Good morning, everyone. Thanks to all of you who've joined us today at the London Stock Exchange, and of course, a warm welcome to everyone on the call. This morning, I'm going to take you through some operational highlights before handing over to Hanno, our CFO, to take you through the financials. Then I'll finish up with more color around our strategic initiatives. When I started out as CEO of Trustpilot almost exactly a year ago, I said I aim to drive strategic clarity, rigorous execution, and improving profitability. I'm happy to say we've delivered against all three of those priorities in the first half. First, our strategy is clear: We're an open, trusted review platform for consumers to help each other make the right choice and for businesses to build trust, grow, and improve.
By going deep in key markets and verticals, we maximize the inherent network effects of the platform. Our SaaS business model reinforces this by expanding customer engagement through product innovation. At group level, bookings increased 19% in constant currency, with particularly strong growth in our four focus markets of the U.K., U.S., Germany, and Italy. I'll cover each market in more detail shortly, but I do want to highlight the exceptional performance of the U.S., where the team delivered 23% bookings growth versus 11% in the first half last year. Consumer adoption of the platform continues to grow, with monthly active users up 28% year on year to 67 million, and we recently crossed the threshold of 300 million cumulative reviews on the platform. Product innovation is at the heart of our offer.
In the period, we released a well-received series of features, providing businesses with AI-driven insights into customer behavior and market dynamics. I'm pleased to say that these releases underpinned a significant improvement in the last twelve-month net dollar retention from 99% - 101%. As you know, it's more efficient to retain a customer than win a new one, so reporting NDR above 100% for the first time is a significant milestone for us. Strong execution of a clear strategy resulted in improved profitability. The adjusted EBITDA margin increased 390 basis points to 10.6%, allowing us to deliver adjusted EBITDA of $10.6 million ahead of expectations as we delivered operating leverage across all key cost lines.
As the business is cash generative and we've got a strong balance sheet, we're today announcing a further GBP 20 million share buyback and now expect full-year Adjusted EBITDA to be at the top end of market expectations. Finally, just to say we had a really nice moment in the U.S. during the period, being prominently included in a customer advert in Times Square in New York, as you can see in the picture on the slide. That served as a great moment of validation that we're gaining awareness and traction in the U.S., which is of course great for our growth, great for the growth flywheel of our business. I'll now take you through the performance by market. Starting with the U.K. The U.K. continues to perform well, with bookings up 19% at constant currency to $47 million in the first half.
Annual recurring revenue was up 18% - $85 million, and the region delivered first half revenue of $40 million. As you'll have heard before, across our focus markets, we're driving growth, particularly with enterprise customers, where net dollar retention is well above the group average. We were particularly pleased in the period to win the state-owned savings bank, NS&I, as an enterprise customer. Our reputation in the UK financial services industry is now second to none, with other enterprise customers including TSB, Monzo, Revolut, Starling, Wise, and First Direct. Due to the viral nature of our business, we see the success we've already had in establishing a powerful and trusted consumer brand as an effective enabler for further market penetration and expansion in the UK. We still think of the UK, to be clear, as an early-stage opportunity.
Our proposition is relevant across both online and offline businesses and across all verticals, from financial services to retail to healthcare. In the UK, we currently have under 10,000 paying customers, so there's clearly massive room for growth. Moving on to Europe and the rest of the world. This region, of course, covers all European markets and those across Asia. We see growth across all markets in the region, but within it, we're particularly focused on building our presence in our focus markets of Italy and Germany. We chose these because they're large, with huge potential, and we already have strong traction and growing consumer awareness there. Overall, we saw bookings growth of 16%, in line with our mid-term guidance.
Germany and Italy grew ahead of the regional average, and the DACH region, which includes Germany, Austria, and Switzerland, is now our third largest market after the U.S. and the U.K. We've reallocated sales, sales resource to these markets, new general managers have been appointed, and our new office in Hamburg is now open, complementing our existing office in Milan. This brings structure and in-market presence, which we expect to drive growth, particularly in the enterprise segment. Revenue in the first half was $39 million, up 18% in constant currency. Moving on to North America, which comprises the U.S. and Canada. When I joined, I saw two key areas for improvement. First, retention rates in North America were well below the group average, and second, there was room for improvement in new sales efficiency.
I'm happy to say the teams addressed both areas and are now executing really well against our strategy and in line with the broader group. The momentum we saw in the second half of last year continued, and the region delivered bookings of $26 million, up by 23% in the first half. Revenue was $21 million, up in line with last year's booking growth, and we continue to improve our contribution margin. Our go-to-market strategy in the U.S. of going deep, not broad, means we focused on high customer lifetime value market verticals. This drives brand awareness and business adoption, fueling the flywheel and supporting further bookings growth. The new product features we launched in the first half, like Market Insights and Review Spotlight, have been really well-received, with 25% of customers moving on to the new plans.
The sales team is buzzing, given the progress they're making. In the first half, we won new enterprise customers, including Verizon, LexisNexis, and Coinbase, and secured significant customer renewals and expansions, such as Uber, all of which combined drove an eight hundred basis points improvement in the net dollar retention rate, bringing it close to the group average. We continue to believe that the U.S. is a huge opportunity for Trustpilot, and the momentum we've seen over the past year, combined with increasing brand awareness and a 22% increase in active domains, shows the growth flywheel is working. Let me now hand over to Hanno to take you through the financials.
Thank you, Adrian, and happy almost anniversary. And good morning, everyone. I'm Hanno, the CFO. In the first half of the year, we have continued to proactively manage our business to deliver top-line growth, operating leverage, profitability, and free cash flow. We also returned $26 million in cash back to shareholders. Bookings have grown 19% in constant currency ahead of our mid-teens guidance, and you've just heard the regional breakdown on that. Adjusted EBITDA, as Adrian has said, is ahead of market expectations and the largest-ever profit we have delivered in the first half. Crucially, we delivered a 3.9% point improvement in margin, demonstrating operating leverage, and we've achieved net dollar retention rate of 101%. Let's first drill into our retention rate a bit more. Most of our revenue comes from existing customers, many of whom have been with us for years.
Our high and resilient retention rates support our visibility into future bookings and revenue, underpinning our guidance. We aim to increase retention rates over time by both reducing gross churn and increasing net account expansion. In H1, we increased net retention rate to 101%, the highest ever reported. Our net expansion continued to improve, partially driven by the implementation of new packages with the launch of innovative product features in Q2. Adrian will take you through the product and pricing changes later. Account expansion includes renewals at higher plan levels, customers adding additional domains or market, and price increases reflecting the higher Trustpilot brand awareness. The strong gross retention rate, which also improved slightly, highlights our compelling value proposition for our customers and the return on investment that they gain from our solutions.
Regionally, North America saw a material increase in net dollar retention rate and is now closer to the group averages after previously being meaningfully below the average. The rate remains over 100%, and our two other focus markets, Germany and Italy, are also continuing to perform well. A reconciliation can be found in the appendix. We delivered revenue of almost $100 million. Looking back, we reported $100 million in revenue for the entire year of 2020 just before going public. Three and a half years later, we've achieved that just in the first half, so effectively, the business has doubled since IPO. You can clearly see the operating leverage we're able to drive through the PNL in the first half of 2024.
As you know, cost of sales include network operating costs, as well as the costs incurred to onboard, support. The customer success teams there really smashed their first half targets and have been rewarded accordingly. We anticipate commissions to return to more normal levels going forward as targets increase. Customer acquisition costs or the cost to acquire new customers reduced as a share of revenue. That's despite a lower capitalization of commission, net of amortization, as we're now in the second year of capitalizing sales commission under IFRS 15, but the relative reduction shows better operating efficiency. We are continuing to invest into tech, product, and content, bringing new people on board and releasing exciting new product features, so costs increased to $26 million. Headcount is up 10% year on year. In relative terms, tech and content costs reduced as a proportion of revenue.
This was due to improved operating efficiency and higher capitalization of product development costs as we developed and launched more new product features. These costs were flat year on year in absolute terms. This is despite a growing review volume and platform usage. We were able to achieve efficiency gains. G&A is where we expect to continue to gain more operating leverage in the short term, and this was already evident in the first half. Total expenses were $16 million in H1, only a slight increase on the previous year, and significantly reducing as a proportion of revenue. We drove this via good cost control. As a result of our SaaS business model, the long-term margin potential of this business is significant.
Given the massive market opportunity in front of us, our top-line guidance remains for sustained mid-teens revenue growth each year for the foreseeable future, with incremental improvements in operating leverage. As we had previously outlined, at maturity, we can achieve Adjusted EBITDA margins over 30%. In the near term, we expect general and administrative expenses to reduce as a proportion of revenue as we cover our group costs more efficiently. The next area we'd expect to generate leverage from is our tech and content spend. Retention and expansion, and so remains a crucial part of the business. However, product features will be developed for a growing customer base, and we're able to scale through technology in the content integrity area, allowing us to drive more efficiency. Finally, we do anticipate an improvement in sales and marketing efficiency in time.
However, this spend is driving growth, underpinning the mid-teens top-line guidance we've discussed, and enabling us to capture the tremendous market opportunity ahead. Let's take a look at the movement in cash since year-end. We generated $11.5 million of adjusted operating cash flow in the period on the back of $10.6 million. We invested $3.5 million into CapEx, largely capitalized product development costs, and taking into account principal elements of lease payments for our offices, we generated adjusted free cash flow of $5.79 million and an effective cash balance before equity transactions of $97.4 million. Employee stock option exercises added a further $4.7
Third, we maximize network effects by going deep, not broad. So we've taken that approach to drive growth, introducing our four focus markets, where we see a greater marginal return on each dollar invested and greater discipline around customer segmentation, which is now well received and understood across the business. Finally, we've refreshed the values that underpin our culture, taking all the positive attributes that have built Trustpilot into the company it is today and layering on a more commercial focus. These have been very positively received internally. Let me elaborate a bit on the growth flywheel and network effects that underpin our growth... The flywheel should be familiar to you, but I think it's important to start here as it's so foundational to our business. The flywheel starts at the top with consumers who trust us enough to read and write reviews.
That leads, of course, directly to more business domains on the platform. Businesses then engage with the feedback, actively inviting their customers and publicly showcasing Trustpilot, as I hope you've seen around London and wherever it is, you happen to live. That in turn, there are also real network effects. The platform is more useful to consumers if more businesses are on it, and of course, more valuable to businesses when more consumers use it. This network effect, combined with our three hundred million strong review history and trust in the brand, gives us a very real competitive moat. To capitalize on this, as I've mentioned today, it's important to go deep, not broad, to strengthen network effects and to work on both sides of the flywheel.
In the first half, we saw a 24% increase in the number of reviews on the platform, which now, as I've said, stands at over 300 million. Businesses sent over 400 million review invitations in the first half of the year, up 15% year on year. The number of reviewed domains increased 19%, and active domains are up 14% in line with last year's growth. Customers use the power of our brand to drive their own growth, and we in turn, benefit from their use of the Trustpilot logo in their assets, which vastly multiplies the reach of our brand. Our brand continues to get tens of billions of impressions every month from customer websites, appearances across all media channels, including TV and Google Search impressions.
It's this whole hive of activity on the platform, rather than any one particular metric, that gives Trustpilot so much influence and such rich potential for future monetization. Earlier, I spoke about rigorous execution as one of our key priorities. One of the first things I did at Trustpilot was to review in detail how we go to market to ensure our proposition is continuing to put customers first. We've listened to them and refined our offering, updating product, packaging and pricing. We've reduced the number of paid packages down to four, with a few additional extras such as Salesforce.com integration. This makes it easier for customers to understand and for our people to sell. Each step up in plan delivers clear additional benefits with progressively more review invitations and insight functionality.
In April, we released new functionality across the platform, but particularly focused on our higher level plans. Two of the features are shown on the slide. These both leverage AI capability to derive insights from complex data or improve productivity. AI-assisted review responses is now offered to our enterprise customers as standard. These customers often receive hundreds of reviews a week, so responding to them can be very time-consuming. The feature uses a large language model to learn the organization's tone of voice and draft review responses, which agents can then check and edit before posting. This significantly improves their efficiency, but crucially maintains the human element. While still early days, feedback so far has been really positive, with over 70% of enterprise customers on the new plans using this functionality.
Market Insights helps businesses to better understand competitors, market trends and key review topics which are aligned with NPS. Customers can choose specific companies to benchmark against or use an industry average. Our product team is, of course, already working on further features, large and small, for businesses and consumers. We're currently beta testing two new Trustpilot homepage designs to improve functionality. Looking ahead, we're focused on developing a multi-year product roadmap to drive retention, new business and upsell on one side, and increase consumer engagement on the other. All of these changes were a big lift for the organization. I'm really grateful to everyone internally for their hard work in delivering it on time and to such a high standard. Trust, of course, is in our name, and it's our foundation. It's what makes us unique and what drives all of us who work here.
Our vision is to become the universal symbol of trust. We hold four core values around trust and transparency, which are highlighted on the right-hand side of this slide. We're neutral and independent, we're open, we're fair to both businesses and consumers, and we're transparent in how we operate. It's therefore paramount that we protect the integrity of our platform. We've been doing this since we were founded, so it's in our DNA, but we continue to evolve as the market and regulations change. Our fake review detection technology has been developed over many years, leveraging machine learning and more recently, generative AI capability. We not only look at the review-
... AI products are included in the top-tier packages. If so, then going forward, in terms of the new product roadmap, do we expect them to be included into the packages to encourage upgrades and price rises? Or is it a matter of adding more products in order to get, you know, customers to do more add-ons?
So why don't I take the first two? On the buyback, yeah, look, I think we have a pretty clear capital allocation strategy, and obviously, we feel very comfortable that on the back of the strong balance sheet at period end, plus the continued cash generation to commit to another GBP 20 million pound buyback, that should take us through, say, March of next year, at which point we will take a look at the balance sheet at that point in time, and review it. And then on the bookings trend, we have sort of seen a continuation of the momentum.
And then on products, I mean, what we're focused on is driving, as we say, an upgrade cycle through the four different grades of product that we make available. The product team are focused on products that are gonna generate a lot more value, particularly at the larger end for our enterprise customers. I think we've shown in the first half that we're pretty adept at claiming our portion of that value once it's been generated. But we're very conscious of wanting to make sure our customers get great value from Trustpilot, and I think our success in the first half shows that we've struck that balance really well.
Yeah, it's Kieran Donovan, Berenberg. Three from me as well, please. Just firstly, on one of the comments, you said headcount is up 10% year on year. Could you just give us a bit more detail in terms of where those heads have been added, whether it be geographically or between tech and sales? Secondly, just trying to get a sense of, I guess, the consumer engagement with the platform in North America and how that's developed. You obviously gave the monthly unique users growth at a group level, but any kind of indication of consumer engagement growth in North America? And I guess thirdly, I think, Adrian, one of your goals is to be in a Super Bowl ad. Is this year the year?
Do you want to take the first one, Hanno, on headcount?
Yeah. So the reference to the 10% headcount growth was specifically to tech and product. And obviously, if you look at the P&L, we continue to invest and add heads in the commercial organization to continue to drive bookings growth, albeit below sort of top-line growth levels. And we've been very restrained in adding heads and G&A to continue to drive efficiencies. And I think the other two are probably more for Adrian.
Yeah. So in terms of the flywheel in North America, I mean, I hope what came across from what we presented is there's really a whole set of activities going on around our platform, which are growing together, and, you know, we've seen great traction across all of them in the first half. We're not sort of laser-focused on any particular one of those metrics. What we want to see is the platform as a whole growing and continuing to drive value. Obviously, with the success on the B2B side in the U.S., with some really significant customer wins like Verizon, Fanatics, the great sportswear brand, we've seen businesses doing their bit to drive that flywheel around, and we're really pleased with how it's going there.
Super Bowl, not on the cards just yet, but time will tell.
Hi, guys, Joe George from J.P. Morgan. Two for me, please. I think the first one, probably for Hanno, just on pricing. A number of software vendors at the moment continue to talk about a more pressured pricing environment and putting these like-for-like price increases through. So on those like-for-like price increases, rather than adding additional product capabilities, how have they been received by the customers? And has this just been in line with the typical annual price increases? And then second question, probably for Adrian, just on a couple of the senior hires you made through the period, I think including the chief revenue officer. Could you just talk a little bit about, you know, the rationale behind these hires and what it is that they bring to the team, please?
Of course. Yeah. So on pricing, the retention rate we showed in the deck is a trailing twelve-month number, and so I think the last half of 2023 , the mix was more towards like-for-like price increases, and then this year, we've really focused on driving expansion through innovation and product upgrades. And so the like-for-like price increase component is actually shifting down. And as you've heard Adrian say, this is sort of our ambition, is to deliver more value to our customers, to help them upgrade to a better product as we deliver more features and put them into the enterprise package first, and then they trickle down. And that should support the long-term ability to expand accounts.
... And then to your point about hires, yeah, we announced earlier this year that we've hired Brian Green out of Adobe as our Chief Revenue Officer. I think Brian Green brings an exceptional mix of experience across verticals, across different customer sizes. I think he's already doing a lot to help us, particularly at the high end with enterprise customers. And I think it's just a great testament to where we've come, where we've got to as a company, that we can attract talent of that caliber into the business. We also announced that we've hired Carrie Ryan out of Prosus as our Chief Strategy Officer.
Among her responsibilities will be strategy and obviously evolving that to the next level, and also pricing and monetization and, you know, driving these decisions around once our product team have created a lot of value, how do we make sure that we're sort of claiming our share of that?
Hi, thanks for taking the question. It's Mark Hyatt from Morgan Stanley. I've just got two, please. Firstly, maybe this is for you, Adrian. Just on the FTC's change in regulation, how big of a step forward do you think this is within the industry? Could you just maybe sketch out exactly what's changing, and how do you expect that to impact both Trustpilot and competitors more broadly? And then secondly, maybe this is one for you, Hanno, just on the LTM net dollar retention rate, which improved, as you pointed out, to 101%. I think what was most eye-catching in the release was the eight-point increase in North America, and you've flagged that that's increased more towards the group level.
Could you maybe just sketch out a couple of the drivers, what's driving that, and anything else that might help us understand what's how that's gonna progress going forward? Thanks.
Yeah. So to start with the FTC, we think it's actually quite an important moment that, you know, Lina Khan and the FTC are explicitly advocating many of the same principles that, you know, we at Trustpilot have been talking about for years. And these aren't controversial things. These are common sense principles of fairness, like, you know, don't get your employees to review their own company. Don't buy reviews from people. Don't suppress negative reviews. I think what's changing and what's gonna have a really great impact is the FTC are making clear that it's a C-level executive's responsibility as a company to make sure that they're actually compliant with these things. So, you know, just as people know what the rules are around financial reporting or environmental reporting, the same applies here to reviews.
The FTC has, you know, set really clear standards here. We absolutely agree, and of course, what we do is we make it really easy. We have a solution to this, right? We make it really easy for senior executives in big companies to say, "Right, you know, here's a company that's actually gonna help us be compliant with what the FTC is saying.
Yeah. On the U.S. retention rate improvement, it was largely more expansion, and so I think it reflects. Again, this is an LTM number, so we've talked about this in March already, how we've seen improvements in the back half of last year. And it reflects continuous execution on that ability to increase price, but also then obviously supported by now a new product to drive more expansion. I think it's a testament to the fact that the brand continues to be more and more valuable in the U.S., and so we're able to then command higher prices from our customers as they get more value from showing Trustpilot on their website.
And so I think the ambition overall is to increase retention rates by reducing churn and improving expansion, and that obviously holds true for the U.S. in particular as well.