed with positive growth (Kiddopia +19%, Fusebox +12%, Animal Jam +11%).

Shift from prior 17.6% (Q1 FY26) to 11% (Q1 FY27). Attributed to higher UA spend (78%→85%), but scale/timeline for recovery unspecified. Prior FY26 call implied margin expansion; actual movement is contraction.

Prior guidance: 'accelerate both revenue and EBITDA growth.' Delivered: -14% revenue YoY. Management normalizes to +9% ex-NODWIN, but headline miss contradicts prior tone. Gaming +14%, but outweighed by other business declines.

Bluetile founder/CEO takes Nazara helm. Nitish transitions to strategy/M&A. Founder's mindset and AI game development expertise cited as key value-add. Unproven in multi-company portfolio role.

Changed from earn-out structure (could reach 180% of committed if targets hit) to fixed upfront payment (₹89M at closing, ₹214M by Apr 1). Provides certainty, full cash economics immediately, but requires dilution/debt financing.

Prior call: qualitative 'acceleration and expansion' for FY27. This call: Bhavik Shah asked for Nazara consolidated FY27 guidance; Nitish replied 'Not at this point of time.' No new numeric targets provided. De facto retreat from prior optimism.

Prior calls cited stagnation concern. This quarter: 19% revenue growth, improving unit economics, 24-month LTV/CAC trending upward. Long-standing concern resolved.

Maxime (Bluetile CPO, replacing Raymond as CEO): Growth driven by paid user acquisition. Released new games/features, deployed UA spend based on campaign profitability. Most revenue increase is paid UA, not organic builds. Strategy is to increase revenue baseline and user base for future EBITDA flexibility.

Nitish: Cannot comment on fundraise before Board approval. Working on structure to incentivize management including Raymond. Details in coming days. (Deferred response on specifics.)

Susan Planck (Curve COO): New titles have 12-18 month dev cycles; delayed benefit under Nazara. Releases in next 3 quarters starting Sovereign Tower (this week), Dragon Shelter (September), others TBD by year-end. 27% margin in Q1 is lower than full-year expectation and prior 40%; new titles will increase margins in subsequent quarters.

Nitish: SMAAASH 2.0 launch Q4 FY27 (Jan-Mar 2027) at Lower Parel Mumbai flagship. Design/backend underway, implementation starting soon. Funky Monkeys expanding via internal accruals, debt, and Nazara capex. Overall offline commitment ~₹50Cr including stake increases. No further allocation decided until SMAAASH 2.0 PMF proven.

Akshat Rathee (NODWIN Founder): Turnaround successful, 14 Comic Con shows, esports category clarity via PROGA Act, strong pre-IPO interest. Geopolitical uncertainty cited. Process continues; final shareholder decision pending. Nitish: Multiple options for Bluetile funding: Bluetile cash ~$20M, Nazara+Bluetile cash flow, debt, equity raise, stake sales. Multiple levers factored in; detailed plan with investment committee.

Nitish: Margin decline is 'good reason'—profitable UA scaling with strong LTV/CAC guardrails. Revenue growing while UA spend rises; margins 'deferred' because UAC absorbed upfront. If tangible revenue growth continues, margins will normalize to higher EBITDA. No caps on UA spend if ROI holds.

Susan Planck: Badlands Crew (Q1 FY26 release) ~50-60k copies sold, in-line with expectations. Dragon Shelter releasing Sep; demo live, wishlists ~130k (vs expectation), on track for full-year revenue target. Sovereign Tower: wishlists + followers exceeding expectations, in-line to exceed August revenue forecast.

Maxime: Margins depend on game performance, new features, seasonality. 'Not exactly sure' on FY27 growth. Have full flexibility to adjust EBITDA once revenue baseline grows. Year looks good so far but uncertain on final mix.

Nitish Mittersain: 'Not at this point of time.' (No guidance provided.)

Mayank Kumar (Sportskeeda CEO): Q1 in-line with internal expectations. Revenue will rise in Q2, more so Q3-Q4 (U.S. sports season peak). Three strategies: (1) diversify traffic/revenue from Google dependency via new distribution, (2) invest in Pro Football Network tool (independent of Google), (3) cost optimization. Already showing results.

Nitish: Optimistic on prospects. Love Island base game continues performing well. Growth currently only from base game; Big Brother + Traitors launches have potential to be as big or bigger. If executed correctly, Fusebox has significant runway not just this year but years to come.

Nitish: Most impairments are writeoffs on Moonshine remnant values, not NODWIN per se. Earlier wrote off 90%; after recent judgments, wrote off remaining balance completely.

Nitish: (1) Bluetile trajectory strong; performance payouts could hit 180% of committed amount—payouts may balloon. (2) Raymond as Nazara CEO; continued performance metrics for Bluetile only could create conflict/misalignment. (3) Under prior structure, 50% cash leak to founders; now 100% accrues to Nazara post-closing. Investment committee has full financing plan (not detailed on call).

Subject to final closing; already detailed structure ($89M at closing, $214M by Apr 1, 2027). Will lift consolidated revenue materially from Q2 onward.

Nitish explicitly deferred on Nazara consolidated guidance when asked by Bhavik Shah. Suggests uncertainty or need for more Bluetile data before committing.

Management claims UA spend elevation is profitable with strong LTV/CAC guardrails. Margins will recover as UAC normalizes. Timeline unspecified.

Maxime: 'Full flexibility' to adjust EBITDA once revenue baseline grows. 'Not sure yet' on timing. Depends on game performance and feature launches.

Susan: 27% Q1 margin is below full-year expectation and prior 40%. New titles expected to drive uptick. IronOak Games' For The King II also contributing uplift.

Includes stake increases in Funky Monkeys, SMAAASH 2.0 development/launch, store expansion. No further allocation until SMAAASH 2.0 PMF proven.

₹303M fixed cash payment due by Apr 1, 2027. Bluetile margin fell 17.6%→11%; management claims UA scaling deferral but timeline to recovery vague. Maxime said 'not sure yet, still beginning of year' on FY27 margin path.

Gaming segment EBITDA margins deferred due to UA spend rise (78%→85% Bluetile). Management defense is LTV/CAC-based, but scale unquantified. Revenue growth must justify continued high spend; if games disappoint, margin recovery delayed.

Sportskeeda revenue under pressure from Google traffic/revenue changes. Mayank's Q1 was 'in line with internal expectations' (implies muted baseline). Diversification to new channels + Pro Football Network investment underway, but timeline unspecified. Further deceleration risk until recovery visible.

Raymond Stauffer, Bluetile founder/CEO, assumes Nazara CEO role Sep 1, 2026 (post-quarter close). Proven track record at Bluetile (organic growth + acquisitions), but no experience managing diverse portfolio (gaming studios, Datawrkz, offline, etc.). Nitish transitions to strategy/M&A. Day-to-day execution dependency on new CEO unproven.

Bhavik Shah explicitly asked for Nazara consolidated FY27 revenue/EBITDA/margin guidance. Nitish replied 'Not at this point of time.' De facto guidance withdrawal vs prior call's bullish 'accelerate & expand' narrative. Suggests management uncertainty or desire to gather more post-Bluetile data before committing.