Truecaller announces preliminary numbers for the fourth quarter 2025

Truecaller reported preliminary Q4 2025 results showing ad revenues of SEK 255.2m (down 22% in constant currency) and total net sales of SEK 451m (down 1% cc), while recurring revenues rose strongly to SEK 193.7m (+51% cc) with Premium SEK 106.0m (+53% cc) and Truecaller for Business SEK 87.7m (+48% cc). EBITDA was SEK 103m (22.8% margin, down ~34% cc) with a one-off SEK 30m incentive cost; adjusted EBITDA margin was ~30.3% and gross margin adjusted to 75.6%. Average non-iOS MAU grew to 454.2m (+14% y/y), cash and short-term investments were approximately SEK 1bn at year-end, and management flagged an ongoing issue with a major ad demand partner while expecting SEK 90m annualized cost savings from recent efficiency measures.

Analysis

Market structure: Truecaller (Nasdaq Stockholm: TRUE B) is shifting from ad-reliant revenue to recurring consumer subscriptions and enterprise products; Q4 showed ad revenue -22% CCY while recurring revenues +51% CCY, implying a structural rebalancing of monetization mix. Winners are subscription/enterprise-focused competitors in fraud prevention and messaging (B2B SaaS players in emerging markets); losers are programmatic/mobile ad partners and demand-side platforms that fed the largest partner. Cross-asset: SEK sensitivity rises if ad slowdown persists (negative for SEK), while corporate credit risk remains limited given ~SEK 1bn cash; equity volatility will spike into the Feb 17 audited release.

Risk assessment: Key tail risks are an irreversible loss of the largest ad demand partner (further 20–40% ad downside), regulatory/data-privacy shocks in India/EU, or LTIP accounting surprises; likelihood medium but impact high. Immediate (days): elevated event risk into Feb 17 webcast; short-term (weeks–months): realization of SEK 90m cost savings and partner negotiations; long-term (quarters): migration to recurring revenue should raise gross margins toward 76% and adjusted EBITDA toward ~30% if execution succeeds. Hidden dependency: material revenue concentration in one demand partner and reliance on algorithmic ad matching; catalyst set: audited Q4, partner remediation updates, and buyback/incentive policy changes.

Trade implications: Tactical trades should be event-driven. Prefer a modest long exposure to TRUE B for structural recurring growth but hedge near-term event risk with options or by waiting for Feb 17 audited confirmation of adjusted EBITDA >30% and ad stabilization q/q. Relative-value: long TRUE B vs short ad-tech peers (e.g., TTD, MGNI) to express adi decoupling; size small (1–3% portfolio) until partner risk resolves.

Contrarian angles: Consensus may overweight headline EBITDA decline (-34% CCY) and miss that adjusted EBITDA-margin excluding incentives is ~30.3% and gross margin ex-items 75.6%. If the market overreacts to ad noise, buying on a >10% pre-audit share price drop captures mispricing given SEK 1bn cash, strong subscription conversion (0.75%) and buyback flexibility. Historical parallel: ad-platforms that pivoted successfully to enterprise (e.g., LinkedIn ads -> Talent/Enterprise) recovered multiples once recurring revenue visibility improved; downside is if partner loss becomes permanent.

Key Decisions for Investors

• Establish a nimble 2–3% position in TRUE B (Nasdaq Stockholm: TRUE B) on any >10% drawdown before Feb 17, 2026; trim to 1% if audited Q4 confirms ad deterioration without partner remediation.
• If you own TRUE B, buy a short-dated hedge: purchase Feb/March 2026 puts (or put spread) with strike ~8–12% OTM to protect against headline volatility into the Feb 17 audited release; size hedge to cover 50–75% of position downside risk.
• Execute a pair trade: go long TRUE B (1–2%) and short 1–2% nominal exposure in programmatic ad names (e.g., The Trade Desk TTD or Magnite MGNI) to express relative strength from recurring revenue vs ad-dependency; rebalance post-Feb 17.
• Wait for audited Q4 and webcast (17 Feb 2026) before adding >3% exposure; specific buy trigger: adjusted EBITDA-margin >30% and q/q ad revenues stabilize (no further sequential decline), or confirmation of partner contract remediation within 30 days.
• If management announces additional buybacks or that cost savings reach ~SEK 90m annualized by mid-2026, increase weight to 3–5% as cash return and margin uplift materially derisks execution.