Team Internet H1 2026: margins improve as Search returns to profit

What happened in the first half?

Team Internet Group's H1 2026 trading was in line with market consensus, although the company did not disclose the consensus figures.

The headline numbers still show the effects of its transition away from legacy AdSense for Domains revenue. Gross revenue fell 32% year on year to USD 179.1 million, while net revenue, which the company also describes as gross profit, declined 16% to USD 61.0 million.

Adjusted EBITDA fell 21% to USD 19.5 million. This measure represents earnings before interest, tax, depreciation, amortisation and certain other items.

The picture improves when H1 is compared with the second half of 2025. Adjusted EBITDA rose 8% from USD 18.0 million, despite revenue remaining lower. Gross margin also climbed to 34.1%, compared with 27.6% in H1 2025 and 29.1% in H2 2025.

That combination suggests Team Internet is becoming a smaller but more efficient business as low-quality legacy revenue disappears.

Team Internet's key H1 figures

Metric	H1 2026	H1 2025	H2 2025	H1 year-on-year change
Gross revenue	USD 179.1 million	USD 263.9 million	USD 218.0 million	-32%
Net revenue	USD 61.0 million	USD 72.8 million	USD 63.4 million	-16%
Gross margin	34.1%	27.6%	29.1%	Not disclosed
Adjusted EBITDA	USD 19.5 million	USD 24.6 million	USD 18.0 million	-21%
Net debt	USD 117.5 million	USD 93.3 million	USD 87.6 million	Not disclosed

The key tension is clear. Revenue and earnings remain below the prior-year period, but profitability improved against H2 2025 and the gross margin moved sharply higher.

DIS and Comparison carried the performance

Team Internet's Domains, Identity & Software division, known as DIS, delivered another period of earnings growth.

DIS revenue declined 6% year on year to USD 97.9 million. However, net revenue increased 8% to USD 40.8 million and adjusted EBITDA rose 28% to USD 13.7 million.

That is a solid result because the division converted lower gross revenue into higher gross profit and earnings. The company said DIS maintained its momentum throughout the strategic review.

Comparison was the strongest growth contributor. Revenue increased 18% to USD 32.9 million, net revenue rose 36% to USD 12.4 million and adjusted EBITDA jumped 54% to USD 8.4 million.

Compared with H2 2025, Comparison revenue was 12% lower, but adjusted EBITDA was 22% higher. This indicates meaningful margin expansion rather than growth being driven purely by additional sales.

Segment	H1 2026 revenue	H1 2026 net revenue	H1 2026 adjusted EBITDA	EBITDA change year on year
DIS	USD 97.9 million	USD 40.8 million	USD 13.7 million	+28%
Comparison	USD 32.9 million	USD 12.4 million	USD 8.4 million	+54%
Search	USD 48.3 million	USD 7.8 million	USD -2.6 million	Not meaningful

Search remains the problem, but June offered encouragement

Search produced the largest declines in the group. Revenue dropped 63% year on year to USD 48.3 million and net revenue fell 70% to USD 7.8 million. The segment recorded an adjusted EBITDA loss of USD 2.6 million, compared with earnings of USD 8.5 million in H1 2025.

This reflects the completed transition away from AdSense for Domains, which reached a negligible level during H1 2026.

There was, however, an important milestone. Search returned to profitability in June following efficiency gains, yield management and the scaling of Related Search on Content. Yield management means attempting to improve the return generated from available advertising traffic.

One profitable month does not establish a durable recovery. Investors will want evidence in the interim results that Search can remain profitable and make a positive contribution throughout the second half.

Why did net debt rise?

Net debt increased to USD 117.5 million at 30 June 2026, up from USD 87.6 million at the end of December 2025. The position included USD 52.0 million of cash and USD 169.5 million of bank debt and prepaid finance costs.

Management said the increase reflected cash used to reduce current liabilities rather than higher borrowings. The main factors were corporation tax payments relating to prior-year profits and the non-renewal of a registry contract, which reduced associated working-capital financing but is expected to have minimal impact on future profitability.

The Board expects net debt to fall significantly in H2 2026. Before any transaction arising from the strategic review, it expects year-end net debt to be in line with market expectations. Again, the relevant consensus figure was not disclosed.

This is an important promise. Stronger second-half cash generation and deleveraging would support management's explanation that the H1 increase was driven by timing and liability settlement rather than weakening underlying finances.

The DIS strategic review could reshape the group

Discussions concerning the strategic review of DIS are advancing with selected parties. The Board is considering the structure of any transaction and continues to expect completion during 2026, subject to customary conditions and regulatory approvals.

A further update is expected at or before the interim results. However, Team Internet stressed that there is no certainty a transaction will be agreed or what its terms might be.

DIS generated USD 13.7 million of adjusted EBITDA in H1, making it a major source of group earnings. Any deal therefore needs to be judged not only on the value received, but also on the profitability, debt position and business mix left behind.

What investors should watch next

The positives are the 34.1% gross margin, strong adjusted EBITDA growth in DIS and Comparison, and Search's return to monthly profitability in June. Group adjusted EBITDA also improved against H2 2025.

The negatives are the continued year-on-year decline in group revenue and earnings, the H1 loss in Search and the rise in net debt. There is also execution risk around both the Search recovery and the DIS strategic review.

Management expects earnings to be weighted towards the second half, with a return to year-on-year earnings growth during H2 2026. Investors will get a fuller picture when Team Internet publishes its interim report on 7 September 2026.

The most useful evidence will be whether Search remains profitable, whether net debt begins to fall significantly and whether any proposed DIS transaction can maximise value without weakening the remaining group.