Team Internet Group reports Q3 2024 results

Team Internet Group Plc (AIM: TIG, OTCQX: TIGXF) announced its unaudited financial results for the nine months ended 30 September 2024 (“September 2024 YTD”).

Financial summary:

● Gross revenue increased by 1% to USD 615.1m (versus nine months ended 30 September 2023 (“September 2023 YTD”): USD 611.7m)

● Net revenue (gross profit) increased by 4% to USD 143.6m (September 2023 YTD: USD 138.5m), with gross margin increasing from 22.6% to 23.3%

● Adjusted EBITDA(i) increased by 2% to USD 70.1m (September 2023 YTD: USD 68.8m), with adjusted EBITDA as a percentage of net revenue stable at approximately 49%

● Operating profit decreased by less than 1% to USD 31.2m (September 2023 YTD restated(ii): USD 31.4m), following a USD 2.7m higher amortisation charge, combined with a similar reduction in share-based payment expenses year-on-year

● Profit before tax decreased by 9% to USD 18.3m (September 2023 YTD: USD 20.0m)

● Profit after tax decreased by 7% to USD 11.9m (September 2023 YTD: USD 12.8m)

● Adjusted EPS (diluted) increased by 7% to USD 16.83 cents (September 2023 YTD restated(ii): USD 15.68 cents)

● Net debt(iii) of USD 99.7m (31 December 2023: USD 74.1m, 30 June 2024: USD 109.9m) and leverage(iv) of 1.20x. The Group has continued to be cash generative during Q3 2024, reducing net debt by USD 10.2m. As of September 2024 YTD, the Group has incurred non-operating cash outflows, including a cash outflow (net of acquired cash) of USD 31.8m for the acquisition of Shinez, USD 13.8m for share repurchases, and a USD 6.4m dividend payment

● Adjusted operating cash conversion of 91% (September 2023 YTD: 95%). We expect cash conversion to continue to normalise nearer to 100% over the remainder of the year

Q3 highlights:

● In the Online Marketing segment, for the core products of TONIC and ParkingCrew, the number of visitor sessions increased by 15% to 6.5 billion for TTM 2024 from 5.6 billion for the trailing twelve-month period ended 30 September 2023 (“TTM 2023”). Revenue per thousand sessions (“RPM”) decreased by 18% from USD 97 to USD 79

● The Online Presence segment recorded organic revenue growth of 5% for TTM 2024

● Adjusted EBITDA as a percentage of net revenue reached 49% for September 2024 YTD, a slight decrease from 50% in September 2023 YTD. However, consistent quarter-on-quarter improvements have been observed throughout the year, supported by improved operating leverage, delivering Q3 2024 adjusted EBITDA of USD 23.5m (Q3 2023: USD 24.2m) with EBITDA conversion of 51% (Q3 2023: 51%)

Post period-end events:

● On 2 October 2024, a payment of USD 3.0m was made for the acquisition of M.A Aporia, related to contingent consideration tied to the ongoing employment of specific employees. We anticipate that this will be the last material acquisition related contingent payment across the Group

● Interim dividend of 1.0 pence per ordinary share paid on 4 October 2024