CLIQ Digital — Awaiting developments

CLIQ Digital (SCALE: CLIQ)

Last close As at 13/05/2025

EUR5.90

−0.05 (−0.84%)

Market capitalisation

EUR39m

More on this equity

Research: TMT

CLIQ Digital — Awaiting developments

CLIQ Digital’s Q125 results show the continuing impact of tough underlying market conditions and the reduction in the business’s scale. However, there is a modest quarterly sequential improvement in North American revenues, although it is too soon to judge if this is sustainable. The group still has a strong cash position (lease debt only), giving some resilience to prospects, and costs have been contained, maintaining adjusted EBITDA margins. There is no further news on the corporate developments disclosed in March, either a potential partial share offer and/or delisting, overshadowing any appraisal of the fundamentals. It would be reasonable to expect clarification by the H125 figures or postponed AGM in August at the latest. The share price is up 84% since the disclosure of the possible transaction.

Fiona Orford-Williams

Written by

Fiona Orford-Williams

Director, TMT

Media

Q125 update

14 May 2025

Price €5.90
Market cap €39m

Net cash at 31 March 2025

€13.6m

Shares in issue

6.5m
Free float 81.0%
Code CLIQ
Primary exchange XETRA
Secondary exchange FRA
Price Performance
% 1m 3m 12m
Abs 3.3 44.4 (30.8)
52-week high/low €9.6 €3.2

Business description

The CLIQ Group is a data-driven online performance marketing company that sells bundled subscription-based digital products to consumers worldwide. The group licenses content from partners, bundles it into digital products and sells them via performance marketing.

Next events

Half year results

7 August 2025

Analyst

Fiona Orford-Williams
+44 (0)20 3077 5700

CLIQ Digital is a research client of Edison Investment Research Limited

Note: EBITDA and EPS are normalised, excluding amortisation of acquired intangibles and share-based payments.

Year end Revenue (€m) EBITDA (€m) EPS (€) DPS (€) P/E (x) Yield (%)
12/23 326.4 50.3 4.91 0.00 1.2 N/A
12/24 243.0 10.2 (2.59) 0.04 N/A 0.7
12/25e 190.0 11.8 0.77 0.04 7.7 0.7
12/26e 215.0 15.0 1.11 0.04 5.3 0.7

Focus on reducing customer acquisition costs

CLIQ’s management has been working to restore levels of profitability through a broader approach to customer acquisition from a wider range of channels, with the aim of attracting more new customers. The impact of driving down the target cost per customer acquisition (CPA) for new subscribers is clear in the revenue line, with a year-on-year reduction in total customer acquisition cost of 49% translating to a 32% decline in the top line over Q124. Management now views the CPA as being more in line with the lower expected lifetime customer value. The internal transformation programme, Fit for Future, has helped to stabilise the adjusted EBITDA margin at 7.3%, with a further €0.5m of associated cost logged in Q125, after a spend of €11.2m in FY24.

FY25 guidance and forecasts unchanged

Guidance stays at revenue of €180–220m and EBITDA of €10–15m. Our forecasts are also unchanged. Q125 revenue was €50m, up from €48m in Q424, but well behind the €73m logged for Q124. In this context, our modelled €190m for FY25 looks reasonable. For adjusted EBITDA, Q125’s figure of €3.7m was down 31% y-o-y, representing a margin of 7.3%, which is higher than we currently model for the full year, giving a degree of flexibility against the continuing uncertain trading conditions. With this backdrop, we also leave our FY26 numbers unchanged until the picture becomes clearer.

Valuation: Awaiting clarity

CLIQ’s share price is up 84% since the potential partial share offer, buyback and delisting announcements, and up 28% over the year-to-date. Over one year, the share price is down 38%. Priced at parity with peers on EV/sales, CLIQ’s implied share price is €53, from €63 in February. However, in the circumstances, we would apply a significant size and current trading discount. Our DCF-based valuation (WACC: 10%, terminal growth rate: 2%) is now at c €8, from €9 previously.

Q125 revenues stabilising

Trading is undoubtedly still difficult and management is seeking a balance between spending on customer acquisition and holding margins. With the change in the expected lifetime value of an individual customer down to €70 in Q125 from €81 a year earlier reflecting the increased churn, driving the efficiency of marketing spend is central to any recovery narrative. The broadened approach to customer recruitment adopted over the last year or two is a positive move and the intended addition of Apple Pay and Google Pay should widen the net further.

The experiment with an advertising-supported offering in the US is still in its early days. There are some promising aspects, particularly in terms of leveraging customer data, but the ability to scale is as yet unproven. Management’s presentation also highlighted new content offerings, including in sport, which is an important customer acquisition tool.

Valuation

With so much uncertainty over both the financial performance and the potential (and timing) of corporate developments, the stock valuation is as much an assessment of sentiment as it is of underlying value.

There are also few quoted stocks that are genuinely comparable in terms of business model, with no obvious quoted performance marketing peers and with most content companies having a longer-term subscriber base. Given the circumstances, with an EV of €24m, comparisons with these latter stocks are tenuous. For the sake of consistency, looking on an EV/sales basis across FY25 and FY26, parity with these subscription-type content peers would suggest a share price of €52, down from our last report in February, when it stood at €63.

We also run a discounted cash flow (DCF) model at varying weighted average costs of capital (WACC) and terminal growth rates. We use a 10% WACC and a 2% terminal growth rate, as previously, and have maintained a cautious view on long-term revenue growth and sustainable EBITDA margin. We derive an implied value of c €8 from this approach, down from €9 previously.

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