1. Company Overview
Truecaller AB is a Swedish technology company and global leader in mobile caller identification, spam blocking, and communication safety. The company’s app enables users to screen calls, block fraudsters, and engage with verified businesses, all in one interface. With roots in India but an expanding footprint globally, Truecaller has become synonymous with trust in mobile communication across developing and developed markets.
The business operates three primary revenue streams:
Advertising: The legacy core business and still the largest contributor by absolute revenue.
Consumer Subscriptions: Monthly and annual premium plans offering enhanced privacy and spam protection, especially for iOS users.
Enterprise SaaS (Truecaller for Business): Includes Verified Business, Business Messaging, and a new Number Intelligence API product.
Truecaller reached a new milestone with 450 million total users as of April 1, 2025, including 412 million monthly active non-iOS users (+15% YoY) and 356 million daily active users (+17% YoY). Importantly, the DAU-to-MAU ratio of 86% reflects sustained utility, a metric that is rarely seen in communication apps and speaks to the platform’s daily relevance in users’ lives.
2. Executive Summary
We are initiating a long position in Truecaller AB (TRUEB SS) following a misunderstood earnings report that created a technical entry opportunity. The company delivered another quarter of solid operating performance, but GAAP net income was suppressed by accounting-driven incentive costs tied to a rising share price, an issue that distorts optics but not business fundamentals.
Truecaller continues to show strength in all three key areas:
User monetization is improving as premium subscriptions grow and Truecaller for Business expands with new use cases.
Operational leverage is clear, with gross margins expanding and ad sales shifting toward higher-margin direct channels.
Platform durability is underscored by record engagement, product innovation, and a cash-rich, debt-free balance sheet.
In short, this is a high-quality growth business with embedded operating leverage, and we view the Q1 earnings reaction as an overcorrection. The stock offers attractive asymmetric upside at current levels.
3. Compelling Positives
A. Rare Combination of Scale and Engagement
Truecaller’s 450 million user base is not only large,it’s highly active. The DAU/MAU ratio of 86% sets it apart even from social apps and represents a moat in communication-based workflows. This is especially rare for a utility-style app. Management emphasized that these figures exclude iOS users, making the engagement metric even more impressive.
B. Recurring Revenue Compounding Behind the Scenes
While most investors still frame Truecaller as an ad-based business, recurring revenues now account for 32% of total sales, growing 49% YoY. Within that, consumer subscriptions were up 40% YoY, and Truecaller for Business surged 60% YoY.
These segments are crucial for two reasons:
They carry higher gross margins and lower volatility.
They indicate Truecaller is successfully building “second acts” beyond its original ad model.
C. SaaS-Like Metrics Emerging in Truecaller for Business
The enterprise offering grew revenues 60% YoY and is increasingly diversified across product types and geographies. Verified Business ARR rose nearly 40% YoY, and management emphasized low revenue churn and long-term expansion opportunities, particularly in financial services fraud detection and customer onboarding.
Truecaller is moving up the stack, selling into risk functions and onboarding workflows, sticky, high-value integrations. This gives the business enterprise-like optionality with minimal incremental capital investment.
D. iOS Monetization a New Tailwind
Historically, Truecaller struggled on iOS due to platform restrictions. That changed with the launch of a revamped premium-first iOS app, which brought Live Caller ID and premium blocking to Apple users. Early results are compelling:
55,000 net new iOS premium users in April alone
iOS now contributes ~40% of subscription revenue, despite being only ~6% of the user base.
Conversion rate from trial to paid rose nearly 30%
The iOS product has now crossed from development to monetization mode, and management believes India and Egypt could become meaningful iOS contributors in H2 2025.
4. Key Risks
A. Incentive Cost Noise in GAAP Reporting:
EBITDA margins dropped from 31% to 30% YoY, but this includes incentive accruals that are non-cash and tied to share price appreciation. Excluding incentives, EBITDA margin was 40%, up from 38% a year earlier. These costs do not reflect operational weakness but rather option-based compensation and RSU-related social tax accruals.
B. FX Headwinds Looming Larger:
Q1 saw a SEK 9 million hit from currency, but management cautioned that at current spot rates, Q2 could see 2–3x that drag. Most FX sensitivity is tied to revenues earned in India, the Middle East, and Africa, offset by SEK reporting.
C. Market Maturity in Core Geographies:
India remains the dominant base, which raises questions about saturation. That said, Rest-of-World segments now make up 50% of subscription revenue, and growth in iOS, business services, and financial use cases offer diversification going forward.
5. Competitive Advantages
First-mover scale with 450M+ users and dominant positioning in India and MENA.
Deep engagement metrics (86% DAU/MAU).
Proprietary ad formats (Caller ID, full-screen rich media) with direct sales driving 35% YoY growth in high-CPM formats.
AI-powered infrastructure driving fraud prevention and spam filtration at scale.
6. Competitive Landscape
No other mobile utility app demonstrates similar DAU/MAU metrics.
Truecaller’s spam blocking, call answering assistant, and message filtering are unmatched in emerging markets.
Expansion into B2B workflows (e.g., fraud scoring APIs) represents greenfield relative to both telcos and SaaS competitors.
Model Portfolio Action: Long TRUEB SS
Model Weighting: 2%
Risk Management (Stop Reference): -20% from entry
Initial Profit Target (Guidance): +40% from entry (subject to validation)
Price Reference: SEK 69.45
This position is part of our illustrative model portfolio and is presented for informational purposes only. It does not constitute personalized investment advice.
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