Truecaller AB (publ)

Hi and welcome everyone who's listening in. I'm Alam Amedy and I'm the CEO and co-founder of Truecaller. With me, I have our CFO, Odd Bolin. We're very happy to announce our interim report for the third quarter of 2022. I will start with presenting financial and business highlights. I will then provide an update on some of the exciting things we have released during the quarter. Odd will then walk you through our financial performance in more details. Finally, I will wrap it up with a summary of the quarter and then we open up for Q&A. So let's get started with the highlights of the quarter. We closed Q3 with an average of 331 million monthly active users, a 14% increase year on year. Average daily active users grew to 261 million, an increase of 15%. This means that our DAO to MAO engagement remains strong at 79%. Our net sales continues to grow. We closed the quarter at 450 million Swedish crowns, 44% increase compared to the same quarter in 2021. Thanks to investments in our products and the growing problem our product solves, We've been able to grow our revenues and we'll continue to do those investments and initiatives which can further improve our effectiveness. And long term, I continue to see great growth potential for our services. And I'm pleased that we're in the strong position we are in compared to many other global tech companies. We also had a strong adjusted EBITDA of 181 million Swedish crowns, which is an increase of 54% year over year, and an adjusted EBITDA margin of 40.3%. We continue to have a very strong cash flow with 162 million Swedish crowns in net cash from operating activities in the quarter. During the quarter, we experienced a somewhat more cautious stance from some advertisers, which, for example, meant delayed investments. Overall, the demand continued to be strong, but in certain regions, the weakened macro and uncertainty could create spillover effects. And we cannot rule out that the increased uncertainty could, to some extent, impact our main markets. However, we're very proud to be a profitable high growth tech company and intend to continue so with solid profitability, great margins and strong cash flow. We continue to grow our user base across targeted regions and saw the highest growth rates in South America and Africa compared to the same period last year. India continues to be an important market for us, which saw the highest user growth in terms of absolute numbers this quarter. On the product side, we launched a couple of exciting new things this quarter, including the global launch of our new iPhone app and our improved subscription offering with the integration of Truecaller Assistant, which is now available on Android and iOS for subscribers in the US. I will cover these in more details in the next few slides. But we're also very excited that True Color for Business continues to grow. We now have customers in 34 different countries, and we're proud to share that out of the 10 most valuable brands in India, seven of them are now True Color for Business customers. Our user base continues to grow. Majority of our user growth is driven by strong organic growth, but we are also seeing our investments in user acquisition start to seed upcoming markets that are of strategic importance to us. We're also investing in staffing up the team that focuses on user growth. As we communicated earlier this week, we also appointed Ben Zhang as chief business officer. In this role, he will be responsible for all growth metrics. We closed Q3 at an average of 331 million monthly active users, which is up by 40 million from the same period last year, or a 40% increase. Our daily active user base is also growing at a healthy pace. We closed the quarter at an average of 261 million daily active users, which is a 15% increase from last year. We had a somewhat slower start this quarter when it comes to growth of new number of users. But during the last week of September, we started to see Dow and Mao growth ramping up. So we continue to see an overall healthy growth rate coming into the fourth quarter. While we are starting to invest more heavily in driving user growth, we're proud that most of our user growth is still organic, as this demonstrates the growing relevance of our services. The effect from the pre-installed deals announced earlier this year is still small as shipments can take some time, but the KPIs from shipments may continue to look very promising. Also, during the quarter, we saw similar development in India, as we recently have seen in the EU, where the Indian Competition Authority took decisions against Google, which clearly restricts them from pushing OEMs to favor Google's native applications. We anticipate that this over the long term will have a positive impact on our growth opportunity, especially on preloads. Lastly, we continue to see solid engagement and in Q3 we had 79% of our monthly active users being active on a daily basis. 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. There are two main areas where we focus on from a product perspective. One is the consumer product, which is available on iPhone and Android. As mentioned, 331 million users use Truecaller every month. And we're proud to be the leading global platform for phone number verification. 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. 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 with consumers, 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. Now let's get into the highlights. As I mentioned earlier, Q3 was a very exciting quarter for us from a product development side. Some of the highlights this quarter include the global launch of our new and improved offering on iPhone. We also launched Truecaller Assistant to subscribers in the US on both Android and iPhone. We believe that these two investments establish the foundation for future growth in terms of both iPhone users and paying users. We also continue to work on our core products through initiatives that improve the user experience across AI identity and our communication offering. We also further developed our ads and enterprise products, and I will go into details on all of these areas in the next few slides. In late August, we launched a brand new version of the iPhone app for users globally. The iOS app was completely rewritten and offers a fundamentally better experience from end to end. The revamped version provides a much faster, smoother search experience and significantly better caller ID functionality compared to previous versions of the app with up to 10x improved spam and business number identification. We've already begun to see significant improvements in metrics from iPhone users in comparison to the most recent version. Key performance indicators such as daily active users on iPhone have increased by over 30% since the launch of the new app. The team's focus has been to build a great product, get engagement going, and later focus on optimizing the advertising side and premium offering on iPhone, which will be prioritized soon. Overall, we are very optimistic about growing our share of iPhone users in the coming years. Next, we want to share an update about our new offering for our subscribers, Truecaller Assistant. But first, a short video that showcases the product.

Introducing your new personal assistant. No, not like that. In your phone. Your assistant can screen your incoming calls, tell you who is calling and why.

Hello, this is Jennifer calling from the pharmacy.