Scout24 Se

Good afternoon, everyone, and welcome to Scout24 second quarter and first half 2025 earnings call. My name is Filip Lindvall and I'm vice president group strategy and investor relations at Scout24. With me on the call today are Ralf Weitz, our chief executive officer, and Dirk Schmelzer, our chief financial officer. Ralf will start the presentation with key business highlights and Dirk will provide a detailed overview of our financial results. 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. This session will be recorded and a replay will be made available as quickly as possible after the event. Please take note of the disclaimer on page two. Ralf, now over to you.

Thank you, Philipp, and welcome, everyone. Let's move to page four of our presentation and review the key highlights of the second quarter and first half. We are very pleased with our second quarter performance, which was strong across the board and continues to build on our excellent first quarter results. Second quarter revenue grew 15.1% with organic growth remaining strong at 11.1%. For the first half, we delivered total revenue growth of 15.5%. Revenue growth was driven by our two great core businesses, which continue to deliver impressive customer growth. Our B2B business is now approaching 26,000 customers. and our B2C segment surpassed the significant milestone of 500,000 subscribers in the second quarter. PPA Private was a bright spot in the quarter with 10.9% growth, driven by increased listing volumes and marketing activities. Transaction enablement showed more modest expansion in the second quarter due to lower transaction volumes. We continue to generate operating leverage as we drive interconnectivity and simplify our organization. Ordinary operating EBITDA grew 16.9%, marking another strong quarter. For the first half, we delivered one percentage point of margin expansion year on year, which is impressive as we are integrating several acquisitions with lower margin profiles. Adjusted EPS continued to grow impressively by 23.6% in Q2. The strength of our platform is becoming increasingly evident. The number of B2B customers using multiple products in our ecosystem grew 15% quarter on quarter. A healthy sign that our interconnectivity strategy is working. Listings increased by 12.8% and homeowner registrations grew by 57.7% in Q2. We are seeing deeper engagement across all market participants. This creates compounding value as more agents, property owners and home seekers connect through our ecosystem. We are creating value for all our stakeholders by integrating AI solutions across our entire enterprise. From consumer products and professional tools to internal operations. As I highlighted in the first quarter earnings call, innovation remains central to how we serve customers. I will provide details on this in the innovation update later. Based on the strong business performance during the first half of the year and the outlook of the remainder of the year, we upgraded our guidance for 2025, as you might have seen from Tuesday's ad hoc release. Our upgraded guidance reflects the strong business momentum we are seeing in our core operations. We now expect revenue growth of 14 to 15% and ordinary operating EBITDA margin expansion of up to 70 base points. Let's move to page five for an update on our customer base. In the first half of 2025, both our professional and private segments reached record customer numbers. Starting with professional. The professional segment accelerated from already fantastic Q1 levels while continuing to gain market share. We are approaching 26,000 customers with growth accelerating again to 6.1% in Q2, building on the already strong 5.9% growth in Q1. This was driven by continued robust performance in Germany, including Neubau Kompass. The Austrian real estate market has started to recover, and our customer base grew every month in the second quarter. Our customer growth in Germany stands out both domestically and globally within the classified sector. It is worth taking a moment to acknowledge where these customers are coming from. Firstly, we are gaining market share among smaller customers through our Bonds membership, an accessible entry-level product. Secondly, we are benefiting from new business formations, And thirdly, we are seeing our large customers expand their franchises. Our strong product offering and responsible approach to pricing are the reasons why we are winning in the market. Turning to the private segment, we sustained healthy expansion after last year's exceptional growth. We crossed the half million subscriber milestone in the second quarter, reaching 502,000 subscribers, a 15.3% year-on-year increase, so we achieved our capital markets day target of 500,000 subscribers significantly ahead of schedule. While growth has moderated from last year's exceptional levels, this represents healthy expansion on an increasingly large base and follows normal seasonal patterns. Regarding our consumer portfolio, we have rebranded TenantPlus and BuyerPlus into SearchPlus. LivingPlus remains unchanged. All consumer products continue to deliver strong growth and value to our users. SearchPlus for BUY is experiencing impressive year-on-year growth of 38%. LivingPlus has doubled its customer base compared to last year, showing how we can bring innovative new products to the rental market and create new addressable markets. Looking at page 6, I would like to share the German real estate market dynamics in the second quarter. The German residential real estate market continues to be healthy with strong underlying fundamentals. As mentioned in our Q1 earnings call, the sales market experienced a temporary slowdown in April and May following the German government's investment program announcement, which resulted in higher mortgage rates. This decline is reflected in our Scout24 transaction momentum index, which showed a slight downturn in Q2. Since then, mortgage rates have stabilized after recent volatility supporting buyer confidence and market activity. Demand for real estate purchases remains strong, with sellers willing to engage as prices remain high. The rental market continues to see robust interest, while contact requests stayed on high levels. The listings index continued to climb in Q2, with more new listings hitting the market and faster turnover times demonstrating robust selling interest and market activity. The German government's Bautour initiative and broader investment program send positive signals for the medium to long term. These measures will stimulate housing market activity and increase demand for our platform services. Moving to page seven, I would like to share with you how AI is transforming every part of our business. As we promised at our Capital Markets Day 2024, and as I emphasized in my first earnings call as CEO in May, We are committed to being the technology and product leader in our market. To achieve this, we continue to invest heavily in product innovation for our customers. We are now in a phase where we are integrating AI across all of our products. Let me give you a few examples. Moving to PropStack AI, one of our professional tools. This is transforming how our professional customers create property listings. Here's how powerful this is. Agents simply select a few photos and within seconds, PropStack AI automatically creates a professional property video, integrating compelling voice narratives and highlighting key selling points. This represents an enormous efficiency and cost advantage. Tasks that traditionally required expensive video production and hours of editing now happen instantly. Agents save significant time and money while ensuring consistent high quality listings across our platform. And the market response has been great so far. PropStack is growing over 40% year on year in customers and contributing 60% more listings to our platform compared to last year, while revenue is surging over 50%. In July, almost two thirds of our upsell revenue came from PropStack. we have been winning customers from competitors every single month for over a year now. Why? Because we have built the most intuitive and powerful and innovative agent CRM software in the market. We are now taking PropStack to the next level with AI, representing our commitment to innovation and our focus on delivering tools that truly transform how agents work. Now turning to the consumer side. Our Hey Immo feature represents the next evolution in property search. Users can prospectively search in a conversational manner. For example, simply asking for a three-bedroom apartment in Munich under 2500 Euro with good transport links or the best investment opportunities in Berlin. We are developing an AI search assistant that enhances the consumer search experience. Heyimo provides conversational search capabilities while leveraging our proprietary and exclusive data assets. This unique data integration creates a differentiated offering that positions the platform to deliver a superior real estate search experience compared to existing AI systems in the market. While traditional search will likely remain the primary access point for several years, we are launching the next level search now. This gives consumer choice and ensures we have the best product available during the transition period as consumer search expectations evolve with AI. Currently, conversational search is in beta. We will be rolling out fully on all devices in H2. We have also partnered with Entropic to integrate Cloud AI because we want to embrace AI productivity benefits internally throughout the organization. Every employee now has their own AI assistant to work with. This provides our teams with sophisticated support for everything from data analysis to content creation. We expect that over time, both employees and processes become more efficient, enhancing our internal operations and productivity. We are moving full steam ahead on these AI initiatives. It is still early days and we remain humble about the journey, but our goal is to provide choice for our customers and deliver the real benefits of AI and automation. Let me conclude with some key takeaways on page eight. Firstly, we delivered a strong financial performance that enabled us to upgrade our full year guidance. Revenue grew 15% with margin expansion, even while integrating acquisitions, proving we can execute growth and efficiency at the same time. Secondly, we are winning in the market with record customer metrics. We now approach 26,000 professional customers and have crossed 500,000 private subscribers. Our product-led strategy and responsible pricing is clearly resonating. We are taking share from competitors and expanding our reach into new customer segments. Thirdly, our AI transformation is accelerating. PubSec AI is already live. Hey Immo will be launched in H2 this year, and we have deployed Claude across the organization. We are not just experimenting with AI, we are implementing it at scale to drive real business results. And lastly, our platform is generating powerful network effects. Multi-product adoption increased while listing volumes are expanding and our interconnected ecosystem is creating compounding value. These results confirm that our strategy is working and we are well positioned for continued success. Now I will hand over to Dirk.

Thank you, Ralf, and welcome, everyone. Let's move to the financial section of our presentation. On page 10, you will find our Q2 and first half financial highlights. Building on strong Q1 momentum, Q2 delivered another solid quarter, resulting in an impressive first half that reflects continued strength across our business. Group revenue in the second quarter reached 160.6 million euros, up 15.1% year on year, with organic growth contributing a healthy 11.1%. This performance reflects strengths across our core business. Subscription services maintained momentum while recent acquisitions are already contributing meaningfully. For the first half, revenue totaled 318.2 million euros, representing 15.5% growth with organic growth accelerating to 11.6%. Turning to profitability, second quarter ordinary operating EBITDA increased 16.9% to 101.7 million euros, marking the first time our quarterly ordinary operating EBITDA has reached nine digits, with margins expanding 90 base points to 63.3%. For the first half, ordinary operating EBITDA reached €195.4 million, up 17.3%, resulting in a margin of 61.4%. This margin expansion is particularly strong as we are integrating acquisitions that carry lower profitability profiles. Reported EPS increased by 15% to €0.54, while adjusted EPS showed even stronger growth of 23.6%, reaching 87 euro cents. Operating cash flow came in at 133.5 million euros, 11% higher year on year. Turning to page 11 for a closer look at our professional segment. Revenue in our professional segment grew by 14.5% in Q2, reaching 115.7 million euros, For the first half, we delivered strong growth of 15.3%, driven by robust performance across both subscriptions and transaction enablement. Our subscription business grew 14.8% to 84.2 million euros with double-digit organic growth of 11.7%. We are clearly winning in the market, capturing share from competitors, benefiting from healthy business formation, and expanding in the rural parts of Germany with accessible products like the Bronze Edition. Professional customers expanded 6.1% to nearly 26,000, with organic growth at 5.6% in Germany, excluding Neubau Kompass. APU grew 8.3% to 1,082 euros, driven by strong performance with our residential agents, offset by more moderate growth among our commercial customers. Transaction enablement grew 18.4% to 26.4 million euros driven by acquisitions and 4% organic growth. The lower organic growth reflects reduced transaction volumes and reduced capital allocation into our leads business as part of our interconnectivity strategy. Demand for data and valuation and agency RM products remains strong. Ordinary operating EBITDA grew by 14.3% to 73.1 million euros with a margin of 63.1%. Ordinary operating EBITDA increased by 14.3% to 73.1 million euro, achieving a 63.1% margin. The half percentage point year-on-year margin compression in half year one reflects the dilutive effect of recent acquisitions. Turning to the private segment on page 12, let's review the results for the second quarter of 2025. Private segment growth picked up momentum in Q2, accelerating to 16.8% revenue growth and 44.9 million euros. The stronger second quarter lifted first half revenues to 87.2 million euros, up 15.9% year on year. Performance was driven by our Plus subscription products, which delivered strong growth of 22.2% in the quarter, while PPA revenues also surprised on the upside with 10.9% growth. We reached 502,000 subscribers in Q2, up 15.3% year-on-year. This strength spans our entire portfolio. Search Plus Buy surged 38% driven by high purchase demand, living plus doubled its customer base creating new rental markets and search plus rent maintained consistent growth apu increased six percent to 17.7 euros driven by improved unit economics from our multi-vendor credit check strategy our ppa business grew 10.9 percent in q2 driven by strengths in both sale and rental listings improving market conditions and rate stabilization boosted sales while rental PPA remained robust. Our targeted marketing campaigns are resonating with sellers and landlords. Ordinary operating EBITDA surged 23.9% to 28.6 million euros in Q2, with margins expanding 370 base points to 63.7%. For the first half, ordinary operating EBITDA reached 53.5 million euros with margins at 61.4%, up 500 base points year on year. Turning to page 13, let's take a closer look at the main ordinary operating items in Q2. Own work capitalized decreased 9.4% to 4.9 million euros, reflecting the completion of various development and integration projects. As a percentage of revenue, this represents approximately 3.1%. Operating expenses increased 10.2% year on year, growing below our revenue growth rates. This reflects the positive impact of our interconnectivity strategy, efficient acquisition integration, and our continued efforts to simplify the organization. On an organic basis, operating expenses were up just 3.6%. Personal cost rose by 7.8% to 28 million euros, primarily driven by M&A integration and regular salary adjustments. On an organic basis, personal costs remain nearly flat. Marketing expenses increased marginally by 3.9% to 10.4 million euros as our interconnectivity strategy continues to enhance performance marketing efficiency. IT costs increased 19.4% to 5.6 million euros, primarily driven by higher AWS costs from migrating acquisitions to our cloud infrastructure and increased data lake volumes. Additional factors include ongoing AI investments and the integration of recent acquisitions. Selling costs increased 33.5% to 11.2 million euros, driven by stronger demand for data and valuation services. This increased activity led to higher third-party costs at Sprengnetter and Bulvingeser. Ordinary operating EBITDA grew strongly by 16.9% in Q2, with margins expanding 90 base points to 63.3%. For the first half, we achieved impressive results with 17.3% ordinary operating EBITDA growth and 100 base points of margin improvement. On an organic basis, margins would have reached 64.4% in Q2 and 62.8% for the first half, demonstrating our underlying operational strength. This strong performance demonstrates our ability to balance multiple priorities, investing into product and innovation, organizational simplification, integration of acquisitions, and investing in our people. Turning to page 14, where we show the items below ordinary operating EBITDA. Non-operating effects increased 78.8% in Q2 due to our strong share price and Sprengneter business performance. I will comment on these positions on the next page. For the first half, reported EBITDA increased 15% to 159.8 million euros. Along with the decrease in own-ware capitalized, D&A decreased 12.8% year-on-year in Q2, primarily driven by the completion of IT projects and platform developments. For the first half, D&A totaled 24.2 million euros, a flattish development of 2.8%. The mix has shifted, with PPA amortization from recent acquisitions increasing to 4.8 million euros in half-year one, while other scheduled depreciation remains stable. The financial result improved year on year to negative 6.1 million euros in Q2, a 28.5% improvement driven by lower one-off impacts compared to last year. We also incurred 1.4 million euros in foreign exchange losses. I will walk through more of the specifics on the following slide. Income taxes increased to 16.6 million euros in Q2, up 14% with an effective tax rate of approximately 30%. Despite all one-offs in Q2, we still managed to grow basic EPS by 15%, leading to strong growth in half year one 2025 of 22.3% to €1.23. Net income for the first half increased 20.5% to €89 million, a solid bottom line expansion despite Q2's temporary impacts. Adjusted EPS, which excludes all one-offs, was strong in both quarters. up 23.6% in Q2, leading to half year one 2025 growth of 20.8% to €1.65. The fact that we delivered over 20% growth in both reported and adjusted metrics for half year one 2025 truly demonstrates our underlying business momentum and margin expansion capabilities. Let's turn to page 15 for the bridge from reported net income to adjusted net income for Q2 2025. Non-operating effects increased by 78.8% year-on-year in Q2 of 2025 due to the following successful business outcomes. Share-based compensation increased significantly due to our share price overperformance up around 40% year-to-date compared to our mid-teens share price growth assumptions leading to higher provisions. Non-operating effects, excluding share-based compensation, came in at 9.8 million euros. Thereof, M&A-related costs totaled 8.2 million euros in Q2, driven by 8 million euro increased provision for Sprengnetter earn-out due to the strong EBITDA performance in 2024. The adjustment of the financial result included 4.9 million euros from purchase price liability remeasurements including 1.4 million euros for the remaining 25% Sprengnetter stake and 3.5 million euros for Neubau Kompass and Exploreal earnouts. These impacts were partially offset by favorable fair value adjustments on our venture capital investments of 700,000 euros. We do, however, not see a material cash impact from these non-operating costs in 2025. Turning to page 16 in cash flow. Free cash flow for the first half reached 118.1 million euros, up 15% year on year. The improvement was driven by our strong operating performance as well as positive working capital impact from the non-cash nature of the non-operating costs. Our conversion ratios remain excellent. Free cash flow representing 99% of adjusted net income and 60% of ordinary operating EBITDA, demonstrating strong cash generation. Turning to page 17 to leverage and capital allocation. Our leverage ratio increased to 0.53 times at the end of Q2 2025, up from 0.42 times in Q1 due to higher credit facility utilization and share buyback program commitments. This temporary increase reflects the typical seasonality of Q2 when we pay our annual dividend. In the second quarter, we allocated €14.8 million to share repurchases, bringing total buybacks for the first half of the year to €38.3 million. Total shareholder returns in Q2 amounted to €110.2 million, primarily driven by a dividend distribution of €95.4 million following the 10% increase in the annual dividend to €1.32 per share. Moving to the guidance on page 18. Based on our strong first half performance, we upgraded our full year guidance to 14 to 15% revenue growth, including approximately three percentage points of inorganic contribution and expansion of our ordinary operating EBITDA margin of up to 70 base points. We are well on track to deliver our fifth consecutive year of double-digit growth and third consecutive year of margin expansion. Let me provide some context around our guidance upgrade and outlook for the remainder of the year. The upgrade reflects our strong execution in the first half and confidence in the underlying business momentum in our core membership and private subscription businesses. Based on the second quarter revenue run rate for transaction enablement, we believe our upgraded revenue guidance range represents a good outcome for the full year and leaves us enough flexibility to balance between profitability and growth. In terms of quarterly cadence, I would like to remind you that the third quarter will likely show lower revenue growth and then accelerate again in the fourth quarter. We expect a similar trend for ordinary operating EBITDA growth and margin. Overall, we feel very good about the momentum in the business, which is reflected in our upgraded guidance. We will provide the next update during our Q3 nine months 2025 earnings call on October 30th, 2025. And 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.