Appier exceeds first quarter projection, reports robust earnings growth

Increasing business momentum lays a solid foundation for second quarter onwards

Highlights and achievements of Q1 FY23

• Revenue increased by 32% YoY to reach JPY 5.6 billion
• Gross profit reached JPY 2.8 billion with a 32% YoY growth rate
• EBITDA profit increased by 60% YoY with 8% margin on a FX-neutral basis
• Achieved 24.4% YoY growth in customer numbers with last twelve months net revenue retention of 133.8% on FX neutral basis, and a customer churn rate of 0.608%

First quarter exceeds projections to establish a solid foundation for FY23

TAIPEI, TAIWAN - Media OutReach - 15 May 2023 - Appier Group Inc (TSE: 4180), henceforth referred to as Appier, today announced its earnings results for the first quarter of fiscal year 2023. Appier's growth in the first quarter exceeded full-year guidance amidst a traditionally low season^[1], while its business momentum increased since the beginning of the year. The company's successful penetration into key accounts and verticals, as well as its continued development into new markets, delivered concrete results and has laid out a solid foundation for the second quarter onwards.

Appier achieved steady growth in its financial performance with a 32% year-on-year (YoY) increase in revenue, reaching JPY 5.6 billion. Gross profit also showed significant growth, reaching JPY 2.8 billion with a 32% YoY growth rate, while EBITDA increased by 60% YoY to reach JPY 418 million with a 8% margin on a FX-neutral basis. Appier continues to accelerate its product innovation via various generative AI (GenAI) integrations to strengthen its core competence, as brands look to the next generation of technologies to further enhance their marketing strategies.

Continuing the momentum from the previous quarters, Appier performed well in the US and EMEA, reporting a 77% YoY revenue growth, and representing 14% of total revenue from 10% a year ago, underscoring its success in cultivating new markets and in meeting market demand for innovative technologies that drive change.

Expansion to accelerate on the back of dual growth engines via Digital Content and Ecommerce sectors

Appier achieved a 24% YoY growth in its overall customer base, with the majority of new customers coming from the Digital Content and Ecommerce sectors. In addition, the company reported a last twelve months net revenue retention (LTM NRR) of 133.8% on FX neutral basis, while its overall customer churn rate remained low at 0.608%. Appier's annual recurring revenue currently constitutes over 95% of total revenues, highlighting the company's stable growth and overall momentum.

Appier's continuous growth trajectory this quarter was attributed to better upselling, product synergy enhancement, and continuous expansion in existing customers, while its overall strategic focus remained on the acquisition of large enterprise customers. Despite the first quarter being a generally low season with clients' limited marketing activities, the company's performance has exceeded the full year guidance. Appier also expects further growth momentum in the upcoming quarters.

Northeast Asia's vertical growth and continuous US and EMEA market development serve as dual growth drivers

Appier also expects increased momentum from this quarter onwards, due to the addition of key accounts in Digital Content, particularly in South Korea. The company's breakdown of markets showed that Northeast Asia (66%) remained stable, with deeper penetration across verticals such as Digital Content and consistent growth from existing customers in ECommerce. The US and EMEA (14%) markets continued to deliver significant product value to customers, with a focus on acquiring new customers, scalability, ROI-driven upsell, and strength in the Digital Content sector.

"Our combined growth engine market strategy, consisting of both the Digital Content and ECommerce sectors, allows us to balance revenue streams and cope with macro economic uncertainties. This position allows us to keep pace well with the rapidly evolving business trends and sustain long-term robust growth," said Dr. Chih-Han Yu, CEO and Co-Founder of Appier. "By combining Appier's sophisticated GenAI algorithms with OpenAI's ChatGPT language models, our customers can embrace cutting-edge solutions and harness the value of AI easily."

Empowering marketing with a full suite of GenAI technology enhancements

Appier is consistently driving product innovation through the integration of industry-leading technology into its entire suite of products. Through the combination of Appier's in-house GenAI technology with ChatGPT features, enterprises can significantly enhance their productivity through advertising tools, conversational marketing, and automated content generation.

• CrossX - AIXPERT: Limited or ineffective interest segments is one of marketers' painpoints, making it hard to create various versions for multiple paid channels. With GenAI powered interest segment and parameter expansions, along with ChatGPT's domain knowledge, marketers can efficiently identify the most appealing interest clusters to acquire high-value users. Based on AI predicted performance metrics and audience overlap rate, marketers can also optimize ads content across channels to achieve better campaign Return on Ad Spend (ROAS).
• AIQUA: Generating marketing copy and creating multiple versions for campaign A/B testing can be time-consuming and challenging for marketers. With the support of GenAI technology, marketers can use basic text input to create multiple language versions^[2], custom lengths, and tones (formal, friendly, uplifting, playful, humorous) in a few seconds.
• BotBonnie: In the past, it was difficult for customer service professionals to provide a quick and detailed response to each customer. After integrating ChatGPT, the reply generation process can now be automated. AI assistant for live chat can also provide rewrite suggestions and adjust the response languages^[3], length or tones (professional, friendly, empathetic, confident) for different situations, enabling better results from conversational commerce and customer satisfaction.

With the integration of GenAI into its product lines, Appier believes that they will provide strong practical value to enterprises and improve marketing performance and efficiency for brands. The enhanced solutions with an intuitive interface also empower brands to support the entire buyer journey, creating greater value and memorable customer experiences.

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^[1]On the quarterly seasonality characteristics, Q1 is a naturally lower season for marketing activities. Q3 and Q4 are high seasons for Ecommerce, while Q2 and Q3 are high seasons for Digital Content.

^[2] AIQUA now can support English, Chinese, Japanese, and Korean languages and will support Vietnamese, Thai, and Bahasa in Q2 2023.

^[3] BotBonnie can now support English, Chinese, Japanese, and Korean languages.

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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. Visitwww.appier.com for more company information and visit ir.appier.com/en/ for more IR information.