Amber International Holding Ltd Q4 FY2021 earnings call

• 2021 was a year of exceptional growth for iClick, with enterprise solutions growing 125% YoY to $65 million and marketing solutions growing 7% YoY to $243 million despite headwinds.
• The company acquired the remaining equity interest in Changyi, a leading independent software vendor in China, to accelerate enterprise solutions business expansion.
• Strategically reduced lower margin, higher risk clients and business in marketing solutions to invest more in enterprise solutions with higher margin and growth potential.
• Believes in the long-term growth potential of China's digital advertising industry and the trillion-dollar opportunity in digital transformation in China.
• SaaS Plus model is key, combining technology with services to provide customized digital operation solutions.

Enterprise solutions: In 2021, revenue grew by 125% year-over-year to $65 million. In the fourth quarter of 2021, revenue was $19.7 million, up 87% year-over-year. Marketing solutions: In 2021, revenue grew 7% year-over-year to $243 million. In the fourth quarter of 2021, revenue was $56.6 million, up 17% year-over-year. Total revenues in 2021 increased by 20% year-over-year to $308 million, and gross profit grew by 22% to $89 million.

• For the first quarter of 2022, expects revenue from enterprise solutions between $16 million and $17 million.
• For the full year of 2022, expects revenue from enterprise solutions between $90 million and $106 million.
• No outlook provided for marketing solutions revenue at this stage due to strategic adjustments in the marketing solutions business.

• Tightened regulatory environment over VIE structure and listing potential risks from the Holding Foreign Company Accountable Act, negatively impacting the capital market and ability to raise capital.
• Reliance on cash on hand and credit facility due to challenges in the capital market.

Q: About management expectation on the sector outlook this year and when would you expect the path for recovery going forward, and about number of new customer additions and retention situation for Enterprise Solutions.

A: TJ mentioned ad business in China suffered short term shocks due to macroeconomic uncertainties, regulatory landscapes, and COVID-19 resurgence, expected to continue in following quarters and focus on core businesses. David Zhang said in Q4 2021, 500 customers contributed to Enterprise Solutions revenue, retention rate around 90% from past experience.

Q: About medium and long term impacts on advertising industry from regulatory changes over the last several months, and about SaaS solution helping customer improve operating efficiency and generating new revenue opportunities during macro witness.

A: TJ said regulatory policies on data security and personal privacy will have mid to long term impact, focusing on compliant businesses. Also mentioned SaaS solutions help customers with digital outlet solutions, adapting to new media ecosystem, enhancing interactions with customers.

Q: About future M&A plans and M&A considerations, and goals for KA clients and Mid-care clients in 2022.

A: TJ said recently acquired Changyi to consolidate enterprise solutions capabilities, looking out for M&A opportunities but cautious due to market conditions. Regarding clients, focus on providing size tools and value-added services to KA clients, and continue efforts on SMB business.

Q: About managing the expense side of the business to limit losses, quantifying bad debt recognized during the fourth quarter, and how much of marketing solutions revenue is low margin and not strategic to the enterprise segment.

A: David Zhang said provided $5 million special provision for bad debts last year, done well in cost control. Currently, low margin businesses in marketing solutions account for a third of marketing solution revenues, and will dynamically adjust scale down scale based on market response