Open Source Securities has released a research report expressing confidence that AI infrastructure will support MOBVISTA (ASX: 01860) in accelerating the expansion of its in-app advertising (IAP) and non-gaming verticals, driving sustained high performance. The firm maintains its profit forecasts for 2026-2028, with estimated net profit attributable to shareholders of $137 million, $237 million, and $380 million respectively. This corresponds to a price-to-earnings ratio of 21.9x, 12.7x, and 7.9x based on the current share price. The "Buy" rating is reaffirmed.

Strong First Quarter Performance, New Infrastructure Seen as Catalyst

The company reported Q1 2026 revenue of $581 million, representing a 32% year-on-year increase and a 1% sequential rise. Net profit attributable to shareholders reached $34 million, up 61% year-on-year. Adjusted net profit was $24 million, marking an 11% increase. The Q1 gross margin stood at 20.96%. Sales, management, and research & development expense ratios changed by +0.04, -0.44, and +1.06 percentage points year-on-year respectively. The increase in R&D expenses was primarily due to higher model training costs. The net profit margin was 5.89%, an improvement of 1.37 percentage points year-on-year, largely attributed to a $17 million gain from changes in the fair value of financial instruments.

Gaming Sector Thrives, Non-Gaming Expands, Algorithmic Edge Expected to Strengthen

Revenue from the ad tech business in Q1 was $577 million, up 33% year-on-year and 1% sequentially. This included $560 million from the Mintegral platform, also growing 33% year-on-year and 1% quarter-on-quarter. Gaming category revenue reached $430 million, a significant 41% year-on-year increase and 3% sequential growth. Revenue from non-gaming categories was $129 million, rising 12% year-on-year. According to Singular's "Q1 2026 Trends Report," Mintegral ranked among the global top four in several core verticals, including entertainment, tools, and games, based on download volume. This reflects the company's continued leadership in advertising algorithms. The report is optimistic that the "data flywheel" effect will further solidify this competitive advantage.

IAP Growth Steady, Next-Gen Infrastructure Poised to Accelerate Expansion

The company is actively advancing its AI infrastructure development. The new-generation infrastructure has completed its primary development phase and is expected to launch in October. IAP products have shown steady growth on the existing infrastructure. The new infrastructure, capable of supporting more complex models and a greater variety of features and data, is anticipated to accelerate the development of IAP products. Furthermore, the company plans to gradually launch vertical-specific models for sectors like e-commerce and short-form video dramas following the new infrastructure's launch, further expanding its business potential. Q1 revenue from the marketing technology business was $4 million, a slight 2% year-on-year increase. The company is promoting the intelligent agent-based restructuring of its MarTech product line, with a new commercialization phase expected in Q4. The report is positive that the new-generation infrastructure will support accelerated expansion into game IAP products and non-gaming verticals, driving sustained high revenue growth and the gradual release of operating leverage to enhance profitability.

Key Risks to Consider

Potential risks include changes in advertising industry regulations, intensifying market competition, and slower-than-expected progress in AI application development.