ShareChat slashes EBITDA losses by 67%, as revenue grows in FY24

Homegrown social media company ShareChat reported improved financial performance for FY24, with significant reductions in operational losses.

With its core ShareChat app achieving profitability and the Moj app moving towards financial sustainability, the social media company is now focusing on strategic growth and potential acquisitions in the creator economy.

ShareChat reported Rs 718 crore in annual revenue for FY24, a 33% increase compared to Rs 540 crore in FY23. Its advertising revenue rose 23% YoY to Rs 315 crore, driven by diversification into mid-market and FMCG sectors. Its livestreaming business showed stronger momentum in the fiscal year, with a 41% revenue increase to Rs 402 crore.

According to CFO Manohar Singh Charan, the ShareChat app contributes nearly two-thirds to ShareChat's revenue, while the rest comes from the Moj app.

Meanwhile, it reduced its adjusted EBITDA losses to Rs 793 crore, down 67% from Rs 2,400 crore in FY23. The total losses for the period stood at Rs 1,898 crore in FY24, down 63.1% from Rs 5,142 crore in FY23.

Charan said the accelerated amortization in FY23—primarily related to the MX TakaTak deal—significantly increased losses by Rs 1,800 crore. Once cleared in the previous fiscal, the company has not reported any similar amortization costs in FY24.

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For employee benefits costs, ShareChat recorded Rs 580.39 crore in FY24, down by 16.84% from Rs 697.96 crore in FY23, on decreased headcount. The company spent Rs 1,537.61 crore in other expenses, mostly encompassing server costs.

"We've halved our tech infrastructure costs per user," Charan revealed, attributing the savings to extensive code optimisation, server architecture restructuring, and elimination of technical debt. He explained, “It's like cleaning up a house you’ve lived in for 10 years—we rewrote two-thirds of our codebase, making our algorithms leaner and more efficient.”

The ShareChat app also hit a significant milestone by achieving full profitability with an EBITDA margin exceeding 15% as of October 2024. The Moj app—while not yet fully profitable—achieved operational profitability, covering all costs except for salaries, and is expected to be entirely profitable by the end of FY25.

As of March 2024, ShareChat's run-rate losses have dropped dramatically, amounting to only Rs 65 crore annually, the CFO highlighted. "We’ve moved from burning Rs 2 for every Re 1 earned to losing just eight paise per rupee of revenue," Charan said, adding, "By March 2025, we hope to be cash break-even."

He noted the company’s ongoing strategy to further optimise tech infrastructure, with more savings expected before the end of FY25.

It also plans to ramp up investments in user acquisition and growth. "Our primary focus has shifted from finding efficiencies to scaling up," Charan stated.

With the ShareChat app now contributing positively to profits, the company is prepared to reinvest in marketing and user acquisition, particularly for Moj. Marketing costs, which had been scaled back for efficiency, are expected to increase in FY26 as the user base expands.

Moj’s profitability trajectory lags behind ShareChat due to higher server costs, which come with live streaming. It also suffers from lower budget allocations for short videos by advertisers. Charan acknowledged, "Efforts from global players and industry trends will push short videos to gain a larger share of ad budgets."

Costs associated with live streaming—such as creator payouts, payment gateway fees, and training expenses—impact gross margins. The creators on ShareChat and Moj collectively earn about $40–$45 million per year on a run-rate basis.

While ShareChat remains sufficiently capitalised—following a $65 million raise earlier this year—the company is exploring another funding round ahead of a potential IPO.

"We are adequately funded, but we see value in bringing additional investors on board as we gear up for our IPO," Charan remarked.

Charan underscored the company’s plans to grow organically and inorganically, citing upcoming efforts to explore acquisitions in the creator economy and content domains. “We’re focusing on expanding the user base and increasing revenue per user, with a keen eye on maintaining profitability," he said.