Investors who looked only at the headline revenue figure from Verve Group’s second-quarter report might have expected a celebration. The adtech company grew sales by 43.5 percent year-on-year, reaffirmed its full-year guidance, and improved its gross margin. Instead, the stock sold off sharply, and a closer look at the underlying numbers explains why: profitability is stagnating, debt is climbing, and the company’s own organic growth came in below expectations.
The market’s reaction was swift. Following the release of the half-year figures last Thursday, the share price dropped more than 16 percent in a single session, extending a slide that has now erased over half of the stock’s value since its record high of EUR 2.48 in September last year. At its current level of around EUR 1.06, the shares are trading barely above their recent 52-week low, having fallen 21 percent over just the past seven trading days. Since the earnings announcement itself, the stock has slipped a further 3.9 percent.
A widening gap between top and bottom line
The core problem is a growing disconnect between revenue growth and earnings power. While second-quarter sales climbed to EUR 152.3 million from EUR 106.1 million in the prior-year period, adjusted EBITDA rose only 2.2 percent to EUR 30.1 million. That translates into an adjusted EBITDA margin of 22 percent—a significant deterioration from the 30 percent margin posted in the same quarter last year.
On a like-for-like basis, revenue growth was 6.5 percent, a figure that management itself acknowledged fell short of internal expectations. CEO Remco Westermann described the quarter as “more challenging than expected,” attributing the shortfall to “macroeconomic headwinds and a more selective advertising market, which led to a slower acceleration of advertising spending on our platform than assumed.”
The company points to tariffs, elevated oil prices, and weaker spending by lower-income consumers as factors that have weighed on advertising budgets across travel, consumer goods, automotive, and parts of the tech sector. These are external pressures, but they hit a business model that depends directly on those same budgets.
Should investors sell immediately? Or is it worth buying Verve Group?
Restructuring costs mount as debt rises
Adding to the operational strain, Verve is pushing through a strategic overhaul. The company is relocating its headquarters from Sweden to Ireland and preparing to report under US accounting standards in US dollars—steps that point clearly toward a potential US listing. Efficiency measures, including a streamlined office network and workforce adjustments, generated one-off costs of EUR 4.2 million in the second quarter, against expected annual savings of at least EUR 8 million.
On paper, the payback period is just over six months, provided the savings materialize as planned. But the restructuring comes at a time when the balance sheet is already under pressure. Net debt stood at EUR 462.0 million at the end of the second quarter, up from EUR 445.9 million at year-end. The adjusted leverage ratio rose correspondingly from 3.0 to 3.3—a move that carries extra weight given the softer organic growth.
The company did bolster its liquidity position, with cash and cash equivalents increasing to EUR 132.4 million from EUR 89.0 million at the start of the year. Operating cash flow before working capital effects reached EUR 16.1 million, up from EUR 15.3 million in the prior-year quarter, offering some evidence that the underlying business retains its cash-generating capacity. The gross margin also improved to 40.0 percent from 33.1 percent.
Guidance held, skepticism persists
Despite the mixed quarter, Verve has maintained its full-year forecast of EUR 680 to 730 million in revenue and EUR 145 to 175 million in adjusted EBITDA. Management argues that the first half was deliberately structured as an investment-heavy phase and expects an acceleration in the second half, supported by improved productivity from sales teams.
Whether that confidence is justified remains an open question. The combination of a growing debt pile and declining profitability is now the central risk factor for investors. The next interim report, due on November 23, will show whether the promised growth acceleration actually materializes—and whether the leverage ratio can stabilize. For now, the market appears to be pricing in a more sober reality: a company whose growth story has shifted from promise to execution, with little room for further disappointment.
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