Nazara Tech's Q4FY24 profit shrinks to Rs 18 lakh, revenue declines to Rs 266.2 crore

Mumbai-based gaming company Nazara Technologies has reported a significant decline in net profit for the quarter ended March 2024, with figures dropping to Rs 18 lakh from Rs 9.4 crore in the same quarter the previous year. 

The drop is primarily due to a Rs 16.87 crore loss from discontinued operations, which includes write-offs in several legacy businesses like the real-money gaming business Halaplay.

Revenue from operations also decreased, falling by 8% year-on-year to Rs 266.2 crore from Rs 289.3 crore in the corresponding quarter last year.

Restructuring impact

Nazara Technologies underwent a significant restructuring process, which involved merging or closing down entities that were not aligned with its future vision.

This included entities like Nazara Bangladesh and NZ Mobile Nigeria. The company is in the process of divesting several subsidiaries, such as Nazara Kenya, Nazara Pro, digital entertainment firm Crimzon, and Sports Unity, the maker of the quiz app Qunami.

As a result, the company’s net profit from continued operations increased by 43.6% to Rs 17.1 crore from Rs 11.9 crore in Q4 FY23.

How did Nazara Technologies perform throughout the fiscal year FY24?

For the full fiscal year FY24, Nazara Technologies posted a net profit of Rs 74.75 crore, a 21.8% increase from Rs 61.4 crore in FY23.

Profit from continued operations increased by 41.2%, reaching Rs 89.5 crore from Rs 63.4 crore in FY23.

The company's revenue for the year grew by 4.3% to Rs 1,138.3 crore from Rs 1,091 crore in FY23. Additionally, the operating cash flow (pre-taxes) stood at Rs 131.4 crore, reflecting strong underlying performance.

Enhancing revenue and free cash flows

Nazara Technologies is focusing on enhancing revenue and free cash flows directly to the parent company by merging gaming IPs. One notable move is increasing its stake in Nextwave Multimedia, the developer of the World Cricket Championship (WCC) franchise, to 100%.

The acquisition is set to be completed in two tranches, with the first involving the purchase of a 3% stake for Rs 2.3 crore and the second tranche involving a 25.12% stake for Rs 19.33 crore. 

The company is planning to deploy similar strategies for other existing games and new acquisitions to capture cash flows directly at the parent level.

Segment growth

Esports remains the company's largest vertical, generating revenues of Rs 148.2 crore in Q4 FY24 and contributing 55% to the total revenue. The advertising sector also performed well despite a 29.5% revenue decline, attributed to a strategic shift toward higher-margin clients and products.

The company's three key segments include esports (Nodwin Gaming, Sportskeeda), gaming (World Cricket Championship, Kiddopia, Animal Jam, Classic Rummy), and advertising technology (Datawrkz), with gaming and advertising technology contributing 36% and 9% to the revenue, respectively.