Ullu’s revenue stagnates at Rs 100 Cr in FY24; profit declines by 16%

Following a two-fold growth in FY23, over-the-top (OTT) platform Ullu recorded a modest 7% year-on-year revenue increase for the fiscal year ending March 2024. However, the Mumbai-based company saw its profit decline by over 16% during the same period.

Ullu’s revenue from operations grew to Rs 99.7 crore in the last fiscal year, from Rs 93 crore in FY23, according to its financial statement sourced from the Registrar of companies (RoC) shows.

Ullu is a subscription-based platform offering a wide range of video streaming content filled with a lot of soft porn. Sale of content was the major source of revenue for the company as it accounted for 99.9% of the total operating revenue. This income increased by 7.7% to Rs 99.5 crore in FY24 from Rs 92.44 crore in FY23.

Revenue from product sales dropped sharply by 82.9% to Rs 12 lakh in FY24. However, the company earned an additional Rs 50 lakh from interest income, bringing the total revenue to Rs 100.18 crore.

On the expense side, cost of materials (content creation) remained the largest expense, climbing 28.7% to Rs 46.24 crore, representing 55.4% of the total costs. Advertising expenses fell by 25.7% to Rs 14.95 crore, while employee benefit expenses surged 41% to Rs 11.89 crore. Other significant expenses such as legal professional charges and rent stood at Rs 2.83 crore and Rs 2.38 crore, respectively. Overall, Ullu’s total expenses grew by 15.5% to Rs 83.5 crore in FY24.

In the end, Ullu’s profit decreased by 16.2% to Rs 12.68 crore from Rs 15.13 crore in FY23. Its ROCE and EBITDA margin stood at 44.3% and 17.54%, respectively, during the last fiscal year.

Ullu’s EBITDA declined by 20.8% to Rs 17.57 crore in FY24 from Rs 22.19 crore in FY23, with the EBITDA margin narrowing to 17.54%. On a per-unit basis, Ullu spent Rs 0.84 to earn a rupee of revenue in FY24.

The company’s total assets slightly dipped to Rs 70.11 crore in FY24 from Rs 71.63 crore in FY23. Meanwhile, cash and bank balances decreased significantly, down 71.7% to Rs 2.66 crore in the last fiscal year.

In February, Ullu filed a draft red herring prospectus (DRHP) with the BSE SME for an initial public offering (IPO). The company proposed to raise funds via fresh issue of up to 62,62,800 equity shares. Notably, the company’s DRHP doesn’t have any offer for sale (OFS) component.

While ambitions of raising public funding is as audacious as it gets, considering a business model built around dropping inhibitions it is no surprise. In the age of OnlyFans crossing $7 billion in revenues, Ullu might just have discovered the limits to growth as an organised player. Customers paying for the content it offers can keep convincing themselves that they like the jokes or the storyline as well, but the truth is, as Ullu grows, the pressure to conform only becomes greater. It faces a challenge of owning up to its ability and success selling smut, or watching a more brazen upstart take over even as Ullu falls into any one of the moral pitfalls it dances around every day.  And as we keep saying, in the smut business, size remains a red herring, sure to attract the kind of official attention no amount of borderline porn will.