Truecaller AB (publ)

All right. Hi and welcome everyone who's listening in. My name is Alam Amedy and I'm the CEO and co-founder of Truecaller. Today's presentation will be presented by me and my CFO, Odd Bolin, who are very excited to announce our fourth quarterly report and full year's results. We'll start with me presenting the quarterly highlights, then a product update. Then Odd will walk you through our financial performance. Then I will quickly go through the summary. And then we open up for Q&A. So let's get started. So let's start with the quarterly highlights. Next slide, please. We had an outstanding quarter and closed Q4 at 301 million monthly active users, a 16% increase. We made 392.2 million Swedish crowns in net sales, 111% growth compared to the same quarter the year before. And we had a strong adjusted EBITDA of 196 million Swedish crown and an incredible adjusted EBITDA margin of 50% in Q4. We're super proud to be a high growth tech company with strong profitability and great margins and highly efficient cash conversion resulting in very strong cash flows. And we intend to stay that way as well. Next slide, please. We had a very strong growth in advertising, driven by increased demand from advertisers, especially in India. And on True Call for Business, we're very proud to announce our first great milestone of surpassing 1,000 paying customers. We're seeing a healthy growth through our direct sales team, but also through our reseller partners. Not only are we growing at a healthy speed, we're also growing in several markets in parallel. Some of the True Color for Business customers we highlighted in Q4 was to educate the market and show the power of our product and its impact on many sectors. India Railway was one example, who's the largest employer in India with over 20 million passengers every day, who we're very proud to have as a partner on True Color for Business. Lastly, every Q4 we publish our global scam and spam reports, and we did the same this time as well and got very strong coverage globally. It's important for us as a company to highlight and make societies aware of the growing pain points of frauds and scams, which leaves big marks in people's lives. What came out of this report was a staggering 770 billion calls and messages that were identified by Truecaller during 2021. Next slide, please. Our user base continues to grow. Majority is driven by a strong organic growth, but we're also seeing a healthy growth coming from some of our focus markets through our user acquisition initiatives that we have started to ramp up in Q4. We closed Q4 at an average of 301 million monthly active uses, and it's up 42 million from last year quarter, or 16%. The larger part of the growth came at the end of Q4, which is not visible in the average numbers, but we're growing at a very healthy speed. Our daily active user base is also growing in a healthy manner and closed at an average daily active user base of 239 million users, a 90% increase from last year's quarter. We continue to see an increased engagement of 79% of our monthly active users being active on a daily basis. So it's a very strong and high engagement on a daily basis. Our growth activities on the user acquisition side ramped up in Q4, as I mentioned, and we continue to see very positive returns on ad spends, meaning that the users we acquire becomes net profitable for us early during their lifetime, which is aligned with our strategy. Next slide, please. In Q4, we continue to see a healthy growth on the incoming call volume side, where our users received 291 billion calls during Q4, which is a 16% increase from last year. And this is just to indicate the growth and the need of something like TrueCaller in existing markets and in upcoming markets where we see a healthy ramp up. Next slide, please. So let's go through some of our product updates for the fourth quarter. It's hard to cover everything we do since we have weekly updates on the app side and hundreds of releases on a monthly basis on the backend side, which improves the user experience. But let's go through some of the highlights here at least. But before that, let's recap the product offering first for some of our new listeners. So next slide, please. There are two main areas where we focus on from a product perspective. One is our consumer product, which is available on iOS and Android and being used by over 300 million users every month, where Truecaller is the leading global platform for phone number verification and call blocking. And consumers use our products in order to have a safer and more efficient calling and messaging experience. It's basically their go-to product for their communication needs. The other side of this is our business product that we call True Colorful Business that allows businesses to verify through KYC process and become verified businesses on our platform. They can also integrate their calling and messaging experience directly into our product so they can grow their business more efficiently through features like call reason and much more. As an example, as a consumer, which we call installed on your phone, you can rest assured that when your bank is calling you, we will verify that it's actually the bank and the reason for why they're calling you or your medical insurance company or delivery company and so on. This enables businesses to become more efficient, save time and save money. Our first B2B product that we launched was about a year ago. So let's go through some of the product highlights. Next slide, please. Some of the highlights we have this quarter, which are on the same themes as our previous report, are the consumer offering itself, our premium offering, our machine learning initiatives, and our ads and enterprise products. Next slide, please. In the fourth quarter, we released through caller a new update called version 12 on Android, which includes a fully redesigned user interface, which separates calls and messages into two different views, as seen on this screenshot. The app was redesigned to provide a more streamlined and user-friendly experience across the app, such that users can navigate through their calls and messages in a more intuitive way. By doing these changes, we started to see great reviews and adoptions from our users, which is a great sign. Next slide, please. Another highly appreciated improvement in TrueColor 12 is our fully new design profile page. After many iterations and A-B tests, we finally launched it. And because it's the top most visited screen inside of the TrueColor app, where people engage to make phone calls and messages and read community comments and so on, we wanted to make sure we made it 10 times better. We've loaded it with more relevant information about people and businesses and some advanced data insights for more advanced users to get a better understanding of the person or business that they're communicating with. We've also prepared it for some future data options for business profiles as well. And we're expecting to see a higher engagement thanks to these improvements over time. Next slide, please. Another big feature release for Truecaller 12 is Video Caller ID, a way for our users to create a more personalized and unique calling experience. Video Caller ID allows users to deliver personalized video greetings, either self-recorded or selected from our built-in templates that plays automatically when calling a friend or a family. Over time, we'll also open this up for our business customers. In addition to delivering these new experiences to our 300 plus million users, Truecaller 12 is faster and leaner and gives users a smoother UX with improved battery optimization. Next slide, please. We made many improvements to our premium offering during Q4. Just to highlight a few of them, we launched an announced call feature which uses our voice assistant to say who is calling you so you don't need to look at the phone through So you don't need to look at your phone. And through this feature, Truecaller's voice assistance reads out the name of the caller or reads out the contextual information on the type of call as identified by Truecaller's AI identity feature. For example, likely sales call. This is an incredibly popular product that has been enabled by almost 50% of our premium users since its launch less than three months back. So it's a very high adoption. We made a number of enhancements to add value to the premium experience for both Android and iPhone users. In the third quarter, we committed to driving iPhone user adoption by dedicating focused resources on rebuilding the app on the iOS platform with the goal of delivering a true-color app that is as much as possible on par with our Android product. We are on that journey and are progressing very well, I would say. Some of the improvements that have been seen so far on the iPhone have been driven by Advanced Caller ID, which was launched in the third quarter for premium users in the US and Canada. Advanced Caller ID was further developed in the fourth quarter with the launch of Voicemail support as an initial step towards cloud telephony services, which we believe is the future of communication. Lastly, on the page we've enabled purchase of premium through our website, making it much easier to upgrade or give a subscription as a gift to a friend or a family member. This has initially been rolled out in the Indian market and supports 25 different payment methods. More markets will be added in the future, but we see a high adoption and the usage of being able to gift premium to friends and families through an alternative source. Next slide, please. We continue to build on machine learning and AI driven capabilities in order to improve services across functionalities. In the fourth quarter, two machine learning initiative drove significant advancements in our spam detection capabilities in a number of markets. A new machine learning powered spam detection algorithm was introduced, driving drastic improvements to spam detection in several markets. Mainly, we can notice that change in the European and in the US market. Also a model for predictive analytics focused on call center carrier was deployed. This model enables TrueQuality to better identify the likelihood of numbers being identified as spam. This initiative has improved spam detection accuracy significantly and also in similar markets. Truecaller's messaging platform has also been upgraded with AI-driven capabilities, improving incoming messages efficiency, and highlighting the most relevant information from businesses who reach out to them via SMS or instant messaging. The integration of machine learning signals into Truecaller's messaging ecosystem has increased precision in differentiating between relevance, promotions and spam, which has resulted in better visibility on business messages. All these improvements we do are built with a customer first mindset, which means that data processing to enable these capabilities occurs on the device and never leaves a user's device. Next slide, please. On the ad tech side, we made a number of investments designed to deliver a better demand profile, which are scaling well and have shown very promising results. Changes previously introduced to the ad server auction mechanism have scaled well in the fourth quarter, driving overall auction efficiency, improving fill rates and eCPM, and providing more value to our advertisers. In the fourth quarter, ad tech infrastructure has been optimized and new features were introduced, enabling diverse integration path and enhancing Truecaller's ability to work with a wider range of demand partners. These enhancements helps improve demand liquidity and yield management while aligning better with demand side expectations. Optimizations on the supply side have also been a key focus area and some recent initiatives have been propagating very well for us. These improvements contribute to the overall revenue growth in the fourth quarter and we will continue to see these improvements adding value to our business in the future as well. Before jumping over to some of the highlights on True Colorful Business, we would like to play a short video that explains how it works. So let's go with that.

reaching your potential customers becoming challenging day by day? Perhaps your calls are getting lost in the clutter of other calls. How can you solve this? Introducing the Truecaller Verified Business Caller ID. Now, every time you call your customers, they see the right brand name, the green caller ID, the green verified tick, the right business category, and the right call reason, indicating you're a verified business and not a fake one. This further enhances your brand reputation by adding identity, improves customer experience, and can further improve your call efficiency. You can also make intelligent decisions with AI-powered analytics. That's not all. Truecaller Verified Business Caller ID works across Android and iOS devices and is also a network agnostic solution. So whether it's for your service, security or sales calls, you can make your business stand out of the clutter of fraud and spam calls. So get started today with Truecaller.

So True Color for Business has grown at a tremendous rate and achieved the milestone of serving over a thousand active business customers across India and several other markets in the fourth quarter. True Color for Business has gained traction across a wide range of verticals with the strongest demand coming from banking and financial services, edtech and healthcare. Key customers onboarded in the fourth quarter, including a number of leading brands such as Zomato, IKEA India, TVS Motors, Digit, as well as a major bank in South Africa. Business Call Reason, an add-on feature that allows business customers to provide context for why they're calling before a Truecaller user decides to answer a call, has shown a strong potential with business adoption, quickly growing to 40% since its launch in the third quarter last year. A number of operational improvements were introduced in order to support the growing demand for Truecaller for Business. We launched a self-serve portal for the new business customers to self-onboard directly on our portal. This has had a significant impact as this enablement contributed to 35% of our direct sales in December alone. We're working on building a similar self-serve portal, but for resellers such as CPaaS companies with the goal of increasing new business potential in many more markets using the resellers' help. Now over to Odd to talk about our financial performance.