Team Internet Group (TIG) Trading Update summary

Transition in Search division and Google partnership

• Google is phasing out AdSense for Domains, leading to a temporary margin decline as the Search division transitions to Related Search on Content (RSOC), with optimization expected to restore growth and profitability.

• RSOC enables monetization of previously non-admissible traffic sources, expanding the addressable market and improving user experience.

• Short-term challenges include lower click-through rates, but machine learning and new ad formats are being deployed to improve monetization.

• Management expects Search to recover and return to double-digit growth after a reset in 2025, leveraging data, content expertise, and diversified monetization.

Financial performance and segment dynamics

• 2024 gross revenue was $802.8 million, down 4.1% year-on-year, with Search declining 11.1%, DIS up 7.4%, and Comparison up 42.5%.

• Adjusted EBITDA declined 4.7% to $91.9 million, with a margin near 50%; underlying operating profit was stable at ~$44 million, excluding $36 million in impairment charges.

• Adjusted operating cash flow rose 7% to $99.1 million, with cash conversion at 108% in 2024.

• Net debt was reduced to $96.4 million by year-end, despite $12 million in shareholder distributions.

• Total equity fell to $93.1 million from $153.3 million, mainly due to impairment and loss after tax.

Segment performance and strategic developments

• DIS and Comparison segments contributed 51.2% of net revenue, up from 43.9%, with EBITDA for DIS up 50.4% and Comparison up 75%.

• All three divisions (Domains, Comparison, Search) now contribute similar EBITDA (~$20 million each), with balanced growth expected.

• Domains is expanding into digital identity services, leveraging partnerships and SaaS integration.

• Comparison is using AI to accelerate international expansion, broaden product coverage, and explore direct-to-consumer sales.

• 2024 marked a year of transformation, with expansion in AI monetisation and direct advertiser relationships.