Nazara Technolo. Q2 FY26 Earnings Analysis

- **Main Growth Drivers for FY26:** - Animal Jam performing very well. - Funky Monkeys on a growth path. - Excitement about Fusebox's potential. - Curve Games expected to have a great year. - Kiddopia anticipated to return to growth soon. - **Curve Games:** - Growth from existing IPs like For The King, Human: Fall Flat, Wobbly Life. - New IPs greenlit for development to fuel growth next year. - **Fusebox Games:** - Revenue grew 49% YoY in Q1 FY26; growth supported by new game launches and IP building. - **Nodwin:** - Strong 49% revenue growth in Q1 with expansions in esports events globally. - **Overall:** - Gaming segment revenue grew 160% YoY in Q1 FY26. - EBITDA margin for the gaming segment at 24.4%, aiming for 30% margin goal eventually. - No specific guidance provided yet for full-year FY26 revenue or volumes.

- Main growth drivers for FY26 topline include Animal Jam performing well, Funky Monkeys on a growth path, excitement about Fusebox, and Curve also expected to have a great year. Kiddopia expected to return to growth soon. (Page 19) - Overall EBITDA guidance not specifically provided yet; focus on achieving INR 300 crores EBITDA by FY27, currently on track or to surpass that. (Page 14) - Fusebox aims to raise gaming EBITDA margins from current ~14.3% toward a 30% goal over time. (Page 18) - Mature IPs typically have gross margins between 60-75% and net margins 20-25%. (Page 16) - Core gaming business delivered a healthy 24.4% EBITDA margin in Q1 FY26. (Page 3) - Management confident in scaling globally with strong IP ownership and operational excellence. (Page 3) - Profitability expected to improve as user acquisition spends normalize, especially for Fusebox and Love Island games. (Page 18)

- Nazara is working on reimagining Smaaash 2.0, with plans to develop new formats and experiences; a proof of concept (POC) is expected in about six months, with rapid expansion anticipated from FY27 onwards. - Fusebox Games is investing in scaling multiple IPs, having launched Big Brother in May 2025 and planning new IP-based games early next year, supported by increased user acquisition spends primarily in Q1 FY26. - Nodwin is executing a portfolio approach for IP incubation, maintaining 10-20 micro IPs under experimentation at any time, costing between INR 50,000 to INR 7-8 lacs each, aiming to develop IPs that justify further investment. - Nazara acquired Curve Digital Entertainment for INR 247 crores in an all-cash deal, expanding platform diversification and investing in upcoming IP-led opportunities including Nintendo Switch 2 titles. - General focus on disciplined capital deployment towards growth, IP ownership, and operational excellence to build a global gaming platform.

- Nodwin is planning a fundraise involving a bridge round followed by a larger raise. - Exact amounts for Nodwin’s fundraise are yet to be finalized. - Nazara will not participate in Nodwin's upcoming fundraise. - Post fundraise, Nazara's revised stake in Nodwin is expected to be around 46-47%. - No specific information on new fundraising through debt or other equity is provided in the transcript. - Management indicates necessary disclosures on exact numbers will be made once the Nodwin raise is completed.

The provided pages of the document do not mention any details regarding current, expected order book, or pending orders for Nazara or its divisions. The discussions primarily focus on: - Growth drivers for FY26 (Animal Jam, Funky Monkeys, Fusebox, Curve, Kiddopia) - Business performances and margins (Fusebox, Curve Games, Kiddopia, Nodwin, etc.) - Marketing spends and their effect on profitability - Strategy and outlook for various divisions including offline entertainment, esports, and gaming - Acquisitions like Curve Games and their integration - No specific data or commentary on order book or pending orders is provided in the given pages. If you need further information about order books or pending orders, please provide relevant sections or clarify.