Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GB Group PLC (GBGPF, Financial) reported a 4.5% revenue growth and a 21% increase in adjusted operating profit for the first half of FY25.
- The Identity segment grew by 6%, driven by strong performance in EMEA and Americas, and new customer wins.
- The Location segment delivered 9% growth, supported by strong customer retention and new market entries.
- The company has successfully reduced net debt by GBP9 million, strengthening its balance sheet.
- GB Group PLC (GBGPF) has made significant progress in operational efficiencies, product innovation, and customer engagement, laying a foundation for future growth.
Negative Points
- The Fraud segment experienced a 9% decline in revenue due to timing differences in customer license renewals.
- The Americas Identity business, while showing improvement, is only just back into positive growth territory, indicating more work is needed.
- Cash conversion was lower than expected at 83.7%, though improvements are anticipated in the second half.
- The company faces ongoing macroeconomic uncertainties and geopolitical instability, which could impact future performance.
- There is a need for further improvement in net revenue retention (NRR) in the Americas, which currently lags behind other regions.
Q & A Highlights
Q: Could you give us a sense of what percent of Identity is Americas and how far was it from the 6% Identity growth overall?
A: David Ward, CFO: Americas represents about 40% of Identity revenue. While we don't disclose specific performance for geographies, Identity in Americas showed year-on-year improvement, moving back into positive growth territory, but only just.
Q: Can you provide more color on the Temu partnership and its potential upside?
A: Dev Dhiman, CEO: The relationship with Temu began in April, focusing on cross-border e-commerce. They saw significant improvement in match rates compared to their previous provider, Google, leading to expansion into 20 markets. In August, we expanded into Identity services for age verification, chosen for our international coverage.
Q: Are there any areas where regime change in the US could impact your business?
A: David Ward, CFO: Stability and decisions could be slightly positive, but we don't foresee any specific impacts. Crypto revenue remains about 1% of total group revenue, unchanged for two years, and we don't expect significant changes there.
Q: Can you contextualize the drivers of NRR improvement, such as multi-bureau and international data?
A: David Ward, CFO: NRR improvement is driven by upselling, pricing discipline, and initiatives like GBG Trust and GO. Multi-bureau has good penetration, especially in the US, and international data has been a focus, improving competitiveness and customer retention.
Q: What are your longer-term growth ambitions for GB Group?
A: Dev Dhiman, CEO: While difficult to quantify, our ambition is to accelerate growth. Recent wins, like with Grab and a Magnificent 7 company, show our increased competitive positioning. We aim for ambitious growth, but macro uncertainties still play a role.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
