Truecaller’s Strategic Share Repurchase in Week 36, 2025: Assessing the Financial Rationale and Long-Term Shareholder Value Implications

Truecaller AB’s share repurchase program, initiated on May 30, 2025, has continued to gain momentum, with the company repurchasing 200,000 of its own B shares in Week 36 (September 1–5, 2025) at a weighted average price of SEK 45.30, totaling SEK 10.76 million for the week [2]. This follows a similar pattern in Week 35, where 200,000 shares were repurchased, bringing the cumulative total to 1,355,000 shares, or 0.38% of the outstanding capital [1]. The program, set to continue until the 2026 Annual General Meeting, is executed under regulatory guidelines to maintain shareholding limits relative to outstanding shares [3].

Financial Rationale: Strong Profitability and Liquidity Enable Strategic Buybacks

Truecaller’s ability to execute aggressive share repurchases is underpinned by robust financial performance. For Q2 2025, the company reported 21% year-over-year (YoY) revenue growth and 38% EBITDA growth in constant currency, despite a 12% appreciation of the Swedish krona (SEK) against the Indian rupee (INR) [1]. Premium subscriptions surged 48% YoY, while the Truecaller for Business segment grew by 53% YoY, both critical drivers of recurring revenue [1].

The company’s balance sheet further supports its buyback strategy. As of Q2 2025, Truecaller held a net cash position of 72.49 million SEK, with 79.63 million SEK in cash and 7.14 million SEK in debt, reflecting a debt-to-equity ratio of 0% and an interest coverage ratio of 49.5x [2]. These metrics highlight a fortress-like liquidity position, enabling the company to fund buybacks without compromising operational flexibility.

Long-Term Shareholder Value: Signaling Confidence and Enhancing EPS

Share repurchases are a strategic tool to enhance shareholder value by reducing the number of outstanding shares, thereby increasing earnings per share (EPS). Truecaller’s program, which has already repurchased 1,355,000 shares, is expected to amplify EPS growth as the company continues to buy back stock at what analysts consider undervalued levels [1].

The rationale for the buybacks also includes signaling confidence in the company’s long-term prospects. By allocating capital to repurchase shares, Truecaller is effectively communicating that its stock is attractively priced relative to intrinsic value. This aligns with the company’s broader strategy of disciplined capital allocation, which has historically included cost-cutting measures to maintain high profitability [3].

Analyst Insights: Capital Allocation as a Competitive Advantage

Redeye, a Swedish research firm, has praised Truecaller’s capital allocation strategy, noting that the company’s share repurchases during periods of economic uncertainty demonstrate a commitment to maximizing shareholder returns [1]. The firm also highlighted that Truecaller’s strict cost control—evidenced by its 44% EBITDA margin excluding incentive costs—has been instrumental in sustaining profitability despite macroeconomic headwinds [1].

However, analysts caution that while buybacks provide a buffer for EPS, revenue growth estimates have been revised downward due to slower-than-expected recovery in cost-per-mille (CPM) metrics and growth in the Truecaller for Business segment [1]. Despite this, the combination of cost discipline and buyback activity has helped stabilize earnings expectations, reinforcing investor confidence.

Conclusion: A Prudent Move in a High-Conviction Strategy

Truecaller’s share repurchase program in Week 36, 2025, reflects a well-justified strategy to capitalize on undervaluation while leveraging its strong liquidity and profitability. By aligning with regulatory frameworks and prioritizing shareholder returns, the company is positioning itself to navigate macroeconomic volatility while enhancing long-term value. As the buyback program progresses, investors will likely monitor its impact on EPS and whether the company maintains its disciplined approach to capital allocation.

Source:
[1] Repurchase of Truecaller B shares in week 35, 2025 [https://www.prnewswire.com/news-releases/repurchase-of-truecaller-b-shares-in-week-35-2025-302542917.html]
[2] Repurchase of Truecaller B shares in week 36, 2025 [https://www.wowktv.com/business/press-releases/cision/20250908IO67615/repurchase-of-truecaller-b-shares-in-week-36-2025]
[3] Truecaller AB ser. B (TRUE-B.ST) Q2 FY2025 earnings call [https://finance.yahoo.com/quote/TRUE-B.ST/earnings/TRUE-B.ST-Q2-2025-earnings_call-306557.html/]