Affle India Ltd Management Discussions

ECONOMIC OVERVIEW

Global Economic Review

In CY2024, the global economy remained resilient and global GDP grew by 3.3%. This growth was facilitated by stable consumer demand, moderating inflation and supply chain efficiencies. Inflationary pressure continued to ease across most regions. Global headline inflation declined to 5.7% in CY2024 from 6.6% in CY2023, aided by stabilising energy prices, improved supply chain conditions and effective monetary actions. Central banks worldwide initiated gradual reduction in interest rates, aiming to balance growth with inflation control.

Emerging markets and developing economies (EMDEs)

EMDEs continued to outpace their developed counterparts and recorded a growth of 4.1% in CY2024 and are further expected to grow at 3.7% in CY2025. Growth in these regions was largely driven by strong domestic consumption, structural reforms and digital transformation, particularly in Asia. Emerging and Developing Asia, led by India, remained the most dynamic region, benefiting from robust internal demand and government-led investment initiatives. In contrast, growth in China moderated as the country faced prolonged weakness in the real estate sector and the impacts of renewed trade restrictions. Latin America and Sub-Saharan Africa witnessed marginal improvements supported by commodity price stabilisation and enhanced agricultural output. However, currency depreciation and rising debt servicing costs posed threats for some EMDEs. Despite challenges, these economies showcased resilience by advancing structural reforms to boost investments and economic stability.

Developed economies

In CY2024, Developed economies demonstrated divergent growth trajectories as they navigated high interest rates, elevated inflationary trends and evolving trade policies. The US economy grew by 2.8% in CY2024 owing to strong consumption.

However, the economy is forecasted to record a growth of 1.8% in CY2025 due to policy uncertainties and heightened trade frictions. The economic activity in Europe remained subdued. Cautious household spending and sustained energy price pressures hampered growth. The region witnessed a growth of 0.8% in CY2024 and is projected to grow by 0.8% in CY2025. Despite these challenges, labour markets stayed relatively robust and fiscal frameworks remained supportive in key economies.

Global outlook

Looking ahead, the global economy is projected to grow at a measured rate of 2.8% in CY2025 and 3.0% in CY2026. Continued easing of inflation, stable consumption, sustained infrastructure and digital investments are expected to support growth. Global inflation is projected to decline further, reaching 4.3% in CY2025, a projected decline of about 140 basis points over CY2024. In addition, stable oil prices and decline in food inflation and accommodativepolicysupportareexpectedtocreate an atmosphere conducive to growth. However, the implementation of tariffs by the US administration and ongoing geopolitical uncertainties continue to pose threats to the stability of global trade.

GDP growth

Global

CY2026	3.0%
CY2025	2.8%
CY2024	3.3%
Developed Economies
CY2026	1.5%
CY2025	1.4%
CY2024	1.8%
Emerging Markets and Developing Economies
CY2026	3.9%
CY2025	3.7%
CY2024	4.3%

Source: IMF

Source: https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/ -economic-outlook-april-2025

Indian Economic Review

The Indian economy maintained its position as one of the fastest-growing major economies in FY2024-25 and recorded an estimated growth of 6.5%. This growth was propelled by robust domestic demand, digital infrastructure expansion and government-led capital expenditure. Steady performance was observed across sectors such as services, manufacturing and agriculture. The services sector remained the backbone of the economy with contribution of around 75% to Gross Value Added (GVA) in FY2024-25. In the Union Budget 2024-25, the government allocated INR 11.11 lakh crore for capital expenses, which was about 3.4% of Indias GDP.

Retail headline inflation eased from 5.4% in FY2023-24 to 4.6% in FY2024-25. This decline was supported by stable food prices and proactive monetary policies. The Reserve Bank of India reduced the repo rate to 6% in April 2025, augmenting liquidity and enhancing the credit flow within the economy.

Outlook

The GDP growth of the nation is expected to remain at 6.5% for FY2025-26, driven by robust private consumption, increment in private investments and continued policy support. The services sector is expected to stay strong and the manufacturing sector is expected perform better with energy costs coming down. Rapid digital adoption, fuelled by affordable mobile data, expanding smartphone usage and increasing rural connectivity, is expected to further strengthen the digital economy. Consumer Price Index (CPI) inflation is expected to come down to 4% in FY2025-26, supported by stable global commodity prices and improved domestic food supply. The country is well positioned to handle challenges, supported by strong fundamentals and strategic government initiatives. However, the evolving tariff scenario continues to pose challenges to the trade sector. In response, the government is maintaining a strict oversight and is implementing actions to mitigate the situation. Positively, India has recently concluded a historic Free Trade Agreement (FTA) with the United Kingdom, which will boost strategic and economic ties between the fifth and sixth largest economies in an era of geopolitical uncertainties.

Source: https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/0BULL220420 25F03F83AE118C4B3B84E662D980C8DE33.PDF https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2120509

INDUSTRY STRUCTURE, DEVELOPMENTS AND OPPORTUNITIES

Digitisation: The Catalyst for Sustainable Growth

The expedited adoption of digital technologies continues to reshape industries, economies and everyday interactions. Digitisation, one of the most influential current global megatrend is playing a crucial role in driving productivity, promoting innovation and paving the way to new opportunities of growth. It enables businesses to optimise operations and expand their reach through data-driven insights and digital platforms. Sectors such as mobile marketing and e-commerce have witnessed rapid transformation with the advent of AI and automation, allowing for more personalised and engaging consumer experiences. In addition, the digital shift is redefining employment, by shaping emerging opportunities in areas such as, data analytics, cybersecurity and artificial intelligence. However, the rise of digital systems also brings focus on ensuring data privacy, ethical usage and the need for inclusive digital access. When harnessed responsibly, digitalisation has the potential to drive inclusive growth, economic resilience and sustainable development, making it a foundation of future-ready societies and businesses.

Source: https://www.globalreporting.org/media/s5kogs1e/the-impact-of-digitalization_-identifying-emerging-challenges-and-opportunities-for-sustainability-reporting.pdf

Global Mobile Economy

The global mobile industry continues to be at the forefront of the digital revolution. In CY2024, it contributed an estimated 5.8% to the global GDP, translating to USD 6.5 trillion in economic value. The expanding footprint of mobile internet connectivity has transformed how people connect, communicate and access services worldwide. By the end of CY2024, 5.8 billion individuals were subscribed to mobile services globally, highlighting its widespread impact. Thevastexpanseofmobileserviceshassignificantly enhanced the accessibility of information, services and has eased the process of tapping into new opportunities. However, an estimated 3.4 billion people residing in areas with mobile broadband coverage still do not use mobile internet. This shows there is big potential for more people to come online. Unlocking this untapped potential offers immense scope to expand addressable market, create new revenue streams and drive the next phase of mobile industry growth.

USD 6.5 trillion

Economic value added by the mobile sector to the global economy in CY2024

Penetration of 5G Technology

The share of mobile connections based on 4G is beginning to wane as 5G technology gains momentum globally. By December 2024, 305 operators across 121 countries had already deployed commercial 5G mobile service, marking a shift in global mobile infrastructure. More countries are expected to follow suit, with 80 operators from 60 markets having already announced plans to launch 5G in the near future.

The rollout of 5G technology is revolutionising digital marketing by enabling faster, more reliable internet connections. This advancement further allows businesses to deliver high-quality and interactive content such as augmented reality and real-time video streams. These developments significantly enhance user engagement. Consumers spending more time on digital spaces. This presents marketers with the opportunity to leverage 5Gs capabilities to provide personalised and immersive advertisements, leading to higher engagement rates and heightened digital ad spending. Additionally, 5G facilitates real-time data processing, enabling immediate adjustments to marketing strategies based on current trends and user behaviour. This dynamic shift is reshaping the digital marketing landscape, enabling companies to effectively connect with their audiences and drive sustained growth.

Source: https://www.gsma.com/solutions-and-impact/connectivity-for-good/mobile-economy/ https://www.cloudi5.com/blog/the-future-of-digital-marketing-with-5g-technology-338

The AI Opportunity

Artificial Intelligence (AI) is emerging as a key catalyst in accelerating global digitization, driving innovation across industries and reshaping the way businesses, governments and consumers interact with technology. By enabling intelligent automation, advanced data analytics and hyper-personalized experiences, AI is creating new digital ecosystems that are faster, more efficient and more connected. From powering next-generation smart cities and autonomous systems to enhancing digital healthcare, education and commerce, AI is unlocking possibilities that were previously unimaginable.

AIs ability to process vast volumes of structured and unstructured data in real-time is enabling organizations to make smarter decisions, innovate faster and deliver highly tailored digital solutions at scale. It is also instrumental in driving advancements in areas like robotics, cybersecurity, natural language processing and predictive intelligence, further propelling the global digital transformation.

Within the broader digital economy, AI is also subtly reshaping consumer engagements and marketing strategies. By enabling more personalized and data-driven outreach, AI enhances user experiences and strengthens the value of digital ecosystems. However, in this context, its role extends far beyond marketing, serving as the foundation for building intelligent, agile and future-ready businesses in an increasingly digitized world.

Key Drivers of AI-led Digitization

Intelligent automation accelerating operational efficiency across industries

Real-time data processing and predictive insights enabling faster decision-making

Hyper-personalized experiences transforming consumer engagement and services

AI-poweredadvancementsinareaslikesmart infrastructure, healthcare and cybersecurity

Source: https://community.nasscom.in/communities/ai/impact-ai-digital-marketing

Indias Digital Transformation

India is steadily moving forward in its digital journey and is now one of the most digitalised countries in the world, behind only the US and China. This progress is measured through the CHIPS framework, which is Connect, Harness, Innovate, Protect and Sustain which looks at how deeply digital technologies are used across the country. Indias digital growth is clearly visible in its strong internet network and public digital services. The cost of mobile data in India has become much more affordable over the years, making internet access easier for a large part of the population. As a result, data usage has increased significantly and is expected to grow even further in the coming years. Digital business is growing fast too. In 2024, India spent INR 40,800 crore on digital ads, more than what was spent on television ads. Digital ads now make up 41% of total ad spending, with 78% of that spent on mobile platforms. Popular formats like short videos, social media posts and search ads are leading this change.

At the same time, India is investing in newer technologies like AI, Connected TVs and environment-friendly digital tools. Sectors like FMCG and e-commerce, which together account for over 60% of total digital ad spending, are growing fast by using these digital tools to reach customers. Government programs like Digital India and Startup India are also helping businesses go online and create jobs. By 2025, Indias digital economy is expected to be worth USD 1 trillion and support 60–65 million digital jobs.

Indias digital transformation continues to accelerate, supported by a growing ecosystem of Digital Public Infrastructure (DPI) solutions. The rapid proliferation of high-speed mobile internet and the swift rollout of 5G are unlocking new use cases across sectors, from immersive entertainment to AI-powered enterprise solutions. Going beyond foundational platforms like Aadhaar, innovations such as Unified Payments Interface (UPI), DigiLocker and Account Aggregators are redefining how citizens and businesses interact with digital services. This digital shift is not only enhancing access to essential services but also fueling innovation in fintech, e-commerce, education, and healthcare. As public and private sectors collaborate to deepen digital integration, India is steadily shaping a resilient, inclusive, and innovation-driven economy poised to harness the next wave of technological opportunities.

Indias Online Usage – Key Numbers and Trends

Internet users and smartphone subscribers

The internet landscape of India reflects the growth of a tech-proficient and young consumer base. With nearly half of its population below the age of 25, the country is rapidly embracing technology to augment daily convenience and access to services. As of 2024, India had around 970 million internet users which is expected to cross 1 billion users and approximately 690 million smartphone subscribers. These highlight the scale of adoption and the vast potential for further digital inclusion in the years ahead.

Emergence of non-traditional devices

As Indias young consumer base continues to accelerate digital inclusion, it is reshaping media consumption patterns. Driven by greater internet accessibility, evolving consumer preferences and technological advancements, more people are moving away from traditional cable and satellite TV in favour of consuming content exclusively through digital platforms. This shift is fuelling the increased adoption of non-traditional devices such as Smart TVs, Smart Speakers, Firesticks, Chromecasts, Blu-ray players and Gaming Consoles. Notably, Connected TV usage is accelerating, with its user base expected to double from 20 million in 2023 to 40 million by 2026. This growing ecosystem of internet-enabled devices underscores the broader transition toward on-demand, multi-device digital consumption.

Pan-India Adoption of Non-traditional Devices (In %)

Growth of smartphone and internet usage in India

The growth of smartphone and internet usage in India is fuelled by a combination of affordable mobile data, the widespread availability of budget-friendly smartphones and expanding digital infrastructure. Data prices have fallen dramatically from INR 225 per GB in 2016 to around INR 17 per GB in 2024. India continues to offer some of the most cost-effective data rates globally. This affordability has played a crucial role in making internet access more inclusive, particularly across rural and semi-urban areas. As a result, average monthly data consumption per user almost doubled from 10 GB in 2019 to 19 GB in 2024 and is projected to reach 66 GB by 2030. Rising digital literacy, greater availability of regional content and government-led initiatives like Digital India have further driven smartphone adoption, positioning India as one of the fastest-growing digital consumer markets in the world.

Average Monthly Data Usage (GB)

2024	19 GB
2023	17 GB
2022	15 GB
2021	13 GB
2020	12 GB
2019	10 GB

The rise of GenZ and evolving digital consumption patterns

GenZ and young millennials are playing a pivotal role in reshaping Indias digital ecosystem, not just through their high engagement but also by redefining online behaviour. While this cohort continues to dominate platforms like Instagram, YouTube and Snapchat, recent trends indicate a gradual shift away from traditional social media toward more authentic, immersive and purpose-driven digital experiences. They increasingly prefer gaming, short-form videos, live streams and interactive formats that offer instant value and entertainment, leading to rising adoption of AR filters, AI-driven content recommendations and niche interest-based platforms. With high smartphone penetration and growing spending power, GenZ is influencing everything from e-commerce to content formats, compelling brands to adopt more experiential and gamified strategies to remain relevant and build lasting brand loyalty.

STATE OF DIGITAL ADVERTISING

Global Digital Advertising Market

The global advertising industry witnessed robust growth of 6.8% in 2024, reaching a total ad spend of USD 772.4 billion. This momentum was fuelled by a combination of macroeconomic recovery in key markets such as the US, UK, Brazil and France and heightened activity around major global events like sporting tournaments and political elections. Within this broader industry expansion, digital advertising emerged as the dominant growth engine, continuing to gain share in the overall media mix. In 2025, digital ad spend is projected to rise to USD 513.0 billion, accounting for 62.7% of total global advertising expenditure. Key contributors to this growth include the rapid rise of retail media, forecasted to grow by 21.9% year-over-year, as brands increasingly harness consumer data for targeted advertising, including formats like connected TV. In parallel, mobile advertising continues to outpace desktop, steadily increasing its share of digital ad spend from 2019 through 2024.

Total Advertising Spends

(in USD billion)

		992
		772
		719
		696
Source: Dentsu
Share of Digital Advertising
		68.4%
		62.7%
		58.2%
		55.9%
Share of Digital Advertising by User Device
Mobile
2024	65.3%
2023	63.6%
2022	61.5%
2021	59.1%
2020	56.3%
2019	52.7%
Desktop
2024	34.7%
2023	36.4%
2022	38.5%
2021	40.9%
2020	43.7%
2019	47.3%

Source: Dentsu Report

Advancements in artificial intelligence, machine learning and big data analytics will further shape the methods in which digital advertising engages with consumers. These technologies enable greater personalisation, allowing brands to tailor their message with enhanced precision. In addition, emerging innovations like augmented reality and virtual reality are beginning to play a more prominent and influential role in designing advertising strategies. These technologies are creating more immersive and interactive brand experiences. Mobile advertising continues to dominate the digital space, fuelled by the accelerated growth in smartphone usage and augmented access to mobile internet. As a result, mobile campaigns are becoming increasingly effective in connecting with broad audiences, while delivering clear, measurable impact.

Source: https://www.dentsu.com/news-releases/global-ad-spend-forecasts-2025 https://www.dentsu.com/news-releases/ad-spend-forecast-to-grow-by-four-point-nine-percent-in-2025-despite-a-reduced-economic-outlook https://insight.dentsu.com/ad-spend-jun-2025/

The Expanding Role of Mobile Apps in the Global Advertising Ecosystem

The mobile app economy continues to play an increasingly pivotal role in shaping global digital engagement and advertising strategies. In 2024, users spent approximately 4.2 trillion hours on iOS and Android apps globally, equating to around 3.5 hours per person per day. This sustained engagement reflects the central role apps play in daily life, from media and commerce to productivity and entertainment.

While global app downloads showed signs of maturity, in-app monetisation surged. In-app purchases (IAPs), excluding gaming, grew by 24.4% from 2017 to 2024, indicating a strong shift toward higher-quality, premium experiences. Notably, Media & Entertainment emerged as the leading non-gaming vertical by IAP revenue, contributing more than half of the annual IAP growth. This reflects a growing consumer willingness to pay for content and experiences within ad-rich environments, which is an important signal for advertisers and publishers alike.

At the same time, app-based advertising continues to gain ground. The Ad Spend per Device is projected to reach USD 6.2 by 2030, up from USD 3.6 in 2023, highlighting the expanding revenue opportunity within app ecosystems. The growth is driven by verticals such as OTT/streaming, social discovery, finance and retail, where advertisers are increasingly focusing on performance-based, personalised and programmatic strategies. As mobile continues to serve as the first and often only digital touchpoint for billions of users globally, it remains a cornerstone of the evolving AdTech landscape.

Source: https://sensortower.com/state-of-mobile-2025 Sensor Tower, 2025 Global App Market Report

Indian Digital Advertising Market

Digital advertising has emerged as the fastest-growing segment within the global advertising landscape, consistently outpacing traditional channelssuchasTV,radioandprint.Theaccelerated adoption of smart connected devices, ranging from smartphones and smart TVs to wearables and voice-enabled assistants is further expanding the scope and scale of digital touchpoints. Simultaneously, innovations related to AI, immersive technologies, decentralised platforms and hyper-personalisation are transforming how brands interact with consumers.

The advertising industry in India witnessed an estimated growth of 6.3% in 2024, reaching a total market size of INR 1,010.8 billion by year-end. Within this, digital advertising continued its strong upward trajectory, growing steadily to reach INR 492.5 billion accounting for 49% of the total advertising spend in India. This reflects the sustained shift in advertisers preference towards digital platforms, driven by increased consumer time spent online, greater measurability and expanding adoption of data-driven and performance-focused media strategies.

The growth in digital advertising budgets is increasingly being fuelled by the rise of performance-led marketing, programmatic advertising and the expanding adoption of Connected TVs. Programmatic advertising, in particular, continues to gain traction for its ability to deliver targeted campaigns with greater clarity, precision and scale. Its automation capabilities, powered by real-time data and algorithmic optimisation, enhance campaign performance and return on advertising spends. Additionally, the use of AI and machine learning is making ads more personalised and contextually relevant, helping brands engage more meaningfully with their audiences across connected devices and touchpoints.

Market size of digital advertising industry in India

Value (in INR Bn)

2026	698.6
2025	592.0
2024	492.5
2023	406.9
2022	297.8
2021	213.5
2020	157.8

Connected TV: A growing performance channel

Connected TV (CTV) is rapidly emerging as a high-impact digital advertising medium in India, offering brands the ability to reach premium, high-intent audiences in a brand-safe environment. The number of CTVs in India is expected to double from 20 million in 2023 to 40 million by 2026, reflecting the growing adoption of smart TVs and streaming devices. In 2024, CTV advertising witnessed strong growth of approximately 35% y-o-y, with the market estimated at INR 15 billion. As viewership habits shift towards on-demand, ad-supported content across platforms like YouTube, JioHotstar and others, CTV is becoming a key channel within the programmatic advertising ecosystem.

Source: https://www.ey.com/en_in/insights/media-entertainment/shape-the-future-the-revolution-in-indian-media-and-entertainment-sector

BUSINESS REVIEW

Affle 3i Limited is a global technology company enabling AI and ML-driven mobile advertising solutions that power personalized recommendations, user conversions and measurable marketing outcomes for advertisers globally. Our proprietary consumer platform stack leverages deep audience insights and advanced intelligence to optimize end-to-end consumer journeys, enhancing Return on Ad Spend (ROAS) across connected devices.

Affles unified platforms provide an integrated approach to mobile marketing by combining real-time adaptive algorithms with innovative technologies to help brands optimize targeting and drive measurable outcome-led advertising both online and offline. Our solutions deliver performance across every stage of the mobile marketing lifecycle and are designed to reduce digital ad fraud, ensuring greater efficiency, relevance and authenticity for advertisers.

We achieved a significant milestone by completing two decades of our journey and as of April 5, 2025, we embarked on our third decade of transformational growth. To commemorate this pivotal moment and reflect the evolution of our business, we have renamed the company to ‘Affle 3i Limited. This new identity underscores our strategic focus on the three pillars of Innovation, Impact and Intelligence, collectively forming the Affle 3i strategy and vision for our next decade. As we advance in our third decade, our emphasis is on invoking the power of the "3rd i — Intelligence," leveraging advanced AI technologies to further enhance our consumer platform offerings. By integrating AI-driven hyper-contextual creative generation and personalized ad experiences at scale, we aim to deliver more effective, efficient and impactful advertising solutions for our clients.

Consumer Platform

Our Consumer Platform functions as a comprehensive AdTech solution, delivering personalised consumer recommendations and driving user conversions through relevant mobile advertising. It enables advertisers to identify new high-intent users while helping them re-engage their most valuable audiences by utilising precise, data-backed targeting strategies. The platform leverages big data, ML and AI to forecast user behaviour, thereby enhancing the accuracy of ad targeting and expanding the potential reach. This intelligent and integrated approach ensures a seamless advertising experience that improves conversion outcomes and maximises Return on Investment (ROI) for the advertisers.

The Consumer Platform primarily provides the following services: (1) new consumer conversions (acquisitions, recommendations, engagements and transactions); (2) retargeting existing consumers taking them closer to transactions, or re-engaging dormant users; and (3) online to offline (O2O) engagements that target online users to drive them to visit and transact at the offline/retail store.

Unique Revenue Model

Our revenue engine is anchored on our Consumer Platform that operates on the Cost Per Converted User (CPCU) model. This performance-led approach focuses on driving user conversions across consumer acquisition, engagement, re-engagement and transaction objectives. The majority of our revenue is derived from advertisers performance marketing spends, where payments are linked to specific, measurable advertising outcomes. Additional revenue may be generated by brand awareness campaigns (non-CPCU business) executed through our Consumer Platform.

Our CPCU revenue for FY2024-25 on a consolidated basis was INR 22,567.97 million, a y-o-y growth of 28.3% and it contributed 99.6% to our Revenue from contracts with customers. Our Consumer Platform also earns revenue through brand awareness type advertising, which is categorised as non-CPCU business. Non-CPCU business on a consolidated basis, contributed 0.4% to our Revenue from contracts with customers in FY2024-25.

*CPCU Revenue (FY2024-25)

FINANCIAL REVIEW
Consolidated Financial Results
In INR million	FY2024-25	FY2023-24	Change (%)
Revenue from contracts with customers	22,663.08	18,428.11	23.0%
Inventory and data costs	13,793.14	11,253.65	22.6%
Employee benefits expense	2,312.66	2,351.79	(1.7%)
Other expenses	1,725.67	1,222.80	41.1%
EBITDA	4,831.61	3,599.87	34.2%
% EBITDA margin	21.3%	19.5%
Depreciation and amortisation expense	966.98	715.26	35.2%
Finance costs	125.91	188.69	(33.3%)
Other income	937.65	572.04	63.9%
Profit Before Tax (PBT)	4,676.37	3,267.96	43.1%
Less: Total tax expense	857.68	295.33
Less: Non-controlling interest	-	(0.06)
Profit After Tax (PAT) net of non-controlling	3,818.69	2,972.69	28.5%
interest
% PAT margin	16.2%	15.6%

 

Key financial ratios
Key ratios	As of March 31, 2025
Return on net worth (%)*	15.0%
Return on capital employed (%)*	16.9%
Total debt/equity (x)	0.03x
Days Sales Outstanding (DSO)	89
Interest coverage ratio (x)	30.7x
Current ratio (x)	3.5x
Diluted earnings per share (INR)	27.19

* Adjusted to normalise the unutilised portion of Preferential Issue and QIP Proceeds as of March 31, 2025

Note: 1. On account of Preferential Issue proceeds received during the previous year FY2023-24, there has been significant changes in cash and equity position of the balance sheet and therefore comparing financial ratios on a year-on-year basis would not be like-to-like comparison.

Consolidated Results of Operations (P&L)

Revenue profile

Our total revenue consists of (a) Revenue from contracts with customers and (b) Other income.

In INR million	FY2024-25	FY2023-24	Change (%)
Revenue from contracts with customers	22,663.08	18,428.11	23.0%
Other income	937.65	572.04	63.9%
Total revenue	23,600.73	19,000.15	24.2%

The Company reported Revenue from contracts with customers of INR 22,663.08 million and total revenue of INR 23,600.73 million in FY2024-25, an increase of 23.0% and 24.2% respectively as compared to FY2023-24.

Other income increased by 63.9% to INR 937.65 million in FY2024-25 as compared to INR 572.04 million in FY2023-24. This was primarily due to increase in interest income on financial assets, gain on overnight funds and fair value gain on financial instruments in FY2024-25 as compared to FY2023-24.

Total expense

Our total expense comprise of: (a) Inventory and data costs; (b) Employee benefits expense; (c) Finance costs; (d) Depreciation and amortisation expenses; and (e) Other expenses.

In INR million	FY2024-25	FY2023-24	Change (%)
Inventory and data costs	13,793.14	11,253.65	22.6%
Employee benefits expense	2,312.66	2,351.79	(1.7%)
Finance costs	125.91	188.69	(33.3%)
Depreciation and amortisation expenses	966.98	715.26	35.2%
Other expenses	1,725.67	1,222.80	41.1%
Total expense	18,924.36	15,732.19	20.3%

We incurred INR 13,793.14 million in inventory and data costs during FY2024-25, which represents a significant portion of our total expenses. These costs accounted for 60.9% of our revenue from contracts with customers, a slight decrease from 61.1% in FY2023-24. We plan to continue investing strategically in our inventory and data costs to expand our presence across markets and connected devices across smartphones, connected TVs and other AI & tech enabled wearables.

Employee benefits expenses decreased by 1.7% in FY2024-25 as compared to FY2023-24, driven by efficiencies arising from our past investments in integrated team strategies and adoption of intelligent automation and AI-supported workflows.

Finance costs comprised: (a) interest on borrowings; (b) interest on lease liabilities; (c) interest on income tax; (d) interest on micro enterprises and small enterprises; (e) bank charges; and (f) others. Our Interest Coverage Ratio (EBIT/Finance cost) stood at 30.7x, representing the Companys ability to service its interest obligations out of its operating income was 30.7 times during FY2024-25. Depreciation and amortisation expenses were INR 966.98 million for FY2024-25, an increase of 35.2% as compared to FY2023-24. This was primarily due to the increase in amortisation of software application development.

Other expenses for FY2024-25 were INR 1,725.67 million and represented 7.6% of our revenue from contracts with customers as compared to 6.6% in FY2023-24.

Profitability

In INR million	FY2024-25	FY2023-24	Change (%)
A. Profit After Tax (net of non-controlling interest)	3,818.69	2,972.69	28.5%
% PAT margin	16.2%	15.6%

Profit before tax stood at INR 4,676.37 million in FY2024-25 as compared to INR 3,267.96 million in FY2023-24, an increase of 43.1% y-o-y.

Profit attributable to equity holders of the parent (i.e. Profit after tax net of non-controlling interest) registered a growth of 28.5% on a y-o-y basis and stood at INR 3,818.69 million for FY2024-25 as compared to INR 2,972.69 million in FY2023-24.

Consolidated Financial Position (Balance sheet)

Total shareholders equity

	As of
In INR million
	March 31, 2025	March 31, 2024
Equity share capital	280.71	280.21
Other equity attributable to equity holders of the parent	29,183.86	24,700.19
Total equity	29,464.57	24,980.40

The paid-up equity share capital of the Company as of March 31, 2025 was INR 280.71 million comprising 140,352,968 equity shares of face value INR 2/- each. The increase in the paid-up equity share capital of the Company as at March 31, 2025 as compared to the previous year was on account of 287,250 new equity shares issued by the Company during FY2024-25, partially offset by 38,704 treasury shares (net) held by the Companys ESOP trust. Other equity attributable to equity holders of the parent increased by 18.2% as compared to FY2023-24. This increase was primarily driven by growth in retained earnings of 39.4%, increase in other reserves of 43.0%, increase in share based payments reserve of 22.4%, while Securities premium 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, 2025	As of March 31, 2024
Current borrowings	665.55	1,051.59
Non-current borrowings	106.61	725.77
Total Debt	772.16	1,777.36
Total Debt/Equity (x)	0.03x	0.07x

Total debt for the Company as of March 31, 2025 was INR 772.16 million and the debt-to-equity ratio was 0.03x as of March 31, 2025. 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, 2025	As of March 31, 2024
Current assets (key line items)
Cash & other bank balance	13,916.99	12,365.47
Trade receivables (net)	2,985.56	3,173.64
Contract assets (net)	2,531.44	2,052.69
Investment held for sale	1,346.32	1,338.33
Other current assets	784.42	622.12
Non-current assets (key line items)
Goodwill	10,083.46	9,828.85
Other intangible assets	2,043.84	1,515.12
Intangible assets under development	1,114.66	981.28
Investments	628.57	373.23

Cash & other bank balance (excluding any liquid investments) increased to INR 13,916.99 million as of March 31, 2025 from INR 12,365.47 million as of March 31, 2024 primarily on account of net cash generated from operations. Trade receivables (net) decreased to INR 2,985.56 million as of March 31, 2025 from INR 3,173.64 million as of March 31, 2024 primarily due to improved collection efforts and tighter credit controls. Contract assets (net) comprises revenue that is not yet billed to customers. The Contract assets (net) as a percentage of revenue from contracts with customers was 11.2% for FY2024-25. 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 10,083.46 million as of March 31, 2025 from INR 9,828.85 million as of March 31, 2024, due to addition of foreign exchange difference of INR 254.61 million during the year under review. Other intangible assets and Intangible assets under development (combined) increased to INR 3,158.50 million as of March 31, 2025 from INR 2,496.40 million as of March 31, 2024 primarily due to INR 1,522.19 million added 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 913.53 million charged during FY2024-25.

Liquidity and Capital Resources (consolidated)

Cash flows position

In INR million	FY2024-25	FY2023-24
Net cash generated from/(used in)
a. Operating activities	4,259.91	2,622.76
b. Investing activities	(1,137.12)	5,772.90
c. Financing activities	(918.13)	7,831.92
Net change in cash and cash equivalent (a+b+c)	2,204.66	4,681.78
Effect of exchange difference held in foreign currency	219.14	49.10
Cash and cash equivalent as at the beginning of year	8,051.01	3,320.13
Total cash and cash equivalent as at the end of year (excluding other bank balances)	10,474.81	8,051.01
Total cash and other bank balances as at the end of year (including liquid investments)	14,182.33	12,375.47

Our liquidity requirements arise principally from our operating activities, working capital needs and investment activities (primarily acquisition of businesses and strategic investments). Our net cash flows generated from operating activities were INR 4,259.91 million and INR 2,622.76 million during FY2024-25 and FY2023-24, respectively. Our cash and cash equivalent as of March 31, 2025 (excluding other bank balances) was INR 10,474.81 million, as compared to INR 8,051.01 million as of March 31, 2024. 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 (gains), and Interest income; 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), (c) Interest income, (d) Gain on overnight fund, and (e) Proceeds from acquisition of treasury shares. 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) Acquisition of a subsidiary, net of cash acquired, (c) Acquisition of non-controlling interest, (d) Investments in bank deposits (having original maturity of more than three months), (e) Investment made during the year, (f) Interest expense, (g) Repayment of borrowings and (h) Payment of principal portion of lease liabilities.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Affle has well-established Internal Control Systems, commensurate with the size, scale and nature of its operations. Stringent controls and processes are in place to monitor and control our operations across the markets we operate in. These controls have been designed to provide reasonable assurance with regard to maintaining of proper accounting controls for ensuring the reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses and compliance with applicable regulations. Mazars Advisory LLP, an external independent agency has conducted the internal audit for FY2024-25 to ensure the adequacy of our internal control system, compliance of rules and regulations applicable to the Company and adherence to the management policies. Effective April 1, 2025, the Company has appointed Protiviti Global Business Consulting as the Internal Auditors. To maintain its independence, the Internal Auditor reports to the Audit Committee chaired by an Independent Director of the Board. The internal Audit team conducts quarterly audits, which include

Auditor, reviewed quarterly by the Audit Committee, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The Risk Management Committee oversees the overall process of risk management throughout the organization. Business Heads and Support Function Heads are also responsible for establishing effective internal controls within their respective functions. The Companys business units and corporate functions address risks through an institutionalized approach aligned to the Companys objectives.

HUMAN RESOURCES REVIEW

We remain focused on advancing our technology, products and services with a constant drive to achieve new milestones each year. At the heart of this progress lies the contribution of our human resources, who play a crucial role in bringing our vision to life. We are resolute in our approach to cultivate a work environment that promotes inclusive growth, inspires thought leadership and supports the sustained development of talent across the organisation.

Our human resource strategy is comprehensive and carefully structured to support this goal, focusing on several key pillars:

1. Upholding ethical and fair practices

We ensure the highest standards of integrity across all our operations, reinforcing our commitment to fairness, transparency and accountability.

2. Encouraging diversity and inclusion

We promote a workplace culture that values diversity and inclusivity. We recognise that varied perspectives and backgrounds enhance creativity and innovation.

3. Performance-linked compensation

We offer competitive, merit-based compensations that are designed to attract, retain and reward high-performing individuals who drive the Companys growth.

4. Recognition and reward culture

We believe in celebrating excellence by consistently recognising outstanding contributions, which helps motivate teams and encourage a high-performance mindset.

5. Ongoing learning and development

We invest in a wide range of training initiatives to enhance technical, functional and leadership capabilities. This enables our workforce to stay ahead in a rapidly evolving industry landscape.

As of March 31, 2025, our total workforce (including contractual staff and full-time consultants) stood at 618 employees. Of this, 183 were engaged in Research and Development and Technology, 187 in Data Platforms and Operations, 151 in Sales and Marketing, 88 in General Administration and 9 formed part of the Management team. Our ongoing adherence to promoting a diverse and inclusive workplace is reflected in our employee composition, with women representing 37.5% of the workforce and men accounting for 62.5%.

618

Total workforce as of March 31, 2025

We remain resolutely committed to driving the promotion of workplace that prioritises safety, respect and growth-oriented culture. Over the year, we organised multiple training sessions focused on key areas including Prevention of Sexual Harassment, Human Rights, Anti-Corruption, Anti-Bribery and more. These initiatives underscore our consistent efforts towards building an inclusive and ethical work environment where every individual is treated with dignity and is empowered to thrive. Our strong focus on equal opportunity and inclusivity has led to meaningful progress in promoting greater creativity, productivity and innovation across the organisation. To keep our teams aligned with emerging industry trends and evolving skill requirements, we have introduced a variety of targeted training programmes designed to support continuous learning and professional growth.

We continued to acknowledge and celebrate the outstanding efforts of our employees, further strengthening a culture rooted in excellence and continuous improvement. By prioritising the development and well-being of our workforce, we are encouraging individual growth while collectively propelling the organisation towards its broader mission and strategic goals.

For further details on our human capital initiatives and strategies, please refer to pages 76 to 83 of this integrated annual report.

THREATS, RISKS AND CONCERNS

We view risk management as an integral part of our strategic planning and decision-making framework. Operating at a global landscape exposesustoabroadspectrumofbothexternaland internal risks, including geopolitical developments, economic fluctuations, technological changes and shifting regulatory dynamics. These risks, if not effectively managed, could have significant implications for our performance and long-term sustainability.

To effectively respond to these challenges, we have implemented a strong risk management framework that enables structured identification of potential risks, assessment of their potential implications and development comprehensive mitigation plans. This holistic approach helps safeguard our assets, brand reputation and financial stability, while also ensuring alignment with international regulatory standards. In doing so, we strengthen stakeholder trust and enhance our ability to handle both present and emerging business uncertainties.

In addition, our forward-looking risk management approach empowers us to identify and leverage emerging opportunities, helping Affle stay resilient and competitive amid evolving market dynamics. For a comprehensive overview of the key risks we face and the corresponding mitigation strategies, please refer to pages 64 to 69 of this integrated annual report. We encourage readers to review this section closely, as these risks may have the potential to have a significant impact on our business performance, financial position and future outlook.

GROWTH STRATEGY AND OUTLOOK

As we begin our third decade, we are setting our sights higher than ever. With Affle 3i strategy, we are charting a bold path for the next ten years driven by Innovation, Impact, and Intelligence. This is not just about scaling up; its about transforming how brands connect with consumers in a privacy-first, AI-powered world.

We see the future in hyper-personalised, contextually relevant experiences delivered seamlessly across devices, channels and markets. By harnessing the full potential of AI, we are enhancing our scale, optimising performance and enabling smarter decision-making.

Our strategic ambition is to grow 10X in our third decade, powered by AI-led systems & product offerings global expansion, platform-led scaling and a relentless focus on operational excellence. We will continue to invest in R&D, strengthen our partnerships and unlock opportunities across high-growth geographies to deliver measurable, 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.