H1 2025 headline numbers and cash flow resilience
Team Internet Group posted a tough but controlled first half, as the business continued its pivot in Search and pushed through a broad transformation programme. Gross revenue fell to USD 263.9 million (H1 2024: USD 409.7 million) as expected, given the shift away from legacy AFD monetisation in Search. Net revenue – effectively gross profit – came in at USD 72.8 million with an improved gross margin of 27.6% (H1 2024: 23.8%).
Adjusted EBITDA (earnings before interest, tax, depreciation, amortisation, impairment, non-core items, FX and share-based payments) was USD 24.6 million, down from USD 46.6 million, equating to a 33.8% margin on net revenue. Despite the profit dip, cash generation held up well: adjusted operating cash flow was USD 26.9 million and cash conversion was a healthy 109% thanks to tight working capital discipline.
| Metric | H1 2025 | H1 2024 |
|---|---|---|
| Gross revenue | USD 263.9m | USD 409.7m |
| Net revenue (gross profit) | USD 72.8m | USD 97.7m |
| Adjusted EBITDA | USD 24.6m | USD 46.6m |
| Operating (loss)/profit | USD (7.0)m | USD 22.9m |
| (Loss)/profit after tax | USD (14.1)m | USD 9.8m |
| Adjusted EPS (diluted) | USD 5.93c | USD 10.92c |
| Adjusted operating cash flow | USD 26.9m | USD 40.6m |
| Adjusted operating cash conversion | 109% | 87% |
| Net debt | USD 93.3m | USD 109.9m (30 Jun 2024) |
| Leverage (TTM) | 1.7x | 1.2x |
| Liquidity available | USD 154.9m | not disclosed |
Segment performance: DIS steady, Comparison expanding, Search pivots to RSOC
Team Internet reports across three segments. The picture is mixed – and that is by design as the company retools its advertising engine.
- Domains, Identity & Software (DIS): revenue USD 103.9 million and net revenue USD 37.9 million. Adjusted EBITDA rose 29% to USD 10.7 million as efficiency gains flowed through. The group won several high-profile contracts, including a 10-year consortium deal to operate Colombia’s .co top-level domain. Value-Added Revenue rose to 17% and average revenue per domain year increased 7% to USD 12.79.
- Comparison: revenue USD 27.9 million, net revenue USD 9.0 million and EBITDA USD 5.4 million. After a soft start to H1, growth returned late in the period. International scaling is working – France is already profitable, Italy and Spain are nearing breakeven, and the UK portal has launched. International GMV represented 5% of segment GMV versus near zero a year ago.
- Search: revenue USD 132.1 million, net revenue USD 25.9 million and EBITDA USD 8.5 million. This is where the big strategic pivot is happening, moving from AFD (AdSense For Domains) to RSOC (Related Search On Content – search results integrated with contextual content). RSOC and other next-generation monetisation models grew 160% year-on-year and now account for 24% of the segment’s revenue. AFD RPM fell 46% year-on-year due to demand-side changes, but supply costs showed high elasticity, keeping margins in line on the legacy piece.
Why the earnings fell: non-cash hits and restructuring
The group swung to an operating loss of USD 7.0 million and a loss after tax of USD 14.1 million. The move is driven by lower EBITDA, combined with non-cash items and one-off costs. Non-core operating expenses were USD 7.2 million, mainly restructuring, acquisition and integration costs. There were USD 6.0 million of FX losses and an impairment charge of USD 0.8 million. Management also highlights a performance improvement programme targeting a USD 24 million reduction in the 2026 cost base versus 2024, which included saying farewell to more than 200 colleagues.
In short, profitability is being deliberately traded near term for a business model upgrade in Search and a leaner operating structure across the group.
Balance sheet, liquidity and buybacks
Net debt reduced to USD 93.3 million from USD 96.4 million at year end, despite USD 6.7 million spent on share buybacks in the half. Leverage rose to 1.7x TTM EBITDA as trailing profits stepped down, while interest cover is 4.4x. Available liquidity totals USD 154.9 million, split between USD 76.6 million of cash and USD 78.3 million of undrawn RCF.
The group reports net current liabilities of USD 12.8 million at 30 June, but this includes USD 25.9 million of non-cash items such as deferred revenue and payments on account. Excluding those, net current assets are USD 13.1 million. A contingent tax liability of USD 5.2 million has been disclosed – the risk is not considered probable but is not remote either.
Strategy and outlook: what management is guiding for H2 2025
Management describes H1 as a period of strategic transformation, with most benefits to appear through H2 2025. The outlook by segment is clear:
- DIS – continued double-digit EBITDA growth, supported by an unprecedented number of net contract wins in H1 2025 and full benefits from platform consolidation rolling through H2.
- Comparison – normal second-half weighting expected. As international portals mature, the segment should shift from investment mode to cash contribution, a pattern already shown in France.
- Search – pivoting social-to-search workflows from AFD to RSOC, plus scaling commerce media and viral video solutions. Next-generation monetisation grew 160% year-on-year and management sees early signs of net revenue growth compared to late H1 2025.
The board continues to review options to maximise shareholder value, including capital allocation and asset ownership, while prioritising sustainable growth and margin improvement.
My take: positives and pressure points
On the positive side, the cash engine is intact. A 109% cash conversion rate and a lower net debt figure in a transition year signal good control. DIS looks like a dependable anchor – winning the .co registry for a decade is a strong proof point. Comparison’s internationalisation is gathering pace with clear milestones: France already profitable and others close behind.
The pressure remains in Search, where the industry shift is real. AFD RPM down 46% is painful, but the pivot is gaining traction, with RSOC and other next-gen formats already at 24% of segment revenue and growing quickly. The margin rebuild will take “several quarters” by management’s own description, so patience is required.
Non-core costs and FX dragged reported earnings, and leverage ticked up as TTM EBITDA fell. Those are watchouts. The contingent tax issue of USD 5.2 million is not a show-stopper, but it is another item to track.
Key watch items for investors in H2 2025
- RSOC mix and monetisation – does next-generation revenue keep rising from 24%, and do campaign margins improve as user engagement beds in.
- DIS contract ramp – timing and revenue contribution from the new wins, including the .co TLD, and whether double-digit EBITDA growth is delivered.
- Comparison seasonality and international breakeven – France should stay profitable, while Italy and Spain aim for breakeven; the new UK portal’s early traction will be informative.
- Cash discipline – sustaining strong cash conversion while investing in product and expansion.
- Leverage path – progression back towards lower leverage as profitability recovers, and interest cover staying comfortable.
- Resolution of the disclosed tax contingency – no guidance on timing, so any update will matter.
Bottom line: a deliberate reset with improving signals
H1 2025 shows a business taking its medicine: lower reported profits today to modernise the ad stack and sharpen the cost base. The numbers are not pretty, but the cash tells a more resilient story. If RSOC adoption continues to accelerate, DIS keeps compounding with sticky infrastructure revenues, and Comparison’s international rollout turns from drag to driver, the ingredients are there for recovery through H2 and into 2026.
I see a balanced risk-reward for patient investors. Execution in Search is the swing factor, but there is visible progress, a stronger contract book in DIS, and solid liquidity to navigate the rest of 2025.
