PensionBee Group plc

Good afternoon, ladies and gentlemen, and welcome to the PensionBee Group Q3 2025 results for the quarter-ending 30th September 2025 presentation. Throughout today's record meeting, attendees will be in listening-only mode. Questions are encouraged. They can be submitted either verbally by just typing your name in the Q&A tab, and we'll come to you and unmute your microphone, or simply just type in your question just using the Q&A tab at the bottom of the screen, press send, and then we'll pose that question to the company on your behalf. The company may not be in a position to answer every question received during the meeting itself, but of course, we will provide those companies for responses post today's meeting if appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand over to the team from PensionBee, Romy, Christophe. Good afternoon.

Thank you very much. Good afternoon and welcome to PensionBee's third quarter 2025 results announcement covering trading for the period ending 30 September 2025. I'm Romy Savova, the CEO of PensionBee Group. For those of you who are new to the PensionBee story, we are creating a global leader in the consumer retirement market. We exist to help our customers prepare for and enjoy a happy retirement. We enable our customers to combine their old retirement accounts into a new online plan. We enable them to make contributions, to invest in line with their objectives, with money managed by the world's largest asset managers, and ultimately to withdraw and spend their retirement savings. Our aspiration is to build a lifetime relationship with our customers, generating predictable and scalable revenue and profit for our company and for our shareholders. We are pleased with the results of the third quarter, which reflects strong execution in the UK and in the US. As is expected for the medium term, the United Kingdom made up the bulk of assets and invested customers. The UK closed the quarter with assets under administration of £7 billion, representing 27% year-on-year growth, annual run rate revenue of £46 million, representing 35% year-on-year growth, and approximately 300,000 invested customers. Over the third quarter, we increased marketing expenditure by 22% compared to the third quarter of 2024, ensuring effective deployment by optimizing our performance channels while also investing in our brand awareness through a UK-wide billboard campaign on roadside digital sites. This investment drove UK customer growth of 39% over the quarter, with 11,000 new invested customers onboarded compared to 8,000 in the third quarter of 2024, underscoring the effectiveness of our growing marketing expenditure. We continue to invest in productivity, introducing new automations and efficiencies across our technology platform. We generated a productivity improvement of 19% year-on-year, with each staff member supporting 1,555 invested customers. We also made strides with our AI initiatives, further refining our internal bot, Beatrix, who is currently supporting our operations team, with a view to enabling Beatrix to eventually serve our customers. The UK achieved adjusted EBITDA profitability of £2.4 million for the quarter, underscoring our commitment to profitable growth in the UK. Turning to the United States, over the third quarter of 2025, we have continued to focus on establishing a strong foundation for long-term growth. In a marketing highlight for the company, we launched our first brand campaign in 12 metropolitan areas, including New York, Chicago, and Seattle. The brand campaign consists of television, billboard, and radio advertising featuring our first US customers. Simultaneously, we have continued to expand our product functionality, and we now have transfer protocols to cover a majority of 401 and IRA transfer types. As a result, we are now exiting the live testing period with confidence that our protocols can generate transfers following the successful completion of $2 million worth of transfers and contributions. During the live testing, we also attracted account sizes multiple times above our target of $50,000, indicating the potential for rapid asset accumulation as brand awareness grows. With our transfer infrastructure now in place and growing brand recognition, we are preparing to enter the next phase of growth through a 1% match on all completed 401k rollovers, IRA transfers, and contributions. This initiative will launch very soon and is expected to accelerate our path to $1 billion of assets under administration. We also continue to invest in our Safe Harbor IRA offering with a number of employers now in the final discussion stage and ongoing consultant-led requests for proposal. We're pleased to share some new market research with you today, which was conducted with the Employee Benefits Research Institute. The findings indicate that 1.7 million 401k accounts are automatically rolled over into Safe Harbor IRAs annually, representing over $4.6 billion in potential annual inflows. Our product offering, including our low fees, leave us well positioned to capture a growing market share over the coming years. I would now like to hand over to Christoph Martin, PensionBee's CFO, who will cover the financial update.

Thank you very much, Romy. Hello and a warm welcome to everyone. I am pleased to cover the financial section of the quarterly trading update. In Q3 2025, PensionBee had strong financial performance with 27% year-on-year growth in our AOA to £7 billion and 35% year-on-year growth in ARR to £46 million. This top line growth, coupled with continuous cost discipline, led to an improvement in our adjusted EBITDA margin, with the group achieving profitability of £1.3 billion at 12% group EBITDA margin for the quarter, driven by the UK adjusted EBITDA profitability of £2.4 million for the quarter. These continuous achievements are derived from the core value drivers of our business, which are first, predictable and recurring revenue, and second, business scalability. Furthermore, they are testament to our ability to consistently and reliably execute against our public market guidance. The first value driver is PensionBee's predictable and recurring revenue, which is generated from a durable base of assets and administration, a function of the assets of existing and new customers. In Q3, we experienced a 27% year-on-year asset growth to £7 billion. The vast majority of the AOA base is derived from existing customers, customers who remain with PensionBee for a long period of time and continue to build up their pension savings with us, resulting in value generation for decades to come. Our average customer is in their early 40s and they build up their pension savings with PensionBee, which means that cohort on an underlying value basis, i.e. before an impact on capital markets, are resilient over time. AOA is also derived from new customers acquired through our proven, cost-disciplined approach to new customer acquisition. Over Q3 2025, we onboarded circa 11,000 new invested customers onto our technology platform, representing 41% year-on-year growth. Over the quarter, customers joining were slightly younger than in Q3 2024, aged approximately 39, in line with our marketing strategy for 2025. We continue to observe strong underlying KPIs on retention rates and net flows, underscoring PensionBee's strengths and resilience. As a result, the compounding AOA base is subsequently converted into our revenue growth owing to the resilient gross revenue margin. In Q3 2025, we saw a revenue margin of 64 basis points unchanged year-on-year which enabled us to convert the 27% of year-on-year asset growth into quarterly revenue growth of 32% and annual run-rate revenue growth of 35%. In conclusion, thanks to our compounding AOA base and resilient revenue margin, we have generated predictable and recurring revenue, which is again PensionBee's first value driver. The second value driver is PensionBee's business scalability. due to the controllable nature of the cost base. Our cost base has continued to decline as a proportion of revenue. These scalability dynamics, i.e., predictable and recurring top-line growth, coupled with cost discipline, led to an improvement in operating margin. On the last 12 months to September 25 basis, the adjusted EBITDA margin improved to 10%, up from 2% last year for the U.K., Furthermore, the operating margin pre-marketing for the UK improved to 38%, up from 30% last year, reflecting the inherent strong scalability and margin potential of the business. Reflecting on our long-term track record, PensionBee has delivered revenue growth since our IPO of a compounded annual growth rate, KEGA, of 48%, to last 12 months September 25 and strong margin expansion in the UK with an adjusted EBITDA margin improvement from negative 166% pre-IPO to positive 10% over the last 12 months period. Furthermore, operating margin pre-marketing improved from negative 35% pre-IPO to positive 38% over the LTM period. This underscores the strong delivery against our growth and business scalability objectives. With respect to our 2025 guidance framework for pension year as a group, we have outlined our short, medium, and long-term targets. In the short to medium term, by the year end 2029, we expect the group to generate of above £100 million of revenue and an adjusted EBITDA margin of circa 20% by the year end 2029, with the UK considerably contributing to those targets. In the long term, by the year end 2034, we expect the group to generate a quarter of a billion pounds in revenue and adjust the EBITDA margin of circa 50% by year end 2034. Our circa 33 million pounds cash balance puts PensionBee in a strong position to further scale the UK business, as well as invest in the tremendous US market opportunity. continuing to execute on our long-term strategy and delivering on our public market guidance. I would now like to hand back to Romy for concluding remarks.

Thank you very much, Christoph. We're very pleased with the conclusion of the third quarter and progressing into the fourth quarter, we remain very excited about the prospects of PensionBee in the UK and in the US. We're now very happy to take some questions.

That's great, Christoph Romy. Thank you very much indeed. I will just bring back up your cameras. But ladies and gentlemen, please do continue to submit your questions just using the Q&A tab situated on the right-hand corner of your screen. But just while we take a few moments to review the questions submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your platform investment company. Romy, we've had a number of questions. So firstly, thank you to everybody for your engagement. If you do want to verbally ask your question, please just type in your name and we'll unlock your microphones. But let's start with the first question that we received, in fact, ahead of today's event. Could you please talk about the long-term competitive advantage of PensionBee?

Thank you very much. And what an excellent question, because it's certainly one that's very important to consider in a changing world. And as we think about the long-term and pension-based future, there are really three factors that we believe drive sustainable long-term competitive advantage. They are brand, technology and culture. On the brand side, I think we have quite a lot of evidence from our presence in the UK from the last 10 years in terms of how brand can be effectively grown, developed and nurtured such that you can become a household name. And we're very excited to be applying a similar approach to the United States. And of course, our latest billboard campaign has been a great example of how we do that, for example, featuring our very first U.S. customers. But of course, brand is about more than just marketing. Brand is about the trust that customers are willing to place in us. It's about the way that customers perceive the company in general. And it encompasses so much of what we do, including our customer service, our focus on information security, and various other factors that make PensionBee a trusted household name. On the technology side, we have been very proud of the work that we've done over the last 10 years to not only deliver an amazing experience for our customers, but also to deliver a very scalable and efficient experience for us internally. And you can see that through the growing productivity metrics that we disclose every single quarter. So technology, the investment in technology, staying at the forefront of innovation, we really have that in our DNA and therefore technology is our second long-term competitive advantage strategic pillar. And then three is our culture. We love our culture at PensionBee. We have a very important vision and mission, which focuses on our customers and the ability to prepare them for a happy retirement. It's been foundational to who we are and aligns with the values that we hold dear internally. And we happen to believe that there is an exceptionally strong alignment between our culture, our technology and our brand. And it's really when you have alignment across the board that you can grow successfully. And we believe we have that in place. I hope that answers your questions.

That's great. Thank you very much indeed. Let's turn to a question around, I guess, the position in terms of defending yourself here. It says, how do you plan to defend against incumbents entering into the digital pension market as they seem to be looking to upgrade their tax tax?

Great question. And of course, as you know, the pensions market is absolutely enormous, not only in the UK, but also in the United States, where we see millions of individuals and millions of accounts as being within the target market. which then translates into incredibly kind of open spaces for us to consider growing. Competitors are, of course, important. This is a market just like any other. But what's really distinguishing about the pension market and retirement assets in particular is that so many people are not thinking about their retirement and saving for retirement when they should be. And so usually when we think about competitive attention within the market, we see that as a factor that has the potential to grow the awareness amongst consumers of their pensions and their retirement savings. And of course, in the UK, we are a market creator. We're a household brand. And so we believe that people thinking about their pensions is ultimately very positive for us because it grows the awareness and the search for our particular solution. So it comes back very much to our ongoing investment within marketing, our growing investment within technology. And I think that because of our particular focus on the mass market, our technology and our product experience and our customer experience will always be best for our customers. And we're very much looking forward to establishing a similar position in the U.S. over time.

That's great. Thanks, Remy. We have a question here from Tom at Canaccord. Thank you, Tom, for your question. And he asks approximately what percentage of customers or what percentage of the customer onboarding journey is automated?

Thanks very much for the question. We don't publish metrics around the level of automation. It really depends. It depends on the source of the customer. It depends on the pension provider in question. We, you know, we have majority protocols in place, meaning that for most things we do, a majority is automated. But it will really depend on which part of the journey where we're looking at, you know, which part of the which part of the funnel really. Obviously, our sign up journey is 100 percent automated within the transfers. It will very much depend on a on a provider by provider basis.

Thanks, Romy. If I may, how do you see PensionBee's market share evolving as the UK pension consolidation takes place over the next three to five years?

Well, I believe we've shown that we consistently keep growing market share. We disclose the market share figures within the annual report every year. They can be somewhat tricky to compile because pension statistics are not as readily available as we might hope they are. But we certainly continue to grow market share in a market like ours, where the market in and of itself is just so large. We are not required to have an enormous market share in order to be a very rapidly growing and successful business. So market share figures, we tend to look at as an output rather than an input. And our focus is really on constantly growing our invested customer numbers and ultimately our assets as well, because that is of course what leads to higher market share.

Great, thank you. Question from Wayne. Thank you, Wayne. Are there any plans to introduce dividends

We do not have plans to introduce dividends at the moment. Of course, this is something that we keep under review, but our potential for growth both within the UK and within the US is simply so big because of the size of the market that we foresee that as being the best deployment of capital for the foreseeable future.

Thank you. A question from Jude from RBC. Thank you, Jude. The questions are as follows. At Q2, you highlighted a strong new customer pipeline. Can you offer any colour on how that pipeline has progressed in the last three months?

Very happy to. At Pentium B, we monitor our pipeline rather obsessively, beginning, of course, from the very moment that a customer enters their email address and their name, we begin tracking. And what we've seen over the course of this year, as we have grown our marketing expenditure, and as we continue to grow our marketing expenditure, is that the pipeline of customers has grown substantially. You can start to see that coming through in some of the third quarter results. So particularly when we compare the third quarter of this year compared to the third quarter of last year, we delivered approximately 40 percent growth in new invested customers. And so that is, of course, a direct reflection of the increase in the marketing spend that has been deployed since the beginning of this year. Of course, our plan is to continue growing the marketing spend. And so we would expect the pipeline of new customers to also continue growing. And it's really nice that in the third quarter, we can see that spend coming to fruition in a very reportable invested customer type of way. But certainly within the background, we can see that the pipeline continues to grow and remain strong and therefore gives us also confidence in the 2026 spending plans as well.

Thank you. A question from Baran. Thank you, Baran. The US seems to be progressing well with the first brand campaign and transfer automation in place. Can you help us understand what early indicators you're seeing that give you confidence in the unit economics, particularly where the US customer acquisition costs and account sizes are trending in line or above UK levels?

It's a really great question around the unit economics. I can certainly share some of our thoughts and observations around that. I mean, I would first start with the customer behaviors, I suppose. So what we see in the US from a customer behavior perspective is very similar to what we see within the United Kingdom. from the perspective of sort of entering the pipeline, converting through the pipeline, the desire to have more control over retirement savings, that message resonates well. We can also see that mass market advertising works well. We have early indications from the brand campaign that we're definitely getting notice. People like the brand and there is increased as a result of that, which is very similar to the kind of experience that we've had in the UK over the years. I would say when thinking about the US unit economics, because of the structure of the US business, they are, of course, different. So, for example, on the marketing side, we have a strong partnership with State Street, whereby the marketing spend to date has been reimbursed entirely by them. And as a result of that, the concept of the cost per invested customer is somewhat less of a relevant concept than it is within the UK. As a result, we have been very focused on establishing initial brand awareness and growing trust in the PensionBee brand as much as we possibly can. We released some numbers in the second quarter around that, which showed that prompted brand awareness was at around 5% in the US. once the brand campaign completes in the US because it's still going on. We will, of course, measure again and probably share some more numbers with you. But, of course, cost per invested customer is a bit less of a concept at this stage within the U.S. The concept that we've been thinking about really centers around the match and the match program that we will be offering to customers to really support the growth of the next billion dollars worth of assets in the U.S., And that match will be a 1% match on completed rollovers, transfers and contributions. We think it makes sense to accelerate the growth of the US business. I'll give you a little bit of context in terms of some of those numbers. relative to the UK. In the UK, I think it took us about three years to get to the first 100 million pounds worth of AUA. And of course, obviously, in the US, we have some very big targets that we would like to accelerate through the match program. We believe that the payback and the return on the match is very compelling. And so we'll be releasing more details on that very soon, but that's certainly one of the ways to think about it. And so we would encourage you to focus on that. Account sizes is a very interesting concept as well. The US is obviously an enormous market of individual consumers and also assets. However, we know that US wealth is distributed very unequally. And so one of the more different dynamics within our US business compared to our UK business is the sort of range of account sizes that we attract. We certainly had, you know, kind of hundreds of accounts that are very small. And we've also had accounts that are very big, not only compared to the small accounts in the U.S., but also compared to our UK account sizes. And so we think it's really important for us to make sure that we're focusing the service in the U.S., in a way that attracts some of the larger account sizes in addition to the small ones. And so that is increasingly being reflected in our marketing approach as well. But overall, feeling very kind of positive around the US unit economics because of the partnership that we have here in the States, but also because of what we are seeing in terms of the underlying trends and behaviors and the types of customer accounts that we've been attracting.

Thanks, Remy. Thank you. We've got three questions from William. I know you've just spoken about the 1% match, but the first question he asked is, what does the 1% match mean for a US 401 customer as an offer proposition? I don't know if you have anything to add there.

Yeah, it simply means that for all completed rollovers, transfers and contributions, there will be a 1% match offering.

He then goes on to ask, are there any changes in flows per customer to discuss? Outflows per head seem slightly higher than last year's flows per new customer spiked in Q4. Why and might that happen again?

Yeah, I'm happy to take the flow question. So I think generally speaking, when we're talking about net flows, the consistency about the pension restore, about the predictability is also there. Because interestingly, when you look at the net flows and you look at actually the two constituents, which is gross outflows and gross inflows, they follow a very predictable pattern. So from an outflow perspective, over the last five years, we did have seen an outflow as a proportion of opening balances actually quite stable, which is good. And then from an inflow perspective, if you actually adjust for the age profile of customers acquired, it's again quite predictable and as expected. So for instance, when you look at gross inflows to the incoming pots for in a way where you look at net flows by new customers over the net new ICs for this year, you actually see that we have onboarded around the pot of 15 and a half thousand pounds, and the average age of the customers was around 39.5. So this compares this last year where we had 17.5, but we acquired older customers at 40 and a half. And two years ago, we had the incoming average product of 14.5 thousand pounds a day. average customer was in the early 39s. So actually, if you look at the age profile of the customers and look at the incoming pots, this is very consistent, actually. And again, it's underscoring the consistency of the model. There's another way you can look at it. When you look at the gross inflows of a marketing spend, It was around £100 of gross inflows over marketing. And that's again the same level that we have seen two years ago in 2023, where we acquired a customer cohort that had a similar age profile as this year. So this really suggests very strongly that from a flow perspective, it is also quite consistently predictable in line with historical trends as well.

That's great, thank you. And I think William's final question was what UK marketing spend is expected for Q4 and what is the outlook for 2026?

I'm happy to take this one as well. I think we have been quite clear from a strategic perspective that the UK is now in its profitable growth phase. So that means we scale the UK while remaining profitable. So for the last quarter of this year, that specifically means that in comparison to last year, where we had a little bit of a constraint around the profitability, we envisage to spend more than last year, where we spent in Q4 in the UK around £1.2 million. This year is a much larger number. However, still having the constraint around profitability as a requirement. And so this is also how we think about the same way next year. So next year, of course, the top line and the net revenue is increasing. So it gives more capacity to spend a higher budget in marketing, which is what we intend to do. But again, still retaining the profitability goal as an underpin. I hope that helps and answers the question.

Yes, thank you, Christoph. Got a couple of questions here around the US. If it's okay, I might put them together. Tong asks, do you plan on taking PensionBee national in the US? And then the other question is, what are your biggest lessons learned from the US entry so far? And how are they informing you on your next phase of scaling?

Great question. I mean, we are already operating at the national level. We have SEC registration, which permits us to operate federally. So that is already happening. Some of our advertising will, of course, especially where it has a physical element, be focused on metropolitan areas. And in particular, our billboards this time around are in New York, Chicago and Seattle. but certainly our digital advertising is going much broader and we see no reason to constrain ourselves to any particular area. So that is very much continuing. In terms of lessons learned, I would kind of refer back to my earlier comments about the size of different accounts. In the UK, there is a much narrower range of accounts, which reflects also income distributions within the UK. In the US, there is a much broader distribution of account sizes. So it's very common to, you know, kind of attract accounts that are substantially larger than what we would have seen in our UK business in the early days. And At the same time, it's very possible to attract accounts that have very little within them. And so that balancing act of making sure that we continue to serve everyone and focusing on the average goals that we have for the US, which is around the $50,000 mark, I think it has some interesting product implications for us because it does mean that we are focused on attracting slightly larger accounts than we may have been in the early days of the UK.

Great, thank you. A couple of questions from Tong, if I may. The first one is what is the financial impact in providing 1% matching on for 401ks and how will you fund this?

I'm happy to take this question. So obviously we have a very strong cash balance of 33 million pounds in the group. And so we are in a very strong position to actually scale the UK business and to answer your question, fund the 1% match as well. So to ensure delivery of the various targets. I hope that helps.

Thank you. And then the follow on there was, would you be able to explain why the outflow has increased by 27%? What was the main driver? Was it people transferring out or retirement? I don't know if you've got any colour you can add there.

I'm happy to take this one. As I alluded to a little bit earlier, I think a very good way of looking at this is as a proportion of opening balance. So we have seen historically that it's actually a proportion that has been remarkably constant. And to your question around the split between transfers out and drawdowns, they actually tend to be quite equally split, so 50-50.

Thank you. This is the final question as it stands, and it's from Jude at RBC. Thanks, Jude. And follow up question. Absolutely welcome. Thank you. It looks as though pensions again could be in focus ahead of the UK budget in November. Did you see any changes to customer behaviour as a result of the event last year? And do you expect to see it this year?

Well, certainly, I think it's been well publicised that tinkering with pensions and the prospect of pension tinkering in general can lead to consumers making decisions that they may not otherwise have wished to make. I certainly think withdrawals have been in the press quite a lot again. And so on the margin, it wouldn't be unreasonable to expect that some people who are nervous about you know, awaiting the budget could think about making withdrawals. Of course, with our average account sizes where they are, which is at around the £20,000 mark, it's unlikely that this would kind of impact us in any material way. But of course, it's something that we that we keep an eye on. We would prefer for that to be very limited, if not none in terms of pension tinkering. So, yes, we'll we'll keep an eye on it. But we think it's pretty marginal from our perspective.

Well, that's great, Jude. I hope that takes care of your question. There are no further questions at this point, Romy Christoph. So thank you once again to everybody for your engagement this afternoon. Romy Christoph, I know investor feedback will be particularly important to you, and I'll shortly redirect those on the call to give you their thoughts and expectations. But perhaps I could just ask you for a couple of closing comments, Romy.

Thank you. I think we've enjoyed the investor engagement that we've had on today's call. We look forward to speaking with many of you in the upcoming one-on-one sessions. I'm very happy to close out the third quarter. Thank you.

That's great. Romy, Christophe, thank you once again for updating investors. If I could please ask those on the call, not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. Only take a couple of moments to complete and I'm sure it'll be greatly valued by the company. On behalf of the management team of PensionBee, we'd like to thank you for attending today's presentation and good afternoon to you all.