Welcome to the Verve Group Q3 2024 presentation. For the first part of the conference call, the participants will be in listen-only mode. During the Q&A session, participants are able to ask questions by dialing pound 5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO Remco Westermann and CFO Paul Echt. Please go ahead.
Thank you all for joining us. I'm excited to present a strong third quarter. After already strong Q1 and Q2, our growth in Q3 was even stronger, and the company is better positioned than ever before, which makes us confident that we will show further growth development in the years to come. Our CFO Paul and I will guide you through the Q3 presentation. In this call, we will also introduce Christian Duus, who will join us as new CFO from January 1st. I would like to start with a presentation. Our positioning: we started the year with taking a decision to rebrand the company to Verve. The decision was taken in our EGM. We also made it clear how we position ourselves, and I would like to quickly guide you through.
So we enable better outcomes for advertisers and publishers, which means we try to work directly with both sides: publisher side as well as the advertiser side or their agency. That makes the most efficient combination working with both and cutting all kinds of intermediaries that take margin and are not gaining efficiency in the whole chain. Then we work with responsible advertising solutions. Most important there is ID-less, working without cookies, without identifiers. The market is changing. More and more publishers have the issue that their consumers don't give consent and that they need to sell their ads without cookies or identifiers. Same problem counts for the advertiser. They need to target an environment without identifiers. In that sense, we are focusing on that. We have invested a lot in solutions for that, and that's driving a lot of our customer growth.
Then we work in emerging channels, emerging channels being mobile, in-app, mobile web, CTV, digital out of home, and audio, for example. This makes a very strong combination and really drives our growth. I would like to go to the next slide, which shows our main growth drivers and market share gains in the third quarter. I'll go through all of these in more detail, but just to give a quick overview, we had a 45% revenue and EBITDA growth. Jun Group, our latest acquisition, which we did in Q3, accelerates organic growth, where we're very happy with a 56% large customer growth. Our ID-less solutions and full-screen ads were really driving strong growth. We see growing platform synergies, which help us to grow further. And very strong, we're driving growth in the U.S. advertising market.
It's the most competitive advertising market in the world, but we have an 80% share there now, or 80% of our revenues is coming from the U.S. We have achieved critical mass. We get better brand recognition, and that's leading to strong growth there. I would go to the points in more detail. 45% revenue and EBITDA growth. This was the strongest quarter so far in this year. 45% overall growth in comparison to EUR 78 million revenues that we did in Q3 2023. We did EUR 114 million revenues now in Q3 2024. A big part of the growth was coming from organic growth. With 31%, we are one of the strongest organic growers in the market. Compare, however, also to a weak Q3 2023, where the market was still down because of the overall economy and companies as a result of that spending less.
Nevertheless, very happy to see that we're rebounding this strongly, which is driven by the growth drivers that I will come to later. Then looking at the EBITDA, it's not only on the revenue side where we're growing. We showed also very strong growth on the adjusted EBITDA from EUR 23 million last year Q3 to EUR 34 million this year in Q3. Paul will go further into detail in the numbers later in the presentation. Coming to Jun Group. We acquired Jun Group in the third quarter. The acquisition was closed on 31st of July, so it's consolidated from the period after that. And the company is very well positioned. It has a very strong position towards agencies and advertisers. And just to give you an example, they are, for example, selling CTV to those advertisers, and now they can sell our CTV to those advertisers.
This is a big synergy that starts to materialize. There's many more synergies which we're working on, which has to do with technical integration and the likes. The company is still mostly standalone now. We work on those synergies. We will see the main effects of the synergies kicking in next year. But already standalone, we have been able to drive in cooperation with them the revenue growth very nicely, coming to a 13% organic growth in October 2024 with a 49% EBITDA margin. Coming to customers driving our growth. Super happy that our large software clients, the customers with over $100,000 revenues per year, showed an extremely strong growth, 56%. If you look at the growth without Jun, we came to 998 customers. If we take Jun or if you take including Jun, we came to 1,076. This is really nice.
We have a well-spread profile there, no substantial customer doing a big part of our revenues, but overall growing our customer base a lot. Small customers or, let's say, onboarding customers even grew faster, but this is the main number to look at because that's driving also our future revenues. The net dollar expansion rate on the left bottom side, we had 8% growth versus the Q3 last year, which is also very nice growth. That means that our existing customer base is also growing. It's not only coming from new customers. Our client retention rate, right upper side, also strong. We're normally between 95% and 98%, so also happy with the 96% that we achieved in Q3. The ad impressions, that's what's driving our revenue. We take a percentage of the revenues that are running through the ads, and that's driven by the ad impressions.
Also here, we see a strong increase. We were already in Q2 well above Q4 2023, and Q4 normally is the strongest quarter in the year. Now Q3 2024, we're even further above that. So 32% increase in ad impressions, a good basis for further growth also. Then what's behind? I talked already about ID-less solutions. A bigger and bigger part of the market doesn't have IDs anymore, and you don't want to target blindly there, or that meaning basically no targeting. So everything that helps of targeting there is valuable. With our different solutions that we've developed, Atom, Moments.AI, several others, we are able to really help people target in these environments. That's also showing in our share of iOS revenues, which grew by 51%, so it's driving a big part of our overall growth.
Important in the ID-less solutions, of course, the ID-less solution itself, but it includes the targeting algorithm, but also machine learning to alter base, improve the algorithms, and that's leading to increasing budgets of advertisers and also increased onboarding of advertisers. Then full-screen and video ads, important part of the market. We were underrepresented there. We have done quite a bit of investments in improving that, and we see here also very strong growth compared to a year ago, which is driving another part of our growth. Then talking about the platform, yeah, the platform is behind it all. It's very fast. It's a, yeah, low latency, high volumes platform. It's robust and scalable. We integrated to over 65,000 apps. We integrated to a lot of CTV inventory and a set going for premium supply. So that's super important.
Then we talk about high transaction volumes, 2-5 billion ads that we are serving per day, 850 billion now over the last 12 months. In this platform, we have a lot of valuable feedback loops. The more volume we drive through it, the more feedback loops we get, and the more information we have to improve our targeting. That is combined with the different ways of data that we get. We get ID data, so it's not only ID-less. We also still work with cookies and all the things where they play a role, but the ID-less part of the market is improving, is growing, and that's where we're really working on the combination of both and making the targeting work the best it's possible in that part of the market. So that leads all those steps together to precise targeting.
Improving our targeting capabilities is one of our main drivers for future success. U.S. market, I talked already about it before. 80% of our revenues is coming from the U.S. Looking also at the psychology of the market, U.S. is super positive at the moment. Economy is positive. Everybody thinks things will continue to grow or even grow faster. We have achieved critical milestones in the U.S. U.S. is the most competitive advertising market in the world, so we're super proud that we are able to do that, and we further will drive our revenues there. We have a lot of direct supply there, as mentioned before, the apps, the CTV supply, but also digital out of home and audio. Yeah, having such a big supply base gives us a strong position there.
What you see in the middle, that on SPO, supply path optimization, so that it's really, yeah, basically covering middlemen, delivering direct supply. We have a leading share in the market. The good thing about, let's say, all these things that are happening is also that entry barriers for smaller players are increasing. To get this kind of supply is difficult. If you have a leading position, it's easier to open new supply than if you're just starting to get into a market. Overall, US market growing by almost 11% CAGR expectation of the analysts. So nice way to further grow, although we will also focus and we are further investing in other markets beyond the US, but US is our main focus and main growth driver. Now I'd like to hand over to Paul, our CFO.
Thank you, Remco.
Coming now to the third quarter financial highlights, here we see a very strong acceleration of revenue and EBITDA growth. As Remco emphasized on, we printed EUR 114 million in revenues, which is a 45% revenue growth compared to the previous year. We printed in the third quarter EUR 34 million in EBITDA, which is a 45% also EBITDA growth. Revenues and EBITDA growing in line with each other, always a very good balance between revenue growth as well as profitability. Organic growth came out so very strongly in with 31%. As Remco emphasized on, it was especially driven by ID-less solutions, especially on iOS, as well as also full-screen and video ads, which was also one of the investment areas of the last years, where we also expect further strong growth in the periods to come. EBIT came also in very strongly with 37% EBIT growth.
Here we had a one-time amortization of a smaller game of EUR 2.5 million. Otherwise, EBIT would have been growing even stronger than the EBITDA, while also the margins came in very strong with 30% EBITDA margin, up from 29% in the previous year and a 22% EBIT margin in the third quarter. Overall, we also generated a very strong operating cash flow with EUR 54 million. Given the very strong seasonal effects in working capital, where we had a very negative effect in the first half year, we're now entering the second half year, and therefore we have a positive effect, which also further improved the cash generation of the business, while the investment cash flow was also down compared to the previous year and coming in at EUR 10 million, excluding the M&A acquisition CapEx.
And looking at the EUR 54 million operating cash flow minus the EUR 10 million investment cash flow, we basically have an unlevered free cash flow of EUR 44 million, which is the strongest free cash flow generation the business ever had in the history of the company. And therefore, what we will see later in the presentation as well, that also has a very positive impact on our leverage ratios. Then looking at the last 12 months' numbers, here we printed EUR 391 million in revenues, EUR 160 million in EBITDA, and EUR 92 million in EBIT, significantly up from the previous year's revenue and profit numbers, while I think that's very good to see on the right side.
Also, we have a very consistent improvement of our organic growth profile comparing to the 5% in 2023, where we basically saw rather weak advertising market, while now we see a very nice recovery.
Here we also expect double-digit organic growth in the periods to come, and therefore driving further revenue and profit growth in, yeah, in the periods to come. Coming to the cash flow generation of the business as well as the CapEx. On the left side, we see that the operating cash flow came in very strongly with EUR 119 million, which is very close to the EBITDA of EUR 116 million. Operating cash flow is very close to EBITDA here, while the free cash flow has significantly improved from EUR 23 million in 2023 to now EUR 67 million on the last 12 months' basis, while interest expenses have stabilized now, coming in at EUR 43 million.
As we emphasized already in previous quarters, given the very strong financial profile of the company, we would also expect if we would refinance our existing debt at much better terms to reduce our interest expenses next year by already EUR 10-15 million, which would directly also add up to the free cash flow generation of the business in the periods to come. Looking at the CapEx development on the right side, and here we see that maintenance CapEx has been very stable now over the last years, while also expansion CapEx, where we further invest also in future organic growth of the business, is actually down by EUR 8 million compared to the previous year. That is also related to the cost-saving program, which we initiated in 2023 and which already shows very good results also in terms of additional free cash flow generation.
Acquisition CapEx, which came in at EUR 119 million on the last 12 months' basis, is completely attributable to the Jun Group acquisition. Overall, yeah, very strong operating cash flows, very low maintenance CapEx, and therefore a very strong free cash flow generation of the business. What does it mean when we have a very strong free cash flow generation of the business? That is what we see here on the very strong deleveraging, which we have in place now.
We basically started in Q1 with a 3.2 times net leverage in that year, where we have significantly reduced that over the last quarters to 2.8 in the second quarter and now to 2.6 already as of Q3, where we also expect to further reduce the leverage ratios given the strong free cash flow generation of the business to now below 2.5 times by end of 2024, and then by end of 2025 already to be below two times, which is then also well within our recently updated net leverage ratio targets of 1.5-2.5 times. While on the right side, and I think that's also really good to see, after years where we had a very strong increase in interest expenses, we now see also that the interest coverage ratios consistently improve now each quarter, where we now already be at 3.3 times again.
Also here, given the very strong financial profile and the recovery, we would also expect that this has a very positive effect on our cost of capital in the periods to come. That brings us to our guidance 2024. Here we basically expect almost more than EUR 100 million revenues compared to the previous year at the top end of the guidance, which is sitting at EUR 400-420 million revenues and EUR 125-135 million for 2024. If we would take Jun Group already into account for the last 12 months, we would already be at EUR 450 million revenues and EUR 150 million EBITDA. We are very confident that we can also print a very strong Q4 in the end with good organic growth as well as a very good profitability increase compared to the previous year. Therefore, the future outlook of the business remains very strong.
That is also coming out to the midterm financial targets, which we wanted to reemphasize here today. These targets basically we want to achieve for the next two to five years. And here we basically have the revenue CAGR of 25%-30%, which we clearly outperformed now also in the third quarter, even standalone with organic growth of 31%, but on top with M&A at 45%. So very strong outperformance of that. The EBITDA margin came in also strongly with 30%, where we expect Q4 already to be even stronger and therefore rather moving up to the middle of the EBITDA margin target, while EBIT margin also sits already well within the target with 32%. And on the leverage ratios, to just reemphasize on it, we had two to three times net leverage target two quarters ago. We reduced that to 1.5 to 2.5 times.
Here we expect already to be by end of this year to be below 2.5 times. Overall, reaching our midterm financial targets already now and also being very confident to print these kind of targets in the periods to come. That brings us to the end of the financial presentation. Today I would like to end the finance part with a personal note. As you could see already in the press release, which went out this morning, I decided to step down after almost seven years. It has been an incredible journey together with Remco and the rest of the management team, starting at a pretty small gaming company in Hamburg and building this global AdTech company here together with the management team.
While I'm very sad to leave for private reasons, I'm actually very happy that we found a very good successor of mine with a very deep industry knowledge. He's also together with me here today, Christian Duus, already in Stockholm. I would like to hand over to him to quickly introduce himself. Thanks.
Thank you, Paul. Yes, as a short introduction to myself, my name is Christian Duus. I come from Adform, where I've been CFO for the past five years. For those that are maybe not so familiar with Adform, it's a top three AdTech player on the demand side in Europe, very strong on pragmatic buying and ad serving. I actually joined Adform back in 2015, so I've been quite some years now in AdTech and bring that experience and knowledge with me into Verve.
I spent my formative years in management consulting with Bain & Company for more than 10 years across many different industries, but focused more and more on kind of online and digital and ultimately also banking. And I've held executive roles for two listed companies where I've driven business development, GN Store Nord, which produces headsets and hearing aids, and North Media, which is more of a media business. I'm Danish, but I will be based in Stockholm. And with that, I hand it back to Remco.
Thank you very much. And Christian forgot to mention that he also speaks fluent Swedish, which is the handicap that Paul and I always have. So especially in this market, I think it's very good to also be able to talk the local language. So thank you, Christian.
Yeah, we're very happy to have you on board and looking forward to grow the company further together with you. I would also already like to thank Paul. He will still be around. He's an exceptional CFO and colleague. So yeah, I have a lot to thank for him to him. We've worked for almost seven years together, so it's a really long period. But he will be around. He will support Christian in his role and will be with the company, consulting the company till mid, I would say till 30th of Jun 2025. That brings us to the end of this presentation. Yeah, we would like to open up for questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad.
The next question comes from Adrian Elmland from Nordea. Please go ahead.
Hi, good morning. First off, just want to say sorry to see you leave, Paul, and welcome, Christian. A couple of questions from me. We saw quite an increase in the purchased services and other operating costs. When looking at percentage of sales, it decreased year over year, but also increased quarter over quarter. Is this mainly due to seasonality, or can you give us more details regarding what this increase comes from and how do you expect this to develop going forward?
So yeah, thanks for the question. And just to give one note on purchase and other operating expenses, which are basically being summed up here in the quarterly report.
To calculate basically the gross margin, you also need to take out the one-time cost, which is in the report basically the reference to the EBITDA adjustments. That said, on the EBITDA margin profile, which is still up by 1% compared to the previous year, where all the one-time effects are being already calculated out, we also had a little bit lower margins than I think you would have expected given that we scaled up further the full-screen and video ads at a little bit lower margins, while we also still had some rollout cost for the Atom rollout. That said, especially on technology cost, given the very strong organic growth which we generate from the video and full-screen ads, as well as also already from our ID-less solutions, they in the end contributing already significantly to the EBITDA.
But that's the reason why the gross margins or EBITDA margins being a little bit lower than you would have expected. I hope it answers the question.
Okay, thank you. Yeah, yeah, absolutely. Can you give us some more flavor on the impairment that was made, given that you stated also that there are no further games in development in the pipeline? How should we think about the future of AxesI n Motion and your other game studios?
And so that's not relating to AxesI n Motion . AxesI n Motion is still going strong, even we basically didn't have to pay the earnout. That said, the one-time amortization was one mobile game, which we still had in development for the last three years.
We launched the game on the 1st of July, and after we did not meet the expectations in terms of KPIs, we decided already to shut it down by end of September and therefore then took this one-time amortization. It's the only game which we had still in development, and therefore you can expect that there's no other one-time amortizations coming from the gaming part in terms of new development in the future periods, but it shows also that we should be happy that we have really pivoted from gaming to advertising. Gaming is super dangerous if we talk about game launches. That's what we saw in an early stage, and this one is, I think, the last proof of that for us as a company, so we're happy that we really have a very solid B2B advertising business, which is growing very fast.
Yeah, gaming has a bit of history in that. But it's definitely a one-time effect, I think, but we did not adjust it on the EBIT level, even on the adjusted EBIT, because we wanted to be rather prudent here. But I think it's important, yeah, it's a one-time effect and you can expect for future periods that nothing similar is in the books.
Okay, perfect. Thanks. Last question here. You said in the CEO statement, Remco, that Atom recently got a patented recognition. Could you develop a bit on that? Yeah, if you do technology developments, we also try to patent them. We got now the first patent for Atom. There's more that are in line of being requested. So we try to patent special technology.
Atom is special, really targeting on-device basically, so collecting signals on the device, building segments with that, and sending that with the ads to the advertisers, which makes targeting in environments where there's no IDs possible. Really good, yeah, let's say first results with that. And of course, super happy that we have a patent on it, which also saves our position, or let's say makes it more difficult for others to follow. Hope that answers the question.
And maybe a follow-up to that question. How long is the patent for? And given that you've patented this, what does the competition look like? Has the success of your ID-less solutions led to a significant increase in competition? Have you seen anything?
The patent is a U.S. patent, which has a normal duration of, I think, three years minimum. It's then extended.
I can find it out, but let's say there is a normal you can extend patents over a number of years. So it gives you protection for, out of my experience, of something like 10 years or more. So that's pretty good. The European patents are also in process. So let's see when we get them or how far that goes. Getting patents worldwide is always, let's say, a bit nuisance, and we're also not getting them in every country because that would be too expensive. But we try to cover core markets. Direct competition in this, let's say, on-device targeting at scale is not existent. But what we see, of course, is that also competition tries to see what they can do in the, how to say it, in the environment where there's no identifiers, no cookies.
So we see also other developments, but I think we have a pretty good head start there. We're absolutely not unique in total in ID-less. A lot of companies are claiming it, but I think really that, yeah, we've started this more than four years ago, invested a lot in it, and we're one of the leading ones in the market, if not the leading one, if it goes about ID-less targeting.
Okay, super. Thank you. That was all for me.
Thank you very much.
The next question comes from Ellis Acklin from First Berlin. Please go ahead.
Yes, good morning, gentlemen. Thanks for the detailed presentation. I noticed you highlighted some very good numbers from the Jun Group, and particularly in October.
I'd be interested in here if you can talk about if that surge in growth is traced to synergy effects, or is that just from a normal pickup in business, if you can maybe break that down a little bit. And then a second question, it'd be great if maybe you guys could share some initial thoughts about what early 2025 might look like.
Thank you. Thanks, Ellis, for the good question. Yeah, coming to Jun Group first, and as you said, here we see a very nice acceleration of the organic growth post-M&A. So they had 2% pre-acquisition in the second quarter. We increased that already to 7% in the third quarter, where two months is basically in the books of Verve already, and now already 13% in October. And it's both effects.
The company is still pretty much standalone in terms of management, where we also see a very nice recovery of the standalone business, but we're also seeing already the first good revenue synergies coming in, while the majority and now coming to 2025 of the synergies, as we also already emphasized during the acquisition, will come in basically in 2025, especially around the upselling of CTV supply, bringing Jun also to new countries, especially to Europe and other jurisdictions, and therefore, it's a fact from both sides, but overall, we're extremely happy with the integration of Jun, which is extremely seamless, and the performance of the acquisition.
That's also one of the reasons why we wanted to emphasize through bringing a bit more visibility into the Jun Group performance here, given that we received a lot of questions over the last few months, how the company is performing, how the integration is going. I think we can say today it's going extremely well. Other than this, 2025, we basically, yeah, don't really, as you know, giving a forecast yet. That's usually something we do then together with Q1 report, when we have also a lot more visibility on the new year, including also some good customer talks, which always give us a good guidance how the new year will look like.
That said, given that we have invested so much into the ID-less solutions and full-screen video ads, as well as also ramping up our sales team now and have significantly grown our customer base, we also expect a very solid double-digit organic growth for next year and in the periods after. And I think this company is clearly gearing towards organic growth in the years to come. And also given the very strong focus on the U.S. market, which contributes 80% to the revenues, where we have achieved a very strong critical mass now and a very good positioning across our direct integrations for publisher supply, I think this company is perfectly positioned also in the periods to come to profit from a very strong U.S. advertising market. So therefore, we have a very positive outlook also for 2025.
Okay, guys, that's great stuff.
And Paul, thanks for all the hard work over the years and the great collaborations. And best of luck with everything going forward.
Thanks, Ellis.
The next question comes from Jörg Frey from Warburg Research GmbH. Please go ahead.
Hi, gentlemen. Well, first of all, I would ask you to shed a bit more light on your growth investments. I actually expected that we would see a bit more increase in your personnel expenses, given that you intended to invest in Salesforce and things like that. So can you say a bit how much you invested into growth spending, so to say, and where we find it in your report?
Absolutely. And yeah, thanks for the question, Jörg. As you can see, personnel expenses is even slightly down despite that we have two months of Jun Group consolidated into the numbers now.
That said, it's already up a little bit if you normalize for it compared to previous quarters, which were basically excluding Jun Group. We have started to hire more salespeople, but given that this takes a bit more time and also given that we had acquired Jun Group with an extremely strong direct advertiser sales team, which we can also scale up further by bringing in new jurisdictions where we have already some salespeople, but just upselling basically the product of Jun Group. Yeah, there is an effect which might not be as strong in terms of cost increase as you would have expected it. That said, we also plan to further invest. As I said, it always takes a bit longer to hire good people.
Therefore, we would still expect to further increase also a bit the personnel expenses, while always finding a good balance between revenue growth as well as profitability and being rather cautious on the cost.
Yeah, absolutely. It was an outstanding performance in terms of personnel expenses.
I hope you don't complain too much about housekeeping.
I would be the last one. Probably some of your employees will complain that you are not generous enough with your salary, but not from me. Maybe housekeeping on Axess in Motion. What? I'm done? Just go ahead, Philip. Go ahead.
Yeah, just housekeeping on Axess in Motion. If I'm not mistaken, the threshold for the earnout was around 9 million EBITDA for the current year. Can you give us some flavor on how close we are to this or have come to this threshold and what's the outlook for this business?
I think the multiplayer game launch, how has that developed? Is there anything which is probably carrying over into 2025 from that path?
Absolutely. So in the end, Axess in Motion is performing still strong, but not as strong as we expected when we acquired the company. Overall, the mobile gaming market has been pretty much under pressure, not just in regards to Axess in Motion. And therefore, basically similar to also other mobile gaming players, Axess in Motion has underperformed in terms of revenue growth as well as then also EBITDA contribution. That said, the company still contributes with a nice EBITDA to the group, but it's below the nine million threshold. While we also expect for the years to come that we can ramp up the organic growth again, given that the multiplayer already shows also increased playtimes for the players.
Overall, I think, yeah, with all the synergies which we can realize also together with our AdTech business, where we place now ads directly from our supply-side platforms in Axess in Motion and increase basically also the monetization of the game by realizing synergies. There's much more we can do in the years to come. The company, and that's maybe also important to emphasize on, still has a couple of hundred millions in terms of active players. There's still also a lot of organic additional players coming in, millions and millions each month. So there's a very strong base where we can also build the business from in the periods to come. Overall, it's a bit below the expectations which we had when we acquired the company.
But I think we had a very strong financially healthy balance, given that the majority of the purchase price was basically payable in earnouts, which we don't need to pay anymore. Yeah, I think it should still be at least multiple based on your fixed contribution. I think it was only around 60 million or something like that. Yes, exactly. Finally, a bit on how much did the U.S. election ad spending influence growth in the third quarter? And is there anything, or how much is there still to come in the fourth quarter? Just some rough idea, or is it totally negligible? Yeah, elections always drive, let's say, a lot of advertising revenues also in the market. By that, also some other advertisers reduce their marketing budgets because they don't want it to get too up. So there's a natural kind of compensation in there.
We're traditionally not very strong in, how to say, political advertising. We don't focus on it. You need special sellers for that. And yeah, they have a lot of work to do one year out of four. And let's say the midterms are also a bit, and the other, let's say, years they don't work so much. So we have on purpose not focused too much on it. So for us, the effect is pretty negligible. There's a bit, but it's really not big. But the big effect, of course, of the election is that now everybody is totally excited in the U.S. about how the economy will develop and that the companies are really positive. So we expect it to have a very positive effect on people's, or let's say, companies' budgets with regards to advertising. And also digital is much more in focus now of the new government.
So we see, yeah, we expect quite some positive effects from that. To just add to that, so in Q3, the effect from political campaigns was rather limited. So the organic growth, which you see here, is really mainly driven by ID-less solutions and full-screen video ads and not much by political ad spend. Sounds good. So we don't need to exclude anything for the next year. Exactly. Well, that's it from my side, Paul. I'm sorry to hear that you are leaving. It was always a pleasure to work with you. So all the best for the future. Thanks a lot. And there's still a six-month transition period. So I think, Philip, we maybe have one or two talks together with Christian in the quarters to come.
Thanks a lot.
Good to hear.
The next question comes from Fiona Orford-Williams from Edison Group. Please go ahead. Good morning.
And can I just join my voice to those strongly saying thank you very much to Paul for all your help and assistance over this period. And best of luck for whatever comes next. So questions. My questions are more about what's happening in the market, really. First of all, you've been really successful at picking up new substantial clients and growing your existing clients. What's the pipeline like for new partnerships? And what are the conditions like in terms of time scales for conversions, things like that? And my second question, which I might as well do both at once, is about the rebranding to Brand Plus and Performance Plus and losing some of the names that are well-known in the market. Do you want to just fill us in on the thinking behind that and the market's initial reactions? Thank you.
Yeah, I can start with the first one. So clients picking up has to do, of course, with a few factors. One of them is our strong position in contextual. That's helping us a lot. Companies are more and more realizing, and that counts for advertisers as well as for publishers and also for their agencies, of course, that they need to target also in this ID-less segment. There we really have a good position. We have good answers. And that opens doors, a lot of doors. They start with testing. So you don't immediately see those customers in our big software customers. That takes time. But the good thing is that a lot of them are converting in these kinds of large customers. And that shows that really our solutions work and that people are happy with us. Because that's important to realize.
We only can grow a customer if we deliver because we get our, how to say, we make our money based on successful ads being served. So in that sense, yeah, happy with the customer intake and discontinuations. And yeah, you saw the substantial increase in large software customers. And it's not stopping at $100,000 per year. So they also can grow much further. And that's what we're also focusing on. I hope that answers your question. Yeah. And the second one about the moving to Brand Plus and Performance Plus? Yeah, that also has to do with the rebranding. We rebranded the company, and the AGM took the decision to do that because one brand is just, from a cost point, more effective, but it's, of course, also much more, yeah, much stronger, as I said already before in the presentation.
If you have one brand, you show up everywhere under the same brand. We, however, have to do with different target groups. We have now introduced Brand Plus and Performance Plus. Brand Plus is for brand advertisers, which we help, and Performance Plus is the marketplace for people that really are looking at app installs or really getting performance criteria for the advertising. It's different markets. There's some overlap between them, and often an advertiser is doing both. So in that sense, it's about working closely together, and they all work under the Verve brand.
Okay. And the market reaction?
Positive. We, of course, have to, let's say, make sure that people understand that Smaato, which had a lot of brand recognition in the market, is now Brand Plus, or let's say it's the majority part of Brand Plus. So we need to do rebranding.
We do that also carefully in the sense that you don't want to lose the organics, for example, on the websites. So it's a process, but it's going very well, and reaction overall is very positive.
Okay. Lovely. Thank you.
Thank you, Fiona.
The next question comes from Rasmus Engberg from Kepler. Please go ahead.
Yes. Hi. Thanks for taking my question. I was just reflecting on the Jun Group acquisition. How should we think about the net contribution to revenues from that acquisition? Is there going to be a significant part that is eliminated? And if you could help us a little bit with that. And the second question is, if you could give us an indication of what Verve or what Jun did in Q4 as well.
Absolutely.
Q4, we would not give much except from the 13% organic growth, which we already reported for October, which I think is already a good visibility for the market. In regards to the contribution in Q3, that's basically the difference between the 31% organic revenue growth, which we have reported, and the 45% total revenue growth. FX effects were limited. The majority of the difference is basically coming from the Jun acquisition, which I think should give you all the numbers to calculate how much the net contribution in terms of revenues is.
Yeah. I was just thinking going forward, if I take last year's revenues at a growth rate, is there a substantial increase in eliminations from the acquisition, or is it a net contribution?
What do you exactly mean with eliminations in terms of the?
I mean, sales. Intercompany?
That were from Jun to Jun or the other one.
So basically, the organic growth calculation is on a standalone basis, excluding any intercompany revenues. And therefore, including intercompany revenues, the organic growth would be even stronger. But that we have already taken out, as always. On organic growth calculations, we do it without any intercompany revenues. I think we're misunderstanding each other. Okay. But Jun did last year's Q4. Could you shed some light on that? That's nothing we have reported in previous periods. But there is a good seasonality in the business. So overall, the pickup basically for Q4 is similar to the rest of the business, pretty significant.
Okay. Thanks.
The next question comes from Anton Hoof from Redeye. Please go ahead.
Hi, guys. Can you hear me?
Yes.
Good morning. So my first question is a broader one regarding Google.
I mean, have you already seen an impact there regarding their intensified scrutiny, or is it early steps?
Yeah. Google is a strong player in the market, but we have to realize that we talk about a market with over $1,000 billion of revenues annually, where even Google is not dominant. Even if there's changes on the Google side, you will still see some effects. We know, and we have also seen that a bit on the gaming side, that especially game companies are a bit under pressure because of, let's say, yeah, lower payouts, we assume, from Google. So there you see a bit of effect, but gaming is a very small part of our business now. In that sense, we don't see any big ripples based on that.
There might be bigger changes, of course, coming up in the market with the Department of Justice investigating on Google, some early rumors about that there might be split-offs and those kind of things. Those things would have, we think, a very positive effect on the market and also for us.
Good. And in terms of the revenue synergies with the Jun Group, or expect to see anything here already in H1 next year, or is it more towards H2?
No, we'll see that gradually coming. We have already first effects now. We will see more in H1 and in H2, actually. Yeah, we should see it much bigger even then.
So usually, it takes two to six months to really connect the pipes. And then, as we also emphasized on when we did the acquisition, by end of Q1, we would expect the first larger synergies really coming in.
Good. That was all for me. Thank you.
Thanks very much. Thanks.
As a reminder, if you wish to ask a question, please dial Pound Key 5 on your telephone keypad. There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.
Thank you very much. Yeah, I would like to come to the end of this presentation. First of all, I would like to thank Paul and also welcome Christian again. Yeah, we had a really great Q3, and the numbers itself are good for Q3, but even more important, we have built a lot of additional potential for the rest of the years to come, for the next years to come. We are very confident that we will continue to grow very strongly.
We have a strong position with the company and also now under one brand, as you see here, one brand, one team, one mission. And we still are convinced that there's a lot to change in this market. So let's make media better. And I would leave it by this. Thank you all very much.