Applovin Corp (APP) 2023 Q2 法說會逐字稿

Welcome, everyone, to the AppLovin Earnings Call for the Second Quarter ended June 30, 2023. I'm David Hsiao, Head of Investor Relations. Joining me today to discuss our results are Adam Foroughi, our Founder, CEO and Chairperson; and Herald Chen, our President and CFO. Please note our SEC filings to date as well as our shareholder letter discussing our second quarter performance are available at investors.applovin.com.

歡迎大家參加 AppLovin 截至 2023 年 6 月 30 日的第二季度收益電話會議。我是投資者關係主管 David Hsiao。今天與我一起討論我們的結果的是 Adam Foroughi，我們的創始人、首席執行官兼董事長；以及我們的總裁兼首席財務官 Herald Chen。請注意，我們迄今為止向 SEC 提交的文件以及討論第二季度業績的股東信函可在 Investors.applovin.com 上獲取。

During today's call, we may be making forward-looking statements regarding our products and services, market expectations, the future financial performance of the company and other future events. These statements are based on our current assumptions and beliefs, and we assume no obligation to update them, except as required by law. Our actual results may differ materially from the results predicted. We encourage you to review the risk factors in our most recently filed Form 10-Q for the fiscal quarter ended March 31, 2023, and in our Form 10-Q for the second quarter, which we expect to file later today.

在今天的電話會議中，我們可能會對我們的產品和服務、市場預期、公司未來財務業績以及其他未來事件做出前瞻性陳述。這些聲明基於我們當前的假設和信念，我們不承擔更新這些聲明的義務，除非法律要求。我們的實際結果可能與預測結果存在重大差異。我們鼓勵您查看我們最近提交的截至 2023 年 3 月 31 日的財政季度的 10-Q 表格以及預計今天晚些時候提交的第二季度的 10-Q 表格中的風險因素。

We will also be discussing non-GAAP financial measures. These non-GAAP measures are not intended to be a substitute for, or superior to, our GAAP results. Please be sure to review the reconciliations of our GAAP to non-GAAP financial measures in our shareholder letter available on our Investor Relations site.

我們還將討論非公認會計準則財務指標。這些非公認會計原則衡量標準無意替代或優於我們的公認會計原則結果。請務必在我們的投資者關係網站上查看我們的股東信函中的 GAAP 與非 GAAP 財務指標的調節表。

This conference call is being recorded, and a replay will be available on our IR website.

本次電話會議正在錄製中，重播將在我們的 IR 網站上提供。

I'll turn it over to Adam and Herald for some opening remarks, then we'll open up for Q&A.

我會將其交給 Adam 和 Herald 進行開場白，然後我們將進行問答。

Good afternoon, everyone, and thank you for joining us today. We had a stellar second quarter, surpassing our revenue and adjusted EBITDA guidance, largely due to the expansion of our software platform business. I'm incredibly proud of our dedicated teams who have worked tirelessly to upgrade our advertising algorithms from AXON 1.0 to AXON 2.0.

大家下午好，感謝您今天加入我們。我們第二季度的表現非常出色，超過了我們的收入和調整後的 EBITDA 指導，這主要歸功於我們軟件平台業務的擴張。我為我們的敬業團隊感到無比自豪，他們孜孜不倦地將我們的廣告算法從 AXON 1.0 升級到 AXON 2.0。

We started talking to you a year ago about the benefits we'd achieved, both short and long term, by upgrading our technology, and now we've executed on it. The launch has not only paved the way for a strong quarter, but also provides us with additional opportunities for future growth. The introduction of such a significant change in our technology required many hours of hard work, innovation and risks taken. The result is a true testament to our spirit and commitment and demonstrates that we operate with the same speed and efficiency as we did in our time as a private company. This is what makes me particularly proud of what we have achieved.

一年前，我們開始與您討論通過升級技術所取得的短期和長期效益，現在我們已經付諸實施。此次發布不僅為強勁的季度鋪平了道路，還為我們提供了未來增長的更多機會。我們的技術引入如此重大的變革需要大量的努力、創新和承擔風險。結果真實地證明了我們的精神和承諾，並表明我們的運營速度和效率與我們作為私營公司時相同。這讓我對我們所取得的成就感到特別自豪。

With cutting-edge AI technologies at the heart of our core offering, our focus will now shift towards continuous enhancement of our technology, expanding our advertiser base and extending AXON 2.0 to our Wurl and Array businesses. We are optimistic that these measures will fuel growth for years to come.

憑藉尖端人工智能技術作為我們核心產品的核心，我們現在的重點將轉向不斷增強我們的技術、擴大我們的廣告商基礎並將 AXON 2.0 擴展到我們的 Wurl 和 Array 業務。我們樂觀地認為這些措施將推動未來幾年的增長。

In conclusion, we remain committed to providing long-term shareholder value. We are confident in the potential of our team, our technology and our products and our financial strength. We appreciate your trust and support, and we look forward to our journey of growth and innovation with you. Thank you.

總之，我們仍然致力於提供長期股東價值。我們對我們團隊的潛力、我們的技術、我們的產品以及我們的財務實力充滿信心。我們感謝您的信任和支持，期待與您一起成長和創新。謝謝。

On to Herald to provide you with our financial highlights.

請聯繫先驅報為您提供我們的財務亮點。

Thanks, Adam, and good afternoon. Based on the incredible efforts from our team this year, in particular, leading the launch of our AXON 2.0 engine, we had a strong quarter financially across the world, with record software platform revenue, high margins, impressive operating leverage and ultimately robust free cash flow.

謝謝，亞當，下午好。基於我們團隊今年做出的令人難以置信的努力，特別是領導推出AXON 2.0 引擎，我們在全球範圍內實現了強勁的季度財務業績，擁有創紀錄的軟件平台收入、高利潤率、令人印象深刻的運營槓桿以及最終強勁的自由現金流動。

Our strong performance in the quarter illustrates that the highly focused plan we articulated about a year ago is working. As a reminder, we said we invest in our core team, improve our AI-based platforms and technology, optimize our apps business, drive free cash flow, and simplify. Simplify, focus and execute against what we do best. That strategy and plan, which is very similar to the fundamentals on which this company was founded, are working, and we're excited about where that can take us.

我們本季度的強勁表現表明我們一年前製定的高度集中的計劃正在發揮作用。提醒一下，我們說我們投資於我們的核心團隊，改進我們基於人工智能的平台和技術，優化我們的應用程序業務，推動自由現金流並簡化。簡化、專注並執行我們最擅長的事情。該戰略和計劃與該公司成立的基本原理非常相似，並且正在發揮作用，我們對它能帶我們走向何方感到興奮。

Touching on our financial highlights for the quarter. Our total revenue reached $750 million, with adjusted EBITDA of $334 million, both exceeding the high end of our guidance. Our adjusted EBIT margin -- EBITDA margin was 44%, and was the highest EBITDA margin we've had in 5 years. Further, for the quarter, we are pleased to have generated $80 million of positive net income.

談到我們本季度的財務亮點。我們的總收入達到 7.5 億美元，調整後 EBITDA 為 3.34 億美元，均超過了我們指導的上限。我們調整後的 EBITDA 利潤率為 44%，是 5 年來最高的 EBITDA 利潤率。此外，我們很高興本季度實現了 8000 萬美元的正淨利潤。

Our Software Platform segment reached a record revenue of $406 million, which represents 2 quarters with consecutive mid-teens growth and an increase of 28% over the prior year. Software platform adjusted EBITDA grew 39% year-over-year and 25% quarter-over-quarter to $273 million, translating to a 67% adjusted EBITDA margin. Software Platform adjusted EBITDA now represents more than 80% of our company's total adjusted EBITDA. Of note, during the quarter, we were able to increase adjusted EBITDA by an amount slightly higher than the increase in revenue, equating to over 100% flow-through.

我們的軟件平台部門收入達到創紀錄的 4.06 億美元，連續兩個季度實現中雙位數增長，比上一年增長 28%。軟件平台調整後 EBITDA 同比增長 39%，環比增長 25%，達到 2.73 億美元，調整後 EBITDA 利潤率為 67%。軟件平台調整後 EBITDA 目前占我們公司調整後 EBITDA 總額的 80% 以上。值得注意的是，在本季度，我們調整後 EBITDA 的增幅略高於收入增幅，相當於超過 100% 的流量。

For our flow-through will fluctuate in the future, it does highlight the impressive operating leverage from our Software Platform segment. As our Software Platform revenue continues to grow, we expect high flow-through and further margin improvements for this segment.

由於我們的流量在未來會波動，它確實凸顯了我們軟件平台部門令人印象深刻的運營槓桿。隨著我們的軟件平台收入持續增長，我們預計該細分市場的流量將很高，利潤率將進一步提高。

Looking at this segment over the past 2 years, revenue increased by 2.8x, representing a 67% compounded annual growth rate. Over that same period, our Software Platform adjusted EBITDA grew 3x, a 70% CAGR. We continue to remain optimistic about our opportunities within the Software Platform segment as we continue to improve our AI-based technologies as well as invest in our growth initiatives, including Connected-TV and Carrier & OEM.

過去 2 年，該細分市場的收入增長了 2.8 倍，複合年增長率為 67%。同期，我們的軟件平台調整後 EBITDA 增長了 3 倍，複合年增長率為 70%。我們繼續對軟件平台領域的機會保持樂觀，因為我們將繼續改進基於人工智能的技術，並投資於我們的增長計劃，包括聯網電視以及運營商和 OEM。

Turning to the Apps segment. During the quarter, we continued to focus on balancing profitability with revenue. For Q2, we had $334 million of Apps revenue and $61 million of adjusted EBITDA, a margin of 18%. We continue to invest carefully to drive top line growth, both through new game development and user acquisition marketing, while also managing for overall margin, targeting mid-teen adjusted EBITDA margin range over the medium term.

轉向應用程序部分。本季度，我們繼續注重平衡盈利能力和收入。第二季度，我們的應用收入為 3.34 億美元，調整後 EBITDA 為 6100 萬美元，利潤率為 18%。我們繼續謹慎投資，通過新遊戲開發和用戶獲取營銷來推動營收增長，同時管理整體利潤率，目標是中期調整後的 EBITDA 利潤率範圍達到中位數。

At the consolidated level, we're pleased to report we had free cash flow of $221 million in Q2, a 66% flow-through of adjusted EBITDA to free cash flow. For the first half of '23, we generated over $0.5 billion in free cash flow.

在合併層面，我們很高興地報告第二季度的自由現金流為 2.21 億美元，調整後 EBITDA 的 66% 流向自由現金流。 2023 年上半年，我們產生了超過 5 億美元的自由現金流。

With regard to guidance for Q3 '23, we are targeting another quarter of growth, with revenue between $780 million and $800 million, adjusted EBITDA between $340 million and $360 million and adjusted EBITDA margin between 44% and 45%. We anticipate the first full quarter of revenue contribution from AXON 2.0 to continue driving our growth as well as see steadier Apps performance. As previously mentioned on our calls, we continue to target free cash flow of approximately 50% to 60% of adjusted EBITDA on a normalized run rate basis, noting that we may have deviations from that in a particular quarter.

關於23 年第三季度的指導，我們的目標是再增長一個季度，收入在7.8 億美元至8 億美元之間，調整後EBITDA 在3.4 億美元至3.6 億美元之間，調整後EBITDA 利潤率在44% 至45% 之間。我們預計 AXON 2.0 第一個完整季度的收入貢獻將繼續推動我們的增長，並看到更穩定的應用程序性能。正如我們之前在電話會議中提到的，我們繼續以標準化運行率為基礎，將自由現金流目標定為調整後 EBITDA 的約 50% 至 60%，並指出我們可能與特定季度的目標存在偏差。

From a cash perspective, we ended Q2 with $876 million of cash on the balance sheet. In terms of stock buybacks, we repurchased $507 million of our Class A common stock during the quarter. And year-to-date through August 8, we have repurchased $601 million. We have $107 million of authorization remaining under our repurchase program, and we'll be carefully watching the markets.

從現金角度來看，第二季度結束時，我們的資產負債表上有 8.76 億美元的現金。在股票回購方面，本季度我們回購了 5.07 億美元的 A 類普通股。今年迄今為止，截至 8 月 8 日，我們已回購了 6.01 億美元。我們的回購計劃尚有 1.07 億美元的授權，我們將密切關注市場。

We're also watching the leveraged loan markets in real time to see if we can extend, reduce and/or lower the cost of our term loans. If we see an attractive window, we will move quickly to optimize our capital structure.

我們還在實時觀察槓桿貸款市場，看看我們是否可以延長、減少和/或降低定期貸款的成本。如果我們看到一個有吸引力的窗口，我們將迅速採取行動優化我們的資本結構。

In conclusion, Q2 was an incredibly strong financially and exemplifies the strength of our business model. Looking forward, our teams continue to be focused on execution and improving our core solutions and technologies. As Adam said, we're very excited about the opportunities in front of us.

總之，第二季度的財務狀況非常強勁，體現了我們商業模式的實力。展望未來，我們的團隊將繼續專注於執行和改進我們的核心解決方案和技術。正如亞當所說，我們對面前的機會感到非常興奮。

And now the moderator will take us through Q&A.

現在主持人將帶我們進行問答。

(Operator Instructions) And we will go first to Morgan Stanley's Matthew Cost.

（操作員說明）我們首先來看摩根士丹利的馬修·科斯特。

It's Dave on for Matt Cost. And so sorry if I missed this earlier, there were a few technical difficulties with the audio here for those of us dialing in. But with the strength of the ad network results, I think that speaks pretty positively to the company's execution in the quarter. Are you able to give some color on perhaps what portion of the quarter's performance you would find attributable to your own execution versus an overall recovery in the market?

戴夫 (Dave) 替補馬特·科斯特 (Matt Cost)。如果我之前錯過了這一點，我很抱歉，對於我們這些撥打電話的人來說，這裡的音頻存在一些技術困難。但憑藉廣告網絡結果的實力，我認為這對該公司本季度的執行力相當積極。您能否說明一下您認為本季度業績的哪一部分歸因於您自己的執行與市場的整體復甦？

Thanks, Dave, for the question. Market has been steady as we've been talking about for a couple of quarters now. So we attribute the growth in our platform really 100% from the advancements in our core technology. The upgrade made our platform a lot more accurate for advertisers and allows us to really monetize more of a breadth of advertisers.

謝謝戴夫提出的問題。正如我們幾個季度以來一直在談論的那樣，市場一直保持穩定。因此，我們將平台的增長100%歸功於我們核心技術的進步。此次升級使我們的平台對廣告商來說更加準確，並使我們能夠真正為更多的廣告商獲利。

So being able to do both things enabled us to really grow our business on the back half of the quarter as we rolled out this technology. And more importantly, we're driving better value to the advertisers. So we expect this not only to contribute to the growth that we have in the short term but also the long term, and that's what gets us really excited.

因此，能夠同時完成這兩件事使我們能夠在本季度後半段推出這項技術時真正實現業務增長。更重要的是，我們正在為廣告商帶來更好的價值。因此，我們預計這不僅有助於我們的短期增長，而且有助於長期增長，這讓我們感到非常興奮。

Great. And maybe just one follow-up, if I could. If we assume that gaming continues along the trajectory, the guide implies 45% to 50% software revenue growth year-over-year. How do you view the sustainability of the gains? And should we anticipate a similar step function that we saw in AXON 1.0?

偉大的。如果可以的話，也許只是一個後續行動。如果我們假設遊戲繼續沿著這個軌跡發展，那麼該指南意味著軟件收入將同比增長 45% 至 50%。您如何看待收益的可持續性？我們是否應該期待 AXON 1.0 中看到的類似階躍函數？

Yes. We do view the Apps side of the business reaching some stability. As we've discussed over the past few quarters that the second half of this year, we do see that, and we're investing in some new games. We're investing more on user acquisition. In particular, given the fact that we're using a lot of our own solutions there, which has become more efficacious. So we do see our ability to drive some growth over the second half of the year.

是的。我們確實認為應用程序方面的業務達到了一定的穩定性。正如我們在過去幾個季度和今年下半年所討論的那樣，我們確實看到了這一點，並且我們正在投資一些新遊戲。我們在用戶獲取方面投入了更多資金。特別是，考慮到我們在那裡使用了很多我們自己的解決方案，這已經變得更加有效。因此，我們確實看到我們有能力在今年下半年推動一些增長。

In terms of the software side, AXON 2.0 is relatively new. It was launched this last quarter, a full run rate this quarter. And we do see an improvement in growth, and that is built into our guide for the third quarter.

在軟件方面，AXON 2.0相對較新。它是在上個季度推出的，本季度已全面運行。我們確實看到了增長的改善，這已納入我們第三季度的指南中。

And we will now hear from Ralph Schackart with William Blair.

現在我們將聽取拉爾夫·沙卡特和威廉·布萊爾的發言。

Great. Just looking at the really strong margins that you delivered this quarter, I think around 44% and guiding for 44% to 45%, I think, next quarter. Historically, the model has contemplated sort of mid-30s, maybe low 40% or 40% model. Is this the new baseline for margins that we should think about, especially given expectation for further software margin improvement and growth going forward? And then I have a follow-up.

偉大的。只要看看本季度交付的真正強勁的利潤率，我認為下季度約為 44%，指導值為 44% 至 45%。從歷史上看，該模型考慮過 30 多歲左右，可能是 40% 或 40% 的低模型。這是我們應該考慮的新的利潤基準嗎，特別是考慮到軟件利潤進一步改善和未來增長的預期？然後我有一個後續行動。

Yes. Thanks, Ralph, for the question. On the software side, a 67% margin was a great quarter. As we mentioned in the introduction, we also had very high flow-through. We actually generated more EBITDA than we did relative to the incremental revenue. That doesn't necessarily continue going forward, but it's a very high flow-through model there. So we do believe that the margin will continue to expand on software as we're able to grow the top line over the medium and long term, maybe not quarter-to-quarter, given vagaries due to timing.

是的。謝謝拉爾夫提出這個問題。在軟件方面，67% 的利潤率是一個很棒的季度。正如我們在簡介中提到的，我們的流量也非常高。事實上，我們產生的 EBITDA 比增量收入還要多。這不一定會繼續下去，但這是一個非常高的流通模型。因此，我們確實相信軟件的利潤率將繼續擴大，因為我們能夠在中長期內（也許不是季度與季度之間）增加收入，因為時間的變化莫測。

And on the Apps side, we've always said that we target more in the mid-teens range for EBITDA margin, whereas this past quarter, we're in the high teens at 18%. As we invest a bit more on the UA side to grow the games, that will probably bring down that margin down into the mid-teens. So on a blended basis, as software grows, margin expands on the App side, reaching stability with potentially slightly lower margins. That's how we end up at the mid-40s margin target.

在應用程序方面，我們一直說我們的目標是 EBITDA 利潤率在十幾歲左右，而上個季度，我們的 EBITDA 利潤率達到了 18%。隨著我們在用戶獲取方面投入更多資金來發展遊戲，這可能會將利潤率降低到十幾歲左右。因此，在混合的基礎上，隨著軟件的增長，應用程序方面的利潤會擴大，達到穩定，但利潤可能會略低。這就是我們最終達到 40 多歲中期利潤目標的原因。

Great. Maybe a question for Adam. Adam, can we maybe get some perspective on AXON 2.0, how it's performing maybe relative to your expectations and any sense of order of magnitude of improvements compared to 1, obviously, very strong results in the quarter, but any more color there would be great.

偉大的。也許有個問題要問亞當。 Adam，我們能否對AXON 2.0 有一些了解，它的表現可能與您的期望有關，以及與1 相比，明顯的改進數量級的感覺，顯然，本季度的結果非常強勁，但如果有更多顏色那就太好了。

Yes, for sure. I'd say it's performing at our expectations. We signaled it a year ago as something that was going to be a big upgrade because we just knew that the technology is available to us were dramatically better than the technologies that we were using. We put it into power the entire platform in the quarter, and it was immediate to start seeing much better performance for advertisers.

是肯定的。我想說它的表現符合我們的預期。我們在一年前就表示這將是一次重大升級，因為我們知道我們可用的技術比我們正在使用的技術要好得多。我們在本季度將其應用於整個平台，廣告商很快就看到了更好的表現。

What that does over time is that all compound and advertisers will be willing to spend more on our platform because they're seeing better return on ad spend on their buys on our platform than they were previously, and that should start to grow over time, get more investment from the base of advertisers we have.

隨著時間的推移，所有復合材料和廣告商都會願意在我們的平台上花費更多，因為他們在我們的平台上購買的廣告支出的回報比以前更好，並且隨著時間的推移，這種回報應該開始增長，從我們擁有的廣告客戶群中獲得更多投資。

But even more exciting for us is the implications that we're going to be able to make a wider breadth of advertisers work with this new technology. It's much more predictive, much more powerful. And if we're able to execute on that, we can really broaden out the advertiser base, service new verticals, and that should really fuel our growth for quarters and years.

但對我們來說更令人興奮的是，我們將能夠讓更廣泛的廣告商使用這項新技術。它更具預測性，也更強大。如果我們能夠執行這一點，我們就可以真正擴大廣告商基礎，為新的垂直領域提供服務，這應該真正推動我們幾個季度和幾年的增長。

Our next question will come from Franco Granda with D.A. Davidson.

我們的下一個問題將由 Franco Granda 和 D.A. 提出。戴維森。

I have 2 quick ones. So with the market stabilizing here and AXON 2.0 yielding such positive results so early on, are you ready to provide an updated figure on how many dollars you can transact through your platform this year or maybe next? And then for the second one, can you talk about maybe any trends across your Apps portfolio that surprised you in the quarter, perhaps in a category where you outperformed the respective market?

我有2個快的。因此，隨著市場趨於穩定，AXON 2.0 這麼早就取得瞭如此積極的成果，您準備好提供今年或明年可以通過您的平台交易多少美元的最新數據了嗎？然後，對於第二個問題，您能否談談您的應用程序組合中本季度令您感到驚訝的任何趨勢，也許是在您表現優於各自市場的類別中？

Yes. In terms of the scale of the platform, we've never provided that, but the advertising business is on a net revenue basis. And we've talked about typical advertising business margins that are known in the industry, somewhere in the 20s to 30% range. And so you could get to a reasonable guesstimate. The marketplace itself is in the billions of dollars. Obviously, our Software Platform cleared $400 million, and the vast majority of that being advertising networks net revenue in the quarter.

是的。就平台規模而言，我們從未提供過，但廣告業務是按淨收入計算的。我們已經討論了業內已知的典型廣告業務利潤率，大約在 20% 到 30% 的範圍內。這樣你就可以得到一個合理的猜測。市場本身價值數十億美元。顯然，我們的軟件平台淨收入達 4 億美元，其中絕大多數是本季度廣告網絡的淨收入。

So we're a very large player in the mobile app ecosystem. And if you just size that against the totality of the mobile app ecosystem, understanding a lot of our partners are mobile gaming customers, we're a critical player for almost all of our customers. They really depend on us for growth.

因此，我們是移動應用生態系統中的一個非常大的參與者。如果你只是根據整個移動應用生態系統來衡量這一點，並且了解我們的許多合作夥伴都是移動遊戲客戶，那麼我們是幾乎所有客戶的關鍵參與者。他們的成長確實依賴於我們。

So the thing that really gets us excited in our ecosystem is this upgrade in technology not only helps fuel our growth, our customers are spending a better dollar on our platform, and we're usually one of their top 1 or 2 or 3 channels that they invest into. So if they're spending a better dollar on our platform, that will compound for them, too. And so as we go forward, we'll start seeing the market of customers that are working with us growing, hopefully materially better than the market itself and return -- helping to return this category as a whole back to growth.

因此，真正讓我們在生態系統中感到興奮的是，這種技術升級不僅有助於推動我們的增長，我們的客戶在我們的平台上花費了更多的錢，而且我們通常是他們的前1 、2 或3 個渠道之一他們投資於。因此，如果他們在我們的平台上花費更多的錢，這對他們來說也是有利的。因此，隨著我們前進，我們將開始看到與我們合作的客戶市場不斷增長，希望在實質上比市場本身更好並回報——幫助整個類別恢復增長。

And Franco, on your second question, as you tell our Software Platform is performing well because we're delivering great solutions and delivering advertising that's effective for those customers. And so we're doing the same thing for our Apps portfolio. So I wouldn't say we have any outperformance in the Apps portfolio for the second quarter, but we do believe in the second half of this year as we invest more in user acquisition and more on our own platforms that we should be able to drive additional growth for those apps.

Franco，關於你的第二個問題，正如你所說，我們的軟件平台表現良好，因為我們正在提供出色的解決方案並提供對這些客戶有效的廣告。因此，我們正在為我們的應用程序產品組合做同樣的事情。因此，我不會說我們第二季度的應用程序組合有任何出色的表現，但我們確實相信今年下半年，隨著我們在用戶獲取和我們自己的平台上進行更多投資，我們應該能夠推動這一點這些應用程序的額外增長。

And moving on to Martin Yang with Opp Co.

接下來是 Opp Co. 的 Martin Yang。

If AXON has performed in line with your expectation, can you give us a sense of where the outperformance came from in the second quarter results relative to your guidance?

如果 AXON 的表現符合您的預期，您能否告訴我們第二季度業績相對於您的指導的優異表現來自何處？

Relative to our guidance, we rolled out the technology towards the second part of the quarter, right? So this is a brand-new technology. We thought it was going to be really powerful. It is very, very hard to measure the impact of a new technology to replace -- entirely replace an old one, right?

相對於我們的指導，我們在本季度下半年推出了該技術，對嗎？所以這是一項全新的技術。我們認為它會非常強大。衡量一項新技術取代——完全取代舊技術的影響是非常非常困難的，對吧​​？

So we were very pleased with the short-term impact. We're more excited about the long-term implications on our overall business. And again, this is a -- it's in infancy stage. It's only a couple of months old of the technology. We think it's going to get a lot stronger over time, and we think it's going to be able to fuel our growth for quarters and years, but we're going to be excited to see what that looks like as we go forward.

因此，我們對短期影響感到非常滿意。我們對它對我們整體業務的長期影響感到更加興奮。再說一遍，這還處於嬰儿期。這項技術只有幾個月的歷史。我們認為，隨著時間的推移，它會變得更加強大，並且我們認為它將能夠推動我們幾個季度和幾年的增長，但我們將很高興看到隨著我們的前進，情況會是什麼樣子。

And my follow-up question on AXON 2.0 is throughout -- should we expect a continuous improvement throughout the third quarter? And when you say AXON 2.0 is being fully rolled out, does that mean the performance improvement will may come from better algorithm instead of being implemented across more ad inventories?

我對 AXON 2.0 的後續問題貫穿始終——我們是否應該期望整個第三季度持續改進？當您說 AXON 2.0 正在全面推出時，這是否意味著性能改進可能來自於更好的算法，而不是通過更多的廣告庫存來實現？

Yes. As we go forward, the technology will continue to fuel growth from a couple of different vectors. One is at the level of scale that we operate at, we drive billions of transactions a year. We're able to -- the technology itself will learn and self-improve. Our team, obviously, is working on improving the technology every step of the way. So that also happens in parallel. Obviously, core of our engineering focus is on this part of our stack.

是的。隨著我們的前進，該技術將繼續從幾個不同的方向推動增長。一個是我們的運營規模，我們每年推動數十億筆交易。我們能夠——技術本身能夠學習和自我改進。顯然，我們的團隊正在努力每一步改進技術。所以這也是同時發生的。顯然，我們工程重點的核心是堆棧的這一部分。

And then you've got the more interesting long-term dynamic that if this technology is so good that we're one of the largest channels, if not the largest, for all of our gaming partners, and it's now working within gaming and outside of gaming. It opens up the door to the possibility of a lot of advertiser expansion, which will create more density in our auction, create more scale to the business.

然後你會得到更有趣的長期動態，如果這項技術如此出色，那麼對於我們所有的遊戲合作夥伴來說，我們即使不是最大的渠道，也是最大的渠道之一，而且它現在正在遊戲內外發揮作用遊戲。它為大量廣告商擴張的可能性打開了大門，這將為我們的拍賣創造更大的密度，為業務創造更大的規模。

And then to your last point, more inventory will come online as well. We're in a -- we operate with MAX being a core driver, but more broadly in the mobile app ecosystem in a real-time environment. If our systems are better than they were, in theory, we will get more inventory and our systems will be able to predict more accurate transactions. And we're really excited about how all of this will compound over time and create a much bigger opportunity to market for our core business.

最後一點，更多的庫存也會上線。我們以 MAX 作為核心驅動力進行運營，但更廣泛的是在實時環境中的移動應用生態系統中。如果我們的系統比以前更好，理論上我們將獲得更多庫存，我們的系統將能夠預測更準確的交易。我們非常興奮地看到，隨著時間的推移，所有這些將如何復合，並為我們的核心業務創造更大的營銷機會。

We have Bernie McTernan with Needham has the next question.

伯尼·麥克特南和李約瑟提出了下一個問題。

Great. On the app discovery announcement that came out on Monday in terms of new products, how should we think about which of those should be most impactful? And then can you just remind us on the sales process or the process of signing up other advertisers outside of mobile games. It's probably pretty clear that as you guys are more successful in increasing return on ad spend for mobile games, they're just going to spend more with you guys. But for a new advertiser to come in, what's that process of getting them on the platform?

偉大的。在周一發布的新產品應用發現公告中，我們應該如何思考哪些產品最具影響力？然後您能否提醒我們一下銷售流程或與手機遊戲之外的其他廣告商簽約的流程。很明顯，隨著你們在增加手機遊戲廣告支出回報方面更加成功，他們只會在你們身上花費更多。但對於新的廣告商來說，讓他們進入平台的過程是怎樣的？

Yes. So on the first question, the release really broke down the whole offering into some of the valuable sub vectors of what we rolled out. But the core product offering is to fully automate the marketing problem and power it with these new AI technologies that we rolled out. In totality, all of the components that we broke down in that article sum up to the value of the whole. And so there's not 1 part of it that's more exciting or not. All of it is exciting to us.

是的。因此，關於第一個問題，該版本確實將整個產品分解為我們推出的一些有價值的子向量。但核心產品是完全自動化營銷問題，並通過我們推出的這些新人工智能技術為其提供支持。總的來說，我們在那篇文章中分解的所有組件總和就是整體的價值。因此，其中沒有哪一部分更令人興奮或不令人興奮。所有這一切都讓我們興奮不已。

On the second question, sales cycle for new, in particular, non-gaming is slower than ramping gaming customers that are already used to our platform and have been buying on our platform. They've been live for years, and they see an improvement in the return on ad spend that they're able to achieve on our platform, they'll invest more. That is actually mostly automated as it is today.

關於第二個問題，新產品（尤其是非遊戲產品）的銷售週期比已經習慣我們平台並在我們平台上購買的遊戲客戶的增長速度要慢。他們已經上線多年，並且看到他們在我們的平台上能夠實現的廣告支出回報率有所提高，他們將進行更多投資。實際上，就像今天一樣，這基本上是自動化的。

A new customer usually takes a quarter or 2 to ramp up, and we're now seeing a lot more interest in joining the platform because already only a couple of months into this platform rolling out, there's a lot of word-of-mouth spreading amongst app developers, both within gaming and on that our platform is working really well for their peers.

新客戶通常需要一兩個季度的時間來提升，我們現在看到加入該平台的興趣越來越大，因為該平台推出僅幾個月，就有大量口碑傳播在應用程序開發人員中，無論是在遊戲領域還是在遊戲領域，我們的平台都為他們的同行提供了良好的服務。

And we will now hear from Vasily Karasyov with Cannonball.

現在我們將聽到瓦西里·卡拉瑟夫 (Vasily Karasyov) 的《砲彈》。

All right. Well, we are not getting any response from Vasily, so we can go ahead and move on to David Karnovsky with JPMorgan.

好的。好吧，我們沒有得到瓦西里的任何回應，所以我們可以繼續討論摩根大通的大衛·卡諾夫斯基。

Adam, I just wanted to see if you could update on whether you see any expected privacy changes either on the iOS or Android side in the next, I don't know, call it, 6 to 12 months that might impact your execution at all? Or from this point on, do you kind of expect just more incremental changes?

Adam，我只是想看看您能否更新一下您是否會在接下來的 6 到 12 個月內，在 iOS 或 Android 端看到任何預期的隱私更改，我不知道，這可能會影響您的執行？或者從現在開始，您是否期望更多的增量變化？

Yes. I think we've constantly mentioned this, that we think, of course, privacy both on the operating system level and amongst regulators will continue to evolve. It's been something that's been evolving as we've operated this business for the last 5 to 7 years. We don't see anything in the 6- to 12-month term that you referenced that's going to be a material change to how we would be able to operate our business.

是的。我想我們經常提到這一點，當然，我們認為操作系統層面和監管機構之間的隱私將繼續發展。在過去 5 到 7 年裡，隨著我們經營這項業務，這種情況一直在不斷發展。我們認為在您提到的 6 到 12 個月期限內，我們的業務運營方式不會發生任何重大變化。

And one thing that really has defined our company since we launched, we moved really fast. Our core engineering team is really strong. The culture of the company is to operate as a start-up at all times. And so when it comes to these changes, we've always been able to adapt and operate within the boundaries of the guidelines. And that gives us a lot of confidence. No matter what we're facing in the future, we're going to be able to move faster than peers, and we're going to be able to continuously improve what we're offering to the advertiser base we work with.

自我們成立以來，真正定義我們公司的一件事是，我們的行動非常快。我們的核心工程團隊非常強大。公司的文化是始終以初創企業的方式運營。因此，當涉及到這些變化時，我們始終能夠在指南的範圍內進行調整和操作。這給了我們很大的信心。無論我們未來面臨什麼，我們都將能夠比同行更快地行動，並且我們將能夠不斷改進我們為合作的廣告商提供的服務。

And our next question will come from [Luke Matt] with Wolfe Research.

我們的下一個問題將來自 Wolfe Research 的 [Luke Matt]。

This is [Luke Matt] on for Josh with Wolfe Research. Just a quick one here. Any update to the competitive dynamics in mediation with the launch of AXON 2.0? Are you seeing any update there or progress or differences?

我是沃爾夫研究公司 (Wolfe Research) 為喬什 (Josh) 所做的 [盧克·馬特 (Luke Matt)]。這裡只是快速介紹一下。隨著 AXON 2.0 的推出，調解領域的競爭動態有何更新？您是否看到任何更新或進展或差異？

Really, in mediation, a couple of things are happening. We referenced this in a prior call, we believe the majority of the mobile gaming market is on our MAX mediation product. We've seen nothing changed there. The company is utilizing our tool set, both on the mediation side and on our app discovery side are seeing better growth than peers in the market because our products work so well, and both sides really come together for the publishers that are utilizing our mediation.

事實上，在調解中，發生了一些事情。我們在之前的電話會議中提到了這一點，我們相信大部分移動遊戲市場都在我們的 MAX 中介產品上。我們看到那裡沒有任何變化。該公司正在利用我們的工具集，在中介方面和我們的應用程序發現方面都比市場上的同行看到了更好的增長，因為我們的產品運行得很好，而且雙方真正為使用我們中介的發行商走到了一起。

So not that we've seen a lot of change because we're already so much of the market but continued strength amongst our publisher base. The other changes coming in mediation is Google bidding. Google as a partner is a close partner of ours, we were a launch partner for their Google bidding product. Over the next few months, we expect that they'll shift entirely to in-app bidding and away from more traditional methods. That will be a benefit to our MAX product and should be a benefit for publishers and the trueness of that auction. And so we're excited as that scales up, that will be a big positive for our business. Hopefully, there is and all of our partners.

因此，我們並沒有看到很大的變化，因為我們已經佔據了很大的市場份額，但我們的發行商群體仍然保持著強大的實力。中介方面的其他變化是谷歌競價。谷歌作為合作夥伴是我們的密切合作夥伴，我們是他們的谷歌競價產品的發布合作夥伴。在接下來的幾個月裡，我們預計他們將完全轉向應用內出價，並放棄更傳統的方法。這將有利於我們的 MAX 產品，也應該有利於出版商和拍賣的真實性。因此，隨著規模的擴大，我們感到很興奮，這將對我們的業務產生巨大的積極影響。希望我們所有的合作夥伴都有。

Great. And I just had one quick follow-up here. In regards to world, just any update there? And if you plan to continue maybe focusing on some of these areas outside of the core continuing to invest in a further iteration of AXON?

偉大的。我剛剛在這裡進行了一次快速跟進。關於世界，有什麼更新嗎？如果您計劃繼續關注核心之外的某些領域，繼續投資 AXON 的進一步迭代？

Yes, totally. In my talk track, I referenced expanding the technology that we just built AXON 2.0 over the Wurl and Array. And on the Wurl side, when we did the Wurl transaction, we were really excited about the competency of their team and really the relationships that they had with the media companies to be able to get to the Connected-TV landscape and go get inventory and be able to mediate and serve into that inventory, not dissimilar to how we were able to scale on mobile. And the Wurl team has been executing really strongly there.

是的，完全可以。在我的演講中，我提到了我們剛剛在 Wurl 和 Array 上構建 AXON 2.0 的技術的擴展。在 Wurl 方面，當我們進行 Wurl 交易時，我們對他們團隊的能力以及他們與媒體公司的關係感到非常興奮，因為他們能夠進入聯網電視領域並獲取庫存和能夠調解並服務於該庫存，這與我們在移動設備上進行擴展的方式沒有什麼不同。 Wurl 團隊在那裡的執行力非常強勁。

Now as we extend AXON 2.0 over to CTV, we think it's a really strong extension point for the advertisers that buy on our platform. And to be able to sell performance media on television is something that people have talked about for years, but very few companies have been able to deliver any sort of solution there. And we do know that our AXON 2.0 offering is cutting-edge and as potent as there is in performance marketing as far as the technology goes. So extending it to Connected-TV could pose a very big growth channel for our business and that of our partners.

現在，當我們將 AXON 2.0 擴展到 CTV 時，我們認為對於在我們平台上購買的廣告商來說，這是一個非常強大的擴展點。能夠在電視上銷售表演媒體是人們多年來談論的話題，但很少有公司能夠在電視上提供任何類型的解決方案。我們確實知道，就技術而言，我們的 AXON 2.0 產品是尖端的，並且與效果營銷中的效果一樣強大。因此，將其擴展到聯網電視可以為我們和合作夥伴的業務帶來非常大的增長渠道。

And we have time for one additional question from Omar Dessouky with BofA.

我們還有時間回答美國銀行奧馬爾·德蘇基 (Omar Dessouky) 提出的另一個問題。

All right. With no response from Omar, that does conclude our question and answer for this quarter, Adam and Herald, thank you so much and to everyone who joined us today. We thank you all for joining us today. Have a great afternoon.

好的。由於奧馬爾沒有做出回應，我們本季度的問答就到此結束了，亞當和先驅報，非常感謝你們，也感謝今天加入我們的所有人。我們感謝大家今天加入我們。祝你有個愉快的下午。

Thanks, everyone.

感謝大家。