Affle 3i Ltd Management Discussions

Economic Overview

Global Economy

During CY2025, the global economy remained on a steady growth path, expanding by 3.4% due to strong private investments and easing inflationary pressures. Across regions, economic performance diverged with emerging markets and developing economies (EMDEs) growing by 4.4%, surpassing the 1.9% expansion in advanced economies. Additionally, a softer US dollar combined with coordinated global monetary policies encouraged consistent capital flows and strengthened demand in developing areas.

During the year, global inflation moderated to 4.1%, driven by lower energy costs and the normalisation of supply chains. This stabilisation supported corporate profit margins and resilient consumer spending. Global headwinds included the steady rise in trade tariffs and protectionist policies shifting global trade patterns. To counter increasing input costs and supply chain risks, companies actively shifted their sourcing strategies towards alternative, cost-effective manufacturing centres, ensuring access to competitively priced raw materials while building supply chain resilience.

Global Economic Outlook

Looking ahead, global trade growth is anticipated to moderate as the early advantages of supply chain adjustments level off and the delayed effects of tariffs start impacting retail prices. Protracted geopolitical conflicts require businesses to remain adaptable, prioritising regional supply networks and varied sourcing methods to mitigate potential risks.

Capital allocation towards artificial intelligence (AI) is projected to remain a major tailwind, driven by operational efficiency improvements. Across various sectors, industries are expediting their uptake of AI-driven tools for inventory management, process automation and demand forecasting to achieve better cost controls.

Additionally, accommodating fiscal policies and continuous improvements to logistics infrastructure in developed nations are set to accelerate the widespread integration of these advanced technologies.

Global GDP Growth Projections

Indian Economic Overview

Amidst a challenging external macroenvironment, the Indian economy remained resilient in FY 2025-26, achieving a GDP growth rate of 7.7%. Easing inflation, particularly in food prices, allowed the Reserve Bank of India to adopt a more accommodating monetary approach. By implementing cumulative rate cuts totalling 100 basis points during the fiscal, the policy rate dropped to 5.25%, substantially improving market liquidity and credit availability.

Manufacturing continued to be a key driver of economic expansion, with Purchasing Managers Index (PMI) figures indicating steady growth backed by robust order volumes and increased productivity. Industrial activity exhibited broad-based recovery, particularly within the automotive, IT and basic metals sectors.

On the demand front, private consumption grew by more than 7% driven by recovery in rural demand and targeted policy interventions. Rationalisation of GST further spurred spending across urban areas.

Indian Economic Outlook

India is undertaking structural efforts to strengthen the countrys innovation ecosystem. The Governments Research Development and Innovation (RDI) scheme, with an budget of _1 lakh crore, remains a strong incentive for private sector participation in advanced tech research and high-tech manufacturing. Further, the Union Budget 2026-27 rolled out tax holidays until 2047 for qualifying foreign greenfield investments in data centres, strengthening Indias status as a premier global hub for AI and cloud infrastructure. Indias growth outlook remains positive throughout FY 2026-27, supported by a favourable policy landscape, relaxed financial conditions and an ongoing recovery in the manufacturing sector. However, the nation continues to monitor prevailing headwinds including subdued investor sentiment driving FPI outflows amidst external uncertainties.

Conversely, Indias AI Mission is consistently boosting productivity and drawing foreign direct investment (FDI) into the economy. Along with the National Broadband Mission, this effort seeks to enhance connectivity through 2030, creating a steadily expanding and permanent market for digital advertising in historically underserved semi-urban and rural areas. Additionally, the Digital Swaraj Mission tackles critical security and economic risks by striving for self-reliance in vital tech domains like cybersecurity, AI and cloud computing by 2030.

	FY2025-26	FY2026-27
Metric	(Actual)	(P)
Real GDP Growth	7.7%	6.7%
(%)

Source –_RBI (AE), MoSPI

Digital Economy & Advertising Landscape

Digitisation

Digital transformation continues to drive economic value through two distinct channels. External value creation includes launching new business models and revenue streams to capture markets and stimulate fresh demand. Internal value is created through optimising organisational productivity, cost efficiency and operational execution.

Enterprises are expected to direct approximately 10% of their revenues toward digital transformation initiatives between 2025 and 2030. The growing investment will be driven by the imperative for enhancing customer experience, improving competitive differentiation, increasing operational agility and meeting regulatory compliance requirements. Growing sustainability commitments further influence investment priorities.

In line with these developments, mobile internet adoption continues to grow at a strong pace. Currently, 58% of the global population, equivalent to approximately 4.7 billion people, access the internet through personal mobile devices.

Global Mobile Economy¹

The global mobile ecosystem supports 8.8 billion wireless connections and 5.8 billion unique subscribers, representing approximately 70% of the worlds population. Driven by new technologies, the industry is transitioning toward intelligent, adaptive and value-added digital services. Next-generation mobile networks including 5G standalone architectures and the rapid integration of artificial intelligence are accelerating the transition.

Consequently, mobile operators are using core network capabilities, including network slicing and open APIs, to deliver differentiated services. The economic contribution of mobile technologies and services to global GDP is projected to grow from $ 7.6 trillion in 2025 (representing 6.4% of global GDP) to $ 11.3 trillion by 2030 (representing 8.4% of global GDP).

Mobile Technologies and Services Growth Projection

(in USD trillions)

2025 7.6

2030 11.3

Source: The Mobile Economy 2026, GSMA

Between 2025 and 2030, the services and manufacturing sectors are expected to account for roughly half of all growth linked to mobile-enabled technologies. This highlights their strong readiness to absorb and deploy advanced digital tools.

5G to 6G Transition

While 5G deployments are ongoing, the mobile industry and governments are already working to plan spectrum for 6G networks, which are expected to come into use in the 2030s. Channel sizes are projected to expand significantly, from 100 MHz in the 5G era to between 200 MHz and 400 MHz, reflecting the higher performance demands of next-generation networks. Spectrum harmonisation efforts in key bands such as 4.5 GHz and 7 GHz are already underway. By 2030, 57% of all mobile connections globally are forecast to operate on 5G, enabling high data speeds, near-zero latency and the massive IoT connectivity required to power the next generation of smart industries, autonomous systems and digital economies.

Artificial Intelligence

Agentic AI and generative AI (genAI) have become central to digital transformation strategies, enabling autonomous decision-making, predictive insights and real-time optimisation across industries.

AI is now embedded across virtually every device category. It enables real-time personalisation, content generation and more intuitive user interaction. This includes on-device AI powered by neural processing units (NPUs), hybrid AI models that distribute workloads across cloud and edge infrastructure and increasingly capable embedded AI assistants. As AI capabilities spread across device form factors, the device ecosystem is evolving into an interconnected network. In this network, context, personal data and real-time inference flow fluidly, enabling more unified, personalised and persistent user experiences. Telecoms operators have traditionally occupied the infrastructure layer of the digital value chain. In recent years, there has been a structural shift toward higher-value service domains. Operators are increasingly active in areas such as GPU as a Service (GPUaaS), AI platforms, the Internet of Things (IoT), and cloud gaming. This vertical expansion is a strategic response to slowing connectivity revenues and the need to capture value in AI-driven markets.

However, this shift is also reshaping the competitive landscape. As operators enter domains historically dominated by hyperscalers and enterprise IT vendors, they face greater competition, higher innovation requirements, and increased execution risk. The commercial model is also more complex. While AI-enabled services offer superior margin potential, they require significant investment in computing infrastructure, software ecosystems, and specialised talent.

Growth Drivers

Large Addressable Headroom

A significant connectivity gap remains globally. More than 3 billion people, representing just under 40% of the worlds population, are still not connected to the internet. This is despite the fact that 96% of the global population now lives within areas served by mobile broadband networks. The unconnected population includes women, rural communities, persons with disabilities, children and the elderly. This represents a large and largely untapped opportunity for digital growth.

Indias Digitisation Journey

Indias digital landscape is growing rapidly, supported by a young, technology-oriented population. The country has over 650 million smartphone users, and the number of internet subscribers has crossed 950 million². This widespread adoption is driving growth in sectors such as e-commerce, digital payments and fintech. Parallelly, significant investments are being made in AI, cloud computing and blockchain technologies further accelerating corporate digital maturity.

Improving Network Connectivity

While 4G has significantly improved connectivity, 5G is expected to further enhance network performance and enable advanced applications such as the Internet of Things (IoT) and smart cities. Indias digital economy is projected to reach a trillion-dollar valuation in the coming years, driven by expanding internet access, improved digital infrastructure, and a focus on rural areas.

Policy Environment

Government-led programmes are supporting the growth momentum of Indias digital ecosystem. Digital India, Skill India and the National Digital Communication Policy (NDCP) of 2018 aim to build strong digital infrastructure and expand broadband access across the country. The National Data Governance Framework and Production Linked Incentive (PLI) Schemes are further supporting innovation in electronics, smartphones and semiconductors.

In August 2023, India enacted the Digital Personal Data Protection Act. The associated implementation rules were notified in November 2025. While the law establishes a clear framework for data privacy, its compliance requirements and operational complexities present challenges, particularly for companies that depend on cross-border data flows.

India has established a strategic blueprint for future-ready innovation through the National AI Mission, the Semiconductor Mission and the Quantum Mission. These initiatives signal a strong intent to build a technology ecosystem ready for the next decade, aligning with the Viksit Bharat 2047 roadmap.

Outlook

As India targets USD 1.4 trillion in infrastructure spending by 2030, digital technologies are becoming a central component of this investment³. However, several challenges persist. Financial constraints continue to limit technology adoption, particularly among smaller firms. Data fragmentation across platforms and systems hampers integration and the generation of insights. A growing skills gap also poses a barrier to effective implementation.

Addressing these challenges will require focused efforts to make the digital transition inclusive, scalable, and secure. Investments in digital infrastructure, training programmes, and regulatory support will be critical. Collaboration between government, industry, and academia will be key to building an innovation-enabling ecosystem that supports long-term growth.

Growth Opportunities

India has the largest number of unconnected people globally. This group includes women, rural populations, persons with disabilities, children, and the elderly. Connecting these segments presents a significant opportunity for digital service providers.

On the regulatory front, the Indian government permits 100% Foreign Direct Investment (FDI) in business-to-business (B2B) eCommerce. It also allows 100% FDI in business-to-consumer (B2C) eCommerce under the automatic route, which does not require prior approval from the Reserve Bank of India (RBI) or the central government. This makes India an attractive destination for international investment in the digital sector. Significant opportunities also exist in the advanced wireless technology market. These opportunities are contingent on the Department ofTelecommunicationsdecisiontoopenspectrum capacity in the 6 Gigahertz (GHz) band to next-generation licence-exempt technologies such as Wi-Fi. Opening the entire 6 GHz band to Wi-Fi could support an additional $ 157 billion in market opportunities for technology suppliers in India. Indias push to become a global leader in AI also presents valuable opportunities for international firms to offer AI solutions, consulting services, and engage in research and development collaborations. The IndiaAI Mission aims to accelerate AI innovation and adoption by developing a strong AI infrastructure, including over 10,000 Graphics Processing Units (GPUs) and indigenous AI models.

Advertising Landscape

Global Digital Advertising Market⁴

The large and growing market for advertising is estimated at ~$ 1 trillion. In this market, digital advertising is estimated at approximately $ 690 billion. Driven by consumer attention shifting from traditional media to online platforms, and brands following this shift, the market has grown at a rate of 15% to 20% per annum over the past decade.

Digital advertising expenditure is outpacing traditional advertising spending in both mature markets like the United States and high-growth markets like India. As digital access proliferates, driven by the growing number of channels and formats, consumer attention remains increasingly fragmented across platforms.

In response, brands are adapting their strategies by diversifying media spend beyond traditional channels toward mobile- and platform-first ecosystems. Businesses are increasingly reallocating budgets toward mid- and lower-funnel tactics while intensifying their focus on personalised marketing. To sustain these initiatives, companies are turning to proprietary first-party data (FPD) assets to drive targeted consumer engagement, while scaling systematic experimentation through robust testing and learning (T&L) frameworks.

Adtech players, including demand-side platforms (DSPs), supply-side platforms (SSPs) and ad exchanges, are evolving to meet the demands of this changing ecosystem, with an increasing role in Indias digital advertising landscape.

With consumers spending more time on mobile devices, mobile account for ~ 70% of total digital advertising spend globally. In-app advertising accounts for the majority of this spend, with high-engagement video and newer ad formats that are native to the user experience gaining particular traction.

Generative AI applications are also expanding beyond creative production into areas such as campaign optimisation and audience modelling. Brands and publishers that move quickly to adopt these capabilities will be better positioned to deliver hyper-personalised consumer experiences and restructure their advertising operations accordingly. Driven by structural shifts, the global digital advertising market is expected to reach approximately 1% of global GDP by 2029.

The Expanding Role of Mobile Apps in the Global Advertising Ecosystem

Mobile applications have become the dominant surface through which consumers interact with digital services worldwide. In CY2025, users collectively spent 5.3 trillion hours across iOS and Android apps globally, a 3.8% increase year-on-year, with the average user spending 3.6 hours per day across 34 distinct apps per month. This depth of engagement — equivalent to more than 600 hours for every person on Earth during the year — underscores the degree to which apps have moved from supplementary touchpoints to primary digital infrastructure for media consumption, commerce, financial services and daily productivity.

The monetisation profile of the app economy shifted materially during the year. Global in-app purchase (IAP) revenue reached USD 167 billion, growing 10.6% y-o-y. For the first time, non-game applications surpassed games in IAP revenue, generating approximately USD 85.6 billion (+21% y-o-y) compared to USD 81.8 billion (+1% y-o-y) for games. This crossover was driven by broad-based revenue growth across verticals, led by Generative AI (+USD 3.5 billion), Movies & TV Shows (+USD 2.2 billion) and Social Media (+USD 2.1 billion). The trend reflects a structural willingness among consumers to pay for personalised, high-utility experiences delivered through app-native formats — a shift that directly benefits performance-oriented advertising models anchored on measurable in-app outcomes.

Generative AI emerged as a defining force within the app economy during CY2025. AI app downloads doubled y-o-y to reach 3.8 billion, while IAP revenue more than tripled to exceed USD 5 billion. Time spent in Generative AI apps reached 48 billion hours, roughly 3.6 times the level recorded in CY2024. AI Assistants accounted for all ten of the top apps by downloads in the category, with capabilities expanding rapidly from text-based interaction to image generation, content creation and context-aware personalisation — creating new advertising surfaces and engagement modalities across the mobile ecosystem.

These dynamics reinforce the value proposition for advertisers operating within mobile app environments. With consumers spending over 60% of their total mobile time within social media and messaging apps alone, and with emerging formats such as short-form video, AI-powered product discovery and quick commerce continuing to gain share, the in-app environment offers advertisers access to high-intent, high-frequency consumer engagement at scale. As app-based digital engagement deepens globally, particularly in high-growth markets such as India, the mobile app ecosystem continues to expand as the most significant channel for precision-led, conversion-driven advertising.

India Digital Advertising Market

Indias total advertising spend, currently at approximately 0.4% of GDP, is projected to reach 0.5% of GDP by 2029. The expected advertising spend growth of 10% to 15% per annum is projected to outpace Indias GDP growth rate of 6% to 7% over the same period, reflecting robust growth outlook. Indias digital advertising market is expanding rapidly, supported by broad-based consumption growth, favourable demographic trends and strong digital adoption across the country. The market is expected to grow at approximately 15% per annum between 2024 and 2029.

Source: Bain & Company

Digital advertisings share of total advertising spending in India is projected to increase by 5 to 10 percentage points, from approximately 50% to 60% in 2024, to 60% to 70% by 2029. The primary growth drivers include rising consumption, high rates of digital media consumption, the emergence of new platforms such as over-the-top (OTT) video services, and the continued expansion of high-speed internet coverage.

Small and medium enterprises (SMEs) are playing an increasingly important role in Indias digital advertising market. Their share of digital advertising expenditure has grown from approximately 35% in 2020 to 37% in 2024, and is expected to reach 40% to 42% by 2029.

Mobile devices continue to dominate advertising spend. As consumers in India and globally favour smartphones for media consumption, mobile devices account for nearly 70% of total digital advertising expenditure, equivalent to close to $ 470 billion globally. Connected TV (CTV) is also gaining share, from the current level of 10% of digital advertising spend. CTVs growth is driven by rising smart TV penetration and access to premium audience segments. The number of CTV households in India has grown from 20 million in 2022 to nearly 45 million in 2024.

Media consumption patterns are also evolving. Three in four internet users today consume short-form video content, reflecting a broader shift in audience preferences towards on-demand and format-specific content. Over the next five years, video ads are expected to witness an increase between 6 to 8 percentage points, from a current share of 35% to 40%, both globally and in India. Parallelly, traditional search advertising is expected to see a partial shift toward AI-powered search engines and AI summary advertisements, reflecting the broader adoption of AI across digital platforms.

Business Overview

Affle 3i Limited is a global technology company enabling verticalised AI-led consumer conversions for advertisers globally, powered by the differentiated CPCU business model across Mobile, CTV and other agentic/autonomous intelligent connected devices (AICDs). With over two decades of operations, Affle 3is Consumer Platform Stack has a reach of over 4 billion+ connected devices across the globe. Affle enables advertisers to optimise targeting, personalise user engagement and maximise ROI by combining proprietary data, deep audience intelligence and advanced generative AI capabilities.

Affle 3i Consumer Platform delivers verticalised solutions across industries and geographies at scale, helping marketers engage with audiences in more relevant and meaningful ways. With innovative technology integrations, Affle maximises user engagement at every stage of the consumer journey across connected devices. Its AI-powered agents and algorithms go beyond automation and efficiency to deliver next-gen experiences through deep human-vs-non-human data distillation.

In FY 2025-26, we entered our third decade with conviction on the 10X growth roadmap, making meaningful progress in deepening the 3^rd i — Intelligence, leveraging advanced AI technologies to further enhance our Consumer Platform offerings. After launching AI-driven hyper-contextual creative generation in the beginning of the year, intelligence is now embedded across every layer of campaign execution — helping advertisers reach higher-intent audiences and drive stronger conversion outcomes.

Consumer Platform

Affle 3i Consumer Platform Stack is the engine behind its CPCU business model — built to drive measurable, deep-funnel consumer conversions across every stage of the advertiser-consumer journey. Powered by proprietary AI, first-party data integrations and a 4 billion+ Audience intelligence, the platform delivers precision targeting and personalised engagement at scale across industry verticals. The Consumer Platform Stack enables three core conversion outcomes for advertisers:

New User Conversions — acquiring high-intent consumers through AI-powered targeting across Mobile, CTV and AICDs, driving measurable first-time engagements and transactions.

Repeat User Conversions — re-engaging existing audiences with personalised, contextually relevant experiences that bring consumers back to conversion.

Branding and O2O Conversions — connecting digital brand engagement with real-world consumer actions, bridging online interactions with in-store visits and offline transactions.

Unique Revenue Model

Our revenue engine is anchored on the Consumer Platform Stack, operating on the differentiated Cost Per Converted User (CPCU) business model. This performance-led approach is built around human-driven consumer engagements across New User Conversions, Repeat User Conversions, and Branding and O2O Conversions. Unlike impression or click-based models, the CPCU business model delivers what every advertiser ultimately wants — verified, measurable consumer conversions that translate directly into business outcomes. The majority of revenue is derived from advertisers performance marketing spends, where payments are linked to specific, verifiable conversion events. By deepening first-party data integrations directly with advertisers across industry verticals, this alignment compounds over time, building long-term advertiser relationships anchored on trust and consistently demonstrated ROI. Additional revenue may be generated by brand awareness campaigns (non-CPCU business) executed through our Consumer Platform

Financial Overview

Consolidated Financial Results

In INR million	FY2025-26	FY2024-25	Change (%)
Revenue from contracts with customers	27,093.09	22,663.08	19.5%
Inventory and data costs	16,798.18	RIGHT>13,793.14	21.8%
Employee benefits expense	2,512.20	2,312.66	8.6%
Other expenses	1,682.15	1,725.67	-2.5%
EBITDA	6,100.56	4,831.61	26.3%
% EBITDA margin	22.5%	21.3%
Depreciation and amortisation expense	1,243.76	966.98	28.6%
Finance costs	52.62	125.91	-58.2%
Other income	782.49	937.65	-16.5%
Profit Before Tax (PBT)	5,586.67	4,676.37	19.5%
Less: Total tax expense	1,038.16	857.68	21.0%
Profit After Tax (PAT)	4,548.51	3,818.69	19.1%
% PAT margin	16.3%	16.2%

Key Ratios

Key ratios	As of March 31, 2026	As of March 31, 2025
Return on Net Worth (%)	13.8%	14.0%
Operating Profit Margin (%)	17.9%	17.1%
Total debt/equity (x)	0.003x	0.03x
Days Sales Outstanding (DSO)	96	89
Interest coverage ratio (x)1	92.3x	30.7x
Current ratio (x)	3.6x	3.5x
Diluted earnings per share (INR)	32.32	27.19

Unlike previous year, Return on Net Worth (RoNW) calculation has not been adjusted to show fair comparison. Minor decline in RoNW is majorly attributable to the increase in Retained earnings and ESOP allocations during the year Note 1: Interest coverage ratio has improved on account of Debt repayments during the year, as well as increase of 25.7% in the Operating profits of the company.

Consolidated Results of Operations

Revenue profile

Our total revenue consists of

(a) Revenue from contracts with customers and

(b) Other income.

In INR million	FY2025-26	FY2024-25	Change (%)
Revenue from contracts with customers	27,093.09	22,663.08	19.5%
Other income	782.49	937.65	-16.5%
Total revenue	27,875.58	23,600.73	18.1%

The Company reported Revenue from contracts with customers of INR 27,093.09 million and total revenue of INR 27,875.58 million in FY2025-26, an increase of 19.5% and 18.1% respectively as compared to FY2024-25.

Other income decreased by 16.5% to INR 782.49 million in FY2025-26 from INR 937.65 million in FY2024-25. This was primarily due to decrease in fair value gains on financial instruments as compared to FY2024-25.

Total expense

Our total expenses comprise of:

(a) Inventory and data costs;

(b) Employee benefit expenses;

(c) Finance costs;

(d) Depreciation and amortisation expenses; and

(e) Other expenses.

In INR million	FY2025-26	FY2024-25	Change (%)
Inventory and data costs	16,798.18	13,793.14	21.8%
Employee benefit expenses	2,512.20	2,312.66	8.6%
Finance costs	52.62	125.91	(58.2%)
Depreciation and amortisation expenses	1,243.76	966.98	28.6%
Other expenses	1,682.15	1,725.67	-2.5%
Total expenses	22,288.91	18,924.36	17.8%

We incurred INR 16,798.18 million in inventory and data costs during FY2025-26, representing 62.0% of our revenue from contracts with customers as compared to 60.9% in FY2024-25 as we continue to invest strategically in premium inventory and data capabilities to deepen verticalised advertiser integrations and expand our Consumer Platform Stack across connected devices.

Employee benefits expense increased by 8.6% in FY2025-26 as compared to FY2024-25, reflecting expansion of our teams in newer / existing markets, balanced by efficiencies from our ongoing AI investmentsandintelligentautomationacrossworkflowsthatcontinuedtosupportproductivitygains. Finance costs declined significantly by 58.2% to INR 52.62 million in FY2025-26, on account of reduction of interest cost due to repayment of existing borrowings and the Companys continued focus on maintaining a lean balance sheet.

Depreciation and amortisation expenses increased by 28.6% to INR 1,243.76 million in FY2025-26, primarily due to the amortisation of intangible assets and new technology modules developed in the current year.

Other expenses declined by 2.5% to INR 1,682.15 million in FY2025-26 as compared to FY2024-25, reflecting disciplined cost management across business operations.

Profitability

In INR million	FY2025-26	FY2024-25	Change (%)
Profit After Tax (net of non-controlling interest)	4,548.51	3,818.69	19.1%
% PAT margin	16.3%	16.2%

Profit Before Tax stood at INR 5,586.67 million in FY2025-26, an increase of 19.5% y-o-y. Profit After Tax (net of non-controlling interest) grew by 19.1% y-o-y to INR 4,548.51 million for FY2025-26 as compared to INR 3,818.69 in FY2024-25

Consolidated Financial Position (Balance Sheet)

Total shareholders equity

In INR million	As of March 31, 2026	As of March 31, 2025
Equity share capital	281.20	280.71
Other equity attributable to equity holders of the parent	36,240.93	29,183.86
Total equity	36,522.13	29,464.57

The paid-up equity share capital of the Company as of March 31, 2026 was INR 281.20 million comprising 140,757,384 equity shares of face value INR 2/- each. The difference in the paid-up equity share capital of the Company for the year under review as compared to the previous year was on account of 261,074 new shares issued by the Company during FY2025-26, partially offset by 12,415 treasury shares (net) held by the Companys ESOP trust.

Other equity attributable to equity holders of the parent increased by 24.2% on a y-o-y basis. This increase was primarily driven by growth in retained earnings of 33.6% and increase in Other reserves of 179.5% on a y-o-y basis, while Securities premium and other components under Other equity remained broadly the same on a y-o-y basis.

Debt position (short-term and long-term borrowings)

In INR million	As of March 31, 2026	As of March 31, 2025
Current borrowings	99.79	665.55
Non-current borrowings	19.18	106.61
Total Debt	118.97	772.16
Total Debt/Equity (x)	0.003x	0.03x

Total debt for the Company as of March 31, 2026 was INR 118.97 million and the debt-to-equity ratio was 0.003x as of March 31, 2026. The decrease in the Companys debt was primarily on account of the repayment of existing loans during the year under review. The Company did not undertake any new borrowings during the year.

Assets position (Line items with significant changes)

In INR million	As of March 31, 2026	As of March 31, 2025
Current assets (key line items)
Cash and cash equivalent	12,074.35	10,474.81
Other Bank Balance	866.33	3,442.18
Other Financial Assets	3,446.18	174.30
Trade receivables (net)	3,856.13	2,985.56
Contract assets (net)	3,240.76	2,531.44
Investment held for sale	1,346.32	1,346.32
Other current assets	1,514.25	784.42
Non-current assets (key line items)
Goodwill	11,123.88	10,083.46
Other intangible assets	2,744.08	2,043.84
Intangible assets under development	1,306.63	1,114.66
Investments	1,138.67	628.57

Cash and cash equivalent increased to INR 12,074.35 million as of March 31, 2026 from INR 10,474.81 million as of March 31, 2025 primarily on account of net cash generated from operations.

Other Bank Balance decreased to INR 866.33 million from INR 3,442.18 million as the company parked surplus funds in fixed deposits, resulting in a corresponding increase in Other current and non-current Financial Assets, which increased to INR 4,466.71 million as of March 31, 2026 from INR 204.39 million as of March 31, 2025.

Trade receivables increased to INR 3,856.13 million as of March 31, 2026 from INR 2,985.56 million as of March 31, 2025 primarily due to increase in overall operations of the Company.

Contract assets (net) comprise of revenue that is not yet billed to customers. The contract assets as a percentage of revenue from contracts with customers was 11.9% for FY2025-26.

Other current assets increased during the year under review primarily on account of increase in balance with statutory/government authorities and advances given to vendors in the ordinary course of business.

Goodwill increased to INR 11,123.88 million as of March 31, 2026 from INR 10,083.46 million as of March 31, 2025, primarily on account of foreign exchange difference.

Other intangible assets and Intangible assets under development increased to INR 4,050.38 million as of March 31, 2026 from INR 3,158.50 million as of March 31, 2025 primarily due to INR 2,111.00 million added majorly on account of new technology modules developed or under the development phase. This increase was partially offset by amortisation of other intangible assets amounting to INR 1,190.99 million charged during FY2025-26._

Liquidity and Capital Resources (consolidated)

Cash flows position

In INR million	FY2025-26	FY2024-25
Net cash generated from/(used in)
a. Operating activities	5,023.49	4,259.91
b. Investing activities	(3,736.21)	(1,137.12)
c. Financing activities	(432.73)	(918.13)
Net change in cash and cash equivalent (a+b+c)	854.55	2,204.66
Net foreign exchange difference	744.99	219.14
Cash and cash equivalent as at the beginning of year	10,474.81	8,051.01
Total cash and cash equivalent as at the end of year (excluding other bank balance)	12,074.35	10,474.81

Our liquidity requirements arise principally from our investment and financing activities, primarily due to investment in tangible and intangible assets, acquisition of businesses / strategic investments, investment in long term deposits and repayment of borrowings.

Our net cash flows generated from operating activities were INR 5,023.49 million during FY2025-26 as compared to INR 4,259.91 million during FY2024-25. Our cash and cash equivalents as of March 31, 2026 stood at INR 12,074.35 million. The Companys liquidity position remains strong, supported by consistent increase in cash generated from operations and disciplined capital allocation.

This increase was primarily driven by

(a) increase in Profit Before Tax adjusted for non-cash items such as depreciation and amortisation expense, unrealised foreign exchange (gain) / loss, and share based payments; further adjusted for changes in working capital and direct taxes paid (net of refunds),

(b) redemption of bank deposits having original maturity of more than three months, and

(c) proceeds from issue of share capital under ESOP scheme.

However, the above increases were partially offset by

(a) increase in purchase of property, plant and equipment, other intangible assets including intangible assets under development,

(b) investments in bank deposits having original maturity of more than three months

, (c) purchase of investments,

(d) payment for acquisition of subsidiary,

(e) interest expense; and

(f) repayment of borrowings.

Human Resource

Human Resources Review

Our people are the foundation of everything we build. Advancing our technology, products and services y-o-y is only possible because of the commitment and capability of our teams. We are deliberate in creating a workplace that nurtures inclusive growth, encourages thought leadership and invests in the long-term development of every Affler.

Our human resource strategy is structured around five key pillars:

1. Upholding ethical and fair practices

Integrity is non-negotiable across all our operations. We hold ourselves to the higheststandardsoffairness,transparency and accountability in everything we do.

2. Encouraging diversity and inclusion

We actively build teams that reflect a diversity of backgrounds, perspectives and experiences — because we believe this breadth of thought is what drives genuine innovation.

3. Performance-linked compensation

Our compensation philosophy is merit-driven and competitive, designed to attract, retain and reward the individuals whose work moves the Company forward.

4. Recognition and reward culture

Outstanding contributions deserve to be celebrated. We have built a culture of consistent recognition that keeps teams motivated and sustains a high-performance environment.

5. Ongoing learning and development

The technology landscape moves fast. We invest continuously in training across technical, functional and leadership domains to ensure every Affler grows alongside the industry.

As of March 31, 2026, our total workforce including contractual staff and full-time consultants stood at 626 employees. Of this, 163 were engaged in Research and Development and Technology, 197 in Data Platforms and Operations, 171 in Sales and Marketing, 84 in General Administration and 11 formed part of the Management team. Women represent 38.7% of our workforce and men account for 61.3%, reflecting our ongoing commitment to building a diverse and inclusive organisation. We continue to champion a workplace built on safety, respect and equal opportunity. During the year, we conducted training sessions on Prevention of Sexual Harassment, Human Rights, Anti-Corruption and Anti-Bribery, reinforcing our commitment to an environment where every individual is treated with dignity and empowered to thrive. Our focus on skill development remained strong, with targeted programmes introduced to support continuous learning and keep our teamsreadyforanevolvingindustrylandscape. We consistently acknowledge and celebrate the outstanding contributions of our Afflers, strengthening a culture rooted in excellence and continuous improvement. By investing in the development and well-being of our workforce, we enable individual growth while collectively advancing the organisation towardsitsbroadermissionandstrategicgoals. For further details on our human capital initiatives and strategies, please refer to the People section of this Integrated Annual Report on page no 74 to 81.

Threats, Risks and Concerns

Effective risk management is central to how we run our business — embedded into our strategic planning and day-to-day decision-making. As a global technology company operating across diverse geographies and industry verticals, we are exposed to a wide spectrum of external and internal risks. These include macroeconomic uncertainties, geopoliticaldevelopments,rapidtechnological change, shifting regulatory environments and the growing challenge of agentic AI-driven non-human traffic in the digital advertising ecosystem. Left unaddressed, these risks have the potential to materially impact our performance, financial stability and long-term sustainability.

To address these challenges, we have implemented a robust risk management framework that enables structured identification of potential risks, assessment of their implications and development of comprehensive mitigation plans. This framework safeguards our assets, brand reputation and financial stability, while ensuring alignment with international regulatory standards. Our Business Heads and Support Function Heads are responsible for building effective internal controls within their respective functions, with risks addressed through an institutionalised approach aligned to the Companys objectives.

Our forward-looking approach to risk management goes beyond mitigation — it actively helps us identify and act on emerging opportunities, keeping Affle resilient, adaptive and competitive as market dynamics continue to evolve.

For a comprehensive overview of the key risks we face and the corresponding mitigation strategies, please refer to the Risk Management section of this Integrated Annual Report. We encourage readers to review this section closely, as these risks may have the potential to significantly impact our business performance, financial position and future outlook.

Internal Control Systems and their Adequacy

Affle operates well-established Internal Control Systems,commensuratewiththesize,scaleand nature of its business. Stringent controls and processes are in place to monitor and manage operations across all markets, designed to provide reasonable assurance with regard to maintaining proper accounting controls, ensuring the reliability of financial reporting, protecting assets from unauthorised use or loss, and ensuring compliance with applicable regulations. For FY2025-26, Protiviti Global Business Consulting, an external independent agency, carried out the internal audit to assess the adequacy of the internal control system, verify compliance with applicable rules and regulations and confirm adherence to management policies.

The Internal Auditor reports to the Audit Committee, chaired by an Independent Director of the Board, to preserve independence. The Internal Audit team conducts quarterly audits that include a review of how effectively internal controls are operating. The Audit Committee reviews the Internal Auditors report quarterly, prompting process owners to take corrective action in their respective areas and strengthen controls accordingly.

The Risk Management Committee oversees the overall process of risk management throughout the organisation. Business Heads and Support Function Heads are responsible for establishing effective internal controls within their respective functions. Business units and corporate functions address risks through an institutionalised approach aligned to the Companys objectives.

Growth Strategy and Outlook

Affle enters the next phase of its third decade with clear strategic conviction and a well-defined path to its 10X growth vision. The growth agenda is anchored on deepening Verticalisation through direct-to-advertiser relationships and first-party data integrations, expanding the reach and intelligence of the Consumer Platform Stack through its 4 billion+ audience stack, and increasing our footprint in developed markets to build a stronger, more balanced global presence. This strategy is built to compound — where deeper verticalisation drives better conversions, better conversions strengthen advertiser relationships, and stronger advertiser relationships expand our platform intelligence over time. At the heart of this is Affles differentiated ability to deliver verified, human-driven consumer conversions. As agentic AI proliferates across the digital ecosystem, our human-vs-non-human data distillation capabilities ensure that every conversion delivered is authentic and meaningful — making Affle the trusted, precision-first choice for advertisers who demand real, accountable outcomes.

We will continue to invest in R&D, deepen our global partnerships and unlock opportunities across high-growth geographies and industry verticals, delivering measurable and lasting value for all our stakeholders.

Cautionary Statement

Certain statements in this Management Discussion and Analysis Report concerning the future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks and uncertainties relating to these statements include but are not limited to, risks and uncertainties regarding fluctuations in earnings, ability to manage growth, intense competition in our industry including those factors which may affect the Companys cost advantage, seasonality of the business, wage increases, Companys ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, client concentration, Companys ability to manage its international operations, Companys ability to successfully complete and integrate potential acquisitions, liability for damages on Companys contracts, the success of the companies in which Affle has made strategic investments, political instability, legal restrictions on raising capital or acquiring companies outside India and unauthorised use of our intellectual property and general economic conditions affecting our industry or the global economy.