Truecaller AB Q3 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Stefan Gauffin - DNB Markets, Research Division - Analyst : Yes, a couple of questions just to understand the advertising market. So basically in Q1, you mentioned that demand for digital advertising picked up at the end of Q1. And in Q2, you guided for Q3 being at the level seen end of Q1. But if we look at the combination of CPM and monetized ads per daily active users, it seems Q3 is, yes, even weaker than the average then for Q1, just to comment on that if things are, in fact, becoming a bit weaker. Then secondly, you mentioned during the presentation that Q4 is expected to be down on advertising year-over-year, but up quarter-on-quarter due to seasonality. I would just like to ask regarding World Cup in cricket, which is currently ongoing in India. And I believe Disney is streaming this for free to smartphone users. Is this expected to have a similar impact or at least some impact on demand in Q4 as we saw with the Indian Premier League in Q2?

Question: John Karidis - Numis Securities Limited, Research Division - Analyst : I've got a bunch of questions and I'll take them one at a time, please. Just to make sure that I understand what's been discussed 2 or 3 times already. But I understand it fully. So in the third quarter, CPM was comparable to Q1. In Q1, the number of monetized impressions was up year-on-year. In Q3, it was down year-on-year and lower than what it was in Q1 also. And you're saying that the market isn't actually getting worse and that's, because in the first quarter, you had some sort of upturn at the end of the quarter. And therefore, the Q1 comps versus Q3 are slightly flattered by that. Is that right?

Question: John Karidis - Numis Securities Limited, Research Division - Analyst : Okay. Secondly, as far as the Q4 outlook is concerned, I hear that Diwali is less of an ad event. So could you help us somehow try to understand the importance of the fact that the downturn started only midway through the Q4 last year versus this year? So how significant is it that is the fact that the comp as it were is an inverted comma easy for Q4 versus Q1 to Q3 this year?

Question: John Karidis - Numis Securities Limited, Research Division - Analyst : Okay. I'm used to the analyst life being tough. Then, thirdly, if I look at your employee costs before LTIP costs and divide them by the period average employees that you've had. Year-to-date that number is up only 1%, which means that you've -- essentially, you've been hiring less valuable people. But I suspect that's not the case. Is there any way that you can help me understand why it's up only 1% on a per period average employee number?

Question: John Karidis - Numis Securities Limited, Research Division - Analyst : Okay. And then Alan, at the very end of your wrap up, you talked about that test to do or the tests to do with the personal data protection build having an impact of just 1% at the end of a 28-day period. I'm trying to understand what a denominator is here. So if you get 100 and by the end of 28 days, you have 90 as you were. Does that mean for the tests you end up with 89? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 27, 2023 / 11:00AM, TRUEb.ST - Q3 2023 Truecaller AB Earnings Call

Question: John Karidis - Numis Securities Limited, Research Division - Analyst : Okay. And then, sorry, I have 2 more things, and I'll shut up. It would be pretty useful if you can start giving us some numbers for TrustCheckr financials. Specifically what you expected to do next year? Is it going to be something that we'll be able to see when you report Truecaller for Business numbers from Q1 next year?

Question: John Karidis - Numis Securities Limited, Research Division - Analyst : Okay. And then, my last question, please. So you still have a very strong balance sheet. And now, it's been pretty much a full year since you've been buying back stock but not canceling it. And in the meantime, all the acquisitions you've made to date have been miniscule, pretty tiny. And you've also implied that you're unlikely to buy sort of many Truecaller databases because you're not really comfortable about with how these databases were put together. So given the sum of all this, do you think that now might be a good time to start saying something more helpful about what sort of assets you'd like to acquire, given the firepower that you have and what's been going on in the last year or so?

Question: John Karidis - Numis Securities Limited, Research Division - Analyst : Okay. But the TrustCheckr acquisition, the cost of that was pretty insignificant relative to the SEK 1.6 billion you have on the balance sheet. Is that?

Question: Stefan Gauffin - DNB Markets, Research Division - Analyst : I have a follow-up question. Just to try to understand what kind of impact we could have from you getting new partners on the business messaging. So could you state something around how much; how large share of Truecaller for Business is coming from business messaging today. And then you mentioned you will launch this with your partners globally in 2024. Do you already have discussions ongoing with these partners, so that we could expect this to happen early on in 2024?