Matrimony.Com Ltd

NSE:MATRIMONY

Earnings Call Transcript 2024-Q4

[Operator]

Ladies and gentlemen, good day, and welcome to the Matrimony.com Q4 FY '24 and FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Pradyut Ganesh from ICIC Securities. Thank you, and over to you, sir.

[Pradyut Ganesh, analyst]

On behalf of ICICI Securities, I would like to welcome all of you to Q4 FY '24 earnings call of Matrimony.com. From the company, we have Mr. Murugavel Janakiraman, MD and CEO; and Mr. Sushanth Pai, the CFO.

Over to you, Mr. Janakiraman for your opening remarks.

[Murugavel Janakiraman, executive]

Thanks so much. Good evening, everyone. I am happy to start that in FY '24, we have crossed a significant milestone of over 1 million paid subscription. Also, including other income, our revenue crossed INR 500 crores for the first time. This is an outcome of our focused initiatives on segmentation and customer-centric measures and enhancing the product.

The coming to quarter 4 on a consolidated basis, we achieved a [ billing ] of INR 121.2 crores, a growth of 4.3% quarter-over-quarter and 0.2% year-on-year. Revenue at INR 109.2 crores, a growth of 1.1% quarter-over-quarter and 4.1% year-on-year. For the full year, we achieved a billing of INR 479 crores, a growth of 4.6%, revenue at INR 481.4 crores, a growth of 5.6%.

The key highlights for the Matchmaking business in Q4 are as follows: in quarter 4, the billing was at INR 119.2 crores. The growth of 4.3% quarter-over-quarter and 1.4% year-on-year. Revenue at INR 107.7 crores -- INR 117.7 crores, growth of 2.4% quarter-over-quarter and 5.5% year-on-year. For the full year, revenue was at INR 472.4 crores, growth of 5.9%.

The other 2.7 lakh paid subscription during the quarter, a growth of 2.1% quarter-over-quarter and 2.9% year-on-year. We added 10.74 lakh subscription during the year, which was a growth of 8 percentage. The average transaction value ATV for the matchmaking business grew by 2.4% quarter-over-quarter and declined by 1.4% year-on-year, in line with our customer appreciation strategy.

For the full year, [ PAT ] declined by 2.8 percentage. In the quarter 4, you may know that, we had an issue with Google, all our apps, matchmaking apps were removed from the play store for almost for 4, 5 days. And then we were able to get the apps back on the play store, thanks to the intervention of the government. It also caused some disruption in terms of downloads and the marketing expense has gone up. So things have been streamlined. We are back to the level where it was [ year-on-year ].

The impact of the disruption we had in terms of business for 1 week, still we managed to achieve the growth [indiscernible] profit better than the corresponding quarter last year.

Now coming to the [ Marriage Services ] business. The billing were to be INR 1.9 crores [ decline of ] 7.75% quarter-on-quarter and 41.4% year-on-year. The revenue was INR 1.52 crore, a decline of 34.2% quarter-over-quarter and the 47.6% year-on-year. This year [indiscernible] business. The reason for the decline was [indiscernible] changes what we are doing to get the business to achieve profitability end of the year.

For the full year billing was INR 8.1 crores, a decline of 21.1% and revenue was INR 9 crores decline of [ 4.1 ] percentage. Loss in the quarter was INR 2.4 crores, as compared to loss of INR 3.2 crores in quarter 4 of FY '23. For the full year, the losses were at INR 10.3 crores as compared to the losses of INR 13 crore in FY '23. We hope to achieve the breakdown by the end of FY '25 in the wedding services business.

On the building revenue outlook for quarter 1. Matchmaking and wedding services revenue be at a similar level of quarter 4. We launched [i MeraLuv.com ] exlusively dating for Indian American. And we have planned to launch [indiscernible] in the next couple of months. And as for matchmaking -- serious match-making space to address next generation segment. However, it could take some time for us to launch it -- to yield revenue, probably sometime we say FY '24 or FY '25, it will start contributing revenue. We intend to keep it for free for some time.

As a [ subsidary ] segment, we have launched [indiscernible] app across 3 Indian cities such as Chennai, [ Kanpur], and Delhi. The [ expert ] is initiative will provide other visibility and increase extraction for [indiscernible].

Let me now pass on to Sushanth to comment on the key [ profitability ]. Sushanth, over to you.

[Sushanth Pai, executive]

Thanks, Murugavel. Good evening, everyone. Our EBITDA margin for the matchmaking business in Q4 is at 19.1% as compared to 18.9% in quarter 3 and 21.1% a year ago. For the full year, EBITDA margins for matchmaking was at 20.9% as compared to 21.4% in FY '23. Marketing expense for matchmaking in Q4 are at INR 47.9 crores as compared to INR 45.5 crores in quarter 3 and INR 45.3 crores a year ago. Marketing expenses for the full year was INR 182.5 crores as compared to INR 178.3 Crores in FY '23. Excluding marketing expenses, our margins in matchmaking are stable at 60% in FY '24 as compared to 61% in FY '23.

On a consolidated basis, our EBITDA margins in Q4 are at 14.2% as compared to 14.3% in quarter 3 and 15% a year ago. For the full year, EBITDA is at INR 73.5 crores, which is 15.2% margin as compared to INR 75 crores with a 16.2% margin in FY '23, a decline of 2%. Tax rate in the quarter is at 23.7% as compared to 22.8% in quarter 3 and for the full year, is 23.4% as compared to 16.6% in FY '23.

We have observed last year in FY '23, we had a lower tax rate. This was due to the lower tax on realized gains on mutual funds, which were redeemed to fund the buyback amount in FY '23. Profit after tax is at INR 11.7 crores, a growth of 5.6% quarter-on-quarter and 2.9% year-on-year. Share of profit for match provision, our associate company, is INR 7.7 lakhs. PAT for the full year is INR 49.6 crores, which is a 10.3% margin as compared to INR 46.7 crores, which is a 10.1% margin in FY '23, which is a growth of 6.2%.

If not for the disputed Google service fee, which we have provided, our PAT margins would have been better by about 300 basis points. Also, if you recollect, we also had the profit on sale of land in FY '23 as a onetime profit of INR 5.8 crores, which was not there in FY '24. So considering all of this, I think we have done very -- reasonably well in profits for the year. If we are -- if not for the Google service fee and also the onetime sale of [ land ], which was in FY '23. So cash balance is at INR 358 crores. ROCE is 15.5%.

On the outlook for Q1 margins, we expect the PAT to improve slightly in Q1 from Q4 levels. Other announcements for the quarter, the Board of Directors at the meeting held today has recommended a final dividend of 100%, which is INR 5 per equity share of par value of INR 5 each, subject to the approval of the shareholders.

I would like to end with the customary safe harbor statement. Certain statements during this call could be forward-looking statements on our business. These involve a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. We do not undertake to update any such forward-looking statements that may be made from time to time by or on behalf of the company unless it is required by law.

We can now open the floor for Q&A.

[Operator]

[Operator Instructions] The first question is from the line of [ Rajat ] Shah from [indiscernible].

[Unknown Analyst]

Sir, a couple of questions from my side. Sir, do you -- can I get an idea on how big is this market of online marriages? And what could it be in the next, let's say, 5 to 6 years?

[Murugavel Janakiraman, executive]

Okay. What are the other questions?

[Unknown Analyst]

So other questions, what would be the key entry barrier and key risks for your business, sir?

[Murugavel Janakiraman, executive]

Okay. These are the questions?

[Unknown Analyst]

And one more question is online marriages yet to enter into tier 2, 3, 4 cities, what are your plans to cater to that group of people since it's the majority of the people in India?

[Murugavel Janakiraman, executive]

Sorry, I'm not getting that question. What was that question?

[Unknown Analyst]

So the third question is, since the online marriages is yet to enter into tier 2, 3, 4 cities, what are the plans to cater to that group of people? Since the majority of the people -- since that's the most majority of the people in India.

[Murugavel Janakiraman, executive]

We expect at this point of time online matrimony, which is among the organized players, to be around probably INR 1,000 crores. So we are around INR 500 crores put together other players and small players. One impact on matrimony per se. I'm not including the dating and other categories. So when matrimony [indiscernible] there are a lot of small players, will be around INR 1,000 crores. And so -- and we've been growing around [indiscernible] last 5 years. So we expect a similar kind of trend may continue [indiscernible] the outlook for the matrimony business.

When it comes to the second question, a lot of the entry barriers. [ We are ready ] to launch matrimony product [indiscernible] launching it's easy. But the challenge is to acquire a customer. I think that's a challenge that many people face all the way. That's one of the reasons, many people who have tried to enter in this segment, can fail to make a significant mark [indiscernible] not launching a product. Because why would someone want to [indiscernible] because we have large profile and [indiscernible] to getting married, and that lead to the [indiscernible] on publicity.

Today, large part of our customer appreciation [indiscernible] are organic. Even the profit [indiscernible] Google also in a way [indiscernible], people are coming through Google as a platform. So what we are able to achieve is the organic acquisition that's contributing the growth and profitability. It's very difficult for the players to [indiscernible] the profit. It's not about a product [indiscernible]. It's about [indiscernible] the profit. It's a challenge for the people. That's a very strong entry barrier for people want to get into this segment, okay, because we are the established players on the Matrimony.com a strong player in most of the markets.

So another risk about, what is the risk we see in the matrimony business. So matrimony business per say, we are not seeing any key risks in all those tiers. However, in the long term, we have to see very changing consumer preference, [anything ] will have impact on the new members coming to online matrimony. That's something you don't keep an eye on [indiscernible] because culturally matrimony [indiscernible] India as the country [indiscernible] very strong and they continue going to grow.

However, there is segment of users, they may prefer [indiscernible]. That's the reason we intend to launch [indiscernible] in the next couple of months or so. That's something. So this is actually, as a company, we have a product for all categories. [indiscernible] the segment to target the people who are non-degree holders [indiscernible] Tier 2, Tier 3.

Now [indiscernible] which is a completely -- it's a very simple product, free for females and targeting a non-dipoma -- diploma plus 2 and below non-degree holders. So basically, we have our various products to capitals segments [indiscernible], as a company, we sort of see the opportunity and try to sell that segment that opportunity to differentiate the product offering [indiscernible].

[Unknown Analyst]

Okay. And sir, last question, the online marriages into the tier 2, 3, 4 cities?

[Murugavel Janakiraman, executive]

That's what [ Jodii ] is a product to cater to the [indiscernible] of Tire 2, Tier 3, who are nondegree holders [indiscernible] I mean in the Indian language. So that's the product [indiscernible]. [ Jodii ] promoting it and the product is free for females also.

[Operator]

The next question is from the line of Aryan Sanghvi, an Individual Investor.

[Vivekanand Subbaraman, analyst]

Sir, my questions was on the marketing expenses have been around [indiscernible] just to generate an EBITDA of INR 72 crores. So it is ideal to spend so much on marketing expense [indiscernible] the marketing expenses like your EBITDA margin [indiscernible].

Sir, second question is -- I wanted to know [indiscernible] are we still keeping the [indiscernible]? And are we going to keep the [indiscernible]?

[Murugavel Janakiraman, executive]

Yes, yes. So in terms of marketing spend. Today marketing spend, is on a elevated level because of the increased competitive spend in the various market. If you see that the category spend on our competitor intensity goes down, then we may obviously introduce a marketing expense that will link to our EBITDA margins. At this point of time, we see that marketing is going to be at a similar level. We don't any -- radical market it because still that the marketing spend or [indiscernible]. But on the marketing spend, [indiscernible], the Google directories are going at various forums, be it a CCI, be it Supreme Court -- and so also the government is also coming -- plan to coming in a [indiscernible] competition law. There are -- various things are at the summer time. [indiscernible] are happening at this point in time. We also sort of changed the business model to open the challenge. So yes, [indiscernible].

[Sushanth Pai, executive]

I think for the -- just to add, for the last year, we have made a provision based on a best estimate basis, based on what we consider is based on the developer distribution agreement. We have already made a provision for last year.

[Operator]

The next question is from the line of Siddhat Shrikumar from [indiscernible] Financial Consulting LLP.

[Unknown Analyst]

I have two questions. One is, for FY '24, what is the provision with regards to Google developed service? The amount?

[Sushanth Pai, executive]

The Google case is a very sensitive case and there are very dimension involved in this case. So we are not disclosing the exact amount on that case. However, I've given you an indication saying that our profitability margins at the PAT level would have been higher by about 300 basis points, if not for the Google service fee dispute.

[Unknown Analyst]

Understand. So I mean the next question I have is with regards to [ Jodii ], the new product that we launched, approximately what is the revenue for FY '24 that this platform has done?

[Murugavel Janakiraman, executive]

Actually, we are not sharing the individual breakup of the businesses. And so yes -- but in terms of [ Jodii ], we are getting our profile, and so we're also marketing. We see some traction and growth on the segment.

[Unknown Analyst]

Okay. So like you are seeing traction in that product since it's launched?

[Murugavel Janakiraman, executive]

Yes. It is still small part of our revenues. So -- and for competition we're not sharing that detail.

[Operator]

The next question is from the line of Ankur Jain, an individual investor.

[Ankur Jain]

The first question which I have is about this -- the provision that you have made for the Google case and Mr. Sushanth just mentioned that it is on a best estimate basis that you have provided for it. So I was slightly confused about it. Is it -- the provisions that you have made, is it on the best estimate done by the company? Or is it mandated by the high court judgment, which said that 4% of the sales have to be provided?

[Sushanth Pai, executive]

Yes. The estimate is based on what we believe is under the agreement, which is disputed. So the High Court only gave an interim judgment to deposit some money to Google, which is at 4%, which we have done whenever they raise the invoice. But however, the agreement says something else. And therefore, based on that agreement, we have made a best estimate basis, that is internal. It is not based on the high court judgment.

[Ankur Jain]

Okay. Then second question is about the same Google case that when we read the Google guideline is about the revenue share, which they asked the companies to share. They mentioned like 15% or 30%. So there are a couple of categories and 2 categories of 15% and 30%, and it is dependent on the subscription model of the company. So where does Matrimony fall in that out of those 2 categories?

[Murugavel Janakiraman, executive]

So Google, that was made mainly for the gaming companies, and the nongaming is around 15 percentage. So there are 3 models. One is that Google building payment system, then introduce that model, that we pay 15 percentage. When we do our own third-party building options, we have to pay 11 percentage. And the third option is there is [indiscernible] given alert to get payments from customers through the apps. There are multiple options. So what we've seen is that the people [indiscernible] given this option, the option for the revenue impact as such. So we respond to your question is 15% where Matrimony comes into -- Matrimony comes into the 15 percentage category, if you have got to GPPs [indiscernible].

However, it implement a usage [indiscernible] that is a [indiscernible] option that we'll pay 11% [indiscernible] to Google. So that's where it works.

[Ankur Jain]

Okay. And about some of the initiatives you mentioned about Jodii that it is getting traction. Could you also share some qualitative thoughts on the Elite Matrimony where you set up the kiosk from the 3 airports and also on the wedding services business because we were expecting that bidding services business would achieve breakeven sooner, but now it is postponed by another 4 quarters. So what's the qualitative thoughts on these 2 things, Elite Matrimony and bidding services?

[Murugavel Janakiraman, executive]

So Elite Matrimony [indiscernible] in India the company is growing. And the number of [indiscernible] people also growing [indiscernible] is a good place to create a brand pilot matrimony. And like all new initiative, we are just setting out this [indiscernible] and hoping to get a better visibility among the people who are trying. So again, they're all very new [indiscernible] in the last few months. So we believe it's a good place to target relatively. So all our products, we have better understanding of how the [indiscernible] kiosks come as a traction is going to come on because of setting of [indiscernible] in the airports. That's on Elite Matrimony.

In terms of wedding services, we definitely get about the plan that we want actually to breakeven before the entire '24. However, some of our things did not go the way you thought about it. So we have done some [indiscernible] restructuring. And so we see definitely that's going to optimize the cost. And with this change is what we are making, yes we could be able to -- we believe that we could have actually the breakeven in this year because last year, it was a [ ton ], but did not [indiscernible]. But we are also looking at some [indiscernible]. We are also looking to launch [indiscernible], sometime next week or so or maybe within 2 weeks. So we are making some product changes. We're also looking at some kind of offering, which helps us to get a better traction in terms of some of the areas and also that some offering, which will help customers choose our services compared to what they are currently choosing from.

[Operator]

[Operator Instructions]

The next question is from the line of [ Sanjeeta Sud ] from Robo Capital.

[Unknown Analyst]

My question was, are we still on track to achieve our INR 1,000 crore top line guidance for the next 5 years?

[Sushanth Pai, executive]

Yes. Definitely, that's the thing we want to get that, okay. So we're trying to reinitiate [indiscernible]. We're also looking at launching -- we launched [indiscernible]. So some of them we also looking to launch [indiscernible]. So a lot of the initiatives are in the works. So we also are trying new things. So we hope that combining now all these factors and some of them [indiscernible]. We hope that we can be able to get to that number. That's the goal, that's the number we want to chase.

[Unknown Analyst]

Okay. And sir, if you could provide us any revenue visibility for FY '25 and '26, how will luv.com and [ Mira ] love, what kind of revenue can they provide us in FY '26 and FY '25?

[Sushanth Pai, executive]

At this point of time, we were on the product maybe past 1 year, you may not even monitor for a couple of quarters because we want to get the users and get their traction before you monetize and all those. So for this year, we don't see any revenue coming, in total, maybe some revenue come in maybe quarter 4 of this year. So at this point in time, you can ask them to know revenue coming from these businesses. All investment for the couple of years down the line. I think some revenue will come next year definitely, but it's revenue we see for the future.

[Operator]

The next follow-up question is from Rishab Shah from [indiscernible].

[Unknown Analyst]

Yes. Sir, I have a question that there has been many ups and downs in the business. So what are key learnings from the past few years? And how do you tackle the situation and move on?

[Murugavel Janakiraman, executive]

Sorry, I think if you can -- sorry, can you please repeat again? There are parts few years, learning from past few years, what are the other part of the question, please?

[Unknown Analyst]

Sir, I was asking, there has been many ups and downs in our business. So when you had your past failures, what were the key learnings from it? And how did you tackle the situation and move on?

[Murugavel Janakiraman, executive]

So it's more of everything where we see there's a [indiscernible] opportunity. So I think we look at -- we look at -- we don't see the failure. We look at what our learning opportunity. As a company, we are never ours to taking a top decision, the situation warrant or not. So whether I can take what happened in 2000 -- early days of -- in the enter [indiscernible], when we enter -- [indiscernible] we realize that [indiscernible] is probably not the model for a matching business. Considering we're not offering a product to service categories, a lot of emotions involved and personal [indiscernible]. So that led to the change of closing the franchise or buying a better franchise, we launched our own outlets. So one time, we had more outlet, we are cutting outlet away that the model was not okay. So there is -- every time you do something, you look at whatever the learning opportunity.

So many things we learn in our career, many thing did not go. So that is I wouldn't say one single thing. And -- but one thing to say that we are definitely challenges were not some of challenges to run a more efficient operation. So I would say nothing like in specific things. It's more of various planning, more over last 2 tickets and that is become what we are. But we try to always try to be nimble and be open -- and there is now that we know it all. We always open to learn, open to change, open to try it out. But we want to keep the energy and [indiscernible] entrepreneur, trying out things, figuring out. I think it's more of that [indiscernible] culture we want, Matrimony.com to continue to have and continue to do. So the value goes to the growth.

[Unknown Analyst]

So my second question is, do you see that going further down the road, then this online marriage partly becoming a 2-player market that the second player acquires the third player?

[Murugavel Janakiraman, executive]

See, let's say, I think that's -- the other players, but normally, the 2 players out there of the large share of the market and all. Number 3, number 2, all get small. If you look at any changing, it's always the case in [indiscernible]. So I think that's a sort of thing we look at the normally #3 player numbers #4, less than 10% market. So that's the way it has been in any -- most of online category. Yes, the other players will be there, but number one, number two are there, large share.

[Unknown Analyst]

Okay. Sir, my last question, what has been the translation like before?

[Murugavel Janakiraman, executive]

What, sorry?

[Unknown Analyst]

Sir how has been the transition like 4 to 5 years back, more people were subscribing towards the basic packages. And now the subscription has moved towards -- if the subscription move towards premium packages?

[Murugavel Janakiraman, executive]

No, the [ real ] revenue packages and most of people tend to choose the 3 months package. I think that's a normal percent -- that's going to continue -- that's the case, yes.

[Unknown Analyst]

So just a follow-up on that. So sir, in the premium packages, we see that it is a greater ARPU business for us. So what are your plans, what are your strategies so that more people subscribe towards the premium packages?

[Murugavel Janakiraman, executive]

We're talking about partly services that are secured and tender. You mean that [indiscernible] service said that the premium package in the premium packages meant partly [indiscernible]. Did you mean that we have this premium package, do you mean [indiscernible] services? Or just trying to understand the question?

[Unknown Analyst]

[indiscernible].

[Murugavel Janakiraman, executive]

Sorry. Clear question mark, can you just kind of repeat. The question is about -- because we have a package like a personal [indiscernible] services package. If your question is what are the strategies to try to personal line services package or what is it?

[Unknown Analyst]

Sir my question is when people who are subscribing more towards the basic packages. Has the transition -- how have the transition been like more people subscribing towards the premium packages? Because -- and what are your planning strategy so that people who have subscribed more towards the same package feels that is a greater ARPU business for us?

[Murugavel Janakiraman, executive]

Yes, it is basically an online package, there is a personal service package, the personal service package is more than 4x of the sort of -- or more than 3x of the online packages. So basically, our strategy always been segmenting and offering the right product to the right customer. It's an ongoing journey is we continue to segment, continue to get people to choose the right package. It's -- we continue the product improvement, continue to adjust the number, what are the right package includes. I mean, it's part of our core strategies to help members choose the right packages or better package. We definitely benefited to put [indiscernible] service packages for number for person. We also done the -- improved our offering so that we see benefits in the premium package to drive more growth package [indiscernible] and we continue to do so.

[Operator]

[Operator Instructions]

The next question is from the line of Pulkit Singhal from Dalmus Capital Management.

[Pulkit Singhal, analyst]

I have 3 questions. One is, have we experimented with in advertisement model. There have been a lot of companies which have started off with subscription and eventually advertisement has kind of taken off in a major way. And we seem to have a good amount of free subscribers out there, and they are a very targeted set of people, subscribers who would be very good [indiscernible] customers for jewelry companies or, for instance, weddingware companies and all of those things. So I'm just wondering why haven't we yet started off an ad model?

[Murugavel Janakiraman, executive]

Okay. Yes. What is the other question? Yes. Is it...

[Pulkit Singhal, analyst]

We can take it 1 by 1 a bit, I guess.

[Murugavel Janakiraman, executive]

The thing is that -- so as far as the experience matters, when you do know one, definitely that we have a large number of users who are the user -- the 3 users will convert second point at time. So what happened is [indiscernible] are coming for the matchmaking, we don't want to bombard them with the advertisement. So while you may get some incremental revenue, that may come in the way of the customer experience, that may even come in the way of converting those [indiscernible]. And it would come out the search with promotions seem to communicate why should we go for premium membership. They also use this position to communicate some of the things, remember, we need to do this in like because they want people don't do [indiscernible].

Things like they need ask photo, they need to ask for ID verification, or maybe [indiscernible]. This is [indiscernible] no customer [indiscernible] so that they can get seriously engaged and see the value in the product and that they're going for a paid subscription. So it's basically, do you want to trade off some revenue that may come in the way of customer experience, it also continues with the subscription. So it's a kind of concentration. And while you have some spots in all those things are on into just the bidding service, in the wedding business to be in order book.

But we've always seen that the advertisement on the matching platform is more a brand building because people are [indiscernible] platform. In terms of experience in it unmaterial that, that the people we see some more like the casual in net and all that thing. So we might keep some banner advertisement, which may not be matchmaking management platform. The customer -- so it's a good for brand building and for a couple of leading services where you have some stock, but it does not have any primary focus, we don't want that getting compromised in the way of customer experience subscription. So that way, we sort of select you about these advertisement spots and promotion offers.

[Pulkit Singhal, analyst]

So to that extent, I mean, Facebook also does a lot of advertisements. There is PVR, cinemas who does a lot of advertisement. It does affect customer experience. But it has still grown much larger than that. So my sense is there are enough and more examples of companies where customer experience might have been impacted, but as revenues and experience has not really impacted them so much that you're fearing that it might.

So you might want to just look at it again because there was a certain thought process 5 years ago. I [indiscernible] was there but now a lot of things have changed in this aspect of advertisement. There's been a lot of ways of placement for adware also there so that it does not necessarily affect the customer experience to that great extent. So I refer to management to relook at this for the simple reason that now our subscription revenue seems to have tapered off. It's a different point when you're actually growing at double digit, and we are worried about this. So it makes sense. But we are growing at mid-single digits for last 5 years. And if you're not going to experiment with an ad-based model then how do we get confident that the next 5 years we'll do double-digit growth, which you're adding to?

[Murugavel Janakiraman, executive]

We are [indiscernible] through because as I told you and I appreciate your suggestion now that [indiscernible] of without compromising a subscription revenue, whether we will be get some advertisement revenue, we definitely will look into it.

[Pulkit Singhal, analyst]

Second question was on the margin check side that if you have grown 5%, 6% revenues this year, right? You claim that if Google provision would not have been there, the PAT margin would have been 300 basis points higher. Now given that the Google provision is already in the base this year, why would, I mean, next year be any different if you are going at 5%, 6%, should we not expect a similar PAT margin increase of 300 basis points or is next year very different?

[Sushanth Pai, executive]

The thing is that now we're also looking at [indiscernible] new initiative. We spoke about luv.com. So some of the initiatives, it may not need the significant revenue. So more like we're announcing new initiative that we [indiscernible] luv.com, we're investing because it is an initiative. So if you look at excluding those initiatives, yes, the profit will definitely increase. We obviously -- we've seen overall how we look at the short-term investment [indiscernible] initiative. So typically, the increase in one of the [indiscernible] and Google thing. Some of these things may go into the new initiative. So let's say doubly we're record growing our profit. But since the new initiatives come in the deadline may have some of the market will go with the new initiative.

[Pulkit Singhal, analyst]

But you had given the guidance that the A&P spend would be similar to this year. So when you talk about investments in new initiative, is that not to do with A&P spend, I mean or some other line items which are not capturing?

[Murugavel Janakiraman, executive]

And that all in new initiatives mainly because [indiscernible] new initiative.

[Operator]

The next question is from the line of Rishab Shah from [indiscernible].

[Unknown Analyst]

Sir, do you have any -- any of the matrimonial sites, which operate at a global level? And do you think globally it can be a huge opportunity size for us going forward?

[Murugavel Janakiraman, executive]

Matrimony is more like the Indian subcontinent. We're not seeing the Matrimony in the global market. Globally, it's a dating market. So it's a completely different than the Matrimony market. So it's very, very Matrimony market, it's very easy to -- Indian subcontinent. So a little bit of a different [indiscernible] sort of competitive in the Western world. Obviously you are talking about the opportunity in the nearby countries that is Bangladesh or Sri Lanka, we already have some of the brand. Again, these are very, very early stage.

[Unknown Analyst]

And sir, how difficult would it be for a new company to make a company like Matrimony by leveraging the skills of AI and matchmaking services. Would it be able to take the market share of Matrimony, like not immediately, but over the years?

[Murugavel Janakiraman, executive]

No, it's very discounted. I think the advantage of Matrimony has been strong brand equity, most of our proposals are organic, and we are well increased in the language-wise, community-wise, have a fixed percent. And the number of marriages that million couples got married, 2 decades of the service. So there are a lot of brand equity into things. It's not just a product or no. That way, we don't see that someone is going to get into this thing, going to take over the Matrimony market.

So we -- obviously, that leads up to further growth and all. I'm not seeing [indiscernible] global companies getting the Matrimony and it's market even in the India. And I want to understand your customer wants in it. It's a combination of [indiscernible] the brand equity, network efforts, understand customer [indiscernible], grown [indiscernible], and we have so many Matrimony [indiscernible]. So all these factors would make it difficult for anybody to make any significant impact at [indiscernible].

[Unknown Analyst]

Okay. And sir, have you tried to see this as an opportunity to tie up with this big event planner and scale up your wedding services business?

[Murugavel Janakiraman, executive]

Yes. We have introduced our platform. So the thing is that we want to operate as a platform player rather than getting into a -- doing a [indiscernible]. I think that's the model we are trying to do it. There are some challenges, which we are trying to overcome. But yes, definitely, we worked with various wedding service providers [indiscernible], make-up artist, wedding planner, et cetera.

[Unknown Analyst]

And my last question is since the last 4 to 5 years, what has been a major chunk of our business? Is it the renewables or majorly the first time payments, the first time subscriptions? And what proportion do you expect to increase going further?

[Murugavel Janakiraman, executive]

See, the business is a combination of both first time payment really well. And we have a very good renewal rate that's been sort of healthy. So [indiscernible] everyone can find a life partner within 3 months. So they continue to use our platform. So those things are very healthy jump. We note any changes happening on those trends. So continue to grow, yes, we need to look at the 3 levers with the matchmaking business, increasing profile, increasing conversion and driving ARPU. So these are 3 levers. We continue to work on driving these all [indiscernible] 3 levers.

[Prakash Kapadia, analyst]

The next follow-up question is from the line of Ankur Jain, an individual investor.

[Ankur Jain]

Sir, my question is about this note in the results that you've mentioned that the company changed its business model, and you also mentioned in your remarks also. So could you just help me understand better what exactly was the business or accounting model before the [indiscernible]? And then what do you mean when you mentioned that the company has changed its business model?

[Sushanth Pai, executive]

See, basically, so we look at the Google billing, which have only [indiscernible] service so we are forced to use one of the Google billing payment system. If we're offering a 1-to-1 service, that is a bit of human element involved, then we don't qualify under the [indiscernible] service that we said that is to not compare to use Google billing payment system. We had a product enhancement that all our packages comes with some of the additional benefits offered by the paid trip. So that paid, we don't qualify with the [indiscernible] we are not compulsory to use the Google services. We are adding additional services, additional offering to our customers. Those are the changes.

[Ankur Jain]

Okay. So this is a change which has been made post the delisting of the app from Google Play Store?

[Murugavel Janakiraman, executive]

It is done post that, yes. It took some time to make all the changes in this regard. Yes, we then post [indiscernible]. We made the product changes within that. We've done that, yes.

[Ankur Jain]

Okay. So now does that mean that with this changed business model and if this stands the scrutiny of the -- you can -- the litigation, which is going on, then you may not have to use the Google, this money that we have to pay the commissions that we have pay to Google.

[Murugavel Janakiraman, executive]

No.

[Ankur Jain]

You may be completely out of that?

[Murugavel Janakiraman, executive]

Yes.

[Prakash Kapadia, analyst]

[Operator Instructions]

As there are no further questions, I would now like to hand the conference over to the management for closing comments.

[Murugavel Janakiraman, executive]

Thank you so much, and thanks for your interest. I look forward to continuing [indiscernible].

[Sushanth Pai, executive]

Thank you all. We look forward to speaking with you in the quarter. If you have any questions, do write to us. Thank you.

[Prakash Kapadia, analyst]

Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.