Trustpilot Group plc

Good morning, everyone. Thanks for joining us for Trustpilot's first half 2025 results. Hanno and I are looking forward to walking you through a very strong first half. I'd like to begin by sharing a few reflections on my first two years as CEO before Hanno covers our financial performance. To conclude, I'll update on progress against our strategy. I joined Trustpilot less than 10 months after the launch of ChatGPT So my two years here coincided precisely with the most important platform shift in the technology industry since the launch of the iPhone in 2007. During this time, many companies have been forced to pivot their strategy in response. By contrast, Trustpilot could in many ways have been designed for this moment. Our mission of Trustpilot Everywhere and our business model of SaaS not advertising means we help companies gather the feedback that's increasingly powering how large line language models view them Trustpilot's role is to collect feedback and then help people turn it into action, whether that's on or off our platform. Citations on ChatGPT that we measure through our server logs rose 246% in just three months from June to August. Trustpilot impressions on Google rose 80% year-on-year in H1, thanks to our frequent appearances in Gemini-powered AI overviews. All of that happened while traffic on our own platform continued to rise. This is clear evidence Trustpilot will be as important in the world of generative engine optimization or GEO as we already are in SEO. Beyond our lens, as agentic commerce takes off, we're well positioned to help AI agents listen before they act by being informed with genuine human experiences. With the launch of the TrustLayer API earlier this year, giving access to all 330 million reviews on Trustpilot, we're ready to do just that. So two years in, my key reflection is that in the age of AI, trust and Trustpilot is more important than ever. And so doubling down on our strategy is the right response for us to the AI moment. It's therefore a good time to remind ourselves what that strategy is. Trustpilot is the world's largest open customer feedback platform. We collect feedback and help people and businesses turn it into action. Being open means anyone can leave a review of any business with whom they've had a genuine experience. The feedback lives in public and is freely available for anyone to read. Our platform and software tools make the feedback useful and actionable for both consumers and businesses. Consumers make their voice heard and make more informed choices by learning from the experiences of others. Businesses pay for customer listening tools, brand rights and insight which help them build trust, grow and improve. Selling these tools to businesses gives us a SaaS business model with gross margins in excess of 80%. It's underpinned by network effects because the bigger the platform gets, the more useful it becomes for all participants. The result of being open is that we operate across verticals and geographies. That means our market opportunity is vast and I'll give you some more colour on this later. I know you've seen this before but I can't reiterate enough how powerful the growth flywheel and network effects are. The flywheel starts with people who rely on our platform to help them make choices and contribute around 200,000 new reviews every weekday. That motivates more businesses to engage with the platform, actively inviting their customers to share feedback and publicly showcasing Trustpilot in their marketing assets and on the web through what we call Trustboxes. That in turn leads to more people using and contributing to our platform. The bigger the platform becomes, the better it gets for everybody. This network effect combined with trust in the brand and our 330 million strong review history gives us a very real competitive note. To strengthen this further, we go deep into four focus markets, the UK, US, Germany and Italy. In H1 we delivered a 22% Euro in Euro increase in the number of reviews on the platform and in the last 12 months the number of Trustbox impressions increased 18% to 149 billion. In addition to Trustboxes our brand continues to get billions of impressions every month from appearances across offline and online channels including billboards, TV, search and of course increasingly large language models as I've just mentioned. It's this whole hive of activity on and around our platform rather than any one particular metric that gives Trustpilot so much influence and such rich potential for monetization. Since I joined, as you know, we focus more and more on large enterprise customers. A question I often get is what we do for these well-known businesses, many of whom already have strong brands and a strong reputation. The answer is best illustrated by how they use our platform to build trust, grow and then continually improve their businesses. So first they build trust. If you were listening to HSBC's UK earnings presentation back in July, you'll have heard them call out hitting four stars on Trustpilot. Their UK CEO told me that trust is the most important thing in banking. He's using Trustpilot to galvanize the entire team around customer service. because our platform provides a transparent independent measure of the trust they're earning every day having established that trust our customers then use it to grow their business by showcasing their trust score and customer reviews prominently on their website HSBC signals to the market that they're a great choice allowing them to win new business directly on the back of their reputation and on the slide you can see Trustpilot showcased on HSBC UK's homepage right now most successful businesses create a continuous feedback loop to improve their business for them Trustpilot isn't just a marketing tool it's a rich source of intelligence HSBC pinpoints recurring themes in customer feedback understands performance across different parts of the business and turns that intelligence into targeted operational improvements thanks to those improvements they recently celebrated hitting a trust score of 4.3 This is also where we capture feedback that other tools would never would. For example, if I walk into a bank branch, see a long line and walk straight out again, management would never have known about that lost opportunity without a platform like ours. That's a unique insight they can use to improve. This entire virtuous cycle is what differentiates Trustpilot from complementary systems like Net Promoter Score or MPS. The data from those traditional NPS tools lives behind a closed login, making it invisible to the public and to most employees. By contrast, Trustpilot is public facing, making it a powerful tool to motivate teams, signal to customers and learn from a distinctive source of feedback. The HSBC example is a great reminder for me of why every large organisation, not just in banking, should be using Trustpilot to build trust and understanding between their internal team and the people they are there to serve. Finally, you will have seen this morning that after nearly 10 successful years as CFO, Hanno Dam will be stepping down at some point next year. Hanno of course has been an exceptionally strong executive and board member, instrumental in shaping the company you see today. We're all immensely grateful to you. On a personal level Hanno has been incredibly supportive during my first two years here and continues to be a constant source of wisdom and occasional good humour. I look forward to working with Hanno well into 2026 while we conduct a thorough search. And with that, let me hand over to the man himself to take you through our first half performance.

Thank you. Thanks for the kind words. Yeah, it's been fun, fun two years already. Time flies. Good morning, everyone. Having heard Adrian reflect on the last two years, I can't help but reflect on my almost 10 years here. When I joined the business we did just a touch over 30 million in ARR and now we're rapidly approaching 300 million. It's been a really fantastic journey and so it's bittersweet to announce the start of an orderly succession today and I'm tremendously proud of what we've achieved here and I feel better than ever about the long-term prospect of Trustpilot. until I hand over to my successor at some point next year I remain highly focused on continuing to drive the business to further success so when we just drive into our h1 performance and outlook for the balance of the year record bookings significant margin expansion exceptional cash conversion define our strong first half bookings grew 17 percent in constant currency with excellent momentum in our focus markets our strategic emphasis on enterprise is working Over the past two years, we have delivered a 38% CAGR increase in businesses paying us over $20,000 annually. The strong top-line performance, combined with our focus on operational efficiency, translated into a 70% increase in adjusted EBITDA to $18 million, expanding our margins by 4 percentage points. And profit before tax was up 45%. Most importantly, this profitability is converting into cash, with 157% improvement in adjusted free cash flow to $15 million and 159% increased improvement in adjusted diluted free cash flow per share. Let me now go into each region in turn. In the UK, our most established market, the key metrics for which are on the bottom of the slide, bookings grew by 15% constant currency. You can see the strong performance is also reflected in our revenue and ARR growth. It demonstrates our strategy in action as we have deliberately redirected sales capacity towards larger accounts. Over the past two years, this has driven the enterprise share of bookings up four percentage points while new sales to small businesses have, as expected, grown more slowly. Regulation has increased with the implementation of the Digital Markets Competition and Consumers Act, DMCCA. We are strongly supportive of these regulations and others in the EU and the US and we continue to engage with regulators across these markets to uphold the review integrity. We want more flagship UK brands with Boots, Barclays and Pets at Home joining us in the period. Moving on to Europe and the rest of the world, this region covers our European markets as well as those across Asia. We're growing across all markets in the region, but within it, we're particularly focused on building our presence in our focus markets of Italy and Germany. Overall, we saw a strong bookings growth of 19% constant currency. Germany and Italy grew well ahead of the regional average, and encouragingly, over half of bookings in these markets are from larger enterprise customers. Notable customer wins in the regions include Engie, Lindt Chocolate, and ING Bank. North America delivered continuous bookings growth of 18%, a strong result on the top of an exceptional performance last year. The market opportunity here remains vast and we're having excellent momentum which was reflected in record new sales months after the period end in August actually. Unprompted brand awareness is up 53% and organic review volume is up 32% demonstrating that both sides of our flywheel are accelerating. We were delighted to welcome SurveyMonkey, Citizens Bank and Vimeo as customers during the period and some exciting other customers over the summer, reflecting continued momentum in the enterprise adoption. Looking at the two charts on this slide, you can see our strategy delivering both growth and profitability. The top bar chart shows bookings have grown from $98 million in H1 2023 to $140 million today. Crucially, as the chart at the bottom shows, this has been achieved while more than tripling our adjusted EBITDA and more than doubling the margin to 14.6%. We also maintained the 103% net dollar retention rate in the 12 months ended June 2025. This is a strong indicator of our existing customer satisfaction and our ability to expand revenue from within our base, a hallmark of a robust SaaS model. Crucially our profitability is directly converting into cash with adjusted free cash flow that is operating cash less leases and capex of 15 million dollars Nearly matching our entire 2024 cash generation and demonstrating the high quality of our earnings all this evidence is the inherent operating leverage in our SAS model in our disciplined approach to cost management and Looking in more detail at our retention rate, it's important to note that most of our revenue comes from existing customers, many of whom have been with us for years. Our high and resilient retention rates support our visibility into future bookings and revenue, underpinning our guidance. We aim to increase retention rates over time by both reducing gross churn and increasing net account expansion. In the first half of this year, we've increased net retention to 103% from 101% in the first half last year, in line with the year end 2024. We saw an improvement in our gross retention rate from 85% to 86%, highlighting our compelling value proposition and the return on investment that customers gain from our solutions. Net expansion is partially driven by the implementation of new packages last year and the launch of new product features in Q2 this year. The package migration annualized in Q2 in North America and in Q3 for the rest of the business, so we don't expect net retention rate to increase further this year. The cohort chart below visualizes our strong retention perfectly. You can see how our revenue base is stable and builds predictably year after year with each new cohort adding to our recurring revenue. This is the power of our SAF model in action. Let's take a look at the income statement from a management view down to adjusted EBITDA excluding stock-based comp and DNA. As always, an IFRS statement and reconciliations can be found in the appendix of this presentation. This slide provides more detail on the operating leverage we're delivering. We achieved a 4 percentage point improvement in our adjusted EBITDA margin in the half. Gross margin improved primarily due to the normalization of retention sales commissions following exceptional performance and associated higher payouts in North America last year. As you might expect, we have refined the commission model as a result and so commission has reverted more to historic levels as a share of revenue. Sales and marketing, which is the cost to acquire new customers, slightly increased as a share of revenue. The net benefit of capitalized sales commission was $0.7 million versus $2 million last year, so a headwind in the P&O. We had laid out the expected impact of capitalized sales commission when first introducing it in 2023, which is a headwind year over year. Obviously, this all washes out in the cash flow. Operating leverage this period came primarily from efficiencies in technology where we realized efficiency gains in content integrity The team delivered significant cost efficiencies through higher usage of AI resulting in simplified processes more accurate resolution time More accurate outcomes and reduced resolution times Adrian will take you through this in more detail later In line with other SAS businesses and the accounting standards, we capitalized $3.6 million of development spent in the first half, up 11% from $3.2 million last year, or about 2.9% of revenue, which is actually slightly lower than the prior year. We are ramping up product development in the second half, and for the full year anticipate that capitalized development spent will be slightly higher as a percentage of revenue than in the first half, but in line with our historic average of around 3%. Our increase in capitalized software development costs is a direct reflection of our product innovation strategy, which is driving customer retention. We continue to deliver leverage across G&A and see the business delivering adjusted EBDA margins over 30% in the long run. Moving down the P&L, let me touch briefly on the non-cash IFRS stock-based compensation charge of $6.3 million, which was up from 3.7 million in the same period last year. Let me give you a couple of reasons for that increase. The H1 figure was low as we saw high levels of forfeiture following management changes. Subsequent to the H1 grant date, we brought new executive team members on board and their grants are now reflected in the 2025 charge. In addition, this year we have introduced additional share-based incentives for our highest performing employees and made changes to executive numerations details of which are in the annual report. These are crucial to enable us to attract and retain talent. We also saw lower forfeiture rates due to the higher performance vesting on the back of a strong 2024 performance. And lastly, there was some of X impact given the stock based compensation charge as a sterling expense and the pound appreciated against the US dollar. Whilst the non-cash charge to the P&L was materially higher, I want to draw your attention to the actual impact on diluted shares outstanding. As you can see in the chart, forfeitures and our buyback program more than offset the shares issued, leading to a continued fall in our diluted share count, which was down 2% from the prior year. The reduction in diluted share count is helping drive the 159% increase in adjusted diluted free cash flow per share, on top of strong free cash flow growth. We anticipate a similar charge and dilution impact in the second half of the year, assuming no FX impact. Looking now at the other items below the line, finance income and expense, while not large in absolute terms, can have an outsized impact on EPS, and so I want to give some more clarity here. Finance income of $0.9 million is lower than last year. This is primarily related to income earned from money market funds, which are held at fair market value through the profit and loss. The reduction in income is due to a reduction in the amounts held in the funds compared to H-124. On the other side, the finance expense of $3 million is materially higher year on year, predominantly driven by exchange rate losses. These arise on the translation of our cash and intercompany balances from local currency into dollars at the period end. Even after these non-operating items, profit before tax was still up an impressive 45% year on year. Turning on tax. Last year, we recognized the UK tax losses, which led to a $5.1 million one-off tax credit in the P&L. As a result, the EPS was artificially increased. This year, the credit does not repeat, so whilst profit before tax is up, there is a 67% reduction in earnings per share. However, the clearest measure of underlying performance and the quality of our earnings is our cash generation. As you will see on the next slide, our conversion of profit to cash is exceptionally strong. Let's take a look at the movements in cash over the past six months. From 18 million of adjusted EBTA we actually generated 21.3 million dollars of adjusted operating cash flow in the period on the back of improved profitability and an improvement in working capital as we have incentivized annual rather than monthly customer payments in predominantly our new business activities. We invested 3.9 million dollars in the capex largely capitalized product development cost Taking into account principal elements of lease payments for our offices and cash tax of 0.4 million We generated adjusted free cash flow of fifteen point two million dollars This is a six percentage point improvement in the free cash flow margin on the back of the four percent improvement in adjusted EBTA margin our pro forma cash balance before equity transaction was eighty four point one million dollars and We spent 23.3 million dollars buying back 7 million shares or 1.7 percent of the shares outstanding on the 1st of January 2025 and had employee stock option exercise proceeds of 0.6 million dollars. Our strong cash generation and period and cash balances allow us to launch a further big beautiful buyback of 40 million dollars or 30 million pounds today. And again, you'll find a reconciliation slides and the appendix for adjusted EBITDA, EPS and adjusted free cash flow. As we have previously outlined, we have a consistent capital allocation framework and you can see how we are executing against this. Our first priority remains to invest in organic growth given the significant market opportunity. In the first half of this year, we invested an incremental $10 million in sales and marketing product and technology as we executed against our strategy. As you will hear, we introduced new products for the businesses and consumers and successfully implemented new systems that leverage AI and content integrity. We continue to consider where M&A could be used to accelerate growth. Any M&A is more likely to be an acquisition of product capabilities. Finally, given we're generating significant cash flow, we want to maintain an efficient balance sheet by returning excess capital to shareholders, and we return $23 million through a share buyback in the first half of the year. The March buyback completed in early September, and as I just mentioned, today we're announcing a further £30 million buyback program. So before I end, let me just talk briefly about the outlook for the balance of the year. Following our strong first half, trading has continued in line with our expectations, and so we maintain our guidance for high-teens constant currency revenue growth. Reflecting the operating leverage we delivered, we now expect the full-year adjusted EBTA margin to be in line with the 14.6% achieved in the first half. This is ahead of current consensus. And with that, I'll hand you back to Adrian for his strategic update.

Thank you. Listening to that, I'm reminded that a few days after joining the business in September 2023, we reported 16% bookings growth for H1 of that year. Our first half 2025, as you've just heard, bookings grew faster than that in a business that is now over 50% bigger in ARR terms. As I mentioned earlier, Our strategy is clear. We're the world's largest open customer feedback platform with a vision to become the universal symbol of trust. Trustpilot collects around 200,000 new reviews on a typical weekday. Our products help consumers and businesses turn that feedback into action. people help each other make the right choices businesses build trust grow and improve by listening to their customers by going deep and focus markets and verticals we maximize the inherent network effects of the platform our SAS business model reinforces this by delivering customer expansion through product innovation This is all underpinned by an ongoing focus on trust in the platform and none of this would be possible without great people and a strong collaborative culture. Taken together this all delivers efficient growth. Because trust matters to every business we often refer to the vast size of our addressable market. Let me now go into that in a bit more detail. We recently completed a bottom-up market analysis. This exercise confirms a serviceable addressable market or SAM of 18 billion dollars based on adoption of our existing products by businesses with websites in verticals where we already have customers in our four focus markets plus Denmark, France and the Netherlands. We've captured around 1% of this SAM so far. Beyond this, our expansion into additional geographies and verticals and adjacent areas like data solutions increases our total addressable market to an estimated $55 billion. This demonstrates the significant multi-year runway for growth ahead of us. Just to break that down further, the US is obviously our largest market opportunity, where today our total penetration into the SAM is around 0.5%. we've been focused on selling into high customer lifetime value sectors such as financial services and telecoms and as you can see from the chart this is working although even in these verticals there remains very substantial headroom for growth as we're only around 2% penetrated in the UK we're about 5% penetrated into the overall SAM and have even greater headroom of course in Germany and Italy are the two focus markets This year, 2025, we have three clear priorities driving enterprise growth, particularly in focused markets, delivering value through product innovation and strengthening trust in the age of AI. Let me take each of these in turn. Our focus on larger customers is delivering tangible results. To put it crudely, we have more customers paying us large amounts of money and fewer customers paying us small amounts of money. The number of customers paying between $10,000 and $20,000 per year has grown 29% a year over the last two years. Even more importantly, the number of businesses paying us over $20,000 per year which make up the largest share of total ARR has grown by 38% a year in the same period. This strategic shift towards larger customers improves our unit economics, enhances the quality of our earnings and of course accelerates the growth by real faster because big businesses invite and showcase at greater scale. Our enterprise strategy is succeeding across an extraordinary range of sectors. From global banks and airlines to retailers, healthcare and technology companies, the world's leading brands are choosing Trustpilot to build trust with their customers. This diversity, a direct consequence of our open platform, is a fantastic source of future growth and resilience and gives a unique data set on customer experiences right across the economies where we operate. product innovation to help consumers and businesses understand feedback and turn it into action is at the heart of our strategy for consumers earlier this year we launched AI review summaries these highlight key themes and quickly enable people to get a clear view of a business we also launched semantic natural language search and a new AI powered topics model to find the most relevant reviews on a page For businesses, we released six new product features in April which underpin the SaaS upgrade cycle and help support the strong net dollar retention rate of 103%, which Hanno mentioned earlier. These include review follow-up, allowing businesses to capture more detailed feedback as soon as the consumer has left a review. Businesses can tailor questions based on the star rating the consumer has submitted. We also introduced Visitor Insights, which provide businesses with deeper analytics on consumer behaviour on Trustpilot.com, such as which other business pages a consumer has visited. Finally, we launched the Trust Layer API, giving access to our entire corpus of global customer feedback. This is opening up entirely new use cases for our data in sectors like investment and consulting. major customers so far include a big four accountancy firm and a leading global strategy consultancy turning now to our third priority of 2025 trust in the age of ai as i said at the beginning large language models are amplifying Trustpilot feedback across new services in line with our mission of Trustpilot everywhere meaning reviews people write on Trustpilot are having more influence than ever before engagement with our platform is therefore more important than ever for businesses internally we're embedding AI across our operations to improve products drive efficiency and protect the integrity of our platform a prime example is in our contents integrity team that is the team that enforces our content guidelines across the platform where AI tools have produced better outcomes more quickly and at lower cost easy queries are dealt with rapidly using AI leaving humans to handle the more complex cases AI tools scan for guideline violations at the point of review submission and post submission they help assess any reviews that are flagged by business or consumer These changes have helped us reduce enforcement handling times by 63% resulting in improved customer sentiment score while cutting the cost per case by 59%. This is a great example of AI helping us to do something faster, better and cheaper to the benefit of everyone. We also continue to release upgraded AI models which identify patterns in metadata points to remove suspicious reviews. In the first half of 2025, we removed 8% of all submitted reviews, up slightly from 7% last year. So to summarise, our strategy is clear and it's delivering. Trustpilot is the world's largest open customer feedback platform, a position that is becoming more important and influential than ever in the age of AI. We're driving strong growth across our focus markets, working with some of the leading brands in the world with enterprise new business up 42% year on year. Our focus on product innovation is reinforcing our competitive moat with new features helping businesses and consumers turn feedback into action. And we're driving operating leverage, translating bookings growth into profitability and strong cash generation. Because of all that and the vast addressable market, we're confident we can deliver sustainable mid-teens growth and ongoing margin improvement. Now, Hannah and I will take your questions.