LBG Media H1 2026: Revenue Up 19% but EBITDA Falls on Strategic Shift

LBG Media’s H1 2026: rapid revenue growth but thinner margins as mix shifts

LBG Media has delivered a punchy top-line performance in the first half of FY26, with revenue up 19% to £52.4 million and constant currency growth of 22%. The flip side: adjusted EBITDA dropped to £8.0 million from £12.2 million as the Group leans harder into “Direct” revenues and invests in senior commercial talent. This is the classic quality-versus-margin trade-off, and it is very much by design.

Management has upped full-year revenue guidance to around £110 million, but reset EBITDA expectations to around £22 million as lower-margin Direct revenues take a bigger share. If you like more predictable, scalable revenue – and can tolerate slimmer margins in the near term – this will make sense.

Headline numbers at a glance

Metric	H1 2026 / Update	Prior / Reference	Notes
Revenue	£52.4m	£43.9m (H1 2025)	+19% reported; +22% constant currency
Adjusted EBITDA	£8.0m	£12.2m (H1 2025)	Lower margins due to mix and investment
Direct revenue mix	>70% of Group revenue	c.55% (FY25)	Direct = branded content for advertisers
Global audience	c.0.5bn	0.5bn (FY25)	Followers, unique podcast listeners, and average monthly website users
Net cash	£28.4m (31 Mar 2026)	£30.8m (FY25)	Supports selective acquisitions
FY26 revenue guidance	c.£110m	Consensus £105m	Upgrade vs market expectations
FY26 adjusted EBITDA guidance	c.£22m	Consensus £25.4m	Reset lower due to mix

What’s driving the story: the pivot to Direct revenue

Direct revenue – creating bespoke content for brands and agencies to reach young adults – now represents more than 70% of Group revenue. That is a big step up from around 55% in FY25, and it is where management is leaning in hardest. The U.S. is becoming materially more important, with strong demand from blue-chip brands for LBG’s content on premium digital platforms.

The strategic logic is clear: Direct contracts offer better visibility and predictability than Indirect (revenue shares from platforms and programmatic ads next to LBG content). The cost, at least near term, is margin – Direct typically carries lower margins than Indirect.

Indirect headwinds persist: platform changes still biting

LBG did not see a recovery in Indirect revenue in H1 26. Referral volumes remain subdued and previously announced changes to Meta’s Facebook algorithm continued in line with H2 25 trends. That pressure on Indirect has dragged on Group margins even as overall revenue grew strongly.

In plain English: less windfall-like platform revenue, more contracted brand work. It is steadier, but not as fat-margin, and it reduces future reliance on Web and Facebook – a key medium-term goal called out by the Board.

Investment and AI: short-term drag, long-term enablers

Adjusted EBITDA was also held back by planned investment in senior leadership and sales capability in the U.S. and UK Direct markets. That spend is deliberate and front-loaded. Management expects a second-half weighting for adjusted EBITDA, benefiting from these hires and H1 cost savings.

On tech, the Group highlights “longstanding” use of generative AI with productivity gains and improved client engagement. No hard numbers are provided, but it is notable as a lever to scale content and client delivery efficiently.

Guidance upgrade and reset: revenue up, EBITDA down vs consensus

The Board has increased FY26 revenue expectations to around £110 million, ahead of consensus at £105 million. However, FY26 adjusted EBITDA is now expected to be around £22 million, below consensus at £25.4 million. The mix shift towards Direct is the main driver of that margin reset.

Crucially, management frames this as moving towards a “higher-quality revenue base” with reduced reliance on Web and Facebook. If the Direct engine in the UK and U.S. continues to scale, margins can rebuild off a more predictable platform – but the RNS does not give a margin timeline.

Cash and optionality: funding the plan and M&A

Net cash stood at £28.4 million at 31 March 2026 (FY25: £30.8 million), giving LBG the flexibility to keep investing and to pursue selective acquisitions where there is a compelling strategic fit. The balance sheet looks supportive of the strategy, even as EBITDA takes a temporary hit.

Why this update matters for investors

The good news

• Top-line acceleration: 22% constant currency growth is a material step-up from 10% in FY25.
• Revenue quality improving: Direct revenues now dominate, bringing better visibility.
• U.S. traction: growth in the U.S. is becoming “materially more important”, supported by blue-chip demand.
• Stronger H2 setup: senior hires and H1 cost actions are expected to support a second-half EBITDA weighting.
• Solid cash: £28.4 million net cash provides strategic flexibility, including selective M&A.

The watch-outs

• Margin pressure: adjusted EBITDA is down and full-year guidance is below prior consensus.
• Platform risk lingers: Indirect hasn’t recovered, and Facebook algorithm changes continue to weigh.
• Execution risk in the U.S.: the plan leans on scaling Direct stateside after recent investment in leadership and sales.
• No detailed segment disclosure: the RNS does not break out Direct vs Indirect revenue in pounds or provide margin by stream.

My take

This is a deliberate pivot from a platform-exposed ad model to contracted brand work with clearer visibility. The revenue upgrade suggests the commercial engine is working, particularly in the U.S. The cost is near-term profitability as the mix shifts and the sales machine is built out.

For long-term holders, this trade-off can be attractive: less reliance on Meta and web referrals, more repeatable brand spend, and a bigger U.S. footprint. For short-term traders, the EBITDA reset and ongoing Indirect weakness are likely to be the sticking points.

Key dates and what to watch next

• Half-year results: 9 June 2026 – expect detail on Direct vs Indirect trends, U.S. growth, cost savings, and H2 pipeline conversion.
• Mix and margin: evidence that Direct margins can improve as scale builds.
• Platform dynamics: any sign of Indirect stabilisation after Facebook changes.
• AI in action: concrete examples of productivity gains or client wins attributed to generative AI.
• Capital allocation: whether net cash is deployed into selective, strategic acquisitions.

Bottom line

LBG Media is swapping some margin today for a sturdier, more predictable revenue base tomorrow. Revenue guidance is up, EBITDA guidance is down, and the U.S.-led Direct push is gathering pace. If management executes, the foundations for medium-term compounding look better – albeit with lower near-term profitability and ongoing platform headwinds to navigate.