Ladies and gentlemen, welcome to the HomeToGo Full Year and Q4 2024 Earnings Call. I am Shari, the current call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone.
For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Sebastian Grabert. Please go ahead.
Thank you very much, and good morning, dear analysts and investors, and welcome to HomeToGo's Full Year 2024 Earnings Call. My name is Sebastian Grabert, Director of Investor Relations and Corporate Finance, and I'm pleased to be joined today by our Co-founder and CEO, Dr. Patrick Andrae, and our CFO, Steffen Schneider.
Together, they will walk you through our financial highlights for the Q4 and the full year 2024, as well as our guidance for the financial year 2025. As always, this call is being recorded, and a replay will be available later today on our Investor Relations website. With that, I would like to hand it over to you, Patrick. The floor is yours.
Thank you, Sebastian. Dear analysts and investors, I'm excited to be here today to reflect on what has been a truly milestone year for HomeToGo. In 2024, our 10th year as a company, we made significant progress across all key areas, enhancing our technology and AI-powered products, expanding our software and service solutions, and strengthening our market position in Europe.
Overall, HomeToGo took major steps towards shaping the future of alternative accommodation and becoming Europe's leading vacation rental platform. This progress is clearly reflected in our financial performance for 2024. First, booking revenues reached EUR 259.7 million, representing an impressive 37% increase year-over-year. Second, IFRS revenues grew by 31% year-over-year, reaching EUR 212.3 million.
Third, adjusted EBITDA surged to EUR 12.8 million, a more than 600% increase compared to last year. With these results, we have achieved the goals we set at the beginning of this year, driving sustained growth while significantly improving our profitability. At the core of this success are our two key segments, the HomeToGo Marketplace and HomeToGo Pro. Let's take a closer look at how each of them performed in 2024.
Starting with the Marketplace segment, our AI-powered B2C business offering the world's largest selection of vacation rentals. Our Marketplace offers a superior product experience to meet demands for the modern traveler. With more than 20 million offers, and including our well-known key brands such as HomeToGo, Casamundo, and e-domizil, we now serve a global audience via local apps and websites in more than 30 countries.
The segment's gross booking value grew to over EUR 1.7 billion in 2024, representing a 21% increase year-over-year. This strong momentum translates into EUR 151 million in IFRS revenues, up 34% year-over-year. While booking onsite was the primary growth driver for that, growing IFRS revenues in 2024 by 67%, and in the Q4, remarkably, by even 163% year-over-year.
Also, profitability for the Marketplace improved significantly, as adjusted EBITDA reached EUR 2.9 million, more than 22 times higher than last year. Turning now to HomeToGo Pro, our B2B segment providing software and tech-enabled service solutions for vacation rental suppliers and other customers.
With HomeToGo Pro, we helped more than 60,000 paying customers to streamline operations, enhance distribution, and unlock new revenue opportunities, strengthening our position as a key enabler in the vacation rental industry. We continue to see strong results in this segment. In 2024, enabled gross booking value exceeded EUR 2.6 billion, reflecting a 29% growth year-over-year.
As a reminder, enabled GBV represents travel facilitated through a HomeToGo Pro solution, primarily based on data from our customers using our tools. HomeToGo Pro also remained a key profitability driver, generating EUR 9.9 million in adjusted EBITDA, nearly six times higher than last year, and now contributing 33% of our group's total IFRS revenues in 2024.
Let's now take a deeper look at our Marketplace segment and walk through its 2024 achievements and key growth drivers. In 2024, we made significant advancements in our AI-powered Marketplace, further enhancing the traveler experience while driving stronger engagement, loyalty, and retention. A key milestone was the evolution of our AI-powered assistant, AI Sunny, designed to provide instant support for booking-related inquiries.
AI Sunny has efficiently reduced the need for human agent intervention, measured by an already improved escalation rate of a staggering 57%, helping us provide faster, high-quality customer service at scale. Beyond AI, we also introduced new value-added tools to support travelers throughout the entire journey with holistic travel planning.
We launched a partnership with Komoot, the world's leading outdoor app, giving travelers access to expert-created hiking and biking routes as an added benefit of downloading the HomeToGo App, empowering travelers, especially in rural areas, so in our key destinations, to explore their surroundings with ease. We also continue to provide options to travelers that want to make sustainable travel choices.
With our partner SQUAKE, travelers across all HomeToGo regions can now compensate for the emissions of their vacation rental stays after checkout. For travelers in Germany with plans to launch in new markets, we introduced WeatherPromise, a revolutionary feature that guarantees a full refund if rain disrupts the trip, ensuring that bad weather never ruins the vacation.
Finally, our HomeToGo App continues to be a major driver of repeat demand, reducing reliance on paid channels and strengthening traveler loyalty. Since 2019, global monthly active users have grown at a 40% compound annual growth rate and at 48% in our core DACH market, making it an increasingly powerful platform for direct engagement and retention.
With an iOS App Store rating of 4.8 stars and 4.6 stars on Google Play in Germany, the app is not only growing rapidly but also delivering an exceptional experience that keeps travelers coming back. Another key milestone in late 2024 and early 2025 was the expansion of HomeToGo's global footprint, bringing our Marketplace to even more travelers worldwide. Since December 2024, we have successfully launched eight new markets, including Croatia, Czech Republic, Finland, Greece, Hungary, India, Slovakia, and Slovenia.
With these additions, HomeToGo now operates localized websites and apps in more than 30 countries, spanning Europe, North America, South America, Australia, and the Asia-Pacific region. This expansion reflects our commitment to making incredible homes more accessible globally while unlocking new revenue opportunities for HomeToGo.
Travelers in these new markets can now access our extensive vacation rental selections in their local language and currency, and that alongside our key AI-powered innovations. As we continue to grow, we remain focused on delivering a seamless and localized booking experience to travelers worldwide.
One of the cornerstones of our profitability success has been the cultivation of a loyal and engaged customer base, driving strong repeat demand. We see that when travelers try HomeToGo once, they are more likely to come back. Over the past year alone, we have grown booking revenues from repeat customers by 33%.
That's more than 10 times growth since 2019 and more than 17 times in our core DACH market. This is then also reflected in our growth in booking revenues from direct traffic that grew more than 31% year-over-year, a clear sign that more travelers are visiting HomeToGo directly or searching our brand names. As you know, another key driver of our profitability uplift is our relentless focus on marketing efficiency.
Through data-driven insights, AI-powered targeted bidding campaigns, and optimized user acquisition and retention strategies, we continue to maximize the impact of our marketing efforts, reaching the right audience at the right time with the right message. In 2024, this allowed us to further reduce marketing and sales costs as a share of IFRS revenues to only 62%, representing an improvement of 38 percentage points since 2019.
Our Marketplace continues to offer high-quality, attractive demand to boost performance for our trusted partners, represented by their willingness to pay higher take rates. We see strong improvements in our onsite take rate, driven by our strategic shift towards higher margin onsite bookings and the impact of the relevance of our short-term business.
For the full year 2024, the onsite take rate increased to 12.7%, up 1.5 percentage points year-over-year from 11.2% in 2023. In Q4, the onsite take rate reached 12.5%, reflecting a strong 2.8 percentage point increase year-over-year. In parallel, we are growing our onsite booking revenue share. In 2024, the onsite share in the DACH region reached an exceptional 86%, another 8% up in terms of percentage points year-over-year, while globally our onsite share increased to 61%, an improvement of 11 percentage points year-over-year.
Beyond driving profitability, our continuously increasing onsite booking share reinforces HomeToGo's position as a premier booking channel for leading vacation rental players who gain immense value from HomeToGo. Today, we are the first or second largest contributor of booking revenues for 50% of our top 25 partners. Additionally, we rank within the top five booking contributors for nearly 90% of our top 25 partners.
These achievements highlight the strength of our Marketplace model and our ability to generate high-value bookings for our partners, further strengthening HomeToGo as a premier platform in the vacation rental industry. Let's now take a closer look at HomeToGo Pro and its financial performance during 2024, as well as key product advancements that further enable our customer success. HomeToGo Pro has evolved into a key growth driver for our business, significantly contributing to both revenue and margin expansion.
In 2024, HomeToGo Pro accounted for approximately 33% of our group's IFRS revenue, supported by strong demand for our B2B software and service solutions. The segment also saw continued strong growth in enabled gross booking value, reaching over EUR 2.6 billion in 2024, a 29% increase year-over-year.
This reflects the increasing adoption of our solutions by professional property managers, destination marketing organizations, and private holders, who all benefit from our technology to streamline operations and maximize their reach. Looking ahead, HomeToGo Pro will play an even larger role in our business. As you know, with the acquisition of Interhome, the expected pro forma 2024 IFRS revenue share of HomeToGo Pro would be around 55%, making it the dominant segment within our group.
This shift underscores the increasing importance of our software-driven solutions, which not only drive high-margin revenue streams but also position us as a leader in enabling the professional vacation rental industry. Let's now look into one of our key developments within the HomeToGo Pro subscription business, which increased IFRS revenue nearly 25% year-over-year.
Zooming in on Smoobu, our subscription-based software solution for private and semi-professional vacation rental hosts, we've rapidly elevated and advanced our product. In late 2024 and early 2025, we introduced a refreshed brand design alongside major product enhancements to further strengthen Smoobu's position as a leading all-in-one management platform. A key milestone was the launch of the new Smoobu app, designed to provide an even more seamless, efficient, and stress-free rental management experience.
With a modernized look and feel, improved usability, and an intuitive interface, the new Smoobu App makes it easier than ever for hosts to manage their properties on the go. Beyond these design and usability improvements, we also rolled out four major product innovations. First, the new Website Builder.
This tool allows hosts now to seamlessly create and launch their own direct booking websites, reducing dependence on third-party platforms and increasing direct revenue streams. Second, Smoobu Dynamic Pricing, a smart pricing solution that helps with occupancy and revenue by automatically adjusting rates based on real-time market data, demand, and seasonality.
Third, the new invoicing feature to simplify financial processes. This feature automatically generates invoices, especially for direct bookings, without an OTA in between, making transactions even more efficient and seamless. Fourth, launched a new logo and a modern UI to increase the usability of critical product features, as already pointed out, but specifically interesting for the calendar and the Smoobu App Store.
These efforts will continue, obviously, throughout 2025. With these enhancements, Smoobu continues to drive revenue expansion in our subscription business and unlocks new opportunities for our partners to scale their business. Another exciting development within HomeToGo Pro in late 2024 was the launch of the Travel Agency Hub by HomeToGo Pro Doppelgänger, a new gateway designed specifically for travel agency partners.
The solution enables trusted travel agencies to seamlessly search and book vacation rentals from our extensive global inventory, unlocking new demand sources for both agencies and HomeToGo. The Travel Agency Hub builds on HomeToGo Pro Doppelgänger's powerful suite of white-label solutions, which allows partners like the German tour operator TUI to integrate our technology through customized interfaces and API solutions.
Travel agencies benefit from the same intuitive experience as our B2C marketplace, but with exclusive features tailored to their needs. If we're looking at the benefits for our partners, these include access to the world's largest selection of vacation rentals, allowing agencies to enhance their offerings for clients, competitive commissions on every booking, creating new revenue opportunities for agencies,
valuable rebooking insights, providing a clearer view of customer demand and trends, and a tailored payment and invoicing process, streamlining agency operations. Last but not least, dedicated support from HomeToGo's in-house customer experience team, ensuring a smooth and efficient booking process.
Since launch, the Travel Agency Hub has already gained strong traction, including securing key customers such as Lufthansa City Center alongside other value partners like Fora or Schmetterling and so many more. As we continue to expand this offering, we see tremendous potential in further integrating vacation rentals into the Travel Agency ecosystem, strengthening again HomeToGo Pro's distribution network.
We are now shifting to 2025. Let's explore current trading trends, key market dynamics, and operational developments shaping HomeToGo's performance in the early months of this year. We saw a strong start in January with booking revenues tracking above 2024 levels. However, in February, we observed a temporary slowdown, which we attribute to the German federal elections and the associated macroeconomic uncertainty in consumer behavior paired with a later Easter. Currently, demand has rebounded in March.
Current trends indicate that we are again tracking ahead of 2024, and Q1 performance remains in line with expectations. As a reminder, given Easter falls later this year in Q2 and is a key driver for travel demand, we expect stronger momentum for the upcoming next quarter. Additionally, as a reminder again, our booking revenue backlog reached a record high, EUR 46.9 million at the end of 2024.
This marks our highest year-end backlog to date, providing solid revenue visibility and a strong foundation for continued growth in 2025. On top of this foundation for accelerated growth in 2025, we also continue to see HomeToGo be a competitive leader across new ways that travelers are planning. With AI-driven search, because the volume of travelers coming to HomeToGo via AI-driven search engines has increased more than 30 times year-over-year in the beginning of 2025.
Looking at HomeToGo's visibility in these AI searches and large language models such as ChatGPT or Perplexity AI, HomeToGo is the most frequently mentioned vacation rental marketplace with a 38% share of AI-generated responses for vacation rental search queries, well ahead of Booking.com, Airbnb, and FeWo-direkt , the German alternative accommodation subsidiary of Expedia.
This leadership position is a direct result of our continued investments in organic visibility through SEO and PR efforts. By leveraging advanced AI-driven content strategies and optimizing our visibility in top-tier outlets, we have positioned HomeToGo as the go-to brand for vacation rentals and AI-assisted searches.
As AI-powered discovery continues to grow, we see this as an important long-term driver of organic traffic and brand awareness, further reducing our reliance on paid marketing. Another major milestone for growing HomeToGo's German brand awareness in 2025 is our partnership with a well-known Bundesliga club, 1. FC Union Berlin.
FC Union Berlin. As of February 2025, HomeToGo proudly became Union's main sponsor, with our logo now displayed on the team's jersey and HomeToGo's branding receiving significant airtime on every televised game. We are the main sponsor for the remainder of the 2024-2025 season and a top sponsor and the official travel partner throughout the season of 2025-2026.
Actually, this partnership is a perfect match, not only because HomeToGo was founded in and is operated from its Berlin headquarters, but also because we share Union's deep-rooted community spirit. Just as Union fans find their home in the Stadion An der Alten Försterei , travelers find their HomeToGo tour away from home with HomeToGo. The impact of this sponsorship was immediate. The announcement drove a record-breaking one-day coverage in press with over 130 media placements across Germany.
This visibility translated directly into a significant spike in search demand for HomeToGo in Germany, tripling compared to the 2024 average. This partnership not only strengthens our local and national brand presence, but also creates an exciting platform for future engagement with travelers and football fans alike through planned brand activations and continued visibility.
Stay tuned for what we will show you along the year. In March, HomeToGo once again took center stage at ITB Berlin, the world's largest travel trade fair, right here on our home turf. Our Twilight Pearl booth stood alongside other big players in the industry, serving as a vibrant hub for connecting with key partners, engaging in discussions on the future of travel, and showcasing our latest innovations.
We also painted ITB red with our Union jersey, even getting lots of praise from local politicians such as the mayor of Berlin with his press entourage. HomeToGo was center stage on topics such as digital transformation, the role of AI in holistic travel planning and travel technology, and sustainable business models across a period of uncertainty.
A special highlight of our ITB presence in 2024 was the launch of the first HomeToGo Vacation Rental Awards. With a portfolio of over 20 million vacation rentals from thousands of partners worldwide, we are uniquely positioned to celebrate the best in the industry. Our first-ever Vacation Rental Awards recognized outstanding partners across industry-specific categories, honoring the properties and providers that go above and beyond to create exceptional travel experiences for guests.
Before we go into our outlook for 2025, let's take a brief look at where we currently stand with our transformative acquisition of Interhome, which we signed in February 2025. The acquisition of Interhome, Europe's second-largest vacation rental management company, is our most significant deal yet.
As a reminder, in 2024, Interhome generated approximately EUR 400 million in gross booking value, EUR 125 million in IFRS revenues, and more than EUR 20 million in adjusted EBITDA. Looking at the timeline of the next milestones, we are all on track. From a financing perspective, we secured EUR 75 million in debt financing in December and also successfully raised EUR 85 million in equity in February 2025. With everything progressing and pending final regulatory approvals, we currently assume Interhome to be consolidated into HomeToGo as of June 2025.
As we approach closing, our focus is on ensuring day-one readiness so that Interhome can seamlessly continue operations from the very first day after closing. In parallel, we are executing a structured carve-out plan to transition Interhome away from eGrowth systems and services.
Overall, this marks a significant milestone for HomeToGo, positioning us even more strongly in the vacation rental management space and further accelerating our HomeToGo Pro growth strategy. Before I hand over to Steffen for the financial deep dive on our 2024 results, I would like to highlight what is arguably the most anticipated part of today's call: HomeToGo's financial guidance for 2025.
Our financial guidance for 2025 marks another major step forward in our journey of profitable growth and scalability. In 2025, we expect booking revenues to exceed EUR 350 million, reflecting a strong year-over-year growth of more than 35%. Similarly, IFRS revenues are projected to grow by more than 40%, surpassing EUR 300 million.
The slower growth of booking revenues compared to IFRS revenues is a reflection of the assumed consolidation of Interhome from June onwards, when the majority of the main booking seasons of the Q1, respectively, is already over. At the same time, profitability is set to accelerate significantly. We anticipate adjusted EBITDA of at least EUR 35 million, marking a growth rate of over 170% year-over-year.
A particularly exciting milestone is the introduction of free cash flow as a new guidance metric. For the first time, we are targeting positive free cash flow in 2025, a testament to our strong financial discipline and sustainable business model. These numbers reflect our ongoing focus on operational efficiency, economies of scale, and the consolidation of Interhome, which we, as mentioned before, assume to consolidate in June 2025.
We will update you for sure, dear analysts and investors, should this assumed timing of the consolidation change. With this outlook, we are confident that 2025 will be a breakthrough year, solidifying HomeToGo's position to become Europe's leading vacation rental powerhouse. With that, I would like to hand over to Steffen, our CFO, to take you through the financials in more detail. Thank you.
Thanks, Patrick. Good morning, dear analysts and investors, and thank you for joining us today. Let's start with a recap of our key financial highlights for the Q4 and full year 2024. First, we delivered strong top-line growth, reaching a new all-time high for the Q4. Booking revenues came in at EUR 260 million, representing a 70% year-on-year growth, exceeding even our already upgraded full-year guidance of more than EUR 255 million.
Our booking revenue backlog at year-end reached EUR 47 million, a new record and setting a solid foundation for 2025. Second, IFRS revenues growth accelerated towards year-end, with Q4 IFRS revenues up 45% year-over-year, driven primarily by strong booking on-site growth of 163% and a 67% increase for the entire marketplace segment. For the full year 2024, IFRS revenues grew by 31% year-over-year to EUR 212.3 million.
Third, we continued to scale profitability in 2024. Adjusted EBITDA increased more than seven-fold year-over-year to EUR 12.8 million, reflecting operational efficiencies and improved margins across both segments. The Q4 adjusted EBITDA came in at negative EUR 4 million, reflecting strategic investments to capture attractive commercial opportunities and a further build-up of the booking revenues backlog for 2025. Fourth, we ended the year with a solid cash position of EUR 82.7 million, reinforcing our financial strength.
Most importantly, free cash flow, while still negative for the full year, significantly improved by 42% in 2024, and we successfully returned to positive territory in the Q4, underscoring our progress towards sustainable profitability. Taking a closer look at key financials for full year 2024 and the Q4, we delivered exceptional growth in both booking revenues and IFRS revenues, alongside strong improvement in profitability and cash metrics.
We achieved record booking revenues of EUR 259.7 million for 2024, reflecting 37% year-over-year growth. This momentum was particularly strong in Q4, where booking revenues reached a new Q4 high of EUR 49.9 million, marking an impressive 70% increase year-over-year. IFRS revenues followed a similar strong trajectory, growing 31% year-over-year to EUR 212.3 million for the full year 2024. In Q4, IFRS revenues increased by 45% year-over-year to EUR 34.7 million, reflecting strong contributions from our booking on-site business. Third, profitability showed remarkable improvement.
Adjusted EBITDA grew by over 616% year-over-year, reaching EUR 12.8 million for 2024. Our full-year adjusted EBITDA margin expanded to 6%, highlighting the structural profitability improvements across both segments. In Q4, adjusted EBITDA stood at negative EUR 4 million, reflecting the investments aimed at capturing attractive commercial opportunities and the build-up of the booking revenues backlog for 2025.
Free cash flow significantly improved by 42% year-over-year, reaching negative EUR 10.3 million for the full year. Notably, in Q4, free cash flow, despite negatively affected by M&A-related one-offs, was again in positive territory, reinforcing our path towards positive free cash flow generation in 2025. Now, let's take a deeper look at the composition of our booking revenues, IFRS revenues, and adjusted EBITDA by segment, highlighting the strong contributions from both marketplace and HomeToGo Pro.
Starting with booking revenues, our booking on-site business in the marketplace segment was the primary driver of growth, increasing by 66% year-over-year to EUR 116.1 million. This reflects the continued shift towards higher margin direct bookings, a higher on-site take rate, as well as the successful integration of our short-term acquisitions. Advertising revenues within the marketplace increased only modestly by 5%, reaching EUR 73.6 million for the full year, as on-site was offering more attractive commercials.
Booking revenues from the volume-based business within HomeToGo Pro grew by an impressive 52% to EUR 57 million. Turning to IFRS revenues, we see a similar dynamic. The booking on-site segment within the marketplace grew strongly by 67% year-over-year, reaching EUR 89 million, while advertising IFRS revenues grew moderately at 5% year-over-year. In the HomeToGo Pro segment, both subscriptions and volume-based revenues increased equally by 25% year-over-year.
Subscriptions grew to EUR 25.6 million, reflecting the continued expansion of our SaaS solution for professional property managers and private homes. IFRS revenues from the volume-based business reached EUR 44.4 million. Looking at the profitability, adjusted EBITDA expanded more than seven-fold year-over-year, reaching EUR 12.8 million. This was fueled primarily by HomeToGo Pro, which contributed EUR 9.9 million, reflecting an almost 500% year-over-year increase.
The marketplace segment also saw a major profitability improvement, posting EUR 2.9 million in adjusted EBITDA after reaching break-even in the prior year. Breaking down the results for the Q4, starting with booking revenues from our marketplace segment, booking on-site business showed exceptional momentum, increasing by 161% year-over-year to EUR 21.8 million.
Advertising booking revenues grew by 18% year-over-year to EUR 10.9 million. Within HomeToGo Pro, volume-based booking revenues surged by 84% to EUR 13.5 million, reflecting increased adoption of our solutions by professional property managers. However, booking revenues from our subscription business declined by 4% year-over-year to EUR 5.5 million due to upcoming technical migration efforts for some of our southern European subsidiaries and therefore scaled-down acquisitions of new customers.
Turning to IFRS revenues, the booking on-site once again led growth up 163% year-over-year to EUR 14.3 million, continuing to drive revenue expansion. Advertising IFRS revenues increased slightly by 4% to EUR 8.7 million. In HomeToGo Pro, IFRS revenues from the volume-based business grew by 41% to EUR 6.6 million, and the IFRS revenues for the subscription business remained flat at EUR 5.7 million.
Looking at the profitability, the marketplace segment recorded an adjusted EBITDA of negative EUR 3.3 million, reflecting the aforementioned opportunistic investments for future growth. HomeToGo Pro posted an adjusted EBITDA of negative EUR 700,000, while improving its quarterly profitability by 70.6% year-over-year. A bit more context on our average basket size development.
You may recall this slide from the previous quarters in 2024. The overall decrease in basket size across the group by 19% year-over-year is primarily driven by the strong growth of the short-term business in the DACH region. These shorter trips result in a lower overall basket size due to a reduced length of stay, even though the average daily rate remains stable.
Excluding the impact of the short-term segment and focusing on our core HomeToGo Marketplace, basket size has actually shown a slight overall increase, with the DACH region even recording a 12% year-over-year growth, almost double the growth of the rest of Europe. In contrast, North America experienced a decline in basket size, driven by a combination of slightly lower average daily rates and shorter length of stay compared to the same period last year.
Now, moving on to the development of our cost ratios and their role in driving group-level profitability relative to our IFRS revenues. Starting with the full-year view, our gross profit margin improved by 0.4 percentage points year-over-year to 97.8%, reflecting ongoing cost efficiencies supported by strong top-line growth. The most important driver behind our profitability expansion continues to be enhanced marketing efficiency.
Our marketing and sales cost ratio improved by 4.1 percentage points, decreasing from 66.2% in 2023 to 62.2% in 2024. This was fueled by better ROI from paid marketing, an increase in repeat booking revenues, and synergies from recent acquisitions. Product development costs improved by 0.9 percentage points to 17.1%, highlighting scale efficiencies despite continued investments in AI and platform innovations.
On the other hand, G&A expenses increased from 12.4% to 13.5%. This reflects higher personnel and consulting costs, in particular driven by newly integrated businesses. As a result of these margin optimizations, our adjusted EBITDA margin improved notably, rising from 1.1% in 2023 to 6.0% in 2024, a 4.9 percentage point uplift year-over-year. For the Q4, we see some expected seasonal effects.
Gross profit margin remained stable at 94.6%, slightly decreasing by 0.1 percentage points year-over-year. The marketing and sales cost ratio was higher year-over-year at 63.4%, increasing by 6.9 percentage points due to the planned investments in building up the 2025 backlog. Product development costs saw a notable decrease from 35.1% in Q4 2023 to 25.1% in Q4 2024, improving by 10 percentage points.
This was mainly driven by first-time consolidation effects of our short-term business, demonstrating better cost ratios. Administrative expenses increased only slightly by 0.1 percentage points to 20.9%. Overall, relative Q4 profitability showed improvement, with the adjusted EBITDA margin increasing by 0.6 percentage points year-over-year, reaching -11.5% in Q4 2024 compared to 12.1% in 2023.
As always, we exclude expenses related to equity share-based compensation, depreciation, amortization, and other one-off items to highlight our operational performance as reflected in adjusted EBITDA. Looking at our cash position, we maintain a robust balance sheet as of the end of December 2024, with a gross cash balance of EUR 82.7 million, which includes a EUR 12 million investment in the Known Money Market Fund.
The sequential decrease of EUR 7.1 million in gross free cash from the end of Q3 2024 is mainly due to the earn-out payments for the SECRA acquisition, purchase price adjustment for e-domizil, and higher income tax payments. In 2024, our cash inflow from operating activities saw a substantial year-over-year improvement of EUR 11.1 million, reaching EUR 4.9 million in Q4 2024.
This improvement is largely due to stronger net results compared to the prior year. Cash flow from investing activities totaled negative EUR 10.1 million, primarily reflecting the aforementioned cash outflows related to acquisitions related earn-out and purchase price adjustments. Additionally, cash outflows from investing activities also include investments in internally generated intangible assets aimed at enhancing the booking experience for our customers.
Finally, cash flow from financing activities amounted to minus EUR 3 million, which includes EUR 2.5 million in debt repayments, EUR 0.4 million for the share buyback program, and EUR 100,000 for principal payments on lease liabilities in the Q4 of 2024. After deducting interest-bearing debt of EUR 0.2 million and restricted cash of EUR 2.4 million held for collection services on behalf of our hosts, our net cash position was EUR 82.1 million.
2025 is set to be a transformative year for HomeToGo, as we solidify our position as Europe's leading vacation rental powerhouse. With our strong growth trajectory, strategic acquisitions, and continuous innovation, we are well positioned to capitalize on the immense opportunities ahead. With that, I thank you for your attention today, and we will now open the floor for your questions.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 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 2. Participants are requested to use only hands while asking a question. Anyone who has a question may press star and 1 at this time. The first question comes from the line of Silvia Cuneo, Deutsche Bank. Please go ahead.
Thanks. Good morning, everyone. I would like to ask three questions. The first one is around the guidance and the demand trends. The 2025 outlook sounds encouraging despite the temporary slowdown in February. Can you elaborate on the current booking trends and what visibility you have already into the peak travel summer season at this time of the year?
What have you factored in your assumptions for the 2025 guidance from a macro perspective? Do you foresee any potential headwinds to consumer demand for travel, or maybe not? The second question is on slide 15 that you showed with the PR and SEO trends in AI search engines.
I wanted to ask if you could share some additional thoughts about whether in the future you expect to receive more and more traffic from these new sources compared to from Google, and what could be the benefit for your marketing costs? Are they cheaper acquisition channels? Perhaps do you see any different trends when it comes to conversion of new customers to the funnel?
Just the final quick one on the Interhome integration. What specific integration milestones are planned for 2025 after completion, and what sort of KPIs do you suggest as tracking to assess the success of the integration? Thank you.
Hi, Silvia. Thanks for your question. I start with the first one and then hand over to Patrick on AI. With regards to the guidance, as we have said before, when we looked at HomeToGo on a standalone level, we expected a low double-digit growth and a significant improvement in profitability, and that still holds true. As Patrick has outlined, we started really well into the year with January well ahead of the prior year. In February, we had the dip that was really driven by Germany.
Other markets developed also well in February, but given that February is one of the most important months for German travelers, that trend, again, has reversed in March, as shown. We are continuously looking very optimistic. We do not see any headwinds in the overall macro, and therefore continue to believe in that low double-digit growth on a standalone business.
With regards to the effects coming out of the integration there, it was for us difficult, given the very limited information in particular, to see what kind of effects there are on a monthly basis and what we have to see.
For example, Pentecost this year, which is an important travel season, is in the beginning of June. Do we get that? Is it still already included with the check-ins, which would have a higher impact on IFRS realization and EBITDA? There we just took a careful approach.
Okay. I take over for your AI question on the visibility. Yeah. Obviously, like you might have seen, there have been a lot of also research ongoing where people say basically it is the traffic that comes for e-commerce and also travel searches is up more than 10 times.
For us, it's even 30 times, which is probably also the reflection of what we see with the visibility of HomeToGo within these searches, right? It's still early, obviously. It's hard for us to grasp in the end what and to which extent this will obviously further grow.
I wouldn't expect like 30 times year-over-year next year, obviously, because it came also not from a super high basis, but it shows basically how fast people are adapting to AI and how fast basically also these Perplexity AI calls themselves a search or an answering machine, right? Like not a search engine. Where people not only necessarily use AI to get an answer, but also then further go after the answer, meaning like coming to our website and so on.
We basically see, which is interesting, yeah, that some of these AI searches, or many of these AI searches from a conversion rate perspective, are even higher sometimes than SEO traffic coming to our page, which is very good because you see it's not only people looking for information, but also people looking for transactional kind of value or doing a transaction with HomeToGo.
This is in general where we see definitely what we invested in the past was not only a good way, so where we positioned ourselves as the expert for vacation rentals was not only good for SEO, but also now turns out to be very good for the relevance within AI because the large LLMs also understand and source obviously a lot of data from the whole internet, where HomeToGo is all over the place with being like the expert for vacation rentals.
Going forward, for sure, like any way on the AI topic. As you know, HomeToGo is pioneering a lot of topics, and you can expect from us further things there on the marketplace side, but as well as we have obviously with HomeToGo Pro and especially with HomeToGo Pro Doppelgänger, explicit product that can serve also as an API and connector, even better connector also to LLMs and to AI companies.
There we are actually very well positioned also for future AI agent, agentic web topics and so on. Yeah. Happy to give further details, but I do not want to overspend the time on the question. With regards to your question on the Interhome integration, we have, let's say, a plan ready for day one.
We have a lot prepared, really looking forward to doing the integration on the milestones that will depend a little bit on when the actual closing is happening. We will update you on the KPIs on that later, just to give you an idea what I mean with that. For example, you remember from when we announced the acquisition, the kind of improvements we see, for example, when it comes to booking by providing them with our tool.
By the time that closing of the transaction is expected to happen, the main booking season will be already over, except for some last-minute business. It will be limited effects happening for 2025 check-in. However, we will, of course, prepare everything for then the 2026 season, which will start in Q4 2024. Stay tuned. We will update you most likely at closing on that.
The next question comes from the line of Christian Salis. Hi, Hauck Aufhäuser. Please go ahead.
Hey, guys. Good morning, everyone. Thanks for taking my questions. I've got three questions, please, that I would like to ask them one by one. The first one is on the full year 2025 guidance. In my view, if I do the modeling with regards to Interhome and HomeToGo standalone, it looks quite conservative.
Could you just confirm that your organic growth run rate of low double-digit growth per year is intact, and also with regards to the margin that you continue to expect HomeToGo standalone also to show margin improvement on the back of higher marketing efficiency and all the margin drivers? Just a follow-up also here on Interhome, do you expect any one-off costs with regards to the integration of Interhome that are backed into your 2025 guidance? That's the first block of questions.
Yeah. Thanks, Christian. As I just said to Silvia's question, yes, the assumption that we are growing the existing HomeToGo business, excluding the Interhome acquisition, is still that we have a low double-digit growth, both in the booking revenues as well as in the IFRS revenues. It's also the assumption that we have a significant improvement in our profitability due to the mentioned improvements in marketing efficiency coming from higher repeat share, etc. That is still intact.
The view on what is coming from the Interhome acquisition, as I also have said, it really comes down to when will the actual closing happen, how much of the early season do we have. I mentioned already the Pentecost business. When you think about the Dutch market, the Dutch school holidays are already in June.
It really depends when that closing is happening and how much are we getting in there. Therefore, we have taken a cautious approach on the impact of that. We have not included any one-off cost or any synergies in our assumption.
This is just really adding the effects of it, only adjusting for then the intercompany charges, which we have, because as you know, we are already doing business with Interhome for quite some year, and that you also have to deduct these intercompany charges.
Okay. Thanks. The second question is on HomeToGo Pro. You've made a lot of progress, especially when it comes to the margin. That's really impressive. 14% adjusted EBITDA margin, which is really, yeah, up double digits. I'm wondering what has been driving this significant margin improvement, and should we expect a similar improvement also in 2025? What's your view here, and also what's your view on the midterm margin ambition you can achieve in the HomeToGo Pro segment?
Yeah. We also expect continuous margin improvement this year. Also reflecting what we said before, over the course of time, we want to reach the industry margin benchmark, which we see as 30% adjusted EBITDA margin for the overall company as well as for both segments.
We expect that HomeToGo Pro, in particular with the acquisition and integration of Interhome, will reach that a little bit earlier than the marketplace, but it's definitely the goal to reach that 30% adjusted EBITDA margin.
Excellent. Lastly, could you just provide an update on the integration of the smaller targets you have acquired one and a half years ago, Kurz Mal Weg and Kurzurlaub, for example? After one year now of consolidation, could you just talk a little bit about the synergies you have reached here? Thank you.
Yeah. Thank you for the question, Christian. For the short-term businesses, as you know, the first phase of getting these companies into HomeToGo was consolidation between the two companies we acquired, because there we are well progressing, and we are currently looking also into how we can leverage their inventory on HomeToGo and our inventory there. We will update you once that's done, because the first phase for us was bringing really the two companies together.
All right. Thank you very much. All the best. Thank you.
The next question comes from the line of Benjamin Kohnke from Stifel. Please go ahead.
Good morning. Good morning, gentlemen. I hope you can hear me all right. I'm dialing in from my mobile. Let me maybe start with one of the very few weak spots in the results. I mean, you're talking very positively about Smoobu, and I can absolutely understand that it's a great asset. That said, I guess we saw that slump in growth in the subscription subsegment in Q3 already.
Now we see that subscriptions were still very weak in Q4. I mean, Stefan, I understand your points about technical migration effects and so on, but can you just provide us with a bit more, I don't know, with a bit more so that we get a bit more confidence that growth there can actually recover in 2025? I guess when we talked in the past, we always talked about the rule of 40 at Smoobu. Is that kind of still intact, or will it at least get back to those levels over the next 12 months?
That would be my first question. The second one would be on marketing. I mean, you obviously made great progress in terms of marketing efficiency in 2024, so well done on that front. You're very clear that you want to continue on that path. Now, it seems we're seeing a bit of a shift of the marketing budget into branding. I mean, most notably, this football sponsorship, right?
I guess you do not want to further elaborate on what this actually costs, but I guess we do know branding is expensive. Now, squaring all of that, it means that the share of performance marketing will actually go down in 2025, and that is obviously the much quicker kind of conversion channel. I would assume that this kind of slows down growth, at least in the short term.
A few more thoughts maybe from you, Patrick, on the marketing mix and the impact on growth would be appreciated. Then very lastly, on your thoughts about the introduction and potential launch of a loyalty program, I mean, everybody in the industry is talking about it and the great effects it has on, obviously, loyalty, but repeat bookings and all of that. I mean, not only in travel, basically across e-commerce, right? Any sort of updated thoughts on why you refrain from doing more on that front? Thank you.
Yeah, thanks for your questions. I'm happy to take them all. Subscription business in Pro, right? It consists obviously of subscription businesses we have in South Europe and also Smoobu. We saw, as you rightly pointed out, that the revenue growth was coming down, yeah, on that path.
Nonetheless, the organic growth is, because it's all organic growth there, right, is still strong. We had, as we pointed out in this call also, right, we worked on various topics that we now launched to the end of 2024 and the beginning of 2025, especially on the Smoobu side, which were basically, for instance, rebuilding the whole website builder, it's a complete new model, having the app live, and these types of things, which will allow us to enter new kind of markets where we can get demand throughout the year.
We will also enter the U.S. with Smoobu as a goal. We are very confident to have basically showcasing you throughout the year what this can mean. Obviously, as it is always with these subscription businesses, there's a lagging effect. We will definitely update you also during the course of the year, and especially also when we have a capital markets day here on that topic.
Secondly, if we look into the marketing efficiency, yeah, so obviously, this is something we are working on every year, yeah. As you know, one strong element of marketing efficiency is obviously how much of the demand we can get for free, yeah, if you want to phrase it like this, or direct, yeah, and something like the Union sponsorship is a helper in elevating the HomeToGo brand because it helps not only getting people directly on the site, but also making HomeToGo as a brand more well-known.
You have overspill effects also into paid marketing, for instance, because efficiency is not only you shift marketing channels, but it also means you get more efficient in paid channels. If people know your brand better, obviously, they are more likely to click, which has this overspill effect there. We are unfortunately not allowed to tell you the price we pay for that sponsorship.
We would be happy to, and that might give you already an indication how cheap or expensive it was. In general, for sure, we want that marketing efficiency trend to further go into that direction. Also, to be very clear, people that come via retention or directly to HomeToGo often have even a higher conversion rate because they know HomeToGo already. It is not like that if you have less paid traffic, the conversion goes down. Maybe just to make that clear. Lastly, on the loyalty program question, that's actually a very, very good question.
Just to put that also in perspective, also Airbnb doesn't have a loyalty program. Obviously, we see the loyalty program as something that we might want to do in the future. That is for us especially something that comes into play once we reached a retention share that has a certain kind of amount, and then we want to invest further there.
Prior to that, we see even more leverage on other topics, but it's obviously something we have on our radar and also on our roadmap at some point.
Great. Thank you very much, Patrick.
The next question comes from the line of Bharath Nagaraj, Cantor. Please go ahead.
Thank you. I just have two questions. With regards to your expansion into new countries, I'm guessing it's mainly in the B2C business. If so, are you doing that mainly via advertising, or also are you growing the on-site business? Secondly, given that you're now trying to grow in multiple countries and also expanding your HomeToGo Pro business with travel agency hubs, Smoobu, etc., I wanted to better understand your priorities for capital and resource allocation given all these things that you're trying to do.
The second question is around the HomeToGo Pro segment, the margin expansion. I'm talking about it on a standalone basis. What would be the drivers of the margin expansion in the medium term to get to the industry-standard margins that you're referring to?
Thank you. Hey. Thanks for your questions, right? Expansion into new markets, for sure, it's first with B2C, like we always do, because as we have the HomeToGo adopting our products that can run external websites, we are also very good in launching own websites, and that's why we now pursued some more where we put some seeds in.
Usually, you're completely right. It starts usually with a larger scale of advertising, for instance, in India, and then we see if the market gets traction where it makes sense also to grow then on-site. It follows exactly that playbook, like you said. In regards to Pro, right, for instance, Smoobu is a very global product, yeah? It's many much more than what in 100 countries use, so there is a large potential audience.
That also means that obviously we will look one after another country to see where we can also put Pro solutions into these markets, but that will also, according to our playbook, follow once we have some better understanding of the market coming from the B2C side, yeah?
Resources in general for our Pro businesses, for all of the entities, basically, we steer with an own P&L and want them to have specific growth and profitability targets so that we have these speed boats within the group, nonetheless profiting from the group resources and group knowledge and experience. With regards to your questions on the Pro margin, it is very much driven by the economies of scale.
As you know, in a software product, once you have more customers, more revenues, yes, you need to have some kind of further work on operating the product, but the kind of economies of scale are really driving the increase in profitability there. That is more on the subscription side. When you look at the volume-based side, again, we have also the economies of scale.
Just to give you one data point there, the business Casamundo, which we acquired there, for example, we were able to increase the share of own bookings, so not going via channels, but bookings on their side, which effectively is running on our technology, it has already increased to over 70%, and that, of course, is a big driver in profitability. Now, will that go to 100% now? There is further improvement possible as well as then in the future, in particular, including the Interhome business.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Sebastian Grabert for any closing remarks.
Dear listeners, thank you very much for your attention and questions. Should there be additional questions, please feel free to contact us. We wish you a great day and hope to see you soon. Many thanks.