Release Date: January 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tips Music Ltd (BOM:532375, Financial) declared a dividend of INR3 per share, reflecting a commitment to shareholder returns.
- The company reported a 20% year-on-year revenue growth for Q3 FY25, reaching INR77.67 crores.
- Operating EBITDA for the quarter grew by 28% year-on-year, with margins at 71.6%.
- The company has formed strategic partnerships with platforms like TikTok and YouTube Shorts, opening new revenue streams.
- The YouTube subscriber base reached 113 million, indicating strong digital presence and audience engagement.
Negative Points
- Net profit margin decreased from 68.95% to 56.95% year-on-year, raising concerns about profitability.
- The company did not include any revenue from the TikTok deal in the current quarter, delaying potential earnings.
- Content acquisition costs remain conservative, potentially impacting long-term content library growth.
- The company faces intense competition in content acquisition, which could affect future growth.
- Revenue growth was slightly below the 30% target, raising questions about sustaining this growth rate.
Q & A Highlights
Q: Does the INR78 crores revenue include a one-time amount from TikTok?
A: No, there is no amount from TikTok included in this quarter's revenue. The revenue from TikTok will start from the next quarter based on streaming. The advance received from TikTok will be booked every quarter. (Sushant Dalmia, CFO)
Q: Why did Tips Music choose to partner directly with TikTok instead of Warner?
A: Mr. Hari Nair, our CEO, who has previous experience with TikTok, suggested a direct partnership would yield a better deal due to existing relationships. This strategic decision is expected to be beneficial in the long term. (Kumar Taurani, Executive Chairman & MD)
Q: There is a reduction in net profit margin year-on-year. What is the reason for this?
A: We focus on annual performance rather than quarterly. For the nine months, we have achieved a 30% growth in both top line and bottom line, which aligns with our targets. (Kumar Taurani, Executive Chairman & MD)
Q: How is the paid-up streaming progressing, and what is the outlook for the music industry?
A: Streaming is performing well, with subscription numbers growing. Platforms like Spotify are showing significant growth, and we expect this trend to continue. (Kumar Taurani, Executive Chairman & MD)
Q: What is the medium-term outlook for Tips Music, and are there any acquisition plans?
A: We anticipate a 30% growth in the next year, driven by increasing subscriptions and monetization opportunities from platforms like YouTube and Instagram. We are not currently focused on acquisitions but are optimistic about organic growth. (Kumar Taurani, Executive Chairman & MD)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
