Believe (BLV) H1 2024 earnings summary

Executive summary

• Revenue grew 14.1% year-over-year to €474.1 million in H1 2024, with organic growth of 12.3% and adjusted organic growth of 15.4%, driven by strong digital sales and the integration of Sentric Music Group.

• Net income declined to a loss of €5.3 million from a profit of €2.0 million in H1 2023, mainly due to higher operating expenses and one-off takeover costs.

• Adjusted EBITDA increased 29.3% to €31.3 million, with margin improving to 6.6% from 5.8%, reflecting value optimization and operating leverage.

• Free cash flow improved to negative €19.4 million from negative €32.9 million, with net cash at June 2024 of €183.6 million.

• Upbeat Bidco consortium completed a simplified takeover bid, now holding over 96% of share capital, prompting a shift to semi-annual reporting.

Financial highlights

• Digital sales rose 11.6% to €424.0 million; non-digital sales surged 40.7% to €50.1 million, mainly from publishing activities, with digital accounting for 89% of H1'24 revenues.

• Premium Solutions revenue grew 13.5% to €440.9 million; Automated Solutions up 23.4% to €33.2 million.

• Cost of sales increased 13.7% to €315.0 million, reflecting higher payments to artists and labels.

• Sales and marketing expenses grew 15.9% to €98.4 million, driven by investments in local teams and new services.

• Technology and product expenses rose 25.2% to €32.3 million, reflecting platform optimization initiatives.

Outlook and guidance

• FY 2024 Adjusted EBITDA margin expected at least 6.5%, above initial guidance.

• Organic growth guidance revised to ~12% (from ~18%), adjusted organic growth to 14–16% (from ~20%), reflecting fading price increases and stable ad-funded streaming.

• Slightly positive free cash flow anticipated for FY 2024.