What Affle and other add-tech are doing to counter ATT( anti tracking transparency ) thing ?
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Amazon launched the advertising business: Amazon Advertising: Online advertising for businesses of all sizes
Will this impact Affle business growth?
If I am not wrong, this is nothing new, as it was there since 2012. Amazon launched Amazon advertising(formerly Amazon Marketing Services, or AMS), as a search advertising solution for Amazon vendors. Similar to pay-per-click ads on Google, sellers only pay when shoppers click on ads.
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I am not sure whether their services are available in India or not. Since both Google and Amazon are big players jump into advertising business, I just want to understand how it will impact in Affle future growth.
Affle’s programmatic business is relatively much smaller compared to their network/OEM business. For Affle the competition is smaller networks ( Globale, Mobavenue, Xapads etc), InMobi and Chinese networks like Mobvista. Unless large Indian advertisers in e-commerce/edtech are moving away from network supply to exchange supply, there is no issue.
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The issue for Affle is this according to me.
They were routing their businesses via Dubai and not paying much tax. Now they have made an acquisition Jampp which has a presence in Latin America and North America. While Jampp will make losses, the IP sitting in Dubai will have to be moved to Latin America and North America so effective tax rates will go up. FY21 company delivered 135crs profits. I believe almost 25crs is exceptional in that. So on a 110crs base because of higher effective tax rates company cannot grow more to more than 130-140crs profits in FY22E. So company trading at > 80x P/E on FY22E
80x P/E might be okay for a company growing 50-60%…but not for one growing 25-30%.
1QFY22 may not be impacted because of higher taxes. But from 2QFY22 it can impact numbers. So dont you think the stock will correct more? Views and insight invited…
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revenues have grown drastically
margins were going down slightly and continuosly.dont know whether its due to competition pressure or not.need some confidence on sustainable margins front. waiting for concall
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there a lot of affiliate ads businesses with 50-300 Cr revenue. Globale Media, MobAvenue, Mobivisits, Xapads, etc.
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5 July, 2020 – Affle (Listed company) buys 8% of a company for USD 2.86 million.
25 Jan, 2021 – Affle (listed company) sells the same 8% stake to Affle (unlisted promoter entity) for USD 2.86 million with call option to buyback the stake for 5% premium at end of 1 year & 10% premium at end of 2nd year.
AR 2021 – reports that Affle (listed company) has exercised the call option as the value of stake has risen to USD 7 million.
Questions raised –
- Why the stake was sold in the first place giving the benefit to unlisted company when the company was strategic fit?
- There is ongoing clash between Affle (unlisted entity) & Phonpe to acquire remaining 92% of the company in which Affle (unlisted company) has claimed to have upper hand in Singapore International Arbitration Terminal?
Positives –
- The legal tussle being taken on by promoters
-
The amount of gain to promoters is small compared to overall market cap.
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Prabhudas Lilladher initiates coverage on Affle.
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I compiled the projected revenue growth by different reports. PL report is very aggressive in terms of projections.
FY21 sales=517cr, TTM Q1FY22= 580cr. Management had guided revenue growth of 25%-30% along with margin expansion over the next five years,
| Revenue (cr) | FY22 | FY23 | FY24 | CAGR |
|---|---|---|---|---|
| PL (sept21) TP 7023 | 912 | 1346 | 1875 | 54% |
| BOB (sept21) TP 6200 | 880 | 1174 | ||
| Axis (aug 21) TP 4790 downgraded | 678 | 905 | 25-30% | |
| idirect (may21) TP 6225 | 698 | 942 | 35% | |
| Dolat (nov20) | 595 | 727 | 26% | |
| Dalal (nov20) | 608 | 740 | 25% |
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Affle successively receives its 5th and 6th US Patent Grants
Affle (India) Limited, the consumer intelligence-driven global technology company, announced that it has received Issue Notification for the grant of 2 patents from US Patent & Trademark Office (US PTO). One patent, bearing Patent no. 11157952 and date of issue as of October 26, 2021, is related to the technology of ‘Creating decentralized repository of fraud IPs and publishers using Blockchain’. Another patent, bearing Patent no. 11151605 and date of issue as of October 19, 2021, is related to the technology of ‘Click to install behaviour based detection of fraud’. With these two patent grants, Affle now has 6 US Patents granted along with multiple other patents filed and pending across US, India and Singapore.
These patent grants fortify our mobile ad fraud detection and prevention capabilities which include sophisticated machine learning algorithms to identify ad fraud in real-time, thereby maximizing quality of conversion-driven marketing for the advertisers. The patent that utilizes Blockchain creates an immutable decentralized shared ledger of fraudulent characteristics for publishers, scoring them into backlists & whitelists through continual interactions verification based on smart contracts. This patent also emphasises the use of machine learning to predict and reduce fraud. The other patent also uses trained machine learning models to detect human natural engagements vs. non-human bot traffic and other real-time signals and patterns to minimise ad fraud.
Commenting on this development, Anuj Khanna Sohum, the Chairman, MD and CEO of Affle said, “Affle has pioneered inventions and innovations in mobile marketing since 2005 and we are thrilled to be granted a total of 6 US patents as on date. Our patents for fraud prevention filed in 2017, demonstrate our scientific rigor and our commitment towards powering digital transformational journeys for advertisers globally. Ad fraud remains one of the top industry concerns and we have invested to enhance our intellectual property on ad fraud detection capabilities to prevent ROI erosion for top marketers. We continue to invent cutting-edge platform-focused solutions, advancing our tech thought leadership and augmenting our strategic defensibility globally.”
Closely driving the patents portfolio at Affle, Charles Yong, the Chief Architect and Technology Officer said, “Our team has done extensive R&D to build robust and reliable algorithms to help detect, highlight and eliminate multiple types of ad fraud. We have identified future usage of Blockchain technology as the trusted immutable platform for efficient sharing of insights amongst relevant stakeholders within the mobile marketing ecosystem to minimise mobile ad fraud in real-time. This technology has many applications and use cases for the future especially in fraud with the proliferation of devices such as IoT devices growing exponentially.”
This announcement comes soon after Affle was granted its 4th US Patent in September 2021, related to gesture-based, voice-intelligence driven interactions within the live streams such as podcasts. Affle has built a robust patent portfolio with 20 patents across India, US and Singapore. It now has 6 patents granted in the US, while 14 patents are filed and pending across jurisdictions. The pending patents include innovative use cases of driving vernacular & voice-based intelligence, conversational marketing, app recommendations timeline and ad fraud prevention.
This report mentions, “Affle through it’s acquisition of Appnext ((device app-discovery company) has given Affle exclusive access to few of the largest mobile OEM’s devices for app recommendations.
Currently Appnext serves Samsung, Xiaomi and Oppo. This gives it a dominant market share and it is also their single largest partner in India and South East Asia.”
Could not find a mention of Samsung, Xiaomi and Oppo in AR of 2020 and 2021, these names did not surface in the previous earning calls, appreciate if anybody can point me to this information.
Affle did not give a breakup of 1. OEM partnerships and number of devices where their software is installed 2. Which are the most popular apps they are partnered with and how many devices have these apps installed 3. Revenue share with app owners for co-ownership
To give a contrasting information, InMobi which is in the similar line of business has received commitment from Reliance that Glance app will be installed on all the RIL devices. Also, InMobi has developed few apps so they have full control on these apps, they will not have issues with version upgrades.
IMHO, it is difficult to predict future revenue in the absence the above mentioned information.
IMO, AdTech provides analytics and management of advertisements, cannot substitute for app on devices, very similar to Dynatrace | The Leader in Automatic and Intelligent Observability. I think, this link is more appropriate Application Analytics | Dynatrace
I am sharing 2 finshots articles here, intrestingly it seems like data privacy is now more important for everyone, including goverments. AdTech businesses should change now.
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Stellar numbers by Affle India. Consolidated EPS for Q2 at 18.08. Revenues, PAT has grown YOY and QOQ basis. In fact consolidated revenues and PAT doubled on YOY basis.
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