Appier records its first profitable year and forecasts profitable growth for 2023

Guidance for fiscal year 2023

• Forecast of 31% (34% on FX neutral basis) increase in YoY revenue growth to 25.5 billion yen and gross profit growth is expected to surpass revenue growth at 35% YoY due to further gross margin improvement.
• Increase in operating income by around 10 times to 535 million yen and further improve operating margin to 2.1%
• Continuous geographic and vertical expansion, along with ROI-driven solutions and further product synergies for better up-sell and cross-sell opportunities, to be key growth drivers in FY23
• Continued growth of AI trends to drive further business growth

Highlight and achievements of Q4 FY22

• Revenue increased by 47% YoY and hit a historical high of 5.8 billion yen
• Annual recurring revenue YoY growth rate further increased from 46% to 53%
• Gross profit reached 56% YoY growth with a record-high gross profit of 3 billion yen
• Attained both EBITDA margin and operating margin improvement of 6 percentage points YoY
• Grew customers by 26% YoY, alongside a low customer churn rate of 0.62%

Closing out the year with a stellar performance

Appier Group Inc (TSE: 4180), henceforth referred to as Appier, today announced its fiscal and fourth-quarter earnings results for the year ended 31 December 2022. Appier closed out the fiscal year of 2022 achieving a full-year operating profit for the first time, one year ahead of schedule from its FY23 target, with a revenue increase of 53% YoY at 19.4 billion yen. This year marks growth acceleration for Appier for four years in a row, as annual gross profit more than tripled in the last four years to accelerate to 60% YoY. EBITDA margin rose to 7%, keeping the company on a strong trajectory toward its 2025 financial targets.

Appier's strong performance was attributed to the continuous expansion of its customer base both regionally and vertically, alongside robust product synergies and successful customer retention through up-sell and cross-sell strategies. Northeast Asia (63%) continued to reach high growth despite a large revenue base, while revenues in Greater China (20%) were mainly driven by vertical growth. US and EMEA (12%) continue to be a key growth driver with a larger total addressable market (TAM), as it increased its revenue over 7 times YoY in the fiscal year.

The company's further expansion to more diversified verticals led to stronger growth acceleration. The Digital Content (gaming, entertainment, e-books, and online streaming) vertical grew significantly with 10 percentage points YoY increase in FY22 to constitute 38% of total revenues, only second to Ecommerce (43%), then followed by Other Internet Services^[1] (12%) and Consumer Brands and BFSI (7%). Strong demand from these digital-first industries will continue as they place digital strategies at the forefront of their transformation under the new normal post-COVID.

In addition to growing the total number of customers by 26% in FY22, Appier's higher business efficiency also resulted in a higher customer Lifetime Value (LTV) at 64% YoY and a lower Customer Acquisition Cost (CAC) at -12% YoY. The higher LTV was driven by a lower churn rate of customer revenue and higher gross profit per customer; while the lower CAC was driven by lower expenses on new customer acquisition and a higher number of net new customers.

The successful transfer from the Mothers segment to the Prime segment on the Tokyo Stock Exchange (TSE) in December 2022 is also a significant testament to the sophisticated organization with strong growth and good corporate governance.

A strong quarter to close out a profitable year

Appier's revenue in Q4 grew at a rate of 47% YoY to record a historical high of 5.8 billion yen, reaching a gross profit of 56% YoY growth. Operating margins reached 137 million yen, providing a strong tail end to close out a profitable fiscal year 2022. The company also retained a low customer churn rate of 0.62%.

"2022 has been a year of growth acceleration for Appier. We achieved full-year profitability one year ahead of schedule and tripled our revenue and gross profit in four years. These great results reflect that the market is responding well to the first-party data trends and our ROI-driven solutions powered by AI," said Dr. Chih-Han Yu, CEO and Co-Founder, Appier. "2023 is an important year for exciting developments in AI. Supporting customers to gain the most value from AI trends and technologies through their digital transformation journeys remains a key priority for us. With the current trajectory that Appier is on, along with our core value of innovative technology enhancement, a customer-centric mindset, and prudent M&A approach, we are confident that we are on the right track to reach our targets this year."

Strong business momentum for future growth

Appier's 2023 guidance comes with forecasted annual revenue growth of 31% (34% on FX neutral basis) to reach 25.5 billion yen. The overall outlook for 2023 is optimistic, with annual gross profit growth of 35% YoY, an operating income increase of around 10 times to 535 million yen, and an EBITDA profit of 2.34 billion yen with a 72% YoY growth rate. The company also targets to achieve operating margins of 2.1% following its strong business momentum.

Looking ahead to FY23, Appier is confident about the future. The influence of first-party data trends and new technologies in AI, alongside the company's strategic geographical and vertical expansions, and its focus on cutting-edge innovation, are set to consolidate demand for Appier's solutions that turn customers' marketing investments into measurable returns.

Generative AI: Enlarge the TAM from decision-making to content creation

The exponential growth of Generative AI and its potential has widened the space for MarTech applications. AI is not only empowering productivity through marketing automation and decision-making, but it is also tapping into the fields of idea generation to explore user insights and content creation to generate more creative materials for campaign usage. As Generative AI is expected to lead the next wave of AI accelerations and streamline marketing workflows, Appier keeps integrating advanced technologies to create cutting-edge solutions to bring value to customers and ensure that the company stays at the forefront of the AI SaaS space.
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About Appier

Appier (TSE: 4180) is a software-as-a-service (SaaS) company that uses artificial intelligence to power business decision-making. Founded in 2012 with a vision of democratizing AI, Appier now has 17 offices across APAC, Europe and US, and is listed on the Tokyo Stock Exchange. Visit www.appier.com for more company information and visit ir.appier.com/en/ for more IR information.