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Welcome everyone to Scout24's Q2 and half-year 2022 earnings call. My name is Ursula Caret and I am Head of Investor Relations and Treasury at Scout24. As usual, we have Tobias Hartmann, our CEO, and Dirk Schmelzer, our CFO, on this call. Tobi will kick off the presentation and Dirk will dive deeper into our Q2 and H1 financial performance in detail. As always, we will conclude the call with a Q&A session. You can find today's presentation on our website under financial reports and presentations. There you can also find our half year 2022 report. If you are using the web link we provided beforehand, you can follow today's presentation live. This session will be recorded and a replay will be made available as quickly as possible after the event. Before I hand it over to Toby, allow me a few words on a personal note. As most of you already know, this will be my last earnings call at Scout24. I very much enjoyed working with all of you over the last three years and thank you for your trust and support. I am handing over the IR and Treasury Departments to a very skilled and experienced colleague, Philipp Lindvall, who will also keep his role of Head of Strategic Development and M&A. If he has not done so already, he will get in touch with you next week after his return from vacation. I am still available for you until the end of this week. And of course, also the IR team, Louis Johannwil and Alena Flemer will be there for you if you have any questions. Louis and Alena, thank you so much for your hard work and engagement in these volatile times. You are the best. And now let's move from the disclaimer page right to Toby's initial statement.

Thank you, Ursula, for your great support. We will definitely miss you. So welcome, everyone. Let's move directly to page three of our presentation. We held our CMD where we presented our next level strategy only nine months ago. At that time, none of us would have thought that our market environment would change so rapidly. As we have already shared in our recent ImmoScout24 research update Wohnbarometer in July, with rising interest rates and overall geopolitical and macro uncertainty, the dynamics of the German real estate market are changing. Of course, trends differ between city real estate and more rural areas, between new developments and existing objects, or between buy and rent. The more important implication for Scout24 is we are becoming even more relevant via the unmatched marketing power of our leading platform and the value add of our diversified product suite. As a result, our business model is highly resilient in a challenging macro environment and should continue to perform well. Our strong Q2 performance is a testament to this resilience and to the growth momentum of our next level strategy. As we have already pre-announced last week, we are raising our guidance for the full year 2022. We are very confident in our top line growth momentum and operating leverage driving ordinary operating EBITDA and cash flow. Dirk will explain our raised guidance in more detail. Let's just take a minute to explain what we mean by changing market arena, resilient business model and diversified product suite. On the left-hand side of page 4, we have summarized the key changes we are seeing in the German real estate market. While the market historically has proven resilient, we are seeing the following trends right now. Buyers are faced with increasing interest rates and higher mortgage scrutiny. While interest rates for a 10-year mortgage were at about 1.0 to 1.5% in the beginning of the year, they are now at about 3.2 to 3.6%. This is starting to translate into reduced demand for property purchases. For sellers, this translates into longer standing times and less interested parties in their properties for sale. According to our data intelligence, The demand for properties to sell decreased by 36% in Q2 2022, while the supply increased by 46% in Q2 2022. For agents, longer standing times of properties for sale and less demand translate into a need for increased marketing. Furthermore, quality leads are becoming ever more important. While we see decreasing demand for property purchases, we see increasing demand for rental properties and an increasing supply demand imbalance, i.e. a scarcity of supply. Our leading Value-Add product suite addresses these challenges. Let me give you some examples. Via TenantPlus, we provide the best visibility for rental seekers with regards to available supply. and we make it easier and more efficient for landlords to find the right tenant. Vermeeted.de facilitates the exchange between landlords and tenants and dealing with ancillary costs in an environment where energy costs are expected to double or even triple. Our agent premium products and membership additions ensure the right positioning and visibility of objects, hence add to the marketing power of the agent. while our seller lead products make the mandate acquisition more efficient. And last but not least, with increased pre-qualification and more complex advisory needs, our mortgage lead and advisory products become more relevant. In Q2, we have acquired a small advisory team with four FTEs and further 16 mortgage advisors, which is now part of Scout24, to underpin this enhanced strategy in the mortgage business. So, in summary, the market dynamics are changing. We are in a great position with our diversified product suite to capture increased demand from selected customer groups and thus drive attractive revenue growth. This should more than offset any potential softness in other areas going forward, which may arise due to changing markets. Page 5 shows you our strong performance in Q2. On group level, Q2 revenue totaled €109.7 million, a 14.4% year-on-year increase. Ordinary operating EBITDA of the group came out at 62.0 million euro representing a margin of 56.6% and a growth over Q2 2021 of 12.5%. Excluding completed M&A, the organic ordinary operating EBITDA came in at 62.5 million Euro at a margin of 57.4% and a growth of 13.3% over Q2 2021. In our professional segment, subscription revenue increased by 8.6% to 63.5 million Euro in Q2. This is a result of strong core membership growth, a dynamic seller leads business and solid professional customer growth of circa 2% to almost 21,000 in tandem with a 6.3% increase in ARPU. In our private segment, including Vermieter.de, subscription revenue increased by 58.8% to 14.8 million Euro. This was fueled in particular by significant new customer wins, especially for the tenant plus product, growing our number of private customers by 56.9% to 297,000. As of today, we have broken the 300,000 mark. Let me just take one minute to put this in perspective. This was a business invented by Scout24 in 2017, So within five years, we have created a greater than 70 million Euro business with great margins, all based on a truly unique product experience. This speaks to our ability to constantly identify new customer needs, innovate and adapt our product suite. Private ARPU increased by 1.2% to €16.6. The blended estimated customer lifetime value increased sequentially from Q1 by 2.3% to €112. In summary, we delivered a strong performance in Q2 across all metrics on group level and within our professional and private segments. Turning to page 6. Let us now take a look at where we stand on our targets for the five value drivers on the basis of the H1 financials. Our performance is a strong testament to the growth momentum of our next level strategy. We are firing on all five growth cylinders. Professional membership revenue has increased by 6.7% in H1 year on year. Note, this exceeds our mid-term 2026 target range of 4-6% CAGR. This is mainly the result of successful rate card upgrades and higher demand for visibility products in an environment which is starting to develop from a seller's to a buyer's market. We grew seller leads revenue by 31.6% compared to H1 2021. This is fully on track with our mid-term guidance of 30 to 40% annual growth on average until 2026. Compared to Q1, we scaled down the acquisition of leads in Q2 and funneled more leads into the Realtor Lead Engine product. Our mortgage business-related revenue increased by 21%, which compares to a 2026 guidance of 18 to 20% growth per year. This is again fully in line and I already explained what the drivers of this business currently are. On the private side, the private subscription revenue, including for me to DE grew by 66.9% with a healthy margin and significantly above midterm guidance of 26 to 28% average growth per annum. As I mentioned before, visibility of seekers and therefore our plus product suite becomes even more important in the current market environment. Also, the software solution for landlords from Vermieter.de is gaining relevance. We grew the number of registered units on the platform by 80%. We are on track to reach our goal of 4.5 million registered units by the end of 2026. Dirk will now provide more detail on our financial performance and group level and for each of the segments.

Thank you, Tobi, and welcome everyone. Also from my side, a big thank you to Ursula. Let's turn to slide seven, which shows the quarter two year-on-year revenue growth in our three segments and the respective EBITDA margins. The 9.6% revenue growth in the professional segment is based, as Toby has already mentioned, on a strong core membership business, a dynamic seller leads business, and an enhanced mortgage leads business. As the professional PPA business is gaining momentum in the current market environment, these revenues add to the segment revenue growth. Consequently, the ordinary operating EBITDA margin of the professional segment came in relatively strong at 61% despite this year's additional growth investments. The private segment showed a revenue growth of 28.4% in Q2. strongly backed by private subscription revenue, which grew by 58.8%, including for Miete.de. In private, we also experienced a revival of our PPA business, creating additional tailwinds. The ordinary operating EBITDA margin of the private segment has significantly increased to 52.2% in Q2 2022. This has mainly to do with a lower penetration of credit checks as part of a longer subscription term, whilst also accelerating the PPA business with longer standing times for listings. The media and other segment revenue increased by 13.2% in Q2 2022. This includes the ImmoScout Austria business, which grew strongly by 12.3%, as well as our CRM business FlowFact and PropStack, which grew by 11.8%. The third-party media business showed declining revenues. The ordinary operating EBITDA margin of the media and other segment fell by 3.4 percentage points to 35.2%. Let's turn to page 8 to dive a bit deeper into the professional segment. As already mentioned, with a strong core business and seller leads growth, subscription revenue increased by 8.6%. As we again managed to increase our number of customers, the Q2 professional APU increased at a slightly lower rate by 6.3% year-on-year, from €951 to €1011. In these times, our highly diversified revenue composition comes at a big advantage. With a stronger core business and in the context of the current market developments, we deliberately scaled down on lead acquisitions. Hence, the slowed seller-lease growth at 13.8%. This is in addition to the revival of the pay-per-add demand, adding momentum to the professional segment's EBITDA growth. Hence, despite additional growth investments, the ordinary operating EBITDA came in at 43.6 million Euro, a 3.6% increase compared to Q2 last year. This results in a margin of 61%. On page nine, let's take a closer look to the private segment. I already elaborated on the year-on-year increase of the private subscription revenue by 58.8% and a significant new customer addition in the second quarter of 2022. In July, we reached the 300,000 customer mark. Speaking of important milestones, the PPA business exceeded the 10 million euro revenue mark in Q2. increasing by 19.8% year-on-year. We reduced the business with third-party credit checks, leading to a decrease of 11.6% of the other revenue line. This, amongst others, had a positive effect on the ordinary operating EBITDA margin of the private segment. In absolute terms, the ordinary operating EBITDA grew strongly by 52.4% to €15.4 million in Q2 2022. This is mainly due to a more efficient plus product business, the revival of the high margin PPA business, and lower expenses for credit checks. The ordinary operating EBITDA margin came in at 52.2%, which is more than 8.2 percentage points higher than in Q2 2021. Turning to page 10, let us go through the main ordinary operating items. Own work capitalized increased by 7.4% to 7.2 million Euro in Q2 2022. This translates into a capitalization ratio of 6.6%, which is 0.4 percentage points lower than last year and brings us closer to our Q4 target of around 6%. Personal cost increased by 9.7%, mainly due to the integration of Formited DE employees and regular increases in wages. Marketing costs increased more slowly in Q2 than in Q1. Reason being that we spent less than planned on the acquisition of leads due to rising lead prices and the changing market conditions. This had an impact on the amount of growth investments we had planned for the value drivers this year. In Q1, these totalled €6.5 million versus €3.7 million in Q2. This has mainly to do with the flexibility we now have given our diversified business model in the current market environment. One important takeaway for you is that in the light of the changing German real estate markets, we will be very focused on return on invested marketing spend, which may result in mix and channel shifts. The year-on-year growth in IT cost of 28.4% to 5.4 million Euro results from the integration of Formited.de and increased AWS costs, which have been impacted by the Euro-US dollar exchange rate. Selling costs increased underproportionately due to the PLUS product revenues, mainly due to a lower amount of credit checks sold with PLUS subscriptions. Putting it all together, we get to a 12.5% higher ordinary operating EBITDA of €62 million in Q2 2022. The resulting margin is 56.6%. Let's turn to page 11, where you see the items below the ordinary operating EBITDA. First point to mention here, non-operating costs decreased by 58% to €2.6 million in Q2 2022. The decrease is mainly due to the lower share-based compensation and M&A-related expenses. The reported EBITDA increased at a higher rate than the ordinary operating EBITDA, coming out at €59.5 million in Q2 2022. 21.4% higher than the year before. Depreciation and amortization increased underproportionately due to the termination of the purchase price allocation amortization of the ImmoScout customer base. The financial result, however, increased with a negative net amount from minus 2 to minus 4.1 million Euro, which was driven by the unfavorable performance of our special fund investments due to the adverse global capital market environment. In June, in view of the upcoming share buybacks and the repayment of a 100 million term loan, we closed the special fund mandate and transferred the remaining liquidity into our current accounts. Since the closing of the sale of AutoScout24, the overall performance of the managed liquidity was at minus 0.6%, hence better than if we would have parked the fund in a cash account with negative interest charges. With these developments, the reported net income increased by 21.3% to €26.8 million in Q2. Due to the ongoing share buyback, the basic EPS increased by 36%, testament to our highly accretive capital allocation strategy. Due to the decreasing non-operating cost in Q2, the adjusted EPS increased by 24.3%. Before I turn to the next slide, let me summarize the main messages for today. As we are executing on our next level strategy with a very comprehensive product suite, we are generating attractive, sustainable growth momentum. Second, our core membership offering becomes more relevant in the current market environment. Third, we have an unmatched B2C offering. Lastly, based on half year one 2022 revenue growth with a favorable product and marketing mix, we are benefiting from increasing operating leverage. In the light of these developments, and as already pre-announced last week, we have raised our guidance for 2022. We are expecting Scout24 group revenues to increase by 13 to 15% year-on-year versus prior guidance of 11 to 12%. For Group Ordinary Operating EBDA, we expect 2022 growth of 10 to 12%, a significant increase versus the prior guidance of 6 to 8% year-on-year. Increasing our guidance for 2022, despite an overall challenging market environment, is a testament to the resilience of our business in combination with our next level strategy, translating into accelerating growth. With that, let's open the line for questions. We would appreciate if you could limit your questions to two per speaker. Operator, over to you.

Great. Good afternoon, everybody. Thank you for the question. I've got two. The first one is about the leads business, and you guys have touched on the reasons behind the slowdown in Q2, but perhaps you could give us a bit more about how you're thinking about those businesses into Q3 and Q4, perhaps talking a bit about the demand from agents, how much it's costing you to acquire traffic, and how much you're planning on spending behind those businesses into the second half of the year in the context of the broader markets. And then the second question is, I guess, a bigger picture question, but it's now been eight months since you did your CMD at the end of last year. And one of the promises in that CMD was to grow margins next year and accelerate EBITDA at a group level. How confident are you feeling about that as it stands today, kind of assuming that there's no big deterioration in the end market and the situation as is continues? Thank you.

Andrew, hi. This is Dirk.

I will start off answering the first question on lead business and then start off with a bigger picture and then leave some room for Toby to also chime in and give his perspective. So on the leads business, yes, you're right. What we need to keep in mind when we talk about the second quarter, this started in April and went down to June, which was the hot phase of, on the one hand, the Ukraine war, on the other hand, interest rate rises and microeconomic uncertainties. Against that background, we have taken a deliberate decision to cut back a little bit on transaction-based leads with our Immo-Verkauf business and put that into the lead engine, where we have roughly 5-6% of our overall agent base that is taking leads from us. And that was a deliberate decision because we felt a certain amount of uncertainty around what's happening over the years. Are we able to realize the revenues in this year? Are we able to realize them only next year? How secure are the transactions that we're giving directly to agents when sellers of real estate make up their mind and might not decide to sell at all? So that was basically a deliberate decision. We also cut down on overall marketing and sales costs. In order to cope with that, that had the effect that more than 45% of our overall traffic now was organic and only a smaller portion of, sorry, the other way around, 55% of our traffic was organic, and 45% was unorganic, where we came down from 61%. So, as you can see from my readings on the second quarter, I would sum it up to we've taken a deliberate decision. We're still very bullish and bought into the transaction business. We continue to believe in what we're doing on the real estate lead engine, and we are seeing first signs of hope and optimism around the development of the leads business for the remainder of the year. On a bigger picture perspective, you were asking about our margin development when we come into 23. I can only state that nine months down the road of our capital markets day, we've seen more promising signs in the market with regards to execution of our strategy than anything else, and I wouldn't think that we would have found anything that changes our mind with regards to growth rate in 2023. We are scaling up the business faster as we initially thought, and Q2 has shown that we are able to scale that business up at a very decent margin accretion. And therefore, we maintain optimistic about what's happening. And caveat certainly being that we have some time to issue our guidance for the next year, 2023. But at the moment, we don't see a reason to change anything.

Yeah, Andrew, this is Toby. Just to add on what Dirk stated with regards to your second question, when it comes to profitability, You see it's basically a function of three levers. We have the one part, which is obviously a revenue mix function. That is something that we control to a certain extent. I think you saw from this quarter that certainly this PPA business is something where we picked up some further scale, so that's good. So that's a trend that we believe will probably continue given a certain macroeconomic environment. The second piece is the investments that we already initiated and they're starting to pay off. And then the third one is that we are scaling within the organization and we are trying to really keep costs obviously under control, also knowing that there's uncertainty kind of ahead with. So all of these three factors, we are pleased with where we are and we are positive with regards to scaling profitability going forward.

That's helpful. And just to follow up on that first question, it sounds like IMOV account may be a little slow in terms of revenues that you recognize in Q3 and Q4 because it's taking longer for things to complete and you've cut back on new lead generation in Q2, but we should expect some improvement sequentially in the realtor lead engine. Is that a good characterization or not?

Andrew, that's an absolutely fair characterization. I was pointing to Q2 for one main reason. it was a period of huge uncertainty. I'm not saying that we have certainty in the business right now, but obviously home sellers had a huge amount of uncertainty. We see increased standing times, we see slightly sideward-moving transaction prices, and that created, of course, also an impact on the offer count. Now, early indications from the third quarter tell us that parts of those effects were just overstated and are coming back to usual and normal again. And we are waiting how they will finally come out. But as I said, the current point in time, we remain rather optimistic for the end and pessimistic. Thank you.

Thank you. We'll take our next question from Pete Kajala with Morgan Stanley.

Hey, yes, it's Pete from Morgan Stanley. Thanks for taking my questions. Two from me as well. Both of them on for me. So, You mentioned you had roughly 760,000 units at Q2 end. Can you give some kind of indication like what percentage of those is currently monetized? And the second question is that what type of landlord profile are you currently attracting? So the landlords that are paying for the product, Are they very large landlords? So do they have a higher than average amount of apartments, like 10 apartments or something? So any kind of color on that would be helpful. Thanks.

Yeah, Pete, you cited it correctly. We have been growing, I think, around 18% compared to Q1 on the units we are managing on Famiglia PE, which is, from our perspective, exactly on track where we want to be. The type of landlords we are attracting are rather smaller landlords that have two, three, four, five units than larger landlords. Larger landlords tend to rely on other solutions. But we are getting there, I think. Also, with regards to monetization, I said it in the Q1 call, for this year with Famiglia.de, our focus is not on full monetization of the asset. Our focus is on gaining market share in the landlord environment. And that's also in line with what we communicated at the capital market day. And we continue to execute on that strategy.

All right, thanks. And just a follow-up on what you said previously. Can you just repeat? So you mentioned the split between organic and inorganic traffic for leads. So can you repeat that a bit?

Yeah, absolutely. I outlined that we have had in the first quarter around 61% of traffic that we acquired inorganically, and that is going down to 45%. So we're coming down from roughly two-thirds unorganic traffic to below half of our traffic being unorganic.

All right, great. Yeah, thanks for that clarification. Yes, and Ursula, best of luck going forward. That's all from me. Thanks. Thanks, Pete.

Thank you. We'll take our next question from Christopher John with HSBC.

Yeah, perfect. Thanks, guys, for taking my questions. Two for me, please. So first, on the membership pricing environment, I think most of the increase we've seen this quarter is coming down from terms of service. sort of upgrades. Maybe you could give us a bit more color, if you can, on the composition of the ARPA growth, basically, and how we should think about pricing momentum with respect to rate cards. I think that could be interesting in the current inflationary environment. A second question related to the agent health. It's been a while since we at least have seen your view on average margins that your typical agent on the platform earns. Given that Prices seem to be at least not growing as much or going down slightly in some instances. With prices for the agents going up, maybe you could share a couple of views on where you see the health of the agent business currently versus, let's say, in the very near future. I think that would be interesting.

Okay. I started off, Chris, and then handed over to Toby. On the rate card question, we have been quite transparent on the rate card in the past with the distribution of our agents in the base image and acquisition edition. We continue to target a roughly bell-shaped curve along the base image and acquisition edition, which would lead us to around about 25% to 30% being in the acquisition edition. the moment, around 20% of our agents in that edition. The biggest chunk of our agents is in the image edition, and there is an amount of around 30% slightly less in the base edition. Now, that will change over the course of time. We remain targeted at getting around 25% to 30% of our agents into that edition. Biggest chunk of price development in the APU nonetheless came from membership price increases across the board that we did. And I think that should answer the question. And I hand over to Toby for the financial health of our real estate agent customers.

Chris, a few more comments. So we don't see an increased churn or anything on the agent side. despite obviously the rate card changes that we've implemented. So that obviously turns and points towards the health, the ongoing health of the agent's business. What we do see is that reach, audience, and branding for agents matters more than previously. So there's more pressure for agents to really work to sell the inventory that they're getting their hands around. And that hopefully will also put some pressure on the so-called gray market that we've talked about earlier in prior calls, where certain inventory doesn't even hit any portals or any web publications. So that will be pressured, which we believe will be a good thing for us in the medium term. So in summary, no major news around agent health. We do believe that the more professional agents will benefit Trump from the current business environment. It will put an utmost focus on driving reach and audience, which hopefully will be a great support for him. Thank you.

One follow-up, if I may, on the gray market transaction that you mentioned. You know, listings obviously have been, you know, or the year-on-year decline has been decelerating. Is there any sort of figure, I know we probably discussed the same question during or after Q1, any sort of updated view on how many more gray market listings are coming online now? Is there any sort of color you can give there, any estimate?

We don't have the details on the grain market, but what we do see is obviously sale listings are going up, and it shows that we are making up some ground compared to prior quarters. We also see that there's a focus more on rent. There's more demand for rent, because obviously some of the people who wanted to buy can no longer afford or are hesitant and now are starting to rent, so there's more pressure there. We do think that there will be a long-term trend on gray market publications and listings, but we have no certain data points that we can share at this point.

Okay, understood.

Thanks. Thank you. We'll take our next question from William Packer with BNP Paribas.

Hi there, and thanks for taking my questions too, please. So firstly, it was an impressive performance in the PPA segment across both private and professional, rebounding to growth after a sustained period of decline. Can you help us unpick for structural versus cyclical dynamics at play? How do you think about the long-term growth of those revenues? And then secondly, it would be helpful if we could talk through the defensiveness of the Scout model a little bit. So among global online classifieds in both the financial crisis and the COVID crisis, you're particularly defensive. And I suppose there's kind of two aspects to that. Firstly, do you think the level of property transactions will again prove defensive, even in this potentially quite tough macro backdrop driven by the gas price shock? And then secondly, has the diversification that you've pursued in recent quarters, which is clearly driving healthy growth, but it may be more cyclical. How should we think about, for example, private subscriptions or OTP revenue in a more challenging environment? Thanks.

Thanks Will.

I start off with the first part of your question with regard to PPA growth. So in both segments, PPA professional and private, we've seen, as you said, impressive growth rates in Q2 compared to Q1 on both ends, roughly 20%. We believe that this will continue following the change of the market environment. Within the PPA, we of course see different developments. Now on sale, we see growth rates of 60 to 70 in the private, up to 90% in Q2. On rent, we see only slight growth, and that has to do with the fact that following the interest rate changes, economic outlooks, the sentiment of the German buyers and potential buyers of real estate and tenants has changed a bit, and they are leaning towards being a tenant in the future. That's why the demand for rental objects remains very high. The supply continues to drop also being a result of the fact that a lot of people tend to stay within their house and not move anymore and therefore the biggest chunk of changes that we've seen in the PPA business was on the selling side, and that is structural, and that's why we believe it will continue. For the remainder, I hand over to Todi.

With regards to the business model, Will, we believe that we do have the advantage of having created this, what we call, ecosystem with different levers, and also the five value drivers that we've referred to, that we've presented during CMD, that No matter what happens, we will be able to participate, to drive, and to support both seekers and, on the other side, professional customers either way. And what that means is, what should you expect? We don't know exactly for the next whatever number of quarters how each of the value drivers will turn out. And we've mentioned and emphasized this in the past. During this call, everything is totally in line or exceeding our CAGR rates that we wanted to generate. There could be quarters where one or the other value driver might be off, but in summary, we feel very confident and we're trying to prove this by showing these numbers right now and the results that no matter what happens, whether it's higher interest rates, whether it's further pressure on the sale market, whether it's further pressure on the rental market, whether it's the pressure that the administration cannot come up with the new homes that they aimed to build with the 400,000 units, we will be able to support and play a more vital role in this market. And the reason for that is that seekers more and more flock towards, in the future, the leading portal and the leading partner who will give them advice and direction. And that's what we are seeing. Otherwise, we wouldn't have seen those growth rates despite the headwinds that we have. So in summary, I guess a long-winded answer is we're not certain about all the five value drivers going forward for each quarter, but we are very optimistic about hitting our goals and targets because we see that we are needed by seekers, by sellers, and by everyone in the marketplace. So that's why we think we are a diversified portfolio, a diversified product suite. And again, even if mortgage rates are increasing, That doesn't mean that the mortgage business is going down completely, because there will be new challenges. People need to refinance. People need to move out, and it'll create a huge pressure for someone to find a new home and will be able to help. So I guess that's why we feel very optimistic about the future.

Thanks, Tobias. And just to come back on the market cyclicality rather than Scout itself, is there any reason to think that in a potential macro slowdown that the German property market wouldn't continue to be relatively resilient versus other European markets in terms of transaction volumes?

Yeah, we think the market is. very resilient in Germany because, again, it goes back to the fundamentals of the German real estate market. We have only a 50% homeowner penetration right now, which is the lowest, among the lowest in Europe. And even by global standards, it's very low. The second thing is we do know that the topic around living, about your home, is the dominant topic, which is obviously not going to fade away and go away. gaining more importance as to other things that people have in their mind in Germany. It used to be cars. It used to be holidays. It used to be my insurance. It used to be my, you know, thinking about where I should go for holidays. But that has all been put aside, and the number one topic is home and living, and that's not going to change. So we don't think there's anything changing in the near medium term.

Many thanks. Thank you.

We'll take our next question from Lisa Yang with Goldman Sachs.

Good afternoon. Thanks for taking my question. The first one is on the membership price increase you mentioned earlier, which I think is quite a significant change versus, I think, your strategy in prior years. Do you think there's anything structural here, or is it more like a tactical price increase because the market was weakening Or do you think we could continue to see this level of regular membership price increase going forward as well? That's the first question. And secondly, I think you mentioned for the leads business, you're seeing higher leads prices. I'm just wondering, are you seeing any major change in the competitive landscape for leads? Or is the softness more market related? And similarly, are you seeing any major change in terms of the competitive landscape for residential agents and listings, or how competition is doing. Thank you.

Thanks. I'll kick us off with the results of the membership pricing.

I think we felt comfortable providing guidance in the past about our CAGR rates that we intended to generate. I think we've delivered. And then there was a question last quarter that said, why don't we take advantage of the inflationary environment and you could push harder on price increases? And we stated that we wouldn't push harder, but that it's probably obvious that it might be easier to execute because everyone is talking about higher pricing and inflationary costs and so forth. So, in summary, it means that this does not set the course for any change in our strategy with regards to membership pricing in the future. It's always a combination of a third of it being a price increase and two-thirds of it really being justified by more value that we bring to the membership. And that is our guidance that is the dominating guidance that we, how we run this business internally. With regards to the leads pricing and the competitive landscape, I think the broader question is how many leads does an environment take that we're currently experiencing? And how many leads do you need and how many leads do you as an agent or as a partner want to submit to and subscribe to if there's a certain level of uncertainty? Obviously, the answer is the higher the uncertainty, the more question marks around the pricing and the robustness of that business. On the other hand, it also means that a market player who is leading, like Imotkaut, should be able to draw more attention and maybe put more pressure on some other competitive players that have been out there. And yes, we do see both sides happening. There's more uncertainty on the one hand, which is driving probably here or there less demand than before. But on the other hand, there are some other market players which cannot uphold and maintain their position that we think we can take advantage. Now, what's the net of that? Again, We don't have a crystal ball for the next couple of quarters, but we're confident that we'll adjust our pricing dynamics according to what's happening in those two dimensions.

Can you repeat that, please?

We didn't get that question.

Sorry, I'm just wondering if you can also comment on any changes in the community landscape in the residential business, so for listings and agents.

There's nothing in particular that's not worthy to mention. Again, the health of the residential business or the agents is fine. There's no major change. Again, there's certainly for homeowners a certain question mark around especially in the upper premium segment, whether they put something up for sale or not, where it used to be in the past, here's what I put up for sale, and then the final price used to be maybe 5% or 6% above that one. It was an easy take. Now, you know, it's harder to sell, so they're pulling back and they're saying, if I'm not getting my price, I'm not putting it up for market. So those are some of the trends we're seeing, but again, nothing major happening or any major shakeup.

Great. Thank you.

Thank you.

We'll take our next question from Craig Abbott with Kepler Chevro.

Yeah. Hi. Good afternoon, everyone. First question was just in the private segment, and we actually saw the ARPU develop, turn up, actually, in the quarter. And I just wondered if we can now consider this to be the turning point already, a bit earlier than I think you were originally guiding us for, and how we might think about that in the coming quarters. And just to follow up on that, sticking with the private segment and your subscription products, if you could maybe just give us a little bit of feel from what you're seeing in terms of maybe some competing offerings from your competitors. And the second question is coming back to traffic development overall. I mean, you gave us a very nice breakdown into the composition of the traffic very much in favor of growth in the organic traffic. which, you know, obviously would be offsetting some of the still weak trends we see overall. But that's my question is the weak trends overall, the monthly sessions were weak in the quarter again, website users still declining, not being able to be offset by the growth in app users. I just wondered how you see traffic trends developing and if you have any comparison data with your peers, Imobed, and Klein and Saigon in regards to traffic development as well. Thank you.

Craig, thanks very much. I start off with your question on the private segment of ARPU development. As we have outlined at the capital market, we're optimizing customer lifetime value here, and we're still optimizing finishing the product with regards to average lifetime of our customers on the platform versus average revenue per user. And you were absolutely right. We have seen a slight increase here. I wouldn't guide you towards a turning point in the market where we are now starting to increase APU. We're still focusing on gaining additional customers. We're still focusing on increasing the value of the product, increasing the lifetime of the customer on the product, and that's going to be our core activity over the next quarters to come. If there might be a slight dip in the ARPU or a slight increase in the ARPU, we are not so much focused on that, to be honest. With regards to visit trends, what we have And I would once again like to remind you that we are talking about the second quarter here. Of course, a large part of activity on the Internet was people looking what's happening with regards to the war in the Ukraine, what impact does that have on me. People were researching about interest rate increases, microenvironment, and everything else. So I think that led their attention a bit away. from purchasing or renting a new apartment or house. Now, that has changed. We see the first signs of change in the comparison of numbers of listings, second quarter 2022 versus second quarter 2021. We only see a slight decline here. We see also a slight decline or better development, let me put it like that, in the unique monthly visitors on the app. And we see a slight decline on the web, but that's just basically from our perspective a substitution. We see more and more continued app users on the platform. We see an increase in app downloads. So I would think also when you look at sessions on the traffic perspective, it's quite healthy. And we draw the conclusion that we are obviously delivering the right thing for our customers, whether it be agent customers or private customers, or searchers of real estate. And if our competitors are doing the same, they might be similar successors to us, but we are not obsessed by the volume and what we see from our competitors, and we haven't seen, as Toby outlined earlier on, any significant changes in that, so we still believe we are the portal in Germany That is number one and the go-to portal for everything around the real estate.

Okay. Thank you very much.

Thank you. We'll take our next question from Nisla Nazar with Deutsche Bank.

Great. Thank you. I have two questions. The first is on the PPA business. Could you remind us again how you monetize this on the professional side and the private side? I remember you sort of launched the free listing period. Is that sort of still ongoing? Or are you monetizing these listings from day one? Some color there would be great. And also the margin profile of PPA versus the membership revenue versus seller leads. If you can just sort of give us some color on how those margins stack up, resulting in the overall 60% margin for professional revenue, that would be great. My second question is on the startup that you acquired. Could you give us a bit more color? Would this sort of business require additional investments? And what are you trying to achieve with the agents that you've sort of acquired? Some color there would be great. Thank you.

Okay, Nisa, thanks very much for your question. With regards to the first part of your question, I would once again point to what I've answered earlier on, the calls around the PPA business and its development. To start off with, on the private side, we have continued to do what we did over the past four to five quarters. No, I think it's already started in the second quarter of 2020, so over the past two years. We are still and continue to offer free listings to people privately selling or renting out their apartments or houses. And why we are seeing increases in revenue here is not the fact that we are offering it for free, It's simply the fact that we are offering additional service to those free subscribers when we are guiding them through the user funnel on the platform. And a lot of them decide in the end to issue a paid listing because that's much more successful for them. To give you an example, I think at the current point in time we are talking more than 30% of all demand from tenants to landlords, for example, that also issue free listings, comes from paid subscribers. That gives you a clear picture on the way we look at this and how we monetize the product. And therefore, PPA revenue will continue to increase on the private side, although we are issuing free listings to the customers. On the real estate agent side, PPA has a slightly lower revenue and it mainly comes from very small agents that didn't sign up to subscriptions with us but have now experienced that they are not able to market their real estate in the market in the changing market environment that we've seen without the help of the leading portal and that's exactly the reason why they turn to our platform but as I said it's smaller real estate agents, it's smaller assets that we are seeing through that, but in the end it's a very promising development and a testament to what we outlined at the Capital Markets Day. We have designed an ecosystem which allows us to perform in a seller's market as well as in a buyer's market. We have designed an ecosystem that allows us to perform in a landlord-driven market as well as in a tenant-driven market. And that's exactly the reason why I think Toby was quite optimistic about the development of the remainder of the year.

I think the second question was on the business model, right, on the recent acquisition of our company. Now, you asked about additional investments that might be required. I think there's no additional investments that are required, nothing beyond that we have already shared with you during prior calls, making good progress, integrating the platforms, the product, the listing flow, and we're starting to turn on the engine for more registered units, and then later on, as Dirk described, but not a priority for us right now, will be the monetization. So nothing beyond that, and it's progressing well.

Maybe to add one point to what Tobi just said, it's once again a testament to our strategy where we said, In a changing market environment where we see mortgage rates going up, the need of a home buyer to have more advice on its mortgage is increasing. And we are delivering the right team and the right product to help those mortgage buyers to fulfill their needs.

And that's the reason why we acquired the company. Understood. Thank you very much.

We'll take our next question from Sarah Simon with Barenburg.

Yes, hi. I've just got one question. So when you gave your guidance for 2022, you were talking about about 26 million of extra investment in lead generation and various other things. You obviously spent less in Q2 than in Q1. Do you have enough visibility to be able to say at the moment where you're going to fall in terms of that 26 number and how that might turn out for fall year 2022, because it clearly looks likely to be lower. Thanks.

Sarah, I'm not giving you a number, as you can imagine here. But as you've seen, the investment in the second quarter significantly went down to below $4 million that we invested on that. And given the guidance that we laid out, You can certainly imagine that our cost of growth are not where we expected them to be, and that's good news. Obviously, we can manage to grow the business with less investments, and that's why we are quite optimistic on Q3 and Q4 with regards to our margin profile and the need for investment. But we want to maintain flexibility. If there's opportunity in the market, then we're going to take it. But at the current point in time, we feel quite comfortable with the amount of investment we had in the second quarter, maybe put up a dip or more on it in the fourth quarter, but not the amounts we originally anticipated.

Okay, great. And sorry, one follow-on, which is, can you give us a sense for how the margins should phase in the back half of the year in terms of the difference between Q3 and Q4?

Well, you know from the past that Q4 is our highest margin quarter, and you also know from doing the math that in the second half of the year, we need to improve our margin profile, and that's about it. I think that should give you enough guidance for the remainder of the year.

Okay, thanks.

Okay, thank you all for listening in and actively participating. And from my side, thank you for great cooperation over the last three years. As I said in the beginning, I will still be there until the rest of the week. And next week, Philipp is going to be there for you and, of course, all of the IR team. So have a nice summer and hope to hear and see you somewhere else. Bye-bye.

Thank you very much. Bye, everybody. Thank you very much.