Good afternoon, everyone, welcome to Scout24 Second Quarter and First Half 2023 Earnings Call. My name is Filip Lindvall, and I am Vice President, Group Strategy and Investor Relations at Scout24. With me on the call today are Tobias Hartmann, our CEO, and Dirk Schmelzer, our CFO. Toby will kick off the presentation, and Dirk will dive deeper into our second quarter and first half 2023 performance. 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. If you're using the web link we provided beforehand, you can follow today's presentation live. 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 2. Toby, now over to you.
Thank you, Filip, and welcome everyone. Let's go straight to page 3 of our presentation and summarize the Q2 and H1 results. I am pleased to announce that our growth trajectory continued in Q2 of 2023, with group revenues increasing by 12% in the first half of 2023. Our continued double-digit growth rates are a testament to the strength of our platform and resilience of Scout24, even in this ongoing challenging market environment. Revenue growth in the first half reflects strong demand for our core product suite. We continued to see a steady increase in agent memberships, a growing number of Plus subscriptions, and strong growth in pay-per-ad bookings. Demand for these products reflects the strong brand, consumer trust, and marketing power of ImmoScout24.
OEBITDA grew by 21% in the first half, and we had an even stronger performance in Q2 2023, with 26% growth. These strong growth rates are not a coincidence. They are the outcome of executing our strategy to be able to grow in all environments with increased focus on operating leverage. On the point of organizational efficiency, let me emphasize that the cost reductions we have implemented are permanent in nature, allowing us to grow revenues at scale while improving profitability over the next years. Adjusted EPS reached EUR 1.23 for the first half- year, growing strongly at 37%. On the topic of Sprengnetter, I am pleased to announce that we closed the transaction beginning of July.
This highly strategic acquisition fits perfectly into our three-sided marketplace and will enable us to cover an even larger part of the real estate transaction value chain in an asset-light and digital way. Based on the strong revenue growth in the first half and increased operating leverage, we are pleased to update our full year guidance for fiscal year 2023 as follows: We now expect revenue growth of circa 15% and OEBITDA growth of 18%-19%, respectively. This range includes Sprengnetter from the second half of 2023. Before we move to the earnings slides, let me express again how pleased we are with our first half results. First, we are continuing to gain customers, both in our professional and private segment, in a difficult market. Second, we continue to grow group revenues at double-digit rates with a favorable product mix.
Third, we are entering a scaling period with increased operating leverage. Fourth, this will result in overproportionate OEBITDA growth and a sustained increase in profitability over the next years. Fifth, we are the beneficiaries of operating in the German real estate market, which is witnessing a shrinking gray market and accelerating trend of digitization. Sixth, we think this increasingly positions Scout24 as unique real estate platform business in Europe. While other platforms are facing declines in listings and revenue pressure, we will continue to grow through the cycle with increasing profitability. To conclude, as we had shared with you previously, we continue to follow a clear playbook, enhancing our network and platform capabilities to facilitate real estate transactions for all stakeholders whilst driving operational scale and efficiency. Now, let's turn our attention to page 4 of the presentation to look at our Q2 2023 metrics.
On a group level, our revenue for the second quarter reached EUR 122.0 million, representing 11.2% growth. As we expected, this is a slight slowdown versus Q1 2023, primarily driven by weaker seller leads and slightly slower growth in private. The ordinary operating OEBITDA of the group came in at EUR 78.2 million, reflecting a margin of 64.2% and a record historical OEBITDA growth of 26.1%, emphasizing our operating leverage. In the professional segment, subscription revenues increased by 10.5% to EUR 70.2 million. Growth was driven by continued strong membership revenue, offset by weaker seller leads and mortgage revenues.
The growing significance of the ImmoScout24 platform and the agents' need for enhanced visibility and marketing services in the current market environment continues to manifest itself through ongoing customer wins. The number of agents grew by 4.2%, bringing the total number to 21,835. I would again like to call out how pleased we are with this development in this challenging market. Professional ARPU increased by 6.0% to EUR 1,071, driven by strong membership growth, offset by declining seller leads revenue. Core ARPU continues to grow strongly. In the private segment, we continued our successful path of winning new customers, ending the quarter with more than 342,000 subscribers. We implemented a change with a longer minimum subscription term.
This change was implemented in the quarter and caused a slowdown in new customer adds in April and May. Growth picked up again in June, and we are pleased how the business is performing in July and early August. Our outlook remains positive going into 2H 2023. Private subscription revenues increased strongly by 16.8% in the quarter, amounting to EUR 17.2 million. Turning to page five, let me elaborate on our H1 results. We saw strong growth across the board, with group revenue for the first half reaching EUR 243.8 million, growing 12.1%, in line with our full year guidance of 12%.
The ordinary Operating EBITDA of the group came in at EUR 146.5 million, reflecting a margin of 60.1% and significant OEBITDA growth of 21.4%. Within the professional segment, revenues grew strongly by 10.6%, totaling EUR 141.0 million, driven by the strong performance of our core membership products throughout both quarters of the year. In the private segment, revenues grew 20.1% compared to the previous year, reaching EUR 34.3 million. This growth was a result of a strong performance in the first quarter, followed by a slightly softer second quarter as we implemented the changed subscription tiering. We expect this change to drive positive impact of LTV and ARPU going forward.
Turning to page six now, which shows an overview of how our value drivers performed in H1 2023. As I already commented on the key revenue drivers on the previous two slides, I will keep my commentary brief. Our professional membership revenue continues to grow at industry-leading rates, fueled by pricing and new customer wins. Our seller leads business continues to be impacted by soft demand. In addition, we pulled out of unprofitable marketing and cooperation activities over the quarter, which pressured revenues. Based on current trading, we do believe revenues have bottomed out and may see slight month-on-month growth as we move through second half. For our mortgage business, the trends are similar as for our seller leads business. Our unique private subscription business continues to exhibit robust growth.
Before handing it over to Dirk for the financial part, I would like to highlight a couple of points regarding our growth track record, how we are benefiting from structural dynamics in the German real estate market, and lastly, how we are taking our platform to the next level. Firstly, as you can see on the charts, we have consistently, over the past 14 quarters, added both professional and private customers. On the agent side, we added more than 2,700 agents, representing circa 4% CAGR. On the private side, we added more than 255,000 private subscribers, representing circa 47% CAGR.
This significant growth is due to a combination of factors: the increased relevance of IS24 as a trusted place to transact, the increased need for online marketing as the gray market subsides, our ability to innovate products to drive efficiency and digitization in the German real estate market. IS24 provides the best buyer leads and highest quality rental seekers, and IS24 provides strong return on invest for the agents. The good thing is, we don't see any of these trends reversing, in fact, rather accelerating. Secondly, we have a product portfolio in place ready to scale. As we have mentioned previously, we are coming out of an investment period where we improved our core product portfolio and expanding into adjacent areas such as Homeowner Hub, landlord and consumer subscriptions, commission share transactions, and most recently, the Sprengnetter acquisition.
We now have a diversified and comprehensive product portfolio catering to all stakeholders in our three-sided marketplace. We will now focus on scaling our current portfolio. When the market improves, our transactional assets and leads businesses provide growth upside. This growth will come at improved unit economics, as we are using the current market phase to improve those businesses. Thirdly, we will double down on taking the ImmoScout24 platform to the next level and differentiate ourselves from competition. As part of this development, you will hear us increasingly talk about our Homeowner Hub and how we are gaining traction here. The Homeowner Hub provides a great opportunity for us to serve the homeowner with exclusive and personalized offerings, while growing the inventory of objects on IS24.
You will also hear us talk more about the premium value of an IS24 listing and data showing that the IS24 platform generates the highest quality buyer and rental leads. In summary, we are very pleased with the health of our business, and the German market provides a great backdrop for Scout24 to benefit from structural growth drivers for many years to come. We look at H2 2023 with confidence, and we are excited about the opportunities in 2024 and beyond. I will now hand it over to Dirk.
Thank you, Toby. Welcome everyone. On slide 8, you see the H1 2023 year-on-year revenue growth and ordinary operating EBITDA margins for our three business segments. We are pleased that all segments continue to grow at healthy rates with increasing profitability. We are delivering against our strategy. The professional segment grew revenues by 8.8%, driven by strong performance in core memberships and pay-per-ad revenues, offsetting declines in the seller and mortgage business. The ordinary operating EBITDA margin improved significantly by 5.7 percentage points to 66.2%. This improvement is due to our favorable product mix and improved efficiency in our seller leads and mortgage business. In the private segment, we continue to witness strong demand for Plus products, driven by the rental market conditions. This resulted in a 21.9% increase in subscription revenue.
Ordinary operating EBITDA margin for the private segment increased by 1 percentage point to 50.8%. Margin improved as we continued to scale the subscription and PPA business. The media and other segment experienced a 6% increase in revenues. This growth was primarily driven by continued growth in our Austrian business and third-party advertising operations. The ordinary operating EBITDA margin for the media and other segment displayed a significant improvement of 10.8 percentage points, reaching 43.2%. Margin improved as we have completed investments in our CRM portfolio over the past years. Let's turn to page 9 for a closer look at the professional segment. In Q2 , 2023, the revenue in the professional segment grew 8.3%, reaching EUR 77.4 million, maintaining momentum from Q1 , 2023.
Growth continues to be fueled by strong performance in our core membership products, growing 15.7% in the second quarter. Despite the challenging real estate market environment, we managed to continue expanding our agent customer base with growth of 4.2% year-on-year. Revenues from seller and mortgage leads declined by 20.1% and 21.5% respectively in Q2 2023, compared to the same period in 2022. As pointed out by Toby, we are cautiously optimistic that we have hit a bottom in Q2 2023 and can return to slight month-on-month growth going into the second half. The professional ARPU increased at a slightly lower rate of 6% than the overall subscription revenue from 1,011 to 1,071 EUR. Core ARPU remains strong, but overall ARPU is offset by the declining seller leads business.
The growth rate of pay-per-ad revenues slowed down in Q2 with a 5.8% year-on-year increase. This was primarily due to our successful customer migration strategy into our core membership products. PPA revenues remain at a high level. Going into the second half of the year, PPA is unlikely to continue to grow. The ordinary operating EBITDA margin improved to 66.2% for the first half, up 5.7 percentage points year-on-year. This development is due to product mix and improved profitability in our seller leads business. On page 10, let's take a closer look at the private segment. Overall, the segment grew by 21.9% in the first half, reaching EUR 70.4 million. Growth was driven by continued strong demand for our TenantPlus products, as well as continued strong growth in our PPA business.
Average number of private customers grew 17.9% for the first half, reaching an average of 342k at the end of the period. As mentioned already, customer ads were a bit slower in Q2, we are pleased with developments going into Q3. For the first half of 2023, subscription revenues increased by 20.1%, totaling EUR 34.3 million. The private ARPU increased slightly by 1.8% for the first half. We expect ARPU going forward to be positively impacted by our recent change in subscription tiering. PPA revenues increased by 29.5% for the first half, supported by the buildup of listings in Q2 2022, as well as some price adjustments.
Ordinary operating EBITDA margin expanded to 50.8% in the first half, up 0.9 percentage points, driven by scale in our subscription and PPA business. This increase, again, also underscores our attractive operating leverage. Let's turn to page 11 to review the main ordinary operating items. Our own work capitalized decreased by 17.9% year-on-year in Q2 to EUR 5.9 million, primarily due to the completion of various developments and integration projects. As percentage of revenue, we are now below 5%. Operating costs declined by 1.7% for the first half and by 9.5% in the second quarter. This was driven by improved efficiency across all cost lines. Personnel costs decreased by 4.8% in Q2.
This represents the successful implementation of our organizational update, as well as one-off impacts due to the release of oversized bonus accruals. Marketing costs experienced a significant decrease of 26.8% year-on-year in Q2. This reduction primarily stems from reduced investments in the leads business, offset by increasing investments in other strategic areas. In particular, we are maintaining a healthy level of marketing spend in our private segment to gain further market share in the current market environment, while reducing marketing spend in our professional segment. IT costs decreased by 4.7% year-on-year, remaining at a comparatively low level in the second quarter. Selling costs increased by 11.3% in Q2 2023, well below growth rates of the private segment.
For the first half, they increased by 27.5%, which was due to the one-off cooperation agreement we discussed in the first quarter earnings call. Other operating expenses declined by 16.1% in Q2, as we are continuing to drive down spend on external vendors and resources. Due to the strong revenue momentum, favorable product mix, and operating efficiencies I just outlined, ordinary operating EBITDA increased strongly by 26.1% in the second quarter and 21.4% for the first half- year. As a result, the ordinary operating EBITDA margin for the second quarter reached 64.2% and 60.1% for the first half. We are pleased to be in this favorable situation, which allows us to continue to grow revenue in double digits while increasing profitability. Let's turn to slide 12 to the topic of operating leverage.
Building on what I just mentioned regarding our favorable developments of key cost items, I'm very pleased that we managed to further accelerate operating leverage this quarter with 26% ordinary operating EBITDA growth, a significant increase versus 16% run- rate in Q1 2023. We started to communicate our focus on operational leverage during the second half of last year. What we are seeing now is a consistent execution of this strategy. The organizational efficiency measures we have implemented will allow us to continue growing at scale within limited increase on the majority of our cost items. To highlight the significant progress we have made on the key cost and CapEx items. Personnel costs stood at 18.2% of revenues in Q2 2023, compared to 21.2% in Q2 2022.
While the baseline clearly has been positively impacted by the organizational efficiency measures, there were also some positive one-off impacts in Q2 2023 related to oversized bonus and vacation accruals. We will also have salary increases become effective from the third quarter 2023 onwards. This means that the Q2 2023 run- rate is not a guidepost for the full year. Marketing cost amounted to 7.6% in Q2 2023, compared to 11.6% in the Q2 2022. This decline is due to phasing out of marketing spend related to the seller lead business, which generated insufficient return on investment. We will be reinvesting some of these savings in the second half of 2023 into other marketing activities. Same as for personal expenses. This means the Q2 2023 run- rate is not a guide for the full year.
Capitalized asset ratio was at 4.9% in Q2 2023, compared to 6.6% in Q2 2022. The decline is in line with the guidance I have provided previously. We do expect the ratio to be stable from here or even trend downward. Overall, we are very pleased with where we are in terms of our cost structure and ability to control our costs from here. You can expect us to continue to be very focused on growing the business and increase profitability going forward. Let's turn to page 13, where you see the items below ordinary OEBITDA. In the second quarter, non-operating effects were driven by higher share-based comp and reorganizational cost. In Q2 2022, the share-based component was largely non-existing, which causes the big jump in Q2 2023.
D&A charges in the second quarter were EUR 8.2 million, roughly in line with Q1 2023. The item fell in a quarterly and half year comparison due to an unscheduled depreciation of self-developed software and the special depreciation of the FlowFact brand in the previous year. Basic EPS rose by 86.1% to EUR 1.09 in the first half, and adjusted EPS grew 37.4% to EUR 1.23. Adjusted EPS for the second quarter accelerated further, reaching EUR 0.66, representing a growth of 45.4%. Turning to page 14, guidance. Based on strong first half- year performance, as well as consolidation of Sprengnetter from July onwards, we are pleased to update our guidance for full year 2023 as follows: upgrading consolidated revenue growth from 12% organic to circa 15%.
Out of the 15%, we expect Sprengnetter to contribute around 3 percentage points. Upgrading consolidated ordinary operating EBITDA growth from 13% organic to a range of 18%-19%. Thereof, we expect Sprengnetter to contribute slightly above 1 percentage point. I would like to provide you with some further color on the updated guidance and our assumptions for the remainder of the year. As you can see from the significantly upgraded ordinary operating EBITDA growth range, we are confident to achieve meaningful ordinary operating EBITDA margin expansion in 2023, even absorbing dilution from the consolidation of Sprengnetter. Excluding Sprengnetter, the increase in profitability would be even higher. For the second half of 2023, we do expect revenue growth to become more challenging. To that end, I would like to reiterate what we outlined in previous earnings calls.
Third quarter 2022 represents a tough comparable with 17% revenue growth. We expect organic growth to fall below 12%. In the fourth quarter, growth could accelerate again. Membership comps becoming increasingly difficult as we move through third and fourth quarter. Both private and professional PPA growth will normalize as we are lapping the benefits of listing buildup happening in the first half of 2022. In addition, professional PPA will be impacted by client migration into core memberships. We will prioritize revenue growth in our core business and run the seller leads and mortgage business for profitability. All in all, this means the 15% revenue guide represents an ambitious target and would definitely represent the high end of where we are likely to end up.
On ordinary Operating EBITDA level, we continue to feel confident to deliver outsized operating leverage, providing us high level of confidence with the upgraded range. In conclusion, based on the momentum we are seeing in the business and the improved organizational efficiency, we feel good about our prospects going into the H2 of 2023 and 2024. We will provide the next update during our third quarter earnings call on November the 2nd. With that, let's open the line for questions. We would appreciate if you could limit your questions to two per speaker. Operator, over to you.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. Our first question comes from the line of Giles Thorne from Jefferies. Please go ahead.
Thank you. My first question is on the professional segment. Bearing in mind the big reboot of the property product portfolio, Kleinanzeigen, did in November last year, then your own price actions around your core membership product this year, it'd be useful, Toby, to get an update on how you see the value of ImmoScout to agents today relative to Kleinanzeigen. If you could focus your answer around kind of the core utility of property marketing, that would be useful. My second question, I suppose, is an extension of the first one, really. As we look into 2024, with hope for a firming up of the property market, given the relative price points between ImmoScout24 and Kleinanzeigen, would you expect to lose share to Kleinanzeigen in a rising property market? Thanks.
Thank you, Giles. This is Tobias Hartmann. With regards to your first question, how we feel about the market and what's happening, I think the numbers for the first half of the year show that we're gaining customers and that we're also able to translate that into meaningful revenue growth. We do believe that this has to do with the attractivity of the ImmoScout24 platform in a market where obviously buyer leads needs to come at a great quality, and this is a scarcity out there. We do think that we have a pretty good track record there to show. With regards to the market and how we feel about that going forward, we don't expect the market to change dramatically. I think we'll rather see a step-by-step slow movement into slightly better market conditions.
We did see prices pretty much stabilizing or in some parts, even increasing. Again, the focus in the future, we think, will be more on the question of what sort of property and real estate we're dealing with, given the energy discussions we're having here in Germany. That's why we also think we're in a pretty good position with our recent acquisition of Sprengnetter, because we will double down on ESG-related products and features that, to our knowledge, are absolutely unique in the market. That's also the going-in assumption for 2024. Yes, we do think, as you saw from the presentation, that most of these measures are there to stay. It's not a one-timer, it's a continued execution of our strategy, which will give us the right opening for growth in 2024. Thank you.
Yeah, and if I could just have a follow-up on that. Do you have any data points that you could share around buyer lead quality, any measures of conversion or attribution?
Well, what we do know is, I think it's what, what is a very strong indication is we do know that, that the value of real estate that's shown and shared on our platform is far, by far higher than on any other platform. What we're pivoting towards is, it's not just about quantity, it's about quality. We do know that we have the best quality in terms of real estate, whether you look at value of real estate, whether you look at the density and the priciest regions and metropolitan regions, and that, of course, then attracts the best buyer quality leads also.
Now, the second point I'd like to state is, hopefully, you can see how these three-sided market pieces are coming together between the agents, the seekers, and our Plus products, which means that we will drive, going forward, more of the interconnectivity of these three parts, because we are creating absolutely proprietary content that is generated on our platform, which is fueled by the Homeowner Hub and by the engagement we're seeing from homeowners. You will hear us talk more about that going forward, which we also think is absolutely unique.
Great. Thank you.
Welcome.
The next question comes from Andrew Ross from Barclays. Please go ahead.
Great. Good afternoon, everyone. I wanted just to ask you a bit more depth about the costs, which clearly were a lot less than expected in Q2, and maybe to dive in a bit on the personnel costs. Can you help us, in a bit more detail, go through the number of heads in the business, the magnitude of salary increases, and then the size of this one-off bonus accrual you benefited from in Q2 as we think into the second half and into next year? As an extension to that, can you help us out on how we should be modeling share-based comp, which stepped up quite a bit in Q2? What would you expect for the rest of the year on that line? Thank you.
Thanks, Andrew. Thanks for the question. On personnel costs, I think overall, you should expect a mid-single digit increase over the year on an annual basis. For the second half of 2023, this also translates into a mid-single- digit change in personnel overall. If you look at the amount of employees we had in the business, it went down from 31st of December, from 960, now by 80 employees in total. We ended 30th of June with 880 employees. That gives you a bit of a flavor on the volume and price mix we're gonna see. On share-based compensation, you are absolutely right.
There was a hike in the second quarter. The reason for that is that the new long-term incentive programs that we set up have been rolled out, not only across the management board, but they have been rolled out across our whole leadership team. Which also gives, I think, the right incentives to the people here that are responsible for managing the growth and the cost base that we are just discussing and the operating leverage. To model that forward, I would think that you could, you could work with roughly the number that you have seen over the first half of the year for the remainder of the second half, and that going forward into 2024.
Thanks. Just want to follow up on that. Are we now saying the number of heads in the business should be flat from here onwards, or are there still further headcount reductions to come through?
We feel quite comfortable with the operating leverage we put on the business. We feel comfortable with the amount of people we have in the business. There is attrition in the business, you will recognize that, but we of course, we're still looking for talent. You should think about ± a few % on what we're having at the moment over the course of the year.
Okay, cool. Thanks.
The next question comes from Pete-Veikko Kujala from Morgan Stanley. Please go ahead.
Hey, it's Pete from Morgan Stanley. Two from me, continuing actually both on cost. We discussed the personal one, but maybe on the IT and other OpEx. The savings that you have received so far, especially in Q2, like, what should we expect in H2 and maybe even more into 2024? You mentioned you're looking to reinvest something, but, like, how much are you gonna reinvest and what are you gonna reinvest into? That's the first question. Thanks.
Pete, I think I start with that. Basically, with the other cost categories beyond personnel, that Andrew was already asking about, I would think that on sales cost, you should expect in-line growth with our overall revenue growth, which makes sense. And then on other costs, I would, I would think that you will see, slightly, they, they go slightly up in the second half of 2023 to bridge some gaps between internal employees and external employees that we're seeing. As we did the organizational update, we also had some projects that need, we needed to finish with other personnel than the internal personnel. Rather expect that going sideways to slightly up.
On marketing spend, we always outlined that we're going to do some additional marketing in the second half of this year, and we just launched our marketing campaign beginning of August. You're going to see those costs compared to the first half going up slightly. You shouldn't expect us to reach the number that we saw in full year 2022, which was around EUR 50 million. Expect us to be below that, expect the second half to be above the first half in marketing spend.
All right. Great, thanks. The second question is, it relates to marketing and, and selling costs, but not through, like, general advertising or anything like that, but from the third-party lead sourcing or the kind of inorganic sourcing of leads. If we assume and slash hope that the leads business is going to be a little bit better in 2024, when the market is looking maybe somewhat better, like, are you going to return to the same level of external sourcing or inorganic sourcing as what you have done before? Do you think going forward, you're going to have, like, a higher ratio of organic lead generation?
No, Pete. What we did is we took the opportunity of the last 12 months to reshuffle our spending on the lead business in mortgages as well as in the realtor lead business. We will rely more and more on organic sources of those leads that come from the platform, which is in line with the strategy that Toby just outlined. Therefore, you will not see us investing anything like we've been investing in 2022 in those in those areas. We will continue to invest into this business at a very attractive return on advertising spend. Talking about that, I forgot to answer your question around the IT and OpEx spend. On IT spend, specifically, you should see us moving sideways for the remainder of the year.
As I said, we did use the last 12 months, not only to do our homework on the personnel cost side, but also to do our homework on our supplier side. We significantly reduced the amount of licenses, we renegotiated some of our IT contracts, and we feel quite comfortable with the setup we have at the moment.
Great. All clear. Thanks a lot. Cheers.
The next question comes from Christopher Johnen from HSBC. Please go ahead.
Yes, thanks for the opportunity to ask questions. I'll do them one by one as well. First one on the sort of challenges. I mean, obviously, looking at the numbers, listings are way up. The agent count is still growing quite significantly. Are there any-- I mean, what, what concerns do you share about the agent count, in particular as we move into 2024? Do you assume that if the market is, let's say, staying where it is right now, that the health of the agents will be impacted? I.e., do you expect any. You'll have to change your pricing strategy by any chance, as we move into next year? What are your thoughts on that?
Hi, Chris. It's Toby. Thanks for the question. Obviously, one concern is nobody really knows what the market will do in 2024. There's a level of uncertainty in the market that needs to be cleared, because we do know there's money in the market, there's willingness in the market for potential homeowners to really get started, but there's too much debate going around in Germany with regards to other open questions on energy questions, on still interest rate questions and on feasibility. With regards to agent health, we don't see a concern. We see still new agents joining the platform, as you mentioned. We also see agents joining for different reasons.
Some of them, actually take the opportunity to become independent now and, basically saying goodbye to the network that they've worked for before, and they think they're more effective if they're working, directly as a small business owner. Some others are switching from competitors, so it's a mix there. We don't have any major concerns with regards to agent health, but rather, to market conditions and the prevailing uncertainty that needs to be cleared.
Okay. Somewhat related to that, actually, actually two on the same topic, because I think there was a bit of a strategy shift in the quarter. I think you mentioned that the PPA, part of the professional business, was impacted by, migrating some potential PPA listings, sort of enticing them, to, to trial a membership, if I'm not mistaken. Maybe you could elaborate on that. Somewhat related to that, on the, on the private subscription side, I think you increased the, the minimum, from two months, membership to three-month membership. Yeah, maybe any sort of, yeah, first takes, how that's been going, any, any more color to better understand that would be, would be helpful.
Thanks, Chris. I think I start off with the professional piece, then Toby will dive into the private piece. For the remark we've been making on professional PPA, that was mainly attributed to the fact that why is that revenue line not significantly growing? The reason for that is that we are using agents that are having a high volume of pay-per-ad on our network. We are targeting those agents specifically to move into membership additions, and that's why that revenue line is rather contributing to the membership revenue line than growing in itself. That was the background to answering that question.
And as we outlined in our call in the first quarter and in some investor calls we had in the meantime, on the private side, we've been focusing on customer lifetime value. Hence, we have been moving from a two-month minimum subscription to a three-month minimum subscription. That costed us, that cost us some subscribers in April and May. But what we are seeing now and what you can see in the numbers as well, is a tick up in subscribers going into June and July. We're quite happy and optimistic what we've been doing there. We've been basically only enhancing the customer lifetime value on that product with a constant ARPU. And we're quite happy with the results we are seeing. That, taken forward, gives you also an indication that we are quite optimistic on growth with regards to our private membership products for the remainder of the year.
Okay, thanks a lot.
The next question comes from Lisa Yang from Goldman Sachs. Please go ahead.
Good afternoon, thanks for taking my question. Apologies. The first question is on your revenue guidance. Obviously, you know, Q2 at a certain basis was a bit below your free guide of 12. I'm talking about the stable business, and Q3 are definitely, you know, becomes definitely tougher. That implies you need obviously a very strong Q4. Just wondering, what visibility do you have at this stage on Q4? And what would be the drivers? What needs to happen for you to achieve that 12%? And I think you said the 12% is still the upper end in terms of what you could achieve. Like, what would be the lower end? If you could maybe share that as well. That's the first question.
The second question is, I think, on this pricing strategy overall. Obviously this year you have raised the sort of the headline prices, I think, for the first time across your entire customer base, and despite that, you continue to gain customers. I just wonder whether does that make you more confident that you can continue to raise prices by a similar magnitude next year? Also any thoughts on the PPA product, whether you'll be also thinking of raising prices. I'm asking that because obviously your improved operating leverage to some extent, also come from obviously, you know, a greater contribution from price increase. Thank you.
Thanks, Lisa. Bless you. On the, on the guidance, you were asking about the lower end. I mean, we've been once again reconfirming the 12% because we believe in the 12%. I think we should leave it there. What are the growth drivers? The growth drivers in our business in the fourth quarter will be a continued very healthy development of our membership revenues based on the value-based pricing approach that we've been executing over the past quarters and years. Secondly, a, a growth, private growth, remaining strong in the second half of 2023. Most importantly, I think no further decline in seller leads in the mortgage revenue base.
It represents only 10% of our overall revenues, so this should be under control. Nonetheless, for the remainder of the year, we would, we would think that the, this revenue line would at least stop the shrink or slightly improve, whether it's the roughly 20% we've seen in the, a -20% we've seen in the first half. Yes, you're right, we're pointing towards a strong Q4. That has also to do with the pricing measures we've been taking in the private segment, and with the pricing measures we are taking in other segments. Also with the fact that when you compare our third quarter to last year, we have been seeing 18% growth in the third quarter, so that will be tough comps.
I think I said that in my comment, in the beginning, of our speech. We are quite optimistic on Q4 and all the early indicators we have on Q4 are supporting us, based on that.
The next question comes from Marcus Diebel, from JP Morgan. Please go ahead.
Hi, everyone. Two questions for Dirk, actually. Dirk, the first one is on, on leverage, and M&A. I guess when it does, and we discussed this, solved, one of the key lags that you thought you have at, at Scout. It sounded like that further M&A is not, not, at least obvious. Now, in the say, in the assuming, lack of M&A, and your previous comments on potentially higher leverage, does that still count also in relation to, to shareholder distribution, or is that really just meant to say higher leverage if the right opportunity still arises? That would be quite, quite interesting. Then the second question, I'm following up on, on Andrew's question on, on personnel costs. I mean, yes, on the one hand, personnel costs are reduced.
You, you gave us the headcount reduction. On the other hand, SBC increased, and also probably that's longer term. Would you say that there's no link, yeah, that you basically didn't change anything meaningfully, paying in stock rather than cash, which would be OpEx? If you can just maybe clarify on, on this as a follow-up. Thank you.
Marcus, thanks. I'll start with the last one. That's a good one. No, we didn't, we didn't change fixed over variable payment of our staff with respect to giving them, giving them shares. It's just a question of incentivizing them correctly. If I look at the current, at the current spend, as I outlined, share-based compensation is around EUR 9 million for the first half of this year. The biggest part of share-based compensation for the whole year is basically behind us. For the remainder of the year, I think you should expect around 50%-60% of that volume that we saw. It depends a little bit on share price development and everything around that.
To answer your question, no, we didn't substitute payments in cash and with short-term bonus by long-term incentives, which doesn't hold for the management board, but I guess you can read that from our remuneration report as well. Coming back to your first question on leverage and M&A. You're absolutely right. We're pretty happy that we could acquire Sprengnetter, and we are pretty happy that we have banks that support us in doing M&A, as well as share buybacks. For the future, you can expect us also to continue share buyback programs when we don't see opportunities to buy companies in the market as our cash flow profile allows us to do so.
You can also see that the management in particular has taken high attention and has given high attention to the development of our earnings per share. We still want to go along that path and also look at the earnings per share over proportionate increase versus our profitability increases.
Correct. Yeah, yeah, correct.
That's super, very clear. Thank you.
The next question comes from Marius Fuhrberg, from Warburg Research. Please go ahead.
Yeah, hi. Thanks for taking my question. Actually, two of them from my side. The first one is on your CAGR targets for the satellites and the mortgage until 2026, which you left unchanged. Given the weak development in 2023, do you expect a recovery in the coming years that will completely make up for the slump in the past years or past year? What are your assumptions on that? The second one on the guidance for this year. You mentioned that the 15% top-line target is ambitious, but how much would the EBITDA guidance be affected if revenues would come in slightly shy of that 15% target?
Hey, I'll take the first question with Toby. With regards to the CAGR targets, we presented five value drivers, and we basically articulated all the way through that there will be quarters or half years where some of them will exceed and some of them will fall short. This is what's happening given the market environment. Now, we think that we have the right portfolio approach because the stronger value drivers are all intact and are actually exceeding, also calculating back to where we should be at this point in time as opposed to where we are. We've actually over-delivered in terms of total results. To answer your question, we don't think, given the current market conditions, that we'll be making up over the next couple of quarters, whatever is left in the tank, that we didn't hit on that particular value driver.
That doesn't matter because we gave total CAGRs for the total business, and there we are tracking pretty well. Dirk, maybe you can take the second question.
Yeah. Marcus, on your second question regarding EBITDA targets, we have seen for the past 12 to 18 months that investor sentiment has shifted from pure revenue growth to profitability growth. We also believe that this sentiment has made its way to our shareholder base, therefore, yes, we are still focusing on revenue growth, but you can see us putting profitability growth before revenue growth. We are pretty confident on the targets we just laid out and on the guidance we've been giving. I can only add to that, that we will that we will take a look at the prioritize profitability growth, basically, over revenue growth. As I said, on earlier occasions in this call, we're pretty confident with both.
Okay, thank you very much.
Next question comes from Nizla Naizer from Deutsche Bank. Please go ahead.
Thanks. I have two remaining on my end as well. Firstly, on Sprengnetter, could you tell us in which segment would Sprengnetter be included going forward? We calculate that for H2, it'll maybe do EUR 40 million of revenue, at around 20% margins. Is that the right direction of travel? What sort of growth can we expect in 2024 and beyond for margins and revenue growth when you consider this as now being part of the larger Scout Group? Are there synergies, et cetera, that would feed into this? Some color there would be great. Lastly, on the private members, has the average age of a private member increased over Q2? How is your strategy to maybe give them products that would keep them with you for longer, even after a home is found? Some color there would be great. Thank you.
Nizla, given your knowledge of the business, I can take my answer pretty short. Sprengnetter will be reported under the professional segment. Yes, the numbers you've been giving on Sprengnetter roughly represent on the plans we're also having. With that, I would I would hand it over to Toby with regards to the private segment and how we are.
Yeah, on the, on the private segment, we, we're actually seeing a stronger interconnectivity between the Plus members and also our recently launched Homeowner Hub. Going forward, and this is also where it fits in neatly with Sprengnetter, this will play a crucial role because homeowners are in desperate need of really understanding whether they should make any type of investments into their homes and whether it would drive an appreciation of the value of the property or not. You will see us launching more product and service features around that. Think of it as almost like a path that once you have access to it, you get additional membership benefits that you couldn't get without it. We have a whole range of product features that are planned for 2024. We're pretty excited about that.
Now, with regards to the age, actually, it's a, it's a great question. We don't have that handy right now, so I can't give you an answer right now, but we'll certainly dive into that as part of the homeowner analytics going forward. But we didn't see any major changes in any other membership characteristics, so I would assume that it pretty much stayed the same. Having said that, lastly, we are driving an integrated campaign. As Dirk mentioned, we're also spending marketing money with regards to fostering those solutions and making sure that people know how they can utilize it going forward.
Nizla, maybe to, to add to what Toby just said, your second question was around synergies that we're seeing with Sprengnetter. I think we elaborated that on that when we, when we did the press release and the call with analysts around that. I think it is quite obvious that if you look at the current phase of the market, where we are seeing sellers being insecure, whether the price that they are receiving is the right one, and really sort of engaging with sellers on the right price to sell their object, Sprengnetter is absolutely the right addition to our portfolio. We will hence bundle that into the agents portfolio going forward.
And sort of remaining question that you had with regards to the synergies we're seeing with Sprengnetter on the one end, and the margin guidance that we're seeing for next year, I think we will, next year, we will see a nice combination between the operational leverage that we've seen in our organic business, plus the slight leverage that we're going to see on Sprengnetter. We expect Sprengnetter margins to go up next year. And hence, what we did is we bought a business that might be margin- dilutive, but for the investor, going from 2023 into 2024, that will not be recognized because with the measures we've been taking on both ends, we're not going to see a margin drop between 2023 and 2024.
Very helpful. Thank you.
The next question comes from Craig Abbott, from Kepler Cheuvreux. Please go ahead.
Yes. Hi, good afternoon, everyone. I just have two remaining from my side, please. Excuse me. The first one is, you talked about scaling your product, your product portfolio, now and an increasing focus there on the one hand. Then later, you also mentioned that you will be taking pricing measures in the private segment and other segments that will start taking hold in Q4, and that you therefore expect increasing momentum in Q4 after facing the tough comps in Q3. Can we interpret this momentum is likely to carry over into 2024? That's the first question, and I have one quick technical question after that. Thank you.
Certainly, that is the, that is the case. I would like to point out that we're not guiding 2024, on this call. Certainly, those measures that are price related will help us to build the platform for growth in 2024, Craig.
Okay. All right. Thank you.
Now, your second question.
Yes. Yeah, the second question is a technical one. On the own work capitalized, as you mentioned it in your presentation, this had come down as you completed some projects. I just wondered if you could give us an update here on the outlook going forward. I think if I recall correctly, you were wanting to bring that down to around the 4% or 5% range on more of a run- rate going forward. If you could just update us here, please. Thank you.
Yeah, absolutely. Craig, It's, it's more than just technical, I believe. We're down to 4.9% on own work capitalized, and I think I guided a few quarters ago that we see that number constantly going down below 5% in 2023, and more into the direction of 4% in 2024.
Okay. Thank you very much. That's very helpful.
The next question comes from William Baker, from BNP Paribas. Please go ahead.
Hi there, thanks for taking my question. Sorry, I've dropped off and on, so just to can I just clarify two things? One, could you confirm how you're thinking about the FY 2024 price rise cycle? Is there the potential to deliver the kind of pricing growth being achieved in 2022 and 2023? Secondly, could you comment on the progress of membership number during July and August? Thanks very much.
On the second question before I hand over with the membership and the pricing piece to Tobi, we don't see a change in the trends that we've been seeing in the first and second quarter in July and August, with regards to membership growth and the memberships that we add to the platform. With regards to the price changes on membership, I think, we can only state what we stated on earlier calls here, Will. We're gonna rely on a value-based pricing approach. We put some new products into our portfolio here. We added some Sprengn etter products into the portfolio, and we're gonna, we're gonna use that also to market our products to the real estate agents and increase their willingness to pay. Let me put it like that.
Yeah.
Thanks. Just. Sorry. Go ahead.
Go ahead. Go ahead, Will. Sorry, go ahead.
Sorry, just, just to confirm on the membership numbers then, you know, so basically, mild quarter-on-quarter growth is the way to think about it?
Absolutely.
Yes, Will, with regards to the, to the pricing environment, you know, you will remember certainly well, 'cause we had many discussions and also a healthy dialogue about, in the past, about what's the right level of price increases. If you, if you may remember, we, we tried to overplay our hand in the past, in the prior years, because we wanted to be a reliable partner, and we also thought that there's a long runway in terms of monetization. That's why we still believe that's the case. Agent health still is intact, and in terms of agent spend, we are still tracking below some of our competitors in the international market environment. That's why we think we have some headroom to grow.
Obviously, having said that, the market situation now is more difficult for the agents, so we need to do a good job in explaining it, and we need to also bring value to the table. This is why, again, it always comes back to, we need to come up with valuable additional features that help agents close some deals that are harder to close. For example, one of the things that we found out, just to give you a very concrete example, was that given the uncertainty in the market, the agents and the potential buyers couldn't really come together and agree with the homeowner and the seller what the right price would be. We figured that some of the agents just are not in a position to do so, 'cause they've not done so for the past 10 years, 'cause they didn't have to.
We developed a pricing feature that allows them to also actively, as an interested party, as a potential buyer, to submit a proposal. That is a new feature that is very interesting and that actually homeowners find quite intriguing because they're saying, "Hey, I'm getting an objective data point from somebody who would be willing to buy something. I'm not so sure yet, but then I'll defer to my agent and ask the agent." We're developing this in partnership. This is one of the features that is just in its early, early innings, given the market cyclicality.
Very nice.
Thank you.
Our last question comes from Adam Berlin from UBS. Please go ahead.
Yeah, hi. Good afternoon. Just a couple of questions. The first thing is, when you gave your guidance for the Capital Markets Day on margins in December 2021, it implied around a 58% EBITDA margin, which it seems like what you're gonna do this year based on the new guidance. There's been a lot of change since then with the acquisitions, with obviously the growth in pricing. Should we just ignore that now? Do we need to just kind of forget that number and move on and recalculate it? Is there anything you can kind of, you know, tell us about where medium-term margins might go to help us reset from that benchmark that was set a couple of years ago? That's the first question.
The second question is, can you just give us an update on Vermietet.de? Have you started monetizing that business yet? If not, when is the plan? Will we see any revenue from Vermietet.de in, in H2 or 2024, if not in Q2? Just if I may, can I just clarify something you said earlier? I think you said that personnel costs would be up mid-single- digit in H2, but was that versus. Was that year- on- year or versus Q2? Thanks.
The latter one, Adam, was year-over-year. Coming back to the first part of your question with regards to margin guidance, you calculated correctly. I think what we did when we kept the Sprengnetter acquisition in the back of our heads and looked at the guidance we gave at the Capital Markets Day, we've been looking at what measures do we need to undertake in order to keep the guidance on the Capital Markets Day, although we are acquiring a margin- dilutive business. That's why one reason why we, at an early stage, came up with measures that help us to improve our margin while maintaining growth. That's why I think we feel quite comfortable on the 58% this year.
Somewhere 57.5%, 58% margin should be achievable, if you do the math, and we feel quite comfortable with outlining that as a margin target for next year. Although, you will see 12 months of Sprengnetter with a dilutive margin, compared to the six months you saw this year.
Yeah, with regards to Vermietet.de, what we did there is we put this now underneath as part of the homeowner approach that we have, Homeowner Hub. The monetization on Vermietet.de is not a primary goal because we do believe it's very important to attract as many landlords and also respectively homeowners, as possible. If just on the homeowner side, we have over 2 million homeowner registrations on our Homeowner Hub. With regards to Vermietet.de, it will be now really important that we stick this underneath as part of the services. A standalone focus on Vermietet.de and also on the future monetization is so, is not so much our primary goal, but rather the homeowner content that we are driving there.
Thanks very much.
Thank you, Adam.
As this was the last question, I hand back to Filip Lindvall for closing comments. Please go ahead.
Okay, on behalf of Scout24, thank you for your interest in us. Any follow-ups, please reach out to the investor relations team. Have a good day. Thank you now. Bye-bye.