Based in Tel Aviv, ironSource (IS) just went public in the U.S. in June following the completion of its merger with a special purpose acquisition company (SPAC). Reception for the stock has been lackluster so far, with ironSource trailing the market by a wide margin. However, its fair to wonder whether investors have overlooked a mind-blowing stat about the company.

IronSource's software helps mobile apps -- primarily mobile games -- get downloaded. And in this video from Motley Fool Backstage Pass, recorded on Nov. 29, Motley Fool contributor Jon Quast explains that in the third quarter, 86% of the top 100 most downloaded games use ironSource's software. 

10 stocks we like better than ironSource Ltd.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and ironSource Ltd. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of November 10, 2021


Jon Quast: Yes, IronSource. This is a company that a lot of our viewers may not know about because it only went public in June, I believe, so just earlier this year. So just a few months now, It went public via a special purpose acquisition company at $10, like they all do. The market hasn't really been crazy about it. Down 20% from IPO price and losing to the market by a wide margin over that time.

The reason that ironSource caught my eye a little bit is that there's a lot to like here and number one is the industry it's in. We just highlighted mobile gaming, and like I pointed out, according to App Annie, this is an industry growing 20% this year in its spending. This is big $120 billion and it's growing, that's something that always catches my eye. And what ironSource does is it creates a software platform for mobile games, any mobile app, but primarily mobile games are what is using it at this point to both, get their game discovered, downloaded and monetized. So if you're familiar with AppLovin, that aspect of their business is, it coincides 100%, they are direct competitors when it comes to this part of the business.

Just for some context, like one customer of ironSource is Activision Blizzard. So Activision Blizzard is Call of Duty franchise. They just released a mobile version of that game, Candy Crush as well, with their King Digital part of Activision Blizzard. What they do is they have turned to ironSource. So they're ironSource's customer and ironSource is in charge of getting those games out there downloaded and monetized.

They also work with telecom companies. This is a little bit different. A telecom company might use ironSource because they want to see certain things downloaded on their phone, maybe at the setup of the phone or over the lifetime of the device, so if you're familiar with Digital Turbine, this is very similar in that regard. One of their main customers or one of their newer customers is Vodafone. This is a very big telecom company in Europe. I believe it's some market share leader in Europe, but I'm not 100% sure on that, very big telecom company, and so if you were to buy a phone from Vodafone, when you then get that phone, it has ironSource preinstalled on there and then ironSource is getting certain apps suggested and downloaded onto your device. So it's making the telecom company money as well.

Several things to like here in that there's five co-founders that are still with the company. So that's very rare to see. Normally, just one or two co-founders stick with the companies through the IPO process, still five here. So that's a lot of continuity and they get rave reviews on Glassdoor. So 4.2 ratings on Glassdoor, 98% approve of the CEO. These are world-class approval numbers from the employees. So this suggests that it's a very good company culture.

All of these things have caught my eye, about a $9.5 billion market cap but here's the wow stat. They compete with AppLovin directly when it comes to getting the games downloaded. I believe Zynga would be a direct competitor now with the acquisition of Chartboost and some other companies as well. If you take the top 100 games that have been downloaded over Apple and [Alphabet's] Google over the past three months. So in quarter three, so take top 100 downloaded games, 86 of them use ironSource.

Sanmeet Deo: That's insane.

Quast: That's the wow stat right there. How do you measure how well a company is doing if their games are getting downloaded. You will see that these other companies have a lot of apps that use their software, but it's a near-monopoly [laughs] when it comes to the most downloaded here, ironSource is winning that game.