Kuku Technologies has moved into the black just as it heads for the public market. The microdrama and audio storytelling company posted a net profit of Rs 182.7 crore for FY26, against a Rs 152.6 crore loss in FY25, while revenue from operations climbed to Rs 1,484.2 crore from Rs 241.6 crore.
A subscription business, not an advertising play
The revenue mix makes the model plain. Subscription fees contributed Rs 1,475.4 crore during the year. Pay-per-piece unlocks, which let users open specific content through virtual tokens, added Rs 6.9 crore. Advertising brought in only Rs 1.9 crore.
- Subscriptions: Rs 1,475.4 crore
- Pay-per-piece unlocks: Rs 6.9 crore
- Advertising: Rs 1.9 crore
India accounted for Rs 1,463.6 crore, or roughly 99% of operating revenue, while international markets generated Rs 20.5 crore. Kuku has scaled to more than 400 million installs and over 10 million subscribers as of June 2026, according to the company.
Costs rose sharply, but revenue rose faster
Total expenditure more than tripled to Rs 1,421.8 crore from Rs 411 crore in FY25. Marketing and advertisement spend was the largest line, rising 288% to Rs 1,105.1 crore. Operational costs climbed to Rs 96.3 crore from Rs 8.7 crore, and employee costs reached Rs 74.1 crore, up 24%.
IPO signal and valuation math
Kuku has the market regulator’s go-ahead. SEBI issued an observation letter last month, clearing the company to proceed with its IPO plans. In June, Moneycontrol reported a confidential filing for a likely issue size of Rs 2,500-3,500 crore. Kuku is reportedly targeting a valuation of Rs 15,000 crore, a 10x multiple on revenue.
AI is the next cost lever
The company is building a 1,000-member AI-focused content production team, according to an Entrackr report cited by Medianama. The aim is to push microdrama production costs to ‘under $100 per minute versus over $150 in China’. One producer could generate around 20 minutes of usable video a day with AI-led production, compared with about a minute through traditional shoots.
What the numbers tell media planners
Kuku’s FY26 results are a useful benchmark for the short-drama economy. The company ran heavy marketing, yet crossed into profit because subscription revenue scaled quickly. That suggests the category can absorb high customer-acquisition costs when conversion to paid tiers is strong. It also shows how little ad inventory matters in this format today; planners should treat microdrama as a paid-content environment rather than a reach play.
The next test is whether AI-assisted production changes the unit economics without making the content feel disposable. Kuku’s reported cost target of under $100 per minute would undercut Chinese production benchmarks and could force rivals to follow. Watch the IPO pricing and any filings that break out customer acquisition cost, churn and content spend per subscriber, because those numbers will be more telling than the headline profit.
Source: MEDIANAMA
