Re­se­arch | 6 März 2025 10:31

Ori­gi­nal-Re­se­arch: Ver­ve Group SE – by GBC AG

06.03.2025 / 10:31 CET/CEST
Dis­se­mi­na­ti­on of a Re­se­arch, trans­mit­ted by EQS News – a ser­vice of EQS Group.
The is­suer is so­le­ly re­spon­si­ble for the con­tent of this re­se­arch. The re­sult of this re­se­arch does not con­sti­tu­te in­vest­ment ad­vice or an in­vi­ta­ti­on to con­clude cer­tain stock ex­ch­an­ge tran­sac­tions.


Clas­si­fi­ca­ti­on of GBC AG to Ver­ve Group SE

Com­pa­ny Name: Ver­ve Group SE
ISIN: SE0018538068
Re­ason for the re­se­arch: Re­se­arch stu­dy (Note)
Re­com­men­da­ti­on: BUY
Tar­get pri­ce: 8.30 EUR
Last ra­ting ch­an­ge:
Ana­lyst: Mar­cel Gold­mann, Cos­min Fil­ker

BUSINESS DEVELOPMENT FY 2024

Ver­ve pu­blished its preli­mi­na­ry busi­ness fi­gu­res for 2024 on 27 Fe­bru­ary 2025. Ac­cor­ding to the­se fi­gu­res, the ope­ra­tor of a ful­ly-in­te­gra­ted ad­ver­ti­sing soft­ware plat­form (ad-tech plat­form) re­cor­ded a re­cord year thanks to strong or­ga­nic growth with a si­gni­fi­cant in­crease in re­ve­nue of 35.7% to € 437.01 mil­li­on (PY: € 321.98 mil­li­on) and was thus able to be­ne­fit si­gni­fi­cant­ly from the on­go­ing re­co­very of the ad­ver­ti­sing mar­ket. In par­ti­cu­lar, the dy­na­mic growth of 46.0% in the fourth quar­ter (of which 24.0% was or­ga­nic growth, ex­clu­ding Jun M&A and cur­ren­cy ef­fects) to € 144.20 mil­li­on (Q4 2023: € 98.7 mil­li­on) made a si­gni­fi­cant con­tri­bu­ti­on to this, with the fi­nal quar­ter also clo­sing with new re­cord fi­gu­res at re­ve­nue and ear­nings le­vel.

In ad­di­ti­on to the si­gni­fi­cant or­ga­nic growth im­pe­tus (or­ga­nic growth achie­ved: ap­pro­xi­m­ate­ly 24.0%), the Jun Group ac­qui­si­ti­on car­ri­ed out in sum­mer 2024 also fur­ther in­creased the pace of growth.

Ac­cor­ding to the com­pa­ny, the Group in­te­gra­ti­on of this ac­qui­red tech­no­lo­gy com­pa­ny is pro­cee­ding ac­cor­ding to plan. Their tech­no­lo­gi­cal and per­son­nel in­te­gra­ti­on is pro­gres­sing well, with the first suc­ces­ses al­re­a­dy vi­si­ble in the form of a si­gni­fi­cant­ly hig­her or­ga­nic growth rate of 10.0% for the Jun busi­ness in the past fi­nan­cial year 2024 (PY: 1.0%). Ver­ve ex­pects to rea­li­se fur­ther sa­les syn­er­gies in the cur­rent fi­nan­cial year and be­lie­ves it is well on track to achie­ve at least the ori­gi­nal­ly com­mu­ni­ca­ted € 9.0 mil­li­on in syn­er­gies in the 2025 fi­nan­cial year. In the me­di­um term, the com­pa­ny even sees fur­ther po­ten­ti­al for an­nu­al sa­les syn­er­gies in the ran­ge of € 30.0 mil­li­on to € 40.0 mil­li­on.

In terms of re­ve­nue dis­tri­bu­ti­on, the tra­di­tio­nal­ly lar­gest ad­ver­ti­sing seg­ment ‚Sup­p­ly Side Plat­form‘ (re­ve­nue share of SSP: 89.3%) ac­coun­ted for the lion’s share of re­ve­nue, with re­ve­nue to­tal­ling € 390.27 mil­li­on (PY: € 301.39 mil­li­on). Due to the streng­thening of the “De­mand Side Plat­form” as a re­sult of the Jun ac­qui­si­ti­on, sa­les in this seg­ment jum­ped to € 100.55 mil­li­on (PY: € 47.12 mil­li­on), re­sul­ting in a so­me­what more ba­lan­ced seg­ment mix than be­fo­re.

The ra­pid re­ve­nue growth re­cor­ded re­sul­ted pri­ma­ri­ly from an in­crease in the soft­ware cus­to­mer base and the ex­pan­si­on of ad­ver­ti­sing bud­gets with exis­ting soft­ware cus­to­mers. The num­ber of ma­jor cus­to­mers (sa­les vo­lu­me > € 100,000) on Verve’s ad-tech plat­form in­creased si­gni­fi­cant­ly by 56.8% year-on-year to 1,140 at the end of the fourth quar­ter (num­ber of ma­jor cus­to­mers at the end of Q4 2023: 727). Even ex­clu­ding their ac­qui­si­ti­on in June, the com­pa­ny also re­por­ted strong (or­ga­nic) cus­to­mer growth of 39.5% to 1,014 soft­ware cus­to­mers on an ad­jus­ted ba­sis. At the same time, exis­ting soft­ware cus­to­mers in­creased their ad­ver­ti­sing bud­gets si­gni­fi­cant­ly by 15.0% to a rate of 110.0% at the end of the fourth quar­ter (net USD ex­pan­si­on rate Q4 2023: 95.0%). At the same time, the vo­lu­me of di­gi­tal ad­ver­ti­sing de­li­ver­ed or pla­ced in­creased si­gni­fi­cant­ly by 33.0% to 274 bil­li­on at the end of the fourth quar­ter (ad­ver­ti­sing ads at the end of Q4 2023: 206 bil­li­on).

On the pro­duct side, growth was dri­ven in part by in­creased cus­to­mer de­mand for Verve’s in­no­va­ti­ve ID-less ad­ver­ti­sing so­lu­ti­ons (e.g. in the form of ATOM 3.0 or Mo​ments​.AI). With re­ve­nue growth well abo­ve the avera­ge for the ad­ver­ti­sing in­dus­try, Ver­ve suc­cee­ded in gai­ning si­gni­fi­cant mar­ket share and thus fur­ther ex­pan­ding its lea­ding mar­ket po­si­ti­on, par­ti­cu­lar­ly in the mo­bi­le mar­ket seg­ment.

Their ex­tre­me­ly po­si­ti­ve busi­ness de­ve­lo­p­ment was also re­flec­ted at all ear­nings le­vels. With EBITDA to­tal­ling € 128.52 mil­li­on, the strong le­vel of the pre­vious year (PY: € 128.46 mil­li­on) was even slight­ly ex­cee­ded. Ho­we­ver, it should be no­ted at this point that the pre­vious year’s fi­gu­re was si­gni­fi­cant­ly po­si­tively in­fluen­ced by a reva­lua­ti­on of the Axe­sIn­Mo­ti­on earn-out pay­ment lia­bi­li­ty (po­si­ti­ve spe­cial ef­fect of € 62.76 mil­li­on). Ad­jus­ted for spe­cial ef­fects (e.g. M&A and res­truc­tu­ring cos­ts or reva­lua­ti­on of ba­lan­ce sheet items), ad­jus­ted EBITDA (Adj. EBITDA) in­creased si­gni­fi­cant­ly by 40.0% to € 133.25 mil­li­on (PY: € 95.17 mil­li­on). This re­sul­ted in a mo­de­ra­te in­crease in the ad­jus­ted EBITDA mar­gin (Adj. EBITDA mar­gin) to 30.5% (PY: 29.6%).

In terms of net per­for­mance, a cle­ar­ly po­si­ti­ve con­so­li­da­ted re­sult (af­ter mi­no­ri­ty in­te­rests) of € 28.80 mil­li­on was ge­ne­ra­ted, which was be­low the pre­vious year’s le­vel (PY: € 46.73 mil­li­on). Ho­we­ver, this si­gni­fi­cant de­cli­ne is main­ly due to the po­si­ti­ve one-off ef­fect from the reva­lua­ti­on of an M&A‑related pay­ment ob­li­ga­ti­on de­scri­bed abo­ve.

The com­pa­ny gui­dance (sa­les of € 400 to € 420 mil­li­on and Adj. EBITDA of € 125 to € 135 mil­li­on) rai­sed again by Verve’s ma­nage­ment at the end of Au­gust 2024 was thus si­gni­fi­cant­ly ex­cee­ded in terms of sa­les and was at the up­per end of the com­mu­ni­ca­ted ear­nings gui­dance ran­ge in terms of ear­nings. Our sa­les and ear­nings fo­re­cast was also ex­cee­ded (sa­les of € 410.02 mil­li­on and Adj. EBITDA of € 128.11 mil­li­on).

With the pu­bli­ca­ti­on of its preli­mi­na­ry busi­ness fi­gu­res, the ad-tech group has also pro­vi­ded a rough out­look for the cur­rent fi­nan­cial year 2025 and in­tends to fur­ther con­cre­ti­se this gui­dance in the fur­ther cour­se of the year (pro­ba­b­ly in the first quar­ter). Against the back­drop of an al­re­a­dy good start to the year, Verve’s ma­nage­ment ex­pects dou­ble-di­git or­ga­nic growth for the cur­rent fi­nan­cial year, with this tar­ge­ted si­gni­fi­cant busi­ness ex­pan­si­on to be achie­ved pri­ma­ri­ly th­rough the in­creased mar­ke­ting of ID-less ad­ver­ti­sing so­lu­ti­ons and an ex­pec­ted strong US ad­ver­ti­sing mar­ket (Verve’s core mar­ket).

At the same time as is­suing a ge­ne­ral out­look for the cur­rent fi­nan­cial year, Verve’s ma­nage­ment has once again con­firm­ed its me­di­um-term gui­dance (sa­les CAGR: 25.0% to 30.0%; Adj. EBITDA mar­gin: 30.0% to 35.0%). Ac­cor­din­gly, the tech­no­lo­gy com­pa­ny ex­pects con­tin­ued high growth mo­men­tum in the form of dou­ble-di­git pro­fi­ta­ble growth ra­tes bey­ond the cur­rent fi­nan­cial pe­ri­od.

In light of their strong per­for­mance, the con­ti­nua­tion of their high growth mo­men­tum and their ex­tre­me­ly po­si­ti­ve com­pa­ny out­look, in­clu­ding con­fir­ma­ti­on of the me­di­um-term gui­dance, we have left our pre­vious sa­les and ear­nings fo­re­casts for the fi­nan­cial ye­ars 2025 and 2026 un­ch­an­ged. We have also in­cluded the 2027 fi­nan­cial year in our de­tail­ed esti­ma­te pe­ri­od for the first time with spe­ci­fic esti­ma­tes.

Ba­sed on our con­firm­ed fo­re­casts and the first-time in­clu­si­on of the 2027 fi­nan­cial year in our de­tail­ed esti­ma­te pe­ri­od, which have also led to a hig­her start­ing point for the esti­ma­tes for the sub­se­quent fi­nan­cial ye­ars, we have si­gni­fi­cant­ly rai­sed our pre­vious pri­ce tar­get to € 8.30 per share (pre­vious­ly: € 6.70 per share). In view of the cur­rent share pri­ce le­vel, we the­r­e­fo­re con­ti­nue to as­sign a ‚BUY‘ ra­ting and con­ti­nue to see si­gni­fi­cant up­si­de po­ten­ti­al in Ver­ve shares.

You can down­load the re­se­arch here: http://​www​.more​-ir​.de/​d​/​3​1​9​1​0​.​pdf

Cont­act for ques­ti­ons:
GBC AG
Hal­der­stras­se 27
86150 Augs­burg
0821241133 0
research@​gbc-​ag.​de

++++++++++++++++
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/​d​e​/​O​f​f​e​n​l​e​g​ung

+++++++++++++++
Date (time) of com­ple­ti­on: 06/03/2025 (8:21)
Date (time) of first dis­tri­bu­ti­on: 06/03/2025 (10:30)

Ori­gi­nal-Re­se­arch: Ver­ve Group SE (by GBC AG): BUY

GBC AG
Hal­der­stra­ße 27
86150 Augs­burg

Pho­ne: +49 821 241133–0
E‑mail: office(@)gbc-ag.de

Fol­low us!