Cutting-edge tech, cost optimization, and strategic diversification are driving ShareChat’s success
ShareChat, a leading social media and content-sharing platform, has demonstrated significant progress in fiscal year 2024 (FY24). The company reported a 33% year-on-year (YoY) increase in revenue, reaching INR 718 crore, up from INR 540 crore in FY23. This growth comes alongside a substantial reduction in losses, as adjusted EBITDA losses declined by 67% from INR 2,400 crore in FY23 to INR 793 crore in FY24. These achievements highlight ShareChat’s strategic focus on profitability, operational efficiency, and diversification.
Revenue Growth Across Segments
Advertising Revenue
ShareChat’s advertising revenue grew 23% YoY, reaching INR 315 crore, despite macroeconomic challenges. This growth is attributed to the company’s diversification strategy, expanding its client base across verticals such as FMCG and mid-market advertisers. ShareChat’s ability to attract advertisers from varied industries underscores the platform’s growing influence and relevance in the Indian digital advertising space.
Livestreaming Revenue
The livestreaming segment recorded an impressive 41% YoY growth, generating INR 402 crore in FY24. This surge was driven by a steady increase in paying user counts across both ShareChat and Moj platforms. Livestreaming has emerged as a significant revenue driver, showcasing the company’s ability to capitalize on user engagement and monetization strategies.
Operational Efficiency and Cost Optimization
Reduction in Losses
ShareChat achieved a 67% reduction in adjusted EBITDA losses, showcasing its commitment to financial sustainability. By optimizing operations and cutting costs, the company has positioned itself closer to long-term profitability.
Server Cost Optimization
One of the key contributors to cost savings has been ShareChat’s server infrastructure optimization, resulting in a 50% reduction in server cost per user since the beginning of 2024. This optimization has been a cornerstone of the company’s strategy to manage expenses while maintaining user satisfaction.
Profitability Milestones
ShareChat and Moj Achieve Profitability
Subsequent to FY24, ShareChat achieved profitability with an EBITDA margin exceeding 15%. The Moj app, though not fully profitable, reached operational profitability, effectively covering all costs except employee salaries. Moj is expected to achieve full profitability by the end of FY25.
The company attributes these milestones to a dual strategy of revenue growth and cost optimization, driven by technological innovation and efficient resource management.
Improvements in User Retention and Monetization
Enhanced User Retention
Aggressive efforts in feed ranking improvement led to a nearly 10 percentage point increase in long-term user retention for both ShareChat and Moj. Improved retention reduces the need for high user acquisition spending, cutting these costs to near zero.
Advertising Revenue per User
ShareChat reported a 25% YoY increase in advertising revenue per user, showcasing improved monetization capabilities. This growth reflects the platform’s ability to deliver value to advertisers while maintaining user engagement.
Margin Improvement in Livestreaming
The livestreaming business also saw a nearly 10 percentage point margin improvement, driven by higher paying user counts and refined monetization strategies.
Technological Advancements
ShareChat’s strategic investment in product development and a state-of-the-art recommendation engine has been pivotal in its journey toward profitability. These advancements enhance user experience, improve engagement, and support monetization efforts, providing a competitive edge in the crowded social media space.
Leadership Insights
Commenting on the financial performance, Ankush Sachdeva, CEO and Cofounder of ShareChat and Moj, highlighted the company’s achievements in cost-cutting and revenue growth. Sachdeva emphasized that strategic investments in product development and technology have been instrumental in achieving profitability for the ShareChat app and setting the stage for company-wide profitability.
He stated, “Over the past few years, we have been successful in cutting our costs significantly and ramping up our revenue. This, coupled with our strategic investment in product development and state-of-the-art recommendation engine, have charted our path to profitability.”
Outlook for FY25 and Beyond
EBITDA Losses in FY25
For FY25, ShareChat anticipates that EBITDA losses will be reduced to one-third of FY24 levels, reflecting continued progress toward financial sustainability.
Positive Cash Flow by FY26
ShareChat expects the consolidated business to start generating positive cash flow by early FY26, marking a significant milestone in its financial journey.
Key Takeaways
Revenue Growth: A 33% YoY increase in overall revenue, driven by advertising and livestreaming growth, underscores ShareChat’s strong market presence.
Cost Optimization: A 50% reduction in server costs and significant cuts in other operational expenses highlight efficient resource management.
Profitability Achieved: ShareChat app’s EBITDA profitability and Moj’s operational profitability showcase the company’s strategic focus on financial health.
User Retention: Improvements in feed ranking and long-term retention have reduced reliance on user acquisition spending.
Technological Edge: Investments in a recommendation engine and product enhancements continue to drive engagement and monetization.
ShareChat’s financial performance in FY24 reflects a well-executed strategy of balancing revenue growth with cost optimization. The company’s ability to achieve profitability milestones for its flagship apps, while simultaneously improving user retention and monetization, positions it as a leader in India’s digital landscape.
With further reductions in losses expected in FY25 and plans for positive cash flow by FY26, ShareChat is setting a strong foundation for sustainable growth. Its continued focus on technological innovation, diversified revenue streams, and operational efficiency ensures that it remains a key player in the competitive social media and digital advertising markets.
