Kuku nearly quadrupled ad spend to ₹1,105 crore and still made a pre-tax profit

Kuku Technologies raised its marketing bill almost fourfold in FY26 and booked a ₹88.6 crore pre-tax profit. Subscription-only revenue, cheap volume content and a revenue-per-ad-rupee ratio that crossed one explain the result, though churn is still undisclosed.

15 Oct 2026 · 5 min read

Kuku nearly quadrupled ad spend to ₹1,105 crore and still made a pre-tax profit

In FY25, an Indian entertainment company spent ₹284.8 crore on marketing and booked about ₹241.6 crore in revenue. Every rupee of advertising brought back roughly 85 paise of sales.

A year later the same company spent ₹1,105 crore, nearly four times as much. Each advertising rupee now brought back about ₹1.34 in revenue, and the year closed with a pre-tax profit. Most startups that quadruple ad spend watch that ratio get worse.

The company is Kuku Technologies, the parent of the audio platform Kuku FM and the microdrama app Kuku TV. Medianama reports it was founded in 2018 by Lal Chand Bisu, Vikas Goyal and Vinod Meena, and that it also runs the learning app Guru. Its FY26 filings with the Registrar of Companies show operating revenue of ₹1,484.2 crore, up from ₹241.6 crore a year earlier, according to Medianama and Inc42.

Entrackr reports a profit before tax of ₹88.6 crore. The two ratios above are calculated from the reported figures.

One revenue source, paid by users

Almost all of Kuku's money comes directly from users. Medianama reports that subscriptions brought in ₹1,475.4 crore in FY26. Pay-per-piece purchases, where users spend virtual tokens to unlock a title, added ₹6.9 crore, and advertising contributed ₹1.9 crore.

The company is not selling audience attention to brands. It sells a recurring product, so each marketing rupee buys a customer who can renew. A subscriber who renews recovers the acquisition cost over time.

The price points are low. When Kuku raised $85 million in October 2025, Bisu told TechCrunch that plans cost ₹199 a month, ₹499 a quarter and ₹1,499 a year, with the quarterly plan the most popular. He also said about 80% of subscribers come from non-metropolitan cities and that over 90% of subscribers stay active month over month. Those are founder claims, and the FY26 filings do not verify them.

Kuku says it has more than 400 million installs and over 10 million subscribers as of June 2026, according to Medianama. That works out to roughly one subscriber for every 40 installs, so the conversion from free user to payer decides whether the ad bill pays back. A GrowthX analysis from the Kuku FM audio era cited an 11% conversion rate, an acquisition cost of about ₹300 and revenue of ₹600 per user a year. That is an older, third-party figure for the audio business, not an audited number for today's microdrama operation.

Making shows costs far less than finding viewers

Kuku produces a large volume of content for a modest sum. BharatFast reports that it releases more than 150 microdramas a month, spends over ₹200 crore a year on content and works with around 50,000 creators. Against a ₹1,105 crore marketing bill, content costs roughly a fifth as much.

AI sits inside that production line. Business Standard reports that Kuku has previously said 60 to 70 per cent of its content is created with AI tools at different stages, and that it is building a 1,000-member AI-led production unit. People familiar with the plan told the paper the aim is more volume and speed at lower cost. Whether cheaper shows keep subscribers renewing is not shown in the filings.

Other costs grew too. Operational costs rose to ₹96.3 crore from ₹8.7 crore, and payment gateway charges reached ₹43.2 crore, according to Medianama and BharatFast. Total expenditure came to about ₹1,422 crore, up from ₹411 crore.

The profit line needs a footnote

The headline net profit is ₹182.7 crore, against a loss of ₹152.6 crore in FY25. A deferred tax benefit of ₹98.1 crore lifted that figure, as Entrackr, Viestories and BharatFast all note. Profit before tax of ₹88.6 crore is the cleaner measure, and RetailIntel puts FY26 EBITDA at ₹82.9 crore.

The margin is thin for a business that spends about three-quarters of its revenue on marketing (₹1,105 crore of ₹1,484 crore). A modest rise in the cost of getting a user to install, or a modest fall in renewals, would hit the result quickly. The filings and reports reviewed here do not disclose churn.

The planned IPO may change that. Inc42 reports that Kuku filed confidential draft papers in June and that SEBI issued its observation letter on September 11, with sources putting the issue at ₹2,500 crore to ₹3,500 crore. RetailIntel lists paid subscribers, ARPU, churn and content-spend commitments among the things to watch once the offer documents become public.

What founders can take from it

Track marketing efficiency as revenue returned per rupee spent, year over year. Kuku's ratio moved from below one to above one while the budget grew nearly fourfold, and that direction is what a lender or IPO investor reads. The reverse case, where a sharp ad cut flattered the numbers, is in Zepto's per-order economics.
Pick a revenue source that matches your cost structure. Kuku's marketing is justified by renewals, so its model does not depend on a thin ad market.
Lower the cost of the product while the cost of acquisition rises. Volume content from a wide creator base keeps the supply side cheap.
Show profit before tax next to net profit. A deferred tax credit lifted Kuku's bottom line to more than double its pre-tax figure, and careful readers will check.
Expect retention to be the next question. Founder claims about active subscribers will need cohort data behind them.

Whether Kuku's loop holds depends on numbers it has not yet published. Until the IPO papers show churn and cohort payback, FY26 shows that heavy spending on subscription growth can pay off in a single year, and leaves open how long that lasts.

Sources

Drafted with AI assistance from public reporting and company announcements. How we work · Report a correction