Last close As at 05/08/2026
EUR1.37
▲ −0.02 (−1.37%)
Market capitalisation
EUR274m
Research: TMT
Verve Group’s Q224 figures clearly show the benefit of its strategic focus on privacy-first targeted advertising solutions, with growth well ahead of the market. Organic revenues grew 26% in Q2 and the operating leverage against a tighter cost base delivered an adjusted EBITDA margin of 30%. We raised our forecasts at the H124 update, and now finesse our assumptions. The capital markets day, held with the results, highlighted the further potential from mobile in-app full screen and video, as well as Connected TV, retail media, audio and digital out-of-home. 78% of Verve’s revenues in Q2 were generated in North America, yet the rating remains well below (mostly US-based) peers.
Verve Group |
Driving better media outcomes |
CMD and Q224 figures |
Media |
10 September 2024 |
Share price performance
Business description
Next events
Analysts
Verve Group is a research client of Edison Investment Research Limited |
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Verve Group’s Q224 figures clearly show the benefit of its strategic focus on privacy-first targeted advertising solutions, with growth well ahead of the market. Organic revenues grew 26% in Q2 and the operating leverage against a tighter cost base delivered an adjusted EBITDA margin of 30%. We raised our forecasts at the H124 update, and now finesse our assumptions. The capital markets day, held with the results, highlighted the further potential from mobile in-app full screen and video, as well as Connected TV, retail media, audio and digital out-of-home. 78% of Verve’s revenues in Q2 were generated in North America, yet the rating remains well below (mostly US-based) peers.
Year end |
Revenue (€m) |
Adjusted EBITDA (€m) |
PBT* |
EPS* |
EV/EBITDA |
P/E |
12/22 |
324.4 |
93.2 |
38.6 |
13.4 |
10.9 |
24.4 |
12/23 |
322.0 |
95.2 |
26.8 |
35.8 |
10.6 |
9.2 |
12/24e |
410.0 |
130.0 |
59.4 |
24.6 |
7.8 |
13.7 |
12/25e |
505.0 |
175.0 |
106.5 |
38.6 |
5.8 |
8.6 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Strong position in a consolidating market
The Verve rebrand is enabling the group to go to market with a more coherent proposition, particularly important when dealing with its global clients and agency customers. The market remains inefficient and overpopulated, with many subscale players, but Verve is a prominent participant with an established privacy-first ethos and strong, collaborative relationships. These include projects with Google, which presented at Verve’s CMD (from 1:58). Verve now has the elements in place on both the supply (publisher) side and the demand (advertiser) side, enhanced by the recent acquisition of Jun, to address the considerable market opportunity.
CMD key points
Q3 has started strongly, with a further quarterly sequential uplift in organic growth, although it is worth noting that the comparatives become tougher in Q4. Verve is achieving better advertising rates (CPMs, being cost per mille), in part because of a slightly better industry backdrop, but mostly reflecting the better quality of inventory with more full-page and video in the mix. Opportunities in other media channels, as well as now having a better balance between supply- and demand-side offerings, support the targeted mid-term revenue CAGR of 25–30%, with the adjusted EBITDA margin expected to expand further on a relatively fixed cost base.
Valuation: Well below peers, DCF
The share price has more than trebled in the year-to-date, reflecting the strong trading. However, the rating still sits at a discount to peers and to the value derived in our discounted cash flow (DCF). Looking at peer average EV/revenue and EV/EBITDA multiples across FY24 and FY25, parity now suggests a share price of €4.47, up from €4.22 as sector sentiment has improved. Our DCF (weighted average cost of capital 10%, terminal growth of 2%) points to €5.28 (previously €4.97) after making a modest (positive) shift in working capital assumptions.
Wide ranging CMD outlines dynamic market
The capital markets day (CMD), held in Stockholm where Verve is now headquartered, provided a thorough oversight of the dynamics of the ad tech market, which remains fast-moving and complex. The day comprised sessions around:
■
the Q224 performance,
■
Jun Group and what it brings to the group,
■
the fast-changing advertising market (presented by a Verve NED with a background at Dentsu),
■
how AI is shifting the playbook (presented by representatives from Google),
■
privacy and targeting (presented by IAB TechLab),
■
where Verve sits in the market, and
■
where Verve’s most attractive opportunities lie.
The link to the webcast sessions is above, with the accompanying presentation here. We do not attempt to summarise the whole event, rather just pick out a few highlights. The extended view, in our opinion, is a useful time investment for those wishing to improve their understanding of the ad tech industry. Verve also hosts a very helpful glossary of ad tech terminology on its investor relations website.
Verve’s performance and outlook
We upgraded our forecasts at the half-year trading update (Another substantial upgrade) and the adjustments that we make now relate to the finance costs (reduced to reflect the interest rate backdrop and management guidance) and small changes to working capital assumptions.
Overall Q3 has started well, with revenue reported to be growing (organically) ahead of the rate achieved in Q2 (+26%). Q4 will be against tougher comparatives, as Q423 was when the market (and Verve’s performance) started to recover. This is built into the management guidance of revenues of €400–420m for the full year. Pro-forma FY24 revenue, as if including Jun for the full 12 months, is given as €447m and it is this figure that is the basis for our FY25 revenue estimate of €505m, which represents 11% year-on-year growth.
The H124 adjusted EBITDA margin exceeded 30%, reflecting the (relatively) fixed operating cost base post the trimming of €10m of operating cost in the prior year. Our full year assumption is for an adjusted EBITDA margin of 31.7%, with Q4 having an inherently seasonally stronger performance. With the building blocks all now in place, we anticipate further margin expansion in FY25.
What’s driving the growth?
The substantial outperformance of the global programmatic ad spend, which is estimated to grow at 9% in 2025 (source: Statista), is down to a combination of factors. There is an element of market recovery in underlying pricing and volume, which is enhanced for Verve through offering better quality and therefore higher-value inventory such as full-page imagery and video ads. This is driving the net dollar expansion rate (ie the spend by existing clients) of 109% in Q224, with the number of large clients generating revenues of over $100k growing to 851, from 764 in Q124. The group is also winning new clients and expanding into new segments, adding Macy’s, LinkedIn, King and Disney+ on the demand side and Slacker Radio, Zynga, CBS News and WeatherBug on the supply side.
Being able to offer proven privacy-first solutions on iOS is also a major factor (iOS represented 31% of group revenue in Q2) and this provides a roadmap for the gradual withdrawal of personal identifiers on Android. Mobile accounted for 85% of revenues in Q224, with the next largest segment the growing Connected TV (CTV) segment, where market growth is estimated at 14% (Statista).
In addition to this market growth and customer expansion, Verve is extending its offering through new products and services such as its privacy-safe contextual solutions and curated marketplaces (PMPs), which were covered in some detail at the CMD.
Interview with CEO Remco Westermann
Post the CMD, we recorded this short interview with the CEO, which summarises some of the factors behind the strong performance and outlook, including the benefits accruing form the Jun Group acquisition.
|
Exhibit 1: Executive interview with CEO Remco Westermann |
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|
Source: Edison Investment Research |
Valuation
We evaluate Verve compared to three sets of peers: (relatively) pure adtech, ad software combined with content (games or other) and (relatively) pure gaming. Although this leads to a cumbersome peer table, it allows us to see the slightly different dynamics. Adtech performance in the year-to-date has been very mixed, with particularly strong performances from Criteo, Viant Technology, Magnite and The Trade Desk, with Digital Turbine and DoubleVerify at the other end of the scale. The median performance has been a gain of 9%. Ad software and content companies also had a mixed showing, with AppLovin continuing to perform particularly strongly (+121% year-to-date), while the purer gaming companies have (on average) underperformed.
Looking at average EV/revenue and EV/EBITDA multiples across FY24 and FY25, parity across the peer set would suggest a share price of €4.47, from the €4.22 calculated previously as sector prospects have improved. This is a little below the figure derived from our DCF of €5.28 (WACC: 10%, terminal growth of 2%), up from €4.97, having made small adjustments to working capital assumptions following the half-year results.
Both approaches result in figures well above the current share price of €3.28, which has more than trebled over the year-to-date as the market has gained confidence in both Verve’s financial performance and improved sentiment around the sector.
Exhibit 2: Peer performance and valuation
Company |
Price |
Ytd performance (%) |
Market cap (€m) |
EV/sales (x) |
EV/EBITDA (x) |
P/E (x) |
||||||
FY0 |
FY1e |
FY2e |
FY0 |
FY1e |
FY2e |
FY0 |
FY1e |
FY2e |
||||
Ad-tech |
|
|
|
|
|
|
|
|
|
|
|
|
The Trade Desk |
101.4 |
41 |
44,957 |
24.5 |
19.8 |
16.5 |
61.8 |
47.7 |
39.3 |
77.3 |
63.7 |
53.6 |
Pubmatic |
15.1 |
(8) |
679 |
2.2 |
2.0 |
1.8 |
7.8 |
6.4 |
5.6 |
779.9 |
72.6 |
N/A |
Viant Technology |
10.5 |
52 |
598 |
1.9 |
1.7 |
1.5 |
15.7 |
10.9 |
9.3 |
N/A |
95.3 |
66.6 |
Magnite |
13.3 |
42 |
1,693 |
3.8 |
3.4 |
3.0 |
12.3 |
10.4 |
9.0 |
24.4 |
17.5 |
14.3 |
AcuityAds Holdings |
1.5 |
(6) |
51 |
0.2 |
0.2 |
0.2 |
19.3 |
4.4 |
2.7 |
N/A |
N/A |
120.2 |
DoubleVerify Holdings |
19.3 |
(48) |
2,961 |
5.1 |
4.4 |
3.7 |
16.1 |
13.9 |
11.6 |
54.3 |
61.0 |
42.2 |
Integral Ad Science Hold |
11.3 |
(22) |
1,641 |
3.8 |
3.4 |
3.0 |
11.6 |
10.0 |
8.6 |
442.7 |
55.1 |
32.7 |
LiveRamp Holdings |
25.5 |
(33) |
1,530 |
2.2 |
2.0 |
1.8 |
19.1 |
11.8 |
9.8 |
34.2 |
17.1 |
16.4 |
Digital Turbine |
2.8 |
(59) |
260 |
1.0 |
1.2 |
1.2 |
3.8 |
6.9 |
7.2 |
2.4 |
5.5 |
6.7 |
Tremor |
287.5 |
41 |
462 |
1.3 |
1.2 |
1.1 |
4.9 |
4.1 |
3.7 |
17.1 |
9.8 |
8.2 |
Criteo |
45.1 |
78 |
2,280 |
2.1 |
1.9 |
1.8 |
7.7 |
5.9 |
5.6 |
16.3 |
10.7 |
10.4 |
YOC |
18.5 |
23 |
64 |
2.1 |
1.7 |
1.5 |
14.6 |
10.6 |
8.5 |
23.7 |
17.9 |
13.8 |
Median |
|
9 |
|
2.1 |
1.9 |
1.8 |
13.4 |
10.2 |
8.6 |
29.3 |
17.9 |
16.4 |
Ad-software and content |
|
|
|
|
|
|
|
|
|
|
||
AppLovin |
87.9 |
121 |
26,506 |
9.7 |
7.3 |
6.5 |
21.3 |
13.3 |
11.6 |
98.9 |
25.9 |
20.8 |
IronSource |
15.9 |
(61) |
5,708 |
3.4 |
4.2 |
4.1 |
18.9 |
20.7 |
18.5 |
N/A |
N/A |
N/A |
Azerion |
1.4 |
(25) |
172 |
0.6 |
0.6 |
0.5 |
4.7 |
4.8 |
4.1 |
12.6 |
43.5 |
15.3 |
Future |
1,049.0 |
32 |
1,401 |
2.0 |
2.0 |
1.9 |
5.6 |
6.5 |
6.3 |
7.6 |
8.7 |
8.0 |
Median |
|
3 |
|
2.7 |
3.1 |
3.0 |
12.3 |
9.9 |
8.9 |
12.6 |
25.9 |
15.3 |
Gaming |
|
|
|
|
|
|
|
|
|
|
|
|
Embracer Group |
24.2 |
(12) |
2,748 |
1.3 |
1.2 |
1.2 |
5.4 |
4.5 |
4.7 |
6.2 |
8.5 |
7.6 |
Stillfront Group |
7.2 |
(41) |
325 |
1.1 |
1.2 |
1.1 |
3.0 |
3.4 |
3.2 |
3.4 |
4.2 |
3.3 |
Paradox Interactive |
147.2 |
(35) |
1,363 |
5.7 |
6.3 |
5.4 |
8.9 |
9.9 |
8.1 |
28.3 |
27.7 |
21.4 |
Modern Times Group |
76.3 |
(11) |
803 |
1.2 |
1.1 |
1.1 |
4.6 |
4.1 |
4.1 |
11.0 |
9.4 |
8.0 |
Rovio Entertainment |
9.3 |
(0) |
707 |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
Team17 |
250.0 |
35 |
431 |
2.2 |
2.1 |
2.0 |
11.4 |
8.0 |
7.6 |
17.3 |
11.7 |
11.0 |
Median |
|
(11) |
|
1.3 |
1.2 |
1.2 |
5.4 |
4.5 |
4.7 |
11.0 |
9.4 |
8.0 |
Total average |
1 |
2.0 |
2.1 |
2.0 |
10.4 |
8.2 |
7.4 |
17.7 |
17.7 |
13.2 |
||
Verve |
3.2 |
215 |
611 |
3.1 |
2.5 |
2.0 |
10.6 |
7.8 |
5.8 |
9.2 |
13.7 |
8.6 |
Premium/(discount) to adtech |
209 |
|
53% |
32% |
16% |
(19%) |
(22%) |
(31%) |
(68%) |
(21%) |
(46%) |
|
Premium/(discount) to adsoftware and content |
213 |
|
17% |
(20%) |
(34%) |
(13%) |
(19%) |
(34%) |
(25%) |
(45%) |
(42%) |
|
Premium/(discount) to gaming |
227 |
|
139% |
108% |
59% |
94% |
72% |
23% |
(17%) |
45% |
8% |
|
Premium/(discount) to total |
212 |
|
56% |
21% |
0% |
3% |
(3%) |
(20%) |
(47%) |
(21%) |
(34%) |
|
Source: LSEG Data & Analytics. Note: Prices as at 9 September 2024.
Exhibit 3: Financial summary
€000s |
2022 |
2023 |
2024e |
2025e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||
Revenue |
|
|
324,444 |
321,981 |
410,000 |
505,000 |
Operating costs excluding D&A |
(239,691) |
(193,523) |
(285,113) |
(332,113) |
||
Adjusted EBITDA |
|
|
93,202 |
95,171 |
130,000 |
175,000 |
EBITDA |
|
|
84,753 |
128,458 |
124,887 |
172,887 |
Operating profit (before amort. and excepts.) |
|
|
76,556 |
76,943 |
112,620 |
154,467 |
Amortisation of acquired intangibles |
(14,853) |
(13,706) |
(19,000) |
(19,000) |
||
Exceptionals |
(27,100) |
(6,500) |
(3,500) |
(500) |
||
Share-based payments |
(1,613) |
(1,613) |
(1,613) |
(1,613) |
||
Reported operating profit |
26,618 |
55,124 |
88,507 |
133,354 |
||
Net Interest |
(37,959) |
(50,128) |
(52,406) |
(47,982) |
||
Joint ventures & associates (post tax) |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
38,597 |
26,814 |
60,214 |
106,485 |
Profit Before Tax (reported) |
|
|
(11,341) |
4,996 |
36,101 |
85,372 |
Reported tax |
(9,064) |
(2,718) |
(11,913) |
(28,173) |
||
Profit After Tax (norm) |
21,085 |
57,312 |
40,343 |
71,345 |
||
Profit After Tax (reported) |
(20,405) |
46,218 |
24,188 |
57,200 |
||
Minority interests |
(88) |
(513) |
(520) |
(525) |
||
Discontinued operations |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
20,947 |
57,025 |
40,863 |
71,871 |
||
Net income (reported) |
(20,317) |
46,731 |
24,708 |
57,725 |
||
Average Number of Shares Outstanding (m) |
156.2 |
159.2 |
166.0 |
186.4 |
||
EPS - basic normalised (c) |
|
|
13.4 |
35.8 |
24.6 |
38.6 |
EPS - normalised fully diluted (c) |
|
|
12.0 |
32.1 |
22.2 |
35.1 |
EPS - basic reported (c) |
|
|
(13.0) |
29.3 |
14.9 |
31.0 |
Dividend (c) |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
28.7 |
(0.8) |
27.3 |
23.2 |
||
Adjusted EBITDA Margin (%) |
28.7 |
29.6 |
31.7 |
34.7 |
||
Normalised Operating Margin (%) |
23.6 |
23.9 |
27.5 |
30.6 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
823,637 |
813,515 |
954,448 |
1,005,252 |
Intangible Assets |
791,284 |
796,607 |
938,970 |
991,320 |
||
Tangible Assets |
5,522 |
3,963 |
2,532 |
987 |
||
Investments & other |
26,831 |
12,945 |
12,945 |
12,945 |
||
Current Assets |
|
|
221,022 |
193,513 |
206,191 |
241,315 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
52,229 |
32,281 |
41,562 |
51,192 |
||
Cash & cash equivalents |
149,992 |
121,740 |
125,136 |
150,631 |
||
Other |
18,801 |
39,493 |
39,493 |
39,493 |
||
Current Liabilities |
|
|
219,471 |
240,768 |
190,413 |
206,029 |
Creditors |
68,711 |
80,335 |
95,229 |
110,845 |
||
Short term borrowings |
31,903 |
34,510 |
32,390 |
32,390 |
||
Other financial liabilities |
97,515 |
104,402 |
42,746 |
42,746 |
||
Other non-financial liabilities |
21,342 |
21,521 |
20,048 |
20,048 |
||
Long-term liabilities |
|
|
503,443 |
413,804 |
528,385 |
516,385 |
Long-term borrowings |
389,386 |
348,038 |
422,000 |
415,000 |
||
Other long-term liabilities |
114,057 |
65,766 |
106,385 |
101,385 |
||
Net Assets |
|
|
321,745 |
352,456 |
441,841 |
524,153 |
Minority interests |
(1,211) |
182 |
182 |
182 |
||
Shareholders' equity |
|
|
322,956 |
352,274 |
441,659 |
523,971 |
CASH FLOW |
||||||
Operating Cash Flow |
(20,405) |
46,218 |
24,188 |
57,200 |
||
Depreciation & amortisation |
70,694 |
29,491 |
36,380 |
39,533 |
||
Working capital |
55,284 |
12,051 |
5,613 |
5,986 |
||
Exceptional & other |
1,907 |
(66,328) |
1,613 |
1,613 |
||
Tax |
1,340 |
(1,940) |
4,500 |
0 |
||
Net finance cost |
37,959 |
50,065 |
52,406 |
47,982 |
||
Net operating cash flow |
|
|
146,779 |
69,556 |
124,700 |
152,313 |
Capex |
(45,859) |
(35,047) |
(37,050) |
(40,337) |
||
Acquisitions/disposals |
(138,000) |
0 |
(130,000) |
(50,000) |
||
Equity financing |
28,517 |
0 |
40,050 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
(53,413) |
(52,301) |
(26,184) |
(29,482) |
||
Net Cash Flow |
(61,976) |
(17,792) |
(28,484) |
32,494 |
||
Opening net debt/(cash) |
|
|
198,600 |
273,900 |
297,427 |
372,000 |
FX |
0 |
(2,881) |
0 |
0 |
||
Other non-cash movements |
(765) |
(2,854) |
(46,088) |
0 |
||
Closing net debt/(cash) |
|
|
261,341 |
297,427 |
372,000 |
339,505 |
Source: Company accounts, Edison Investment Research
|
|
Research: Healthcare
H224 continues to be a rewarding period for Basilea Pharmaceutica, with the announcement of a third successive milestone payment for Cresemba in the last month following strong sales performance (+24% y-o-y growth in in-market sales to US$489m for the 12 months ending March 2024). The latest milestone (US$25m/CHF21m) was triggered by license partner Pfizer exceeding a predetermined sales threshold in Europe. In total, Cresemba has raked in upwards of CHF34m in milestone payments in the year to date (with c CHF32m in H224 thus far), and we expect a further c CHF5m before year-end based on the most recent guidance from management. Beyond Cresemba, we expect the key focus areas for Basilea in H224 to be finalising a US commercialisation partner for Zevtera and the initiation of the first Phase III study for fosmanogepix (in candidemia/invasive candidiasis).