Team Internet Group — Strategic review and trading update

Team Internet Group (AIM: TIG)

Last close As at 11/11/2025

GBP0.49

6.00 (13.95%)

Market capitalisation

GBP121m

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Research: TMT

Team Internet Group — Strategic review and trading update

Team Internet’s trading update flagged that FY25 EBITDA is now expected to be $40–45m (Edison $60m previously), mainly due to the Search business, where legacy AFD revenues have dropped rapidly while uptake of RSoC is uneven while the product evolves. Having received a number of inbound approaches, a formal strategic review has been launched, and discussions are underway regarding divestment or strategic partnerships for all parts of the business in separate transactions. Our SOTP valuation based on listed peer multiples is now 63–76p per share, but we believe the break-up value of the business could be materially higher.

Written by

Dan Ridsdale

Head of Technology

Software and comp services

Trading update and strategic review

12 November 2025

Price 55.00p
Market cap £134m

US$1.32/£

Net cash/(debt) at 30 June 2025

$(93.3)m

Shares in issue

246.2m
Free float 100.0%
Code TIG
Primary exchange AIM
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs (30.6) (33.2) (50.6)
52-week high/low 120.4p 44.5p

Business description

Team Internet Group is a global internet company that generates revenue through domain name distribution, online product comparison and AI-driven customer digital marketing solutions. The company’s mission is to ‘create meaningful connections’ by enhancing user experiences and by fostering deeper engagement through innovative technology.

Next events

Deutsches Eigenkapitalforum

24-26 November 2025

Analyst

Dan Ridsdale
+44 (0)20 3077 5700

Team Internet Group is a research client of Edison Investment Research Limited

Note: PBT and diluted EPS are normalised, excluding amortisation of acquired intangibles, share-based payments and exceptional items.

Year end Revenue ($m) EBITDA ($m) PBT ($m) EPS (¢) DPS (¢) EV/EBITDA (x) P/E (x) Yield (%)
12/23 836.9 96.4 77.5 22.48 2.00 2.8 3.2 2.8
12/24e 802.8 91.9 71.4 21.18 1.00 2.9 3.4 1.4
12/25e 484.6 41.3 25.8 7.95 0.00 6.5 9.1 N/A
12/26e 510.9 46.0 32.0 9.83 0.00 5.9 7.4 N/A

Difficult transition for Search

The Search division has been further disrupted by Google’s policy changes. AdSense for Domains (AFD) revenue fell sharply in Q3, while uptake of Related Search on Content (RSoC) has been constrained by tighter Google compliance rules. Guidance for Search FY25 EBITDA is now $8–10m (Edison previously $21m). Trading at Comparison has improved from a weak Q1, but at a somewhat slower rate than forecast and EBITDA guidance is now $11–13m (Edison previously $14m). Domains, Identity and Software (DIS) remains solid, though the majority of revenue from newly won contracts will come online in FY26. EBITDA is suppressed by a higher allocation of central costs. FY25 EBITDA guidance now $21–22m (Edison previously $25m). We downgrade our group FY25 and FY26 EBITDA by 31% and 33%, respectively, with adjusted EPS reducing by 42% for both years.

Strategic review

The announcement of a strategic review is not unexpected, given management had previously indicated it would consider all options to enhance shareholder value. Several inbound approaches have been received, with discussions most advanced regarding DIS, the company’s core asset. A tier-one advisor has been appointed to explore strategic options, including a potential divestment.

Valuation: Potential to unlock material upside

The board’s assertion that DIS could command a valuation materially above the current market capitalisation is supported by our revised sum-of-the-parts analysis. Based on peer multiples, we value the group at 63–76p per share, with DIS alone worth around 57p per share, even before factoring in potential upside from synergies or the removal of central costs. Comparison and Search are harder to value given recent earnings volatility, but we see scope for value creation through international expansion at Comparison and increased uptake of RSoC at Search, while partnerships or M&A could unlock further synergies.


Divisional overview

Our divisional forecasts are shown below. At group level, our FY25 EBITDA estimate is $41m (previously $60m), which sits at the lower end of management’s revised guidance of $40–45m.

The majority of the downgrade comes from the Search division, where we have cut our EBITDA estimate to $8m from $21m. This implies the business will operate at broadly EBITDA break-even in H2. Visibility was always limited during the transition from AFD to RSoC. While AFD revenues held up relatively well in H1, they fell sharply in Q3 as Google accelerated the sunsetting of the platform. RSoC revenues grew over 200% sequentially in Q3 (albeit from a low base), but growth has been uneven, affected by tighter Google compliance rules designed to maintain a healthy environment. Management remains confident it is a good actor, but the changes required to monitor traffic and maintain compliance have demanded development work and temporarily suppressed growth.

It is important to note that Google’s discontinuation of AFD has collapsed parked domain revenues across the industry. Competitors such as System1 and Ionos’s Sedo have experienced similar weakness, with Ionos now classifying Sedo, its AdTech business, as an asset held for sale.

For DIS, we have reduced our FY25 EBITDA estimate to $21m from $25m. This reflects later-than-expected onboarding of certain large clients (including the .CO domain), a more cautious approach to guidance and a higher allocation of central costs which is based on net revenue. Nevertheless, prospects remain strong, and FY26 should benefit from a full year of .CO revenues and the initial uplift from ICANN’s expansion of the internet domain system.

Trading at Comparison has improved since the weak Q1, but not as quickly as expected. As a result, EBITDA guidance is now $11–13m versus our previous $14m estimate. The proportion of international business continues to grow and is now contributing to EBITDA, albeit marginally. We expect a return to growth in FY25, driven by further international expansion, including the UK (which went live in H2) and the US (scheduled for launch in FY26).


Estimate changes

Our estimate changes are shown below, with the lowering of FY25 forecasts across all three divisions resulting in a 31% downgrade to EBITDA and a 42% downgrade to adjusted EPS. Our FY25 net debt forecast of $100m is less than the profitability downgrade might suggest, reflecting the fact that the Search division has the highest working capital requirements and therefore we expect an inflow this year.

Valuation

Our sum-of-the-parts valuation, based on listed peer multiples, suggests a fair value for the group in the range of 64–76p per share. We believe the break-up value of the business could be materially higher.

DIS is the most stable and predictable division, making it the easiest to value and the most likely to crystallise value in the near term. Peer analysis indicates a fair value of 58–62p per share for this business. In a takeover scenario, we believe DIS could command a meaningful premium to this rating. Potential cost synergies may apply, and we note that the current EBITDA figure includes an allocation of central costs. US peers also trade at substantially higher multiples.

Comparison and Search are harder to value due to their less predictable financial performances.

For Comparison, if the business delivers diversified, international growth, long-term prospects will become clearer and risk will reduce, justifying a higher rating than the peer multiple we have applied here.

For Search, we need evidence of sustainable growth in RSoC before we can confidently apply a multiple to forecast earnings. However, a c 5x EV/EBITDA multiple on what could be trough earnings seems reasonable in this context.

General disclaimer and copyright

This report has been commissioned by Team Internet Group and prepared and issued by Edison, in consideration of a fee payable by Team Internet Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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