Good morning, ladies and gentlemen, and a warm welcome to today's Q3 2025 earnings call of BIKE24 Holding AG. Therefore, I'm delighted to welcome CEO Andrés Martin-Birner and CFO Sylvio Eichhorst. The gentlemen will speak shortly and guide us through the results. Following the presentation, we will move on to our Q&A session. I would say, let's jump straight into the numbers. Andrés, the stage is yours.
Thank you very much. Good morning, everybody, and welcome to today's earnings call presentation for the third quarter 2025. My name is Andrés Martin-Birner. I am the founder and CEO of BIKE24. At my side today, for the first time, is Sylvio Eichhorst, the new CFO of BIKE24. Let me now begin with the general update for the third quarter of this year before handing over to Sylvio for the business update. Finally, I will provide an outlook, including confirmation of our updated 2025 guidance, followed by the Q&A session. The third quarter was very successful overall. In terms of sales, it was another record quarter. We achieved a revenue growth of almost 32% and an adjusted EBITDA margin of plus 6.4%. This was the strongest sales growth since Q1 2021.
With the end of Q3, we have now already achieved our minimum internal company target of EUR 10 million in adjusted EBITDA at the end of September. Although the quarter was marked by summer sales, we were able to keep our gross margin relatively stable and to achieve an adjusted EBITDA of plus EUR 5.3 million. We derived this result from high product availability and attractive offers. Furthermore, we continued with our cost discipline and focus on efficient processes supporting the contribution from our top-line growth, resulting in an increase of our adjusted EBITDA above our growth rate. In particular, the continuous improvement of our assortment for our customers led to strong growth in all core markets: GSA plus 36%, the localized markets Spain, Italy, France, and Benelux, plus our new markets Finland and Poland with sales growth of 32%, rest of Europe plus 18%.
It is particularly rewarding that the newly localized markets of Finland and Poland contributed above average to growth at the end of February. Both markets grew by 63% in the third quarter. Moving on to our assortment segments, our core PAC segments recorded sales growth of 31%. On the other hand, despite a difficult market environment, we achieved unexpectedly high sales growth of 32% for full bikes. This was the highest sales of full bikes in a quarter ever. In terms of inventory levels, we have made further progress. The ratio of inventory to sales has returned to pre-pandemic levels. We are now close to reaching our target of 25%. Looking ahead, we are very pleased that, thanks to all our efforts and measures, we were able to further raise our full-year guidance in October, which we, of course, today still confirm.
We therefore expect the positive trend of recent quarters to continue in the fourth quarter with double-digit sales growth, as we already saw in October. This was the introduction from my side. Sylvio, over to you for the financials.
Thank you very much, Andrés. I'm very pleased to have the opportunity to present the financials to you in detail for the first time today. Before I introduce you into the details, let me briefly say something about my thoughts. Over the past two and a half months, I have been able to significantly deepen my knowledge of BIKE24, both in terms of business operations and processes, and I have gained an impression of how directly the business is actually managed and how lean the organizational structure is. Moreover, and even more importantly, I have been greatly impressed by the high level of commitment and the extensive knowledge of our employees. This passion is now also reflected in our financial developments.
Naturally, I'm pleased to experience such a tailwind at the beginning of my appointment as CFO, and it's particularly important to me to support the strategic direction with a solid financial foundation and stable processes. With that said, let me now continue with the financial statements presentation. As Andrés already mentioned, we have once again seen a very positive development in Q3 2025 compared to Q3 of the previous year. We continued our steady revenue growth compared to the periods in reference a year before. Since the first quarter of 2024, and this despite the market environment remaining challenging, with EUR 82.8 million, we have once again achieved a new quarterly revenue record. In detail, you can see revenue growth in bikes and in parts, accessories, and clothing, shortly referred to as PAC.
As you can see from the presentation, and as Andrés already has described, the third quarter showed a revenue increase of over 30% in both categories, bikes and PACs. Also, year to date, both categories grew significantly. While bikes increased by 24%, PAC was able to grow by 27%. For bicycles, we are seeing overall a raise in demand and prices, especially in the area of traditional bikes, whereas for e-bikes, although the quantity increased significantly, it decreased compared to the previous year. The strong competition in the market, especially in stationary or brick-and-mortar retail, is putting pressure on prices. In the subcategories of PAC, we also see a differentiated picture. On the positive side, all categories saw a volume increase of 22%-30%. While the margin for clothing could also be increased, the margin of parts remained stable, and accessories saw a slight decline.
Our strategy for offering an attractive assortment, combined with the special offers, is very well received by our customers and increases both the purchasing enthusiasm of our existing customers and the acquisition of new customers. When we now look at the regional developments, you will see that we grew in all our markets, particularly in Europe. What you can notice is that we grew significantly in our main markets, and particularly in Germany, Switzerland, and Austria. After a 28% increase in sales in the second quarter, we were able to grow revenues in this region by a further 36% compared to the same quarter last year. This continues to underline the fundamental importance of these markets. However, we were also able to accelerate our growth in the localized markets and the rest of Europe, with particularly strong gains in the localized markets.
Sales in our most recently localized markets, Poland and Finland, increased disproportionately, with revenue growth year over year of 51% and 49% respectively. The new localized markets clearly outpacing the growth of other markets in this fiscal year. Overall, our focus remains on our markets in Europe, while the rest of the world, accounting for about 1.25% of revenue, plays a rather subordinated role and is seen more as a supplement, especially in times of rapidly changing conditions and unclear customs situations. For the two most important market areas, we show you on the following slide the development of active customers and the average revenues per customer. Particularly pleasing is the vitality in GSA, where in the third quarter we recorded 296,000 active customers, an increase of 28%, and where we were able to raise average revenue per customer from EUR 182 to EUR 196.
In the second quarter, it amounted to EUR 185. This growth is certainly due to strong bicycle sales in Q3. In addition to bicycles, which grew by 31%, all areas of PAC also increased by over 35% in the third quarter. Regarding the localized markets, we also saw an increase in both active customers and average revenues, both in the quarter and on the yearly average. Both in the quarter and on the yearly average, bicycles recorded the largest growth of 35% in the third quarter and over 37% year to date. If we now look at the inventory development, it shows clearly how heterogeneous the management focus must be during the fiscal year. Not only is the focus on growth and competitive products, but inventories are also continuously monitored.
Despite a remarkable 26% increase in sales during the fiscal year, we managed to increase inventories by only about 7% and even reduce the inventory-to-sales ratio by 4 percentage points due to the sales increase. Looking even deeper into the age structure of our inventories, we also were able to reduce our age stock by more than half compared to the previous year. This development gives us particularly the flexibility to continuously reorder attractive products and thus keep our offering interesting. If we now move to the next slide, we see how business developed. Our strict cost management and our focus on working capital are reflected in the cash flow. At first glance, free cash flow increased by only 2%, but working capital improved by about EUR 1 million during this fiscal year, whereas last year it improved by about EUR 10 million, mainly due to inventory reductions.
The significant increase in adjusted EBITDA by more than EUR 7 million year over year is particularly contributing to the positive development of free cash flow. With this free cash flow, we were also able to further reduce net debt and, despite regular repayments of our financial debts, maintain our cash level. On the following slide, the adjusted EBITDA is broken down, and the operating costs are listed in detail. The starting point of the positive earnings development is the gross profit, which is a result of the sales development increased by EUR 5.1 million in Q3 and by EUR 12 million year to date. Looking at individual line items, the only position that has changed substantially in the third quarter and year to date is performance marketing and materially, especially selling costs. Both are directly related to sales volume and increased accordingly.
Overall, the cost components of adjusted EBITDA increased only by 11% in the first three quarters, while sales rose by 26%. The disproportionately lower increase in costs led to a correspondingly higher increase in earnings. I would like to highlight the development of personnel expenses, where the effects of structural optimization become clearly visible. In the prior year number, there we also included the adjusted amount of EUR 1 million for SAP implementation costs. The relative development of costs is also presented on the next slide. It is very clear that the ratios of the individual cost items to sales are essentially the same or even lower, both year to date and in the third quarter. Only performance marketing shows a slight increase in Q3 due to seasonal sales campaigns in the third quarter.
In addition, the optimization measures are not just limited to the described structural adjustments in the workforce, but are also extended to process optimizations. There are further improvement measures that were broadly implemented to increase operational efficiency. This also includes the cost-optimized use of our carriers in localized markets, leading to lower selling costs, particularly in Q3. Above all, I would like to summarize that we have done our homework and are strongly focused on the needs of our customers, as well as strengthening our operational excellence, so that we feel well equipped for the future developments. With that said, I would like to hand back to Andrés, who will give us the outlook for the coming months.
Thank you, Sylvio. Let me shortly summarize the main contributors to our growth. Following an already successful second quarter, we were able to increase sales and profits in the third quarter. The turnaround initiated in the second quarter of the previous year gained even more momentum and exceeded expectations with sales growth of 32%. This shows once again that our focus on revenue combined with scaled-up profitability is paying off. In particular, the regained strength in our home market makes us confident for the coming quarters. On the other hand, localization is an important part of our three-pillar strategy, as are investments in the growth of our full bike assortment. Improvements in the product assortment, the enhanced availability, the optimized logistics, and overall increased operational efficiency lead to more growth and, as a result, greater profitability.
The shop experience has improved significantly as well, with a new design, with new features including better filters, better checkout, and with a bike-parked compatibility solution for our customers. Finally, let's take a look into the near future. Given the significant growth in the first nine months and the promising results of recent weeks, we expect revenue growth between EUR 278 million and EUR 288 million in 2025. We also confirm our guidance for the adjusted EBITDA between EUR 12.5 million and EUR 13.5 million. However, I would like to make the remark, of course, that our guidance is based on the assumption that neither the macroeconomic environment nor consumer sentiment will suddenly deteriorate significantly. Finally, thank you for your attention, and please let me lead over to our Q&A session, where we are more than happy today to answer your questions.
Thank you so much for handing over, Andrés, and thank you for your presentation and congratulations on the results. Ladies and gentlemen, we are now happy to take your questions. If you would like to speak directly to the gentlemen, you can raise your literal hands, and then I give you the permission to unmute yourself. Furthermore, you have the opportunity to place your questions in our chat, and then I will read them out for you. We received the first literal hand from Ingo Schmidt. Ingo, you are now able to speak and ask your questions. Ingo, still waiting that you're able to unmute yourself.
Can you hear me now? Yeah, perfect. Good morning and thank you for hosting this call. It's great to see such impressive growth in revenue and profitability. I have three questions. First of all, you have seen strong growth in localized European markets like Poland and Finland. How do you plan to expand this strategy further in 2026? Your EBITDA margin improved to 6.4% in Q3. What are your main priorities to keep improving profitability next year? Last but not least, of course, looking ahead to 2026, what are your expectations for revenue growth?
Okay, let me maybe start, and maybe Sylvio can add something on that. Yeah, localized markets, of course, as you know, it's a part of our strategy we published during our IPO process. Yeah, of course, we have more countries that we plan to localize also for the next year. I expect it during the second quarter, I think, what we can expect. Yeah, there are three or four countries where we discussed, but it's not finally we don't have the final decision on that. It is a part of our plan also for the next year. EBITDA margin, of course, we see tailwind for BIKE24. This is correct. On the other hand, we see a difficult market environment at all. To increase gross margins, and this is the main part of, I think, the better EBITDA margin historically.
As you know, we had the double-digit EBITDA margins historical. It needs a little bit more tailwind from the whole market. This is what we do not see today. Our first goal is to be stable, profitable, and to grow next year. We see our plan is, of course, to have high single-digit gross EBITDA margin next year. When we look to 2026 and also the next years, I always mention that the ambition is to have double-digit growth rates in terms of revenues. This is also, of course, our goal for next year and also for the coming years.
Maybe just to add to the EBITDA margin, of course, we are also looking now to assortment, where we have the most profitable products. Of course, we want to strengthen these products. In regards to the other costs, of course, we have now a lean structure. This is what we also want to keep as long as possible. Of course, if we grow further, then also there might be a little increase. This is, yeah, as we started last year, it continues to be in our focus.
Okay, understood. Thank you. Best of luck in the coming months.
Thank you very much.
Thank you for your questions, Ingo. Sorry. By now, we have no further literal hands in the queue. That is why we take a look in our Q&A box. We have a quite similar question from Luis. He says, "Good morning. Gross margin is not improving at all year to date. How should we interpret it? Tougher markets and/or competition or strategically decided by BIKE24.
Maybe I can take the first point. Yeah, that's a little bit what I mentioned before, that it's a difficult market environment. When we see or when we will have more tailwind from that, it's possible to come back to better gross margins close to the 30%. Today, the market environment is not, yeah, we don't see that big tailwind on that. Yeah.
Maybe this is something to add, Andrés, and I think you mentioned this already, I think, a couple of times, that we're also now focusing, not so we're focusing, of course, also on the margin, but at the end, it's all about gross profit. We want to scale up our revenue so that in total, we have a better gross profit than just a good gross margin.
All right, thank you so much. We will move on with the questions from Raphael Knopfler. You should be able to speak now.
Hello, can you hear me?
Yes.
Yes, this is Raphael Knopfler from Birnberg, just jumping in for Wolfgang Specht. You already mentioned the inventory to sales ratio, but just another question on this. After inventory grew less than revenue was known in Q3, do you expect any large changes in inventories for Q4?
When we look at the development of our revenue, yeah, it's, of course, a seasonal business biking. That's why we expect a lower inventory at the end of the year. We expect also that we will achieve our target of 25% at the end of the year. I expect, yeah, something about EUR 60 million-EUR 65 million in inventory at the end of the year.
Okay, thank you very much.
Thank you so much for your questions. We move on with the questions from Charles. Please ask your questions.
Hello, can you hear me?
Yes.
Perfect, great. First of all, congratulations, Andrés, and welcome, Sylvio, to arrive at a pretty exciting time. Your growth rate was spectacular. In fact, looking back a year ago, one would have never imagined such high growth. In connection with that, I would also say great to hear always that you expected in the future over 10%. Now with this quarter, that is becoming more believable. I think the market did not believe it, obviously, when the shares were down at EUR 1 or so. Today, with 32% almost, what is the reason it is so strong? How sustainable are some of the reasons to create 32% in the coming quarters?
To be honest, what I sometimes maybe mentioned is that I expect not a growth rate of 30% for the coming quarters. Yeah, it's for us a little bit also unbelievable. We use our opportunities in the weak market environment. On the other hand, I think we have a little catch-up effect on BIKE24 because, as you know, last year, we had the SAP introduction. Now, it's a little bit easier for mastering all the things or the important things what BIKE24 made so successful in the last years. Yeah, I mean, not 2023 and 2024, but years before. It's the assortment, it's the high availability. That's what we are focusing on, combined with fast logistic and the fair price. That's why I think this year is the year of the catch-up effect.
On the other hand, when we see more tailwind from the market, it is easier, of course, to see double-digit growth rates in the coming years. I see also in a weak market environment, we are strong enough with our organization, the team, with the assortment, with our plan also for the coming years to see double-digit growth rates.
Great, good to hear that. Thank you so much.
You're welcome.
Thank you for your questions. By now, we have three further questions in our Q&A box. The first one, you mentioned improvement in your web shop with better filters and checkout process. How are your conversion ratios? How are your conversion ratios? And how is the trend in this ratio?
Yeah, I would say as a modern e-commerce company, of course, we use modern tools for checking, I mean, A/B testing when we introduce a new feature. We use A/B testing to check if we have better conversion rates. This is what we do. We introduce it and launch it. Yeah, we see, of course, better, but better conversion rates. That's why we, yeah, we launched it.
Thank you. For the question, can you give us a bit more color about the competition behavior? Did you see a change in the tough market?
Yeah, it's just not so simple to answer because we don't have the full transparency for the full market. As you know, there are many, many competitors, offline competitors, and only some few online competitors. We don't have, yeah, correct numbers from that. It's not so transparent. I feel a little bit that some of them are weaker than the years before. I think it's, yeah, maybe one reason why we saw this year, yeah, high growth rates in revenue that we, on the other hand, use our market opportunities. I don't know exactly, but I feel that some of the competitors are weaker than the year before.
Thank you. By now, we only have one question left. Dear participants, it is still possible to ask questions. Please let us know, whether it is by your literal hand or pose your question in our Q&A box. By now, the last question, how much has the stock depletion in the bicycle market progressed in the overall market? What is your perception there?
Yeah, it's, yeah, not so easy to answer, to be honest. Can you do something?
I mean, what we see or what we hear is, of course, that a lot of old stock has been also sold from the bike. We are a little bit looking forward. We anticipate that we have now more newer stock. Maybe with the newer stock, also the willingness to sell bikes at very low prices might be reduced, at least looking forward, yeah, so that the competition will a little bit ease. The full picture is maybe difficult to see. What we see is also that a lot of producers are very weak, yeah, so they're suffering. They get off the market, and maybe others will step in. At the end, we hope that the bike market will also recover next year, yeah, and will not continue to have these old stocks carried forward.
All right, thank you so much. We have a follow-up question from Charles. Please go ahead.
Follow-up, if you can hear me, can you hear me?
Yes.
Great. I'm talking about bikes and differentiating between different types of bikes, e-bikes and the classic bikes. Then within classic bikes, the super high-end, maybe EUR 8,000 above, and just the more mid-range. Could you give us some more color on what you're selling in the area of bikes? I think you highlighted at the beginning that e-bikes have been more difficult, possibly. I'm not sure if I heard that right.
Historically, BIKE24 is very strong in the road bike segment and also in the assortment. I think we are, yeah, I would say in the front in Europe or one of the best players in the e-commerce market for road bikes and also for gravel bikes. This is one reason why we were so successful this year because from this special, and this is just only a small market environment, to be honest, but we saw the big tailwind for BIKE24 because graveling or road bike cycling is very, very popular in Europe. On the other hand, I see it's, yeah, the price pressure for e-bikes is very high. You can imagine because there are so many market participants focused in the last years on e-bikes. The obsolete stock problem is especially in this segment.
That is why the pressure is strongest in that special segment. We benefit a little bit on this pressure because we had some good clearance deals in the e-bike segment. On the other hand, we benefit this year from the strong popularity of the gravel bike and the road bike segment.
Great, thank you.
Thank you so much. We have another question in the Q&A box. Do you have the ability to refinance your debt with better conditions due to the solvency improvement?
That's definitely something I would take. Of course, we are looking in this area as well. I mean, now we have the tailwind from our business development, and we also would like to have a robust financial background also when we grow. It's not just because of investments, but also because we want to finance our working capital, meaning our inventory stock. If we grow more, then we need also to pre-finance at least for a certain period of time a little bit more. That's why, of course, we need to look at whether we are appropriately financed now. This is definitely something that I will, yeah, look at in the near time, yeah, so that we can have a stable going forward.
All right, thank you so much. It seems there are no open topics, no questions left. That means we therefore come to the end of today's earnings call. Thank you everyone for joining. You've shown interest. Also, a big thank you to you, Andrés and Sylvio, for your time, your presentation, and for the good results. From my side, I wish you all a lovely remaining week. Andrés, Sylvio, some final remarks from your side.
Yeah, thank you for joining. Thank you for listening. Yeah, wish you, or we wish you a happy day. Bye-bye.
Bye.