Original-Research: Verve Group SE (von GBC AG): BUY

Original-Research: Verve Group SE - from GBC AG

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14.10.2025 / 10:30 CET/CEST

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Classification of GBC AG to Verve Group SE

Company Name: Verve Group SE

ISIN: SE0018538068

Reason for the research: Research study (Note)

Recommendation: BUY

Target price: 7.95 EUR

Last rating change:

Analyst: Marcel Goldmann, Cosmin Filker

Business Performance HY1 2025

On 15 August 2025, Verve Group (SE) published its Q2 and half-year figures

for 2025. According to these figures, the ad tech group recorded a positive

sales and earnings performance despite a persistently challenging

environment.

In addition to a strong start to the year, the first half of 2025 was also

marked by challenges in the second quarter, with delays in the completion of

the platform migration (mid-August instead of the end of June) leading to

weaker quarterly performance. Negative currency effects (weaker US dollar)

also had a dampening effect on business development in this quarter.

Irrespective of this, Verve significantly increased its digital Group

revenue by 20.2% year-on-year to EUR 215.16 million in the first half of the

year (HY1 2024: EUR 179.04 million). Both organic and inorganic growth effects

(Jun Group acquisition in September 2024) contributed significantly to this

significant growth.

The positive Group sales performance was primarily fuelled by the sharp

105.4% jump in segment sales to EUR 59.23 million (HY1 2024: EUR 28.84 million)

in the Demand Side Platform business area (DSP segment). This was primarily

due to the strengthening of this business division as a result of the Jun

Group acquisition in summer 2024 (Jun segment sales contribution GBCe:

approximately EUR 30.0 million). In the much higher-volume SSP business

division, segment sales also increased significantly by 5.1% to EUR 182.73

million (HY1 2024: EUR 173.93 million).

In parallel to the expansive business development, EBITDA increased

significantly by 12.9% year-on-year to EUR 54.48 million (HY1 2024: EUR 48.27

million). Adjusted for one-off costs and special effects (e.g. M&A or

consulting costs), adjusted EBITDA (Adj. EBITDA) increased significantly by

16.6% to EUR 59.60 million at the end of the first half of the year (HY1 2024:

EUR 51.10 million). This resulted in an adjusted EBITDA margin of 27.7%, which

was almost on a par with the previous year (HY1 2024: 28.5%).

At net level, however, a significant decline in after-tax earnings (after

minority interests) to EUR 0.59 million (HY1 2024: EUR 6.26 million) had to be

accepted due to higher depreciation and amortisation and financial effects.

Earnings were negatively impacted in particular by significantly higher

financial expenses (HY1 2025: EUR 38.70 million vs. HY1 2024: EUR 29.93 million)

compared to the same period of the previous year.

Business development in Q2 2025

As previously mentioned in the half-year analysis, the second quarter was

primarily characterised by the standardisation of platform technology in the

area of in-app marketplace activities in the high-volume Supply Side

Platform segment (share of mobile advertising revenue in Q2 2025: 96.0%).

According to the company, business development in the second quarter

proceeded largely as planned. However, the implementation of the platform

migration resulted in slower growth momentum due to the associated temporary

effects. These effects continued to be felt into the first six weeks of the

third quarter. Among other things, the technological challenges led to

temporary interruptions in the bidding volume, temporary scaling problems

with existing customers, delays in onboarding new customers and problems

with margin management. The platform migration was fully completed in

mid-August.

As a result, the pace of growth slowed significantly in the second quarter

after the strong first quarter (sales growth Q1 2025: approximately 32.2%),

with sales increasing by approximately 10.0% to EUR 106.12 million (Q2 2024: EUR

96.57 million). Adjusted for unfavourable currency effects, quarterly growth

nevertheless amounted to 14.0%.

The main reason for the slower growth momentum was a 2.6% decline in sales

in the SSP business unit to EUR 90.65 million (Q2 2024: EUR 93.11 million) due

to the negative effects of the platform migration. In contrast, the DSP

business unit saw a rapid increase in segment revenue of 81.5% to EUR 29.66

million (Q2 2024: EUR 16.34 million), which was primarily due to inorganic

growth effects resulting from the Jun Group acquisition in the previous

year.

The robust business performance of the high-volume SSP core segment in the

second quarter was also reflected in the predominantly positive development

of the Ad Tech Group's KPIs in this period. At the end of the second

quarter, the total number of software customers increased significantly by

22.3% year-on-year to 3,079 (software customers Q2 2024: 2,518), with

organic growth still amounting to almost 10.0%. Due to sustained strong

customer growth and the continued high customer retention rate (Q2 2025:

98.0% vs. Q2 2024: 98.0%), declining advertising expenditure (net USD

expansion rate Q2 2025: 92.0% vs. Q2 2024: 109.0%) for existing customers

only led to an organic decline in revenue of 4.0% compared to the same

quarter of the previous year. It should be noted that the decline in

advertising expenditure among existing customers resulted from the platform

migration. As a result of the disruptions caused by the platform migration,

many software customers were unable to spend as much on advertising as they

would have liked, which was clearly reflected in the decline in the net

dollar expansion rate described above. Nevertheless, the customer retention

rate (retention rate Q2 2025: 98.0%) remained at a very high level,

underscoring the continued high attractiveness of the advertising platform.

In terms of operating earnings, Verve suffered a slight decline in EBITDA to

EUR 27.00 million in the second quarter of 2025 (Q2 2024: EUR 28.08 million) due

to the higher IT and support expenses incurred as a result of the platform

migration. On the other hand, Group EBITDA adjusted for one-off and special

effects (e.g. M&A and consulting costs) totalled EUR 29.5 million (Q2 2024: EUR

29.1 million), almost at the same high level as the same quarter of the

previous year. At the same time, the adjusted EBITDA margin remained stable

year-on-year at 28.0% (Q2 2024: 28.0%).

Acquisition of Captify and Acardo

On 17 September 2025, the Verve Group announced the acquisition of UK-based

Captify Technologies Ltd (Captify), one of the largest search intelligence

platforms outside the Walled Gardens. It analyses the search behaviour of up

to 1.0 billion search queries per day and aggregates around 400 billion

active data points per day, continuously improving its machine-learning

models. Captify's innovative search intelligence platform enables brands to

gain a deep understanding of consumers' interests, motivations and

intentions in real time, enabling precise targeting and better analysis of

campaigns without the use of cookies (ID-less solution).

This acquisition strengthens Verve's demand-side business with new

well-known customers and a strong sales team of more than 30 employees. The

technology company has business relationships with a large number of leading

advertising agencies and around half of the world's 100 largest advertisers.

Captify is headquartered in London and has a strong presence in the UK

(second largest market by revenue), with the majority of revenue generated

in Verve's core market of North America. The technology company has several

offices in the US, UK and Australia. One of Verve's most important strategic

goals is to significantly expand its own sales team of currently around 50

sales employees to 150 in the short and medium term. This transaction will

make a significant contribution to this and will increase the sales team to

around 80 employees. By merging the Captify and Verve sales and agency

teams, significant synergy effects are expected as early as 2025.

In terms of operating performance, Captify is expected to contribute revenue

of around EUR 41.0 million and EBITDA of around EUR 5.0 million in the current

financial year 2025 on a normalised pro forma full-year basis, including

significant synergies after the transaction, according to the company. The

short-term synergies identified by Verve through the integration of the

target into the group primarily relate to costs and include, among other

things, expected positive synergy effects through the optimisation of

technology costs and the workforce. The total purchase price for the

acquired company corresponds to an EBITDA multiple of around 7x before

synergies and around 5x after synergies. The transaction provides for a cash

payment of EUR 16.2 million within six weeks of closing and an additional

deferred cash payment of EUR 9.4 million 18 months after closing. Captify will

be consolidated into the Verve Group's financials from 16 September 2025.

In view of the consolidation date and the fact that Verve's management

assumes that the synergy effects will be fully realised from January 2026,

the acquisition is expected to contribute approximately EUR 12.0 million to EUR

13.0 million to revenue and approximately EUR 1.0 million to EUR 2.0 million to

the Verve Group's EBITDA in the current financial year 2025. Verve has

identified extensive synergy potential in the acquired company, which is

expected to generate positive synergy effects of around EUR 1.6 million per

year (based on short-term synergies) from the coming financial year onwards.

Additional future synergy opportunities arise primarily at the cross-selling

level (additional upside potential in terms of revenue).

Shortly before, Verve had already announced a transaction to strengthen the

demand side with the acquisition of Acardo Group AG (Acardo), a leading

provider of digital solutions for customer activation in Germany. By

integrating into the point-of-sales (POS) systems of more than 5,600 retail

shops and scaled brand apps for retailers, Acardo reaches 85 percent of all

German households. The acquired company's digital platform focuses on

couponing and cashback solutions for leading retailers such as Edeka,

Kaufland and REWE, while processing transaction data in real time and

ensuring fully automated billing in the background.

Acardo's strong customer network, which includes over 200 international

consumer goods brands such as Unilever, Nestle and Mars, as well as

customers from the entertainment and healthcare sectors (e.g. Warner

Brothers or Beiersdorf), significantly strengthens Verve's market position

in Europe. With a total of 120 employees, Acardo brings a team of 14

experienced sales experts for the German region to the Verve Group, who have

promising connections to major brands and agencies. Following the

acquisition, Verve will integrate Acardo's consumer activation capabilities,

including coupon functionality, into all of its advertising channels -

mobile, CTV and DOOH - to further drive technology transfer.

Through the Acardo transaction, the Verve Group significantly strengthens

its international growth in Europe by adding innovative retail media

solutions to its product portfolio while expanding its offering for new

(emerging) advertising channels.

According to the company, Acardo is expected to contribute sales of around EUR

15.0 million and EBITDA of around EUR 6.0 million to the consolidated Group

performance in the current financial year on a normalised pro forma

full-year basis. The total purchase price of the transaction of EUR 24.5

million corresponds to an EBITDA multiple of approximately 6x EBITDA before

synergies and approximately 4x EBITDA after synergies. The acquisition was

completed at the beginning of October 2025 and provides for a cash payment

of EUR 17.2 million at closing and an additional deferred cash payment of EUR

7.3 million 12 months after closing.

In view of the consolidation date and the fact that the Verve management

expects the targeted synergy effects to fully materialise from January 2026,

the Verve Group assumes that the acquisition will contribute around EUR 3.5

million to EUR 4.5 million to sales and EUR 0.9 million to EUR 1.2 million to the

EBITDA of the Verve Group in the current financial year 2025. The previously

adjusted company guidance (sales of EUR 485 million to EUR 515 million and an

Adj. EBITDA of EUR 125 million to EUR 140 million) for the current financial

year 2025 is being retained by the Verve management as, as previously

communicated, it does not take into account the effects of potential M&A

transactions during the course of the financial year.

Forecasts and valuation

In view of the longer than initially expected recovery in segment sales

following the platform standardisation in the SSP business area, which also

extended into the third quarter, and unfavourable exchange rate effects,

Verve's management lowered its previous corporate guidance when announcing

the Q2 and half-year figures. It should be emphasised at this point that the

adjustment of the company's outlook is not the result of the second quarter

performance or other structural problems. The two recent acquisitions also

had no influence on the adjusted outlook, as the effects of possible M&A

transactions during the year are not taken into account in the company

forecast.

For the current financial year, the technology company now expects

consolidated sales in a range of EUR 485.0 million to EUR 515.0 million

(previously: EUR 530.0 million to EUR 565.0 million) and Adj. EBITDA of EUR 125.0

million to EUR 140.0 million (previously: EUR 155.0 million to EUR 175.0 million).

At the recent Verve Capital Markets Day, the ad tech company also reaffirmed

its medium-term guidance, which includes average annual sales growth of

25.0% to 30.0% (CAGR) and Adj. EBITDA growth of 30.0% to 35.0% (CAGR).

Against this backdrop, we have also adjusted our previous sales and earnings

forecasts for the current financial year and subsequent years downwards,

whereby our estimates also take into account the expected positive effects

from the recent acquisitions (inorganic growth through M&As by Captify and

Acardo). In view of the continuing challenging conditions and volatile

exchange rate developments, we have deliberately kept our new forecasts

conservative, particularly with regard to the expected organic growth of the

Verve Group.

For the current financial year, we now specifically expect sales of EUR 502.93

million and EBITDA of EUR 121.75 million. For the subsequent financial years

2026 and 2027, we are forecasting sales of EUR 619.26 million and EUR 738.33

million respectively. At the same time, we expect EBITDA of EUR 173.16 million

(FY 2026) and EUR 213.55 million (FY 2027).

Overall, we therefore expect the pace of growth in the current financial

year to initially be rather subdued due to the one-off effect of the

platform migration. From the coming financial year, the ad tech company

should be able to significantly increase its growth momentum again,

primarily due to its strong positioning in the up-and-coming digital

advertising segments (in-app area, CTV, DOOH, etc.) and its promising

product portfolio (innovative ID-less product range). At the same time, we

also anticipate a significant improvement in earnings and profitability,

whereby the already completed platform migration should also boost future

company performance through the expected improved economies of scale and

efficiency benefits.

The expected positive sales and earnings contributions as well as extensive

synergies from the two recent acquisitions should also have a significant

positive impact on the Verve Group's key figures from the coming financial

year. The significantly strengthened sales base resulting from the

acquisitions will open up considerable cross-selling potential, which should

result in significant growth impetus for Verve's US and EU business in the

short and medium term.

Based on our adjusted sales and earnings estimates for the current financial

year and subsequent years, we have lowered our previous price target to EUR

7.95 per share (previously: EUR 9.20). In view of the current share price

level, we assign a 'BUY' rating and see significant upside potential in the

Verve share.

You can download the research here:

https://eqs-cockpit.com/c/fncls.ssp?u=49e9d2cff441e9701c2418880fc6ab09

Contact for questions:

GBC AG

Halderstrasse 27

86150 Augsburg

0821 / 241133 0

[email protected]

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Date (time) of completion: 14/10/2025 (9:35)

Date (time) of first distribution: 14/10/2025 (10:30)

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