Sweden-based caller ID and spam-blocking company Truecaller is preparing for a significant round of cuts after a difficult start to its 2026 financial year. The company says it will reduce its workforce by 70 roles, about 15% of employees, during the second quarter, as it reports a sharp year-over-year decline in both revenue and profitability.
Truecaller points to a mix of market and industry disruptions behind the slump. The biggest hit came from India, its largest market, where revenue fell sharply. The company also cited weakened advertising performance tied to shifting ad-partner algorithms, along with revenue pressure related to ongoing conflict in the Middle East.
Revenue and ad sales slide in Q1 2026
In its Q1 2026 report, Truecaller said net sales dropped 27% to 362 million SEK (around $39.34 million). India saw the steepest decline, with net sales down 41% year-on-year. Advertising, a major source of income for Truecaller, was hit especially hard, with ad revenue falling 44%.
During the earnings call, CEO Rishit Jhunjhunwala explained that comparisons with last year look particularly weak because Q1 and Q2 of the prior year benefited from a surge in advertising from real-money gaming brands in India during the IPL season. This year, that boost didn’t materialize. He also noted that conditions in the Middle East reduced the company’s revenue from the region.
India’s real-money gaming crackdown reshapes ad budgets
A key reason behind the advertising slowdown traces back to India’s clampdown on real-money gaming. In August, the country banned major real-money gaming apps that allowed users to pay to participate in fantasy sports-style contests. Industry groups had valued the real-money gaming sector at roughly $23 billion in India, making it a major advertising category across mobile platforms.
With that category largely shut out, ad spending in areas where those apps previously marketed heavily declined. For ad-driven platforms like Truecaller, that shift translated into reduced demand and lower revenue, especially during periods that historically performed well.
Ad partner algorithm changes add more pressure
Truecaller also attributed part of the advertising downturn to changes made by a programmatic advertising partner’s algorithms. When algorithmic updates affect ad targeting, placement, or auction dynamics, publishers can see rapid changes in fill rates and pricing, even if their user base remains stable. For Truecaller, this appears to have compounded the impact of reduced ad budgets from key categories.
Bright spots: user growth and subscriptions
Despite the weak quarter, Truecaller did report a few meaningful positives. The platform surpassed 500 million active users, an important milestone that signals continued global reach even amid slower growth in some regions.
More notably, subscription revenue rose 27% and now accounts for 31% of net sales. That shift matters because subscriptions tend to be more stable than advertising, and it suggests Truecaller is making progress in diversifying its business model. The company has been expanding its paid feature set, including tools like an AI Assistant and Family Protection, to make premium plans more compelling.
Stock performance and what comes next
Truecaller’s stock has struggled, falling more than 26% so far this year and more than 79% over the past 12 months, though it has shown some recovery following the latest earnings update.
With layoffs planned in Q2 and advertising headwinds still unresolved, the next few quarters will be crucial. Investors and users alike will be watching whether Truecaller can stabilize its ad business, navigate competitive pressures in India, and continue growing higher-margin subscription revenue as it adjusts to a rapidly changing mobile and telecom landscape.
