naoo AG (NAO) Earnings Call Transcript & Summary

Ladies and gentlemen, we warmly welcome you to the Earnings Call of the Full Year Figures of 2025 of the naoo AG. Please note that this call is being recorded, and your participation in the call implies your consent to this. Now, I am pleased to welcome naoo's Strategic Advisor, Dr. Thomas Wolfensberger; and CFO, Kevin Dragon, who will guide us through the presentation in a moment, after which we will move over to a Q&A session. Having said this, I'm handing over to you, Dr. Wolfensberger.

Thank you very much. So my name is Thomas Wolfensberger. I founded naoo in 2019. I have built and run a property company with a capitalization of EUR 1.1 billion in the peak in 2020 -- end of 2022. I have founded a fintech company that made it to a global presence with clients everywhere, 120 employees, and I used to be a consultant in 4 technology companies. And I authored a book about virtual communities, which is the background of why I started naoo. Kevin, do you want to introduce yourself?

Yes. Hello, everyone. My name is Kevin Dragon. I'm the Chief Financial Officer of the naoo Group, including Kingfluencers. I was heavily driving the group consolidation, the M&A integration and capital markets reporting since I have started. I led the IFRS 1 adoption, which I'm highly thrilled of getting more insight into. And I have a background in financial planning, controlling and group finance, and I'm very happy to share some more insight today.

Fantastic. So let me introduce you to the naoo Group. So we are the #1 creator marketing platform in Switzerland with the brand Kingfluencers. We have 3,800 creators. We work with about 300 brand clients we constantly run campaigns for. Our combined network reach of all the influencers that we represent is about 175 million followers. So we have immediate access to distribution and sales and content. naoo is the local social media activation platform. It allows people to have a social discovery experience. It connects the real world with social media. It fosters store visits, and it leads to verified ROI for retailers. We're going to get into the details of that. We're in a very strong market position. So there's a local marketing market of CHF 15 billion to CHF 30 billion on a global scale and the DACH influencer market is also growing at a very good rate. naoo as a platform has seen 160,000 total downloads, all of them in Switzerland so far. We have about 5,500 monthly and about 1,200 daily active users. We have a proven and highly scalable business model consisting of 3 pillars that we're going to get into, creator-led revenue, then the business merchant SaaS revenue and the programmatic advertising revenue. We have a very execution-focused team of 41 employees. We'll get into some of the people that work here. And we are publicly listed on the Dusseldorf Exchange since December 2024. And yes, let's dive into some of the history of naoo. So we started in 2020 with the first release of the app and developed the app, the first features were really the profile and feed map, point system, et cetera. Then we had a phase of making it more usable, more performance, faster, et cetera. Until the end of 2024, we introduced a graph database at that point. And we reached Android parity. We had these 2 platforms. And then in 2025, really everything accelerated a lot because during that year, we acquired Kingfluencers, the biggest influencer marketing agency in Switzerland and one of the biggest one in the German-speaking Europe. And also, we introduced AI into everything that we do. We'll talk about that. And now it's really about scaling. So 2026 and onwards are the years where we're going to scale our offerings. You can think of naoo as a combination of really stable income with media and platform upside. So the stable part of the income are the influencer marketing, creative media assets that were -- that we have on the left. In the middle, you see the naoo business solutions. So those are the solutions that will enable retailers to advertise their products and services in a social media context with loyalty, et cetera. We'll talk about how that works. And then naoo programmatic platform advertising is a cooperation with the Google Ad Manager and where we automatically monetize our ad inventory. Here's a slide that very effectively explains the positioning of naoo as a platform. It's a local activation platform with a social media interface. So it looks very similar to some of the social media apps that I'm sure you all love so much, and naoo looks a little bit the same, but it has some features that these platforms don't have. It's geared towards activating a local user base to perform specific tasks such as going into a shop. Then here, we would show a live demo of the app. Really, we have grouped this live demo in 4 parts. Unfortunately, this system doesn't allow us to show it live. So normally, you would see user profiles, content, search and chat. These are all functionalities that the naoo app offers. And on the right, you would have polls and points and games. And then the next part would be to show how we have -- how we store the points in users' wallets, how you can trade these points into vouchers of our partners. And on the right side, you would see how businesses can create offers in the naoo business app that are then visible to the naoo users. So it's one AI platform, and it's probably from today's perspective, 4 distinct different revenue engines that we can think of. So we started talking about naoo programmatic. naoo programmatic is really the automatic, let's say, monetization of the ad inventory that goes without the sales team, et cetera, that's programmatic. It's also, let's say, the lowest value monetization possible for us at this point. You see a CPM. This is a cost for 1,000 impressions. We estimate between CHF 5 and CHF 15 for 1,000 impressions. Then on the right, you see naoo business. This is a 2026 initiative. It was just successfully launched. We just had the first client live with naoo business literally just now, where we monetize the intention to go shopping. So we give people deals, places they can go shopping with a feed native local discovery with incentives. So they can see where a shop is on the map. They get points if they go and visit that shop, if they buy the product of this business. So this is a perfect example where we blend decentralized, let's say, a decentralized question and we solve that decentralized problem for businesses in a really unique way. We'll talk about this a little bit more. We have other use cases that are the same nature, so decentralized problems such as property and jobs. And as we solve these increasingly valuable sort of problems, you see that the CPM is moving upwards. So we -- while we estimate that in our programmatic, we're looking at about CHF 5 to CHF 15 per 1,000 impressions, this number goes up as user intent moves upwards. So the relative user value is on a relatively steep curve in the next few years as we progress through these verticals. For now, we're going to talk about the naoo business use case, which we're rolling out right now. So social media works very, very well for global brands, but not so well for local retail. Why is that? 45% of retail media spend goes through social channels. That is a brand-new study that we've looked at. Yet only 10% or less than 10% of all these social media interactions they lead to a physical action, even though people would be 4x more inclined to engage with local rather than global content. So social media works for global business. It doesn't work so well for local business, and we try to tackle this problem. Because there's an experience gap, a social app should give you access to daily rewarding opportunities as you roam through a city. We imagine -- we reimagine social media as a local activation infrastructure where you qualify people's attention, you turn that attention into a clear intent and you convert that clear intent into visits and value. This is exactly what we're doing for our clients in our business. There are 3 important components if you want to act as a local activation platform. So one is you need a really powerful social media user experience. B, you need incentives that turn attention into clear action. And these incentives, they come in the form of gamification. So we use games, points, all kinds of incentives to get people to be interested in what our clients have to offer. And then the last one is the local discovery with the real-world conversion. So actually, these are the shops that put their products and services onto naoo. They give incentives when people come to the shops. And like this, we can make sure that we have this transition from the user experience into the, let's say, attention into the conversion. There are 4 very important layers that we need in order to do that, and that has taken us a few years to build. So social media access layer, very important, AI-driven relevance engine because we need to match what users want to what is -- what there is in the real world. And that's why AI is extremely important. Incentive engine is very important because we need to -- we know that we can trigger action much more easily if we have something to offer along the lines of gamification. And then the last one, the last layer is the local monetization layer where we turn visits into measurable revenue for our clients. So with this, I hand over to Kevin.

Thank you, Thomas. So let's go into the operational update. I want to give you some insight on what we've been working on in the past year, what we've already managed to achieve. We were building systems through reporting and infrastructure, mainly to be able to have a strong foundation. We built a whole new ERP system covering all organizations within the group based on Abacus. This enabled us to build more streamlined processes in the operational -- we built a whole CRM system that integrated into the CRM as also based in Abacus, enabling us to use all the information we have to power it out much, much stronger and to focus on actually performing. We're all here due to the IFRS reporting in our earnings call. So our IFRS reporting, one of the big achievements of the past year -- of our past financial year, we covered and started with the initial 1st of January 2024, covering all 3 reporting dates up to end of this year. We also focused a lot of automation and on project and campaign management. This mainly on the Kingfluencers structure, where we enabled the already strong foundation to be more streamlined and more business ready for any scaling initiatives we are driving. That said, let's go into the revenue pipeline and what we have developed. First, with the integration of Kingfluencers, we enabled a big already strong revenue driver to be more stable and more growing. We are targeting larger tickets. That said, we're going for agency contracts, recurring businesses that work with us as budgets for social media and influencer media is growing. The pipeline consistency due to all our measures, we managed to get to an 80% win rate, raising that one from around 71% to 80%. So all our measures in the past year are actually showing the results we are trying to achieve and even outgrow. Moving over to the naoo business pipeline as we are now in the active build. Thomas already mentioned it earlier, we are now onboarding business companies. We're in active talks. The foundation is set. We are looking on strategic partners, how we can grow and increasingly widen our business base. So we have direct talks underway with larger enterprising to structure their individual requirements that exceed basic requirements of small- and middle-sized businesses. And as already mentioned, we had a lot of it going on in the past, building our foundation also on the platform with the AI structure. The AI structure that we built covers GAIA, Moira, ModelKnife, METIS, Hermes, all different aspects of an AI-driven platform. With these, we can tackle different aspects, as also Thomas already mentioned, is it with the business, our main focus and our subsequent focus with jobs and real estate, where the foundation of AI is required and gives us the edge over what we're doing. So looking at the past and the last year, we launched GAIA in June 2025, our data lake house. We launched the naoo search in December 2025, giving it much more of a feel on how we perceive all the searches and the results that are provided through the search. And for us, highly exciting, we launched the Generation V in February 2026. So everyone on the app will now know our new Model V that is live and running. And highly thrilled the 2026 Ad Manager rollout, which we will provide within the Google Ad Manager and be able to streamline ads to our platform. Overall, all these measures have shown that feed impressions approximately doubled after the Generation V launch. And now after -- as you can see here, an already increasing percentage after all the measures we have launched up to the Q1 2026. We have more feed impressions, up 69%. We have more follows due to the recommendation algorithm with up 120%. We have more post likes up 42%, and we noticed or measured more comments up to 81%. So all in all, very, very promising, very excited for us to see how we have built the foundation. We rolled out all the new tech to get to the new numbers. Right. From the operational update, I would like to go into the financial highlights of the financial year 2025, covering the IFRS report of our first adoption. If we look at the key metrics of 2025, we have reported group revenue of CHF 6.05 million, that is up from CHF 0.11 million in 2024, mainly due to the acquisition of Kingfluencers and the incorporation of 9 months of its revenue. The gross margin on campaign revenues was 45%, reaching a net profit of CHF 334,000, mainly due to acquisition and IFRS gains. I will cover that a little later. Resulting in the earnings per share undiluted of the first positive EPS of CHF 0.06. We raised our balance sheet to a total asset of CHF 14.35 million, whereas there's CHF 12.07 million of intangibles, building a strong platform incorporating also the platform of Kingfluencers enable us to have a strong foundation of intangible asset as a company. Our related party debt sank to CHF 96,000 from an origin of CHF 7.3 million, resulting in a total equity and a strong foundation of CHF 7.74 million. Even here, we started with a minus CHF 501,000 in January 2024. A lot of this is driven by the bargain purchase gain that we managed through our M&A acquisition and activity with Kingfluencers in the past year. Kingfluencers brought us 300-plus brand clients. We have the 80% win rate, we already discussed or mentioned and the market capitalization of today with CHF 25.1 million and an overall creator network in the KF network of 3,800-plus. You can see, all in all, we enabled a strong substantial growth across all relevant metrics that we have reported with the annual report 2025. In 2025, we managed to get 3 decisive steps forward. We created a strong and substantial revenue engine, strengthened our balance sheet for the report and turned into our first profit. Well, the revenue engine is mainly driven by Kingfluencers by the end of 2025, where we reported CHF 5.77 million in only 9 months. Projecting that up to the 12 months, we would add up to about CHF 8 million of revenue if we would cover the full year in the IFRS report. We strengthened our balance sheet up to CHF 9.84 million in shareholder loans that were converted fully into equity across 2 tranches within the year 2025. I'd like to go into that one slightly later. And we enabled our first profitable year once again with CHF 334,000 and an EPS of CHF 0.06 due to the IFRS and business combination. So from a negative CHF 501,000 of our initial IFRS report of 1st of January 2024, we went over to a positive one of CHF 1.09 million to CHF 7.74 million equity. We enabled that one through reclassifying shareholder loans earlier into equity, where they belong and where they should be, and subsequently also were added to through the conversion into equity. So we enabled the story of equity to be smoother, to be more reliant due to the reclassification earlier on and to show what we have achieved in the years past. If I look into the financial statement, we had with the IFRS 1 adoption, we had shareholder loans reclassified. We had the Kingfluencers acquisition that took into the result and the acquired intangibles of brand, client relationship and platform of the Kingfluencers, which was recognized at a fair value of CHF 12.07 million of total intangibles. And the Swiss pension plan treated as defined benefits with CHF 378,000. Talking about Kingfluencers, the commercial foundation, Kingfluencers, enabling us to have already a very good, strong revenue base. Kingfluencers, we consolidated 9 months since the acquisition. The first 12 months will be 2026. Kingfluencers is the leading influencer agency within Switzerland. The campaign revenues of last year, CHF 5.77 million, the gross margin, 45%. The brand and offer win rate, we already mentioned. What I'd like to add is the multiple agency contracts we have installed in the last year. We've built a long and good strong partnership with multiple big agencies for influencer marketing. We built out our creator network on the already existing foundation and growing it. And we are now focusing on ongoing joint naoo campaigns to also enable our creator network to utilize their power onto the naoo network. The main details of the profit and loss of 2025, the revenue of CHF 6 million, the profit of -- gross profit with a 45% gross margin. The operational loss resulting in minus CHF 3.6 million. The bargain purchase gain of CHF 5.6 million already shown is the result of the strong foundation that Kingfluencers actually brings on intangibles that we managed to acquire and the correction of amortization to the share-based payments and the net profit resulted in CHF 334,000, marking our first profitable year. Also disclosed further down in yellow, you can see the noncash that we absorbed within the same year, resulting in CHF 2.2 million to have it more detailed. All right. So Thomas, back to you.

All right. Thank you very much, Kevin. Let's move on to a bit of an outlook. So we're looking at local worlds of opportunity. This is just an example, but you can imagine that we're striving to add local use cases to be discovered by our users with an AI-based AI-first social media interface. We have developed a new format. So this is the outlook section, right? We have developed a new social media format that we call the naoo Worlds. This is actually brand new. We announced it a few weeks ago. But actually, we just hit the App and Play Store today. So this is actually brand new for us. So what is a naoo Worlds? It's a thematic layer on top of a city. It curates real places through a shared idea or theme, and it's built around the theme or a person or a brand and it rewards exploration with local offers. So we create, let's say, we take content usually that already exists, but we put it on the map and we put it into -- let's say, we enable users to experience content this way in a completely new way. And I can tell you that we have now discussions with some of Switzerland's most interesting influencers like Steve Merson, for example. He has agreed to build a world based on all the restaurants that he's tested, et cetera. It will be very exciting. And so what you see here is a bit more detailed how this will look actually in the next few days. So this is very real. So in the social media field -- feed, you discover a world that you see on the left, so the Merson Food Award, for example, then you see how many places there are, you can toggle between the map and the feed. And among these places that there will be commercial partners where you can actually go and get the naoo points for participating, for giving them business or to get exclusive offers that you can redeem there. So it's really a combination of creator content, geolocation or geographically relevant content and the social media feed and the commerce system, all in one. And we're very excited about this innovation that we have been able to come out with naoo. So what we're looking to do now is to create a repeatable city launch playbook where we start with the supply. So we start with these worlds, we start with partners. We start with brands, physical places, and we then activate the demand for these places. And then we try to create this flywheel where ROIC can be verified, where people go to these stores, they watch the content, et cetera, and then we try to create this density flywheel, repeating the same, let's say, the same playbook city by city. So we already have very successful client relationships across all industries. Most of these clients are from the influencer marketing side. Some of them are from the naoo side and an increasing number of them are and will be customers that are -- that we service from both the naoo and the Kingfluencers side. Some proof of execution. We have seen very successful numbers on campaign performance, these campaigns that we made for clients on the naoo app where we experimented with gamification with the specific traits of a gamified campaign on naoo. And you see that some of these campaigns where we use gamification have click-through rates of 4.8%, which is about 5x the 1% benchmark that usually people think about in social media campaigns. We've also seen some platform traction. We've once been on #3 in the app charts. On the last day of last year, we were on #6 of the Swiss social media app store charts. And so this is not the end. This is the beginning, but we're a little bit proud of being able to already reach these positions now. And we think it's only getting better. A few words about the team. So there's myself as Founder and Senior Advisor. We have Kevin Dragon as CFO. And we have Gregor, who is the Managing Director for the agency and the Chief Commercial Officer for the group. He was a member of the Google Executive Management in Switzerland for 13 years. We have Karl Fleetwood, our COO, has been here for 6 years. Gabriel Hoehener, one of the architects of TWINT, the famous Swiss payment solution. And we have David Liu, who is our lead data scientist and Head of AI. And yes, and he is building all the AI stack technology. He joined us from eBay, where he spent 7 years in recommendation systems, and he joined us about 14 months ago. So what are our key priorities for 2026? Well, there are many, but we try to only talk about a few. So AI-driven personalization at scale, this is extremely important, and we've -- I think we've come a long way. So we want to 100% personalize everything in the feed, search people, business recommendations, basically everything, every use case that we can think of. And by the way, this is our edge over -- also, if you remember, we talked about the naoo business use case, but we're going to talk about real estate-related or jobs-related use cases. And most of these existing platforms, they don't have AI embedding of all those elements, but we do have that. So that's an edge that we have in our technology stack where we continue to basically take information from the real world, personalize it to our user base and deliver it to them through the feed, through the map in the naoo platform. So monetization acceleration, increase the revenue and user base is very important. We're still working on launching more creator media formats. We're working on rolling out naoo business and naoo mirror+, which is an account [ duplication ] service. And so yes, we talked about, I think, the pipeline, and that's constantly growing. And then we have the new format. In the beginning of the year, we said we would launch 4 naoo Worlds. As it looks, it will be more than that, maybe substantially more, because we have accelerated the development of these naoo Worlds significantly, and we've already signed the first contracts. So this will scale our user base with very unique content IP that actually only we have and no one else has. It will deepen the engagement ecosystems, and it will give us the possibility to expand our recurring brand inventory revenue potential. Then we talk about DACH expansion. We want to first strengthen our commercial presence here in Switzerland and strengthen the user base and prepare the groundwork for a regional scaling initiative in 2027. Germany is already on the map for this year. And then in terms of operational and governance excellence, drive efficiency through shared AI infrastructure. That's very important. So you would have seen all the components that we've built and that we're continuing to build. We integrate teams and workflows for scaling. You saw a lot of detail in the presentation that Kevin gave. This was very important. So all this, let's say, introduction of ERP system, CRM system, et cetera. That allows us really to scale the organization and corporate governance and transparency upgrades. So we're very proud to have IFRS now, and we anticipate that this will unlock further steps in our, let's say, capital market strategy. All right. Thank you very much for your time, and happy to have your questions.

[Operator Instructions] And I will start with the first question, what are the 1 to 2 operational and financial KPIs to track over the next quarters? What really tells us if the business is going in the direction?

Thank you very much. Am I still on? Maybe I can take this one. So right now, for this year, our biggest revenue driver is the organic revenue from influencer campaigns. So that is a very important KPI that we're reporting on that we should track. And then we're building these new use cases with new clients based on the naoo app and naoo business app. And so that, let's say, the number of clients that we'll report is, I'm sure, a very interesting KPI that we can look at over the next few years because it's a proxy for the adoption of that product in the market. And so I think these would be, in my opinion, the 2 KPIs I would track.

Head count and employee costs seem to be quite high. How will these costs scale from here?

So I guess our head count looks high because we have a very skilled team of software developers and architects. So you can think of naoo as a company that builds an infrastructure and a lot of this is built. So I think we will become more efficient and more profitable as we grow the other revenue components. The influencer marketing business is, by definition, a bit lower margin than the new revenue verticals that we're accessing right now. So I expect margins to go up, so relative personnel costs to go down with -- significantly with -- as the new revenue verticals are unlocked.

And can or will you include links to naoo into the creators' Instagram or TikTok feeds? How does that work? And is that allowed?

So absolutely. So we have a very sophisticated deep linking technology that is -- that our creators are already making good use of. So we can basically link to any item in the naoo universe in Instagram. So for example, we can link into content pieces or games or point winning opportunities into polls, for example, is something that we're doing right now. And we haven't talked about this technology because of the -- we didn't have enough time in this presentation, but it's very exciting, and it's a strong area of focus for us.

There's a question for you. No specific outlook was provided when the IFRS report was published for the first time. Perhaps you could now, during the earnings call, at least give us a rough outlook for the current financial year. Is significant revenue growth also expected in the 2026 financial year?

So on the -- one of the first slides, we made a guidance to the budget -- revenue budget of the influencer marketing side, which is CHF 9.5 million. So that's quite up from the 2025 operating, let's say, revenue figures. So that is the baseline of what we're guiding towards right now, and that's what we're working towards and what we're trying to exceed.

Okay. Thank you very much for your questions. I will hold the room for another moment in case somebody might be typing. And that doesn't seem to be the case. We, therefore, come to the end of today's earnings call. Thank you very much for your interest in naoo AG. If any further questions should come up later on, please feel free to contact Investor Relations. A big thank you also to you, Dr. Wolfensberger and Mr. Dragon, for your presentation and your time. I wish you all a successful day around the world. And having said this, goodbye.

Bye-bye.

Bye.