Online rummy platform A23 has released its financial results for the fiscal year 2024, showing stable revenue figures and a notable increase in profits. Despite flat revenue growth, the company managed to achieve impressive profit margins by controlling expenses and benefiting from an increase in non-operating income.
For FY24, A23 reported a marginal increase in net revenue, totaling Rs 841 crore compared to Rs 839 crore in FY23. While the revenue growth remained modest, the company’s profit saw a significant 24% rise, reaching Rs 72 crore, up from Rs 58 crore in the previous fiscal year.
Revenue Breakdown: A Closer Look
A23’s gross revenue for FY24 surged by 31%, hitting Rs 1,378 crore, up from Rs 1,051 crore in FY23. This substantial rise in gross revenue was largely due to the increasing activity on its platform, including higher buy-in fees paid by users. However, after accounting for the Rs 537 crore paid out to players, the company’s net revenue stood at Rs 841 crore.
The platform continues to rely on its platform fee — a commission charged as a percentage of the buy-in fees from users — as its sole source of revenue. In addition, A23 earned Rs 37 crore from interest on deposits and current investments, further boosting its total revenue to Rs 878 crore.
Controlled Costs and Profit Growth
While the company’s revenue growth remained flat, it managed to significantly improve its profitability by keeping a tight rein on its expenses. A23 reported a total expenditure of Rs 761 crore for FY24, up from Rs 726 crore the year prior. The company’s employee benefits grew by 41%, reaching Rs 138 crore, a reflection of its expanding workforce. However, the platform’s largest expense was recorded under the miscellaneous head, which accounted for 68% of its overall costs, possibly including advertising, server maintenance, and hosting.
Notably, the controlled expenditure helped A23 post a 24% increase in profits. The company’s net profits amounted to Rs 72 crore, significantly higher than the Rs 58 crore reported in FY23. This marks an impressive achievement, especially considering the challenges in the online gaming sector.
Operational Metrics and Performance Indicators
A23’s operational efficiency seems to be improving. Its Return on Capital Employed (ROCE) increased to 11.5%, while the EBITDA margin grew to 15.26%. The company’s expense-per-revenue ratio was recorded at Rs 0.90, indicating efficient management of operational costs relative to its income.
A23’s growing user base also indicates its continued success in the online gaming space. The platform now boasts over 5 crore players and operates a variety of games, including rummy, fantasy sports, poker, carrom, and pool. The diverse range of games attracts a broad audience, helping the platform maintain its user engagement.
A23’s Financial Health
Despite the modest revenue growth, A23’s financial health remains solid, as evidenced by its robust cash position. At the end of FY24, the company’s total current assets were recorded at Rs 613 crore, indicating strong liquidity. A23’s ability to manage its operational costs effectively while increasing profits shows that it’s well-positioned to navigate the competitive landscape of online gaming and continue growing its business.
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