Nazara Technologies returns to profitability in Q2 FY27 despite tripling ad spend
Nazara Technologies reported a 52.7% year-on-year increase in operating revenue to Rs 803 crore for the second quarter of FY27, returning to profitability with a Rs 35.36 crore profit. The turnaround comes despite a 3.6x surge in advertising expenses, which now make up 54% of total costs.
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Revenue growth and profitability
Nazara Technologies reported a 52.7% year-on-year increase in operating revenue for the second quarter of FY27, reaching Rs 803 crore. The company returned to profitability, posting a profit of Rs 35.36 crore after reporting a loss of Rs 34 crore in the same quarter of the previous fiscal year, according to Entrackr.
Segment performance
Gaming remained the dominant revenue driver, contributing 81.7% of operating revenue with a 2.22x jump to Rs 656 crore from Rs 296 crore in Q2 FY26. However, the ad-tech business saw a 13.9% decline in revenue to Rs 124 crore, while the esports segment experienced a sharper drop of 73.6%, falling to Rs 23 crore from Rs 87 crore in the same period.
Rising advertising costs
Advertising and business promotion expenses surged 3.6 times to Rs 417 crore, accounting for 54% of Nazara’s total costs in Q2 FY27. Employee benefit expenses rose 9.2% to Rs 85.21 crore, while depreciation costs increased 20.6% to Rs 73.56 crore. Total expenditure grew 43.8% to Rs 768 crore during the quarter.
Half-year performance and market standing
Despite the profitable quarter, Nazara reported a net loss of Rs 47.11 crore for the first half of FY27, compared to a net profit of Rs 17.41 crore in H1 FY26. The company’s shares closed at Rs 399.95 on the National Stock Exchange, reflecting a market capitalisation of approximately Rs 16,402 crore.
What this means
Lazyfounder analysis — our interpretation, not reported fact.
Nazara’s return to profitability in Q2 FY27 highlights its ability to scale revenue—particularly in gaming—while absorbing a sharp increase in advertising costs. The heavy reliance on gaming (81.7% of revenue) and the volatility in ad-tech and esports segments suggest that diversification remains a challenge. For founders and operators in gaming and adjacent sectors, Nazara’s spending pattern signals a competitive market where customer acquisition costs are rising rapidly. The shift from a loss to profit in a single quarter also demonstrates how quickly leverage can change in high-growth, high-spend sectors, which is worth watching for startups balancing growth and profitability.
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Sources
- Entrackr · 2026-10-26
Nazara returns to profit in Q2 FY27; advertising accounts for 54% of total cost
This story is an original summary drafted with AI by Lazyfounder from the reporting listed above and checked by automated validation. Facts are attributed to their original publishers; sections marked as analysis are Lazyfounder's. Where a source is in another language, facts were machine-translated and quotations are reported, not reproduced. Read the original coverage via the links, and see our AI policy and corrections policy.
About the author
Editor, Lazyfounder
Tarun Mottlia edits LazyFounders, covering Indian startups, funding rounds, AI and product launches. Every story on the site is AI-assisted and checked against its cited sources before publication.
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