Nazara swings to ₹35 Cr profit as gaming revenue jumps 53% YoY

Nazara Technologies reported a net profit of ₹35.4 crore for the quarter ending September 2026, reversing a ₹33.9 crore loss in the same period last year. Revenue climbed significantly, with sources indicating a 53% year-on-year increase to ₹803.2 crore. The company’s gaming segment, which now represents the majority of its business, saw substantial growth, partly due to the inclusion of acquisitions made in the previous year.

The shift to profitability follows a period of volatility, including a steep loss in the prior quarter. Earlier financial challenges had been linked to one-time charges, though the current quarter’s results reflect a more stable operational performance. EBITDA rose sharply, with margins improving as impairment expenses remained limited.

A key driver of the quarter’s performance appears to be the integration of recently acquired studios. These additions contributed significantly to revenue, with reports suggesting they accounted for nearly half of the total growth. The company has emphasized operational efficiencies, including automation and new feature rollouts, to support this expansion. However, not all segments performed equally. Some of Nazara’s existing gaming properties saw declines, reflecting broader industry trends, while others benefited from increased user spending.

One of the company’s subscription-based offerings reported revenue growth, supported by higher average spending per user. However, profitability in this segment declined as the company invested more in user acquisition. This trade-off suggests a deliberate strategy to prioritize scale, even at the expense of short-term margins.

Outside gaming, Nazara’s offline entertainment and adtech businesses delivered mixed results. Revenue in the offline segment remained largely unchanged, though margins improved slightly. The adtech arm, meanwhile, faced headwinds as a major client reduced spending, limiting its financial contribution. The sports tech vertical also struggled, with negative profitability attributed to one-time costs.

The quarter’s results reflect Nazara’s broader strategy of leveraging acquisitions to drive growth. While this approach has delivered immediate gains, the uneven performance across segments raises questions about the company’s ability to maintain momentum without further consolidation. Investor sentiment appeared cautious, with the stock showing minimal movement following the earnings announcement.

Looking forward, Nazara’s focus on scaling its acquired studios and expanding internationally could further strengthen its position. However, the company’s reliance on a few high-performing verticals may leave it exposed to sector-specific risks. The coming quarters will reveal whether this quarter’s profit marks a turning point or a temporary rebound.

Sources: inc42.com · yourstory.com · economictimes.indiatimes.com