Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OnMobile Global Ltd (BOM:532944, Financial) reported a 27.3% quarter-on-quarter increase in gaming revenues, showcasing strong growth in this segment.
- The active subscriber base for gaming increased by 11.6% to 8.49 million, indicating successful customer acquisition and retention strategies.
- The company achieved a revenue of INR131.9 Crore for Q2 FY25, marking a 4.7% growth over the previous quarter.
- Gross profit increased by 4.9% quarter-on-quarter, with a gross margin percentage of 51.2%, reflecting efficient cost management.
- OnMobile Global Ltd (BOM:532944) has successfully doubled its subscriber base over the last five quarters, demonstrating effective marketing and operational strategies.
Negative Points
- The company faces high marketing costs, which are a focus for reduction in upcoming quarters to improve profitability.
- There was minimal growth in Challenge Arena (CA) subscribers, attributed to the cessation of operations with an operator in India.
- The EBITDA margin is currently not at the desired level, with expectations to achieve 25% EBITDA margin only in the next 18 to 24 months.
- The company is still in the process of optimizing its accounts and marketing strategies, indicating ongoing challenges in operational efficiency.
- OnMobile Global Ltd (BOM:532944) has a high dependency on international revenue, which could pose risks if global market conditions change unfavorably.
Q & A Highlights
Q: When do you see EBITDA stabilizing for the new mobile services business, and what are the expectations for overall company profitability?
A: Francois-Charles Sirois, Executive Chairman and CEO, stated that the gaming business is expected to break even at the EBITDA level by Q4. The goal is to achieve a 25% EBITDA margin within 18 to 24 months. The company aims to grow and be profitable simultaneously, with gaming revenues projected to reach 50% of total revenues by FY26.
Q: Can you provide a revenue breakdown for Onmo and Challenge Arena (CA)?
A: Francois-Charles Sirois explained that the company consolidates all gaming revenues and does not split them between Onmo and CA. The marketing efforts are integrated, and the teams operate on the same platform, allowing for flexibility in optimizing revenue across accounts.
Q: What is the strategy for optimizing the number of operators and growing revenues?
A: Francois-Charles Sirois mentioned that the focus is on optimizing current accounts and growing revenues rather than increasing the number of operators. The company aims to ensure winning conditions for each operator added, focusing on profitability and managing marketing costs effectively.
Q: What kind of revenue is expected from leasing out surplus capacity?
A: Francois-Charles Sirois indicated that platform revenues, including the leasing of surplus capacity, are expected to constitute 45% of total revenues by the end of 2026. The partnership with Geosphere (GPH) will manage new customer onboarding, leveraging existing server capacity.
Q: How does the company plan to strengthen the gaming platform and attract more partnerships?
A: Francois-Charles Sirois stated that the partnership with GPH allows for the installation of their technology on OnMobile's network, enhancing capacity. The focus is on managing the network and additional capacity required by customers, with GPH handling customer acquisition and management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
