WinZO earns maiden profit of Rs 126 Cr on operations, revenue triples in FY23

Real money gaming startup WinZO made a maiden profit of Rs 126 crore on the basis of its operations in the financial year 2022-23, a turnaround from a loss of Rs 120 crore incurred in the year-ago period.

On a consolidated basis, the company incurred a loss of Rs 710 crore for FY23. This loss is mainly attributed to how it accounts for investments through Compulsorily Convertible Preference Shares (CCPS), which are treated as a liability rather than equity, according to its accounting standards. This treatment led to an additional impact of Rs 836 crore on its liabilities.

However, the operational performance was positive, supported by the operating cash flows of Rs 140 crore generated during the same period.

In FY23, it registered Rs 674 crore in revenue from operations, reflecting a nearly 3X increase from Rs 234 crore it earned in the preceding fiscal year, as per financial statements filed with the Registrar of Companies. Its total income for FY23 was Rs 687 crore.

WinZO's expenses stood at Rs 566 crore in FY23, increasing 1.5X from Rs 363 crore in FY22. Its largest expense component was advertising and promotions at Rs 257 crore. Meanwhile, employee benefit expenses stood at Rs 54.8 crore in FY23.

WinZO attributed the turnaround to its innovative multi-gaming platform approach and micro-transaction model, which fosters superior retention cohorts and distribution metrics.

In the six years since its launch in 2018, WinZO has amassed 175 million users.

For FY24, WinZO anticipates "significant variations" in its business after the hike in GST announced by the GST Council last year. This rise is poised to affect its financial performance, prompting the company to undertake strategic planning and proactive measures to sustain profitability.

In October 2023, the government imposed a 28% GST on the total value of player deposits made on online platforms, subjecting significant financial strain on real-money gaming firms.