Nothing India is finally profitable - FY24 Financials Revealed

arpan2308 · 2024-11-10T09:45:29+00:00

![](https://nothing.community/assets/files/2024-11-10/1731226802-103656-screenshot-20241110-1332012.png "banner") > *"Okay so the bill of material is about USD360, we sell it at about USD450, So our profit margin is, if you remove all the kind of shipping logistics and giving some of that margin to channel partners like carriers or Amazon or whatnot, **OUR MARGIN IS ZERO**. After we have launched this product (phone1), now we have shipped half a million of these and now suppliers are budging. We are getting better and better pricing. So our future products, **OUR MARGINS WILL ALSO START GROWING**"* > > \~Carl Pei in 2022 *(Source: [Youtube Video](https://youtu.be/13PowoqJkEM?si=8cacRvGC4H70hy3N))* Looks like this is turning out to be true atleast for the Indian entity of Nothing. As a recap, Nothing India publishes its financials annually and if you remember, the entity was not profitable (on underlying basis) in FY23 (April'22 to March'23) [Detailed analysis of last year here](https://nothing.community/d/2838-is-nothing-india-already-profitable-details-inside) As Carl mentioned in the above quote, things are improving, margins are improving. Nothing India is actually making money on every unit sold. IT IS FINALLY PROFITABLE, on underlying basis i.e. without any financial support (subvention) from holding company. **Here are the summarised financial:** During FY24, it reported total revenue of INR 905 crores (USD 108mn), EBITDA of INR 17 crores (USD 2mn) and profit after tax of INR 12 crores (USD 1mn), While the revenue declined 9% YoY, the profitability profile improved significantly. From making almost 20% loss on material cost itself (i.e. gross profit) last year, now it is making 11% gross profit. So, now Nothing is not selling Phones below Bill of Materials (BoM). Even it is now able to absorb the overheads (employee cost, other expenses, advertising) and still make a positive EBITDA, albeit only 2%. But being breakeven within 3-4 years of operation, IS AN ACHIEVEMENT IN ITSELF. Still many startups in India, even after getting IPOed also, are still loss making machines. Great job by Nothing India, I must say. ![](https://nothing.community/assets/files/2024-11-10/1731260102-706213-image.png "banner") Coming to the revenue, it declined primarily led by decline in mobile phones sales, while the accessories (audio products, wearables etc) performed significantly better by more than doubling their revenue. Considering the products launched in FY24, looks like that the Phone (2) sales were much lower than Phone (1) and that is understandable given the high price point of Phone (2). Additionally, taking in account that Phone (2a) also launched in FY24, while only in the last month but it sold more than 100k units globally in March 2024 within a matter of hours, the Phone (2) sales must be quite low. On the accessories, looks like the launch of Ear (2), CMF line-up (Buds Pro, Watch Pro, GaN charger, Buds) did quite well, thus doubling the revenue. Btw, CMF Phone 1 launched post the closure of FY24, thus its revenue is not captured in this. **Full Financials:** ![](https://nothing.community/assets/files/2024-11-10/1731260064-342196-image.png "banner") **Estimated product wise volumes:** Similar to last year, if we try to estimate the product wise volumes, looks like Nothing India sold about 400k mobile phones and more than 200k accessories in FY24. *Refer last year's post to better understand the estimation approach followed.* ![](https://nothing.community/assets/files/2024-11-10/1731260126-508501-image.png "banner") **Some other observations:** * **Pickup in sales & marketing expenditure**: Encouraging to see that Nothing India efforts on sales and marketing have improved substantially. Its marketing expenditure increased 165% to INR 25 crores (USD 3mn) i.e. now 2.7% of revenue vs only 0.9% of revenue last year. I think it was bound to increase given higher advertisements we have seen, India launch events and hiring of Ranveer Singh as the brand ambassador for Phone (2a). Considering the early stage at which Nothing brand is there, I think this expenditure needs to further increase. Even nowadays mature companies spend 3% of revenues on advertising. Aggressive companies spend 15% of revenue and startups spend even 40%+ on advertising. * **Imports increasing but in line with accessories sales**: CIF value of imports almost doubled implying much higher imports by the company. I think it is understandable considering more than doubling of accessories revenue as these things must be coming from China for Nothing India. May be Nothing now should evaluate manufacturing these also in India, along with its existing Phone manufacturing. Recent Indian pricing of Nothing accessories pricing have been on increase along with limited availability (for example, high pricing for Ear 2024 and Ear Open), which can be improved with Indian manufacturing. * **Exports still zero**: As mentioned in last year's post, exports from India continues to be zero. That means, Indian manufactured products are solely being sold in India. Given now Apple is also shifting supply chains to non-China markets, exporting from India can be a big opportunity. Even Carl recently in his interview at TechCrunch ([interview link](https://youtu.be/aYTf1Zi-72s?t=832)) has also talked about experimenting exports from India manufacturing facilities in an year. * **Warranty & rebate provision**: Provision increased by INR 42 crores (USD 5mn) which is 4.6% of FY24 revenue. Looks like a decent number for warranty claims. * **Subvention / Support from Nothing Tech**: Unlike last year, in FY24, Nothing India has not considered any income subvention / support from the holding company, mostly because now the Indian entity is profit making. While it still has last year's income subvention as receivable on the balance sheet, it was reduced a bit. Looks like Indian entity has received some last year's support this year and has also written off some of the amount (INR 18 crores or USD 2mn) as a loss. It seems that this amount will be over a period of time be reduced by considering as a loss, because as mentioned in last year post, Nothing India had paid taxes on it last year. Considering it as a loss now may net it off going forward. But, in short, Indian entity is not requiring any more financial support from global unit, which is a big positive. * **Royalty payment**: Biggest thing to prove that Nothing India is doing well is from the fact that it has started paying Royalty to the holding company. FY24 was the first year when India entity paid Royalty. It paid INR 11 crores (USD 1mn) i.e. 1.2% of revenue. 1-1.5% royalty to the brand holder is quite common for MNCs in India where the India unit is using the global company brand. **In summary**: FY24 financials reveal a significant milestone for Nothing India, marking its first profitable year on an underlying basis. Despite a slight dip in overall revenue, the company’s improved margins and became self-sufficient. Investments in marketing, increased accessory sales, and the initiation of royalty payments to the holding company. Nothing India’s journey to profitability within just 3-4 years is commendable and points to a robust future. *Thanks for spending time on reading this long one. Please note, the above analysis is my personal one and is based on many assumptions, thus it may or may not match with business underlying performance.* Excel attached [upl-file uuid=2aefb65c-3225-4670-98b8-46af0ee3fece size=28kB]nothing-india-fy24-financials.xlsx[/upl-file] ***What do you think about this financial performance? What do you think Nothing should focus on now, particularly in India? Let's discuss in comments ⬇️***

SubrahmanyaHegde

arpan2308 Customer satisfaction should be at the core of Nothing’s strategy.

In today’s competitive landscape, after-sales support isn’t just a service—it’s a powerful differentiator.

In a city like Bengaluru, customers expect timely, efficient support, and the current level of service isn’t meeting this standard.

yet I personally experienced a delay of over 15 days for a service pickup especially in Bengaluru. Such delays highlight the need for urgent improvement in support services.

A satisfied customer becomes the best brand ambassador, reducing the need for heavy marketing spends and improving conversion rates.

Investing in quality support services is essential for building long-term loyalty and reputation.

arpan2308

SubrahmanyaHegde 100% true, good quality, quick and accessible service is paramount. Many brands have been created and even failed just because of the service. Offering the product is just one small part of the customer experience but servicing customer through regular software support/updates, warranty claims and repairs is quite important. Good to see Nothing steps in right direction by setting up exclusive service centers starting with Delhi, Bangalore etc, but still a lot of initiatives are required in that direction. From financials perspective, nice to see Nothing India keeping 4-5% of revenue as warranty provisions, so warranty claims should be easy for customers as company is keeping some money aside for such claims.

Amol

arpan2308 great job on the detailed post bro.

I believe FY25 numbers will look much much better with the success of Phone (2a) and CMF Phone (1) showing up in revenue and hopefully profit growth.

Nothing can double their revenues in India and reach around 2000 crore revenue by next year with the way they are growing.

I’d say if the environment is right, Nothing India can list at a 2.4 to 2.5 $ valuation(slightly more than 10 x sales,pricey but it’s a hyperscaling unique startup that might deserve it looking at future growth, Zomato is trading at 14-15 times sales for comparison). There is no listed company in india like nothing and they can surely attract premium valuations with the kind of growth we are expecting.

Cheers and thanks for the effort.

Akis

Hey man - came across your post and taking the opportunity to add some further context and clarity.

As you mentioned, the above analysis includes several assumptions, and when it comes to profitability, various factors need to be considered, making it a complex exercise.

First - it is important to mention that the financial year for our Indian entity ends in March, which is out of sync with the rest of our group, where it ends in December. This misalignment tends to give an inaccurate view of overall performance for 2024 as it is missing April to December.

Also, interactions with other Nothing group entities mean that these figures deviate somewhat from the broader group performance. For example, allocations for R&D, global key hires, and marketing expenses, along with other centralized costs, and ensuring fair compensation for the risks the Indian entity takes on behalf of the group, are all complex matters managed by experts. This context affects how these figures should be interpreted.

While we’ll publish our results next year for the period from April 2024 to March 2025, it’s useful to look at recent analyst reports for insights on overall 2024 performance. For instance, Counterpoint Research released its Q3 report last week, showing that Nothing was the fastest-growing smartphone brand in India for the third consecutive quarter and entered the top 10 for the first time in Q3. The exciting part is that this success is fueling Nothing’s innovation, which will be a core focus for us in 2025, with our most ambitious product roadmap yet!

Take care ✌️

arpan2308

Akis Thanks Akis for adding additional context 💯

Points well taken about the complexities of different fiscal year-end and inter-entity allocations.

Glad you mentioned about the recent Counterpoint Research’s report and record numbers Nothing has been clocking. Quite encouraging to see Nothing’s impressive growth in India 🔥

RavishKumar

Congratulations Nothing India

RubasGohar

I WAS SO EAGERLY WAITING FOR THIS, I NEED IT FOR A COLLEGE RESEARCH, BIG LOVE BRO

Daywalker

arpan2308

This is super interesting, thanks for sharing. May I ask where you found this information?

They’ve been reporting triple digit growth for each of the subsequent quarters, as high as 600% in Q2 2024.

As a rough guess I’d say Nothing India revenue for April 24 - March 25 is around $300m, and we keep on (at least) doubling from here.

Not sure why they would only list Nothing India rather than the parent company, doesn’t make much sense imho.

According to Carl Nothing (group level) is on track to reach $1bn revenue this (calendar) year.

Would be keen to hear about the current valuation. There were reports in January they’re looking for new funding, but it’s been quiet since (on that front).

arpan2308

Daywalker these high growths you mentioned 600% and all are recent phenomenon post CMF and 2a launch. Will be interesting to see FY25 financials of Nothing India.

Listing in India can unlock a lot of value given the types of valuations here companies are getting. Now there are non-profitable companies also getting listed here in India with great valuations. But listing comes with its challenges of quarterly reporting etc.

Have heard nothing about that funding round since January.

Ant-e-so-shial

I don’t know about Nothing but CMF has a lot of market potential in India if they target the lower end phone range. They should make inexpensive phones which are bought by like more than 80% Indians from villages, old people, towns people, young students,etc…It’s like a gold mine waiting to be struck.

arpan2308

Ant-e-so-shial yes correct, thats why they are focusing a lot on CMF in India. Recently, if you remember, they announced that CMF will be fully handled from a team in India. New marketing head has also joined.

Ant-e-so-shial

arpan2308 good. I hope they actually study the market and just put what is required. Cause the demographics i mentioned don’t care a bit about changeable back gimmick, all they care for the money I have, is this the best in the market. Which is not Nothing stands for, so I feel for CMF they should make tailored varients to target that demographics.