Truecaller (TRUE) Investor Update summary

Ad revenue challenges and mitigation efforts

• Q4 ad revenues are projected at SEK 210–230 million, about 30% lower year-over-year in constant currency, due to an algorithm change by the largest demand partner and a weakened Indian ads market, including a ban on real money gaming.

• The algorithmic issue led to a large portion of inventory being flagged, reducing ad flow and revenue, but the incidence of flagging has now been substantially reduced through ongoing experiments, though not fully resolved.

• Only minor improvements in ad revenues were seen in November, and the short-term outlook remains muted.

• The company continues to focus on fully resolving the flagging issue and stabilizing ad revenue.

Long-term strategy and business resilience

• Strategic initiatives include launching more proprietary and premium ad units, leveraging AI on first-party data, expanding direct sales and reseller partnerships, and focusing on markets outside India.

• These efforts aim to reduce reliance on any single demand partner and region, building resilience against future disruptions.

• Recurring revenue now constitutes 40–50% of total revenue, reflecting a conscious shift in the revenue mix.

• Premium subscriptions and Truecaller for Business are expected to continue robust growth in Q4 2025.

• User base is approaching 500 million, supporting a more stable long-term revenue mix.

Cost management and LTIP impact

• Increased cost focus has been implemented to maintain profitability despite lower ad revenues.

• The LTIP program was revalued from an 80% to 100% probability of meeting performance criteria, resulting in a one-time cost increase in Q4 due to accumulated adjustments since 2022.

• This revaluation led to an additional SEK 30 million in incentive plan costs for Q4; total incentive costs (excluding share-price dependent social security) are expected to be around SEK 70 million, with no cash flow impact.