Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Truecaller AB (TRUBF, Financial) reported a strong user growth with an average of 427 million monthly active users, marking a 15% year-on-year increase.
- The company's net sales grew by 21% in constant currencies, surpassing SEK 0.5 billion.
- EBITDA, excluding incentive costs, increased by 38% in constant currencies, reflecting a robust EBITDA margin of 44%.
- Truecaller for Business experienced significant growth, with revenues increasing by 34% in Swedish Krona and 53% in constant currencies.
- The company launched new ad products, Truecaller Masthead and Truecaller Play, aimed at enhancing advertising revenue and market share.
Negative Points
- Currency fluctuations, particularly the strengthening of the Swedish Krona, negatively impacted reported financials, reducing net sales growth to 9% in SEK.
- Ad revenue in Swedish Krona saw a decline of 1%, despite an 11% growth in constant currencies, indicating challenges in the ad market.
- The geopolitical tensions, such as the India-Pakistan conflict, affected ad demand and revenue during the quarter.
- The company's incentive costs, including dilution and social security fees, continue to impact the bottom line, complicating financial forecasting.
- The tax rate is increasing due to more business being conducted in India, where the corporate tax rate is higher than in Sweden.
Q & A Highlights
Q: Could you provide some insight into how Q3 has started for the ads market, given that Q2 ended stronger?
A: The ads market did grow stronger towards the end of Q2. However, predicting Q3 is challenging due to external factors beyond our control. We remain optimistic about Q3. - Rishit Jhunjhunwala, CEO
Q: Can you elaborate on the direct sales strategy for ads and its impact on gross margins?
A: Direct sales account for about 10% to 15% of our ad revenues and offer higher gross margins. This strategy strengthens our relationship with advertisers and leverages our proprietary ad tech. We have expanded our sales team, particularly in the Middle East and Africa, to support this growth. - Rishit Jhunjhunwala, CEO and Odd Bolin, CFO
Q: How does the ad revenue per DAU from direct sales compare to the average?
A: Ad revenue per DAU from direct sales is higher than average due to better control over pricing and the use of different ad formats. - Odd Bolin, CFO
Q: Could you explain the impact of geopolitical events on ad revenue per DAU?
A: Geopolitical uncertainties, particularly the India-Pakistan conflict, impacted ad revenue per DAU in Q2. This led to a material slowdown in the Indian ads market, affecting our revenue. - Rishit Jhunjhunwala, CEO and Odd Bolin, CFO
Q: What are the expectations for iOS subscriber growth in H2?
A: We aim to accelerate iOS subscriber growth in H2. The trends are influenced by users upgrading to the latest OS and Truecaller app versions, and we remain optimistic about continued growth. - Rishit Jhunjhunwala, CEO
Q: Why was there a reduction in marketing spend in Q2, and what are the expectations for H2?
A: Marketing spend was lower in Q2 following a significant campaign in Q1 focused on iOS. We plan to conduct more campaigns in H2, balancing the spend across quarters. - Odd Bolin, CFO
Q: How should we model the tax rate for 2025 and beyond, given the increase in the current quarter?
A: The tax rate is increasing due to more business being conducted out of India, where the corporate tax rate is higher. We expect this trend to continue as more profits are recognized in India. - Odd Bolin, CFO
Q: Why were LTIP costs higher than expected, and how can this be better communicated?
A: Calculating LTIP costs is complex due to multiple programs with different instruments. We acknowledge the difficulty for external analysts and will strive to improve communication on this matter. - Odd Bolin, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
