Truecaller AB (publ) (TRUEB) Earnings Call Transcript & Summary

Welcome to the Truecaller Q2 Presentation for 2023. [Operator Instructions] Now I will hand the conference over to the CEO, Alan Mamedi; and CFO, Odd Bolin. Please go ahead.

Thank you. Welcome, everyone. I'm Alan Mamedi and I'm the CEO and Co-Founder of Truecaller. And with me, I have our CFO, Odd Bolin. We're happy to announce our interim report for the second quarter of 2023. We'll start with presenting financial and business highlights. Then we'll move on to the Q&A. So let's get started with the highlights of the quarter. In Q2, our user growth accelerated. We closed Q2 with an average of 356 million monthly active users, an increase of 11%. Average daily active users grew to 289 million, an increase of 13%. This brings us to an all-time high DAU to MAU ratio of 81.4%, meaning that the number of users who engage with Truecaller on a daily basis has grown. I am very pleased with the increased growth, which lays the foundation for long-term financial development. We closed the quarter at SEK 518 million in net sales, an all-time high number and an 8% increase compared to the same quarter in 2022. This was achieved by the growth of revenues in all 3 revenue streams, ads, subscriptions, and Truecaller for Business. I'm also pleased to say that we report an all-time high profit with an adjusted EBITDA being SEK 239 million, which is an increase of 9% and an adjusted EBITDA margin of 46%. We continue to have a very strong cash flow with SEK 251 million in net cash from operating activities before tax payments. Overall, I'm very pleased to report these numbers in a challenging macro, where the general demand for advertising still is muted compared to 2022, but we're an improved product, new features, improvements of our AdTech and solid cost control, managed to be new records. In the second quarter, we accelerated the growth of our user base across markets, and on both Android and iOS. Growth in the rest of the world was at an all-time high, and we see good traction in all our focus markets. The annualized growth rate in markets like Malaysia, Indonesia, Latin America and the U.S. was about 30%. We report the highest growth of DAU since 2020. Most of the growth continues to be organic, and we've seen improved retention and more efficient user acquisition contributing to the growth. We had an all-time high quarter when it comes to ad income, although macro has slowed down general demand and pricing. As mentioned in the last quarter, Indian Premier League in cricket in India is a big seasonal component here with increased demand from many advertisers where Truecaller as a platform serves their needs perfectly. We also made great progress in growing our enterprise offering, Truecaller for Business, as we call it. We saw good growth coming both from the verified business offering as well as Business Messaging, which reached record volumes. For verified businesses, we saw good growth coming from both new customers as well as deeper relationship with current customer base. We continue to see good traction with Truecaller Premium and our efforts to improve our pricing packages and product offering have driven strong growth with a 21% increase in subscribers and revenue year-on-year. I would like to highlight that the investments in AI and cloud telephony solutions now are starting to pay off, and we see good traction on iOS. I will cover these in more details in the coming slides. More on our user growth, which, as I said, accelerated in Q2. As you can see from the chart, the absolute user growth from Q1 is the highest we achieved in the last 5 quarters. And for MAUs, it's the highest growth since Q3, 2021 and for DAUs, the highest since Q4 2020. This illustrates the increased need of our product as this is achieved with lower marketing spend than last year. Increased number of users is the foundation for us to continue to develop well within all our revenue streams. So I'm really pleased to see this development. It was a very good quarter where we caught up on some of the missed opportunities from previous quarter. The growth comes from all our regions with the strongest relative growth in the rest of the world and with solid development, both on Android and iOS. I want to emphasize that we're a product-first company, which means that we continuously invest in developing our product offering to improve the user experience. This not only makes the product better, but also attracts more new users to Truecaller and also leads the existing users to engage with us more frequently, and I think that is the key. As we've done in previous calls, let's recap what Truecaller actually does for those who are not familiar with what we do. Our 2 main product offerings are the following. The first one is, of course, our consumer product, which is available globally on iPhone and Android. More than 356 million people use Truecaller every month, and we're proud to be the leading global platform for trusted communication. Consumers use Truecaller in order to have a safer and more efficient calling and messaging experience. It's basically their go-to product for their communication needs. The other side of this is our business product that we call Truecaller for Business, which allows businesses to verify through a KYC process and become verified businesses on our platform in order to increase trust in their communication with consumers, but also to prevent impersonation, for example. They can also integrate their calling and messaging experience directly into our products so that they can grow their business more efficiently. Now, this quarter, we continue to make progress around product development for the core offering, Truecaller for Business and our AdTech capabilities and Truecaller for Business, of course. As technology advances, so do the tactics of bad actors who seek to deceive and defraud innocent individuals. With AI impersonations, phishing attempts and overall sophistication of scams, we do see an increase that goes rapidly across a wider variety of channels due to the use of AI-based technologies. We continue to work tirelessly to provide state-of-the-art solutions that address these risks as they become more prevalent. In light of this, we have ramped up our efforts to combat fraud beyond phone calls. We leverage on-device machine learning algorithms to proactively identify and flag fraudulent SMS messages, thereby preventing users from falling prey to malicious contents or scams. The service is designed so that potentially unsafe links within SMS messages are automatically disabled, which adds an extra layer of security for our users. And we continue to develop more features that support fraud prevention across multiple channels to protect users from these growing threats. This initiative is enhanced by partnership with established players, including Tanla, enabling a comprehensive approach to identifying fraudulent senders and messages. Supporting the focused efforts on this, the new feature, Message ID, which is sort of our caller ID for SMS messages, was released during the first quarter to better alert users about the identity and purpose of an incoming message. And that continues to show positive growth, which is now rendering more than 200 million daily impressions, which are currently unmonetized, I should also add. Everyday fraud includes the combination of calls and messages such as OTPs and by enhancing the information's relevance, the ability to protect strengthens. We launched a highly requested feature, Call Recording, on iOS in the U.S. and Australia. This is the second AI-based feature coming from the cloud telephony platform. Call Recording on Truecaller includes call transcribing, the choice of saving recordings on either the local device or on the cloud and many more things. The efforts in improving the paid offering on iOS with Live Caller ID and the Call Recording have been well received during the second quarter. Good growth was experienced on the iOS platform with numbers -- with the number of subscribers increasing by 8% quarter-on-quarter and 25% year-on-year. So we're seeing good progress here. Just before the end of Q2, Truecaller Assistant was launched in the Indian market in English and Hindi. The integration of Hindi marked a milestone being the first time an additional language was incorporated into the Assistant product. The process was considerably challenging, especially given the vast complexity of Hindi as a language such as its grammar, syntax, pronunciation and its extensive use of transliteration. The product is now available across India on the Android platform as well as in Canada and Australia on both Android and iOS. Since the U.S. release of Truecaller Assistant in second half of last year, the team has worked on refining and adapting the product experience to local market needs. Clearly, we have a lot to do with a lot of potential. Cloud telephony presents that platform with huge potential. Its flexible and scalable infrastructure allows for the rapid deployment of new features in local markets. We look forward to releasing both Call Recording and Assistant to the new markets during the second half of the year to add more value to our premium offering and our premium users. Now over to AdTech. Building on the advancements made on our ads tech capabilities during the first quarter, we were able to improve the offering to an expanding number of demand partners and advertisers across the industries during the second quarter. The enhancements of Truecaller Ad Server now supporting sophisticated features like custom targeting and retargeting has shown potential in boosting conversion rates for objectives like app installs, lead generation and sales. These developments have all contributed to the results witnessed in the second quarter with the Indian Premier League, IPL, being a noteworthy highlight. With more than 250 million users in India, Truecaller offers a high degree of overlap with the IPL audience, making it an ideal platform for advertisers to target IPL audiences digitally at hyperscale and frequency. Truecaller offers advertisers a massive reach and scale, unparalleled by any other stand-alone publishers in the country with the ability to deliver 4 billion impressions within 24 hours globally. The unique blend of massive reach, unique insights for precise targeting, high-impact ad solutions and dedicated servicing offered makes Truecaller Ads a preferred platform for a wide variety of advertisers. On the iOS product, we haven't focused on ads monetization before since we wanted to get the product right first. We have definitely made huge progresses there, which is why we started to focus on the inventory efforts to show improvements in the supply side metrics to drive more ads per opportunity as well as ad engagements via improved click-through rates. Our initiative to optimize the ad inventory on the iOS platform has grown the iOS ad revenue by 190% year-on-year, 1-9-0. The team continues to explore high-yielding ad formats that would drive higher user engagement with ads, leading to higher CPMs and better click-through rates. That, of course, translates into higher revenues. Key indicators shows that this experimentation resulted in higher quality ads with higher CPMs on our iOS products. Lastly for ads, Truecaller Ads aspires to be the most preferred full-stack ad solution that leverages Truecaller's massive scale and user insights. I'm happy to share a recent case study about Xiaomi that underscores our efforts in this direction. So Xiaomi India is a leading smartphone brand. The goal of the campaign was to drive substantial traffic for the highly anticipated online reveal event of their new phone, Xiaomi Redmi A2. The approach was, with Xiaomi's position as Desh Ka Smartphone and their mass appeal across various demographics, we devised a custom high-reach, high-impact solution to ensure maximum visibility for the big launch event. Truecaller presented Xiaomi with a never before opportunity, a custom one-hour pan India roadblock that would generate an astounding 70 million impressions within just 1 hour. And the result yielded remarkably well. The campaign successfully reached 36 million people driving an astounding [ 1.80 ] million clicks within 1 hour. Truecaller Ads played a pivotal role in Xiaomi's Redmi A2 series launch event, creating an immense buzz and capturing the attention of smartphone enthusiasts across the nation. We stand committed to delivering robust solutions for advertisers and enhancing the user experience. Building on the milestones [ reached ] in the second quarter, Truecaller aims to drive further innovation in the time to come. Now let's talk about Truecaller for Business. So Truecaller for Business experienced consistent growth throughout the second quarter of 2023. While its adopting remains -- adoption remains strong in India, there has also been an increase in the rest of the world segment. The account base of companies using Truecaller for Business' verified service grew by 50% year-on-year with notable brands like Volvo, Paytm, National Bank of Kuwait, Domino's Pizza and Aramco, to name a few. The range of brands from multiple industries joining Truecaller for Business indicates an upward trend in enterprise interest in the platform's verified business solution and fraud detection capabilities. An encouraging trend among long-standing customers was observed through expanded contracts and increased utilization of the platform's advanced features. During the second quarter, we introduced a new Call Management API and webhook Alerts to empower businesses with ability to seamlessly manage information and experience from each call. Companies can leverage this new infrastructure to manage a series of processes using the same number and create more personalized communication for their customers. The expanded integration capabilities allows enterprises to connect their CRM and dialer systems directly to the Truecaller for Business platform, which significantly increases the use of Truecaller in their core workflow. We also released an upgraded and enhanced version of Truecaller SDK, which is a solution that provides companies with the tools needed to facilitate user logins through quick and efficient user verification via the Truecaller's platform. The focus for the coming quarter is to migrate all existing partners to the new SDK solution, which provides a better end-user experience with much more secure authentication. Now over to Odd to talk about our financial performance.

Thank you. Thank you, Alan. So let's look a little bit deeper into the financials for this quarter then. As usual, we'll start with the revenue development. Our overall revenues increased by 8% compared to the last -- the same quarter last year. As Alan mentioned before, Q2 is a seasonally strong quarter due to the Indian Premier League cricket. We are, however, very pleased with the improvements coming from all 3 revenue streams in a pretty challenging macro environment still. As also mentioned last quarter, IPL is a seasonal effect that impacts the second quarter. The general demand for digital ads have stabilized on the levels we had when we released our Q2 report. We continue to develop our premium offering, and here we see a steady increase in the number of subscribers across platforms and geographies and a higher conversion, which we're very happy about. For Truecaller for Business, which consists of our verified business solutions and the messaging business -- Business Messaging product, which we deliver in cooperation with Tanla, the income grew strongly on a year-over-year basis as well as quarter-over-quarter. Now let's look at a bit in more detail on these 3 revenue streams and start with the largest one with ads. Q2 '23 was an all-time high quarter for ads revenue. This was achieved, to a large extent, by the fact that we could capitalize well on IPL and the ads demand that came through IPL, but that demand was somewhat different from what we have seen in the past. We had a wider base of IPL advertisers who could buy our inventory, and we can offer these advertisers a larger impression base for their targeted audience. Although we saw lower CPM this year, our inventory improvements offered much more scale in terms of impressions, and that led to a higher IPL revenue. General demand, apart from IPL, continues to be muted, but it has stabilized, not getting worse, but so far, no obvious improvements either. We continue to improve our platform through our tech improvements and the growth of the user base. We continue to optimize for revenue per user rather than pricing or fill rates. The increase in impressions were made possible as different stages of the ad life cycle were optimized, ad requests, catching, serving, et cetera, leading to an increase in monetizable impressions within the existing [indiscernible]. These improvements help us now, but more importantly, when demand bounces back, it will generate a significantly higher return. The normal seasonal pattern is such that Q3 usually is stronger than Q1, but slower than Q2 and Q4. We think this holds true also this year as all large festivities, including Diwali take place in Q4. We don't yet see any material uptick in the underlying demand, and we continue to focus on factors that we can influence, ensuring that we are in the best possible position once the macro situation starts improving again. When looking at comparison numbers, remember that the general slowdown in the demand started to impact us in Q4. That should be taken into account when looking at Q3 and Q4 this year. When looking at our subscriptions, you can see that we grew our revenue by 21% compared to last year. And the relative growth in the number of premium users is exceeding the relative growth in the monthly active users, which is encouraging. We see growth coming from many different markets. The biggest contributors have been India, the U.S. and Malaysia. Our strategy to add more functionality through the cloud telephony platform has started to pay off with contributions coming from the AI features, Truecaller system Call Recording, which is a higher subscription price. We look forward to introducing the features -- these features in more markets going forward. Truecaller for Business continues to grow the customer base and the trend with longer and deeper relationships with clients continues. New sales continue to be a bit more challenging than last year, but we keep on developing more products to integrate tighter with our clients. During the quarter, Business Messaging volumes reached record levels and contributed to the interim improvement. Here it is worth highlighting that the volumes were positively impacted by seasonality and that Q3 is expected to be somewhat slow. As you're aware, we are doing Business Messaging exclusively with one partner, Tanla, at this point. But from the fourth quarter this year, we have the option to open up this product to more partners. Our gross profit improved, although the margin was somewhat lower than last year. We saw an improvement from the last 3 quarters as investments and work that has been done to increase efficiency in server and verification costs has started to pay off, and we will continue to put efforts in these areas going forward. Let's now turn to the cost side. Our overall cost base is at the same level as Q2 last year. We have increased that cost somewhat due to more FTEs and due to the annual salary review, which came into effect from the start of Q2. But the number of FTEs in the quarter was stable compared to the previous quarter, Q1. For other expenses, we continue to report lower expenses than last year. As macro has made it tougher on the revenue side, we have increased our focus on efficiency, and we will continue to keep a close eye on costs, but at the same time, executing on our growth ambitions. A note for the coming quarters is that the new incentive program that we decided on, on the AGM in May is expected to increase incentive cost by approximately SEK 3 million per quarter from -- starting from the third quarter. As we have previously stated, our tax rate is a combination of the Swedish corporate tax rate and the Indian tax rate. And we have expected the tax rate to increase somewhat going forward. This quarter, the tax rate was approximately 21% and for the first half of the year, 23%. The operating leverage is something that I'd like to talk about. We have it in -- the operating leverage that we have in our businesses is quite extraordinary. And thanks to our lean machine, we're able to deliver solid returns even in tougher macro -- in a tougher macro environment. And the leverage, when demand comes back is [indiscernible] is quite substantial. In the quarter, we reported our second highest quarterly EBITDA margin, which for the quarter was 46%. And as usual, we have a very good cash conversion, as you can see on the next page. At this point, we have approximately SEK 1.6 billion in cash and short-term investments and another SEK 500 million that we have in an in-use revolving credit facility. We continue to believe that this is an excellent position to be at this point in time when the macroeconomic uncertainty is what it is. During the quarter, we have continued buying back some shares to trim the capital position and the Board gave an increased mandate from the AGM to buy back up to 10% of the outstanding shares, including the ones that already have been bought back. Share buybacks continue to be a tool that we can use where appropriate and we'll also keep scanning the market for potential acquisitions. Now let's then look quickly on how we track compared to our financial targets that were set by the Board in conjunction with the IPL. The medium-term financial targets were set in a different economic climate compared to what we have right now. In the current macro climate, the revenue growth target is clearly less relevant when evaluated on an annual basis. However, even though the financial targets are based on the average results during the period '21 to '24, we and the Board still believe they make sense also on an annual basis, but in a more normal macro environment, which is not what we have right now. As mentioned last quarter, with a shift in macro and with the outstanding performance we had in '21 and '22, it is fair to say that '23 will be a more challenging year on a revenue growth basis, compared to our financial targets. But we intend to continue to deliver well when it comes to our profitability ambitions. When it comes to the ads business, it is difficult to assess when we will see the annual demand pick up again. And in the meantime, we'll focus on safeguarding the profitability and making sure that we are in a better position once the general demand in the market increases again. With that, I will hand back to Alan and to wrap things up before we start the Q&A.

Cool. Thank you, Odd. So to wrap this up, I'm really proud of what we've achieved this quarter amidst of the challenging operating environment. We recorded the highest ever quarterly revenues, profits and user base. Despite declining smartphone sales, we accelerated our user growth and saw the highest growth of daily active users since 2020 and all-time high growth in rest of the world. Our advertising business continues to be affected by macro conditions, as mentioned before, but with the strong impact of IPL and with the internal improvements we have made, we were still able to achieve record-high ads income, although average prices are 14% lower than the same quarter last year. Our subscription revenues continues to develop well with good growth in terms of both revenue and number of subscribers. And we see solid development in many markets and positive effects from our AI features as well as newer price plans. We continue to see solid developments with Truecaller for Business and continue to innovate in order to serve growing demands and evolving needs of enterprise customers. We'll continue to develop new products to help businesses become more efficient and provide safe and secure communication with their clients. Finally, we've always prioritized efficiency and engineering excellence, but an enhanced focus and investments this quarter enable us to deliver good profitability ratios. Overall, we're proud that we continue to be in a strong position with solid financials, strong cash flow and strong organic growth with zero debt. Our strong position and our continued growth means that we still will continue to make strategic investments. And even in a time of uncertainty, we will continue to take advantage of our strong position and find opportunities to continue growing. We want to share some insights into what we're focusing on, both short term and long term. As always, product innovation is a priority for us. The problems that we solve are constantly evolving with AI and other technological changes. It is always a priority for us to ensure that the product stays ahead of these challenges. We will increase our efforts within fraud prevention, both for consumers and businesses. On the advertising side, we continue to invest in improving our technology to offer best-in-class experience while improving our monetization potential. In recent quarters, we invested significantly in building out our advertising capabilities to set the foundation for a transition towards becoming a full stack advertising solution partner. This will allow us to cater to a much wider range of use cases across the advertising funnel, meaning that in the medium to long term, we will be able to serve more advertising needs in addition to being a top-tier publisher. Beyond this, we focus on growing further in new markets, and that will grow our ads revenues in the long term. Regarding the user growth, our focus remains on investing in targeted markets with high potential alongside the organic growth that continues to drive our overall expansion. For Truecaller for Business, we will continue to integrate deeper into our partner companies and introduce new features to make them more efficient along with growing with more clients, basically. The Business Messaging, the exclusivity deal we have today with our partner [indiscernible] to Q3. we have the choice to open up this product to other cPaaS companies and partners, if so. With subscriptions, we will continue to invest in introducing even more relevant value-add features, especially taking advantage of our cloud telephony and AI capabilities. We'll work on continuing to grow this income stream, especially in markets with higher subscription adoption. We are encouraged by the upward trends in subscription rates in our largest market, India, and are working on continuing to grow the subscription base as well. Truecaller has always been a company that values efficiency in everything we do. That's why we're only 400 people serving over 356 million users to continue to have a big operating leverage being key for us, and we have more investments to do to maximize server utilization and optimizing server costs. With our strong profitability, cash flow and balance sheet, we will continue to pursue relevant investment opportunities. We are confident that our continued operational improvements set us up well for growth and continued profitability once broader sentiment improves. And as always, a big thanks to all our users, the great partners that we work with and the phenomenal Truecaller team across the world. And now we're happy to take your questions. So over to the operator.

[Operator Instructions] The next question comes from Predrag Savinovic from Carnegie.

I think first off, just on the growth in Q2, if you could quantify how much you think is coming from IPL.

We know how much is coming from IPL, but we haven't made that a public figure. So that's not something we can give you an answer to. What we are saying is that IPL was normal, so to speak. We didn't see any -- there were changes made to IPL this year that created some uncertainty ahead of the season. But it turned out that the IPL season, from a digital advertising perspective, was normal versus, say, last year, which is also to say that we didn't see any weakening in IPL demand that we've seen -- as we have seen in the general demand situation. So IPL this year was a normal -- a very normal seasonal effect for us.

Okay. Okay. In the report, you write that users on average interacted with Truecaller around 30 times per day in India. Could you say what -- roughly what the average is for the entire user base? So maybe it could be around 20 to 25x then? And just tying this to the impressions per user today, I believe you would be around half that number, right? So over time, could we assume that the impressions number could be much higher than you have already?

Hi, Predrag. I can take that one. Well, the thing is that every market looks very different. Some markets could have 20, 25 others could be 10 to 15. So it really depends. And usually, what we see is that markets with slightly lower sort of impressions are also those markets with higher CPMs. So in some way, it evens out. But I think you're on to something, and that is how can we grow our retention or revenues per user over time and engagement is, of course, key. And we've done a lot of great improvements in the product during the first 2 quarters, I would say, which we've seen returning into higher retention, meaning users stay for longer, they find more value in the product, which also leads to more revenues or more ads impressions. So I would probably stop at that, but it is very different from market to market.

Okay. Perfect. And then, Odd, you were speaking a little about operating leverage. And I was just wondering if you could [ theoreticize ] with me a bit here. So the margin is arguably quite strong already, but we know the demand is sluggish. So when demand returns and you have this nice operating leverage, could we be seeing EBITDA margins that are 50%, 55% or even higher, assuming this kind of return to ad spend or normalization, if you will?

Sure, Predrag, but I'm not going to give you a number there, but it is -- I think it's obvious to everyone particularly within the company, but also outside of the company that we could do more earnings, more revenue than we do with the existing cost base that we have today. So yes the answer is clearly that we could have a higher operating margin than we reported this quarter, but what that could theoretically be is something that I will -- I have an idea of course, a pretty good idea, but it's not something that I am about to communicate externally. Sorry about that, Predrag. Good try, though.

Okay. I think it's fair. Let me try to see if I can get something extra in the growth rate then instead. So not for Q3 but assuming longer term or so without also considering a return on macro, but we see the user growth is quite consistent at least at 10%. The utilization, as we discussed earlier, is probably quite low. Impressions could increase, say, I don't know, 10%, 15% per year for a few years. So if we think about these inputs, a growth of 20% or, say, 10% to 15% top line without market recovering and then [ fastening ] that on the business side, where are we going wrong then?

Could you sort of quantify the question?

Just grasping for some outlook comments on -- and if this theory is wrong then. I mean user growth consistent, the ad load being quite low, should be able to increase the number of ads and then you have the Truecaller business side, which is arguably growing quite much faster than the average.

You're pointing out a number of factors that can and will improve. I think the best number-wise indication I can give you is to say that we still continue to believe that the revenue-related financial target that we have makes sense on more of an annual basis and just not annualized over the 3, 4 years that we're talking about. So I think that should give you an indication of what we think is believable.

Okay, perfect. And just finally on the user growth, if you could share how much is coming from preloads and how happy or unhappy you are with that initiative at this point?

Well, we're happy with the preloads initiative but then again, we do see a clear impact on -- from the macroeconomic environment on global smartphone sales. So the smartphone manufacturers that we have signed up are not selling as much as they thought they would do at this point when you -- looking back to when we started those cooperation, that doesn't mean we're not going to get where we thought we were going to get but it's going to take longer time. So preloads are good. It is eventually an important channel for us to grow our user base, but it hasn't had as much of an impact at this time that we -- as we thought it would when we started those -- when we entered those deals. So far, most of our user growth continue to be organic.

Yes I would say, just to add, Predrag, I mean if you look at the growth -- user growth during the quarter, how much of that is actually coming from preloads, I would say it's a single percentage, it's below [ 5% ]. So it's not that, that is driving the current growth right now, it's more the other initiatives that creates more of a stronger organic growth.

The next question comes from Jesper Von Koch from Redeye.

Alan and Odd, congrats to the strong quarter.

Thank you.

All right. So let's just start with the ongoing change in data regulation in India through the Digital India Act. So particularly, if -- do you think you will need to change anything like how you manage data for underage users or how you target ads for these or if there's any other change that you see coming for you?

Well, I think it's too early to say since the latest draft has not been published yet. But looking at what we've seen floating around, you have to understand that when it comes to data processing of -- for, let's say, ads targeting, that is for our own users. So those are users that are using our products. So we don't see how that would get impacted. Regarding other operational changes, we just don't know yet. There might be certain things but I would say, many of the things that we have been anticipating, we've already made those changes in the past. Some of them like data localization, for example, happens to -- so far at least in the latest draft that we've seen floating, that got dropped, for example. So we'll have to wait and see but we are still on the confidence that we don't believe that it will change the experience for our users basically.

Okay, good. And then, also regarding your UAE investments, I understand that you maintain strict cost control and margin focus until the advertising market improves, but when it does, do you still plan to increase UAE investments? I mean, do you feel that you found a way to do this efficiently enough?

I think we found ways to do it efficiently at the current rate of the spending that we do. But of course, once you start to increase it to a higher level, then you will have to adapt that strategy as well because you sort of inflate the market. So we'll have to wait and see. But we're doing -- we're still investing in some of our focus markets. We've just narrowed it down to certain markets where we see a higher impact and a higher return of investment as well that are strategically of importance to us. But we also -- I mean I've said this before and it's in the report as well, we still want to maintain a high profitability. So if the market goes in the positive direction in terms of ads revenues and so forth, then we might and most likely will adjust some of these investments even more to stay on a similar sort of a profitable level.

The next question comes from John Karidis from Numis.

Huge congratulations to the entire Truecaller team for a great result. I'm really pleased for you. I have 3 questions, please. I'll start with the first one, which is, could you help us think all the reasons why adding more than 11 million people -- users to your MAU base is likely to be the new normal for Truecaller going forward?