Hostelworld Group (HSW) H1 2026 earnings summary

Executive summary

• Net revenue rose 12% year-over-year to €52.2m, with double-digit growth despite external headwinds from the Middle East conflict; net transactions increased 1% to 3.8m, with average transaction value up 11% to €14.91.

• Social members now lead in transactions, revenue, and margin, with engagement and messaging up 65% year-over-year.

• Platform transformation underway, expanding from a single-product OTA to a multi-stream social platform with three revenue streams: core hostel commission, budget accommodation, and Social Pass.

• Completed a £5m share buyback (3.2% of issued capital) and maintained a robust balance sheet with a net cash position.

Financial highlights

• Adjusted EBITDA reached €8.2m, up 11% year-over-year, at a 16% margin.

• Net margin grew 16% to €22.9m, supported by higher transaction value and marketing efficiency.

• Adjusted free cash flow conversion improved to 74%, generating €6.1m in adjusted free cash; closing cash was €15.0m, returning to a net cash position of €2.5m.

• Interim dividend of 0.83 cent per share declared, slightly above last year; €2.0m final FY'25 dividend paid in May 2026.

• Operating costs rose to €14.7m (28% of revenue), mainly due to investment in product, marketing, and technology.

Outlook and guidance

• Double-digit revenue growth expected to continue, with marketing spend guided at 45%-50% of revenue and adjusted EBITDA margin target above 20% for FY 2026.

• Deferred revenue of €3.2m from H1 to unwind as profit in H2, supporting second-half results.

• Ongoing investment in social network and AI-powered features to drive future growth.

• Integration of OccasionGenius Inc. on track for early Q3 2026, enhancing event discovery and Social Pass proposition.

• Guidance assumes easing of Middle East conflict disruption and stable trading conditions in H2.