Significant improvement in profitability! MOBVISTA (01860) achieved growth in both gross profit and adjusted EBITDA in 2023.

On March 15, MOBVISTA (01860) released its annual performance report for the twelve months ending December 31, 2023. The financial report shows that the company's performance in 2023 was impressive, with accelerated profit generation, achieving revenue of 1.054 billion US dollars, an increase of 17.9% year-on-year; gross profit of 217 million US dollars, an increase of 22.7% year-on-year; and adjusted EBITDA of 105 million US dollars, an increase of 191.3% year-on-year. Among them, its programmatic advertising platform Mintegral achieved revenue of 980 million US dollars, an increase of 18.8% year-on-year. Technological advancement, cost control, and operational optimization all showed results, significantly improving the business profitability. The improvement in MOBVISTA's profitability is mainly attributable to the enhancement of platform machine learning capabilities, effective cost control, and positive progress in business operations. The financial report shows that the company has integrated machine learning technology in creative dynamic optimization, ad recommendations, ad bidding, etc., and continues to upgrade technology and optimize algorithm capabilities. It is expected that the platform algorithm efficiency will increase with the increase in data throughput, further enhancing future gross profit margins. In terms of cost control, the company continuously optimizes its underlying cloud native platform, uses multi-cloud scheduling and introduces new types of computing power to reduce resource usage costs. By using personalized computing power technology, the company achieved its target of reducing server costs by 5% at the end of 2023. With the expansion of scale, optimization of cloud resources and unit prices, the company will continue to reduce unit server costs. In terms of operational management, with the increase in industry visibility, both the traffic supply side and demand side of the company have achieved high-quality growth. At the end of the reporting period, the traffic publishers and app situations cooperating with Mintegral were positive, with a 94.7% retention rate among cooperating traffic publishers in the fourth quarter of 2023, and a 12.8% increase in the number of new cooperating traffic publishers. At the same time, the number of new customers and advertising budgets of MOBVISTA have continued to increase, with increasing retention and net expansion rates of existing clients, sustaining revenue growth. The retention rate of enterprise-level clients with revenue contributions exceeding $100,000 was 93.3%, with a net expansion rate based on US dollars of 115.0%. In line with the trend of mixed monetization, substantial breakthroughs were made in revenue from medium to heavy games From the perspective of Mintegral's revenue, the game category remains an undeniable cornerstone. During the reporting period, the game category recorded revenue of 759 million US dollars, an increase of 20.3% year-on-year, accounting for 77.4% of Mintegral's business revenue. Among them, revenue from light games was 474 million US dollars, an increase of 3.2% year-on-year; revenue from medium to heavy games was 285 million US dollars, an increase of 66.3% year-on-year. As the industry's monetization model shifts towards a mixed model of advertising and in-app purchases, Mintegral seized this opportunity to further capture the market share of medium to heavy games with higher in-app purchase rates while maintaining its leading position in light games, achieving significant breakthroughs in this vertical expansion. During the reporting period, revenue from medium to heavy games increased by 66.3% year-on-year, accounting for 29.1% of Mintegral's total revenue, and the retention rate of large clients remained at a high level. According to publicly available materials, the company invested over 100 million Hong Kong dollars in share buybacks in 2023, and the buyback plan will continue. It is expected to further stabilize investor expectations and boost market confidence.