Dream Sports, the parent company of Dream11, demonstrated an outstanding financial performance in the last fiscal year as its revenue grew 66.21% and neared the Rs 6,400 crore threshold in FY23. At the same time, the firm’s profit grew 32.4% during the same period.
Dream11’s revenue from operations surged to Rs 6,384 crore in FY23 from Rs 3,841 crore in FY22, its consolidated financial statements sourced from the Registrar of Companies (RoC) show.
The platform fees received from the users for participating in the contest also known as Gross Gaming Revenue (GGR) was the sole source of revenue for the fantasy gaming platform in FY23.
The company also earned Rs 197 crore from the gain on sale of current investments, tallying the total revenue to Rs 6,581 crore in FY23.
Dream11 has been sponsoring the Indian Premier League for the past three editions. It has onboarded a host of star cricketers as brand ambassadors. As a result, its advertisement and promotional expenses accounted for 51% of its total burn. This expenditure increased 37.3% to Rs 2,964 crore in FY23 from Rs 2,158 crore in FY22.
Its employee benefit cost saw a 2.3X jump to Rs 1,154 crore in FY23. Information technology, content, processing, and other overheads pushed the firm’s overall expenditure up by 55.21% to Rs 5,839 crore in FY23 from Rs 3,762 crore in FY22.
Check TheKredible for the detailed expense breakup.
Expense Breakdown
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- Employee benefit expense
- Advertising promotional
- Others
The significant surge in scale helped Dream11 to post a 32.39% increase in its profits which stood at Rs 188 crore in FY23 from Rs 142 crore in FY22. Its ROCE and EBITDA margin improved to 29.4% and 12.8% respectively. On a unit level, it spent Rs 0.91 to earn a rupee in FY23.
FY22-FY23
| FY22 | FY23 |
| EBITDA Margin | 9% | 12.8% |
| Expense/Rupee of ops revenue | ₹0.98 | ₹0.91 |
| ROCE | 13% | 29.4% |
During the last fiscal year, the company had a total current assets of Rs 1,609 crore which includes Rs 779 crore of cash and bank balances.
Dream11 is the highest revenue-generating fantasy sports company in India followed by Gameskraft, Games24x7, A23, MPL, Zupee, and Gameberry. However, Gameskraft topped the list when it comes to profit. The bootstrapped firm reported Rs 1,062 crore profit in FY23.
Fantasy and skill-based gaming firms have been going through a rough patch ever since the introduction of 28% GST by the Indian government. The crackdown by the government forced Mobile Premier League (MPL), Spartan Poker and Kavin Bharati Mittal-led Hike Rush Gaming Universe to fire several hundred employees. A clutch of startups including Fantok, One World Nation (OWN) and Quizy shut their operations.
While Dream11 officially did not cut its workforce, the firm shut down its corporate venture capital (CVC) arm Dream Capital in October last year.
For FY24, Dream11 cut its operating profit target by 80% due to the new GST regime. The company is the highest valued startup in its space and was valued at $8 billion after a $840 million round in November 2021.
While well entrenched in its space, its struggles with the new regulatory regime will certainly take a toll on growth as well, even as margins shrinking further. Efforts to change mindsets haven’t borne fruit so far, and FY24 will be a litmus test of the growth prospects and margins going ahead in the near future. The cost base which has expanded will also come under pressure we believe, and we will see some cost cutting announcements very soon, one can assume.
