Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Truecaller AB (TRUBF, Financial) reported a 15% year-on-year increase in net sales, reaching 457 million Swedish crowns.
- The company achieved a new all-time high in user growth, adding 16 million users from the previous quarter.
- Truecaller AB (TRUBF) saw a 25% growth in recurring subscription revenues compared to last year.
- The company maintained a strong cash flow with 166 million Swedish crowns in net cash from operating activities before tax payments.
- Truecaller AB (TRUBF) continues to operate profitably with an EBITDA margin of 37%, exceeding their long-term financial target.
Negative Points
- Currency effects had a negative impact on revenue growth, estimated to reduce growth by about 5 percentage points.
- The advertising market in India remains subdued, affecting overall ad revenue growth.
- The company faces challenges from unfavorable fixed conditions despite increased EBITDA.
- There is uncertainty regarding the stability of ad revenue growth, with no clear trajectory established yet.
- Truecaller AB (TRUBF) is dealing with an inquiry from Indian tax authorities, which could pose reputational risks.
Q & A Highlights
Q: In India, there seems to be a lot of ads, which you call supply inflation. Is this trend easing, and how could it affect you in the coming quarters?
A: We expect the market to bounce back sooner or later. While this quarter was good, it's too early to say if it's the start of a stable trajectory. There is still a lot of supply, and demand is increasing gradually. We see positive signs but can't confirm a stable trend yet. - Odd Bolin, CFO
Q: How have new sales developed since the price adjustments in Truecaller for Business, and will revenue growth improve further as customers mature into new pricing contracts?
A: We expect further effects from the pricing increases. More customers are on longer contracts, and the price increases didn't negatively impact the majority. We've had some churn with small customers, but it's non-material. The product is valued by our customers, and significant customers have not churned. - Odd Bolin, CFO and Alan Mamedi, CEO
Q: How do you plan to convert existing iOS users to paying users, and why is ad revenue generation more restricted on iPhone compared to Android?
A: Apple's integration means users don't need to return to the app, reducing engagement. However, iOS users have a high willingness to pay, and conversion is seamless. We'll use trial periods to convert users. Currently, iOS users are 7% of our base but contribute 40% of subscription revenues. - Alan Mamedi, CEO
Q: Regarding the FX headwind of 5%, does it mean that without it, revenue growth would have been 20% instead of 15%?
A: Yes, that's correct. - Odd Bolin, CFO
Q: How confident are you that CPMs for banner ads will return to better levels, and what's your base case trajectory for banner ads CPMs?
A: We don't have a base case trajectory to communicate. CPM levels are a function of maximizing revenue. We could report higher CPMs by decreasing impressions, but that would impact total revenue. It's too early to talk about a stable growth trajectory. - Odd Bolin, CFO and Alan Mamedi, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
