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Earnings Call Analysis
Q2-2025 Analysis
Nazara Technologies Ltd
Nazara Technologies Limited reported robust financial results for the first half (H1) of FY '25, achieving revenues of INR 69 crores and an EBITDA of INR 550.1 crores. Particularly in Q2, the company recorded revenue of INR 318.9 crores, with an EBITDA of INR 25.2 crores. This performance signals a stable trajectory toward profitability, bolstered by strategic investments and mergers.
The company raised INR 500 crores through a preferential equity issue from prominent investors to support both organic and inorganic growth initiatives. A significant highlight was the acquisition of a 100% stake in Copiapo Motors, alongside increasing stakes in existing cash flow-generating businesses like Absolute Sports, which is the parent of sports platform Scotia. Nazara's CEO, Nitish Mittersain, emphasized the company's commitment to enhancing ownership in ventures that bolster cash flow.
Nazara operates in three major sectors: gaming, eSports, and ad tech. During H1 FY '25, gaming contributed 36% to revenue while eSports accounted for 50%. The company aims to leverage the synergies between these verticals, highlighting its ambitious plans for the core gaming studio business, which is expected to scale significantly as the company establishes centers of excellence in strategic operational areas, particularly leveraging AI.
To improve operational efficiencies, Nazara plans to develop centers of excellence focused on data analytics, user acquisition, and M&A. Such initiatives are expected to yield significant benefits over the next 12 months, potentially leading to improved financial metrics in H2 FY '25. Early signs of positive impacts from these initiatives are already being observed.
The recent merger of Kidopia's parent app with Nazara aims to consolidate core gaming operations under one umbrella for more fungible cash flows. This strategic merger is anticipated to streamline financial performance, allowing for better resource allocation towards both organic and inorganic growth with a focus on optimizing cash flow generation.
Nazara noted that international revenues constituted 40% of total revenues in H1 FY '25, up from 15% a year ago. This highlights the company’s focus on expanding its global footprint. With planned product enhancements and partnerships with popular IPs, Nazara aims to bolster its user acquisition efforts, particularly in Kiddopia, which is expected to benefit from the upcoming launches in FY '26.
The poker platform Poker Barge is expected to achieve a year-on-year growth rate of 20% to 40%, driven by market leadership and expansion plans. Further, Nodwin Gaming, while facing challenges in EBITDA margins, is set to see improved profitability as the Q3 and Q4 seasons are historically stronger, fueled by increasing demand in media rights and physical events.
Looking ahead, Nazara anticipates significant improvements in margins and overall performance. The company has expressed confidence in achieving stronger profitability in H2 FY '25, with expectations of returning to double-digit EBITDA margins. Overall, the strategic focus on enhancing both revenue streams and margin profiles is expected to manifest as positive financial outcomes in the coming quarters.
Ladies and gentlemen, good day, and welcome to Nazara Technologies Limited Q2 and H1 FY '25 Earnings Conference Call.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Sundaram from Avendus Spark. Thank you, and over to you, sir.
This is Sundaram from Avendus Spark. Festive greetings from our side. Avendus is pleased to welcome you all to the Q2 and 1H FY '25 conference call of Nazara Technologies Limited. The management today is represented by Mr. Nitish Mittersain, our CEO and Managing Director; Mr. Sudhir Kamath, Chief Operating Officer; Mr. Rakesh Shah, Group CFO; and Ms. Anupriya Das, Head of Corporate Development.
I now hand the call to Nitish for opening remarks and then for the Q&A session. Over to you, Nitish.
Hi, everyone, a very good morning. Let's get started by looking at our numbers. In H1 FY '25, we achieved revenues of INR 69 crores and an EBITDA of INR 550.1 crores. Q2 came in at INR 318.9 crores with an EBITDA of INR 25.2 crores. Our focus remains on driving profitable growth through both organic initiatives and strategic M&A with the strong emphasis at this point of time on the 4 game studio business.
In Q2, we announced the raise of INR 500 crores preferential equity issue from a group of marquee investors. These front support both our organic and inorganic growth initiatives. We have made our largest investment to date in copper base paranoia technologies.
Sokabati is India dominant online poker platform backed by an extremely strong team and strong technology. With this step, we now have significant ownership in 2 market leaders, Nodwin, Gaming in eSports and boot industrial-based gaming space. That further strengthens our position as India's leading diversified gaming black box.
Another important step this quarter was about 100% ownership in Copiapo motors, and we also further increased our stake in absolute Sports, the parent of Scotia. In addition to acquiring a minority statement and exciting fast-transports community at Alta. So our intent has been to increase our ownership in our existing cash flow generating businesses.
In addition to that, the merger of Kidopiaparent paperboard apps with Nazara Technologies Limited has been approved bareboat recently. And this step is aligned towards bringing core gaming businesses into the parent entity that will provide for fungible cash flows that can be subsequently deployed for organic and inorganic growth going forward.
A key focus to improve operational efficiencies involves creating centers of excellence in various strategic areas such as data analytics, user acquisition, M&A and particularly artificial intelligence, which we believe can be used effectively to have a lot of positive impact on our businesses.
We're also going to translate centers of excellence for some back-office operations such as HR, compliance and finance. We will continue to roll out these initiatives over the next 12 months and believe that there will be significant benefits due to shared knowledge pools and provide opportunities also for cost optimization. Some of the initiatives in the last few quarters are showing early signs of positive impact that should be visible in our H2 performance.
With that, I now hand over the call to Anupriya, our Head of Corporate and Government for further business highlights. Thank you very much, and over to you, Anupriya.
Thank you, Nitish. Good morning, everyone. As you are aware, Nazara operates across 3 business sectors: raining, eSports and asset. We are well diversified across demographic geographic business products. In H1 FY '15, gearing contributed 36% of revenue and 6% of EBITDA while eSport contributed to 50% of revenue and 28% of EBITDA. With a back about importing share.
North America continues to the largest market with 39% revenue contribution by India and Rest of the World are at 31% and 30%, respectively, H1 FY '25. Levine, if you look at Tedopia, H1 FY'25 revenues was INR 978 crores and EBITDA of INR 22.4 crores with an EBITDA margin of 22.9%.
In Q2 FY '25, as Nitish mentioned, we continue to is the 100% acquisition of capable. Subsequently current changes have been on state to drive growth via product changes this new strategy and IP partnerships. We expect the results from these statements to be visible in subsequent quarters.
In addition, Magara, Board of Directors has approved the merger of paperwork with Nazara Technologies Limited, which step is aligned towards us drilling core gaming businesses into the parent entity to provide a fungible cash flow that can subsequently be deployed for organic and organic growth.
Going to fuel box, Nazara has announced the acquisition of 100% stake in U.K.-based Boca, a ban established IT-based tailing Studio. Fuo have been consolidated from 23rd August 2024 in our books. During this time, the business reported revenue of INR 23.2 crores with an EBITDA of INR 4.5 crores.
Turning to Animal Jam, the core Animal Jam business is profitable and growing again. Product metric for retention, engagement and monetization of fields ahead. In H1 FY '25, the revenue increased by INR 2.7.6 crores with an EBITDA of INR 7.7 crores. We had higher investment in user acquisition, which is expected to pay back over the 12- to 18-month period.
Moving to OpenPlay, the gross saving revenues have declined only slightly since customers are among the -- almost the same -- while the portion paid out of the GST bonus has increased sharply from 13.4% to 46.7% of the gross gaming revenue. As a result, the net revenue, which is reported after GST bonuses has followed sharply. Profitability has dropped across the sector and water companies have been hit hardest by the change.
Moving to the in-store segment. This segment revenue grew by 8%, while EBITDA grew much faster by 76% in H1 FY '25. While this 1 to FY '25 revenues grew by 4% compared to Q2 FY '24. However, the like-for-like revenue growth was 111% excluding main from Q2 FY '24 numbers. The sealing expansion base that was said last year has started fan and activation expecting speak for you.
Nazara continues to be a content provider of choice for many all global mobile policies. In H1 FY '25 the year-on-year revenue, excluding is grew -- the growth was led by strong performance from model for pricing at an iris as GMI Market, multiple activities at Gamescom, Captain proceeds, all that matters, esport World Cup global Broadcast and prime leaflets.
Models around state of new or expanded IPs entering in the second half with ComicCon expansion to 8 cities from existing 5 cities mobile in Batista and 1 coming back to CD14, and announcement of lagoon PV4. Marvel will continue consolidating multiple assets worldwide in emerging markets while investing organic growth, thereby expanding its share of international revenue. Notably, international revenues were 40% of total in H1 FY '25 versus 15% in H1 FY '24.
Moving to Sportskeeda. Sportskeeda continues to maintain its ranking among top 10 -- top 10 U.S. ports website. Absolute for the group gross revenue and EBITDA by 22% and 18%, respectively, in H1 FY '25. The core Sportskeeda business continues to grow well, both in terms of revenue and EBITDA. However overall have been reported were impacted due to a sectorial network, which recorded a year-on-year decline on EBITDA.
Sportskeeda was impacted during September, which affected its traffic flow then the NFL season is starting. We believe this is temporary giant site should recover in the next few quarters.
Moving to the Adtech segment. During Q2 FY '25, we continue to move away from lower-margin business. This tariff was in a year-on-year revenue growth of 7%, with gross margin improving significantly, reflecting the higher share of product business. Throughout Q2 FY '25, we have continued to invest in product development and increased marketing efforts for special the U.S. market.
EBITDA remained stable as compared to Q2 FY '24. So we expect the impact from these investors to show in business outcomes during the coming quarters. Test 100% old step-down subsidiary data was operated in U.K. acquired 100% of Patient Limited for an equity value of 4.8 million around INR 52.3 crores of INR. This acquisition is a key move in advancing data works growth ambition across Europe and North America, positioned as a scale player in the global business marketing.
With this, I conclude my remarks, and we will now be open for Q&A. I invite Nitish to derate Sadu, join me for the question.
[Operator Instructions] The first question is from the line of Abhishek Kumar from JM Financial.
So I have 3 questions on outlook. First, on Kiddopia, I see that the cost per trial has gone up again, and it has almost crossed $40. While I know we have been trying alternate ways of monetizing and acquiring users. So how should we look at this metric going forward?
And because what that is doing from what we see is that we are cutting down on our marketing spend and that is in a way impacting user acquisition and revenue. So just any color on both the cost of acquisition and our marketing strategy, which would have some bearing on the user acquisitions?
Abhishek, this is Nitish. So I think a couple of points there. One is the reality is that the cost per tile has been kind of floating around this $40 mark gigawatts plus 15%. And we haven't really proactively cut down our marketing spends, but we've fully not been able to find a easy way to scale the marketing dollars at this price point.
And even if we were to increase it, we don't see that kind of result. So I think we need to find alternate solutions to break out on this than. In my personal opinion, 1 big rig who is going to be partnering with popular IP and starting to integrate it within Kiddopia. And I think we are -- we are all spoken about it generally over the last few quarters. We are very close to closing some IP transactions of meaningful large global IPS.
And I think that would help us in multiple ways. It will help us bring down our cost per trial because conversion rates would increase, it would help reduce, it will help generate organic traffic for us beyond just the paid acquisition that we are doing. So I'm quite bullish on this part that we are trying to take at this point of time. And hopefully, within this quarter, which is Q3, we should be in a position to at least announce 1 or 2 IP partnerships.
So I think that's one thing we are doing. The second thing is after acquiring 100% stake in the company. There are a lot more hands on now. And there are multiple quick iterations we are doing in terms of price points monthly versus quarterly versus annual type of subscription plans, et cetera. I think we should be able to find some opportunities over there. So I think this is what we are currently doing in Kiddopia, while maintaining our current marketing spend in the best efficient partner as possible.
Okay. No, that's clear. Second is on Nodwin. So I noticed that while the headline number ex of WINGS looks strong, but there would have been a consolidation of fix for you, and from my calculations, if we remove that, the uptick that we generally see, I think, from Q1 to Q2 has not been very strong. So just general demand environment both in terms of media rights and physical games and outlook for second half for Nordwin specifically? And if we can separately provide for free or that would be a?
Yes. Rakesh, so do you take this one?
The time for that question. So if we actually remove peaks for you, we would still be about 40% kind of organic growth across other businesses -- and keeping in mind that the 3 quarters are not then ahead, we can define that positioned for good growth in this year.
Okay. Maybe just 1 clarification. The revenue composition of Fix for you, would that be similar to Nodwin in India in terms of media rights and sponsorship revenue, et cetera.
The core business model and therefore, the core revenue streams are similar in the sense of plus helping others to viable IP for import event. There was a little bit of media, not too much on that sense, but very similar in tatters to margin. The cost structures are slightly different, of course, where is the company based in Germany, England, et cetera Europe, little Europe. So therefore, that content is high. And one of the things that Martin will be able to leverage the India team is team to also help drive more profitable revenue for -- but core business.
Okay. One last question is on margin and again, outlook. Despite us moving towards higher-margin business on a Y-o-Y basis, there was a dip in EBITDA margin. Now going forward, how should we look at overall margins for the company? Can we get back to double digit within this year itself? Or any color on the way forward on margin.
Abhishek, I think we've kind of strategy away from giving specific guidance on this, but we do expect second half to be stronger for the business is that we can see. So we do expect that, but I don't think we give the guidance at the.
The next question is from the line of Jinesh Joshi from Prabhudas Lilladher Capital.
Sir, I have a bookkeeping question. You have mentioned that depreciation increased in Q2 amortization of fees and fee book. But if I look at the number on a sequential basis or even on Y-o-Y basis, it appears to be quite high. So is this an amortization of some kind of a write-down, if you can clarify on that? And if it is not a write-down, is this the new run rate going ahead? That is one.
And the second question is also I look at our employee cost, it has moved up considerably, and I believe it is predominantly due to consolidation of free. And in the past, you had mentioned that there were some challenges to kind of cut down the half on this business, which operates in Germany, too. Is the consolidation the primary reason for rising cost? And do you expect it to taper off going ahead? And what should be done unread?
Thanks for the question again. So 2 responses. So 1 is these are not right now. the amortization of the act higher expenses are for 2 reasons. One is the move of the and the other is talked about these related expenses, which have been expensed out to. That's our answer to your question.
Sure. So that means from third quarter, the depreciation run rate should ideally be lower, right?
It may be amortization of intangibles, I need to come back to you all as the run rate will drop it probably should. But maybe later in the call, we can just take our data summary.
Sure. And sir, on the employee cost side, if you can clarify.
On the employee cost side, having said, definitely is a move to have more of the projects, which are there for the port. Delivered out of India and to leveraging those. So as the revenue keeps growing, which we expect, the percentage cost, which is being delivered from offshore will increase to that impact as well. So overall, I portal, we do expect employee costs.
Okay. And sir, my second question is on Kiddopia. I mean you responded to earlier participant question that we're trying to close some IP partnerships and basically boost the organic acquisition. But have any of your peers been able to do that recently in the U.S. market? And once the partnership deal is concluded, which you highlighted that in Q2. What kind of growth can we expect? Because we have seen the subscriber numbers with Wendel for quite a few quarters. So if you can just kind of give some insights on growth.
Sure. I'll answer that. This is Nitish. So far, we have seen several companies in the U.S. dollars and UP, which are focused on skills related content which was taken the IP approach has been quite successful. We have been able to overcome the tar acquisition challenges and grow the business. So we are very hopeful of emulating the same.
It's not a first time attempt. We've seen other companies successfully do that playbook, and we are just now replicating the same. It's taken us some time because our idea was to really go for best-in-class IT. And as we announced, you will see that the quality of IP we are bringing to the table is important. It is important to note that given that we are working with global IP, it will take us at least a couple of quarters to really launch, but we are trying to accelerate it as soon as possible.
Sure, sir. One last question from my side. And that is on margins in the Nodwin business and the use box business. So in Nodwin, despite the consolidation of reemitEBITDA, we have basically managed a breakeven. So how should we think of profitability from here on? That is question one.
And also in fubo, I mean if I look at the Jan-July number, which you have shared when we acquired smoke. Margin was 28%, but now in the consolidation period, it has fallen to about 19%. So if you can highlight the reason behind that as well.
So I think coming first to Fusebox, because games are related to TV IP. During the summer months, they had so much largest organic spike because the TV shows is on air in the U.K. as well as in the U.S. We are probably seeing a period of higher revenues during that period. I think we should look at Fusebox margins similar to our other gaming company margins, whether it is Kiddopia or the other ties that we have like animal can we will be aiming for that 20% to 25% kind of EBITDA margin on a steady state.
On Nodwin Gaming, I think Q3, Q4 is define the main season for this business, and you will see better EBITDA margins come in. Overall, as a business, I think we are at a point where we are starting to push for higher margins. There is strong alignment with the team. And hopefully, you will also see that play out in the coming financial year beyond Q3, Q4.
[Operator Instructions] The next question is from the line of Samarth Patel from Equirus Securities Private Limited.
So given we are currently focusing on growth in Poker base, what kind of top line CAGR, let's say, we can expect for next 3 years? And should we be able to sustain the current margin trajectory? Or would we try to improve upon it as well? So that's the first question.
Sure. So I will take that on Poker base, look, at this point of time, we are not consolidating the business. So until we consolidate the business, you will not see direct impact on our financials. At the same time, PopelBaji is, by far, India's most dominant poker platform, going at a very healthy 20% to 40% year-on-year growth rate.
And this business, as it expands, as it scales, the margins would actually significantly expand because one of the core costs besides the increased GST payout is the money being spent on branding. And I think that will pay off rich dividends on this business over a period of time. So we expect over 2, 3 years, just to be a very highly cash-generating business. But more specific numbers, we will be able to do it in coming quarters.
That was really helpful. Now coming to the Adtech segment, with the combining space and times growth marketing expertise with the Datawrkz, what kind of synergies we are expecting here? If you can just double click into that. And any revenue uptake in near term we would be able to see in this particular Adtech segment, which has been stagnant for some time for us.
Yes. I think there are 3 points here. One is Datawrkz on its own, we are starting to see a better output for many of the businesses, especially on the product side. And I think on a stand-alone basis, it will continue to improve in Q3, Q4 and beyond. And now with space and time, which is a sizable business in relation to existing sites of Datawrkz. There are at least a couple of immediate synergies.
One is many of the products made by Datawrkz books now can be sold in the U.K. and European market by recent times, therefore expanding the revenue opportunity quite quickly. The second is Datawrkz can do some of the work that space and time in terms of execution and therefore, lead to cost optimization for the space and time business have been creating an uplift of margins.
So we expect some of the synergies to show impact in the next couple of quarters. So I think you'll really see the large impact of it in FY '26. But yes, this business will add significant EBITDA to Datawrkz and Adtech business existing EBITDA.
And the last question from my side is what kind of revenue and EBITDA contribution that we can see from the upcoming big better game for Fusebox. So is it a medium-term kind of play for us? Or should we see some revenue uptick in the near term from there?
I mean we aim to launch the game in Q1 of FY '26. And in games, usually, you will soft launch it for 3, 4 months, iterate the KPIs and then make it mainstream. So I think Q2 or Q3 FY '26 onwards, we should be able to see the impact. Bitether, of course, as you know, is a large, well-established IP and we have global rights for it. So we are obviously very hopeful that we should be able to monetize it at scale. And you've already seen the kind of scale the existing IP Lavalin is doing.
And just one last question from my side. Any further updates on the mesh entertainment, if you can just give some color on that, that would be really, really helpful.
Yes, it is still in the NCLT process. We hope to get approval in the next couple of months or so.
[Operator Instructions] The next question is from the line of Manan from MTP Securities.
Congratulations on posting a good site. I have a couple of questions. First, with respect to Poker Bali, like you said that the margins will go higher. If you could just call out the margins before the GST issue and right now, in EBITDA terms because I know you report revenue net of GST, right? If you could just give us some guidance on that?
And another suggestion is if you could -- even if you're not incorporating poker barge numbers into your consol books. If you could just call them out in the presentation, I think that would be slightly helpful.
Yes. So as you are still in the financial process of closing the transaction, we thought it would make sense to start providing more detailed information from Q3 onwards. So I won't share specific margin profile right now. But generally, if you look at pre and post GST, new GST policy implementation, all cost -- GST costs are basically ForEx for most companies.
Right. So that's the number we can record, right?
Yes.
And sir, my second question is with respect to the business that we are already in with classic. Do we see any place to palate some sort of tie-up with Poker Barge or endorsement on Poker buddy or something like that out? And how are you thinking about the current existing business that we have in R&D.
Let me take that one, Manan. The existing business, which is open place. That is really to the smaller case as we called out in our presentation as well. The smaller companies were -- so that's a good number to what you had asked earlier. This is a business which was doing, say, 25%, 30% EBITDA margins before the GST came.
Now effectively, all of that is going towards higher DSP, and we think that's about breakeven kind of number. We are doing a lot in terms of operational changes to help move that number up. Could we still expect that to be in the maybe low single digits to early teens kind of numbers in the coming quarters.
Badi is different because it's the market leader in poker and as a much larger space. We should do expect margins to be higher -- but in the present period, it will also be investing a lot of money back into trend marketing which is already the leader, it wants to have a domiciliation.
So over time, I think it will be a different profile. I think in the initial impact different -- and as is mentioned in the previous one. Right now, we're not in any case consolidating the revenue and EBITDA for Badi. And obviously, you'll be one.
[Operator Instructions] The next question is from the line of Rahul Jain from Dolat Capital.
So based on the input that has been shared so far, if I do a back of the annual calculation, it seems like we are expecting a very strong profitability in Q3, Q4 with some consolidation coming into play as well as the improved commentary in the profitability. So is it safer to assume the favorable seasonality of H2 would be more sharper this time versus the past trend?
Yes. Rahul, I believe so that we should see a very positive H2.
Right. And from Kiddopia perspective, this IP -- upcoming IP announcement that you are talking about, let's assume it will 55 in Q3. Then ideally, what is the time lag between some of these things actually playing into the CAC benefit or retention benefit? Is there any trend or observation that you might have seen that could help us build our thought process of the business?
So assuming we close a couple of IPs in Q3, we would definitely try to launch them into Kiddopia in Q1 of FY '26. Earlier possible, then we will do it, but I'm saying on a CFR Q1 FY '26 because these IPs have a lot of approval processes, et cetera, in that we are working at global companies, large companies. So Q1 FY '26, we will launch and hopefully, we should be able to see early signs very quickly, maybe within a month, 45 days, 2 months of launching. So hopefully, we should be able to report back something in Q1 '26. If not then most definitely have some clarity of how it is going to help -- how is points in Q2 of.
Okay. And since there is still some time away from that point to happen, what should be the interim strategy in this business? Because I understand the reason of not spending so much on marketing is also about the kind of retention metrics that you're seeing and what kind of LTV CAC you may be getting. But if you think with these IP customer acquisition is going to improve later on and retention may improve on the Akros portfolio. Will it make sense to start scaling up on the spend or general retention strategy to sustain the momentum right from post announcement of IP or that step-up would only happen once we are launching those IP in the game?
Yes. No, I think irrespective of IP or not, right, our objective and focus obviously is to enhance and improve the business metrics in all aspects. And I think we are looking at it at multiple areas.
One, I think there's a significant product enhancement we can do, which has not happened for quite some time. We can lead the standard content updates were happening, but we're looking at introducing new elements to the product, which will, I think I add more value to the children playing it, but also the parents who are downloading it -- actually paying for it, right? So we have some parent tools, et cetera, that we are going to introduce.
So I think one is increased focus on the product. Second is, I think there's a lot of opportunity in experimenting with different price points, different periods of subscription, different periods of free trials that we give to the consumer in different geographies. We have restarted a certain geographic expansion, which had kind of taken a back seat in the last, I would say, 18 months or so.
So I think there are multiple accesses that we are working on besides the IP. So it's not that we're only betting on the IP initiative. Beyond that, I think there's a lot we are doing on an ongoing basis, and you will see momentum pick up on that now that we have taken over this business completely.
Right. And how the capital allocation in the of the funds that you might have in the Kiddopia subsidiary, what the strategy would change once now this is integrated? Will that -- will this unit will be -- can be leveraged to do subsequent M&A? Or this is not the thought process? I just part.
Two things, we are looking at a couple of kids, I see that we may invest in and acquire it, but it's early days. So we get good opportunity, we will do that. But also remember that we are going to merge paperboard with Nazara, which means that we will have the funds available at the Nazara level to deploy wherever we need to.
[Operator Instructions]
If there are no further questions, we can cut off.
Sir, we have 1 question. The next question is from the line of Nikhil Gupta, who is an individual investor.
So Nitish, I just want to understand a long-term expect in the sense that, let's say, so down the line, which segment do you think will contribute to more revenue and will be the gaming segment or it will be the not win the sport segment?
Is it difficult to give a perspective 4, 5 years out. But at this point of time, I naturally very bullish on all 3 key segments, I would say. So to detail specifically, right? The core gaming studio business, I think, has a lot of potential to scale. I think we can really build a large business out of India and especially with the new initiatives that we are doing, which is building Center of Excellence around AI, et cetera.
I think there's a lot of optimization we can do to studios that we are acquiring and scale them. So this will also be a high margin business and a high cash flow generating business. So we will continue to build it out.
Nodwin, of course, has been scaling revenues. The EBITDA margins have been lagging. But like I was mentioning earlier, I think going forward, the focus is now going to be to also start increasing EBITDA margins wherever we can. So 3, 4 years out, hopefully, that should deliver good EBITDA because there's a lot to catch up on that front.
The Adtech business with certain recent steps we have done should grow in EBITDA. And I think the R&D business, especially the car large position now a market leader like Poker Base can be a very large cash generating business for us.
So in that sense, I think directionally, all 3 businesses of ours are in the right direction. And I think 3, 4 years out, we must -- we should and we must see much higher EBITDA margin profile from where we are today.
As there are no further questions from the participants, I now hand the conference over to Mr. Nitish for closing comments.
Yes. Thank you, everyone, for joining the call. Looking forward to speaking to all of you again in Q3. Have a good day.
On behalf of Nazara Technologies Limited and Spark Institutional Equities Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.