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TrueCaller - $TRUE - Earnings Analysis: Consistent growth in revenue and profitability.

By sagebytes in Technology —

Business Model

Truecaller generates revenue through advertising, premium subscriptions, and Truecaller for Business (TfB) solutions, which includes Verified Business and Business Messaging.

Revenue Sources

  • Advertising: Revenue from displaying ads to users.
  • Premium Subscriptions: Recurring revenue from users who subscribe to premium features.
  • Truecaller for Business: Revenue from businesses using Verified Business and Business Messaging services.

Income Statement Analysis

  • Net sales increased by 23% year-over-year, driven by growth in advertising, premium subscriptions, and Truecaller for Business.
  • Gross profit increased by 25% year-over-year, and gross margin improved to 77.1%.
  • EBITDA increased by 19% year-over-year, with an EBITDA margin of 38.5%.
  • Basic earnings per share increased by 33% year-over-year.

Balance Sheet Analysis

  • Total assets decreased by 9.5% from Q4 2023 to Q4 2024.
  • Total equity decreased by 13.6% from Q4 2023 to Q4 2024.
  • Total liabilities increased by 5.2% from Q4 2023 to Q4 2024.

Cash Flow Analysis

  • Net cash from operating activities increased slightly from Q4 2023 to Q4 2024.
  • Net cash used in investing activities decreased significantly from Q4 2023 to Q4 2024, with investments in short-term interest rate funds.
  • Net cash used in financing activities decreased significantly from Q4 2023 to Q4 2024, primarily due to decreased share repurchases.
  • Cash and cash equivalents at the end of the period decreased due to financing activities.

Capital Allocation

Truecaller allocates capital towards user acquisition, pre-installation agreements with phone manufacturers, marketing, and strategic investments. The company also returns capital to shareholders through share buybacks and dividends. The board is authorized to buy back up to 10% of the outstanding capital until the next AGM on May 23, 2025.

Management Commentary

Ad revenues back to double-digit growth, which fueled overall growth.

Strong underlying profit development with EBITDA excl. incentive costs +36% and EPS +33%.

New full Truecaller experience launched on iPhone late January ‘25. Positive initial user feedback and KPIs. Revenue impact is expected gradually from Q2 2025.

Transfer pricing survey in India: At this point in time, no reason to assume that this will result in any material increase in tax payments, once the process reaches its final conclusion.

Overall Sentiment: Positive. Management expresses confidence in growth prospects, profitability, and the new iOS product. They are closely monitoring the tax survey in India but do not anticipate material impact.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.