Update regarding Truecaller’s revenue development in the fourth quarter of 2025

Truecaller said an algorithm change by its largest demand partner in mid‑August materially reduced ad yield and expects fourth‑quarter ad revenues of SEK 210–230 million, roughly a 30% decline in constant currencies; the incidence has eased but not been fully resolved. The company reported continued robust growth in recurring revenue streams (Premium and Truecaller for Business) and monthly active users and is nearing 500 million users, while executing a revamped ads strategy to reduce partner and market concentration, expand outside India and focus on direct sales/resellers, alongside tighter cost control to protect profitability. Q4 will also include non‑cash incentive-related charges—about SEK 30 million of additional LTIP 2022 revaluation and roughly SEK 70 million of incentive costs excluding share‑price dependent social security—and management will host a webcast for investors and analysts.

Analysis

Truecaller reports material ad revenue disruption stemming from an algorithm change by its largest demand partner on August 13, 2025; management now expects Q4 ad revenues of SEK 210–230 million, a roughly 30% decline in constant currencies, with incidence substantially reduced but not fully resolved and improvements not yet material. The company reiterates continued robust growth in recurring revenue streams—Premium and Truecaller for Business—and in monthly active users, and notes it will soon reach ~500 million users (company currently cites more than 450 million active users).

Management is executing a pre-existing ads strategy to reduce dependency on specific partners and markets, accelerate growth outside India, and expand direct sales and reseller channels; these initiatives are progressing but are expected to materialize gradually rather than immediately. To protect profitability during muted ad receipts, Truecaller has tightened cost controls and flagged non-cash incentive accounting effects in Q4, including a SEK ~30m LTIP 2022 revaluation and roughly SEK 70m of incentive costs excluding share-price dependent social security.

Near term the primary risks to revenue and EBITDA are continued ad-yield weakness until the partner algorithm issue is fully resolved and the time lag on monetization of international and direct-sales initiatives; investors should therefore focus on ad-revenue run-rate recovery, cadence of recurring revenue growth, and cash-profitability metrics disclosed in upcoming updates (management will host a webcast at 13:00 CET today, 15 Dec 2025).

Key Decisions for Investors

• Pause adding to exposure until there is clear evidence of ad-revenue stabilization or a successful remediation from the largest demand partner,
• Monitor three leading indicators closely: weekly/monthly ad-revenue run-rate and partner incidence, quarterly recurring revenue growth from Premium and Truecaller for Business, and MAU progression toward 500 million to validate the revenue-mix transition,
• Adjust short-term EBITDA and valuation models to reflect a ~30% ad-revenue hit and the one-off non-cash Q4 incentive revaluation (~SEK 30m) and incentive costs (~SEK 70m), focusing investment decisions on cash-flow and margin trends rather than headline accounting charges,
• If constructive on the long-term strategy, consider selectively accumulating only after sustained improvement in ad yields or demonstrable traction from international/direct-sales initiatives; otherwise hedge or reduce position size to reflect near-term execution risk