Growens S.p.A. (0MU.F) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the first half of 2026 discussion call. Today, Mr. Monfredini, our chairperson; and Mr. Gorni, our CEO, are with us, and they will proceed to comment on the data. Please may remind you that this call is being recorded, and it will be available on our website very soon. And that you can send any questions that you have at our own Investor Relations email address, investor.relations@growens.io. Thank you very much for being here. And I would leave it to Matteo now to comment on the most recent data. Thank you very much.

Thank you, Micaela. Okay. Good afternoon, everyone, and welcome to Growens' investor call to discuss our consolidated results for the first half of 2026. Yesterday, 15 September, our Board of Directors approved the consolidated half report as of 30 June 2026, and short-term work, we published the related press release on our website. Today, I would like to walk you through those figures in a bit more detail, starting from the income statement. So let's start with revenues. Consolidated revenues for the first half of 2026 reached EUR 40.3 million, up 11.5% compared to EUR 36.2 million in the same period of 2025. This is a market acceleration compared to the growth rates we have reported in recent periods. And it's worth noting that it was driven by both of our business lines together and rather than by an one alone. The SaaS component that led by Beefree grew by 12% to EUR 7.7 million, representing about 19% of total revenues, the CPAs component, our Agile Telecom business unit also grew by 12%, reaching EUR 32.2 million and accounting for roughly 80% of the total. Other revenues were essentially marginal at EUR 0.4 million, down 20.5%, reflecting the reduction of some nonrecurring items compared to last year. Foreign revenues amount to EUR 30.3 million or 76% of total revenues, growing 17.4% year-on-year while recurring revenues reached EUR 7.7 million, up 12%. Moving down in the profit and loss. Gross profit reached EUR 10.5 million, up 10.3% with revenue incidence of 26.1%, broadly stable versus last year, 26.2%. Cost of goods sold grew 11.8% to EUR 29.8 million, essentially in line with the increase in CPaaS traffic volumes. On the operating cost side and led to highlight that total operating expenditure actually decreased by almost 4% to EUR 9.3 million from EUR 9.7 million in the first half of 2025 as -- even as revenues grew more than 11%. This reflect the cost discipline we have been focused on. Sales and marketing costs grew by 5.8% to EUR 3.6 million, continuing to support the Beefree commercial growth. Research and development costs, including both OpEx and capitalized component decreased by 7.1% to EUR 3.25 million. With the OpEx line down 11.6% and capitalized development down 2.9%, while general and administrative costs decreased by 8.3% to EUR 4.2 million. As a result, consolidated EBITDA turned positive at EUR 1.2 million or 3% of revenues, a strong turnaround from the negative EUR 0.2 million we reported in the first half of 2025. This is really the headline of today's results. For the first time, in a while, revenue growth and cost discipline are working together and both of our business unit contributed to the improvement, as I will detail in a moment. Depreciation and amortization amounted to EUR 2.26 million, up 7.6%, mainly reflecting the growth in research and development amortization, which reached EUR 1.9 million, up 11.2%, consistent with the capitalized development investment we have made in Beefree in recent years. IFRS 16 related amortization was broadly stable at EUR 0.26 million. Early before interest and taxes improved significantly to EUR 1.1 million from negative to -- excuse me -- sorry, to negative EUR 1.1 million from negative EUR 2.3 million, an improvement of almost 54%. Net financial income more than doubled to EUR 0.50 million from EUR 0.07 million benefiting from the return on our liquidity. As a result, earnings before taxes improved by almost 60% to negative EUR 0.9 million from negative EUR 2.2 million. Taxes for the period amount to approximately EUR 0.45 million combined, of which EUR 0.32 million of current taxes and EUR 0.12 million of deferred taxes. As usual, these allocated figures are derived from the aggregate of the individual taxation of each legal entity group. So consolidated net results show a loss of EUR 1.36 million, improving by 42.7% compared to the EUR 2.37 million loss recorded in the first half of 2025. Of this, EUR 1.32 million per case to the group and about EUR 43,000 to minority interest. Let's go a bit deeper into the individual business unit. Agile Telecom posted revenue of EUR 32.6 million, up 13% and EBITDA of EUR 1.4 million, up 21.3%. This confirm the validity of the strategy we have been posting, focus on operating profitability alongside growth. Beefree's revenues reached EUR 7.6 million, up 7.4% in our returns or 9% at constant exchange rates. So the drag from unfavorable foreign exchange was limited at this time at less than 2 percentage points. Beefree EBITDA was negative by EUR 0.46 million, an improvement of almost 67% compared with a negative EUR 1.4 million reported in the first half of last year. Annual recurring revenue reached USD 18.4 million as June of 2026, up from $16.9 million up earlier. We remain on track towards our target of positive cash flow for Beefree by 2028 as we continue relocating the research and development resources towards the opportunity created by artificial intelligence in content creation, both for designers and increasingly for AI adjacencies. Turning into balance sheet overview. Total assets amounted to EUR 60.1 million up to -- up 6.6% compared to EUR 56.4 million at the end of 2025 with a total equity of EUR 30.5 million, down 3.2%, mainly reflecting the period's net loss. Noncurrent asset due to EUR 22.4 million for one, within this intangible asset amounts to EUR 7.2 million, up 3.8%, while goodwill is unchanged at EUR 8.5 million. Current assets grew 6.3% to EUR 37.7 million. And in this, trade receivables decreased 11.7% to EUR 10.9 million, mainly reflecting Agile Telecom connection dynamic, while cash increased 68% to EUR 3.6 million. On the liability side, current liabilities increased 17.9% to EUR 24.8 million, mostly explained by an increase in short-term payables from EUR 3 million to EUR 6.3 million, while trade payables actually decreased to 4.5% to EUR 11.2 million. Okay. And now finally, the consolidated financial position as of 30 June 2026 that exceed EUR 9.2 million in cash, decreasing that so the net position of over EUR 11 million recorded in the -- at the end of 2025. This variation is mainly explained by the increase in short-term bank financing I just mentioned, together with the continued investment in the capitalization of research and development costs, mainly related to Beefree and by the usual seasonal dynamics in net working capital. Cash and equivalents -- cash and cash equivalents exceed EUR 16.7 million, up 8.4% compared to year-end 2025. So to sum up, the first half of 2026 marks a turning point in our group profitability, revenue growth and cost discipline work together to bring EBITDA back into positive territory, and our balance sheet remains solid enough to let us keep investing in innovation and in the quality of our product with full autonomy. And that's all from my side. I will now hand over to Nazzareno Gorni, our CEO, for an update on the main business development. Thank you for your time.

Thank you very much, Matteo. And I will leave it now to [indiscernible]. And I would ask you specifically to comment on B's growth path and predictions as per what is shareable today. And as per the different product lines, what B is made up from. Thank you very much.

Thank you, Michael. So starting from Agile Telecom, which is quicker. We don't have much updates since as you know, the business is very mature. The industry is very mature. There is no any technology or business disruption. And so we are just continuing the business as usual. Within Agile, actually, we have a new project that we are exploring. It's a new platform that could enable Agile Telecom to even increase the marginality addressing smaller clients. but this is something that we are still working on, and we cannot share more at the moment. For Beefree, of course, the main impact this year is about AI. AI is changing a lot from different angles. First of all, is changing how clients are looking for new solutions. It's changing also the barriers to enter our market. So developing software is much easier now. There are many different solutions that enable designers to create e-mail templates and learning pages from very different tools now. And so -- and also on top of that, this uncertainty makes our prospects, especially on the SDK side, more hesitant to sign new contracts and to start new developments with our Beefree SDK. So in this context, of course, the impact is around our growth that is not as high as in the previous periods, in previous years. Still almost double digits. So it's not bad, but it's not the one that we were expecting, and we forecasted. So what we are doing about this? First of all, what we have already done, we rebranded Beefree up as RG Studio later last May, at the end of May. This is also a strategy that is pushing RG Studio, the new product, more towards the mid-large enterprise clients. And this is a way to face the market change. Since casual users that are just -- they just need to create 1 template and then they're happy with that. Probably today, are going to use other systems, free systems or LLMs GPT Cloud and that provide a good enough solution for them. While large enterprise clients to also require more sophisticated solutions with more advanced use cases with personalization accessibility compliance requirements and workflow approvals and all those requirements translate in still interesting demand for our MG Studio solution. And that's why we are -- we completed this rebranding and this shift towards the higher tier. On top of that, we also implemented some changes in our organization, both the how the team is organized, but also we are going to change our go-to-market leadership. We introduced already -- we already appointed a new CRO, Customer Revenue Officer, and we are looking for a new [indiscernible]. And so this change, I hope we have been reshaping our go-to-market approach. We also completed the repricing of our Beefree SDK a few months ago, is still an ongoing process because for enterprise clients, it takes longer because they may have a contractual constraints or longer contracts, so it could take longer. And of course, we released and finally, general availability since September, the MCP, so model contact protocols that allow other agents are LMs to use our own solutions without accessing the usual interface. This is something very new, and this is free for our STK clients. But as long as they use this MCP, this will trigger new API calls, and we charge for those API calls. So we expect an increase in this kind of usage.

Thank you very much.

I am not done. This is a -- I'd like to share also something about what we are going to do. So we are now working on the repricing, pricing packaging, of the RG Studio because we see there is a value that we could gather from a different price and packaging. And so we are working in this quarter and the next quarter, and we hope to release the new price and packaging beginning next year. And in terms of strategy towards this new AI world, our strategy is to -- since clients are now using different tools and the path to achieve our final outcome always means jumping from one tool to another depending on the task, translation, generate text, generate template validation. So it's not linear anymore. And our position in this new world is to be available and usable in any possible overall flow combination, which means that our editor will be available on the major LLMs. And on this project, we already have a bit working. And we will allow agents with our MCP to use our tools without UI -- usual UI. We also believe that the final manipulation is still important. So anyway, in any case, if you create something outside. At the end, if you want to adjust and make minimal adjustments, I believe this is a capability that still is important to have. And this is where we are also investing. So to improve the user experience for this final manipulation phase. And on top of that, we are developing more enterprise features towards better governance, also in a world where AI agents and humans are collaborating together to traceability to compliance to have compliance to set barleys for the AI agents. And then -- and the one thing that we already released in this new enterprise features set is the passion control, enterprise passion control that allow our STI client to have more control over the new updates that we are releasing. That's it. Thanks.

Thank you very much again. I think that we covered pretty much all the questions that came in so far but for one issue, which is, can you comment a little bit on Growens' position in M&A, be a seller or buyer? Thank you so much.

Yes. We don't have any active M&A process going, both sale side or by side, but we maintain an opportunistic approach. So we are open to evaluate opportunities as they present themselves. I also see a question about Agile Telecom. And -- so the question is if we are willing to sell Agile Telecom business unit? And my answer is that this comes down to evaluation. Agile is growing, both on its top line and its margins. But the industry is broadly contracting. And so it's difficult to have a good evaluation with a strong multiple in this kind of industry. And so we are not going to sell just to simplify our investment case, and we remain opportunistic until we get a good evaluation.

And thank you very much, Nazzario. I see there's a further question, but I really know whether we can allow discussions over here. I would kindly invite you to just drop an e-mail to the Investor Relations platform e-mail. Otherwise, I can try to -- hello, the question. I can't -- okay, there we are. There we have them. So a lots and topics. So first question is about Beefree's ARR. As a whole, it reached $18.4 million as of the month of June. And can you discuss on a quality or a quantitative basis, you just now. what level of ARR expansion is required during the second half of the year to achieve the target that was disclosed within the guidance calls of $21 million to $23 million? And what do you expect that acceleration to come from?

Yes. So the gap to get to the target that we shared is less than EUR 2 million in ARR, which means an acceleration in terms of both average customer value and so expansion and new business. We have put in place some initiatives like the repricing and the new go-to-market strategy and we are going to release those initiatives in the last 2 quarters. And we hope that this will allow us to get to the target. Of course, this is something that is challenging, of course, because the context is challenging, not only our regular go-to-market activities, but it's also the market that is challenging. But we are doing whatever it takes to get there. And so those are initial shares. So the new GTM leadership and the new GTM initiatives that we are putting in place and the repricing.

Thank you very much, Nazzareno. And after that, we have a few questions about the competitive scenario. Can you give a bit more context about competitive scenario? And specifically focusing on whether scenario conditions are different for small players from what they are from bigger players like FICA.

Yes. So today, it's much easier for anyone developing software to develop something good enough in order to have at least e-mail that has not measure issues in terms of rendering. So which means that you can see that e-mail on a device, any net client and Chase. How often the result is not as good as the one that we are providing, but is good enough in many use cases where probably there is no much attention on e-mail rendering or accessibility. Those kind of tools are evolving quickly. Camber, for example, is an example of a tool that now supports in May and 2026 is the first year for Camber for us to support emails. But also if you ask Claude to develop an e-mail template now is possible with some challenges, but it's possible. And on top of that, there are many, many start-ups that provide sort of service that allowed you to goes from a prompt to an e-mail template we just in a few clicks. Of course, the final results are not suitable for mid-large marketing teams with strict brand compliance. And some is not very flexible, but still is being good enough for smaller players, which means that the original approach we had with Fino and the Primo strategy is now working less and less because for this kind of basic usage, there are many, many alternatives.

Thank you very much. One further question on the integration of AI. So can you comment on what extent is the AI Power capability of our tools improving the key operating metrics? What is the expectation towards that? Are times mature enough? Or can you disclose at least a qualitative view on the expected return on the AI investment, please?