Truecaller (TRUE) Investor Update summary

Ad Revenue Challenges and Mitigation Efforts

• Ad revenues have been significantly impacted since mid-August due to an unexpected algorithm change by the largest demand partner and a weakened Indian ads market, including a ban on real money gaming.

• Q4 2025 ad revenues are projected at SEK 210–230 million, about 30% lower year-over-year in constant currency, with muted short-term outlook.

• 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.

• The company continues to focus on fully resolving the flagging issue and stabilizing ad revenue, with ongoing efforts to build a more stable long-term ads strategy.

Long-term Strategy and Business Resilience

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

• User growth and recurring revenues, including premium subscriptions and Truecaller for Business, remain strong and stable, offsetting current ad revenue challenges.

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

Cost and Operational Update

• Q4 will include an additional SEK 30 million in incentive-related costs due to LTIP revaluation and performance criteria met in the LTIP 2022 program.

• Total incentive costs for Q4 (excluding share-price dependent social security) are expected to be around SEK 70 million, with no cash flow impact.

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