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Original-Research: Verve Group SE - from GBC AG

15.12.2025 / 10:30 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
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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 DEVELOPMENT 9M 2025

On 18 November 2025, the Verve Group announced its Q3 and nine-month
financial figures for 2025. According to these figures, the ad tech group
achieved a robust revenue and earnings performance in the first nine months
of the financial year despite a weak advertising market and challenging
environment as well as effects from the platform migration. The company
benefited in particular from the strong opening quarter of the financial
year (Q1 revenue growth: 32.2%). At EUR 325.20 million, comparable sales were
up 11.0% on the same period of the previous year (consolidated sales 9M
2024: EUR 292.78 million). Reported sales even increased by 22.0% to EUR 357.09
million. It should be noted that this significant increase in sales was
primarily caused by their increased price control as a result of their
platform migration and the resulting change in revenue recognition (now
reporting gross sales instead of net sales). Under IFRS 15, revenue must now
be recognised on a principal basis (= gross billing basis).

Both organic and inorganic growth effects (Jun Group acquisition in
September 2024) contributed significantly to the significant growth on a
comparable basis. Specifically, the growth achieved was primarily driven by
the significant increase in segment sales of 53.2% to EUR 87.74 million (9M
2024: EUR 57.26 million) in the Demand Side Platform business area (DSP
segment). This significant increase in revenue is mainly due to the
strengthening of the Demand Side segment as a result of the Jun Group
acquisition completed in summer 2024 (Jun segment revenue contribution 9M
2025 GBCe: approximately EUR 47.0 million). Segment sales in the
higher-turnover SSP business area also increased significantly by 13.7% to EUR
308.94 million (9M 2024: EUR 271.74 million).

In parallel to the increase in Group sales, however, a moderate decline in
EBITDA to EUR 76.31 million (9M 2024: EUR 84.45 million) was achieved due to
increased cost-optimisation measures and growth initiatives (e.g. expansion
of the sales team) and unfavourable exchange rate effects (weak US dollar
against the euro). Adjusted for one-off costs and special effects (e.g. M&A
and consulting costs or restructuring costs), however, adjusted EBITDA (Adj.
EBITDA) increased slightly to EUR 85.70 million (9M 2024: EUR 84.80 million).
This resulted in an adjusted EBITDA margin of 24.0% (9M 2024: 29.0%).

At net level, a significant decline in earnings after taxes (after minority
interests) to EUR -2.99 million (9M 2024: EUR 14.49 million) was recorded due to
stronger depreciation and amortisation and financing effects. Earnings were
dampened in particular by significantly higher depreciation and amortisation
(9M 2025: EUR 36.49 million vs. 9M 2025: EUR 28.10 million) compared to the same
period of the previous year.

Business development in Q3 2025

As in the second quarter, the third quarter was also characterised by the
platform unification which was successfully completed in August and already
delivered the first positive effects. In addition, Q3 2025 was also
significantly characterised by strategic measures and course-setting.

In terms of top-line performance, Verve generated comparable sales of EUR
110.0 million in the third quarter, down 3.0% on the same quarter of the
previous year (Q3 2024: EUR 113.7 million). This decline in revenue
development was primarily the result of a 4.0% decrease in organic growth
due to temporary problems with platform migration (leading to limited
customer scaling, for example) and weaker market demand. The latter included
significantly lower political advertising expenditure than in the same
period of the previous year (keyword: US election year 2024). In terms of
reported revenue, however, the ad tech group achieved a significant increase
in consolidated revenue of 24.8% to EUR 141.92 million (Q3 2024: EUR 113.74
million), which is attributable to a change in revenue recognition following
the unification of the platform in accordance with IFRS 15. From the third
quarter onwards, sales on the migrated platform will be recognised on a
gross basis (instead of the previous net basis). The significant increase in
sales revenue was reflected accordingly in a substantial 29.1% rise in SSP
segment revenue to EUR 126.22 million (Q3 2024: EUR 97.81 million). At EUR 28.51
million, the segment revenue generated in the DSP business field was almost
on a par with the previous year (Q3 2024: EUR 28.42 million).

The operating business improved noticeably in the third quarter compared to
the second quarter. Verve was able to return to its growth trajectory at
quarterly level (Q3 sales growth compared to Q2: 3.7%). This was primarily
the result of the successfully completed platform unification and the
resumption of full customer activities. The former has already led to
efficiency gains and a significantly improved gross margin of 37.0% at the
end of Q3 (Q2 2025: 35.0%).

With the successful completion of its platform unification, Verve says it
has accelerated its new customer acquisition, stabilised and further
improved the performance of the AI algorithm and expanded the marketplace's
delivery capacities towards the end of the third quarter, thus providing
itself with a considerable 'tailwind' for the traditionally strong fourth
quarter. It should be emphasised at this point that Verve has already made a
strong start to the final quarter, according to its own statements.

Parallel to the technical consolidation, Verve implemented targeted
efficiency measures in the third quarter in order to optimise processes,
structures and the cost base. This included a targeted harmonisation of
personnel requirements across all business divisions as well as a number of
personnel changes. At the same time, the technology company expanded its
sales organisation, particularly in the brand and agency area. Among other
things, the measures introduced led to one-off redundancy costs totalling EUR
1.60 million, while the company also expects annual salary cost savings of
around EUR 8.00 million from 2026 onwards. With the two acquisitions announced
in mid-September (Captify & Acardo), the ad tech group has also strengthened
its sales base and the development of its core business in key markets.

In terms of operating earnings development, Verve suffered a significant
decline in EBITDA to EUR 21.83 million (Q3 2024: EUR 36.17 million), mainly due
to one-off effects (severance payments, M&A-related costs, etc.), negative
effects from the platform unification and increased growth investments
(expansion of the sales team, etc.). Adjusted for one-off and special
effects, EBITDA (Adj. EBITDA) totalled EUR 26.10 million and was therefore
within reach of the previous year's level (Q3 2024: EUR 33.60 million). The
EBITDA margin on a like-for-like basis thus amounted to 23.7% (Q3 2024:
29.6%).

The robust operating earnings performance and strong cash generation of the
company's platform-based business model were also reflected in high
operating cash flow. This initially amounted to EUR 4.66 million in the third
quarter (Q3 2024: EUR 54.07 million) and EUR 10.23 million in the first nine
months of the financial year (9M 2024: EUR 81.46 million). However, Verve
recently announced in a company announcement that operating cash flow
increased significantly to EUR 24.32 million in the third quarter and to EUR
29.89 million in the nine-month period due to a reclassification of a
deferred purchase price payment (in connection with the Jun Group
acquisition). According to the company, the subsequent adjustment of the
previous cash flow statement is also cash-neutral and therefore has no
impact on the amount of cash and cash equivalents at the end of the
aforementioned reporting periods.

FORECASTS AND VALUATION

With the publication of its Q3/nine-month figures, the Verve Group has also
reaffirmed and adjusted its previous guidance for FY 2025. With regard to
the top-line targets for the year, Verve's management now expects higher
consolidated revenue in a range of EUR 560.0 million to EUR 580.0 million
(previously: EUR 485.0 million to EUR 515.0 million) due to the recent
acquisitions (Captify and Acardo) and the change in revenue recognition (in
accordance with IFRS 15). In terms of earnings, the technology company
continues to expect Adj. EBITDA in the range of EUR 125.0 million to EUR 140.0
million.

In line with the confirmed and adjusted annual forecast, we have revised our
previous sales estimate upwards. For the 2025 financial year, we now expect
consolidated sales of EUR 571.05 million (previously: EUR 502.93 million). It
should be emphasised here that Verve has already reported positive business
development to date (including transaction volume) in the first half of the
fourth quarter, which is traditionally the strongest quarter in terms of
revenue, indicating strong year-end business.

Due to the change in revenue recognition since the third quarter (gross
revenue recognition instead of the previous net revenue recognition), we
have also increased our previous revenue estimates for the 2026 and 2027
financial years to EUR 750.37 million (previously: EUR 619.26 million) and EUR
875.95 million (previously: EUR 738.33 million) respectively. In view of the
unchanged earnings guidance and the generally earnings-neutral effects of
the change in revenue recognition (in accordance with IFRS 15), we have
maintained our previous earnings forecasts for the current financial year
and subsequent years.

Thanks to their successful platform consolidation (leading, among other
things, to improved new customer retention and stronger customer scaling),
their recent acquisitions (strengthening their sales base), their innovative
ID-less product range and their strong positioning in the emerging
advertising channels (in-app, CTV and DOOH), the Verve Group should be able
to significantly increase its growth rate again from the coming financial
year. As a result of the increased efficiency and economies of scale we are
forecasting from the platform migration and the expected savings from the
cost optimisation measures, the earnings situation and profitability should
also improve significantly again from the coming financial year. The two
most recently acquired companies (Captify & Arcado) should also make a
noticeable contribution to Group performance in the coming financial year in
terms of sales and earnings.

In light of our confirmed earnings estimates, we have left our previous
price target of EUR 7.95 unchanged. In view of the current share price level,
we therefore 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=33f5e3e9becab7206be3d3ae25d8eaac

Contact for questions:
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de

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Date (time) of completion: 15/12/2025 (9:02)
Date (time) of first distribution: 15/12/2025 (10:30)

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2245514 15.12.2025 CET/CEST

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