Chatterbox Technologies Ltd Management Discussions

Industry Overview

The Indian influencer and digital marketing industry has continued to witness strong growth, supported by increasing internet and social media penetration, rising smartphone adoption and the growing preference of brands for authentic, creator-led content. Influencer marketing has evolved into an integral component of brand marketing strategies across sectors such as Beauty & Personal Care, Technology, BFSI, Travel & Hospitality, and Health & Wellness.

As brands increasingly focus on measurable outcomes, targeted audience engagement and data-driven marketing, the demand for specialised influencer marketing and digital marketing agencies continues to grow. The broader Indian Media & Entertainment industry also remains a high-growth sector, supported by rising consumer spending, increasing digital consumption and the continued expansion of affordable, high-speed internet access.

Indias influencer marketing industry is estimated to reach approximately 3,375 crore [US$404.82 million] by 2026, representing an estimated CAGR of 18% during 2022-2026. Globally, the influencer marketing platform market is projected to reach approximately US$306.9 billion by 2033, reflecting the increasing adoption of creator-led marketing as an important channel for brands to build awareness, engagement and consumer affinity.

Against this backdrop, the industry continues to present significant opportunities for businesses with strong creator networks, technology-enabled capabilities, data-driven solutions and the ability to deliver measurable value to brands.

Business Overview

As a subsidiary of QYOU Media Inc., listed on the TSX Venture Exchange, Canada, Chatterbox Technologies Limited is the first multinational company to be listed on the BSE SME platform, a distinction that reflects both its global parentage and its position as Indias only publicly listed influencer-marketing company.

The Company operates through two principal service verticals Chtrbox and Chtrsocial providing end-to-end digital and influencer marketing solutions to B2B clients. Chtrbox focuses on influencer marketing, talent management, regional marketing and campus/Gen Z marketing, while Chtrsocial provides social media management and brand design services.

The Companys revenues are primarily generated through professional fees for campaign planning and execution, talent representation through Chtrbox Represent, and social media management services. Chtrbox Represent has emerged as a significant contributor to the Companys business and accounted for more than 50% of the Companys revenue during FY 2025-26.

The Companys specialised sub-verticals Youth, focused on campus and Gen Z marketing; Bharatbox, focused on regional influencer marketing; and Chtr International, focused on cross-border campaigns further expand its capabilities and enable it to address a diverse range of client requirements. These offerings complement the Companys core Brand Solutions and Represent businesses, enabling Chatterbox to deliver integrated solutions across the digital and influencer marketing value chain.

Our Competitive Strengths

- Experienced Promoters and Management Team: The Company benefits from an experienced promoter and management team with strong domain expertise across the media, marketing and digital ecosystem. The Managing Director brings over a decade of experience in the media industry, with a focus on marketing, brand building and short-form video. This expertise is complemented by a management team with extensive experience across customer relationship management, operations, marketing, finance and compliance, supporting the Companys ability to execute campaigns effectively and scale its operations.

- Strong Relationships with Influencers and Customers: With over a decade of experience in the influencer marketing industry, the Company has developed and maintained strong relationships with leading brands and influencers. Several of these relationships have been built over four to five years or more, reflecting the Companys ability to consistently deliver value and develop long-term partnerships. These relationships support repeat business, customer retention and continued engagement with a broad network of influencers.

- Specialised and Diversified Service Portfolio: The Companys specialised service offerings enable it to address diverse brand and consumer engagement requirements across markets and audience segments. Youth focuses on campus and Gen Z engagement, while Bharatbox focuses on regional influencer marketing and enables brands to engage with audiences across Tier-2 and Tier-3 markets. These specialised capabilities complement the Companys broader service offerings and differentiate its proposition from generalist agencies, enabling it to serve clients across a wide range of sectors, including technology, financial services, beauty and personal care.

Our Strategies

- Deepen and Scale the Creator Ecosystem: The Company intends to further strengthen its creator ecosystem by expanding its network of influencers and talent across categories, audience segments and geographies. Initiatives such as Chtrbox Represent, which exclusively represents over 104 influencers, campus ambassador programmes and regional influencer networks provide the foundation for this strategy. The Company will continue to build deeper relationships with creators across categories including Beauty, Personal Care & Lifestyle, Entertainment, Technology, Health & Fitness, Hospitality and Finance, enabling it to offer brands greater access to relevant and differentiated creator communities.

- Expand Integrated and Higher-Margin Service Capabilities: The Company is focused on expanding its ability to provide integrated solutions across influencer marketing, content creation, social media management and brand-led digital engagement. Through Chtr Studios and its planned studio infrastructure, the Company aims to strengthen in-house production capabilities, reduce dependence on third-party production providers and improve control over quality, timelines and execution.

The development of these capabilities is expected to enable the Company to participate more extensively across the value chain, create opportunities for operating efficiencies and support the development of higher-value service offerings.

- Accelerate Geographic Expansion: The Company intends to expand its presence beyond its established markets and build a broader national and international footprint. In India, the Company aims to strengthen its presence in Southern India while continuing to deepen its position across existing markets. Historically, Western & Central India and Northern India have together contributed more than 80% of the Companys domestic revenue, providing an opportunity to further diversify its geographic revenue base.

Internationally, the incorporation of the Companys UAE subsidiary during FY 2025-26 and the establishment of Dubai as its first international hub mark important steps in its international expansion strategy. The Company intends to leverage this platform to pursue opportunities in the Middle East and subsequently explore the wider Asia Pacific market.

- Build a Technology- and Data-led Marketing Platform: The Company intends to strengthen its technology capabilities to improve the efficiency, scalability and transparency of its influencer marketing operations. Building on its existing use of third-party tools, including HypeAuditor for influencer analytics, the Company plans to develop enhanced technology capabilities covering influencer discovery, campaign management, live dashboards, performance tracking and customised reporting.

The objective is to create a more integrated, data-led operating environment that enables the Company and its brand partners to make informed decisions, measure campaign outcomes and improve visibility across the campaign lifecycle.

- Drive Client Growth, Retention and Revenue Diversification: The Company aims to deepen relationships with existing clients while expanding its presence across new brands, sectors and marketing requirements. By offering a broader suite of services across influencer marketing, talent representation, social media management, regional and campus marketing, content production and digital brand solutions, the Company seeks to increase its share of client marketing spends and create opportunities for repeat and cross-selling business.

The Company will continue to focus on sectors with increasing digital and creator-led marketing adoption, while leveraging its diversified service portfolio and specialised offerings to build recurring and sustainable client relationships. This strategy is intended to support long-term revenue growth, improve client retention and create a more diversified business mix.

Financial Performance - FY 2025-26 vs FY 2024-25 (Consolidated)

(Amount in Lakhs)

Key Financial Ratios (Standalone)

The movement in profitability ratios during FY 2025-26 is primarily attributable to the significant increase in the Companys capital base following the 4,286.28 lakhs IPO, which resulted in a corresponding increase in shareholders equity and capital employed. This was accompanied by higher employee costs, depreciation on newly capitalised assets and other expenses incurred in support of the Companys business expansion and transition to a listed entity. These factors influenced the movement in certain profitability ratios during the year, even as the Companys absolute profitability continued to grow year-on-year.

Segment / Geography-wise Performance

Revenue from operations is reported under a single reportable business segment, in accordance with the audited Financial Statements, with revenue geographically attributed based on customer location.

During FY 2025-26, domestic revenue stood at 6,907.81 lakhs, representing 82.0% of revenue from operations, while export revenue increased significantly to 1,514.36 lakhs, representing 18.0% of revenue from operations. This compares with domestic revenue of 5,670.00 lakhs, representing 95.9% of revenue from operations, and export revenue of 242.57 lakhs, representing 4.1% of revenue from operations in FY 2024-25.

The substantial increase in export revenue and its contribution to overall revenue reflects the Companys growing international business and expanding ability to serve clients across geographies. The increase is consistent with the Companys strategy of diversifying its geographic revenue base and expanding its presence in international markets, including the Middle East and other emerging markets.

As the Company has a single reportable business segment, no separate segment-wise revenue or profitability information is disclosed. The above represents the extent of geographical revenue disclosure available in the audited Financial Statements under Note 24 - Segment Reporting.

Strengths, Weaknesses, Opportunities and Threats

- Strengths: Strong industry experience and established market presence: The Company has over a decade of experience in influencer marketing, supported by an established brand presence, extensive industry relationships and domain expertise.

Strong talent and creator ecosystem: Chtrbox Represent, which exclusively represents over 104 influencers and contributed more than 50% of the Companys revenue during FY 2025-26, provides the Company with a differentiated talent representation and creator-led offering.

Diversified service portfolio: The Companys specialised offerings, including Youth, Bharatbox and Chtr International, enable it to address diverse audience segments, geographies and marketing requirements.

Strong financial position: The Companys debt-free balance sheet, further strengthened by the IPO, provides a sound financial foundation to support its growth and expansion initiatives.

Experienced management and global ecosystem: The Company benefits from an experienced management team and the global influencer-marketing expertise and ecosystem of its parent, QYOU Media Inc.

- Weaknesses: Customer Concentration: The Company has a strong base of established clients, with opportunities to further broaden its customer portfolio across sectors and client segments. Continued client acquisition and retention remain important to achieving greater revenue diversification.

Geographic Concentration: The Companys operations have historically been concentrated in key Indian markets. Expanding its presence across Southern India, Tier-2 and Tier-3 cities and international markets provides an opportunity to create a more geographically diversified revenue base.

Working Capital Intensity: The Companys growing scale and increasing business volumes require effective management of trade receivables and working capital. The Company continues to strengthen its collection processes and working capital management practices to support sustainable growth.

- Opportunities: Growth in influencer and social-first marketing: Increasing adoption of creator-led, digital and social-first marketing by brands presents opportunities for the Company to expand its client base and increase its share of marketing spends.

Expansion into Tier-2 and Tier-3 markets: Bharatbox provides an opportunity to tap into the growing demand for regional and vernacular influencer marketing and deepen the Companys presence beyond major metropolitan markets.

International expansion: Chtr International and the Companys Dubai hub provide a platform to pursue opportunities in the Middle East and other international markets.

Technology-led growth: Investments in technology, data analytics and proprietary platforms can enhance campaign measurement, operational efficiency, transparency and scalability.

Cross-selling opportunities: The Companys integrated service portfolio provides opportunities to cross-sell Chtrsocials social media management and brand design services to the existing Chtrbox client base and vice versa.

Enhanced capabilities through IPO investments: Deployment of IPO proceeds towards brand building, studio infrastructure and technology is expected to strengthen the Companys capabilities and support future growth.

- Threats: Competitive Dynamics: The influencer and digital marketing industry continues to attract new participants and evolve rapidly. Sustaining differentiation through a strong creator ecosystem, specialised offerings, client relationships and integrated capabilities remains an important focus for the Company.

Technology and Platform Evolution: Rapid changes in social media platforms, algorithms, consumer preferences and digital marketing technologies require continuous adaptation. The Company continues to invest in technology, data capabilities and innovation to remain responsive to these changes.

Regulatory and Market Developments: The digital advertising and influencer marketing ecosystem is subject to evolving regulations, industry guidelines and market practices. The Company continues to monitor regulatory developments and strengthen its compliance and governance framework to support responsible and sustainable growth.

Outlook

The Board and management remain confident in the Companys ability to deliver sustainable and scalable growth, supported by the strength of its creator ecosystem, expanding service portfolio and growing client relationships. The Company is focused on increasing its share of clients digital and influencer marketing spends by deepening existing relationships, expanding Chtrbox Represent and Chtrsocial, and leveraging its integrated capabilities across influencer marketing, talent representation, social media management, content production and brand solutions.

The Company is also entering a new phase of geographic expansion. The establishment of its Dubai hub provides a strategic platform to build its international presence, access new clients and markets across the Middle East and pursue opportunities across the wider Asia Pacific region. This international expansion, together with continued penetration of emerging markets in India, is expected to progressively diversify the Companys revenue base.

Investments in studio infrastructure, technology and data-led capabilities are expected to further strengthen the Companys ability to deliver integrated, scalable and measurable solutions to clients. As these investments mature and the benefits of increased scale begin to translate into operating efficiencies, the Company expects to benefit from improved operating leverage and margin expansion over the medium term.

With a strengthened balance sheet following the IPO, an expanding creator and client ecosystem, diversified service capabilities and a growing international footprint, the Company is well positioned to capitalise on the structural shift towards creator-led and digital-first marketing and build long-term, sustainable value for its stakeholders.

Risks and Concerns

The Company operates in a growing and dynamic industry and, as part of its business expansion, continues to focus on effectively managing working capital, client relationships, geographic diversification and international operations.

Working Capital and Receivables: The Companys business involves a significant level of trade receivables, and effective working capital management remains an important focus area as the business scales. Trade receivables increased to 2,636.76 lakhs as at March 31, 2026, compared with 1,433.34 lakhs as at March 31, 2025, in line with the growth in the Companys business. The Company continues to strengthen its collection processes, credit monitoring and receivables management practices to support healthy cash flows and optimise working capital.

Customer and Influencer Relationships: The Companys business is supported by long-standing relationships with brands, customers and influencers. Maintaining strong relationships, service quality and timely execution remains important to sustaining repeat business and continued growth. The Company continues to focus on strengthening these relationships and broadening its client and creator ecosystem.

Geographic Concentration: A significant proportion of domestic revenue continues to be generated from established markets, providing an opportunity for further geographic diversification. The Companys focus on expanding its presence across Southern India, Tier-2 and Tier-3 markets and international geographies is expected to progressively broaden its geographic revenue base.

International Expansion: As the Company expands into international markets, including through its UAE operations, it may be exposed to market-specific regulatory, compliance and foreign exchange considerations. The Company continues to strengthen its local capabilities, governance processes and compliance framework to support sustainable international growth.

Receivables Monitoring: The Company maintains ongoing oversight of its receivables portfolio. A provision for doubtful debts of 59.70 lakhs was recognised during the year. The Audit Committee continues to monitor the receivables position and collection efforts, including certain older balances requiring enhanced follow-up, as part of the Companys ongoing focus on prudent credit and working capital management.

Internal Control Systems and their Adequacy

The Company has established and maintained adequate internal financial controls commensurate with the size, scale and nature of its operations. These controls are designed to support the reliability of financial reporting, safeguard the Companys assets, ensure compliance with applicable laws and regulations, and promote operational efficiency.

The Companys accounting system incorporates an audit-trail (edit-log) functionality, which remained operational throughout the year. Based on the observations of the Statutory Auditors, no instance of tampering with the audit trail was identified during FY 2025-26.

In compliance with Section 138 of the Companies Act, 2013, the Company appointed M/s. Sandip Shah & Co., Chartered Accountants, as its Internal Auditor for FY 2025-26. The Internal Auditor conducted the internal audit for the period from April 1, 2025 to March 31, 2026, and the Internal Auditors report was duly considered by the Statutory Auditors as part of the statutory audit process.

The Audit Committee reviews the Internal Auditors reports and the status of internal control processes periodically. The Internal Auditors report was reviewed by the Audit Committee at its meeting held on May 29, 2026, and no material adverse observations were noted.

The Company remains committed to continuously strengthening its internal control framework, risk management processes and governance practices in line with its growing scale and evolving business requirements.

Human Resources

Employee benefits expense increased to 1,145.65 lakhs in FY 2025-26 from 605.53 lakhs in FY 2024-25 on a standalone basis, reflecting the Companys continued investment in talent and organisational capabilities to support its business growth and scale-up as a listed entity.

The Company recognises that its people are a key driver of its success in the dynamic influencer and digital marketing industry and continues to focus on building a strong, experienced and engaged workforce. The Companys focus on employee retention is reflected in the tenure of its team, with more than 15 team members having been associated with the Company for over three years.

As the Company continues to scale, it remains focused on strengthening its talent pool while maintaining operational efficiency and disciplined cost management. These efforts are aimed at building the organisational capabilities required to support sustainable growth and long-term value creation.

Statement of Utilisation of IPO Proceeds (as per Monitoring Agency Report)

Pursuant to Regulation 32 of the SEBI Listing Regulations, the Company appointed Acuite Ratings & Research Limited as the Monitoring Agency for the IPO proceeds. As per the Monitoring Agencys Report dated May 15, 2026 (for the half-year ended March 31, 2026), there was no deviation in the utilisation of proceeds from the objects stated in the Prospectus. The object-wise position as at March 31, 2026 is summarised below:

(Amount in Cr.)

As at March 31, 2026, the unutilised amount of 19.28 crores was held as 19.00 crores in fixed deposits with Axis Bank Limited (earning interest of 0.558 crores at rates of 5.75%-6.50% p.a.) and 0.28 crores in the Axis Bank Public Offer Account. Utilisation of two objects - meeting incremental working capital requirements and General Corporate Purposes - was running approximately 45 days behind the timeline indicated in the Prospectus as at the date of the Monitoring Agencys report, on account of the phased deployment of funds; the Board has noted managements confirmation that utilisation will continue progressively in line with business requirements. Of the 0.85 crores utilised under General Corporate Purposes, 0.30 crores was applied towards an incremental security deposit for the Companys new (larger) leased office premises - in substitution for the smaller additional office space originally contemplated in the Prospectus - and 0.55 crores towards statutory dues (TDS payments). The full Report of the Monitoring Agency is reproduced as a part of this Annual Report.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, plans, projections, estimates, expectations, outlook and other forward-looking information may constitute "forward-looking statements" within the meaning of applicable securities laws and regulations. These statements are based on the Companys current expectations, assumptions and assessments and are subject to various risks, uncertainties and other factors.

Actual results, performance and achievements may differ materially from those expressed or implied in such forward-looking statements. Factors that could cause such differences include, among others, changes in economic and business conditions, market demand, competitive dynamics, government policies and regulations, taxation laws, interest rates, foreign exchange movements, technological developments and other factors beyond the Companys control.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws and regulations. Readers are advised not to place undue reliance on such forward-looking statements.