Tradedoubler Quarterly Report January - June 2024

The second quarter, April – June 2024

• Total revenue amounted to SEK 481 M (469) an increase of 3% or 1% adjusted for changes in exchange rates compared to the same period last year.
• Gross profit was SEK 108 M (100) an increase of 8% or 7% adjusted for changes in exchange rates. Gross margin was 22.5% (21.2). 
• Operating costs excluding depreciation were SEK 93 M (83), an increase of 14% or 13% adjusted for changes in exchange rates. 
• EBITDA amounted to SEK 14 M (17). Adjusted for change related items, EBITDA was SEK 15 M (18).
• Investments in immaterial assets, mainly related to product development, were SEK 10 M (9).
• Cash flow from operating activities was SEK -3 M (-12).
• Earnings per share, before and after dilution were SEK 0.01 (-0.03).

The interim period January - June 2024 

• Total revenue amounted to SEK 1 005 M (928), which is an increase compared to the same period last year by 8% or 6% adjusted for changes in exchange rates. 
• Gross profit was SEK 215 M (198) an increase of 9% and 6% adjusted for changes in exchange rates. Gross margin excluding change related items was 21.4% (21.3). 
• Operating costs excluding depreciation were SEK 180 M (157), an increase of 15% or 14% adjusted for changes in exchange rates. 
• EBITDA amounted to SEK 35 M (41). Adjusted for change related items, EBITDA was SEK 36 M (42). 
• Investments in intangible assets, mainly related to product development, were SEK 20 M (17). 
• Cash flow from operating activities was SEK -6 M (28) and the sum of cash. The main reason to the decreased cash flow relates to a one-time payment to a publisher that amounted to approximately SEK 20 M during the second quarter. The payment related to commission earned during previous years. 
• Earnings per share, before and after dilution were SEK 0.04 (0.13). 
• During the second quarter Email Network was acquired from the principal owner of Tradedoubler for an amount of 180 000 EUR.
• During the first quarter Tradedoubler signed a short term overdraft facility with its bank of SEK 15 M, at the end of Q2 this facility was unused.

CEO Matthias Stadelmeyer's comments

Tradedoubler’s business in the second quarter of 2024 developed similar to the beginning of the year. Revenue was flat in Q2 while gross profit grew by 7% on currency adjusted basis. Adjusted EBITDA was SEK 15 M which is SEK 3 M lower than in the comparison period. 
 

The lower growth rate in gross profit and the lower EBITDA are to some extend still linked to our French subsidiary R Advertising. An effect that will cease to be from Q3 2024. Further to that we had slower business in our core business affiliate marketing which we see being linked to the external market environment with weaker consumption and decreased advertising spending. 
 

The new business lines Metapic, Appiness and Grow developed in line with previous quarters and in line with our expectations. As this business developed better than affiliate marketing our gross margin increased to 22,5% from 21,2% in the comparison period last year.

Regions & Products
The slower development of affiliate marketing is especially visible in France although this region still includes the impact of R Advertising, the DACH region and to some extend the Nordics. The impact on revenue is higher than on gross profit as the slow down of business is rather coming from larger clients and decreased additional budget spendings.  
The gross profit from the influencer network Metapic grew by 80% in Q2 which is a further acceleration compared to the previous quarters, our self-service affiliate platform Grow grew gross profit by 45% and the app marketing platform Appiness grew gross profit by 21%. With these growth rates the new business lines contribute significantly to our growth.

Margins
The increase of the Gross margin to 22,5% is mainly related to slower development in affiliate marketing which has lower margins than the growing new business. 
The adjusted EBITDA margin has decreased to 2,8% as the slower development of the business directly affected our EBITDA result. The measures we have taken to increase profitability levels are only partly visible in Q2 but is expected to come into effect. We continue to invest into our business both for affiliate marketing as well as for the new business lines but as we believe that we have done the main efforts by now these investment levels will be smaller.

Market 
The external market environment continues to be difficult with lower consumer confidence and reduced investments by advertisers. Increased regulation by authorities and continued technical changes by dominant market players like Google or Apple influence digital marketing significantly and require us to be innovative and agile.
While these challenges are clearly visible in our industry, we do not see an effect on our business for the time being. Our portfolio of performance marketing solutions seems to match the needs of our clients for results-focused marketing campaigns. Our proprietary platform and strong technical capabilities help us to adapt to a changing environment. 
 Our vision is to generate more revenue for our clients than any other partner and we receive encouraging signals from our clients that we are on a good way. 
I want to thank my colleagues across all markets and units for their commitment to our business and their great contribution. Their energy drives our success.
 

Contact information

Matthias Stadelmeyer, President and CEO, telephone +46 8 405 08 00   
Viktor Wågström, CFO, telephone +46 8 405 08 00   
E-mail: ir@tradedoubler.com

Other information

This information is information that Tradedoubler AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, at 08.50 CET on 19 July 2024. Numerical data in brackets refers to the corresponding periods in 2023 unless otherwise stated. Rounding off differences may arise.