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

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: 7.65 EUR

Last rating change:

Analyst: Marcel Goldmann, Cosmin Filker

Revenue development FY 2025

On 19 February 2026, the Verve Group published comprehensive preliminary

figures for the past financial year 2025. According to these figures, the ad

tech group achieved a significant increase in reported consolidated revenue

of 26.1% to EUR 550.92 million (PY: EUR 437.01 million) in the past financial

year despite a difficult advertising market and challenging environment,

thanks to solid performance in the first and final quarters. The rapid

revenue growth was also positively influenced by the change in revenue

recognition in accordance with IFRS 15 (reporting gross revenue instead of

net revenue as previously) that took effect in the third quarter. In terms

of comparable revenue (pro forma reporting of revenue before Q3 2025 based

on gross revenue in accordance with IFRS 15), however, a significant

increase in consolidated revenue of 8.4% to EUR 601.82 million (PY: EUR 555.19

million) was recorded.

The positive revenue development was driven in particular by the significant

growth in the fourth quarter of 9.9% to EUR 193.84 million (comparable revenue

in Q4 2024: EUR 176.44 million), which also marked a return to growth

(following previous declines in revenue in Q2 and Q3 2025). Growth in the

fourth quarter, traditionally the strongest quarter of the year in terms of

revenue, was driven by significant organic revenue growth (organic revenue

contribution: 5.3%). In addition, organic growth was supplemented by

inorganic growth effects from the acquisitions of Captify and Acardo in Q3

2025, which contributed 12.2% to revenue growth in the final quarter.

It should be noted that this significant revenue growth in the fourth

quarter was achieved despite a customer-specific effect that led to the loss

of this customer and a high year-on-year comparison basis (positive one-off

effects in Q4 2024, mainly due to high political advertising expenditure).

In addition, the pace of growth in the final quarter was slowed by

considerable 'currency headwinds', as according to the company, the US

dollar depreciated by 9.0% year-on-year, which had a significant negative

effect on revenue of around 8.0%.

The organic revenue growth recorded in the final quarter was primarily due

to an increase in the software customer base. The total number of software

customers on Verve's ad tech platform at the end of the fourth quarter rose

significantly by 26.7% year-on-year to 3,734 (total number of customers in

Q4 2024: 2,948). In the large customer segment (revenue volume >$100K), the

number of customers remained virtually stable at the end of the fourth

quarter at 1,124 (Q4 2024: 1,140), with the number of large customers rising

significantly again by 5.3% compared to the third quarter (number of large

customers in Q3 2025: 1,067). As overall customer growth was thus above

organic revenue growth, these key figures already reflected the first

positive effects of the significant expansion of the sales base.

At the same time, the number of ad impressions placed rose significantly by

13.1% to 310 billion at the end of the fourth quarter (ad impressions Q4

2024: 274 billion). The customer retention rate reached a record level of

99.0% in the fourth quarter (Q4 2024: 97.0%), underscoring the high level of

customer satisfaction with the unified technology platform. The significant

revenue recovery in Q4 also highlights the positive effects of the

successfully completed platform migration, which was launched in Q2 of last

year.

Earnings performance in 2025

The structural cost and efficiency measures implemented over the course of

the year already had a noticeable effect on margin and earnings development

in the fourth quarter. As a result, the gross margin (comparable revenue

minus purchased services) increased significantly to 44.6% in Q4 2025 (gross

margin Q4 2024: 40.6%) and also improved significantly compared to the

previous quarter (gross margin Q3 2025: 36.6%). This margin recovery is

primarily the result of successful platform unification and the associated

significant improvement in the performance and efficiency of the technology

stack, as well as strengthened operational leverage (including greater

scalability).

Despite higher gross margin and higher gross profit, adjusted EBITDA

remained stable at EUR 48.60 million (Q4 2024: EUR 48.50 million) due to

significant sales investments and negative currency effects. This resulted

in an adjusted EBITDA margin (on a comparable revenue basis) of 25.1% (Q4

2024: 27.5%).

In terms of operating earnings for the full year 2025, EBITDA declined

moderately to EUR 122.12 million (PY: EUR 128.52 million). Adjusted for one-off

costs and special effects (e.g. M&A and consulting costs or restructuring

costs), adjusted EBITDA (Adj. EBITDA) actually rose slightly to EUR 134.40

million (FY 2024: EUR 133.20 million). This resulted in an adjusted EBITDA

margin (on a comparable revenue basis) of 22.3% (FY 2024: 24.0%). In our

opinion, increased cost optimisation measures, growth initiatives (e.g.

expansion of the sales base and strengthening of the service offering) and

unfavourable exchange rate effects (primarily a weak US dollar against the

euro) in particular prevented a further improvement in earnings.

Forecasts and model assumptions

The company guidance confirmed and raised by Verve management with the

Q3/9-month figures (revenue of EUR 560 million to EUR 580 million and Adj.

EBITDA of EUR 125 million to EUR 140 million) for FY 2025 was thus close to the

lower end of the forecast range in terms of revenue and above the midpoint

of the technology company's forecast range in terms of earnings. Our revenue

estimate (GBCe revenue: EUR 571.05 million) was narrowly missed, whereas our

earnings forecast (Adj. EBITDA GBCe: EUR 127.85 million) was exceeded.

With the publication of the preliminary financial results, Verve's

management also provided a detailed outlook for the current 2026 financial

year. Following strong growth momentum in the fourth quarter, further

investments in the sales base, improvements to the platform structure and

AI-based customer solutions, the ad tech group expects the dynamic growth

trend of Q4 2025 to continue in the current financial year. On a

conservative basis, Verve therefore expects revenue in the range of EUR 680

million to EUR 730 million and adjusted EBITDA in the range of EUR 145 million

to EUR 175 million for the current 2026 financial year. According to the

company, the Verve Management Board has also applied a robust safety margin

to this forecast range.

In view of the operating result for the past financial year (Adj. EBITDA FY

2025: EUR 134.4 million) and the expected effects of the cost-cutting

programme announced in Q3 2025 (expected annual personnel cost savings from

2026 of approximately EUR 8.0 million) as well as the earnings contributions

from the two recent acquisitions (pro-forma Adj. EBITDA contributions from

Captify & Acardo M&A in FY 2025 according to Verve Group: EUR 7.8 million), we

consider this guidance to be significantly conservative, particularly in

terms of earnings. Further relevant profitable revenue potential is opening

up, among other things, from market growth in the core markets (according to

our research, expected market growth of approximately 9.0% for the global

digital advertising market in 2026) and, at the same time, possible market

share gains.

Against the backdrop of their successful return to profitable growth in the

important fourth quarter of 2025, the positive outlook and the consistent

implementation of their growth strategy, we confirm our previous revenue and

EBITDA forecasts. Due to non-cash depreciation effects (primarily relating

to PPA and product development depreciation) in the past financial year that

were significantly higher than expected, we have reduced our previous net

income estimates for the current 2026 financial year and the following year,

2027. We have included the following financial year 2028 in our detailed

estimate period for the first time with specific revenue and earnings

estimates.

Thanks to the continued intensive expansion of its sales base, the improved

platform structure (greater efficiency and scalability following

unification) and innovative ID-less targeting solutions, Verve should be

able to achieve significantly higher growth momentum again starting in the

current financial year. With the help of their improved gross margin

structure and optimised technology base, it should be possible to achieve

significantly above-average earnings improvements in the future, in parallel

with the expected strong revenue growth.

Based on our confirmed revenue and operating profit estimates, we have

slightly lowered our previous price target to EUR 7.65 (previously: EUR 7.95)

per share. Our target price reduction results from the increase in the

risk-free interest rate (to 3.0% instead of 2.5% previously) and the

associated increase in the weighted cost of capital (to 9.7% instead of 9.3%

previously). On the other hand, the first-time inclusion of the 2028

financial year in our detailed estimate period and the resulting higher

starting point for the forecasts for the following financial years had a

positive effect on the target price. In view of the current share price

level, we therefore continue to assign a 'BUY' rating and see significant

upside potential for Verve shares.

You can download the research here:

https://eqs-cockpit.com/c/fncls.ssp?u=024066b4b7afd440a68d9485c7b476db

Contact for questions:

GBC AG

Halderstrasse 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Date (time) of completion: 02/03/2026 (8:42)

Date (time) of first distribution: 02/03/2026 (10:30)

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