Ladies and gentlemen, welcome to the Scout24 Q3 nine months 2026 results conference call. I am Moritz, the Chorus Call operator. I would like to remind you that all participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question-and-answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is 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 earnings call for the third quarter and first nine months of 2026. My name is Filip Lindvall, and I am Vice President, Group Strategy and Investor Relations at Scout24. With me on the call today are Ralf Weitz, our Chief Executive Officer, and Martin Mildner, our Chief Financial Officer. Ralf will start the presentation with key business highlights, and Martin 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 shortly after the event. Please take note of the disclaimer on page two. Ralf, now over to you.
Thank you, Filip. Good afternoon, everyone, and thank you for joining us. Our Q3 results show once again that Scout24 can deliver consistent results in changing market conditions while executing on our Agentic OS strategy. We maintained our organic revenue momentum, with total revenue up 20%. Growth was broad-based, led by professional and private subscriptions. German professional subscriptions continue to grow at a healthy double-digit rate, supported by customer additions, higher ARPU, and ImmoPoints. In private, the momentum we described after Q2 translated into double-digit subscription revenue growth, supported by our higher-value memberships. Our platform continued to grow engagement and relevance. Listings increased by 19.7% year-on-year. Users engaged more deeply, and search requests increased. Importantly, total leads grew compared with Q2. Our transition towards an AI-native organization is in full swing.
This is helping our teams develop products faster and work more efficiently, freeing up resources to invest in technology and marketing while creating scope for further margin expansion. In Spain, integration is progressing well, and we are starting to see the benefits of our operational playbook. Fotocasa grew its customer base, traffic, and leads, while revenue increased and profitability improved significantly. Ordinary operating EBITDA and adjusted EPS growth accelerated, with adjusted EPS up 21.5%. Finally, we are specifying our full-year revenue guidance and now expect growth of circa 18%, while margin targets remain unchanged. Despite challenging market conditions in Germany, we grew our average professional customer base by more than 900 year-on-year to almost 25,000 in Q3. Year-on-year growth reached 3.9%, its highest rate this year. Beyond Germany, we continue to add professional customers in the rest of Europe.
We continued migrating customers to our new membership models, with around 20,000 using them by the end of September. This creates opportunities for upgrades and additional product use, supporting ARPU growth from 2027. On the private side, our average subscriber base reached 534,000, around 16,000 more than in Q2, representing quarter-on-quarter growth of 3.1%. Year-on-year growth was 1.4%. Going into Q4, we expect the usual seasonal pattern with a potentially slightly lower subscriber base than in Q3, but still well above last year's Q4 average of around 504,000. Turning to the German real estate market on page six. Let me start with the sales market. After a healthy 2025 and a solid start to 2026, higher mortgage rates and the challenging labor market in Germany have made financing more difficult for buyers. Transactions are taking longer to complete, extending marketing periods.
Buyer inquiries continue to fall slightly, but remain at healthy levels and well above the lows seen in 2023. In the rental market, demand remains strong while affordable homes remain scarce. Rental inquiries have picked up again in recent months. We continue to gain market share and are opening up the rental market and making access more fair. Coming Soon listings and the Tenant Network give seekers access to homes that would otherwise remain in the grey market. This additional rental supply, together with longer marketing periods in the sales market, contributed to the almost 20% increase in total listings. Turning to page seven. Transaction prices remain broadly flat year on year. Meanwhile, asking prices have continued to rise in 2026, despite higher interest rates since the summer. As a result, the gap between asking and achieved prices is widening again.
While the market remains healthy, this dynamic is leading to longer transaction times. Let me now update you on our Agentic OS for real estate on page eight. We are delivering the roadmap presented at CMD, while the growing role of AI agents reinforces our strategic direction. First, our platform engagement remains strong, with a stable audience, increasing search activity, and growing adoption of our AI services. Second, we are extending our role from helping people find a home to helping them secure it. Exclusive properties and AI services are making our consumer memberships more valuable and encouraging more customers to choose higher value offers. Third, Propstack is going from strength to strength as a leading CRM for realtors in Germany. With Proppi, we are turning it into an agentic service that helps them run their businesses.
Fourth, ImmoPoints are becoming our digital currency across this expanding range of services, translating greater product use into growing membership revenue. Fifth, our exclusive properties, verified data, and software give our specialist AI agents a strong foundation to support customers throughout the property journey. Let me take you through these developments on the next slides. Let's start with platform engagement. In light of the recent discussion about traffic, it is worth highlighting that our users are becoming more active in their searches and developing closer relationships with our platform. Around 19 million people use ImmoScout24 each month, broadly unchanged from last year, while search requests increased by 3.5% year on year. Our relationships with seekers are also deepening. Registered accounts increased by 17% and saved searches by 5%.
By registering and saving their preferences, seekers enable us to support their search over time and alert them when suitable properties become available. Lead volume increased by 8% compared with Q2, driven by stronger rental demand. Turning now to AI search. AI is becoming a growing part of our search experience. We recorded more than 10 million AI-supported searches in Q3, 26 times the level a year ago. AI's share of total searches reached 2.5% in August, up from just 0.1% a year earlier. We also lead in visibility on external AI channels, ranking first among the peers tracked on both ChatGPT and Google AI Overviews. AI adoption is also translating into increased lead generation. These services are also contributing to the renewed growth in our consumer memberships, which I will cover next. Our private subscription business is accelerating further.
Revenue growth returned to double digits in Q3, reaching 10.4%, driven by stronger ARPU growth. The new memberships we launched earlier this year are an important driver. Around 40% of subscribers now use Pro or Unlimited, and Unlimited's share increased by 4 percentage points compared with Q2. These memberships combine access to properties beyond public listings with AI support through the application process. Users of the Unlimited AI Application Assistant receive four times as many viewing invitations, and our Application Assistant already accounts for 5% of total rental leads. This shows how we can combine exclusive properties with AI to create distinctive services for renters. We are now seeing the benefits in both customer outcomes and subscription growth. Propstack continues to strengthen its position as the market-leading CRM for realtors, with revenue growth accelerating from 18% in Q1 to 25% in Q3.
With Proppi, we are turning Propstack into an agentic service that helps agents run their businesses better. It prepares replies, organizes tasks, and turns meeting notes into follow-up actions, giving agents more time for their clients while keeping them in control. This embeds our software more deeply in their daily work and creates further opportunities to grow our software business. ImmoPoints reached revenue of EUR 3.4 million in September, up 37% year on year and outpacing B2B subscription revenue growth. More than 10,000 customers within our new memberships now use ImmoPoints. ImmoPoints are our digital currency for services such as greater listing visibility, valuations, and AI-powered marketing. As customers use up the points included in their memberships, they can buy additional points online. In September, around 1,600 professional customers purchased ImmoPoints outside their membership contracts, up around 58% year on year.
These additional purchases demonstrate demand beyond the points included in the memberships. Expanding the services available through ImmoPoints gives customers more ways to use their points and supports further growth within our membership business. At our Capital Markets Day in May, we outlined our Agentic OS strategy for a world where people use AI agents to find a home and take the next steps on their behalf, through our own services or external providers. That shift is accelerating. We believe our specialist agents, like Immo or Proppi, are best placed to help customers through the property journey. At the same time, we are working to open our platform to external agents, giving their users access to our properties and services. We will be agent-friendly. We believe we can thrive as an agentic real estate specialist in this environment.
Our exclusive properties, verified data, and tools embedded in agents' daily work give us a valuable role wherever customers begin their search. With that, let me hand over to Martin to take you through our financial performance.
Thank you, Ralf, and good afternoon also from my side. As Ralf already highlighted, Q3 was another strong quarter for Scout24. With a revenue growth of 19.7%, including 10.1% organically, we maintained the momentum from the first half. Ordinary operating EBITDA growth accelerated to 15.9%, while our reported margin rose from 60.2% in Q2 to 60.9%. Adjusted EPS growth accelerated in the quarter, growing 21.5%, driven by our strong operating performance and a lower number of outstanding shares due to our accelerated buyback program. Free cash flow reached EUR 151.1 million over the first nine months, or EUR 201.8 million, excluding LTIP and Sprengnetter related payments, which I will explain shortly. Let me now take you through all of the details, starting with professional. In the professional segment, German subscription revenue increased by 11.5% in Q3.
Customer growth reached 3.9%, its highest rate this year, while ARPU growth moderated to 7.4%. While our core residential agent business remained strong, we faced less activities among project developers and new home builders. Both contributed to slower ARPU growth than in Q2. Moreover, transaction enablement gained momentum, delivering its strongest revenue growth this year at 8.8%, up from 4.2% in Q2. Growth was broad-based, led by CRM and property data and valuation products. Profitability also improved. Our reported ordinary operating EBITDA margin increased from 59.9% in Q2 to 60.7% in Q3, supported by improving profitability in Spain. On an organic basis, the margin reached 63.9%, up 1.2 percentage points year-on-year. Let me give you some more details to Spain on the next slide. Within seven months of taking ownership of Fotocasa, we are already seeing improvements across our Spanish business.
Our integration teams are applying the Scout24 acquisition playbook, strengthening the customer offering, improving operations, and building a more profitable business. Let me give you a few examples. Our professional customer base grew by 2.4% since June, and revenue increased compared with Q2. September traffic rose by 12% year-on-year, while leads increased by 14% to a record level, delivering more contacts to our customers. This operational progress is also translating into better profitability. The ordinary operating EBITDA margin reached 34.2%, including ongoing transition costs by several transitional service agreements. Of course, we still have work ahead, but this progress reinforces our track record of creating value through bolt-on acquisitions. Our private segment delivered its strongest revenue growth of the year in Q3, with revenue up 10.5%. Both subscriptions and pay-per-ad contributed to the revenue growth, reflecting the breadth of our products for private renters, sellers, and landlords.
Subscription revenue growth accelerated to 10.4%. As Ralf already explained, more customers are choosing higher-value memberships. This supported ARPU growth of 8.9%. Sequential subscriber growth also strengthened throughout the year. Our average subscriber base increased by around 4,000 in Q1, 10,000 in Q2, and 16,000 in Q3, reaching 534,000. Pay-per-ad grew by 9.8%, supported by higher listing volumes and continued demand from private landlords. Our trusted brand and access to an active and reliable audience are important reasons for property owners to choose our platform and connect with the prospective tenants and buyers. Also, the profitability improved sequentially, with the ordinary operating EBITDA margin reaching 61.6%. The margin remained below last year's level, reflecting temporarily higher marketing spending to attract customers and support our new memberships.
On page 20, we are turning to cost, where I'd first like to remind you again that if you compare the actual cost with the cost of the last year, the actual cost base now includes the cost of our Spanish business as well. Our total operating cost reached EUR 84.5 million in Q3, just EUR 1.1 million above Q2. Year-on-year cost growth slowed from 30.5% to 28.3%. Our two largest expense categories, personnel and marketing, were both lower than in Q2. Personnel costs declined from EUR 32.9 million to EUR 31.8 million. Organic personnel costs continued to decline in Q3. Organizational changes, automation, and AI adoption are helping our teams become more productive. I will explain this further on the next slide. Marketing spending fell from EUR 17.2 million in Q2 to EUR 15.8 million in Q3.
Organic marketing spending increased slightly compared with Q2, while lower spending in Spain more than offset this increase, partly reflecting expenditure being deferred. We continue to support our brand and customer memberships. These reductions were partly offset by increases in IT, purchasing, and other operating costs. Those increases reflect spending on infrastructure and AI, higher purchasing volumes in data and valuation products, external services, and also some higher bad debt costs. Own work capitalized also increased slightly as we accelerated development of our software and AI solutions. Together with our improving profitability in Spain, this supported a reported margin of 60.9%, up from 60.2% in Q2. Our organic margin reached 63.3%, up 0.4 percentage points year-on-year. Moreover, we expect stronger organic margin expansion in Q4.
If we take a deeper look on slide 21 into our personnel cost, you can see that the organic year-on-year decline accelerated from 2.2% in Q2 to 7% in Q3. Organic personnel cost represented 15% of organic revenue, down from 17.8% a year ago. It shows that we are delivering on our commitment to build an AI-native organization. Alongside organizational changes, three practical benefits are emerging. Coding agents help us developing more products faster. Automated workflows free teams from routine tasks, and higher output per employee allows us to grow with less reliance on additional hiring. We expect these productivity gains to continue as adoption expands, supporting our medium-term margin ambition presented at our Capital Markets Day in May. We are now coming to slide 22, where I would like to walk you through our movements from ordinary operating EBITDA to net income.
Reported EBITDA increased by 20.2% in Q3, supported by lower non-operating expenses, particularly for share-based compensation. I will explain these items on the next page in detail. Depreciation and amortization grew more slowly than revenue. The increase mainly reflected amortization of acquired intangible assets, while other depreciation and amortization rose only moderately. Over the first nine months, the financial result also improved, supported by valuation gains on investments, positive currency effects, and the release of provisions relating to the Sprengnetter acquisition. Together, these developments supported earnings before tax growth of around 20% in Q3 and 36% over nine months. I would like to draw your attention especially to the comparison of the line tax on income, which needs some explanation as a reminder. As you probably remember, the third quarter of the last year included a significant one-off deferred tax benefit in the amount of EUR 43 million.
It was a non-cash event and related to the amendment of the German tax law with respect to the reduction of the corporate tax rate in Germany. This explains why reported net income declined in Q3 despite higher earnings before tax. But nevertheless, and even with the tax effect in place last year, our reported net income still increased by 6.4% over the nine-month period. Adjusted EPS growth accelerated to 21.5% in Q3, reaching EUR 1.09. Our operating performance and lower share count following our buybacks both contributed. Over nine months, adjusted EPS increased by 19.7% to EUR 3.06. Let me now explain on slide 23 the non-operating items and other adjustments. The bridge on page 23 takes us from reported to adjusted net income for the first nine months. Non-operating expenses declined significantly year-on-year.
For share-based compensation, we first released provisions in Q1 due to a lower share price, followed by expenses in Q2 as we recognized new LTIP tranches and a share price increase within the second quarter. In Q3, again, a weaker share price led to a further release, resulting in a net positive effect of EUR 1.7 million over the first nine months. Lower M&A expenses were partly offset by higher reorganization costs. Amortization of acquired intangible assets increased following the Spain acquisition. The financial result benefited from valuation gains on venture capital investments and the release of excess provisions for the Sprengnetter call option recognized in Q2. After the related tax adjustments, adjusted net income amounted to EUR 213.6 million, equivalent to adjusted EPS of EUR 3.06. Turning now to cash flow.
As you can see, we generated EUR 151.1 million of free cash flow in the first nine months, down 25.3% year-on-year. In Q3, we generated EUR 50.5 million of free cash flow. The decline in Q3 was driven by two special effects totaling to an amount of EUR 50.7 million, mainly comprising payment cash-outs for LTIP settlements and payment cash-out with respect to the acquisition of the remaining outstanding 25% in Sprengnetter, where a part of the purchase price payment for the acquisition of the shares is, from an accounting point of view, not attributed to investments, but to personnel cost, and is therefore already included in the operating cash flow.
If you would adjust the free cash flow for these both items, only for comparison reasons, free cash flow would be EUR 201.8 million for the first nine months in 2026, compared to EUR 176 million for the first nine months of 2025, demonstrating our continued strong underlying cash generation. Let me now turn to how we have allocated that capital. On page 25, you can see our capital allocation during the first nine months of the year, and as a consequence, our net debt development and the leverage as well. The leverage increased from 0.99x at the end of Q2 to 1.23x at the end of Q3. During the third quarter, we accelerated not only our share buyback to EUR 165 million, but we also settled the purchase price for the remaining 25% stake in Sprengnetter.
Over the first nine months, on the one hand, we returned EUR 397 million to shareholders through buybacks and dividends, and on the other hand, we spent EUR 192.8 million on acquisitions. In addition to the free cash flow, we funded this capital allocation with a EUR 300 million Schuldschein issued on attractive terms in Q2. Let me now provide you with our perspective on share buybacks in the current environment. In the first nine months of 2026, we invested EUR 292 million in share buybacks, repurchasing more than 4 million shares at an average price of EUR 72.78. That represents 5.3% of the share capital we started this year with.
Last but not least, we reduced our share capital from 75 million shares at the beginning of this year to 72 million shares today, which means, in other words, that we have permanently redeemed 3 million of the shares we repurchased. We see this as an attractive use of capital. We are funding the buybacks at a pre-tax cost of debt of around 4%, while we remain confident in our ability to deliver our CMD targets, and Scout24 shares are trading at historically low multiples. The impact is already visible in earnings per share. In Q3, adjusted EPS grew by 21.5% compared with 15.8% growth in adjusted net income, supported by the lower share count.
After finishing with our numbers for the first nine months of the year, now let's have a look forward to the end of the year and how we think about our given guidance. We are on track to deliver another year at the upper end of our given guidance. Therefore, we are pleased to confirm that we now expect revenue growth of circa 18% for 2026, compared with the previous range of 16%-18%. Based on the improvements we are seeing in Spain, we now expect that the revenue contribution from our Spanish business will be in the range of 7-8 percentage points, up from 6-7 percentage points previously. Our margin outlook remains unchanged, an ordinary operating EBITDA margin of up to 61% and up to 64% organically.
With this updated guidance, we continue to deliver the targets we set while strengthening the business for our shareholders over the longer term. With that, let me hand back to Ralf for his closing remarks.
Thank you, Martin. Q3 shows that we continue to deliver strong results through changing market conditions while building our Agentic OS for real estate. We maintained double-digit organic revenue growth, expanded organic margins, and added customers in both professional and private. Private subscription revenue growth accelerated, and Spain's profitability improved. We have invested in the data, content, software, and technology that underpin this performance. That foundation allows us to keep delivering today while helping shape how AI is used in real estate. The benefits are becoming clearer quarter by quarter. AI-supported services add value to our memberships and bring us further into professionals' daily work, creating opportunities for revenue growth. Internally, AI and automation, alongside organizational changes, are helping our teams develop products faster and operate more efficiently. We are turning the strategy we presented at CMD into action with products customers use and pay for.
At the same time, we are preparing to work with external AI agents, giving customers more ways to access our properties and services. Our nine-month performance supports our confidence in delivering circa 18% revenue growth this year, with our margin targets unchanged. Thank you for joining us. Martin and I are now happy to take your questions.
Ladies and gentlemen, 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 and two. Participants are requested to use only handsets while asking a question. In the interest of time, please limit yourself to two questions. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from Joe Barnet-Lamb from UBS. Please go ahead.
Excellent. Thank you very much for taking my questions. Firstly, we saw some softness in professional ARPU in [4Q] driven by fewer developments. Can you help us understand how you think about this headwind into FY 2027? How long will it last, and is there capacity for you to work to offset it? Secondly, private ARPU growth accelerated to 9% in 3Q. I assume that is driven by the new packages ramping up, but if there is anything else there, please let us know. Based off what you observe in October, do you think that acceleration can be sustained into 4 Q and beyond? Finally, just because it is related to the second question, and I know, Ralf, you do love this question, where were you for consumer subscription volumes at the end of October? Thank you.
Yeah, thanks for the interesting questions. Let us start with the professional ARPU. I mean, this ARPU softness or slight decline is due to subdued project activity among the property developers and new home build providers. I mean, as you know, the market is challenging here, and of course, this has an impact, but this is something which we expect is going to change, I mean, as the market is going to recover. Of course, we also have measures in place to compensate that. So, I am quite optimistic for 2027. The other effect you have to see is that we have been quite successful in customer acquisition in the last quarter, and of course, new customers, they start usually with an ARPU which is below the average, but this is actually potential for 2027, where we can develop customers into higher ARPU levels.
Therefore, we think there are good opportunities for 2027. If it comes to private, first of all, you see that the strategy, the tiering and so on, all what we tested and so on, it is working, and we see double-digit revenue growth, which is what we are optimizing. You also see that the conversion uplift between the mid-tier and the highest tier is also quite promising, and this gives us also confidence for 2027. If it comes to subscriber numbers, as you said, I really like this question. It is hard to predict. I mean, of course, we will have seasonal effects in Q4, as we always had, but we will end the year, we think, with a higher, or we are quite confident that we will see a higher level than what we had last year.
Actually, what we did in terms of percentage, what we delivered in Q3. Therefore, again, we have not solved everything here, but we are quite confident as it comes to revenue growth next year here on the private side as well as on the professional side. Thank you.
Thanks very much, Ralf.
The next question comes from Adam Berlin from Goldman Sachs. Please go ahead.
Yeah. Hi, good afternoon. Just two questions. Just following on from the last one, are you saying that the absolute number of private subscribers will be down Q-on-Q because of these seasonal effects? If so, can you still deliver double-digit growth in private subscription revenue in the quarter? That's the first question. The second question is, you launched a product called Deposit Guarantee Plus at the beginning of September. I know it's only been a couple of months since you've launched it, but just interested to hear any customer feedback on how that product has been received. Is there much consumer interest around it? Anyone using it? Any color you can give there would be helpful.
Yeah, happy to take your questions. If it comes to private, you asked about that the number will be lower than in Q3. Yes, it will be because of the seasonal effects, and that was always, if you compare the numbers from last year and the years before, it was always the situation. Q4 is always lower, which is explainable because of the holiday season, everything we have here. Then usually we start really strong in the new year because the moment where you consider to move is actually in the first half of the following year. If it comes to double-digit revenue for this year, yeah, this is something which is our target, yeah, to deliver double-digit revenue for the private. What we are predicting today, at least, where we will end, so what we are confident. Yeah.
The last question was regarding the new product here. What we see is that there are positive signals on the product adoption and also acceptance. So, of course, we have to optimize conversions. The upper funnel, that is what I can share, is quite positive. If it comes to the lower funnel, that means people convert into product, we can optimize here. But this is normal for a new product like this, and we also have to optimize the offering on the deposit side still. Now we take all the learnings from the consumer side, and we are going into the process of optimizing the product. That means maybe also that we need another provider for the product.
As you know, we cannot offer this product at the moment standalone from our side, so we need a partner here, and of course, we consider who is best here for the product. Thank you.
Okay. Thank you.
Then the next question comes from Doyinsola Ojo from Citi. Please go ahead.
Thanks for taking my question. The first one is on Spain. Previously, you mentioned that Spain might contribute about EUR 5 million a month over 2026. Given the metrics disclosed today, do you think this could step up further into 4Q? Then just on the margin, I think previously you've had commentary that it could be a 30%-40% margin business. Have your expectations there changed today as a result of the disclosure we've had? I think if we take out the TSA impact, the margins for Spain look stronger than that range. Then my second question is on the private segment. In terms of the new memberships, where do you think the mix could get to, and over which time period? Then in terms of bringing more grey market listings online, can you give us any details on how that's progressing? Thank you.
Okay. So, didn't get fully your last question, but I start with the first two, and then maybe you can repeat your questions again. So, if it comes to Spain, you asked about the revenue expectations we have. So, you can see that the performance is going well and better maybe as we expected. So, we believe this is also stable and possible for the future, so, but it will be there, a big outperformance. So first of all, we are happy that the business is recovering, and we are ahead of our plan. So, this is all what I can share, and everything else is part of what we going to guide or, what the conference has already covered. If it comes to margin, I don't know whether it's higher than the 40% I mentioned. I don't think so.
But, we have high margin expectation for a classified business in general, and I said, and then this is from where the 40% came from, was performing in the two business. This double-digit revenue growth should be able to perform the 40% at least. Let's see. I think we also want to invest into the business. That means probably we have to do a bit more marketing here and there, as we did so far. Let's see. But we are on track here. So, and the last question, maybe you can repeat your last question, please.
Yeah, it was just on the mix of private subscription membership. I think you've got 40% of subscriptions in the higher value memberships. Just if you have any color on where you think that could get to over time. Then in terms of the grey market listings, bringing more of that online, just how is that progressing?
Yeah. Gray market listings are going well. You can also see it in the listing numbers in the presentation. This is quite on track, I would say. If it comes to product mix, it's hard to predict, to be honest, because we are still experimenting about what kind of value should be in each package. What we can say is that as more agentic features we put in the packages, so in the membership tiers, as higher the usage is. We see a high conversion from the mid-tier into the high tier because we have in the highest tier all the agentic services. The seeker system, I mean, where you apply automatically for new apartments coming to the market, and this is really well accepted and requested by the users.
Therefore, we think this is the direction we need to go, also to keep customers longer in the membership. We have to add more agentic products, and we have to add more products which are more relevant to a later phase of the life cycle of the seeker, which means after the seeker found the apartment and signed the rent agreement. Therefore, hard to predict, but the numbers we see at the moment and also the uplift increase, as you can see, is promising.
Thank you.
The next question comes from Will Packer from BNP Paribas. Please go ahead.
Hi there. Thanks for taking my questions. Two quick ones, please. We had the CMD range provided for 2027 and 2028. We are n ow going towards the end of 2026. You are a business with very good revenue visibility. Could you help us think through the puts and takes as to whether you will get to the higher or lower end of the range of high single digits or low double-digit revenue growth, and what factors we should consider, and the implicit operating leverage as well? The second question is, could we just come back on the ARPU softness within professional? On first principles, I would think that if there is some subdued activity in the new home space, that would weigh more on membership rather than ARPU. Or was that wrong? Could you just take us through the mechanics?
Is it kind of less aggressive spending rather than the number of new developments coming online is weaker? Any color there would be helpful. Thank you.
This is Martin. Maybe I take the first question regarding the outlook for 2027 and also 2028. I think we are not only finishing the year 2026 so far, and we already said something for our guidance in 2026, and let us wait for our guidance for 2027, which is probably coming out in February, as we are always doing it. But to give you a little bit more flavor, of course, with respect to our CMD, what we said, we are feeling still quite confident that we are in the line what we said, that we are still achieving this giving numbers from the revenue perspective, from the subscription number perspective, and also from the margin increase in perspective. Yes, so therefore, only to give you the confidence that we are still believing that these were the right numbers which we gave at the CMD.
But clearly, we are focusing on the year end, and then let us see how the next year is guided. But this is a little bit too early to give you more details on this.
Yeah. So about the ARPU softness, I think there are many effects at the end. So why the ARPU is now softer than the quarter before? I mean, there was still holiday season, for instance, and many agents, they have been on holiday as well. And usually, if it comes to upsell and on top products, they do it actively with the ImmoPoints and so on. But if you see, if you just take the last month of the quarter, there was high activity on those products in particular, so after the holiday season ended. Therefore, I think we shouldn't be too critical on this softness now, because, I mean, we are optimizing not really on this ARPU effect quarter by quarter. It's more like we're optimizing on delivering double-digit revenue growth for the segment professional.
What we can say is, also given that the market is now more challenging than it was before and also in the quarters before, that the residential business is really healthy, and we also have ways to compensate the impact in other segments, like the commercial customer segment and the project developer segment. If it comes to project developer, please have in mind that the product is a mix out of membership and transaction revenue. Therefore, that was also impacting here. It's not that the activity on the customer side in terms of on-top product is lower. It's more that we are also waiting longer for some transaction revenue. But it's coming later. It's not that we lost those revenues. So altogether, at the end, led to the softness in ARPU.
But again, for me, it's more important that we have enough opportunities for ARPU increase next year. If you just zoom in, what we did on the product side with the ImmoPoints now that many, many memberships, as you've seen in the presentation, have now the ImmoPoints as part of their contract. There's also commitment. There's the opportunity to do further upsell via ImmoPoints, more products now. You can now buy more products with ImmoPoints. So there are more opportunities now to do upsell, and that should drive ARPU next year or should give us the certainty that we are able to grow on the professional side, even if the market is maybe also not recovering as we think at the moment.
But yeah, so also, the new customers I mentioned earlier, that we are quite successful of adding new customers to our ecosystem and into the membership, so it gives us additional opportunities for ARPU growth. That's more important to me than that there is a softness quarter by quarter.
Very clear. Thank you.
The next question comes from Andrew Ross from Barclays. Please go ahead.
Great. Good afternoon, guys. My first one is to ask you about your pricing plans in residential for 2027. Normally, I think the letter goes out to agents sometime in January. The last couple of years, I think it has had a kind of 10% price rise in it. Is your plan to do 10% again, and then we should think about upsell from Bronze into Silver into Gold and the ImmoPoints being on top of that when we think about the residential ARPU trajectory into 2027? That is the first question. The second one is on ImmoPoints more specifically. Obviously, you are getting good engagement with that feature, but can you give us more insight in terms of what people are actually buying with their points? Specifically, you spoke at the CMD about this idea that agents would pay incrementally to get visibility to kind of intelligent searches.
Are you seeing agents starting to adopt that, and how is your view as to how that could be a driver in ImmoPoints consumption in 2027 and 2028 and beyond? Thanks.
First of all, I mean, we are not disclosing our pricing strategy for next year, sorry for that. I mean, hopefully you understand that. I think what we have is we have the tool set and toolkit for delivering double-digit revenue growth. That's actually the confidence we would like to show with all the different product initiatives and our Agentic OS and all what we presented at the CMD, but also what we delivered after the CMD, for instance, Proppi, the assistant for our professional customers. And actually, Proppi, that was our first Agentic experience for customers, and it's also helping us to automate, let's say, to automate on top product sales for real estate agents because Proppi is optimizing the visibility for the agents. It's helping the agents to automate their business, and it's then, of course, also consuming more in an automated way.
We see already that the usage of Proppi, but also of other Agentic services we have for professional customers, it's actually, it's increasing. And you see also in the numbers that more customers now using ImmoPoints, so buying more ImmoPoints outside of the membership commitment, which is also driving at the end membership commitment of the future. Because if you once consumed more ImmoPoints than what you have in your membership, then of course, this is actually then the new level. Therefore, at the end, we have this toolkit, and we have also 12 months' time to use every tool from this toolkit in order to deliver what we want to deliver, double-digit revenue growth, ideally for professionals still. And so far, as I said also earlier, that we have a lot of new customers, so I think we are quite confident to do it.
Another tool is, as you said, is bringing customers up the membership ladder. You see it in the numbers, there's still potential to migrate customers from a lower edition to a higher edition. All this together, it's for us actually positive in order to drive revenue next year.
Cool. Then in terms of specifically whether agents are starting to engage with your idea of applying visibility to intelligent searches?
They do. I mean, they use the ImmoPoints for buying more visibility, either in the old, let's say, way of choosing the exact product they would like to have. That was also not possible in the past, because in the past, you bought the product at the beginning of the contract period. Now you have more flexibility because of the ImmoPoints, and they choose the product which they need specifically, or they use an automated way with our Agentic services we have here. This is what I mentioned, this Proppi, we would like to develop Proppi into this agent, which is on behalf of the realtor optimizing the listing experience and visibility experience for the agents. We are making progress here.
Thanks.
The next question comes from Nizla Naizer from Deutsche Bank. Please go ahead.
Hi. I have two questions as well, please. First, thanks for the stats that you shared on your Agentic or the AI traffic that is coming to the platform. Do you expect this share from like 2.5% to continue to grow? Is there sort of a range that you are thinking the share might reach based on the trajectory that you are seeing? What have the challenges been in building out an Agentic OS for real estate after a few quarters of trying it out? Some color there would be great. Second, private margins were affected in Q3 because of the step-up in marketing. Would these marketing efforts continue in Q4, or would you ease back on it given the seasonality that you flagged? Thank you.
Yeah, maybe I start with the marketing question, the last one. I think what we said earlier as well is marketing is actually something we use in order to push products, also brand. Brand becomes more important in Agentic times, because we see already that traffic, SEO traffic is going down because of the change of the search experience from Google, for instance, and we have to react to it. I mean, Google has changed a lot the search experience over the last 12 months, and it is not that they are talking to us and say, "Look, this is coming now." They just switched over, and then we have to react. Therefore, we now are in the situation to have a quite flexible marketing budget.
And of course, we use this budget in order to maintain performance of product lines, but also for driving our brand advantage in the market. This is something we would like to continue, and probably we would like to increase that also next year. We do it as part of our investment strategy, and it's not much in dilutive here. Therefore, our job is now to drive the efficiency internally that we can afford investments into product, but also into marketing. The other question, sorry, I didn't get fully. What was it, Martin?
The share of AI search?
That's share of 2.5%. This is actually the volume we have on our own site, where seekers using our AI search experience, and this is growing fast, and the adoption is also going up, and that gives you a data point which shows that our Agentic OS at the end is starting now to fly. People are more engaged, they send more requests as they're using our AI tools, and therefore our AI investments are paying off in this perspective that now we see better performance of the active users in our portal, which is good. If it comes to external AI traffic, this is still really low, as on most of the other classifieds out there as well. But of course, we are working on a strategy to catch more traffic, more visibility.
I mean, our visibility increased in the LLMs, as we said, which is good for us, but also, of course, we need to understand better how can we bring the people over. The question for us is how much agent-friendly we want to be, and we made the decision we want to be really agent-friendly. Because we know that people that are using our website and products, and they also register themselves, so we own then the customer relationship, and this is what we're optimizing for. You can see the number of registered customers also increased and so on. This is really positive for us and shows us that the ecosystem itself and strategy here is working.
Okay, thanks.
Then the next question comes from Craig Abbott from Kepler Cheuvreux. Please go ahead.
Yeah, good afternoon. Well, I was exactly going to ask on that topic about the traffic generation. I also interpreted slide 10 as suggesting that your LLM source traffic had suddenly increased from 0.1% to 2.5%. I was going to inquire about how you felt that might develop, and therefore what the impact might be on your brand marketing costs. But you've addressed that. I guess we're all pretty up to speed on that now, so thank you.
Yeah, I mean, thanks for the question. I think it's a really good one because it shows you also what happened over the year. I mean, at the end, we have to react. As we had the Capital Markets Day, none of the other, let's say, classifieds also had really presented a strategy if it comes to AI. We also, we set our strategy, and we have a conviction now that the strategy can work. That is what we have to show to the market, and that's also what we're trying to deliver step by step. With all the agentic products, we're going to deliver, but also on the traffic side. We said we would like to be more visible in the LLMs.
We also, I mean, everyone is saying, "Oh, traffic is still low from the LLMs, so therefore there's no risk." I don't think so. I think we have to think about how can we integrate ourselves better. Therefore, we developed an own app for OpenAI as it was possible. This is something we would like to continue. So we are staying paranoid here, what's happening on the traffic side, but we also see already that we have opportunities. The opportunity is that we are able to engage better with our customers, with the seekers, but also with the professionals. That means then we win customers, we can register them, we own the customer relationship at the end, and that's important for us.
Okay. Okay, very interesting. Thank you.
The next question comes from Annick Maas from Bernstein. Please go ahead.
Hi there. My questions are around the B2C adoption of packages. So the 10% of the Unlimited clients, do they actually start in Unlimited, or do they end up in Unlimited after having used standard and it just didn't lead anywhere? Same for Pro. Can you also please just give us the lifetime differences in between a standard client and a Pro versus Unlimited client? Thank you.
At the end, I mean, we are not disclosing those details in terms of lifetime for each product. At the moment, we are just focusing on the overall lifetime by cohorts. If it comes to conversion, I think most of the customers, they are starting with the Unlimited version. Of course, now we try to promote customers, which used or we used the lower editions. In the moment where they are going to terminate maybe their contract or so, we are trying to push them into the higher edition because we try to understand how successful they have been with the plus subscription. Then if they say, "Look, I still haven't found an apartment," then we make them a special offer for the highest edition.
But you can see in the ARPU uplift we have, most of the customers, they are starting exactly with the highest edition, which is good because it shows you we are able to transport the value and that there is a willingness to pay for still an advantage and a differentiation to the lower tiers. That's a good signal for monetization opportunities. Yeah.
Thanks.
The next question comes from Joseph Barker from Rothschild & Co Redburn. Please go ahead.
Hi, thanks for taking my question. First one on Spain. I am just wondering if you could comment a bit on the macro around housing activity in Spain. Anything structural in that market that helps you deliver these Fotocasa numbers, or is it all really driven by specific changes that you are making within that business? Anything you can give there on a split between internal changes or external impacts? Then secondly, I thought it was just interesting the color you gave in the letter on ImmoReels. A large U.S. platform is delivering pretty good numbers from an equivalent product to this, albeit they do sell different assets to you.
Just wanted to know any color on whether this engagement is delivering higher intent, stronger lead quality signal, impacting monetization in some way, or is it more just about securing ongoing casual engagement from consumers when they do not have as active search intent? Thank you.
Yeah. Let's maybe start with Spain. Spain actually, what we said, and what was as we acquired the business, the belief was, we know how to run a real estate classified. As we did the due diligence and so on, we found something where we thought, okay, we can optimize that. That means, if it comes to how we treat customers, if it comes to packages, if it comes to traffic, if it comes to pricing. This is actually now what we did over the last six to eight months, that we rolled out our playbook in Spain as well. This is actually what you can see at the moment, the impact here. Focusing, for instance, on customer acquisition now leads to the fact that we have growing customer numbers.
We also see that the ARPU is going better and also that the traffic is recovering. Because we launched it, for instance, on Habitaclia, which is we have two portals in Spain, Fotocasa and Habitaclia. Habitaclia was quite outdated in terms of technology and also in terms of SEO performance, not that successful anymore. Adevinta was not able before to renovate or to replace the portal. We did it in just two months with two engineers, and we built a complete new experience there. We see also now that this traffic is here recovering and so on, which is quite positive. So, actually now we try to optimize the operations. Of course, we also made some organizational changes. The size of the business was an issue in order to become faster, for instance, for product development. This is what we did.
When it comes to Immo, I think your second questions, I think one strategy in order to tackle, let's say, the traffic problem you might have if it comes to LLM search, external LLM search, is that you can, of course, you can increase the product, let's say, attractiveness with social content. That's what we did. We added social content because at the end, every customer is a content creator. Of course, you have to use those creators then to create attractive content for the seekers. That's what we tested with Immo, and we see that there's, at least for some part of the businesses here, a great result and which is a success for us.
All right. Thanks very much.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Filip Lindvall for any closing remarks.
Thank you for joining and your interest in Scout24. This concludes today's call.
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