Vend Marketplaces ASA

OSE:VEND

Earnings Call Transcript

[Jann-Boje Meinecke, executive]

Good morning, and thank you for joining our Q2 results presentation here this morning. As usual, here in Oslo, our CEO, Christian; and our CFO, PC, are ready to present the financial performance and key developments in the quarter. Following the presentation, we will have a Q&A session with a hard stop at 10:00 and analysts can, as usual, call in via Microsoft Teams. And now following the disclaimer slide, I will hand over the word to Christian to begin the presentation.

So Christian, please go ahead.

[Christian Halvorsen, executive]

Thank you so much, Jann-Boje, and good morning, everyone. Very happy to be here to present our results for the second quarter. And it was right after the Q1 presentation in early May that we officially changed our name to Vend, and this was a very important milestone, symbolizing our transition to becoming a pure-play marketplace company. In this quarter, we have maintained a strong strategic momentum. Revenue per ad increased across all our verticals. Transactional revenues continued to grow at a solid pace. And at the same time, our costs continued to decline further.

We also continue to streamline our group structure by divesting assets that are noncore and also some of our venture investments. All that while steadily progressing on our remaining sales processes. One note on that is that all the numbers you will see today are excluding delivery, which have now been deconsolidated due to the sales process that has started. Group revenues for the quarter ended at NOK 1,694 million, that represents a 2% year-on-year decline. However, underneath the surface, the revenue development was indeed positive for our verticals, and that was driven by solid ARPA growth. The decline is a result of a reduction in the other HQ segment, continued soft advertising as well as the strategic decisions that we have mentioned before to discontinue certain revenue streams within Recommerce and jobs in particular.

If we look at our profitability, we saw an EBITDA growth of 25% to NOK 583 million. And this improvement was mainly the result of reduced operating expenses across the group. Let me also remind everyone that we received a capital distribution of EUR 336 million from Adevinta in this quarter. And according to our capital distribution -- capital allocation policy, we have returned around NOK 6.2 billion to our shareholders during this quarter.

Now before going into the details of the quarter, I also wanted to make a few comments on our other stock exchange notice this morning. Vend has, as many other major listed companies hosted so-called pre-close calls that has been considered best practice Investor Relations. And we know that many analysts who follow us have expected and also seen the benefits of those calls. But as you probably noticed, the Vend share fell significantly following our Q1 pre-close calls. And we recognize that we shared some information related to the quarter that should not have been given in those calls. And I just want to say that is Vend's responsibility, and that is my responsibility in the end.

Now the Financial Supervisory Authority of Norway, NFSA has looked into this matter, and we have received a notice that we will be given a violation penalty of NOK 10 million, and related to those pre-close calls in Q1. And yesterday, we informed the NFSA that we are accepting this violation penalty. I want to be very clear that our foremost priority is having the trust from all of you. That's why we're accepting this violation penalty. That's also why we are giving you this information now. And it's also the reason why we have decided to discontinue these pre-close calls as of Q2. And PC will come back to this matter and give some more color on it in his part of the presentation. And we will, of course, also be more than happy to take any questions on this at the end of the presentation.

So now over to something very different. As many of you know, we're moving to one technology platform. That is something that will gradually free up capacity to develop and expand our core. That is also something that enables us to develop and roll out new innovations to multiple assets and multiple countries at the same time. And today, I really wanted to include this slide to give all of you a sense of some of the product development that we are working on, especially related to AI because AI is an area where we see enormous opportunities to improve the product and the matching capabilities and efficiency of our marketplaces, both for buyers and sellers in all categories.

One of the common topics for all our verticals is to use AI to improve matching between buyers and sellers. We're doing that through a number of different relevance and intention-based search and recommendation features using AI. One example is that now in jobs, you can use natural language instead of the more traditional filters and so on to find relevant jobs as a candidate. Another common area is to use AI features to help customers in the ad insertion process, making it both go faster, but also improve the quality of the ads. And related to this, Nettbil introduced a car valuation tool that is something to help sellers get a more realistic price expectation and that is something we know improves conversion in that product.

And finally, I'd like to mention the real estate smart floor plans. This is a feature that uses AI to match pictures in the real estate ad with the rooms in the floor plan. So you can click on a room and get the pictures from that room. And that's not only a great feature for users, but it's also a great example of how we are now differentiating the different package tiers because this is a feature that is only available for the large package tier in real estate.

So with that, let's move to the verticals. And as usual, we will start with Mobility. And here, revenue per ad ARPA, which is our most important KPI continues to grow well across all markets and all segments. And once again, Sweden has the strongest uplift. It's driven by professional ARPA and also exceptional ARPA growth within the private segment. And this was driven by continued success of upselling products, of course, the new value-based pricing model that we introduced late in Q3 of last year as well as packages that we launched before the end of the year.

Norway also delivered strong ARPA uplift. But as we have talked about before, the professional ARPA growth is somewhat curbed by a decline in the revenue from our dealer management software CARWEB, and this is due to churn to other systems. If we were to exclude CARWEB and only count the growth in FINN marketplace as such, FINN grew 23% year-on-year. And this was driven by a quite successful launch of packages in Norway. Also here, there was a strong private ARPA growth, and this was also driven by the introduction of the more value-based pricing model that we introduced in late Q4 last year. Then we have Denmark. Professional ARPA here developed in line with the price adjustments we made at the end of the year, while the ARPA boost that you see here was driven by the introduction of listing fees for cars below DKK 50,000 as well as certain other categories after DBA launched on our common platform.

If we then look at the volumes, we already announced the volumes for April and May as part of our pre-close newsletter on June 20. So that should already be known to you. But -- and let's also bear in mind that Easter this year fell in April compared to March last year, which impacts numbers in a somewhat negative way. But in Norway, we see a volume decline in Q2. This is a result of drop in the subcategories, things like boats, caravans and motorcycles. If we look at cars in isolation, we saw a volume growth for professionals and a slight decline for privates. In Sweden, the Pro volume dropped, and this is mainly due to a change in business model from a subscription to a pay per ad in the category heavy machinery.

And in Denmark, the market continues to perform well. That means that there is a fast sell rate, and this results in a decline in average daily listings for our Pro segment. The drop that you see here in our Private segment was expected, and that was driven by the introduction of the listing fees, as I mentioned before, and that we have also mentioned in the previous quarter.

Then moving on to the financials. Revenues in Mobility increased 4% in Q2. The closing of Tori Autot affected revenues negatively with around NOK 11 million and the split from media with an additional NOK 6 million. And that implies a growth of 7% if you adjust for those factors. Now on the back of the ARPA growth that we just went through, classifieds revenues grew 12%, while the transactional business grew 14%. Advertising, however, continued to decline in the second quarter with a drop of 20%.

Going to cost and OpEx, excluding costs, decreased 2%, and this is despite continuous investments in our transactional businesses. But just like in Q1, the cost in the core business declined, and this was driven by the closing of Tori Autot as well as positive effects from the reorganization that we did last year. I do want to mention that at the same time, we are continuing to invest in our product to strengthen our market position and also our long-term profitability in our Mobility markets. And all in all, EBITDA improved by 14% compared to Q2 last year, and that results now in a 58% margin. If we exclude the transactional models, the margin was 65%, up from 60% last year.

Then let's move to Real Estate. And also here, starting with ARPA. And in Norway, the real estate ARPA grew by 11%. The main driver was the FINN residential for sale, where ARPA increased 7% year-on-year. And this was supported by double-digit growth across other segments within real estate. While residential for sale ARPA continues to be impacted by package downgrades in the second half of last year, we did see a stronger upsell in the second quarter of this year, and that has led now to a steady increase in the growth rate from 1% in Q4, 6% in Q1 and 7% now in this quarter. In Finland, we saw 13% year-on-year ARPA increase, that is slightly better than what we had in Q1. And this was driven by price increases, but also a more favorable product mix between residential for sale and for rent as well as continued growth in upsell.

Looking then at the volume. This quarter represented a more normalized volume level compared to the exceptional growth that we saw in Q1. And with the 3% volume growth, we are now back to, let's say, more normal growth levels that we are used to from the past. But I want to reiterate what we have said also that we may, in fact, face declining volumes in the second half of the year. Then Finland, here, residential for sale volumes grew by 6%. Total volumes declined by 4%, and this is reflecting an ongoing transition of rental listings to a transactional business model through our Qasa service.

Looking then at the financials. Real estate continued to deliver double-digit revenue growth in the second quarter. And the performance was driven by an 11% increase in classifieds revenue, supported by the ARPA growth that we just went through, but also the slightly higher volumes in residential for sale in Norway. Qasa also continued to develop well in Sweden. I can also say that the results in Finland are really promising, and all of this is reflected in transactional growth of 40% in Q2. Now in May, we actually launched Qasa in Norway as well. And I can say that we are really looking forward to see what this product offering can do in Norway and how we can use that to further strengthen and monetize the residential for rent position in Norway.

OpEx, excluding COGS, declined once again in this quarter, and this is despite the investments that we are doing in these transactional models as well as the investments that we're doing in both marketing and product development in Finland. And this gives us, in total, an EBITDA margin of 53% for the quarter. And again, if we adjust for the transactional business model, the margin in the more traditional real estate classifieds business was around 59%.

Moving to jobs. And as you know, we have exited jobs in Finland and Sweden. So this is all about Norway. And I would say the story here is quite simple because we continue to deliver strong ARPA growth, which is really underpinned by our segmented price model as well as some adjustments that we have made to the discount model. Volumes, unfortunately, continue to fall due to a challenging macro environment. And also, again, Easter happened in April this year, and that also weighed somewhat negatively on the Q2 volumes.

Looking then at the financials, we delivered 3% revenue growth in Norway, supported by the strong ARPA trend. We continue to work, of course, with the different initiatives to strengthen our position and our ARPA potential going forward. I mentioned a few at the beginning of our presentation today, how we work with improving the service with AI, both to candidates and to recruiters, which we believe very much in. For jobs, OpEx, excluding COGS, decreased 29%, and this was mainly driven by the exits as well as other personnel reductions in Norway. And this gives us an EBITDA of NOK 172 million, which is up 13% year-on-year, and this is resulting in an EBITDA margin of 60% in a seasonally strong quarter for jobs.

And then finally, Recommerce, transacted gross merchandise value continued to grow across all markets in Q2. Norway saw a 17% increase in GMV and Finland continues to ramp up of Tori Diili following our platform migration last year. And I would say both transactional volumes and average order value are increasing year-on-year in these 2 markets. Then on take rate, we have seen improvement across all markets, except Norway, where we keep a very solid take rate of 15%. Finland, as an example, increased 5 percentage points year-on-year to 16% and this is driven by different product and price changes in that market. Looking then at the financials. Revenues in Recommerce declined 6% in Q2 and the 23% increase in the transactional revenue was offset by a further decline in advertising revenue as well as the decision that we have mentioned before to phase out and deconsolidate certain noncore revenue streams in the vertical.

On the cost side, OpEx, excluding COGS, decreased 9% year-on-year. This was driven by personnel reductions, platform simplification and also marketing costs. I do want to say that we really believe that our Recommerce business operates in attractive markets. These are, of course, markets with multiple players. And as such, the marketing spend will obviously fluctuate somewhat from quarter-to-quarter in this business. EBITDA improved 10% year-on-year, landed now at minus NOK 66 million for the quarter, and the margin improved by 2 percentage points for Recommerce.

And with that, I'll hand it over to PC to provide more details on the financials.

[Per Morland, executive]

Thank you, Christian, and good morning, everyone. Before going into the financials for the quarter, let me give you some more comments on the pre-close calls that Christian mentioned earlier today.

We recognize that some of the information that was shared during these calls should not have been given. We work to keep everybody updated in a prudent, timely and accurate manner. And while trying to help analysts understand Vend better, we made a mistake. We are dependent on the trust of all our key stakeholders, yourself, other financial stakeholders and also other nonfinancial stakeholders.

We have now made a number of decisions and actions to make sure we do just that. As Christian mentioned, we will accept the violation penalty from the Norwegian financial authorities. We are sharing this information with you now at the earliest possible time. We have decided to no longer hold pre-close calls. We have formalized a silent period of at least 4 weeks before we publish the quarterly results.

We will, as we did in Q2, publish a pre-silent newsletter as a stock exchange release with key messages from the previous quarter, also include listing volume data for the first 2 months of the quarter and any other relevant information that we believe we need to share.

We will ensure that the company maintains our information requirements, upholds best practice Investor Relations by continue through adjusting and improving our practice when and if needed. With these changes, we are working to ensure your continued trust.

So to sum up, we regret that we shared information that should not have been shared. We are taking several actions to improve, and we will work hard to make sure that all stakeholders get information in a prudent, timely and accurate manner.

Let's move to the financials for Q2. In total, revenues for Q2 ended 2% below Q2 last year, mainly driven by Other/HQ, partly offset by the underlying growth in both Mobility, Real Estate and Jobs. Total EBITDA ended at NOK 583 million, 25% up from Q2 last year, driven by Mobility, Real Estate and Jobs.

Christian has already covered the performance in the verticals, but let me give you some additional flavor on Other/HQ. The year-on-year decrease in revenues in Other/HQ was driven by a change in our allocation model, and a revenue decline following the split from Schibsted Media. Other/HQ had an EBITDA of minus NOK 114 million in the quarter, slightly lower than the loss of NOK 109 million in Q2 last year. Significantly lower personnel-related costs was offset by lower revenues, but also a NOK 12 million one-off costs related to the Vend rebranding that was executed during the quarter.

Let's move over to cost development in the quarter. This slide shows the development of OpEx, excluding COGS. The cost development and workforce reductions are on track with total OpEx, excluding COGS, declining 11% versus Q2 last year. Personnel costs were down 15%, driven by significant FTE reductions from the downsizing process that we executed last year, but also the closure of our Jobs business in Sweden and in Finland, plus also some effects related to the Schibsted split happening in the first half of last year.

Our total workforce are now around 1,720 FTEs. Marketing costs were down 26% in the quarter, driven by the exits of Jobs in Sweden and Finland, but also some phasing of marketing investments within the Recommerce versus last year. Other costs were quite stable with ending 1% below last year. Overall, this resulted in a 7 percentage point improvement in OpEx, excluding COGS over revenue from 64% in Q2 last year to now 57% in Q2 this year.

Let's move to the income statement. Our operating profit for the quarter increased to NOK 330 million, up from NOK 199 million last year, and this is mainly driven by the improved EBITDA. The fair value of our 14% ownership stake in Adevinta has increased from NOK 19.3 billion in Q1 to NOK 20.0 billion now at the end of Q2. Based on the updated valuation, a gain of NOK 4.6 billion was recognized as financial income in Q2, driven by higher peer group multiples and the weakening of the Norwegian kroner versus euro compared to Q1.

In the fair value calculation, the NOK 4.6 billion gain is partly offset by the around NOK 3.9 billion in capital distribution that we received from Adevinta during the quarter. Our valuation approach and also the underlying financial performance for Adevinta is kept unchanged. In totality then, net profit for the group ended at around NOK 5.2 billion.

Let's move to cash flow. Cash flow from operating activities for the continued operation ended at NOK 313 million versus NOK 174 million last year. The increase here is also driven by the improved EBITDA. Cash flow from investment activities in Q2 ended at around NOK 3.7 billion, primarily explained by the proceeds from Adevinta of around NOK 3.9 billion. And finally, cash flow from financing activities are impacted by payment of dividend of around NOK 1 billion and share buybacks of almost NOK 5.2 billion in the quarter.

Let's move to an update on our capital returns in the quarter. In Q2, we continued to execute on our disciplined capital allocation policy. We returned approximately NOK 6.2 billion to shareholders during the quarter. And this was done through a combination of dividends and share buybacks, fully in line with our commitment to return surplus cash back to the shareholders in a value-accretive way.

We paid ordinary dividend for 2024 of NOK 2.25 per share, amounting to roughly NOK 500 million. And in June, we also, on the back of received proceeds from Adevinta, distributed a special cash dividend of NOK 2.22 per share, also that around NOK 500 million in total.

On share buybacks, the first NOK 2 billion tranche of our total NOK 4 billion program that we announced last year was finalized in February this year and then with the second tranche initiated shortly thereafter. After having bought around NOK 800 million worth of shares, this was concluded in June. And this was to facilitate a faster and larger share buyback through a reverse accelerated book build that we executed in June after having received significant proceeds from Adevinta. And through this tender offer, we bought back approximately 13.5 million shares, equivalent to around NOK 4.65 billion.

And then following this significant distribution of proceeds, net debt at the end of Q2 are NOK 0.2 billion. We didn't do any refinancing activities in the quarter. And also still because we have a significant cash balance, we have deposited NOK 1.6 billion in short-term liquidity funds to achieve a slightly higher return versus bank deposits. Also, in June, Scope Ratings upgraded the issuer rating to BBB+ with a stable outlook and confirming Vend as a solid investment-grade company.

Let me then end my presentation with a reminder of our financial framework and some comments related to outlook.

I want to once again reiterate our strategy, our medium-term targets, and also the capital allocation policies that we laid out in the Capital Markets Day in November last year.

During the first half of 2025, we have made multiple divestments and are well on track on simplifying our portfolio. In addition to selling Prisjakt, we have also divested several of our venture positions. The exit processes for Lendo and our skilled trade marketplaces are progressing as we planned and has communicated before. And as previously mentioned, the process for exiting or selling Delivery is well on track and expected to be launched after summer.

Then a couple of messages related to outlook before we move into Q&A. In the second half of 2025, we anticipate a continued solid ARPA momentum across all verticals. While volume trends remain difficult to predict, we currently see no clear signs of improvements following the mix development that we have seen now in the first half. The exceptionally strong volume development we observed in Real Estate in the first half is expected to normalize over the course of the full year.

Several strategic actions aligned with our simplification agenda will also continue to influence the near-term results. These includes exits from Job in Sweden and Finland, phaseout and deconsolidation of noncore revenues in Recommerce, and also the wind down of our Mobility positions in Finland. Advertising revenues are expected to remain to be under pressure in the medium term following the separation from Schibsted Media, weighing on the revenue growth, particularly in Recommerce and Mobility.

Our cost agenda, as stated, is progressing as planned. But also, as we have said before, the full financial effect of these measures will -- including phasing out the TSA with Schibsted Media, divestments of noncore assets, aligning our support functions and also the platform consolidation will take time to reach full effect.

For the remainder of 2025, we expect our cost base to continue to decline on a year-on-year basis, albeit significantly lower than the levels that you now have seen in Q1 and Q2.

Against this backdrop, and based on the current business and trends and visibility that we see, we currently feel that the current consensus of 2025 for group EBITDA, which currently stands at around NOK 1.9 billion with a range of NOK 1.8 billion to NOK 2.0 billion seems reasonable.

Looking beyond 2025, we remain confident in achieving our medium-term targets, underpinned by monetization and our cost efficiency agenda, continued simplification of the portfolio and the organization and the strategic initiatives to strengthen our competitive position.

And with that, I will hand over to you, Jann-Boje, and let's go into Q&A.

[Jann-Boje Meinecke, executive]

Thanks, PC. So let's have a look how many people have connected this morning here. Lovely day in Oslo. So first up is Will Packer.

[William Packer, analyst]

Thanks, JB. Yes, Will Packer here from BNP Paribas Exane. A couple from me, please.

Firstly, you've delivered some impressive cost control over the last year plus. But in the context of your aggressive margin targets, it feels like there's more to come. Could you share with us your latest thinking on the appropriate scope of your headcount, now we've digested some exits and your initial round of headcount reductions. Is there another leg down?

And then secondly, could you update us on where we are with the Hjem competitive threat in Norwegian property and the spin-down issues we've had at FINN? Are you maintaining your share of listings? And how are package choices being impacted at this point following the package changes you made?

[Christian Halvorsen, executive]

So I can take the Hjem question, and you can comment on the cost side, PC. I can begin with the competitive situation in real estate in Norway. And I would say that there are no changes to the situation there. We continue to grow FINN real estate in a very positive way in terms of traffic development and so on. There are no changes with regards to our share of listings. We basically have all homes for sale on FINN real estate in Norway.

And to some -- and there are no changes either to, let's say, the package distribution among the different tiers. And to some degree, I would actually say that the fact that there is now competition in the Norwegian real estate market is something that actually highlights the real value of our service because it's so clear that we deliver such enormous value to home sellers. So I think that's -- we are in a good position.

[Per Morland, executive]

And thanks on your feedback and the questions when it comes to costs. And as you also stated, the main driver for cost efficiency in Vend is basically controlling and managing our number of people.

So we have taken multiple steps over the course of the last 12 to 18 months to strengthen our approach. And you also see that in the results that we -- I mean, at the November CMD, we were closer to 2,000 people, and we are today 1,720. And we sit on a weekly basis, assessing any recruitment, any extension as part of our operating model for now.

When you're looking forward, we have been quite clear that over time, we will be even fewer people. That will likely happen a bit sort of gradual if you look during the next few years. And you should not expect any significant changes for the remainder of 2025.

And this is basically due to two key things because there's two key levers for us to further reduce the size of the organization. One is, as you mentioned, the divestments and selling of assets. And even if we are progressing well and disclosing this, it takes time before the actual assets are sold and we can actually scale down our support function correspondingly. But rest assured, we are doing what we can to prepare for that time to happen. But then we are talking more '26 and beyond and not '25.

The second sort of key lever is our platform consolidation, which is running at peak capacity, I would say, at the moment, and we're preparing the Blocket transition later this year, and we will also then finalize the platform consolidation during 2026. So the full financial effect of that, we will only see from a cost perspective in '27.

So I think that's some -- I'll leave some comments on your question.

[Jann-Boje Meinecke, executive]

Thanks for the good questions, Will. And then next in line is Christian from Arctic.

[Christian Nordby, analyst]

So a question on Recommerce, which growth is tapering a bit off and especially in more mature markets like Norway. And to me, it looks more and more unlikely that you will reach EBITDA profitability within '27, '28, and you also have quite a high R&D level here. So just want to hear your thoughts on how long we are -- you are willing to kind of keep trying and if there's anything we're missing from an outside view to see the potential for a positive cash generation here. Is there or any larger potential cost reduction we should think about?

[Christian Halvorsen, executive]

Well, good question. I would say we are remaining confident in the development of our Recommerce business and the prospects of that and that it can reach profitability within the time frame we have indicated. That said, it is clear that there are some near-term headwinds. We have, as we have said before, decided to discontinue and deconsolidate certain revenue streams. That is putting a pressure on the growth right now as well as the Advertising, which is primarily impacting Recommerce, of course, also Mobility, but Recommerce is even harder hit.

What is required to reach profitability is that we continue to grow transactional business. That is the fundament of it. But we also need to continue to have really strong cost control. And then I also want to say that, of course, for Recommerce, the platform consolidation is really, really important. And now with the consolidation of Blocket that is planned to happen later this year, we will actually have all Recommerce assets on one platform, which is very important, both to be able to innovate fast, but also to take out synergies.

[Jann-Boje Meinecke, executive]

Thanks, Christian. The next in line is Pette.

[Petter Nystrøm, analyst]

Two questions from me. Firstly, on the Advertising revenues. Looking then on your internal initiatives and organizational ramp-up, how is that developing? And can you share some insight on that?

[Christian Halvorsen, executive]

You had 2 questions or did you only have one?

[Petter Nystrøm, analyst]

Yes, I can take the second one right away. And that goes on the private car volumes in Sweden. It's down 14%. Are you seeing any material change there in the competitive landscape? And can you give some more flavor on that one?

[Christian Halvorsen, executive]

Yes. So on the last one first, the private volume in Mobility in Sweden is primarily driven by subverticals like caravans, motorcycles, boats and so on.

And when it comes to Advertising, I would say, I mean, we are in a transition from the split from Media. We have rebuilt the sales capacity to where we think it will be. It will never be the same sales capacity as we had in a combined entity with Media, but we have the sales capacity that we want.

So right now, the task ahead is to rebuild, let's say, the commercial relationships with customers, with agencies and so on and really inform the market that they now have to buy Vend and Media separately. And that actually takes some time.

On top of that, we are also working on developing, let's say, more marketplace proprietary advertising solutions related to customers who are on our platforms, it could be car dealers, OEMs, banks, insurance companies and so on, but that is a little bit further down the road.

[Jann-Boje Meinecke, executive]

The next line is Ed Young. Ed, can you hear us?

[Edward Young, analyst]

Can you hear me?

[Jann-Boje Meinecke, executive]

Yes.

[Edward Young, analyst]

Perfect. Two small ones, please. First of all, could you give an update on the competitive situation in Finnish real estate? It looks like maybe that's come off a little bit. And I wanted to see a comment if that was market level or how you see the overall listings and engagement versus your main competitor?

And the second is on your AI innovations that you highlighted, when it comes to Recommerce, could you give any color on what proportion of listings are now generated using AI or any kind of color in that regard?

[Christian Halvorsen, executive]

Yes. So first, on the competitive situation for real estate in Finland. We are very happy with the development there. We are improving on all the metrics that we follow like awareness, top of mind, traffic and content. It is the case that the competitor now, Etuovi, they are launching a new campaign in the market. But we are very satisfied with the way we are holding up and developing in Finland. And if you look into this market, I would encourage you to look at region by region. For example, in the capital region, Helsinki, we are -- which is the most important region, we are by far the strongest player.

Then on AI and Recommerce, One of the things I mentioned in my introduction is that we now have AI features that help people post their ad. And it's features that help you take good pictures, for example. It's also features that based on the pictures you have taken will actually create the ad for you with the text, with the heading, it will put it in the right category and so on. But these features were launched very recently. So it's a little bit too early to go out with numbers on how many people are using those features. But we see good pickup and we see good results from those features.

[Jann-Boje Meinecke, executive]

Thanks, Ed. Then next is Markus from SEB.

[Markus Bjerke, analyst]

So two questions for me. The first one is your comment on full year EBITDA 2025 in the range of NOK 1.8 billion to NOK 2 billion seems reasonable. In H1, you have now NOK 1.0 billion and ARPA looks very good for the second half. Costs are also developing positively. You had some one-off costs in H1. So isn't it a bit conservative? Or can you please elaborate on your thinking there?

And secondly for me is on the phasing of ARPA in Mobility. It was a bit slower than maybe some had anticipated in Q1. Now in Q2, it seems to accelerate. Can you elaborate on how this is expected to progress through the year with the price changes that you did earlier in the year? That's the one for me.

[Per Morland, executive]

Yes. So I'll start on the full year outlook. Yes. So I think you need to break it down. If you look at the revenue side, as we have commented on, as you also mentioned, we expect ARPA momentum to continue also in the second half. I think the unknown is still that we still see a quite challenging situation in totality on volumes, and there's no indication that, that's going to turn around. Of course, we need to see what -- how things are developing during the second half. And also remember that some of the effects that we have talked about earlier today also will influence the second half on the revenue generation.

And then if you look at the cost, as I mentioned in my presentation, the first half, you get full effect of all the initiatives that we executed last year. And in the second half, even if we will see a continued reduction, it's going to be in a significantly different level than what you have seen in the first half.

And then, of course, we don't know exactly what you all assume as part of the consensus. But it seems to me at least that some of the beat now for Q2 is more phasing, right, that we didn't assume such a big cost reduction in Q2. So it's more a phasing between the second quarter and the second half more than a sort of a full overperformance for the full year. But then let's see how things develop in the coming months.

[Christian Halvorsen, executive]

Yes. And for the Mobility ARPA, I don't think there is so much to say about it. I think you can expect the same trend in a way, not a big change. We are planning to make some additional adjustments and price increases for Pro in Denmark in the second half, but I wouldn't count on any, let's say, big trend changes in that area.

[Jann-Boje Meinecke, executive]

Thanks for the question, Markus. Then we can go to the next one, who is Giles from Jefferies.

[Giles Thorne, analyst]

My first question is on the Qasa launch in Norway. You've been bundling Qasa with FINN. And this is obviously the first time we've seen you do this because you do property advertising in Sweden. So can you talk about the logic here and the extent to which you can influence competitive dynamics and deal with some of the challenges you're getting from here? I'm assuming the answer is no because it's a private landlord product, but any color there would be useful.

The second question is back on Recommerce profitability. And it's an open question, but it would be interesting to hear how you reconcile your current losses with what we're seeing out of Vinted who's currently printing 20% EBITDA margins. I appreciate you're not here to talk on behalf of Vinted, but I'm assuming you know the business well and the differences in what you're doing that leads to the very big difference in profitability.

And then the final question was for Christian. Maybe these are all 3 for Christian. But certainly, the last one is, you've been quoted in the past week or so in interview, Christian, as being inspired by Hemnet, which is a very interesting word to use for a peer company. So I'd be interested to know what inspires you about Hemnet?

[Christian Halvorsen, executive]

Yes. Good questions. First of all, the Qasa launch in Norway is completely unrelated to the Hjem situation. Qasa only operates in rentals and Hjem is not operating within rentals. The whole idea behind Qasa is that it is a better business model, the transactional model captures a larger share of the rent, so to speak. So moving from a listing model where you capture a few hundred kroners on a listing to a model where you capture a percentage of the ongoing rent is a better model. And that's why we have launched it in Sweden and Finland and now also in Norway.

When it comes to comparison in Recommerce with Vinted, I would say that I think Vinted is a great example in showing the potential in this market, right? It's growing. It really shows that this is an attractive area and an attractive business. Of course, they are operating in many more markets than us in different markets also, but they are also operating on one technology platform, which is a scale game in this vertical. So that is also why I highlighted the importance for Recommerce to move to one platform and that being a big driver of reaching profitability.

Then the last question was about being inspired by Hemnet. I'm inspired by all our peers. And I think this is a great thing with the marketplace business that you can actually look around you. Oftentimes, you're not a direct competitor and you can learn from each other. And I think with Hemnet, they have been really good at really capturing the value in the real estate market, being good at executing that. And I think that is quite inspiring and relevant for our Norwegian business.

[Jann-Boje Meinecke, executive]

Thanks, Giles. So we have 5 more minutes. I can see 2 more here on the queue. So next one is Ole Martin.

[Ole Westgaard, analyst]

Sorry for getting back to this cost development. In Q1, I believe you guided that the cost decline was sort of set to ease for the second quarter. That didn't play out. What surprised you in a positive way here?

[Per Morland, executive]

Yes. So I don't think I said to ease in the second quarter. I think we said that going forward, you will not see the same decline. I think we reported 9% and when we're commenting then on the year. So we are not sort of seeing any big surprises in the second quarter that we didn't expect, but it's more a sort of a second half versus a first half issue.

I think also worth mentioning that if you look at our numbers, we are operating with relatively low marketing costs in the whole first half, and that will vary quarter-by-quarter depending on campaigns and competitive development and so on.

[Ole Westgaard, analyst]

And then a second question, if I may. On Real Estate in Norway, have you made any price changes to the model lately?

[Christian Halvorsen, executive]

No, we have not.

[Jann-Boje Meinecke, executive]

Thanks, Martin. And then we have Silvia this morning here.

[Silvia Cuneo, analyst]

You just answered one of the questions that I had on marketing, but the other question I wanted to ask is a bit more broadly on the margin progression. You are already at the medium-term targets you provided for 3 of the segments given the impressive improvements on the costs. So can you discuss how you intend managing margin versus growth in H2 and into 2026? Just wondering what are the priorities and things that you can control differently from the Advertising revenue trends perhaps. So just wondering if you could help us think about the revenue growth for this year and next in comparison to the margin trends that have already improved meaningfully.

[Per Morland, executive]

I can try and then you can support if you want to share some more. So I think it goes for all the verticals, the 3 that you comment on here and the medium-term targets. As we said, we reiterate our -- those targets and our ambitions to reach that, and we are well on track.

When we're looking at the margin, if you go back to our Capital Markets Day last year, it's a combination of significantly growth, a lot on the back of ARPA monetization that we now have shown over the last couple of quarters that we are developing well on. That will continue. And then, of course, that will help us to continue to improve our margins.

In addition, we are also capturing that growth without the corresponding increase in cost. And we have commented on what are the key levers to become more efficient and operate with lower cost. And the combination of those two will help us both on a total group level, but also influence the margin development in all the verticals.

I don't think it's -- we have not commented a bit on 2025 expectations, and then we have the medium-term target, which we have said is kind of '27 time line. And I think it's too early to go into more details around '26 and the expectations. So I think you work with that framework, and that should sort of carry you from today until 2027 in an okay way.

[Jann-Boje Meinecke, executive]

Okay. Thanks, Silvia, for a good question here. And that concludes our Q&A session for today. So I think thank you from us, and have a good summer.

[Christian Halvorsen, executive]

Thank you.

[Per Morland, executive]

Bye-bye.