Appier delivers strong Q1 results, achieving continuous profitable growth with diversified customer traction

• Growth momentum continues, as revenue increased by 33% YoY, exceeding 31% of FY24 guidance to reach JPY 7.4 billion, driven by robust traction from existing customers and early success in vertical diversification strategies
• Gross profit grew 37% YoY, with gross margin reaching 51.7%, a historical high for Q1 due to GenAI technology advancements and prediction accuracy improvements
• Profitability ahead of schedule, with operating income turning profitable from the same period last year to JPY 65 million and a 0.9% operating margin, in addition to EBITDA margins at 10% to reach JPY 736 million
• R&D investment in AI technology development enhances the positive cycle of operating leverage and sales productivity improvement, thereby driving continued improvements in key operating metrics

Strong Q1 performance reveals market strategy and business operation success

Appier Group Inc (TSE: 4180), henceforth referred to as Appier, today announced its earnings results for the first quarter of fiscal year 2024. Despite a traditionally low season, Appier's Q1 revenue reached JPY 7.4 billion, marking a 33% YoY growth and exceeding 31% full-year guidance, further accelerating its business traction from the last quarter and the same period of last year with its consistent growth momentum. Meanwhile, the company’s gross profit YoY growth reached 37%, with a record high gross margin for Q1 of 51.7%.

The company's operating income has significantly improved, increasing by JPY 96 million YoY and achieving profitability at JPY 65 million. This performance, highlighted by a 0.9% operating margin and a 10.0% EBITDA margin, is ahead of schedule due to disciplined cost management and gross margin improvement.

Appier's enhanced gross and operating profit margins reflect its excellent execution capability to drive continuous technological advancements to profitable growth and S&M productivity enhancements. Appier’s R&D investment in AI technology not only enhances the positive cycle of operating leverage and sales productivity but also positions the company on a clear path toward achieving its FY25 targets. These investments lead to continuous improvements in key operating metrics, including growth in Average Revenue per Customer (ARPC) and gross and operating margins.

Robust revenue expansion and strategic customer diversification

Appier's Q1 revenue growth highlights the success of its vertical diversification strategies across regions, aligned with continuous traction from existing customers, especially in the E-Commerce and Digital Content sectors. The company has observed significant growth in the adoption of GenAI technology by existing customers within the Advertising Cloud. Appier has also successfully expanded its customer base for Digital Content in South Korea and extended its reach into new domains across the US & EMEA, and NEA, demonstrating solid early gains.

Diversified vertical expansion and revenue streams have also been instrumental in driving Appier’s resilient growth. The company achieved 67% and 31% YoY revenue growth in the US & EMEA and NEA regions, respectively. Following the upcoming higher season for Digital Content and accelerated new customer acquisition, a promising second quarter and continued improvement in profitability are expected.

"We focus on developing state-of-the-art AI technology and translating it into tangible commercial benefits to drive customer ROI. As our customers grow, so does our operating leverage, leading to stronger financial outcomes,” said Dr. Chih-han Yu, CEO and Co-Founder, Appier. “Our Q1 results clearly reflect our dedication to these objectives and underscore our commitment to continuous strategic growth through technology advancement.”

Enhance GenAI capabilities in three strategic directions

Appier's recent GenAI innovations are designed to elevate customer experiences and catalyze business growth across multiple dimensions. These include enhancing advertising performance, optimizing keyword exploration and improving auto-onsite editing.

1. Enhanced advertising performance: Leverage GenAI to boost Advertising Cloud efficiency and achieve ROI-driven results through automated personalized marketing messages and creative generation.
2. Optimized keyword exploration: Utilize GenAI to discover and target keywords and interests beyond conventional strategies and human knowledge, effectively expanding the customer base through innovative GenAI.
3. GenAI auto onsite editor: Enable customers to describe their desired website templates through text or image inputs, which are then automatically learned and integrated using GenAI, reducing cross-departmental communication among marketing, engineering, and design teams.

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