Naturally, no groundbreaking new information was shared at the CMD (or a stock exchange release should have been issued about it). I quickly went through the recording, and my own view (still strongly bullish) remained the same, if not strengthened.
Mainly, it explained the company’s business, technology, and the use of AI in the future of the industry in a way that was somewhat understandable to the average person.
Numbers, guidance, etc., were naturally discussed, but no major new information was provided; rather, existing public information was perhaps clarified or described more broadly.
The merging of platforms was discussed and it was indeed a big deal, as they mentioned, if I recall correctly, that about 80% of revenue came through those two previous platforms, which are now unified, increasing efficiency as only one platform will need to be updated in the future. The merging of the other half of the platforms is still ahead, but their impact on business is quite minor. Apparently, it hasn’t had a major impact on existing customers, and onboarding new customers has only been delayed, not significantly canceled altogether.
They mentioned that they are very pleased that the merger was completed well in advance of Q4, as Q4 is the most important quarter in the advertising industry, and continued disruptions until then would have been very bad. Q4 was again predicted to be strong; Q3 will be a transitional quarter, with negative effects from the merger still present in the early part, but numbers should start to improve significantly during September. They mentioned that there has also been a slight softness in the market situation (natural given the circumstances), but the main part of the weakness was precisely due to this merger project.
Regarding potential acquisitions, they probably mentioned that at least companies containing new platforms are unlikely to be acquired without careful consideration (to avoid time-consuming mergers again), as they feel they don’t necessarily need acquisitions for growth at the moment, believing organic growth will remain strong. The traditional “if something suitable is found at a suitable price, then we’ll look into it” (and at the moment I would bet that, for a change, it might not be found, unlike 1-2 years ago). I’m also fine with surplus money being used to reduce debt levels instead of acquisitions at the moment.
More detailed comments from the analyst probably tomorrow.
Edit.
- Regarding competitive advantages, they mentioned that they are a market leader (this has already become clear from the statistics seen on the forum) and that new players entering the industry is very slow, as developing platforms to be functional, stable, and beneficial to customers’ businesses takes years.
- They also mentioned that if advertising industry as a whole is forced by legislation into an ID-less system, that is a possible “carrot” in the future. And furthermore, Google etc. will not necessarily intrude on Verve’s ID-less technology without being forced by legislation to change advertising to “anonymous”. Or so I understood, my technical expertise is limited to that
. So Verve cannot be bought out without Remco’s consent (if those certain redemption limits apply in Sweden), even if a competitor somehow bought all other shares from the market.
. In my opinion, Verve has a fairly good track record regarding acquisitions, so I see this as fundamentally positive, as I believe they know better than basic investors what kind of companies fit the overall picture.