LBG Media Reports Mixed Half-Year Results: Direct Revenue Surges 95% but EBITDA Falls, FY26 Guidance Lowered

LBG Media half-year results 2026: strong sales growth, weaker profits and another guidance cut

LBG Media’s half-year results are a proper mixed bag. The headline revenue number looks strong, with Group revenue up 19% to £52.4 million, but profits have gone the other way and full-year guidance has been cut again.

The simple version is this: the bit of the business LBG wants to grow most – Direct revenue from brands and agencies buying campaigns – is flying. The bit it wants to rely on less – Indirect revenue from platform revenue-sharing and websites – is falling faster than expected. That shift matters because Direct is more predictable, but it currently comes with lower margins.

LBG Media 1H26 key numbers retail investors should know

Metric	1H26	1H25	Change
Group revenue	£52.4 million	£43.9 million	+19%
Adjusted revenue at constant currency	£53.6 million	£43.9 million	+22%
Direct revenue	£37.6 million	£19.3 million	+95%
Indirect revenue	£14.5 million	£24.5 million	-41%
Adjusted EBITDA	£8.0 million	£12.2 million	-34%
Adjusted EBITDA margin	15.4%	27.8%	-12.4 percentage points
Profit before tax	£1.8 million	£8.6 million	-79%
Net cash	£28.4 million	£30.8 million at 30 September 2025	Down £2.4 million

For anyone new to the jargon, Adjusted EBITDA is a profit measure before interest, tax, depreciation and amortisation, with some one-off or non-cash items stripped out. It is useful, but it is not the same as hard cash profit.

Direct revenue growth at LBG Media is the bright spot – especially in the UK and U.S.

This is where the report gets genuinely encouraging. Direct revenue rose 95% to £37.6 million and now makes up 72% of Group revenue, up from 44% a year ago. That is a huge strategic shift in a short period.

The UK Direct business grew 64% to £20.6 million, while the U.S. surged 154% to £16.1 million. LBG says it is winning more spend from blue-chip clients and becoming more embedded in their marketing plans, which is exactly what investors want to hear from a media company trying to build more repeatable revenue.

• UK clients generating more than $1 million annually increased to 16 from 12
• U.S. clients generating more than $1 million annually increased to 7 from 5
• Repeat Direct revenue in the UK improved to 89% from 78%
• Sponsorship revenue increased seven-fold from c.£0.5 million to c.£3.5 million

My read is that the commercial engine looks credible. Brands clearly still want access to LBG’s young adult audience, and the U.S. business is becoming much more important. That said, some of this growth came with lower margins, including two large U.S. deals priced below normal levels to win more client spend.

Indirect revenue decline from Facebook algorithm changes and AI Overviews is the real headache

The bad news is that Indirect revenue fell 41% to £14.5 million. Social revenue dropped 44% to £8.0 million and Web revenue fell 36% to £6.5 million.

LBG pins this on two things. First, changes to Meta’s Facebook algorithm, which have already been flagged before. Second, lower search traffic because of AI Overviews, which is Google giving answers directly in search results rather than sending users onwards to websites.

That is not a one-off wobble. It looks more like a structural problem for publishers relying on referral traffic. Daily web sessions dropped 53% to 2.3 million, although web yield per 1,000 sessions improved 35% to £13.93.

This matters because Indirect revenue has historically been higher margin. So even though Direct is growing nicely, the loss of profitable Indirect income drags on earnings.

Why LBG Media EBITDA fell even though revenue rose

Adjusted EBITDA fell 34% to £8.0 million and the margin nearly halved from 27.8% to 15.4%. That is the awkward part of this transition story.

There were three main reasons given in the RNS:

• Direct revenue is lower margin than Indirect revenue
• LBG invested heavily in senior leadership and sales teams in the UK and U.S.
• Indirect revenues continued to decline faster than expected

Costs tell the same story. Content costs jumped 121% to £16.8 million, payroll costs rose 11% to £19.1 million, and total net operating expenses increased 42% to £50.4 million.

Some of that spending is sensible growth investment. Some of it is the price of chasing future scale. But investors should be honest about it – this is not currently a clean, high-operating-leverage growth story. It is a transition story with short-term pain attached.

FY26 guidance cut again – and that is the biggest negative in this update

The most important new information is the downgrade. On 22 April 2026, LBG had guided to revenue of £110 million and Adjusted EBITDA of £22 million. It has now cut that to revenue of £100 million to £107 million and Adjusted EBITDA of £15 million to £20 million.

That is a meaningful reset in a short space of time. Management says Direct trading remains healthy, but Indirect trends have not stabilised as quickly as expected.

In plain English, the good part of the business is not yet strong enough to fully offset the faster deterioration in the weaker part. That is why this announcement is hard to call outright positive, despite the strong top-line growth.

LBG Media cash position stays solid, but working capital needs are rising

One reassuring feature is the balance sheet. LBG ended the period with £28.4 million of cash and remains debt-free, which gives it room to keep investing and potentially make acquisitions.

Cash generated from operations fell to £3.5 million from £13.4 million, and cash conversion dropped to 63% from 110%. Management says this was partly due to the higher mix of Direct revenue, which takes longer to turn into cash, plus the timing of a £2.8 million overdue customer payment that was collected in April 2026.

That explanation is reasonable, but it is still worth watching. When a business shifts into a more sales-led model, receivables and working capital can become a bigger swing factor than investors first expect.

AI tools, audience scale and client demand support the long-term case

LBG is also leaning hard into AI across editorial, sales and operations. The company highlighted tools including Mission Control, LAD RADAR, EMMA, ARNOLD and The Brief Unpacker, with claimed productivity and workflow gains.

Some companies mention AI because they think they have to. LBG sounds further along than that, and the detail in the RNS suggests these tools are being used in day-to-day operations. Whether that turns into a material earnings advantage is not disclosed yet, but it is at least more than empty buzzwords.

The audience story also remains strong, with a global audience of c.0.5 billion. That scale still gives LBG a strong pitch to major advertisers.

My view on LBG Media shares after these half-year results

I think this update is strategically encouraging but financially disappointing. The pivot towards Direct revenue is clearly working, especially in the UK and U.S., and that should make the business better over time.

But right now investors have to swallow lower margins, weaker profit, softer cash conversion and another guidance cut. That is not ideal, and it increases the pressure on management to prove that the Direct business can grow fast enough – and profitably enough – to outweigh the ongoing erosion in Web and Social.

If you already liked the long-term thesis, there is still evidence here to support it. If you wanted a smooth upgrade cycle and rising margins, this RNS was not that. For now, LBG looks like a business with real commercial momentum, but also with more execution risk than the revenue headline first suggests.