Truecaller AB (publ)

Hi, everyone, and welcome who's listening in. I'm Alam Amede, and I'm the CEO and co-founder of TrueColor. I'm joined by our CFO, Ad Bolin. We're very excited to announce our interim report for the first quarter of 2022. So I will start with presenting financial and business highlights for the quarter. I will then provide an update on some of the exciting things we have worked on during the quarter to continue to improve our product offerings. And Aud will then walk you through our financial performance. Finally, I will wrap up with a summary of the quarter and then we'll open up for Q&A. So let's get started with the highlights of the quarter. We had an outstanding quarter and closed Q1 with an average of 310 million monthly active users, a 40% increase year-on-year. Average daily active users also grew to 248 million, an increase of 18%, which gives us an engagement of 80% of our monthly active users being active on a daily basis. Our net sales continues to grow, and we closed the quarter at 398 million Swedish crowns, a 116% increase compared to the same quarter in 2021. We also had a strong adjusted EBITDA of 181.4 million Swedish crowns and an adjusted margin of 46%. We continue to maintain a strong financial position with 122 million Swedish crowns in net cash from operating activities. We are extremely proud to be a high growth tech company and intend to move forward with strong profitability, great margins and very strong cash flows. And we're excited to be on SensorTower's list of the top 20 most downloaded apps in the world this quarter. We also achieved the incredible milestone of 80% DAO to MAO engagement ratio this quarter, which shows just how important our app is in the daily lives of our users. We're very proud of being one of the very few companies in the world with this growth and reach. And also, we saw a very strong growth in advertising this quarter. This growth was driven by user growth in various markets combined with improvements in ads revenues per user. We made some very encouraging progress on Truecall for Business by onboarding some major logos such as SBI, India's largest bank, and the e-commerce giant Flipkart. We also made good progress in growing Truecall for Business in other markets like South Africa, Egypt, and Israel. And we also announced an exclusive partnership with Tanla to provide business messages through our platform and product, which helps businesses reach users with more enriched B2C messages. Lastly, we finalized our acquisition of CallHero this quarter. We've been receiving questions from investors and analysts on what CallHero does, and we're excited to provide a sneak peek of the CallHero experience in a few minutes. Now to growth. Our user base continues to grow. Majority of user growth is driven by strong organic growth, but we're also seeing our investments in user acquisition start to seed upcoming markets that are of strategic importance to us. We closed Q1 at an average of 310 million monthly active users, which is up by 39 million from the same period last year, or a 40% increase, as mentioned earlier. Our daily active user base is also growing at a healthy pace. We closed the quarter at an average of 248 million daily active users, which is up by 37 million from last year, or an 18% increase. We continue to see solid engagements, and in Q1, we had 80% of our monthly active users being active on a daily basis. Now to the product, and as a product-first company, we continuously invest in developing our offering to further improve the user experience. As usual, let's recap the product offering for those who are new to this company. There are two main areas where we focus on from a product perspective. One is our consumer product, which is available on iPhone and Android. Truecaller is used by over 310 million users every month, and we're proud to be the leading global platform for phone number verification and call blocking. Consumers use our product in order to have a safer and more efficient calling and messaging experience. It's their go-to product for their communication needs, basically. The other side of this is our business product that we call True Color for Business, which allows businesses to verify through a KYC process and become verified businesses on our platform in order to increase trust in their communication, but also to prevent impersonation. They can also integrate their calling and messaging experience directly into our product so that they can grow their business more efficiently through features like call reason and much more. As an example, as a consumer with Truecaller installed on your phone, you can rest assured that when your medical insurance company is calling you, we will verify that it's actually them and the reason why they're calling you, or your bank or delivery company and so on. This enables businesses to become more efficient, save time and, of course, save money. Now, let's get into the highlights of our product update. So some of the highlights we have this quarter, which are on a similar theme as our previous report, are the consumer product itself, our machine learning initiatives, and our ads and enterprise products. I will also be sharing a little bit about our acquisition of Kali here. We'll always stay focused on improving our core offering every day. Following the launch of our app version 12 on Android, we continue to develop the features that were rolled out at the end of last year. We continue to deliver technical enhancements to improve speed and performance. And there has also been very good traction on the adoption of features that we rolled out in our version 12. The user adoption of video caller ID, for example, grew by over 150% since the end of the previous year. We also introduced additional messaging capabilities in the first quarter to continue to improve the core communication experience for users. We introduced a new way of sending messages called urgent messages, which the recipient can read and respond without having to unlock their screen. So this makes the messaging experience much more efficient and urgent when needed. We continue to develop Smart SMS, a much-loved feature of our app. The Smart SMS categorizes the most important messages in a dedicated tab. We rolled out advanced machine learning models that automate spam SMS detection based on user feedback globally. These models are fully automated based on community feedback, and this ensures that every user has the most relevant experience regardless of where they are. One of the most popular features of smart SMS is smart cards. When a message is categorized as important, Truecaller highlights relevant content from lengthy SMS messages and summarizes the most relevant information into easily digestible smart cards. We improve the artificial intelligence behind smart cards during the quarter so that smart SMS messages gets delivered with the most relevant information to the user. These machine learning initiatives are done without compromising user privacy, and all of this magic happens locally on your device. In the previous quarter, we were excited to introduce opportunities for users to leave feedback on unknown numbers in the form of comments and up and down votes. This quarter, we have expanded comments to cover over 30 additional languages, empowering even more users to report their own experience while further enhancing our spam detection capabilities. We also introduced additional engagement points for users to provide input through a dynamic feedback system. This is expected to drive significant improvements to the app's ability to provide the most useful information. And over time, this will strengthen our contextual search capabilities, which will enable the app to provide relevant information even without a specific name, but more around the calling experience. We also strengthen our presence on the web and desktop by improving the search experience on our website. This provides a more consistent experience across Truecaller, regardless of the device you're on. Searching for a number on the Truecall website provides just as much information as on the mobile app, such as call activities, spam reports, and opportunities to leave feedback. Our web presence also increases the accessibility of its services and now allows anyone to conduct a limited number of searches on their computer or feature phone, where we see a big increase of adoption. On the ad tech side, we have progressed very well and integrated more demand partners into our re-architectured auction setup. This enables us to operate in a more flexible and efficient way while improving our revenues. Besides that, we deployed a new performance-driven ad unit with the goal of improving yield per ad opportunity and better return of investment for performance advertisers during the year and beyond. Now, demand for Chukal for Business continues to grow across a wide range of industries. Key customers onboarded in the first quarter include a number of leading brands in India. Some of them are here on the screen. The State Bank of India, which is the largest state-owned banking and financial services company in the country and amongst one of the largest banks in the world as well. Also, Flipkart, which is a subsidiary of Walmart and one of the top e-commerce players in India that also became a new Truecaller for Business customer, came on board in the first quarter. The need for Truecaller's business-facing solution remains apparent in markets beyond India as well, with the addition of new business customers from South Africa, Egypt, and Israel across diverse industries. The first quarter also marked our entry into business messaging through the establishment of an exclusive reseller partnership with Tanla, as I mentioned before, which is a leading player in the CPaaS space. The partnership aims to help businesses reach out to their customers using our messaging channel instead of the traditional SMS channel And with this, we can provide rich media and engaging content. This experience is expected to drive improvements in click-through rates for businesses sending messages on our channel. In our Q4 report, we talked about the success of launching our self-serve portal where businesses could go into our website and sign up directly, which in December stood for around 35% of our direct sales. We also mentioned that the demand from our reseller partners increased to a level which required us to start working on a reseller portal. I'm happy to announce that in Q1, we finalized that product and launched it so that all resellers can now onboard new customers using our reseller portal. It has, in a very short period of time, been widely deployed, enabling resellers to handle all services on behalf of their customers more efficiently. Next, we want to share an update on our recent acquisition of CallHero. First, I want to play a short video that showcases the CallHero product.

Hi, the person you're calling is using a screening service. May I ask who it is and the reason for the call?

Joining Truecaller, the work to integrate CallHero into the Truecaller app progressed very well in the first quarter. When the integration is finalized, there will be a feature inside the Truecaller app that we call Truecaller Assistant. The screenshots that you see on this slide are from the CallHero app prior to the acquisition and not what it will look inside the TrueColor app. That will remain a secret for now. The CallHero app itself has been sunsetted and now all the focus is on getting the juicy stuff into the TrueColor product. And we look forward to sharing more in the future, in a future report and earnings call. Now over to Odd to talk about our financial performance.