Original-Research: Verve Group SE (von GBC AG): BUY

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Original-Research: Verve Group SE - from GBC AG

02.07.2025 / 11:30 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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Classification of GBC AG to Verve Group SE

Company Name: Verve Group SE
ISIN: SE0018538068

Reason for the research: Research study (Anno)
Recommendation: BUY
Target price: 9.20 EUR
Last rating change:
Analyst: Marcel Goldmann, Cosmin Filker

Q1 closed with significant sales and operating earnings growth, share price
target raised after guidance concretisation

Thanks to strong organic growth, Verve Group closed the past 2024 financial
year with a significant increase in revenue of 35.7% to EUR 437.01 million
(PY: EUR 321.98 million), making it a record year. The dynamic growth of 46.0%
to EUR 144.2 million in the fourth quarter (Q4 2023: EUR 98.7 million) made a
particularly significant contribution to this. In addition to the organic
growth impetus, the Jun Group acquisition carried out in summer 2024 also
increased the pace of growth. At the same time, adjusted EBITDA increased
disproportionately by 40.0% to EUR 133.25 million (PY: EUR 95.17 million).

Verve also achieved a significant increase in revenue of 32.2% to EUR 109.04
million in the first quarter of the current financial year 2025 (Q1 2024: EUR
82.47 million). This was primarily fuelled by a significant increase in
large software customers (revenue > USD 100,000) by 51.0% to 1,152 (Q1 2024:
764). At the same time, adjusted EBITDA (Adj. EBITDA) increased
significantly by 37.3% to EUR 30.2 million (Q1 2024: EUR 22.0 million). The
adjusted EBITDA margin improved slightly to 27.7% at the end of the first
quarter (Q1 2024: 26.7%).

With the recent publication of its Q1 business figures, Verve's management
has concretised the previous rough company outlook (double-digit organic
growth) for the current financial year 2025. Accordingly, Verve now expects
sales revenues in a range of EUR 530.0 million to EUR 565.0 million and an
adjusted EBITDA of EUR 155.0 million to EUR 175.0 million for the current
financial year. Based on this, Verve Group is aiming for future sales of
over EUR 1.00 billion and an operating result
(EBITDA) of over EUR 330.0 million in 2028/2029. In line with its growth
ambitions, Verve recently announced its uplisting to the Geregelten Markt
(regulated market) of the Frankfurt Stock Exchange and is aiming to be
included in the prominent SDAX in the future.

In view of the more specific guidance, the confirmed medium-term outlook and
the positive Q1 performance, we have adjusted our previous estimates
upwards. For the current financial year 2025, we now expect sales of EUR
547.34 million (previously: EUR 502.11 million) and EBITDA of EUR 157.37 million
(previously: EUR 156.84 million). For the following years 2026 and 2027, we
are forecasting sales of EUR 652.42 million (previously: EUR 596.79 million) and
EUR 784.77 million (previously: EUR 716.74 million) respectively. At the same
time, EBITDA should increase to EUR 192.42 million (previously: EUR 191.58
million) or EUR 237.34 million (previously: EUR 236.16 million).

Thanks in particular to its strong positioning in the US core market
(especially in the mobile in-app and CTV sector) and with its innovative
ID-less advertising solutions as well as the increased expansion of its
marketing and sales staff, this ad tech company should be able to continue
its dynamic growth trajectory despite the current difficult environment. In
the course of this, Verve should also be able to capitalise on its highly
diversified customer portfolio with a predominant share of advertising
customers from defensive sectors (e.g. gaming/entertainment,
retail/e-commerce or social media/internet or consumer goods industries), as
customers from these sectors (share of Verve's total customer base GBCe:
>70.0%) traditionally keep their advertising budgets relatively stable even
across different economic cycles.

In addition, the mobile in-app and CTV advertising channels, in which Verve
is primarily active, have also proven to be significantly more robust in an
advertising market phase with a tendency towards 'tighter' customer budgets
than alternative advertising formats, such as display advertising or web
advertising.

With regard to future Group profitability, Verve should be able to
increasingly benefit from the expected positive effects of the efficiency
and optimisation measures introduced (bundling and standardisation of
cloud-based platforms as part of platform integration, etc.) from the end of
the current financial year onwards.

Based on our increased sales and earnings estimates, we have also
significantly raised our previous price target to EUR 9.20 (previously: EUR
8.30) per share. The rollover effect (price target based on the 2026 fiscal
year instead of 2025 as previously) also contributed to the increase in the
price target. This was offset by the recent dilution effect resulting from
the capital increase and the shares issued as part of the employee stock
option program. In relation to the current share price level, we therefore
continue to assign a 'BUY' rating and see significant upside potential for
the Verve share. The share could receive an additional 'boost' from a
possible inclusion in the SDAX. We consider the probability of this ad tech
group being included in this prestigious index in the near future to be
relatively high.

You can download the research here: http://www.more-ir.de/d/32946.pdf

Contact for questions:
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de

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Beim oben analysierten Unternehmen ist folgender möglicher
Interessenkonflikt gegeben: (5a,5b,7,11); Einen Katalog möglicher
Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung

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Date (time) of completion: 02/07/2025 (9:55)
Date (time) of first distribution: 02/07/2025 (11:30)

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2164064 02.07.2025 CET/CEST

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