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Welcome everyone to Scout24 third quarter 2022 earnings call. My name is Filip Lindvall and I'm head of strategy and investor relations at Scout24. As you know, this is my first earnings call with Scout24. I've already had the pleasure to meet with most of you over the past months, but for those of you I have not yet met, I'm very much looking forward to meeting and engaging in dialogue. Back to the call now. As usual, we will 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 third quarter and nine months financial performance. As always, we will conclude the call with a Q&A session. We would kindly ask you to limit your questions to a maximum of two. You can find today's presentation on our website under financial reports and presentations. There, you can also find our nine months 2022 report. If you're using the web link we provided beforehand, you can follow today's presentation live. This session will be recorded and the replay will be made available as quickly as possible after the event. Please take note of the disclaimer on page two. Tobi, now over to you. Thank you, Philipp, and welcome everyone.

Let's move directly to page three of our presentation. Q3 was one of the strongest quarters ever in the history of Scout24 and it is a testament to the consistent execution of our strategy. Revenues grew by 18% year on year and we saw profits grow in line with revenue. We achieved all of this despite the challenging macro context, i.e. rising inflation, interest rates and energy costs. Proving the resilience of our business model and the structural growth we are able to capitalize on our moving to the next level strategy. The real estate market is currently in a transition phase, moving from a red hot seller's market to more of a buyer's market. As a result, marketing power and maximizing audience and reach is more important than ever for agents. Let me share our perspective on the current market environment. In terms of transactions, Over time, we have seen solid transaction volumes in Germany. Even during the financial crisis of 2008, the decline was on a moderate level. Also, remember that over 50% or possibly close to two-thirds of all transactions happen because of natural reasons, such as establishing a family, inheritance, death, divorce, etc. While sale transactions currently take longer time to close, we don't see any evidence of a malfunctioning real estate market in Germany. Price development. Based on our Wohnbarometer price data, which we, by the way, will make available in English in the near term, we are seeing sellers still holding on to high prices. This is holding back transaction volumes for the time being. We believe that efficient market dynamics will prevail and a new market price level will establish itself over the next quarters as direction on inflation and interest rates become clearer. Mortgage market. Volumes are down as transactions are down, but we believe the market will remain healthy, supported by transactions occurring for natural reasons. Banks are interested in doing business and are adapting its products to the new market with, for instance, lower amortization rates. Rent market. We see enhanced activity as a certain group of potential buyers are out of the market until sale prices come down a bit. We expect the rent market to remain very active due to lack of new supply at affordable rates coming into the market. So, to summarize, we are experiencing a real estate market which is in a transition phase, which we are able to capitalize on. Our professional and private subscription businesses are market leading platforms providing superior lead quality in the German market. We continue to support our agents with attractive seller leads. Given the flexibility of this offering, shifting from lead engine to commission split and vice versa, our exposure to transactional revenues through IV24 remains very low. Growth of our tenant plus product is fueled by the shift from buy to rent. Against this background of our strong growth momentum and our resilience to the macro environment, we are narrowing our fiscal year 2022 guidance towards the upper end. Dirk will provide further details on this, as well as provide you with an early look at fiscal year 2023 guidance. Now, let me move to page four. On group level, Q3 revenue total 114.7 million euros, a 17.7% year-on-year increase. Ordinary operating EBITDA of the group came out at 63.9 million euros, representing a margin of 55.7% and a growth over Q3 2021 of 17.3%. This is one of the strongest quarters ever in the history of Scout24. Our growth trajectory is the result of executing against our moving to the next level strategy. Our teams have worked hard to make this happen. We now have a much more diversified business model in place, which is well positioned to drive growth for multiple levers. A lot of work has gone into our professional membership business to structure memberships, develop dynamic pricing strategies and deploying a loyalty scheme. we have developed our unique tenant plus business, which provides diversification and addresses completely new revenue pools. Our next level business model is unique in European classifieds. Having multiple growth levers now firmly established to access new revenue pools will continue to translate into attractive growth and resilience. In our professional segment, Subscription revenue increased by 12% to 66.3 million euros in Q3. This is the result of strong core membership growth, a dynamic seller leads business and solid professional customer growth of more than 3% year on year. Customer growth has accelerated quarter on quarter to 21,234 customers in tandem with an 8.4% increase in ARPU. More than 300 customers signed up for a new IS24 membership in Q3 as they want to access the market-leading power of the IS24 platform. The corresponding subscription revenue growth has accelerated from 8.6% to 12%, complemented by a healthy growth in professional PPA. In our private segment, including Vermietet.de, subscription revenue increased by 58.2% to 15.4 million euros. This was fueled in particular by significant new customer wins, especially for the Tenant Plus product, growing our number of private customers by 43.1% to almost 316,000. Private ARPU increased by 10.5% to 16.3 euros. The blended estimated customer lifetime value increased sequentially from Q2 by 2.7% to 115 euros. Given the scarcity of rental objects in Germany and the value add this product offers, it continues to drive new customer wins. We are very proud of what our teams continue to deliver in this business. Turning to page five, let us now take a look at where we stand on our targets for the five value drivers on the basis of the Q3 financials. Our performance is a strong testament to the growth momentum even in the volatile market environment. Professional membership revenue has increased by 11.1% in Q3 year on year, a notable acceleration from Q2 2022 and significantly above our midterm 2026 target range of 4% to 6% CAGR. Our agent membership products are in high demand as they generate superior return on investment for real estate agents. We grew seller leads revenue by 17.5% compared to Q3 2021. While this is below our communicated target, it is still a healthy growth rate in this changed market environment. This business is of course somewhat impacted as agents are less willing to spend money on winning new mandates as their current pipeline might already be quite full. The benefit of our diversified business model, however, allows us to shift an increasing amount of high-quality leads to IV24 and executed via commission shares. We can also proactively scale back marketing spend on inorganic lead acquisition. IV24's mandate pipeline remains healthy. However, it is likely that average time to close a mandate will increase in the near term. Our mortgage business related revenue increased by 5.6%, reflecting a solid performance in an overall challenging quarter. The industry is in the process of adapting to the new market environment. And as you know, some market participants reported contracting volumes in Q3. In addition to selling leads, we continue to very selectively build mortgage advisory capabilities in an asset-light way, as we believe there will be continued demand for high-quality services in the future as well. As you would expect in the changing market environment from sale to rent and the sellers to a buyer's market, our private segment has once again delivered above expectations. Private subscription revenue, including Vermietet.de, grew by 58.2% with a healthy margin and again significantly above mid-term guidance of 26 to 28% average growth per annum. Our tenant plus products experienced strong demand as the rent market in Germany has become even more relevant as some potential buyers are temporary out of the market and switching to renting. Also, The software solution for landlords from Vermieter.de is gaining relevance. We grew the number of registered units on the platform by 103.1%, reaching almost 900,000 units. On track to reach our goal of 4.5 million registered units by the end of 2026. Now turning to page six. I would like to further elaborate on the positioning of Scout24 in a challenging macro context. While the real estate market is in a transition phase, our business is very well placed to generate sustained growth in this new normal. Why is that? Our resilience is based on the following pillars. First, our professional membership business is essential for agents. marketing power becomes more crucial to achieve good prices in these markets. Therefore, we are also seeing accelerated growth in number of agents joining our platform. Second, diversification. Our private consumer subscriptions are largely insulated from the state of the sale market as the focus is on the rental business. In terms of demand, there's a clear shift from buy to rent. Third, Our revenue exposure to transactions is less than 3% of 9-month 2022 revenues, as most of our revenue is recurring subscription revenue either from agents or plus subscribers. We are certainly not dependent on short-term transaction volumes. Fourth, selling mortgage leads is temporarily softer, but we can channel an increasing number of leads to our mortgage brokers. As we are currently only addressing a very small chunk of the market, we see room to grow. Fifth, lastly, advertising revenues are accounting for a minimal share of our total revenues. To conclude, housing remains to be one of the dominant issues for residents and households in Germany. And we are the leading household brand when it comes to helping find and manage a home. Dirk will now provide more detail on our financial performance on group level and for each of the segments.

Thank you, Tobi, and welcome everyone. On slide seven, you can see the Q2 year-on-year revenue growth in our three segments and respective EBITDA margins. The 13% revenue growth in the professional segment is based, as Tobi has already mentioned, on a strong core membership business and dynamic seller leads business. As the professional PPA business is gaining momentum in the current market environment, these revenues add to the segment growth. Consequently, the ordinary operating EBITDA margin of the professional segment came in relatively strong at 60.2% despite this year's additional growth investments. The private segment showed a revenue growth of 34.2% in Q3, strongly backed by private subscription revenue, which grew by 58.2%, including Vermieter.de. In private, we also experienced continued strong growth in our PPA business, creating additional tailwinds. The ordinary operating EBITDA margin of the private segment has significantly increased to 51.3% in Q3 2022. This has mainly to do with the 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 7.5% in Q3 2022. This includes the ImmoScout24 Austria business, which grew strongly by 16.4%. In our CRM businesses, we observe a shift from FlowFact to PropStack, reflecting our sales approach to focus on standardized and integrated product and feature sets. The ordinary operating EBITDA margin of the media and other segment grew by 1.9 percentage points to 33.3%. 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 12%. We managed to increase our number of customers again. Q3 Professional APU increased 8.4% year-on-year from €959 to €1040, reflecting dynamic pricing and mixed effect of new customers. 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 seller leads growth was at 17.5%. This, in addition to the revival of paper at demand, added momentum to the professional segments EBITDA growth. Hence, despite additional growth investments, the ordinary operating EBITDA came in at 44.8 million euros, a 6.9% increase compared to Q3 last year. This results in a margin of 60.2%. On page 9, let's take a closer look at the private segment. I already elaborated on the year-on-year increase of the private subscription revenue by 58.2% and the significant new customer additions in the third quarter of 2022. Revenue growth and net new customer wins continue to be fueled by the hot rental market. Speaking of important milestones, The PPA business exceeded again the €10 million revenue mark in Q3, increasing by 35.8% year on year. We reduced the business with third-party credit checks, leading to a decrease of 13.1% 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 61.8% to 16.2 million euros in Q3 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 51.3%, which is more than 8.8 percentage points higher than in Q3 2021. Turning to page 10, let us go through the main ordinary operating items. Own work capitalized increased by 1% to 7.3 million euros in Q3 2022. This translates into a capitalization ratio of 6.3%, which is 1.1 percentage point lower than last year and brings us close to our Q4 target of around 6%. Personal cost increased by 15.9%, mainly due to the integration of Farmita DE employees and regular increases in wages. Marketing costs increased more slowly in Q3 than in Q2. Reason being that we spend less than planned on the acquisition of leads due to rising lead prices and the changing market conditions. This has an impact on the amount of growth investments we had planned for the value drivers this year. Over the year, these investments slowed down adapting to the current market environment from 6.5 million euros in Q1, 3.7 million euros in Q2, going down to 3.4 million euros in Q3. This is mainly to do with the flexibility we now have given our diversified business model and the current market environment. One important takeaway for you is that in the light of 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 costs of 13.8% to 5.3 million euros results from the integration of Vermieter.de and increased AWS costs, which have been impacted by the Euro-US dollar exchange rate. Selling costs increased under proportionately to the plus product revenues, mainly due to a lower amount of credit checks sold with the plus subscriptions. Putting all together, we get to a 17.3% higher ordinary operating EBITDA of 63.9 million euros in Q3 2022. The resulting margin is 55.7%. Let's turn to slide 11. Combining our ability to strategically steer investments and increase efficiencies within our operations, we were able to close the gap over the year between revenue growth to ordinary operating EBITDA growth, as both are now at 17 to 18% growth level in Q3. As we have completed most of the growth investments for our moving to the next level strategy, you can also see at the bottom of the page that the gap to our 2021 margin has now closed. Importantly, we now have the platform in place to generate meaningful operating leverage. That is, increasing our EBITDA margin and cash generation via revenues, growing significantly stronger than our fixed cost base. Let's turn to page 12, where you see the items below the ordinary operating EBITDA. Non-operating costs increased to €10.2 million in Q3 2022. The increase is mainly due to provisions for higher share-based compensation. Therefore, the reported EBITDA increased at a lower rate than the ordinary operating EBITDA, coming out at 53.8 million euros in Q3 2022. 3.2% higher than in Q3 2021. Depreciation and amortization decreased by 44.1% to 8.3 million euros. due to the termination of the purchase price allocation amortization of the ImmoScout24 customer base. The financial result, however, is not impacted anymore by the performance of the managed liquidity. For Q3 2022, the financial result turned positive to €0.3 million. With these developments, the reported net income increased by 36.6% to €32.7 million in Q3. Due to the ongoing share buybacks, the basic EPS increased by 47.7%, testament to our highly accretive capital allocation strategy. The adjusted EPS increased at a slightly lower pace with 31.5%. Let's turn to page 13, where I want to give you an update on the capital allocation. Since the carve-out of AutoScout, we returned 1.9 billion euros to our shareholders, which is 67% of the proceeds. Taking our debt repayment into account, we already reallocated about 90% of the 2.8 billion euros. Via share buybacks, we redeemed in total about 25.5 million shares. In the currently ongoing share buyback program, we have bought back shares in the amount of 213 million euros as end of September 2022. Now turning to page 14 and full year 2022 guidance. Based on the strong performance for the first nine months and the momentum we are seeing in the business, we are pleased to narrow our guidance for the full year 2022 on revenue to 14 to 15% growth and 11 to 12% for ordinary operating EBITDA growth. Furthermore, I would like to reiterate that we are 100% committed to our capital markets date targets from December 2021. also going into full year 2023. Specifically, based on what we are seeing today, this means we are confirming at least 12% revenue growth and 13% ordinary operating EBITDA growth for next year. Given our outperformance in the current fiscal year versus the 2021 CMD targets, growth rates for the next year will come in on a higher nominal base. As such, we are currently running ahead of the CMD CAGRs which reflects focused execution of our strategy. Early confirmation of financial year 2023 growth rates represents the confidence we have in our ability to navigate the new market environment with our diversified business model. 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.

Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question comes from the line of Markus Diebel with JP Morgan. Please go ahead.

Hi, everyone. Two questions from my side. I think that the comments on the developments in the German housing markets are clearly very helpful. So thank you very much for this. I think one area that is a concern for some investors is if the housing market gets tighter, that at the end of the day, that might result in agents leaving the market. If you can tell us a little bit more what kind of your experts internally are thinking about that, what is kind of like a base case scenario from what you can see on specifically that topic. The second question is about the 2023 guidance. So thanks for reiterating the 12% growth and revenues next year. At the Capital Markets Day, you are guiding for 13 to 15% growth in EBITDA. Your comment today, I just want to get it straight, is that you said you achieve at least 13%, or do you stick to 13% to 15%? How should I read this? Apologies to splitting hair here, but the markets are always interested in this. So if you can just comment on if the full kind of like old EBITDA guidance for 2013 to 15% still holds, or if you believe to end in the end up at the lower end of the range. If you can just give a specific comment on this. Thank you.

Hi, Markus. Thank you. This is Toby. I'll start with the first question with regards to the agent health and the agent environment. We do believe that agents are faring quite well, and they're also going to be able to keep up with that. And there's a couple of structural reasons for that, given the German real estate market. Just to name a few, the real estate prices are still at very high levels and also historically seen at pretty high levels. So that means if you translate the 4 to 7% commission rate that agents are taking, it means that there's a very healthy transaction sticker for each agent for each transaction. Another point we'd like to mention is structurally, it's not going to change that there's a large share, namely over 65% of all transactions that are driven by natural reasons, such as death, divorce, changes in your family status, and things like that. And then lastly, which is part of our in the headroom we have to grow is that, as you know, if you do the comparison, the agents spend on Inward Scout 24 as percent of their total cost base is still fairly low. And this is also thanks to the strategy that we've chosen in the past because we didn't overstretch it with regard to pricing. So thank you with that. I'll hand it over to Dirk for your second question.

Hi, Markus. Yes, I can confirm that the ordinary EBITDA growth rate will be at least 13% for 2023. How do we back that? First of all, in my speech, I was elaborating on the amount of investment costs that were actually going down from quarter one to quarter three. And as you could see on the graph that we displayed on page 11, you also see that operating leverage is increasing as we speak. And that makes us pretty confident to deliver at least 13% next year.

Perfect. That's clear. Just to follow up on Toby, so you basically, from your comments, Kind of like what is the best case? Do you think the number of agents on the platform will be flattish or not down at all or marginally? If you can just give us an idea where you think that this number specifically might end up from your best guess as of today.

Marcus, we think right now we should assume they stay flattish, around flattish. I think we've seen some growth in the past, which is great. But I wouldn't count on a continued growth like that, even though it might be a small growth. Hope this is helpful. Yeah, thank you very much. Welcome.

The next question comes from the line of Lisa Young from Goldman Sachs. Please go ahead.

Good afternoon. So the first question is on your revenue growth target for next year, so the 12%. What gives you the confidence you will be able to sustain that growth momentum next year? And what do you think are the main drivers? And I'm asking given, obviously, we're seeing the mortgage and the leads business slowing down. They're probably running below your midterm targets. I think PPA, the 40% growth we're seeing, probably is not sustainable. So doesn't this mean that you will have to continue to raise prices quite aggressively in the core membership areas? segments in order to be able to grow that much. So any thoughts on, especially on the pricing strategy for next year will be helpful. And the second question is on the margin. So I think you understand you're very comfortable with improved margin next year. So I'm just wondering why don't you think you will be able to already grow margin in Q4? I think your guidance for the free implies flat to slightly down in Q4. And given the reduced level investments, I'm just wondering why margin should not already start to improve from this quarter. Thank you.

Thanks, Lisa. I think I start off with the first piece on our revenue growth target. And forgive me if that's a bit of a longer answer, but I think what you could see over the first three quarters of this year was that we continue to deliver our growth based on the value drivers we outlined at the capital market stage. And now let me briefly go through them. In the core business, which is number of agents, alpha growth, et cetera, we should do very well, given that marketing power is needed to create buyer leads by all market participants, right? That is private and professional. For example, also larger real estate agents will need marketing power to create buyer leads. And we are the number one platform in Germany, and we are the go-to place to create those leads. Secondly, in times of moving prices for real estate moving sideways, we expect agents to look for more volume and hence increased competition for seller leads. We see ourselves as a net beneficiary of that. So improved demand for seller leads, which then should be benefiting our realtor lead engine business. Then what we see in the market is a shift from buy to rent. That continued shift to rent will drive our tenant plus offering. And lastly, in mortgage, financing will be more tailor-made to those that are still considering to buy. That is helping our partner brokers, also in this business, and we are the number one platform in Germany creating those leads. So that would give us additional tailwinds to fuel that growth in that area. I think at this point in time, this should give you enough transparency on the growth drivers we've seen for 2023. And we're going ahead with that. Lastly, on margin, I can stick to the comment that I made to Markus. I think you will see us coming out with a very healthy margin in Q4. You have seen our operating leverage kicking in. And on one commentary on the Q4 growth, if you look into 2021 numbers, what you probably see is that we grew the business by 12% versus a nine-month 2021 growth of 9.4%. So accelerating growth in Q4 is a bit more challenging than it has been in Q1 and Q2. But as I said, overall, the business will deliver very healthy growth on both revenue and margin for the full year 2022. And as I said, we are pretty optimistic for 2023. Thank you.

Thank you very much. Can I just follow up on the first question, your intentions on prices? Should we expect like, you know, similar price rise to what you've done in 2022?

I mean, Lisa, it's obvious. I mentioned upper growth and we are living in times of inflation and we are living in times of rising costs. And that will also have an impact on our agent base. So, yes, we are looking at upper growth for the next year as well.

OK, thank you.

The next question comes from the line of Sarah Simon with Barenberg. Please go ahead.

Yes. Hi, I've got two questions. First one was, can you give us an update? You'd originally said you were going to spend 26 million euros, I think, for sort of total investment spend this year. Where do you think that number is going to ultimately drop out for the year? And then I was a bit confused. You were talking about less shufa, less standalone shufa. Is that because it's been bundled into 10+, or is it some other explanation? And why did it have positive implications for the margin?

Sarah, thank you very much. As I said in the beginning, growth investment in the first quarter has been 6.5 million, going down to 3.7 and then 3.4 consecutively. So we're talking about 13 to 14 million, which is already spent. And if you look at the Q4, I don't think that we will go significantly beyond 18 million in our overall spend here. So this is where it will end. Supposedly, this figure is going down even further in Q4, roughly to 3 to 4 million. And that is a positive surprise for us as well, as it has been from the first quarter onwards. What we see is that the strength of our brand, the strength of the platform drives growth without investing too much into performance and affiliate marketing. So that is my answer to the first part of your question. And the second part of your question regarding Shufa has simply to do with the fact that we are putting more and more of our customers, of our private customers into the subscription piece. And here we offer them, depending on the length of the subscription, to get one, two, or three Schufa credit checks in the time of their subscription. Now, what we experience is that this amount is significantly lower than originally anticipated. So two effects. First of all, shifting from one-time Schufa revenues to subscription revenues. And secondly, within the subscription, lower demand for SUFA gives us that tailwind.

Okay, very clear. Thanks a lot.

The next question comes from the line of Will Parker with exam DMP Paribas. Please go ahead.

Hi there. Thanks for taking my questions. Two from me, please. Firstly, just following up on the margin question as we head into next year. So in Q3 2022, we had a pretty favourable mix of growth, but the operating leverage was limited. As we head into next year, we're going to have some operating leverage. Can you just help us understand precisely what's going to drive that? I suppose one headwind is going to be, I would imagine, PPA growth will slow on the tough comps. Is it as simple as there's underlying operating leverage in the business right now, but you're investing and those investments are going away? Or have I misunderstood? And then could you just remind us of your cash allocation policies for the year ahead on the balance between returns, acquisitions, et cetera? Thank you.

Absolutely, we'll do. Well, as you are probably aware, the growth in PPA does not necessarily provide or need any marketing spend on our end. So that's rather a margin improvement than anything else. And if you take a look at page 10 and compare basically the nine month growth versus the quarter three growth on marketing costs, on IT costs, on selling costs and other operating costs, you can see that we are decelerating on most of these items. Also on personal cost, we will be decelerating in 2023 versus 2022 as the cost of acquisition of Famita DE will then be baked into the previous year performance comparison. So I think these are the main sources of operating leverage that you will see continues going forward. So I think that gives us enough confidence to guys for an improve in margin for 2023. sorry the second question on capital allocation sorry I skipped that well I mean we are around 70 to 75 percent through with our 350 million share buyback program we estimate that this is latest in q1 going to be finished and then we will educate the market on additional share buybacks as you know we are a highly cash generating business and We have basically guided a zero, around zero leverage policy. This will give us enough headroom, together with the agreements we have in place with our existing banking consortium, to look for another buyback in 2023. But we will educate you early 2023 when we have more detailed plans around that.

Thanks for the call. I appreciate it.

The next question comes from the line of Marius Fuhrberg with Baerbock Research. Please go ahead.

Yeah, hi. Thanks for taking my question. Also two from my side. Firstly, can you elaborate a little bit on the average standing time of the listings that you currently observe and how this developed just recently and also maybe on the prices on the listings per square meter? You mentioned that sellers tend to remain on high prices, but can you give a little bit more color on that? And the second question also with regards to your 2023 growth targets. I mean, you mentioned that you observed a shift from the buyer to the rental market Also, coming from the mortgage market, which is down quite significantly in Q3, I would assume that in this current market situation, we see significantly fewer transactions than previous quarters, obviously. And given that the interest environment is set to increase further, and sellers tend to remain with high prices, this situation is probably not to relax for the next couple of months. In this situation, this should also lead to a declining revenue basis for the agents, as obviously buying an object brings more money for the agent. Don't you fear that in this market environment, agents might cut their subscriptions to a to a low package or also maybe renegotiate prices to the lower end?

Hi, Meir. This is Toby. Thank you. Maybe let me start with your rather broader question around the environment. I think we talked on this call about the confidence we have about the agents given the structure of P and L drivers for the agent's business. We've also seen historically that transactions have not really come down significantly, so we have no reason to believe that transactions will come down significantly. Again, close to 70% are driven by natural causes, so that's pretty much our own block. And then thirdly, we do have as a leading player out there, very comprehensive product portfolio. So we can shift gears back and forth between sales and rent. And we are starting to monetize also on the rental part, more and more going forward, having direct access to consumers and throughout plus product. So to sum it all up, we're rather confident. That's why we also gave an outlook in terms of guidance for first year. And we're optimistic. Dirk, you want to take the other questions?

Yeah, Mario, thanks for your question on the transaction time at the standing times on our platform. We have seen that standing times have increased around 20 to 25% over the last quarter. And that has to do mainly with the fact that real estate prices haven't really come down. If you look at our latest research that we offered, there's only two areas where prices have significantly come down. And that is existing apartments in Munich and Stuttgart area. The rest still shows a slightly improving prices on new builds. So the development also in a very difficult quarter, and I 100% agree with you, shows that obviously the market is continuing very much on what we have seen. the question remains what is happening once this increased volatility that we're seeing. So standing times, transactions going up and down, mortgage rates going up and down. When this disappears, when a bit more security comes into the market, as Toby outlined, we're deeply convinced that this will help our business model and that transactions will return in the market. And on our business models, I outlined on an earlier question, On the realtor lead engine, if you are a real estate agent, what is your biggest problem? The biggest problem will remain to get the next lead if transactions are going down. And that provides room for growth on our platform. What is your biggest problem once you have the lead? The biggest problem is to get a buyer. And that creates significant room for growth on our platform in order to get buyer leads for that because we are the platform delivering the most valuable buyer leads. So all in all, even if I sum it up and look at a lot of your hypotheses, it brings me to the conclusion that it's not necessarily to the disadvantage, but rather to the benefit of the number one platform for real estate in Germany.

Okay, thank you very much.

The next question comes from the line of Pete Veiko Kujala with Morgan Stanley. Please go ahead.

Hey, thanks for taking my questions too from me. So a little bit on 2022 still and Q4, I think the guidance, the upper range of the 2022 guidance implies like a deceleration on both revenue and EBITDA growth. And you mentioned there the tough comps, but is that like the only rationale for deceleration or are you seeing something

already that kind of uh makes you want to guide for a deceleration also in the kind of higher end of the range both ranges that was only one question pete and thanks for that and no no we are not seeing that uh as i said it's tougher comp versus q4 2021 apart from that we see the business developing absolutely according to our strategy And maybe one thing which I would add to that is that what you see usually, and that doesn't help you with comps, I get that. But what you usually see is that transactions in November and December of any given year are lower. And also relocations in the rental business are declining. But apart from that, there is no structural reason why we should see any significant changes in Q4.

Okay, great. Thanks. And then the second question relating to the professional segment and the kind of cost development there. So what are the main cost drivers in professional for 2023? Is it like the variable cost? Is that mostly coming from leads or how should we think about the professional margin?

Absolutely. That's mainly lead cost. And what you have seen and what I've outlined on the previous question is that those lead costs have developed to a lesser extent than we expected in 2021, planning for 2022. And that has to do with the fact that our platform has the ability to create a lot of organic and zero-based leads. So the necessity to buy additional leads for our platform has decreased, and we can do that on a very opportunistic basis. And please keep in mind that we outlined at the Capital Markets Day 2022 will be a year of investment. And yes, we invested in the platform. But we also said that 2023 will be a year of operating leverage. And yes, we will show operating leverage in 2023 going forward, especially for that reason. Look at the development of our marketing spend in 2022. You're not going to see marketing spend in 2023 going up by 40% as we've seen that in the first nine months of this year. So that allows us and gives us significant room for margin improvement across all segments.

That's very clear. Thanks a lot. Thank you.

The next question comes from the line of Joe Barnett-Lam with Credit Suisse. Please go ahead.

Excellent. Thank you very much. Just two very quick ones from me. First one, just harking back to the question before with regards to the shift in blend towards organic leads from inorganic leads. Are you able to quantify that for us? It'd be helpful to know how much it has changed. And then secondly, I think you referenced alongside dynamic pricing that blend had aided R2 in professional. I'd have thought that if you had higher membership, Blend would have been the headwind as you got more smaller agents as you grew the agency base. I might be totally wrong or misinterpreting it, but give me a little bit more color as to how Blend has impacted ARPU. Thank you.

Yes. We're coming to the first question that was around lease and organic lease developing. I think the best metric you should look at is the amount of investment, as Sarah pointed to in an earlier question on this call, the amount of investment we put into marketing. And that was mainly the lead-based marketing that we invested in. And that came down significantly from 6.5 million to 3.4 million. So that gives you a flavor on how this will develop in the fourth quarter, as I outlined already, and how that will develop going forward. But what we have seen now is, and that is an additional number I can give you, is that the amount of organic leads with SEO together now is significantly above 40%. And that makes us optimistic to deliver a better operating leverage for this part of the segment next year. On the Apple piece, your question was, to what extent are we sort of driving APU and that your view is that the APU increase on the different segments is a bit hindered or a bit given the headwinds that we are seeing from the 3% smaller customers coming in. Now, if I look at the professional APU 1, which is the pure subscription APU, that is going up 7.5%. And if we include the real-time lead engine revenues and then the OVACAO revenues, is going up 8.4% in the third quarter. So that number tells you that overall we managed to grow the ARPU across the board, which means for the base edition as well as the image and the acquisition edition, plus improving OTP and real delete engine. So that is a development that we see across the board and that is not impacted by smaller customers coming in on the lower base edition and delivering significantly lower ARPUs.

Thank you.

The next question comes from the line of Adam Berlin with UBS. Please go ahead.

Hi, good afternoon. Thanks for taking one slash two questions from me. Just with all the focus on the professional customer base, could you just remind us of the split of the different types of customers you have within the agent professional customer number you report? I know that there's some normal estate agents, some have mortgage business as well. There's kind of a mix of different types of customers in there. If you could kind of help us understand how that breaks down, that'd be really helpful. And the second thing is in the last few years, say since 2019, you've added around 2000 professional customers. Can you tell us a bit about who those 2000 customers are? Are they all kind of small estate agents? Are there other kinds of customers in there? And are those 2000 customers that you've added you know, at risk of leaving if times get tougher.

I start with a question, basically the last question you asked, which I think is around the return of the agent. As I said, for the metrics we are seeing in the next year, we don't see a reason why agents that have just come on board this year will leave us next year. simply because those agents need the buyer leads that they have on the mandates that they recently won. Apart from that, we believe that the structure of the platform and the structure of the agent base we are having in now also allows us to keep those agents and manage churn. And please keep in mind when you look at those figures that in Germany, the amount of total revenue of an average agent that average agent spends on our platform is just around three to 4%. So there's plenty of room basically for those agents to spend more on our platform in order to improve their business. Um, on the, on the second piece you were asking, um, I think that was around, uh, the amount of, uh, new customers we were gaining. I just gave a comment on that.

If you take the 21,000 professional customers, can you give us any segmentation of how to think about that group of 21,000? How many are corporates? How many are building societies? Just to understand the breakdown of the 21,000 customer base.

Yeah, we broke that down into base image and acquisition edition over the past. And there I can only rephrase that we are targeting a bell curve shape here. And we are basically having that bell curve in the environment. The second piece is there is a lot of customers that are doing rent and sales, agent customers that are doing rent and sales. but we are not drilling that down further towards the amount of, or the size of the professional customers we have on the platform. I'm sorry for that.

Okay, glad to try. Thanks.

The next question comes from the line of Giles Thorne with Jefferies. Please go ahead.

Thank you. My question concerns Bellavit. We've seen him about out with a couple of products very recently, and then object radar products in particular looks quite differentiated. So I'd like to get your thoughts on the relevance of your Seller Lead products to agents compared to the competitions and then any implications from that as to your ambitions for growth in Seller Leads and the operating leverage question again around Seller Leads into 2023. Thank you.

Hey, this is Toby. With regards to the competitive products that are out there, you don't see any change or any change dynamics in the market. To the country, what we see is that it seems to be appealing that there is a trusted brand out there that is very visible and that more and more people are looking for their home needs and orientating themselves towards In-West-Cal 24, so we see this as rather positive. On the seller leads, Dirks, anything else to mention? Operating leverage, I think we've talked about.

I think, yeah. Thanks for the question again. I think we already talked about the operating leverage that we see on the seller leads. And maybe as an addition to that, please keep in mind that we are pretty flexible with regards to selling those leads via the lead engine or selling them transaction-based. And we can do that and we can steer that on a weekly basis. So once we see the opportunity returning into a market where transactions are coming, we would certainly transport and transfer more leads to IMOVACAL and less into the real-to-lead engine and vice versa. So we have a huge flexibility on this part of the line of business, and we're going to use that to our advantage.

And just to be clear, you're not seeing currently any competitive constraints from IMOVAL around Satellite?

We are currently not seeing any meaningful constraints with regards to seller leads. Yes, that's correct. We believe that there will be obviously more focus on quality, naturally speaking, but we think we're very, very well positioned to also provide the best quality and leading quality. And I think that's the distinction that we're probably going to expect and see in the market going forward. Thank you very much. Thank you.

The next question comes from the line of Nisla Neiser with Deutsche Bank. Please go ahead. Great, thanks.

My question relates to the private customer segment and the consumer class business. I mean, impressive customer additions in Q3. Trying to understand how you find these new customers. I mean, is it conversions from organic traffic to your website? Are you also actively marketing online to promote the product? Some color there would be great. And linked to that, how long does a consumer plus subscriber stay on average? And have you taken the time to sort of increase the options that you are providing them to sort of keep that stickiness going? Some color there would be great. And my second question is related to FlowFact and PropStack. Maybe a bit of color there as to how these two products are different and what your future plans are for them. That would be great. Thank you.

Hey, this is Toby. I'll take your question, thank you. On the private business and the consumer plus business, the customer acquisition cost, and this is the beauty of the model that we've built as part of the ecosystem approach, is almost zero. We are attracting those customers right off of the platform. And depending on the stage where they are as a seeker, they may have more or less experience, but usually they're pretty experienced. So they're well-educated and then they sign up for our product. So looking at the cohort and again at the profitability of this business, it's a usually attractive business. With regards to the duration of the subscription, we are at about five months right now, naturally speaking, because that's the engagement phase. And then also, that's owed to the fact that over a third of our total subscribers actually are telling us that they're very pleased because they find a home and they finally lock down their home and then move in. So the CLV blended is currently approximately 115 euros. And yes, to your question, we are working on how we can extend that. And the extension obviously will be around we have the Femita DA platform, which is the landlord. The landlord will be connected to the tenant. Ideally, the tenant was found also on the other side using a plus product. We stitched them together, and then we will have another transactional stream going forward. But we are working on that as we speak. On the flow fact, your question, yes, I think we also have a very nuanced strategy here because we have now Two options, we have a FlowFact and also a PropStack option in the market, which allows, depending on what your preferences are and your business looks like, which model you want to sign up for. So there's synergy between those two platforms that we're using, while it's also working towards a more standardized backend going forward so that we have more of a streamlined database and architecture underlying for those two platforms. Thank you.

Thank you, very helpful. The next question is a follow-up from Mr. Veiko Kujala from Orga Stanley. Please go ahead.

Yeah, thanks again, and sorry for jumping back into the queue. Just one quick question relating to the private ARPU. The simple answer to your question is like, why isn't the ARPU coming down, because My understanding is that the majority of the big volumes coming in are for the rental product and your goal is to drive them to the maximum LTV subscription, which to my understanding is around 9 euros or 10 euros a month. So my thinking is that that should lead to ARPU dilution, but we're not seeing that. So could you help me understand what I'm seeing for a few quarters already now? Thanks.

Yeah, thanks. That's a good question. And I think that refers to a remark we did at the Capital Market Day already, which is we're optimizing customer lifetime value on the private subscription segment rather than ARPU. So basically, if you as a private customer come onto our platform, you have the choice between, I think, one month, three months, six months, a 12-month product. And that basically gives you the opportunity to choose how long you personally think it will take. And the question for us is rather to get the customer for a longer lifetime on the platform than increasing the monthly APU with that customer. So you have seen and you will see relatively stable APUs and a slightly improved customer lifetime value for those customers. But most importantly, and that is what we refer to as a land grab mode at the capital market share, but more importantly, you're going to see increasing customer numbers as you have seen over the past three quarters. And that's basically driving the metric here.

Yeah, thanks. But does that basically mean that large volumes are not taking the 12-month subscription? They're taking like two months or so?

I think the best-selling product that we're having is the three-month product followed by the six-month and a very low amount of customers taking the 12-month product, yes.

Yeah, thanks a lot. That's very helpful. Thanks.

There are no further questions at this time. I hand back to Philip Lindvall for closing comments.

Well, thank you all for joining and your questions. And if there are any follow-ups, please don't hesitate to reach out to myself and our team. We're happy to help. Thank you all. Have a good afternoon. Bye-bye.