Good afternoon and welcome to the Azerion Interim Financial Results Q2 2025. After the speaker's remarks, there will be a question and answer session. If you would like to send a question through, please type it in the "Ask a Question" tab at the right-hand side of the player. These questions can be sent in at any time during the presentation, and they will be addressed after the live Q&A portion of the event. Thank you. I'd now like to turn the call over to Umut Akpinar for welcome remarks.
Thank you very much. Good afternoon, everyone. I am Umut Akpinar, CEO of Azerion . I am here with my colleagues. This is Julie Duong Ferat, our Chief Financial Officer.
Hello, everyone.
Thank you very much, that's Julie. Sebastiaan Moesman, our Chief Strategy Officer.
Hello, everyone. Good afternoon.
We would like to welcome you to today's webinar to present Azerion 's Q2 and H1 2025 interim results. Before we start, I would like to take a moment to acknowledge the disclaimer and our forward-looking statements. Thank you. Let's please move on to the presentation. This has been a strong quarter for the company. We have continued to execute on our strategy, focusing on our core assets to deliver long-term growth. In Q2, we delivered solid 6% revenue growth for the group, resulting in a total revenue of €147 million. Our Q2 adjusted EBITDA grew 8% to €18.9 million. However, the metric I would like to highlight today is EBITDA, which more than doubled with an impressive 109% growth to €14 million and €22 million for the first semester. This clearly shows the positive effect of last year's consolidation programs and our ongoing investments in AI-driven automation.
A key part of our strategy in the recent quarters has been the simplification of our business. As part of that, we successfully completed the sale of Wild Games, the largest part of our premium games segment. Julie will give more details later on. This divestment sharpens our focus on our core business, the digital advertising platform. Commercially, our platform had a record-breaking quarter. We secured 34 new agencies and 84 new publishers. We also continued the successful integration of recent acquisitions like Eniro Group, Captify, Chronicress, and Goldbach Austria GmbH, which are already delivering promising results. I am pleased to report that thanks to these continued efforts, Azerion is leaner, stronger, and more focused. I would now like to hand over to Sebastiaan Moesman for an update on our strategy.
Yes, thank you, Umut. Okay. As Umut also just referenced, we obviously had a significant project in the last few months where, after initial contact early in the year with DoubleDown Interactive, we progressed into a negotiation and ultimately the sale of Wild Games. Now, Wild Games was a series of games around digital slot machines. No gambling, just a social casino with no payout. Most people there paid to play the game, and as such, advertising wasn't a big factor in the environment. We started to manage this game for value a while back, also when we sold the poker portfolio. When DoubleDown Interactive approached us, we were certainly interested in that conversation. Ultimately, the valuation we felt was right for Azerion .
This game also had a few risk factors like future legislation on these topics and an aging user demographic that we were happy to be able to address as well with this divestment. Mostly, by divesting in Wild Games and furthermore discontinuing the entire premium games segment, we are now able to focus on the advertising business completely, and in doing so, also clean up and save costs in the structure. The advertising business is more of a skill business than premium games. When we invest and focus more on growth and advertising, both the profit and the profit margins go up, while premium games have a more linear profit model where profit would increase but at similar margins. Azerion has grown a lot in recent years, but in advertising, there's still a lot of room for growth and improvement.
With the full focus on that business line, we expect to accelerate faster. That acceleration of the advertising platform, in our minds, will mostly come from AI. As you know, we have been moving more and more into AI and multi-cloud in recent months, and our platform is perfectly positioned to take advantage of that. Digital advertising is run on technology, of course, but that technology still needs an immense amount of human work to develop a media or channel strategy, to come up with and create the ads, to configure the systems to know what, when, and where to buy the media slots, to analyze how the campaign is doing, and then to optimize the campaign. All of that is currently done by expert operators. These people, of course, need to be paid, and their time is limited.
Now, with our AI investments, we will increasingly automate the whole chain of bringing an advertising campaign to life, lowering the cost to operate them, and increasing the quality as the systems can optimize much faster and more often than people can. This will both increase our profitability and the results of those campaigns. At the same time, if you think about this smoothening and simplification of using the technology, it makes our platform also more accessible to customers with smaller and more local advertising budgets. Because as an advertiser, you no longer need Unilever-sized budgets, for instance, to run great effective omnichannel media campaigns, and you're also no longer limited to using only simple ads like on YouTube or Facebook. With Azerion, even out-of-home TV or radio advertising becomes accessible to every advertiser, regardless of budget or expertise.
Our AI efforts will therefore drive efficiencies, but also increase our revenues over time as our SaaS platform becomes more and more seamless and used by all types of advertisers. With the divestment of the premium games segment, we can focus both our energy and the additional money in the upcoming months in enhancing our products with AI and then bringing those products to market. We will do mostly organic investments where we invest in the efficiencies in our product development teams and our commercial capabilities, but also M&A in case we see opportunities to accelerate in this direction. With a brief lead to the last slide about our outstanding bond, obviously, any future investment or growth is linked to financing. As you know, we have a €265 million bond maturing in October 2025.
Given the recent divestment and the current market conditions, we are now evaluating whether this is a good time to refinance that debt early. Interest rates are favorable, which would decrease our costs significantly if we were to refinance. We obviously also don't want to refinance too close to the maturity date anyway. Therefore, we have engaged our long-term partners at Pareto Securities, and this time also DNB Carnegie, to initiate preparations for a potential refinancing. We are expecting them to approach credit investors in the near future to assess whether such a refinancing would be beneficial and feasible for the company in the short term.
Healthy Q2 numbers, increasing efficiency and growth through AI, the proceeds of the Wild Games transaction, and the potential refinancing at lower interest costs all combine to put Azerion in a very good position to accelerate both the top and the bottom line in the next 12- 18 months. We're really looking forward to making the most out of that. I will update you, of course, on that topic again in the next few months. That's it from my end this time. Let me hand over the presentation to Julie, our CFO, to take you through the financials.
Thank you, Seb. Hello again, everyone. Let me present you Q2 and H1 2025 numbers, starting with the group performance. As both Umut and Sebastiaan mentioned, we are happy with the performance across the first half here, driven by a particularly strong second quarter. For Q2, revenue grew by 6% to €147 million. For the first half, revenue increased by 7% to €275 million. You can see here the split of the group between continuing and discontinued operations. The discontinued operations correspond to the segment premium games. This reclassification is a key part of our strategy to simplify our structure, as largely explained by Sebastiaan. Following the announcement of the sale of Wild Games, which represented the lion's share of premium games, and our intention to sell the remaining part of the segment, the premium games segment has been reclassified as discontinued operations.
On the other side, continuing operations of the group correspond to the combination of advertising platform and AAA game distribution, both parts of the platform segment. This is definitely our core business, and let's see it now more in detail. As said, our continuing operation consists of two things: advertising platform and AAA game distribution business. This is the engine of our growth. This segment generates revenue mainly by displaying digital ads and by selling and distributing AAA games. In Q2 2025, the total revenue for our continuing operation was €136 million, an increase of 9% compared to Q2 last year. Total adjusted EBITDA for our continuing operations reached €16 million, a strong increase of 20%. This was driven by the revenue growth combined with cost efficiency efforts. As Umut highlighted, our focus on profitability is even most evident in our EBITDA results.
In Q2, EBITDA has more than tripled for our core continuing business, growing from €2 million- €11 million. As mentioned on the previous slide, the platform is the engine of our growth. This slide shows why, as it demonstrates consistent and regular growth quarter on quarter for the last four years, adding 66% to the top line in that time. This is driven by solid management of our direct sales channel, fueling higher margin sales. If you combine it with the integration of our core ad company and the subsequent consolidation initiative, this has led to enhanced profitability reflected by 20% Q2 year-on-year growth in adjusted EBITDA, as shown before. You may also know that our disciplined focus on profitability has been a key theme. Specifically, we've seen the benefit of controlling personnel costs while revenue is growing year on year.
In the light blue line, you can see the FTE, and in the dark blue line, revenue per FTE that also follows the seasonality of our business. Revenue per FTE increased to €147,000. The increased profitability this quarter is a direct result of the integration and consolidation effort that we have undertaken. To summarize, a strong quarter that reflects our successful strategic realignment. We are disciplined, continuing our work to demonstrate our capacity to deliver sustainable growth. We divested Wild Games in order to focus on the platform, which we consider to be more scalable with more potential growth. Our premium games segment came with stronger margins, which contributed both to the growth of the group and the investment in the platform. This was the right time to shift completely to our platform strategy.
Now we are concentrating our resources, and we clarified our positioning as an advertising-led platform with a strong omnichannel offer supported by expertise in emerging formats such as CTV, DOOH, and audio. Given the performance of our advertising business and our sharpened strategic focus, we are confident in our outlook. Thus, for our continuing operation, we maintain our guidance for the full year 2025, adjusted for the divestment of the discontinued operation. Now, I would like to hand over to our Head of Investor Relations, Andrew Buckman, for the Q&A session.
Thank you, Julie. Operator, can you please repeat the instructions for Q&A, and we can get started?
We will now move into our Q&A session. If you would like to submit a question, please use the "Ask a Questions" tab on the right-hand side of the webcast player. I will now hand over to Andrew Buckman for written questions.
Great, thank you. We've had a number of questions in. The first one is up for Seb. We'd like to hear more about the relevance of AI to the current business and the new AI business.
Yeah, I think I covered most of it already in the presentations. First, we made sure that we have an AI platform that we can work off, and we announced this in the last few months. With that platform, we are now able to both support our own and our clients' business. Starting with our own business, it means, as I said, we are using the AI more and more to streamline and optimize the products that we have. Also, of course, we use the AI internally to streamline and optimize the, let's say, the supporting and the back office services, the finance, and the operations. We are doing a lot of work to make sure that the AI increasingly makes the running of our tools cheaper and more efficient.
As I said, that will open up opportunities for new types of clients that normally would cost a lot of money and energy from us to operate. Now, with the AI, they can sort of self-serve more easily. Our SaaS platform will continue to grow and tune towards these clients. That's on the client side. The platform itself is at such a scale and level that we're also helping suppliers and clients in our ecosystem to onboard on the platform. For instance, for hosting or for using generic AI compute power, publishers and advertisers can use our platform to automate their own business and their own work on top of it. Quite a few topics there: efficiency, more easy client work. We have the internal department, which we optimize, and we sell the platform to our clients and suppliers.
Great, thanks, Seb. Second question's coming. You've answered some of this already, but there's a couple of extensions. The business growth strategy, in simplest terms, where do you see the growth going forward? For example, if we look at what products or features are driving, will you scale the bidding platform business essentially, or will you expand with other revenue streams?
I think it's important, we think the business that we offer as omnichannel means that we include in that offering certain channels like digital out-of-home and digital audio, which are not as simple as a banner or a video on Facebook or YouTube. If you think about it, if you walk through the train station and you see ads on a digital out-of-home display, it is hard for that display to know how many people walked past, how many people watched the ad, how many people then executed or did something with it. These are channels that are not essentially simple. We, as a one-stop shop, are already trying to help the big clients to make sense and to operate these kinds of campaigns in a simple way. That's our core business already, and that's where we are also a little bit different from the others.
We are in those cities where the advertisers are. We are local, and we're helping them to make this work. With the AI on top of it, as this gets more and more easy to execute, smaller and smaller clients will also be able to use this for very local omnichannel competitors. I think that's where a lot of growth is, on the combination of more clients on our SaaS platform and using more of the channels that we are really good at with the digital audio, digital out-of-home, and connected TV.
Okay, great. Whilst you were asking, another question came in. Do you think we'll see some cost reductions as a result of the AI strategy?
Absolutely, absolutely. Let me give that as an example. If you think about buying media in the past, you could say, "I'm buying from these 20 newspapers." If you make an Excel out of that, you have 20 lines saying, "I'm going to spend $10,000 with The Guardian, $5,000 with Financial Times," et cetera. If you think about this Excel list, then in digital advertising, this Excel list translates into a platform. The platform has the same 20 lines that say, "Okay, I want $10,000 to be spent on banners on Financial Times, $10,000 on The Guardian," et cetera. Someone needs to type in these lines. After a day, for instance, you start checking, are people watching the ad? Are people clicking on it? They might, they might not, and you might want to change the mix a little bit. This is all human work right now, so expensive.
That means that if we can automate that more in an intelligent way, the cost of operating these products goes down. That means that our profit goes up. Also, at the same time, if you're a client and our people need to optimize your product or your campaign, we probably do it every day or every week. The AI will probably do it every minute or every second. The quality and the performance of the campaigns themselves will also go up. You have a cost reduction in the operations of the platform while actually improving the quality of the product.
Great, thank you. We've also had a couple of finance questions come in, Julie, specifically for you. The first one is, do the Q2 accounts already include the Wild Games data sale?
Yeah, good question. No, indeed, the gain of sales will be taken into account in our Q3 results as the sale was effective during the month of July. The result will be shown in our P&L in a dedicated line, income from discontinued operations, at the bottom of the P&L. The gain of sale will be the difference between the cash consideration and the carrying amount.
Great, thank you. The next question is really about the EBITDA. How did you manage to more than double EBITDA in continuing operations this quarter?
As I've explained in the presentation, basically through disciplined control of costs and also, as Sebastiaan mentioned, AI-driven automation and obviously the integration of the acquisition, EBITDA rose 200% in H1 for the continuing operation. This clearly demonstrates operational leverage and scalability in our business.
To add to that, because we report for years already on the adjusted EBITDA, what you often want, basically, is that the adjustments in the EBITDA turn into real EBITDA in the period after. I think this is what we're also seeing. We haven't done many acquisitions in the last year. What you see now is that the adjustments that we did last year come back also as a true result in the year after. I think that's also an important point.
I think we've got one more question that's come in. I think this is more of a strategy question. I'll point this one towards Umut. What is the key reason why investors should back Azerion today?
Oh, that's it. That's a really good question. I think if you look to the changing market, to changing positions, then you could say we are one of the biggest in Europe, concentrating on Europe, being local, AI-driven. Probably we are the only one in Europe who has a full AI platform using, making use of all the different, let's say, models which are available in the markets. If you also listen to Sebastiaan and Julie, the improvement in the performance of the, let's say, profitability of the company.
All right, thanks very much. I think that's all the questions that we've got that we can answer today.