Good day and welcome to the Scout24 Quarter Three 2021 Results Conference Call. Today's conference is being recorded, and at this time, I would like to turn the conference over to Ursula Querette. Please go ahead, ma'am.
Welcome everyone to Scout24's Q3 2021 earnings call. My name is Ursula Querette, and I am Head of Investor Relations and Treasury at Scout24. As speakers, we have Tobias Hartmann, our CEO on this call, who will kick off the presentation. Dirk Schmelzer, our CFO, will then present our Q3 and nine-month financials. We will then have time for your questions. As usual, you can find today's presentation on our website under Financial Reports and Presentations. There you can also find our quarterly statement with Q3 and nine months 2021 financials. If you are using the web link we provided beforehand, you can follow the presentation live. This session will be recorded and a replay will be made available as quickly as possible after the event. Please be aware of the disclaimer on page two, and let us now turn to page three, where I hand it over to Toby.
Thank you, Ursula, and welcome everyone. Let me start on page three. I think we made it very clear over the last quarters what we understand as ecosystem strategy. It is how we are moving away from a traditional classified business towards a network marketplace model, and how this leads to a more diversified revenue model. As a proof point, let's take a look at our very pleasing Q3 results. While the core residential agent ARPU did grow through price increases, it is a bit dampened by new customers, but also boosted by our strongly growing Realtor Lead Engine product. On top of that comes the strong demand for mandates from Immoverkauf24, which led to a respective revenue increase of 41% in Q3. On the consumer side of the business, we saw our Plus product revenue grow by 23%.
Our traditional core agent business is complemented by acquisition products for agents, and our consumer listing business is complemented by subscription products, which now significantly overcompensate the free to list effects. Additionally, we are capitalizing on the fact that both customer groups, professional and private, are becoming more and more digitally savvy. The B2B real estate business is still suffering from the impact of the COVID-19 pandemic. Despite that, and in context of our continued free to list push, we were able to achieve an overall revenue growth in Q3 of around 9%. Since Immoverkauf24 has been acquired on July 1, 2020, organic and reported growth is nearly the same for the quarter. At our CMD in three weeks, we will share more context and plans how we are tackling growth in the future, while at the same time creating long-term shareholder value.
Talking about shareholder value, in Q3, our EPS increased significantly following the recent share buybacks. It came out at EUR 0.29, 27% up YoY. I leave it to Dirk to talk about our next share buyback program in the amount of up to EUR 200 million. As just explained, thanks to the right product offering in place, we delivered strong revenue growth. This despite the ongoing challenging market conditions in Germany. Those of you who have followed the German election campaign have noted that the housing shortage is a major political topic over here. We are addressing this issue, amongst others, with mandate acquisition products and solutions for agents and tailored search products for consumers. These are all products which go beyond the traditional offering of a classifieds player.
This is the main reason why, despite decreasing listing numbers, which you can see on page four, we are delivering increasing revenues. At the same time, we are seeing an increased usage of our platform by home seekers. This is a proof of our significantly increased relevance. In the first nine months of the year, the app traffic went up by 23% year-on-year, compensating for the decrease in desktop usage. Next to improved mobile usage, we believe this desktop trend is driven by the changed cookie consent, which leads to reduced measurability of traffic. Monthly sessions on Immoverkauf24 were only slightly down by 3% to 104 million, and therefore almost back to previous year's level. Taking into account the cookie consent, the number of sessions on desktop and app together actually implies a significant increase in demand.
This increased engagement is certainly due to the strong demand for property, which is ultimately met by the help of our search products. Those search products are included in the consumer subscriptions portion depicted in teal on the graph on slide five. Revenues from this product group are now exceeding the one-off listing or Pay-per-ad revenues. The same holds true for the leads revenues, the yellow portion of the graph. As I mentioned before, we are becoming less and less dependent on our traditional classified business. From classifieds to ecosystem. That is our stated strategy. Both the leads and consumer subscription products bring us closer to either sale or rent transactions. Through our membership editions, the largest and orange portion of the graph, we offer our agent customers the right tools to efficiently market their inventory, and it also helps them win new mandates.
This very solid core business, while growing at a slower pace, is the foundation for our strongly growing transactional business. Page six now shows how this translates into nine-month 2021 key performance indicators. Our group revenue grew by 9.4% to EUR 287 million in a year-on-year comparison. The main growth driver was our residential real estate segment, with a revenue increase of 12.8%. Considering the operating cost developments linked to the changed revenue mix I showed you before, the ordinary operating EBITDA increased by 4.5% to EUR 165 million. Due to the strong demand for the Realtor Lead Engine product and continued price adjustments, the ARPU of the residential real estate partners increased by 5.9% to EUR 751.
The business real estate ARPU also increased, still at a low pace due to the pandemic, by 0.5% to EUR 1,748. Once again, we were able to also grow our customer base by 2.5% to 20,511 customers. The biggest pain point for this customer base remains to win new mandates in a market with a lack of supply. The currency for these mandates is our growing registered homeowner base. At the end of September, we stood at approximately 670,000 homeowners, an increase of 34% year-on-year. The number of consumer plus product subscribers grew even stronger by over 80% to almost 237,000. With the resulting revenues, we were able to significantly overcompensate the declining Pay-per-ad business, leading to a good overall growth of consumer revenues.
This is fully in line with our intended business strategy, and we are pleased to see our company deliver very tangible results as part of our execution. With that, I will hand it over to Dirk to provide more color on the financials. Dirk, over to you.
Thank you, Toby. Welcome, everybody, also from my side. Now let's move to slide seven, which shows you the segment view. As Toby already mentioned, the residential real estate revenue increased by 12.8% to EUR 212.4 million in a nine-month comparison. This growth was mainly driven by our revenue with agents, which grew by 14%, strongly supported by delivering sales mandates to our agents. The Realtor Lead Engine and Immoverkauf24 together increased revenue by 111% to EUR 23.9 million in a nine-month view. Comparing quarter-on-quarter, the respective growth rate was 54% due to the consolidation of Immoverkauf24 in Q3 last year. Revenue with consumers increased by 10.2% in a nine -month comparison, despite free to list.
This is due to a high demand for our Plus products, reflected in a strong increase in consumer subscriptions, as Toby just told you. The ordinary operating EBITDA margin of the Residential Real Estate segment came in at 59.5% for the first nine months of 2021, which is 3.9 percentage points below previous year. On the one hand, this is due to higher operating costs, mainly for homeowner marketing initiatives. On the other hand, the margin development reflects the changed revenue mix associated with our market network strategy, with the recent acquisitions strongly contributing to this strategy. Organically, the ordinary operating EBITDA margin was at 61.8% for the Residential Real Estate segment.
The Business Real Estate segment revenue is still affected by the pandemic, resulting in a stable revenue development with EUR 51.4 million for the nine-month period, 2021. Nevertheless, the revenue with developers and new home builders increased by 4.3% and thus compensated for the decline in the revenue with commercial real estate agents. The latter was primarily due to a decreasing Pay-per-ad business with commercial agents. The ordinary operating EBITDA margin of the Business Real Estate segment came in at 72.7%. The Media and Other segment revenue increased by 2% to EUR 23 million in the nine-month period. This was mainly driven by the strong ImmoScout24 Austria business, while at the same time the media business declined. Flowfact also recorded a declining revenue due to the ongoing conversion of the payment model to software as a service.
Since August 2021, the newly acquired Propstack also contributed to the media and other revenue development with its cloud-based CRM product for smaller agents. The ordinary operating EBITDA margin of the media and other segment fell by 5.3 percentage points to 34.5%. We already mentioned the continued customer growth and the ARPU increase. Page eight gives you the customary quarterly and year-to-date overview by segment. The residential ARPU increase by 7.4% in Q3 can be explained by the growing Realtor Lead Engine revenues and price increases. On the other hand, the growing agent base creates downward pressure as it mostly applies to smaller agents. The business real estate segment is still influenced by the COVID-19 pandemic, with a slight recovery in Q3 reflected by the ARPU growth of 1.7%.
Turning to page nine, let us go through the main ordinary operating items affecting our margin development. Own work capitalized increased by 21% to EUR 19.5 million in the first nine months. This translates into a capitalization ratio of 7.4%, which is above our target ratio of 6%. This is mainly to do with capitalized project developments from vermietet.de, which come on top of our accelerated product innovation efforts. Examples of such product investments include further development of the Home Seller Hub and the Plus products which pay into our ecosystem strategy. However, I'm expecting that by the end of 2022, the capitalization ratio should be down to our 6% target again. Personnel costs increased by 14.5%, mainly due to the integration of vermietet.de and Propstack employees.
As a recurring topic from the last quarters, the higher marketing expenses mainly reflect our ambition to generate valuable homeowner contacts, which are at the heart of our leads business. With these leads, our agent customers can digitally accelerate their mandate acquisition efforts, eventually leading to more transactions. Our marketing expenses increased by 28% to EUR 27.8 million in a nine-month comparison. This includes expenses for TV and online advertising, search engine optimization, search engine advertising, and performance marketing. IT expenses remained stable in a nine-month comparison at EUR 12.7 million. The increase in Q3 was due to a higher number of software licenses coming with more employees.
The year-on-year growth in other operating costs by 21.4% to EUR 38.5 million is mainly due to increasing purchase costs in connection with the sale of more leads and plus products, higher external labor costs due to additional call center activities, and additional investments into Flowfact. Taking all those operating effects into account brings us to an ordinary operating EBITDA of EUR 164.7 million for the first nine-month period and EUR 54.5 million for Q3 2021. This reflects a year-on-year increase of 4.5% and 4.4% respectively. The nine-month margin came in at 57.4%, while Q3 was lower at 55.9%. Again, organically, the margin would have been at 59.1% for the nine-month period and at 57.1% for Q3.
Let's turn to page 10, where you see the items below the ordinary operating EBITDA with a highly accretive development in earnings per share. Non-operating costs decreased significantly by 70.6% in Q3, mainly driven by the development of share-based compensation. Due to the declining share price, long-term incentive program provisions were released in Q3 2021. This was partly offset by higher M&A costs. For the nine-month period, the non-operating effects decreased by 34%. As a result, the reported EBITDA was up 18.2% in Q3 2021 and increased by 9.2% in the first nine-month period. Depreciation and amortization increased due to higher depreciation rates resulting from the move to the new Berlin office, as well as depreciation of own work capitalized.
The strong decline in the financial result in Q3 is resulting from a lower amount of cash invested in the special securities fund due to further share buybacks. In addition, the actual performance of the fund was slightly lower than in previous periods. The recent share buybacks are also the reason for the strong increase in earnings per share. Based on a reduced average number of shares of 83.5 million for Q3 2021, this results in a 27% higher EPS of EUR 0.29 . The nine-month EPS amounted to EUR 0.79 , up 18% year-on-year. Let's take a closer look at the development of our share capital on page 11. What you see here is the development of outstanding shares and treasury shares in connection with our capital return roadmap.
The number of outstanding shares depicted in black in the graph forms the relevant base for calculating the EPS. The volume of up to 10% of our total share capital, which we can hold in treasury shares, is reflected by the orange portion of the graph. In December last year, after the public tender transaction in April this year, and one week ago, at the beginning of November, we canceled treasury shares. Consequently, our total share capital now stands at 83.6 million shares, of which 83.5 million are outstanding free float shares and less than 100,000 are left as treasury shares. As announced on the third of November, the next share buyback program in the amount of up to EUR 200 million is just around the corner.
It is planned to start within the next days and should be completed at the latest at the end of June 2022, and therefore before the next AGM. Let me finish our presentation with page 12 and our outlook for 2021. With increasing confidence in the business development for the rest of the year, we decided to refine our full year outlook. Mid to high single revenue growth now becomes around 9% revenue growth. Our previous outlook for the ordinary operating EBITDA margin of up to 60% is refined to a range of 57%-58%. This range now also fully reflects the recent acquisitions of vermietet.de and Propstack. I told you in our last earnings call that vermietet.de would cost us one margin point this year.
Without vermietet.de, we would have been able to share here a margin outlook in the range of 58%-59%. Just like Immoverkauf24, vermietet.de perfectly fits into our ecosystem strategy. Both businesses bring us closer to the real estate transaction. With Immoverkauf24, we participate in sales transactions by realizing a share of the agent commission. With vermietet.de, we participate in rental transactions when private landlords create and sign digital rental contracts over the platform and manage ongoing tenant relationships. In the first nine months of this year, Immoverkauf24 completed approximately 1,230 property transactions with our partner agents. vermietet.de had 144,000 registered landlords on the platform at the end of September. By the way, the integration is running as planned. Users can now log on to vermietet.de with their ImmoScout24 account and seamlessly transfer property data.
With this, let me open the floor for your questions. Operator, over to you.
Thank you very much, sir. Ladies and gentlemen, if you would like to ask a question over the phone, please signal by pressing star one on your telephone keypad. Please note if you're using a speakerphone, just to make sure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one to ask a question, and we'll pause for just a brief moment to give everyone an opportunity to signal for questions. We'll now move to our first question over the phone, which comes from Christoph Bast from HSBC. Please go ahead. The line is open.
Yes. Thank you, everyone, for taking the question. First question on ARPU trends in residential. I'm curious how you think about the impact that the declines on the listing side that we're seeing in the market are impacting your ability to increase prices with agents. I remember historically, this has always been discussion of, you know, more for more agents, you know, have been pushed to put more product on the platform, and hence it was easier to go to them and say, "Look, you've used X% more, you know, for sale listing on our platform.
Hence, the price increase of X is only, you know, to be put into perspective." I'm wondering how much of an issue this is going to be when we look into Q4 and early next year, 'cause I would assume that the listings issue is not gonna go away anytime soon. Then second, related to that, how do you see the final migration of the residual customers into the higher tiers on the membership side having impact on ARPU in the fourth quarter? Then third, a bit of a bigger picture question on your current view on M&A. You've been linked to a number of transactions, but so far, you know, you've mostly done small bolt-ons like vermietet.de, for example.
I'm just curious on, in terms of your appetite, I mean, what is generally on your radar at this moment? You know, are you willing to potentially look at cross-border again, you know, hybrid agents or agents, purely tech? I mean, you know, what we should know about your M&A ambitions? Thanks.
Thanks, thanks very much, Chris. This is Dirk. I think I'll start with question one and two, and then, we'll hand over to Toby for the third question relating to M&A. First of all, good one on the declining listings and, the underlying ARPU trends around that. What we can say is that there are two elements around it, right? First of all, the overall agent revenue is increasing by the increasing value of transactions that he, or she's undertaking in Germany. And we believe we earn our fair share around that with the value we are delivering to that. That is also bought in by the agents.
Therefore, our pricing with regards to the memberships is more and more based not on listings only, but also on local market shares and local surroundings. I think I explained that when we last year decided to move into the rate cards, that was also based for our pricing and the transparency initiatives we have taken there. We don't see an impact of the declining listings on the overall membership ARPU. We believe this can continue to increase in the future. That is fueled by a second effect, which is certainly the additional businesses, business we're offering to the agents by providing the agents with leads through our lead engine on the one hand and through Immoverkauf24 on the other hand.
We don't think that there will be a significant impact on the ARPU from the decline in listings, given the underlying pricing mechanisms we have put in place on our operational business. Secondly, you've been asking with regards to the migration. Migration is continuing. By the end of Q3, we had around about 80% of our agents migrated, and we'll continue to migrate the agents. I believe that by the end of the year, we have migrated around 95%-100% of our agent base, and that is proceeding as planned.
Interesting trend that we are seeing is that agent satisfaction is improving in the Image Edition, and it's also improving in the higher tier editions, which gives us a clear signal that we are obviously offering something that is of value to our key customers, namely the German real estate agents. For the third question regarding M&A, I would like to hand over to Toby.
Yeah. Hi, Chris. Thanks for your question. With regards to M&A, we've established clear criteria. Again, a few to recall. They need to fit the bill to build out our ecosystem approach. They need to be accretive in the longer term. They need to help us building and establishing a stronger competitive advantage. The last question is, you know, do we really need this and organically, or could we do this organically? The combination of these factors are applied. There's lots of rumor about many potential transactions always in the market. There has been obviously, since you followed the news, we've only focused on add-on acquisitions so far. We're very happy with the track record right now.
We do think it's a good combination of strengthening our product foundation while at the same time accelerating with our transactional model, i.e., getting deeper into the transaction. For now, that remains the strategy. Having said that, do we have appetite in general if there's something interesting popping up? Absolutely. We are open for business. Thank you.
Okay. Perfect. Thanks a lot.
Thank you. We'll now move on to our next question over the phone, which comes from Nizla Naizer from Deutsche Bank. Please go ahead.
Great. Thank you. I have two questions from my end. Firstly, so on Immoverkauf24, could you please give us a bit more color on the economics that you've seen in the nine months, the number of leads that you've been successfully able to sell, how many of those were generated internally on the Scout platform versus how many did you have to sort of acquire yourselves? Secondly, what was the value of the transactions that these nine months of sales have manifested? Lastly, on the response of the agents themselves, are they still happy to share the 30%-40% of the commission, if I'm not mistaken, with you in exchange for these leads? Some color there would be great.
Secondly, you know, with the potential change in the German government, could you maybe take us through what sort of implications it may have for real estate and for Scout in particular? Some color there would be great. Thank you.
Thanks, Nizla. This is Dirk. I once again start and so then hand over to Toby for the overall development in the property market in Germany here. Your question was mainly related around Immoverkauf24. What I can confirm is that the overall revenue share with regards to leads we are selling on a cost per lead basis versus commission-based leads is around one-third for the commission base and two-thirds for the Realtor Lead Engine. In total, the amount of leads that we have been selling and processing this year is around 80,000. In the first nine months of this year, we had 1,230 commission-based leads that we went through with Immoverkauf24 and its customers.
What we can also state here is that the price per lead on the Realtor Lead Engine is significantly lower than what we see on the Realtor Lead Engine with Immoverkauf24. Here, and that was the second part of your question. We managed to get around 40% with a trend towards 50% of the overall commission of the agent. That answers your question on whether we are maxed out on this part. We still believe that there's a high willingness to pay on the agent side and a high willingness to share on the agent side, to share 50% of the commission when we deliver an Immoverkauf24 lead to the agent. I think that was about it, and that should give you some flavor around that.
With that, I hand over to Toby for the question on the current government.
Yeah. Hi, Nizla. Just to build on what Dirk just mentioned. With over a year behind us now, having integrated Immoverkauf24, hopefully, you can see not only the numbers, but also as part of the overall strategy and how we're executing against it, that this is a significant part of our future strategy, i.e., yes, we do think this will be a very growing business going forward. We've tried and pivoted around it, and we're very comfortable with the asset. We're very comfortable with the integration. We're very comfortable with the client satisfaction and how it's actually priced in the market. There's more to come. On your question with regards to the government, let's just roll back where we came from.
The former government obviously was led by the CDU, but the FDP was the coalition partner, which is now the leading partner in the new coalition. So far in the coalition papers that we've seen from the new government, there's nothing mentioned to have any sorts of caps or restrictions further put on to restrict the market or limit the market. Let's also be aware of the fact that there's the FDP, which is the third party in that coalition scheme, and they typically stand for liberal politics, i.e., they're against any sort of regulation or limitations.
By large, for now, obviously we don't have it in writing or we're not 100% certain, but, for now there's nothing that we would expect that could be challenging our position or could be weakening our position with regards to governmental legislation. I think the positive effect, though, is on the other hand, and that's something we should focus on, that, clearly the parties and also these three parties have-
Understood that there is a problem of capacity of housing. The former government under Merkel did not fulfill the expectations to live up to their promises, i.e., new housing development plans. They fell short of their own goals. That's what they've picked up, and they would like to make sure that there will be more capacity on the ground, i.e., we expect some strong statements with regards to focusing on the housing topic of the new government, helping to lower some sort of construction costs, making it easier to get tangible permissions to build and have new buildings built up. Also that in combination with some sort of climate goals for the real estate sector. That's what we expect to happen. Hope this answers your question. Thank you.
Yes. Thank you very much. Very helpful.
Thank you. We'll now move on to our next question over the phone, which comes from Adam Berlin from UBS. Please go ahead. Your line is open.
Hi, everyone. Thanks for taking the questions. Just two left from me. On the page six of the presentation, you talk about 237,000 consumer Plus product subscribers. Could you please break those out for us between the different products that are now in place? I know there's a lot of MieterPlus, but you've also got credit reports and some other products out there. Just to understand how that is being driven. The second question is, you didn't deliver very much Q-on-Q growth in ARPU within residential real estate this quarter. You said it was partly to do with more agents coming on board, but you know, the number didn't go up that much.
Now, what's gonna drive the Q- on- Q ARPU growth in the next few years? 'Cause, you know, you had very strong performance of the ImmoScout24. You got the price increases, but it's still kind of stuck around that EUR 750 number. Just trying to understand how we get more conviction that that number's gonna go up in next year.
Thanks. Thanks, Adam. I start off with the latter question around the ARPU. First of all, 7.4% ARPU growth in Q3 for us is first of all a function of the Realtor Lead Engine revenues that we put in the ARPU, as you are aware. Secondly, we think that around 6% of the increase is purely driven by pricing, comparing on a like-for-like agent base. The growing agent base certainly has some downward pressure on the ARPU, because the agents we are adding to our portfolio usually are smaller agents with an ARPU of EUR 200, EUR 300, EUR 400. Those effects, I think, are already known to you.
Now, looking forward, I think what we need to understand is that when we do the year-on-year comparisons, we're coming out of a situation last year, which has been largely influenced by COVID and some discounts that we have been giving for various agents and for various contractual obligations. When we look forward, we have a much clearer picture. There, I would like to state what I stated before. In the future, you can expect ARPU growth by terms and conditions-based price increases in the low- to mid-single-digit. You can expect ARPU growth in the low- to mid-single-digits from additional services we're offering, like the Realtor Lead Engine and others. We believe we can continue on that.
If in your model you assume mid-single digit ARPU growth to high single digit ARPU growth in the future, I think you should be on the safe side. Now, when we come to the amount of subscriptions we're having on the platform, what we see here is that we have around 220,000 subscribers on the TenantPlus product. It's a bit changing quarter-on-quarter given the seasonality, but we have around 220,000 subscribers on the TenantPlus product. On the BuyerPlus product, we have around 20,000 subscribers. There comes a few subscribers around the LandlordPlus product that we are offering. Here, however, we are in the midst of the integration of vermietet.de.
You can see that growing in the future, certainly. At the moment, the majority of our subscribers is certainly coming from the consumer LandlordPlus subscriber.
Okay. Thank you very much.
Thank you. We'll now move on to our next question over the phone, which comes from, William Packer from Exane BNP Paribas. Please go ahead.
Hi there. Many thanks for taking my questions. Firstly, thanks for the color on Immoverkauf24. My memory is that you have very good visibility on the outlook of that business because of the way in which the product works. Should we expect growth to accelerate going forward or any color on growth outlook from here would be helpful. Secondly, could you comment on the investment required at Immoverkauf24 to scale it? As it gets bigger, do you need to invest in marketing, customer service, agent relations? How should we think about that challenge? Finally, regarding the competitive backdrop, are there any market developments worthy of note? I suppose two things that would be obvious to me would be, firstly, Adevinta have now had control of eBay Kleinanzeigen for a while. Have you seen any movements from them?
Secondly, the vendor lead segment is a very hot segment in global classifieds. Have there been any developments within the wider vendor lead segment? Thank you.
Thanks, Will. Welcome, and thanks very much for the question. I start off with Immoverkauf24 and the growth outlook there. What you can see is, and what we experience is, that the good thing with having two different monetization models in place, on the one hand, the lead engine product, where we are billing our agents with the cost per lead, and on the other hand, the product with Immoverkauf24, where we are taking part of the commission, enables us to balance out the leads with regards to the capacity we are having on Immoverkauf24. As we said on earlier occasions, there is an amount of agents that are subscribed to our product. There is some regionality in our product.
We are balancing out the amount of commission-based lead that we are bringing to the market based on the demand of our agents in the various regions. When we see that we cannot fulfill this demand, we are putting additional leads to Immoverkauf24 to make them commission-based. If we see that the demand in a certain region is lower, we are putting that on the commission-based lead machine. That enables us to balance growth a bit here. When it comes to growth of the business, you are absolutely right. We need marketing costs and marketing spend on that. Although more than one-third of all our leads is coming from our own platform, we still prefer to buy some leads from affiliates and through performance marketing.
On the other hand, we need some personnel behind it to really deliver the leads to the agents and follow up on the commission with that. We believe that we can significantly grow the business. We're gonna see slight growth rates in 2022 and an accelerated growth rate in 2023 going forward with that business. But we also believe that we need to take into account the situation that we have with regards to the difference between spending the money on the one hand and receiving the revenue on the other hand. The expectations of our investors and our analysts on our margin and revenue development. We balance this out and very carefully, but we are very, very bullish on the business.
Yeah. Will, thanks for your questions. Obviously very relevant questions. We feel very comfortable with the Immoverkauf24 model. We do understand now the economics. We also do understand what it takes to grow the business and to scale it. We have different options to scale the business. I would rather abstain from going into details here in this call, but one is regionality, the other one is the density of affiliated agents that we have out there, and the third one is also the tooling that we provide and the quality of leads that we provide. Those are all areas where we are constantly trying to improve, to cast a wider net and to really drive that business because that gets us closer to the transaction, which is part of our network ecosystem strategy.
Yes, you should expect us to scale it further down the road as part of our growth plan. On the market development and the competitive environment, we try to bring across the same nomenclature each quarter that we are talking to you and others on the phone or when we meet in person, which is, we've been following a very clear strategy here, which is we are constantly and continuing to move away from the monetization from the pure listing, rather into a more transactional relationship be it with customers, which is embodied by the memberships, and with consumers, which is embodied by the subscriptions that we have. The whole trick here is that we've invested heavily into our product stack to really support that. What you can see from these numbers is it is working. It is scaling.
It is scaling up, and it's working on the consumer side, and it's working on the customer side. We believe that, talk about competitive environment, we have the leading product portfolio out there. We do know that we are the largest player in providing homeowner leads today in the digital arena, by and large. We do know that, as we've showed you on this call, that we've grown our, you know, just recently this quarter 34% our homeowner registered homeowners on our platform, which is a key investment area. What does this mean? We think we have the right strategy in place. We will continue going down that path.
We will continue to invest into our product stack and into marketing on exactly those dimensions, i.e., the memberships on the one hand, to provide more business to our agents, to our partners, and the subscriptions on the other hand, because that's what landlords, homeowners, and so forth want us to provide and have the optionality to engage directly or through an agent. Hope that's helpful. Thank you.
Thanks for the color.
Thank you. As a reminder, ladies and gentlemen, it is star one on your telephone keypad if you would like to ask a question on today's call. We'll now move to our next question over the phone, which comes from Andrew Ross from Barclays. Please go ahead.
Great. Good afternoon, everyone. Hi, Paul, as well. I've got a couple. First one, just to come back on the point on residential ARPU and your comment there that you expect it to grow mid- to high-single-digit% over time. Can I clarify that you do expect that for 2022 as well or should we be assuming that the weaker sequential growth you're seeing in the second half might persist into 2022? That's the first question. Second question is to push you a bit harder on margins for next year, given that you've got to absorb the annualization of M&A plus dilution from Immoverkauf24. Could margins decline further from 57%-58%, or is this about a level we should think about for next year?
Third one is a housekeeping one, and I apologize if I missed it, but what was the revenue of Immoverkauf24 in Q3? Thank you.
Thanks, Andrew. A lot of questions pointing to 2022. We're still working on 2021, I have to admit. Yes, you can confirm what I just said, that ARPU development in 2022 will follow similar pattern as you've seen it in 2021 with the growth rates I just mentioned. Somewhere between mid- to high-single digits. You're gonna see that. We're working on that. On the other points with regards to margin outlook, more specific ARPU outlook, revenue outlook, and everything else, you can be assured that we will educate you on the Capital Markets Day in three weeks time. I wouldn't like to take that as of today.
On the last question, with regards to the revenue of Immoverkauf24 in the nine months, that was EUR 7.9 million. In the quarter, that was EUR 2.6 million, Andrew.
All right. Just on that point, am I right in saying it was 5.2 for the first half, and if so, has that business accelerated? Has it grown sequentially in Q3 against Q2, or what am I missing there?
Can you repeat the question again? Sorry, especially the first part.
You said it was 7.9 for the nine months, right?
Yes.
Okay, fine. Just to clarify, that was 5.2% in the first half, so it's been 2.7% in Q3.
Yes, absolutely. Yes.
And-
Sorry.
Okay.
There might be some rounding errors in between. Yes.
It is still growing sequentially then quarter-on-quarter? I'm maybe a bit surprised it's not growing more given your positive turn on the KPI.
Yeah. Okay, now I get where you're coming from, Andrew. As I said earlier on, I mean, we need to balance the amount of leads we are bringing to Immoverkauf24 based on the regional split of those leads. When we don't have enough agents in the specific regions or those agents that are partnering with us already have enough leads that they are following up, we don't put so many leads into the Immoverkauf24 funnel, and we keep them on a cost per lead basis. Our target here is to improve and widen our agent base that is qualifying for working together with Immoverkauf24 on the one hand, and balancing that out towards the agent base we have that is taking the commission-based leads from us.
I think I made this clear. In total, I think we are not growing as fast as we could simply because we believe that we need more qualified agents on that. We are balancing very much here the customer satisfaction and the home seller satisfaction on the one hand, with the agent satisfaction on the other hand, plus limits to growth with regards to our own people that are working on following up on those leads. I hope that answers your question.
It does. That was very helpful. Thank you.
It appears there are no further questions queued over the phone at this time. I would like to turn the conference back over to Ms. Querette for any additional closing remarks.
Yes. Thank you very much for your questions. We will hear or see each other again at the beginning of December for our Capital Markets Day. Looking forward to that. Thank you and bye-bye.
Thank you very much to today's speakers. Ladies and gentlemen, this does conclude today's call. Thank you very much for your participation. You may now disconnect.