Original-Research: Verve Group SE (by GBC AG): BUY
| Original-Research: Verve Group SE – from GBC AG
02.03.2026 / 10:30 CET/CEST Classification of GBC AG to Verve Group SE
Revenue development FY 2025 On 19 February 2026, the Verve Group published comprehensive preliminary figures for the past financial year 2025. According to these figures, the ad tech group achieved a significant increase in reported consolidated revenue of 26.1% to € 550.92 million (PY: € 437.01 million) in the past financial year despite a difficult advertising market and challenging environment, thanks to solid performance in the first and final quarters. The rapid revenue growth was also positively influenced by the change in revenue recognition in accordance with IFRS 15 (reporting gross revenue instead of net revenue as previously) that took effect in the third quarter. In terms of comparable revenue (pro forma reporting of revenue before Q3 2025 based on gross revenue in accordance with IFRS 15), however, a significant increase in consolidated revenue of 8.4% to € 601.82 million (PY: € 555.19 million) was recorded. The positive revenue development was driven in particular by the significant growth in the fourth quarter of 9.9% to € 193.84 million (comparable revenue in Q4 2024: € 176.44 million), which also marked a return to growth (following previous declines in revenue in Q2 and Q3 2025). Growth in the fourth quarter, traditionally the strongest quarter of the year in terms of revenue, was driven by significant organic revenue growth (organic revenue contribution: 5.3%). In addition, organic growth was supplemented by inorganic growth effects from the acquisitions of Captify and Acardo in Q3 2025, which contributed 12.2% to revenue growth in the final quarter. It should be noted that this significant revenue growth in the fourth quarter was achieved despite a customer-specific effect that led to the loss of this customer and a high year-on-year comparison basis (positive one-off effects in Q4 2024, mainly due to high political advertising expenditure). In addition, the pace of growth in the final quarter was slowed by considerable ‚currency headwinds‘, as according to the company, the US dollar depreciated by 9.0% year-on-year, which had a significant negative effect on revenue of around 8.0%. The organic revenue growth recorded in the final quarter was primarily due to an increase in the software customer base. The total number of software customers on Verve’s ad tech platform at the end of the fourth quarter rose significantly by 26.7% year-on-year to 3,734 (total number of customers in Q4 2024: 2,948). In the large customer segment (revenue volume >$100K), the number of customers remained virtually stable at the end of the fourth quarter at 1,124 (Q4 2024: 1,140), with the number of large customers rising significantly again by 5.3% compared to the third quarter (number of large customers in Q3 2025: 1,067). As overall customer growth was thus above organic revenue growth, these key figures already reflected the first positive effects of the significant expansion of the sales base. At the same time, the number of ad impressions placed rose significantly by 13.1% to 310 billion at the end of the fourth quarter (ad impressions Q4 2024: 274 billion). The customer retention rate reached a record level of 99.0% in the fourth quarter (Q4 2024: 97.0%), underscoring the high level of customer satisfaction with the unified technology platform. The significant revenue recovery in Q4 also highlights the positive effects of the successfully completed platform migration, which was launched in Q2 of last year. Earnings performance in 2025 The structural cost and efficiency measures implemented over the course of the year already had a noticeable effect on margin and earnings development in the fourth quarter. As a result, the gross margin (comparable revenue minus purchased services) increased significantly to 44.6% in Q4 2025 (gross margin Q4 2024: 40.6%) and also improved significantly compared to the previous quarter (gross margin Q3 2025: 36.6%). This margin recovery is primarily the result of successful platform unification and the associated significant improvement in the performance and efficiency of the technology stack, as well as strengthened operational leverage (including greater scalability). Despite higher gross margin and higher gross profit, adjusted EBITDA remained stable at € 48.60 million (Q4 2024: € 48.50 million) due to significant sales investments and negative currency effects. This resulted in an adjusted EBITDA margin (on a comparable revenue basis) of 25.1% (Q4 2024: 27.5%). In terms of operating earnings for the full year 2025, EBITDA declined moderately to € 122.12 million (PY: € 128.52 million). Adjusted for one-off costs and special effects (e.g. M&A and consulting costs or restructuring costs), adjusted EBITDA (Adj. EBITDA) actually rose slightly to € 134.40 million (FY 2024: € 133.20 million). This resulted in an adjusted EBITDA margin (on a comparable revenue basis) of 22.3% (FY 2024: 24.0%). In our opinion, increased cost optimisation measures, growth initiatives (e.g. expansion of the sales base and strengthening of the service offering) and unfavourable exchange rate effects (primarily a weak US dollar against the euro) in particular prevented a further improvement in earnings. Forecasts and model assumptions The company guidance confirmed and raised by Verve management with the Q3/9‑month figures (revenue of € 560 million to € 580 million and Adj. EBITDA of € 125 million to € 140 million) for FY 2025 was thus close to the lower end of the forecast range in terms of revenue and above the midpoint of the technology company’s forecast range in terms of earnings. Our revenue estimate (GBCe revenue: € 571.05 million) was narrowly missed, whereas our earnings forecast (Adj. EBITDA GBCe: € 127.85 million) was exceeded. With the publication of the preliminary financial results, Verve’s management also provided a detailed outlook for the current 2026 financial year. Following strong growth momentum in the fourth quarter, further investments in the sales base, improvements to the platform structure and AI-based customer solutions, the ad tech group expects the dynamic growth trend of Q4 2025 to continue in the current financial year. On a conservative basis, Verve therefore expects revenue in the range of € 680 million to € 730 million and adjusted EBITDA in the range of € 145 million to € 175 million for the current 2026 financial year. According to the company, the Verve Management Board has also applied a robust safety margin to this forecast range. In view of the operating result for the past financial year (Adj. EBITDA FY 2025: € 134.4 million) and the expected effects of the cost-cutting programme announced in Q3 2025 (expected annual personnel cost savings from 2026 of approximately € 8.0 million) as well as the earnings contributions from the two recent acquisitions (pro-forma Adj. EBITDA contributions from Captify & Acardo M&A in FY 2025 according to Verve Group: € 7.8 million), we consider this guidance to be significantly conservative, particularly in terms of earnings. Further relevant profitable revenue potential is opening up, among other things, from market growth in the core markets (according to our research, expected market growth of approximately 9.0% for the global digital advertising market in 2026) and, at the same time, possible market share gains. Against the backdrop of their successful return to profitable growth in the important fourth quarter of 2025, the positive outlook and the consistent implementation of their growth strategy, we confirm our previous revenue and EBITDA forecasts. Due to non-cash depreciation effects (primarily relating to PPA and product development depreciation) in the past financial year that were significantly higher than expected, we have reduced our previous net income estimates for the current 2026 financial year and the following year, 2027. We have included the following financial year 2028 in our detailed estimate period for the first time with specific revenue and earnings estimates. Thanks to the continued intensive expansion of its sales base, the improved platform structure (greater efficiency and scalability following unification) and innovative ID-less targeting solutions, Verve should be able to achieve significantly higher growth momentum again starting in the current financial year. With the help of their improved gross margin structure and optimised technology base, it should be possible to achieve significantly above-average earnings improvements in the future, in parallel with the expected strong revenue growth. Based on our confirmed revenue and operating profit estimates, we have slightly lowered our previous price target to € 7.65 (previously: € 7.95) per share. Our target price reduction results from the increase in the risk-free interest rate (to 3.0% instead of 2.5% previously) and the associated increase in the weighted cost of capital (to 9.7% instead of 9.3% previously). On the other hand, the first-time inclusion of the 2028 financial year in our detailed estimate period and the resulting higher starting point for the forecasts for the following financial years had a positive effect on the target price. In view of the current share price level, we therefore continue to assign a ‚BUY‘ rating and see significant upside potential for Verve shares. You can download the research here: 20260302_Verve_Group_Note_ENG Contact for questions: ++++++++++++++++ Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung +++++++++++++++ |
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