Ladies and gentlemen, welcome to the Scout24 H1Q2 2025 Results Conference Call. I'm Chorus call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star then zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Filip Lindvall, Vice President Group Strategy and Investor Relations. Please go ahead.
Good afternoon, everyone, and welcome to Scout24's second quarter and first half 2025 earnings call. My name is Filip Lindvall, and I'm Vice President, Group Strategy and Investor Relations at Scout24. With me on the call today are Ralph Weitz, our Chief Executive Officer, and Dirk Schmelzer, our Chief Financial Officer. Ralph will start the presentation with key business highlights, and Dirk will provide a detailed overview of our financial results. As always, we will conclude the call with a Q&A session. You can find today's presentation on our website under Financial Reports and Presentations. This session will be recorded, and a replay will be made available as quickly as possible after the event. Please take note of the disclaimer on page two. Ralph, now over to you.
Thank you, Filip, and welcome, everyone. Let's move to page four of our presentation and review the key highlights of the second quarter and first half. We are very pleased with our second quarter performance, which was strong across the board and continues to build on our excellent first quarter results. Second quarter revenue grew 15.1%, with organic growth remaining strong at 11.1%. For the first half, we delivered total revenue growth of 15.5%. Revenue growth was driven by our two great core businesses, which continue to deliver impressive customer growth. Our B2B business is now approaching 26,000 customers, and our B2C segment surpassed the significant milestone of 500,000 subscribers in the second quarter. PPA Private was a bright spot in the quarter with 10.9% growth, driven by increased listing volumes and marketing activities. Transaction Enablement showed more modest expansion in the second quarter due to lower transaction volumes.
We continue to generate operating leverage as we drive interconnectivity and simplify our organization. Ordinary operating EBITDA grew 16.9%, marking another strong quarter. For the first half, we delivered one percentage point of margin expansion year- on- year, which is impressive as we are integrating several acquisitions with lower margin profiles. Adjusted EPS continued to grow impressively by 23.6% in Q2. The strength of our platform is becoming increasingly evident. The number of B2B customers using multiple products in our ecosystem grew 15% quarter- on- quarter, a healthy sign that our interconnectivity strategy is working. Listings increased by 12.8%, and homeowner registrations grew by 57.7% in Q2. We are seeing deeper engagement across all market participants. This creates compounding value as more agents, property owners, and home seekers connect through our ecosystem.
We are creating value for all our stakeholders by integrating AI solutions across our entire enterprise, from consumer products and professional tools to internal operations. As I highlighted in the first quarter earnings call, innovation remains central to how we serve customers. I will provide details on this in the innovation update later. Based on the strong business performance during the first half of the year and the outlook of the remainder of the year, we upgraded our guidance for 2025, as you might have seen from Tuesday's ad hoc release. Our upgraded guidance reflects the strong business momentum we are seeing in our core operations. We now expect revenue growth of 14%- 15% and ordinary operating EBITDA margin expansion of up to 70 basis points. Let's move to page five for an update on our customer base.
In the first half of 2025, both our professional and private segments reached record customer numbers. Starting with professional, the professional segment accelerated from already fantastic Q1 levels while continuing to gain market share. We are approaching 26,000 customers, with growth accelerating again to 6.1% in Q2, building on the already strong 5.9% growth in Q1. This was driven by continued robust performance in Germany, including Neubauer Compass. The Austrian real estate market has started to recover, and our customer base grew every month in the second quarter. Our customer growth in Germany stands out both domestically and globally within the classified sector. It is worth taking a moment to acknowledge where these customers are coming from. Firstly, we are gaining market share among smaller customers through our Bronze Membership, an accessible entry-level product. Secondly, we are benefiting from new business formations.
Thirdly, we are seeing our large customers expand their franchises. Our strong product offering and responsible approach to pricing are the reasons why we are winning in the market. Turning to the private segment, we sustained healthy expansion after last year's exceptional growth. We crossed the half million subscriber milestone in the second quarter, reaching 502,000 subscribers, a 15.3% year-on-year increase. We achieved our Capital Markets Day target of 500,000 subscribers significantly ahead of schedule. While growth has moderated from last year's exceptional levels, this represents healthy expansion on an increasingly large base and follows normal seasonal patterns. Regarding our consumer portfolio, we have rebranded Tandem Plus and Buyer Plus into Search Plus. Living Plus remains unchanged. All consumer products continue to deliver strong growth and value to our users. Search Plus for Buyer is experiencing impressive year-on-year growth of 38%.
Living Plus has doubled its customer base compared to last year, showing how we can bring innovative new products to the vendor market and create new addressable markets. Looking at page six, I would like to share the German real estate market dynamics in the second quarter. The German residential real estate market continues to be healthy with strong underlying fundamentals. As mentioned in our Q1 earnings call, the sales market experienced a temporary slowdown in April and May following the German government's investment program announcement, which resulted in higher mortgage rates. This decline is reflected in our Scout24 transaction momentum index, which showed a slight downturn in Q2. Since then, mortgage rates have stabilized after recent volatility, supporting buyer confidence in market activity. Demand for real estate purchases remains strong, with sellers willing to engage as prices remain high.
The vendor market continues to see robust interest, while contact requests stayed on high levels. The listings index continued to climb in Q2, with more new listings hitting the market and faster turnover times demonstrating robust selling interest and market activity. The German government's Bautrup Initiative and broader investment program send positive signals for the medium to long term. These measures will stimulate housing market activity and increase demand for our platform services. Moving to page seven, I would like to share with you how AI is transforming every part of our business. As we promised at our Capital Markets Day 2024, and as I emphasized in my first earnings call as CEO in May, we are committed to being the technology and product leader in our market. To achieve this, we continue to invest heavily in product innovation for our customers.
We are now in a phase where we are integrating AI across all of our products. Let me give you a few examples. Moving to Prospect AI, one of our professional tools, this is transforming how our professional customers create property listings. Here's how powerful this is. Agents simply select a few photos, and within seconds, Prospect AI automatically creates a professional property video, integrating compelling voice narratives and highlighting key selling points. This represents an enormous efficiency and cost advantage. Tasks that traditionally required expensive video production and hours of editing now happen instantly. Agents save significant time and money while ensuring consistent, high-quality listings across our platform. The market response has been great so far. Prospect AI is growing over 40% year-on-year in customers and contributing 60% more listings to our platform compared to last year, while revenue is surging over 50%.
In July, almost two-thirds of our upsell revenue came from Prospect AI. We have been winning customers from competitors every single month for over a year now. Why? Because we have built the most intuitive and powerful and innovative agent CRM software in the market. We are now taking [Prospect] to the next level with AI, representing our commitment to innovation and our focus on delivering tools that truly transform how agents work. Now turning to the consumer side, our Hey Emu feature represents the next evolution in property search. Users can prospectively search in a conversational manner. For example, simply asking for a three-bedroom apartment in Munich under EUR 2,500 with good transport links, or the best investment opportunities in Berlin. We are developing an AI search assistant that enhances the consumer search experience. Hey Emu provides conversational search capabilities while leveraging our proprietary and exclusive data assets.
This unique data integration creates a differentiated offering that positions the platform to deliver a superior real estate search experience compared to existing AI assistants in the market. While traditional search will likely remain the primary access point for several years, we are launching the next-level search now. This gives consumer choice and ensures we have the best product available during the transition period as consumer search expectations evolve with AI. Currently, conversational search is in beta. We will be rolling out fully on all devices in H2. We have also partnered with Anthropic to integrate Cloud AI because we want to embrace AI productivity benefits internally throughout the organization. Every employee now has their own AI assistant to work with. This provides our teams with sophisticated support for everything from data analysis to content creation.
We expect that over time, both employees and processes become more efficient, enhancing our internal operations and productivity. We are moving full steam ahead on these AI initiatives. It is still early days, and we remain humble about the journey, but our goal is to provide choice for our customers and deliver the real benefits of AI and automation. Let me conclude with some key takeaways on page eight. Firstly, we delivered a strong financial performance that enabled us to upgrade our full-year guidance. Revenue grew 15% with margin expansion, even while integrating acquisitions, proving we can execute growth and efficiency at the same time. Secondly, we are winning in the market with record customer metrics. We now approach 26,000 professional customers and have crossed 500,000 private subscribers. Our product-led strategy and responsible pricing are clearly resonating.
We are taking share from competitors and expanding our reach into new customer segments. Thirdly, our AI transformation is accelerating. Prospect AI is already live. Hey Emu will be launched in H2 this year, and we have deployed Cloud across the organization. We are not just experimenting with AI; we are implementing it at scale to drive real business results. Lastly, our platform is generating powerful network effects. Multi-product adoption increased while listing volumes are expanding, and our interconnected ecosystem is creating compounding value. These results confirm that our strategy is working, and we are well positioned for continued success. Now, I will hand over to Dirk.
Thank you, Ralph, and welcome, everyone. Let's move to the financial section of our presentation. On page 10, you will find our Q2 and first half financial highlights. Building on strong Q1 momentum, Q2 delivered another solid quarter, resulting in an impressive first half that reflects continued strength across our business. Group revenue in the second quarter reached EUR 160.6 million, up 15.1% year- on- year, with organic growth contributing a healthy 11.1%. This performance reflects strengths across our core business. Subscription services maintained momentum, while recent acquisitions are already contributing meaningfully. For the first half, revenue totaled €318.2 million, representing 15.5% growth, with organic growth accelerating to 11.6%. Turning to profitability, second quarter ordinary operating EBITDA increased 16.9% to EUR 101.7 million, marking the first time our quarterly ordinary operating EBITDA has reached nine digits, with margins expanding 90 basis points to 63.3%.
For the first half, ordinary operating EBITDA reached EUR 195.4 million, up 17.3%, resulting in a margin of 61.4%. This margin expansion is particularly strong as we are integrating acquisitions that carry lower profitability profiles. Reported EPS increased by 15% to EUR 0.54, while adjusted EPS showed even stronger growth of 23.6%, reaching EUR 0.87. Operating cash flow came in at EUR 133.5 million, 11% higher year- on- year. Turning to page 11 for a closer look at our professional segment. Revenue in our professional segment grew by 14.5% in Q2, reaching EUR 115.7 million. For the first half, we delivered strong growth of 15.3%, driven by robust performance across both subscriptions and transaction enablement. Our subscription business grew 14.8% to EUR 84.2 million, with double-digit organic growth of 11.7%.
We are clearly winning in the market, capturing share from competitors, benefiting from healthy business formation, and expanding in the rural parts of Germany with accessible products like the Bronze Edition. Professional customers expanded 6.1% to nearly 26,000, with organic growth at 5.6% in Germany, excluding Neubauer Compass. Our pool grew 8.3% to EUR 1,082, driven by strong performance with our residential agents offset by more moderate growth among our commercial customers. Transaction enablement grew 18.4% to EUR 26.4 million, driven by acquisitions and 4% organic growth. The lower organic growth reflects reduced transaction volumes and reduced capital allocation into our leads business as part of our interconnectivity strategy. Demand for data and valuation and agent CRM products remains strong. Ordinary operating EBITDA grew by 14.3% to EUR 73.1 million, with a margin of 63.1%. Ordinary operating EBITDA increased by 14.3% to EUR 73.1 million, achieving a 63.1% margin.
The half percentage point year-on-year margin compression in half year one reflects the dilutive effect of recent acquisitions. Turning to the private segment on page 12, let's review the results for the second quarter of 2025. Private segment growth picked up momentum in Q2, accelerating to 16.8% revenue growth and EUR 44.9 million. The stronger second quarter lifted first half revenues to EUR 87.2 million, up 15.9% year- on- year. Performance was driven by our Plus subscription products, which delivered strong growth of 22.2% in the quarter, while PPA revenues also surprised on the upside with 10.9% growth. We reached 502,000 subscribers in Q2, up 15.3% year- on- year. This strength spans our entire portfolio. Search Plus Buyer surged 38%, driven by high purchase demand. Living Plus doubled its customer base, creating new rental markets, and Search Plus Rent maintained consistent growth.
Our pool increased 6% to EUR 17.7, driven by improved unit economics from our multi-vendor credit check strategy. Our PPA business grew 10.9% in Q2, driven by strengths in both sale and rental listings. Improving market conditions and rate stabilization boosted sales, while rental PPA remained robust. Our targeted marketing campaigns are resonating with sellers and landlords. Ordinary operating EBITDA surged 23.9% to EUR 28.6 million in Q2, with margins expanding 370 basis points to 63.7%. For the first half, ordinary operating EBITDA reached EUR 53.5 million, with margins at 61.4%, up 500 basis points year- on- year. Turning to page 13, let's take a closer look at the main ordinary operating items in Q2. Own work capitalized decreased 9.4% to EUR 4.9 million, reflecting the completion of various development and integration projects. As a percentage of revenue, this represents approximately 3.1%.
Operating expenses increased 10.2% year- on- year, growing below our revenue growth rates. This reflects the positive impact of our interconnectivity strategy, efficient acquisition integration, and our continued efforts to simplify the organization. On an organic basis, operating expenses were up just 3.6%. Personnel costs rose by 7.8% to EUR 28 million, primarily driven by M&A integration and regular salary adjustments. On an organic basis, personnel costs remained nearly flat. Marketing expenses increased marginally by 3.9% to EUR 10.4 million, as our interconnectivity strategy continues to enhance performance marketing efficiency. IT costs increased 19.4% to EUR 5.6 million, primarily driven by higher AWS costs from migrating acquisitions to our cloud infrastructure and increased data lake volumes. Additional factors include ongoing AI investments and the integration of recent acquisitions. Selling costs increased 33.5% to EUR 11.2 million, driven by stronger demand for data and valuation services.
This increased activity led to higher third-party costs at Sprengnetter and BuildingEase. Ordinary operating EBITDA grew strongly by 16.9% in Q2, with margins expanding 90 basis points to 63.3%. For the first half, we achieved impressive results with 17.3% ordinary operating EBITDA growth and 100 basis points of margin improvement. On an organic basis, margins would have reached 64.4% in Q2 and 62.8% for the first half, demonstrating our underlying operational strength. This strong performance demonstrates our ability to balance multiple priorities: investing into product and innovation, organizational simplification, integration of acquisitions, and investing in our people. Turning to page 14, where we show the items below ordinary operating EBITDA, non-operating effects increased 78.8% in Q2 due to our strong share price and Sprengnetter business performance. I will comment on these positions on the next page. For the first half, reported EBITDA increased 15% to EUR 159.8 million.
Along with the decrease in own work capitalized, D&A decreased 12.8% year- on- year in Q2, primarily driven by the completion of IT projects and platform developments. For the first half, D&A totaled EUR 24.2 million, a flattish development of 2.8%. The mix has shifted with PPA amortization from recent acquisitions increasing to EUR 4.8 million in half year one, while other scheduled depreciation remains stable. The financial result improved year- on- year to negative EUR 6.1 million in Q2, a 28.5% improvement driven by lower one-off impacts compared to last year. We also incurred EUR 1.4 million in foreign exchange losses. I will walk through more of the specifics on the following slide. Income taxes increased to EUR 16.6 million in Q2, up 14%, with an effective tax rate of approximately 30%.
Despite all one-offs in Q2, we still managed to grow basic EPS by 15%, leading to strong growth in half year one 2025 of 22.3% to EUR 1.23. Net income for the first half increased 20.5% to €89 million, a solid bottom line expansion despite Q2's temporary impacts. Adjusted EPS, which excludes all one-offs, was strong in both quarters, up 23.6% in Q2, leading to half year one 2025 growth of 20.8% to EUR 1.65. The fact that we delivered over 20% growth in both reported and adjusted metrics for half year one 2025 truly demonstrates our underlying business momentum and margin expansion capabilities. Let's turn to page 15 for the bridge from reported net income to adjusted net income for Q2 2025. Non-operating effects increased by 78.8% year- on- year in Q2 of 2025 due to the following successful business outcomes.
Share-based compensation increased significantly due to our share price overperformance, up around 40% year to date, compared to our mid-teens share price growth assumptions, leading to higher provisions. Non-operating effects, excluding share-based compensation, came in at EUR 9.8 million. Thereof, M&A related costs totaled EUR 8.2 million in Q2, driven by EUR 8 million increased provision for Sprengnetter earnout due to the strong EBITDA performance in 2024. The adjustment of the financial result included EUR 4.9 million from purchase price liability remeasurements, including EUR 1.4 million for the remaining 25% Sprengnetter stake and EUR 3.5 million for Neubauer Compass and Exploria earnouts. These impacts were partially offset by favorable fair value adjustments on our venture capital investments of EUR 700,000. We do, however, not see a material cash impact from these non-operating costs in 2025. Turning to page 16 and cash flow. Free cash flow for the first half reached EUR 118.1 million, up 15% year- on- year.
The improvement was driven by our strong operating performance as well as positive working capital impact from the non-cash nature of the non-operating costs. Our conversion ratios remain excellent, free cash flow representing 99% of adjusted net income and 60% of ordinary operating EBITDA, demonstrating strong cash generation. Turning to page 17 to leverage and capital allocation. Our leverage ratio increased to 0.53x at the end of Q2 2025, up from 0.42x in Q1 due to higher credit facility utilization and share buyback program commitments. This temporary increase reflects the typical seasonality of Q2 when we pay our annual dividend. In the second quarter, we allocated EUR 14.8 million to share repurchases, bringing total buybacks for the first half of the year to EUR 38.3 million.
Total shareholder returns in Q2 amounted to EUR 110.2 million, primarily driven by a dividend distribution of EUR 95.4 million, following the 10% increase in the annual dividend to EUR 1.32 per share. Moving to the guidance on page 18. Based on our strong first half performance, we upgraded our full-year guidance to 14%- 15% revenue growth, including approximately three percentage points of inorganic contribution, and expansion of our ordinary operating EBITDA margin of up to 70 basis points. We are well on track to deliver our fifth consecutive year of double-digit growth and third consecutive year of margin expansion. Let me provide some context around our guidance upgrade and outlook for the remainder of the year. The upgrade reflects our strong execution in the first half and confidence in the underlying business momentum in our core membership and private subscription business.
Based on the second quarter revenue run rate for transaction enablement, we believe our upgraded revenue guidance range represents a good outcome for the full year and leaves us enough flexibility to balance between profitability and growth. In terms of quarterly cadence, I would like to remind you that the third quarter will likely show lower revenue growth and then accelerate again in the fourth quarter. We expect a similar trend for ordinary operating EBITDA growth and margin. Overall, we feel very good about the momentum in the business, which is reflected in our upgraded guidance. We will provide the next update during our Q3 9 months 2025 earnings call on October 30, 2025. We would appreciate it if you could limit your questions to two per speaker. Operator, over to you.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star, then two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question from Craig Abbott, Kepler Cheuvreux. Please go ahead.
Hi, yes, good afternoon everyone. Thank you for that. I have two questions for now, please. One is just some early thoughts on the run rate heading into 2026, and in particular thinking about the components of that continued growth. I'm thinking about things like the new AI tools, of course, the continued trade-offs amongst your membership packages, scaling up at Neubauer and Bogen Visa. If you could just maybe give us some early thoughts at this stage on how we should think about that going into 2026, when you're going to be obviously going up against quite a high competitive base. I'll ask my second question. Thank you.
Hi Craig, it's me, Dirk. Maybe I start before I hand over to Ralph. Of course, you can see us preparing our growth levers for 2026 already. As you rightly pointed out, it will be a mixture between continued growth in the professional membership, which is driven by our increases based on our new acquisitions as well as our product rollouts that we're having. Secondly, of course, also by continued growth in our private segment with regards to subscriber growth. You might have seen that we are seeing a nice tick up in the buy product as well, not only in the rental product. We are scaling beyond 500,000 as we speak, and we also believe that there is room to grow in the next year on private as well as professional. You've also seen the nice tick up that we're having on our PPA business in private.
That will be added by additional growth in the transaction enablement business because we think that the transactions in the German real estate market will start picking up again in 2026. As you might have read this morning, the numbers in the German real estate market look quite good for the second half as well as for 2026 coming in. We're seeing a slight uptick in prices for houses. We're seeing a similar, but only half of that, roughly 1% quarter- on- quarter price uptick for apartments. All in all, we believe that the transaction environment overall for next year will light up. You can see us in Q1 with a good mix between professional growth, private growth, and transaction enablement growth.
Yeah, actually, not much to add, Dirk. Sorry. I was speaking here. What I can add maybe is helpful that there's still room to grow on the new membership additions, right? Just 12,500 customers are migrated so far, so there's still a lot of potential. As you know, we are not forcing customers into the new memberships. We are only bringing them in if they see the value, and also we do the price enforcement for the new memberships, and that's guaranteeing an uplift in terms of revenue if the customers are migrated in the new membership additions.
Okay, sorry, Ralph, I didn't quite get the number you said that had migrated, sorry.
5,500 customers are migrated in the new membership additions.
Okay, thank you. Yeah, my second question, and I'll get back out. Dirk, you mentioned the private PPA number having picked up quite strongly in Q2. I mean, obviously, you know, this is a high margin product. Could you maybe elaborate on that? Secondly, are you seeing this trend in growth in PPA continuing in Q3? Thank you.
No, we didn't have specifically a large number of targeted campaigns around that. What you can see is what I mentioned when we come to trends for 2026 is that the transaction market is slightly picking up again. That's also reflected in our private PPA numbers. On the professional side, you don't see those numbers picking up in the same order simply because of the fact that we are trying to get more and more customers into our starting edition, the Bronze Edition. That is reflected in the more than 5% customer growth organically in the second quarter that you are seeing. Overall, I think the PPA business is also a testament to our product offering, which is right in time for a market uptick in the second quarter as well as in 2026.
Okay, thank you both very much.
The next question from Ed Young, Morgan Stanley. Please go ahead.
Thank you. My first one is just, I hope you could give a bit more color on the sort of temporary impact you spoke about around transactional enablement in Q2 and how we should think about that in H2. I said broader commentary on the broader macro. The second question was around Prospect . It's very interesting you speaking about that. Can you give a bit more color around the upsell in terms of which packages it incorporates into? I think in Austria it's in all of them, but I might be mistaken. You know, how do you think about the dynamics around upsell for that product? That'd be interesting to hear. Thank you.
Maybe we start with the Prospect question. Yeah, I can, I mean, what we see in Prospect is that customers really appreciate the new features we built in, in particular the AI features are well perceived by the customers. With the package we are offering to the market, I think we are winning at the moment market share. Why is it important for us? Because as you can see, with customers using Prospect we can increase our listing share against the competition. We have an interest that more and more of our customers are using Prospect . Therefore, we are upselling actively Prospect through our membership customers. I think in the highest edition, or in the highest edition, there's also a Prospect product included, but not the full-fledged product. That gives us actually also upsell potential.
As I said, the strategic interest is that our customers are using Prospect , our CRM solutions, and they benefit from additional features and also from better placements they get because the product, of course, Prospect is better integrated than we could do with other external CRM systems.
I think your first question was with regards to transaction enablement. I think I answered parts of that when Craig was asking the same question, but let me repeat it here again. I think what we have seen in the first half was a modest growth and macro headwinds that we were seeing. Mortgage and relocation and our media business was a bit weaker, but that was fully substituted by the homeowner leads business, and that was doing quite okay. What we are seeing, and what is a testament to our strategy, I think, is that we are seeing a very strong demand for data valuation and CRM services. For the remainder of the year, I would expect similar trends.
We are also expecting the leads business to pick up a bit again versus the first half, and we are seeing quite healthy incoming interest into our data valuation business, and as Ralph outlined on the CRM side. Overall, a moderate picture for transaction enablement for the first half, but the early signs we're seeing in the second quarter, I think we're going into a very good second half of the year with transaction enablement.
Okay, thanks, Craig.
The next question from Andrew Ross, Barclays, please go ahead.
Great, good afternoon, everyone. I've got two on numbers. First one is on the share-based comp, which obviously was higher in Q2. I think largely because of share price going up a lot. Can you just give us guidance as to what you expect for share-based comps for the rest of 2025 and also for 2026, I guess, on an assumption of kind of more normal share price appreciation? That's the first question. The second one is just to follow up on your comment on the outlook where you said you'd expect Q3 to be a bit slow and then to reaccelerate in Q4. I was just kind of checking the transcript on the Q1 call, and I think you spoke about subtle comps in Q2 and then in Q4 back then, and just kind of looking at it, the comp actually looked a bit easier in Q3. Just help us understand why growth is going to slow in Q3 before it reaccelerates. Thanks.
Andrew, thanks. Let me start with share-based compensation to give you a bit more color around that. The programs we have out there are split into basically two line items. One is the Executive Board, and the second part is the leadership team. They both amount to an annual value of around 9%. It is slightly below 10% of our overall personnel cost. Over the past four years, the performance period of our programs has basically been ramping up. When you look at our balance sheet, what you see is a reflection of liabilities on the company towards employees of around EUR 54 million- EUR 55 million. That is due to the fact that, on the one hand, we have performed quite well versus our performance targets.
The second piece is, as Filip outlined already, that we have seen a pickup in the share price, around 30%- 40% since the beginning of the year. Those effects had to be reflected in share-based compensation. To do the math, if you think about roughly a EUR 40 million liability on our balance sheet and the share price increases by 30% based on constant performance metrics, you would need to increase that liability by EUR 12 million per quarter. That is the way the metrics work. If you look into next year, you will see more of a normalization because next year payout periods are starting. We are taking liabilities away with cash from the balance sheet, and we are only adding additional liabilities through the new consecutive programs coming through.
We think about those programs in the area which I outlined in the beginning, so EUR8 million-EUR 9 million year- on- year. That was also the basis which I gave you at the beginning or end of last year when it came to 2025, not having in mind that the share price would show such positive reaction. I hope that helps a bit, Andrew, to give you a flavor and an idea on where this metric will develop in the next years. It will, of course, be a tailwind for us that we start converting liabilities into cash. The second part of your question was around comps in Q3. You are absolutely right. When we were talking in Q1 about Q2 and Q3, we actually had not expected a very positive development in Q2.
That was especially with regards to the new customer acquisitions on the professional side as well as on the private side. That was also the reason why we increased guidance, as you have seen. Against that guidance, I would think that the Q3 revenue growth will be slightly lower than in the first half. What you have traditionally seen in our business is an acceleration in the fourth quarter. Transaction enablement, we see a slightly softer organic growth before it picks up in Q4. As I said, first numbers we are seeing at the end of Q2 are quite encouraging. We are starting to lap and benefit from our multi-vendor credit check strategy in private. We expect transaction enablement to grow in Q4, as I just said, a bit quicker. For EBITDA, we see basically the same trend, top comp with the 63% we saw last year.
Overall, I would reiterate that the fourth quarter is usually a strong one for us on profitability as well as on growth. We expect the same for Q4 2025. That's why we felt quite optimistic with regards to our targets for the second half with the phasing I just outlined between Q3 and Q4.
Can I get a follow-up on the stock-based comp point? That was helpful color. I guess to kind of summarize it, when we kind of think about the overall P&L charge that we should be putting into our numbers for the second half of 2025 and 2026, what would be a kind of sensible assumption? Are you kind of saying we're going back to the mid-teens run rates annualized from here, or have I misunderstood that?
I think in the future, what you will see is rather a range from us than anything else. I outlined that we will always be around 10% of our overall personnel cost. What you're currently seeing is around, I think, Filip, EUR 30 million that we have for provision for share-based comp for this year, versus the EUR 15 million. I wouldn't think that we will materially go beyond EUR 30 million for the full year 2025.
Okay, thank you.
The next question from Will Packer, BNP Paribas Exane. Please go ahead.
Hi, many thanks for taking my questions. Firstly, you're very good at customer numbers again. Could you help us think through the drivers of that, gaining share of small agents, new formation, market share gains versus peers? Should we think these positive trends could extend into 2026 and remain a growth driver? In the last 12- 18 months, there's obviously been a fair bit of change around your competitive environment in terms of ownership. At the coal face, are you seeing any evolution in pricing strategies, marketing strategies, and any potential new competition in areas like Search Plus? Thank you.
Hi, I'm happy to take the first question regarding customer numbers. I think what we see is that the structure of the market or the nature of the market is quite robust. What it means is that there is dynamic in the market. There are new starters. There are also consolidations in the market. The franchise companies are also growing in terms of customer numbers, and we are benefiting from that. Our market actually is quite healthy, and we believe we can, we will also see that in 2026. There is no reason why there should be a change in the, let's say, in the nature of the market. Why we are benefiting is also because we have quite effective products if it comes to smaller customers in particular.
We can actually offer new starters a really good package, not just a listing product, also they get more, they get kind of CRM systems from us. They get support if it comes to energy certificates, for instance. For new starters in particular, it makes sense to start with us if you are new to the market. We also offer some trainings to new starters. We are building a kind of loyalty to new starters, and that helps us also to upgrading those customers later on from a Bronze edition into a higher membership tier. Therefore, we are starting quite early on the customer journey, and we are successful. That's also a bit different to competitors where you have a hurdle price often, and you need to hit this hurdle first before you can get a member or a real customer of the platform business.
That's different to how we approach the market, and I think we are quite successful here. Therefore, we think this will remain a driver for next year for sure.
Second question, Dirk? I think the second question, thanks for that, was around the competitive environment. To be honest, we haven't seen so much difference in our competitive strategy over the past 12 months. We continue to see very healthy metrics on our side. For example, when I look at listing development, we've been adding 13% listings to more than 560,000 listings on the platform as we speak. In Q2, and overall in the first half, listings were added by 11%. We see an uptick in objects. We see an uptick in homeowners that are registering objects on our platform. We have more than 3 million objects on the platform as we speak. Why do I mention those numbers? They give you a good indication on the relevance of our platform in the market. How is that taken?
Object uptake, customer uptake is obviously driven by the fact that a lot of our B2B customers take objects away from the market, from the competition to our platform. A lot of the private customers are taking their objects on our platform because they see us as a clear market leader. In total, I would think, yes, we're still heading for tough competition in the German market, as always. The strategy that we are following and that interconnected strategy really helps us to gain value to customers. That's been showing in the non-financial KPIs I just outlined to you.
Thanks for the color, very helpful. Just one minor follow-up. In terms of the underlying number of estate agent branches in Germany, does your 6% benefit from an underlying growth in that number, or is it more just accessing some of these smaller agents, etc.? What do you think the market growth in agency branches is? Thank you.
I start off with that. I think, and Ralph will answer the question more detailed, but I think what we have seen here is a growth in the Bronze Edition, which points you to the agents that are coming onto the platform, which are rather small agents. We don't see a huge uptick in the overall amount of agents. On the other side, I think, Ralph, we're also seeing more agent conglomerates coming onto the platform with additional listings.
Yeah, I mean, I think that what I outlined before, I think the dynamic is quite good in the market. The question is, how many agents do we need for such a dynamic? As you know, there are no barriers in Germany to becoming an agent. It's actually quite attractive at the moment to become an agent because there's some liquidity in the market if it comes to objects. Therefore, what we see is that our customers are growing. The franchise groups are growing in terms of agents. It's also more attractive to enter the market. We see new starters. We see that for agents who are just with the competition, it makes no sense because the dominance of Scout has increased our dominance. They have to move to us as well.
What we saw in the past is that some of the agents in Germany had a one-portal strategy, so either with us or with the competition, they also move over to us. That's all supporting the customer number growth you can see. We think that will continue. You see it also in the car classified business at the moment in Germany. The number one is eating market share from number two and also partially from number three. I think we believe that's also true then for next year.
Thanks very much.
The next question from Nizla Naizer, Deutsche Bank. Please go ahead.
Hi, I have two questions as well. The first one is on the guidance for 2025, where you've now said that you're guiding for a 70 basis point margin improvement for the full year. Given margins already expanded by around 100 basis point in H1, I'm just curious to understand if there's some conservatism baked into H2, or is there some incremental investments you've specifically got in mind? Some color there would be great on the thinking. Second, on leverage being sort of 0.5x , how are you thinking about future M&A as a use of cash as well, maybe beyond Germany, because there's been a lot of consolidation and activity in other markets as well? I'm just curious to see how you think of that opportunity for maybe more aggressive inorganic growth. Thank you.
Nizla, thanks for the questions. To the point, as always. On your first question with regards to margin guidance, of course, we want to leave a little bit of headroom and flexibility for the remainder of the year. If you followed our half year one guidance, or sorry, our half year one results, you can see that we still have to add more than 80 basis points to come to the target margin until the end of the year. We feel comfortable around that, I have to say, but we also want to keep up flexibility and we want to keep our powder dry in order to support growth for the remainder of the year. That was the first part. The second part is around M&A. We haven't materially changed and we won't materially change our capital allocation strategy.
You know that we are paying and we continue to pay dividends. We are doing share buybacks and the remainder we are using for M&A all along the strategy which we laid out at the Capital Markets Day, which is around interconnectivity. Nothing to add to that and no changes around that.
Understood. Thank you.
The next question from Giles Thorne , Jefferies, please go ahead.
Thank you. The first question is back on competition. Christine's finding is I can bring in a big new external hire to lead the property vertical back in April. He's been quite vocal on where he sees the opportunity, specifically in giving the market a consumer-centric platform rather than the professional-centric platforms like ImmoScout24 and ImmoWelt. Given Kleinanzeigen's very big and C2C, that makes a lot of sense. It would be useful to hear your thoughts on the direction Kleinanzeigen's moving in and how you might respond if you need to respond at all. The second question was on the private business. It'd be useful to hear what plans you have to drive up the cross-sell rate from Search Plus Rent, as it's now known, to Living Plus. If I'm not a bit wrong, that cross-sell rate currently is very, very low. Thank you.
Maybe first up is the first question. I think you referred to the interview from the Kleinanzeigen CEO, right? So far we haven't seen any activity in terms of that they founded or that they started an own vertical for real estate. It might come, who knows? It could be. What we are seeing at the moment is that the traction they get is not high and they're mainly winning shares or market share from the number two. That's what I mentioned before, that ImmoWelt is a bit in the middle here. What I can say if it comes to consumers, Kleinanzeigen's offering of course is quite attractive for consumers, but we are also attractive. Why? Because we try to position ourselves as the trusted platform out there, and there's a lot of fraud in the market.
If you want to sell your property seriously, then I think we are the best place to go to. That's what we are also communicating to the market. You can see it in the private listing numbers that this strategy is working. If it comes to rent listings, there's still a way to go, but we are also investing heavily into our homeowner strategy. Homeowners are also landlords, as you know, and this is quite unique listing content for us. By the way, it's quite hard to monetize on the listing side, at least the rent listings. Those listings are for free on Kleinanzeigen's side, so the economic impact will be low here. Of course, this content is quite attractive, so therefore we are investing so heavily into our homeowner strategy. If it comes to cross-selling, as you know, our strategy is to expand the lifetime of Plus subscriber, right?
That's also a value driver for us. Ideally, the consumers start with the Plus subscription if it comes to Search, and then they convert into our Living Plus. We are experimenting still with Living Plus, you are right. I mean, the conversion could be higher, but we see progress in the product here. If you take the standalone growth numbers of Living Plus, and if you compare it with the growth numbers we had in Search Plus as we started 10 years ago, I think we can be quite happy, right? The good thing here is that the Living Plus subscribers are coming out of the product, right? We have a clear funnel where we start on the Search Plus product, and then we are going, we are migrating those customers down to Living Plus. I would see it as a big opportunity and potential rather than that we are not successful here.
Maybe complementing on what Ralph just said with a few numbers, what you need to keep in mind is that the Search Plus customer base is roughly 6% of our overall rental search base, right? There isn't much to cross-sell at the moment. If you look at the average customer lifetime on the Rental Plus product, you can fish per month out of a pool of, say, 60,000 or 70,000 customers. That's all going to be more integrated, and there will be more cross-sell in the future. At the moment, I would think that our full focus is on those customers that have a real search need for buying real estate. With 30,000 customers, we're really, really happy.
Thank you very much.
That was the last question. I would like to turn the conference back over to Mr. Lindvall for any closing remarks. Thank you.
Thank you, everyone. This concludes today's call. Thank you for joining and your interest in Scout24 .
Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus cal and thank you for participating in the conference. You may now disconnect your lines. Goodbye.