Truecaller reported a solid quarter, bouncing back to y/y growth, accelerating user growth while continuing to show strong cash conversion. Sales were 1% better than our expectations, with the largest deviation coming from Truecaller for Business, which saw a 48% y/y growth, 6% above our forecast. However, the solid report was somewhat overshadowed by the news of the CEO change and the visit by Indian tax authorities to Truecaller's India offices. We believe the former should be seen as a non-dramatic event, while we understand that the latter creates uncertainty in the market.

With CPM levels likely having bottomed out and easier comps ahead, ad revenues should grow even without a rebound in the underlying ad market. Combined with continued solid growth in recurring revenues and the upcoming product launch on iOS, we expect the strong business momentum to continue. However, until more information is disclosed regarding the Indian tax authorities' visit, there is a risk that the current uncertainty will persist, potentially hampering the share price.

On the back of the report, we make relatively small estimate revisions, lowering ad revenues by 4% for 2025e–2026e, while increasing subscriptions and Truecaller for Business by 2% and 3%, respectively, for 2025e–2026e. Truecaller will continue to face easier comparables in the upcoming quarters, and we anticipate continued strong momentum in recurring revenues, supporting both growth and stability. We maintain our valuation with a base case of SEK55 and a fair value range of SEK28–90.