Verve reported another strong quarter, and net sales increased 26% organically while coming in 13% above our estimates. In terms of profitability, the company demonstrated the scalability of the business, and Adj EBITDA came in at EUR29m (21), with a margin of 30% (28). This was 23% above our estimates of EUR23.6m. Adj EBIT (excl PPA) came in at EUR23.2m (16.6), yielding a margin of 24% (22). Overall, we consider the report to be strong, both in terms of growth and margins.

We attended Verve’s Capital Markets Day, which was held on the reporting day. Our main takeaway is that organic growth will be the primary focus going forward, while privacy-first solutions remain the biggest trend in the market, despite Google’s pivot regarding cookie deprecation. It is also clear that Verve will benefit from a market tailwind in the foreseeable future, as advertising spend will follow consumers who are spending more and more time on the open internet compared to walled gardens such as Meta and Google.

In conjunction with the preliminary Q2 figures, we raised our estimates, and since the report contained no surprises, we have made limited estimate revisions based on the full Q2 report. Management stated that July and August have started strongly, and we expect Verve to enter the strong H2 season with good momentum. We reiterate our fair valuation range of SEK18–SEK60, with a base case of SEK40, corresponding to 7x EV/Adj EBIT for 2025.