FY25 headline numbers: double‑digit growth at constant currency, strong cash generation
LBG Media delivered a solid FY25, with revenue of £92.2m, up 10% at constant currency and 7% on a like‑for‑like 12‑month basis. Adjusted EBITDA rose to £25.2m, with a healthy 27.4% margin (down from 28.4% as the Group leaned into growth investment). Profit before tax was £14.0m, down 3% year‑on‑year on a pro forma basis.
The cash story is a bright spot: £30.8m of cash and cash equivalents at year-end, up 13%, cash conversion at 93%, and no debt. That firepower supports both the step‑up in U.S. and UK Direct investment and selective M&A.
Quick jargon check: “Direct” is content marketing sold to brands and agencies; “Indirect” is platform-revenue share from ads around LBG content and its websites. “Adjusted EBITDA” is operating profit before interest, tax, depreciation and amortisation, adjusted for items like share‑based payments. “Cash conversion” is operating cash flow divided by adjusted EBITDA.
Direct vs Indirect: mix shifts to higher‑visibility Direct revenue
Strategically, the centre of gravity is moving. Direct revenue was £49.7m, up 13% and now 54% of the Group. Within that, Direct U.S. jumped 29% to £18.6m, while Direct UK rose 11% to £30.0m despite a tough comparator that included c.£3.5m of Euros-driven UK revenue in FY24.
- Direct UK: £30.0m (+11%), with 82% repeat revenue and 11 clients delivering more than $1m annually.
- Direct U.S.: £18.6m (+29%), now with 3 clients over $1m each and a strong pipeline.
- Direct Ireland & RoW: £1.1m (‑56%).
Indirect revenue stabilised at £41.5m (+1%). “Social” rose 12% to £25.3m, offset by “Web” down 13% to £16.2m amid weaker referrals and a tough prior year. The audience remains vast at 509m (+1%), with most growth in the U.S.
Management expects Direct to exceed 50% of Group revenue and potentially reach 70% over time. Guidance points to low‑to‑mid teens Direct growth with margins before central costs in the mid‑30% range; Indirect to grow low single digits with margins above 50%.
U.S. momentum and Betches: scaling in the biggest ad market
The U.S. is delivering. The combination of LBG Media and Betches is clearly resonating, evidenced by the 29% Direct U.S. growth and larger client engagements. Betches hit its 2024 revenue target, triggering a $5.5m earnout payment in May 2025.
To support the next leg, LBG added experienced U.S. leaders across partnerships, operations and content, and invested about $3.5m in the U.S. business during the year. The logic is straightforward: bigger, more senior teams unlock larger, multi‑brand, multi‑year briefs – exactly the sort of predictable revenue LBG wants more of.
Cash, earnouts and balance sheet: plenty of firepower
Net cash of £30.8m with no debt gives LBG room to invest and to pursue bolt‑on M&A where there’s a strategic fit. Even after paying the $5.5m Betches earnout, cash increased year‑on‑year, underpinned by strong cash generation.
The Betches contingent consideration stood at £7.0m at year‑end after a £3.2m fair value uplift reflecting better odds of hitting EBITDA targets. In short, Betches is performing and still has milestones to clear. Noted for later: the earnout profile and any further payments are worth watching through FY26‑FY27.
AI, data and operations: tightening the content flywheel
LBG continues to double down on proprietary tools and AI to bolster productivity and engagement. Examples include Mission Control (real‑time content performance), EMMA (workflow automation saving over 4,000 hours annually), LAD RADAR (early trend detection), and ARNOLD (video spell‑check time cut from 69 days to 29 hours).
Editorial strategy blends human and AI‑generated content, with a clear stance that human creative value rises alongside AI use. The aim is pragmatic: faster, sharper, more effective content that delivers for clients and platforms.
FY26 outlook: heavier investment now for more predictable earnings later
Management cites increasing client engagement and a strong pipeline in the UK and U.S. Direct markets. The plan is to accelerate investment in senior leadership and sales to convert that pipeline into sticky, multi‑year, IP‑led work. The Board expects EBITDA margins to remain in line with consensus near‑term, improving over time through operational leverage and monetising higher‑value IP across channels.
There’s also capacity for selective acquisitions given the net cash position and cash generation. For those who want the full briefing, a replay will be posted on LBG’s results page: Results and presentations.
What’s positive – and what’s not
Positives that stand out
- Direct revenue mix shift with better visibility and repeatability (UK repeat revenue at 82%).
- U.S. traction: faster growth, bigger client budgets, senior team in place.
- Cash strength: £30.8m, 93% cash conversion, no debt.
- Indirect Social resilience (+12%) and audience scale (509m) support the flywheel.
Points to keep an eye on
- Indirect Web decline (‑13%) and the path to stabilisation and recovery.
- Margins trimmed to 27.4% as investment steps up – sensible, but needs payback.
- Customer concentration: one customer accounted for 24% of revenue in FY25.
- Leadership transitions (CFO departed in FY25) and a new London lease post year‑end (£2.5m per annum) add fixed cost.
Five things investors should watch in FY26
- Direct revenue share: does it push past 55% and trend toward the 60‑70% ambition?
- U.S. deal flow: growth in the count of $1m+ clients and multi‑year sponsorships.
- Web monetisation: evidence of stabilisation after leadership hires in the Web unit.
- EBITDA margin trajectory: near‑term stability, then operating leverage later in the year.
- Cash discipline: cash conversion staying high while funding growth and any acquisitions.
Key numbers at a glance
| Metric | FY25 | YoY change |
|---|---|---|
| Revenue | £92.2m | +7% (reported, 12m v 12m) / +10% constant currency |
| Adjusted EBITDA | £25.2m | +3% |
| Adjusted EBITDA margin | 27.4% | down from 28.4% |
| Profit before tax | £14.0m | ‑3% |
| Cash and cash equivalents | £30.8m | +13% |
| Cash conversion | 93% | not disclosed prior-year in this table |
| Direct revenue | £49.7m | +13% |
| Indirect Social | £25.3m | +12% |
| Indirect Web | £16.2m | ‑13% |
| Global audience | 509m | +1% |
Note: figures compare FY25 with unaudited pro forma 12 months to 30 September 2024 where stated.
Bottom line: sensible reinvestment to compound Direct growth
LBG Media is doing what you want a content‑led, social‑native business to do at this stage: use its audience scale and brand portfolio to win bigger, stickier Direct work, particularly in the U.S., while keeping the Social revenue engine humming. The trade‑off is a modest dip in margin as they hire senior talent and expand sales – but with 93% cash conversion and no debt, they can afford to press the accelerator.
If management turns the strong pipeline into multi‑year, IP‑led programmes at the pace they’re signalling, FY26 should show that investment translating into more predictable earnings. Keep an eye on Web recovery, customer concentration, and the cost base as the new London lease comes through. For now, the direction of travel is clear – and positive.
