Original-Research: Verve Group Media SE (von GBC AG): BUY
| Original-Research: Verve Group Media SE – from GBC AG
16.09.2026 / 10:30 CET/CEST Classification of GBC AG to Verve Group Media SE
Stable operating performance in H1 2026; significant acceleration in revenue growth expected in the second half of the year BUSINESS DEVELOPMENT H1 2026 At the end of August 2026, Verve Group Media SE published its Q2 and half-year figures for 2026. According to these, the ad-tech group achieved moderate growth in the first six months of the current financial year, despite a macroeconomic environment that remained challenging and currency-related headwinds (USD depreciation). Consequently, on a like-for-like basis, consolidated revenue rose by 2.9% to € 293.9 million in the first half of the year (H1 2025: € 285.7 million), thanks to organic growth, primarily driven by the expansion of the software customer base. Reported revenue even rose significantly by 34.5% to € 289.5 million (H1 2025: € 215.2 million). With regard to operating profit, Verve saw its EBITDA fall to € 44.9 million (H1 2025: € 54.5 million) due to significant investments in expanding the sales team, product innovations (development of the retail media business) and internal structural optimisation measures. In addition to one-off effects, exceptional items also had a significant negative impact on earnings performance. Adjusted for one-off costs and exceptional items (e.g. severance payments and consultancy fees), adjusted EBITDA (Adj. EBITDA) remained virtually stable compared with the previous year at € 58.4 million (H1 2025: € 59.6 million). This resulted in an adjusted EBITDA margin of 19.9%, which was thus slightly below the previous year’s level (H1 2025: 20.9%). The first six months of the financial year can therefore be regarded as a phase of investment and transition. This financial period is therefore also in line with the company’s statements at the start of the year, according to which the first half of the year represents an front-loaded investment phase with initially lower expected EBITDA margins, during which the costs of expanding sales, retail media and platform development are immediately reflected in the key figures, before the expected full revenue contribution from these areas is set to materialise with a time lag. On a net basis, the adjusted net result at the end of the first half of the year stood at € 13.1 million, which was also virtually on a par with the previous year’s figure (H1 2025: € 13.3 million). Business performance in Q2 2026 As already outlined in the previous half-year analysis, the ad-tech company’s second quarter was characterised above all by a challenging macroeconomic environment (weaker consumer spending, high oil prices, tariffs, etc.), which led to lower advertising expenditure in some sectors important to Verve (e.g. retail, tourism and the automotive sector). These sector-specific declines could only be partially offset by higher advertising expenditure in other sectors, such as the gaming and entertainment industries. Consequently, Verve continued on its growth trajectory in the second quarter of 2026, albeit with significantly weaker growth momentum than management had originally anticipated. On a like-for-like basis, consolidated revenue in Q2 rose significantly by 6.5% year-on-year to € 152.31 million (Q2 2025: € 143.10 million). Of the growth achieved, 3.5% was attributable to organic growth and 4.6% to inorganic growth, whilst negative currency effects reduced the growth rate by 1.7%. Their solid business performance in the second quarter was driven primarily by the expansion of their software customer base following a further increase in their sales team. Accordingly, the total number of software customers and large software customers (with revenue volumes exceeding USD 100,000) rose significantly to 4,176 (Q2 2025: 3,079) and 1,159 (Q2 2025: 954) respectively. The customer retention rate (relating to major software customers) and the so-called ‘net-$ expansion rate’ also improved slightly to 99.0% (Q2 2025: 98.0%) and 95.0% (Q2 2025: 92.0%) respectively. In contrast, the number of so-called ‘ad impressions’ fell significantly to 234.0 billion (Q2 2025: 259 billion) by the end of the second quarter. The main reason for this was the deliberate reduction in business activities relating to non-premium and low-quality advertising inventory. In terms of margin performance, Verve was able to significantly increase its gross margin (on a like-for-like revenue basis) at the end of the second quarter compared with the same quarter of the previous year to 40.0% (Q2 2025: 33.1%), thanks to the positive effects of the completed platform standardisation. In addition to the improved platform performance resulting from the platform migration, more efficient management of cloud hosting utilisation and costs has also led to a significant rise in the gross margin. With regard to the development of operating results, EBITDA in Q2 was significantly impacted by several one-off and exceptional items that weighed on earnings, leading to a marked decline in operating profit of 22.7% to € 20.88 million (Q2 2025: € 27.00 million). These effects included, amongst other things, costs associated with the company’s relocation from Sweden to Ireland, the switch to US dollar reporting and a potential US listing, the streamlining of the international network of sites, and various costs relating to the optimisation of the workforce. According to the company, the one-off costs associated with these restructuring measures alone totalled approximately € 4.20 million and are expected to enable annual savings of at least € 8.00 million in future. By contrast, consolidated EBITDA, adjusted for one-off and exceptional items (e.g. restructuring or consultancy costs), rose slightly compared with the same quarter of the previous year to € 30.10 million (Q2 2025: € 29.50 million). At the same time, the adjusted EBITDA margin, at 19.8%, remained virtually at the same level as the corresponding quarter of the previous year (Q2 2025: 20.6%). FORECASTS AND MODEL ASSUMPTIONS As part of its recently published Q2 and half-year results, the Verve Group has also confirmed its guidance for the current financial year. Accordingly, the ad-tech company continues to expect revenue for the current financial year to be in the range of € 680 million to € 730 million and adjusted EBITDA (Adj. EBITDA) of € 145 million to € 175 million. Against the backdrop of their half-year performance, which fell short of our expectations, and the current noticeably more challenging operating environment (due, for example, to the Iran conflict, etc.), we have revised our previous estimates downwards. For the current financial year, we now expect revenue and adjusted EBITDA of € 684.17 million (previously: € 750.37 million) and € 146.56 million (previously: € 179.46 million) respectively, and consequently expect to reach the lower end of the guidance range. Given the expected higher productivity of the expanded sales organisation and the typically stronger seasonality in the third and fourth quarters, we continue to anticipate moderate and significant growth in revenue and earnings, respectively, compared with the previous year’s levels. Verve’s management has already indicated that business volume on its advertising platform has improved in the current third quarter. For the subsequent financial years 2027 and 2028, we forecast revenue of € 789.53 million (previously: € 875.95 million) and € 905.59 million (previously: € 1,010.85 million) respectively. In parallel, we forecast adjusted EBITDA (Adj. EBITDA) of € 192.65 million (previously: € 219.65 million) and € 230.93 million (previously: € 264.84 million) for these financial periods respectively. Given the continued gradual expansion of the sales base, the promising entry into the retail media market and the innovative AI-based advertising solutions, Verve should be able to significantly pick up the pace of growth again in the medium term and, in doing so, also substantially increase and improve its operational performance. Against the backdrop of our reduced revenue and earnings estimates for the current financial year and subsequent years, we have moderately lowered our previous price target to € 6.80 per share (previously: € 7.65). However, this reduction in the price target is offset by the so-called ‘roll-over effect’, which has a price-target-raising impact. The new target price horizon is 31 December 2027 (previously: 31 December 2026), which, from a modelling perspective, is associated with a slight increase in the target price. In view of the current share price level, we therefore maintain our ‘BUY’ rating. You can download the research here: 20260916_Verve_Group_Media_HY_Note_ENG_final Contact for questions: ++++++++++++++++ Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung +++++++++++++++ |
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