Scout24 SE (G24) Earnings Call Transcript & Summary

Good day, and welcome to the Scout24 H1 2022 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Ursula. Please go ahead.

Welcome, everyone, to Scout24's Q2 and Half Year 2022 Earnings Call. My name is Ursula Querette, and I'm Head of Investor Relations and Treasury at Scout24. As usual, we have Tobias Hartmann, our CEO; and Dirk Schmelzer, our CFO, on this call. Tobi will kick off the presentation, and Dirk will dive deeper into our Q2 and H1 financial performance in detail. As always, we will conclude the call with a Q&A session. You can find today's presentation on our website under Financial Reports and Presentations. There, you can also find our Half Year 2022 Report. If you are using the web link we provided beforehand, you can follow today's presentation live. This session will be recorded and a replay will be made available as quickly as possible after the event. Before I hand it over to Tobi, allow me a few words on a personal note. As most of you already know, this will be my last earnings call at Scout24. I very much enjoyed working with all of you over the last 3 years and thank you for your trust and support. I am handing over the IR and Treasury department to a very skilled and experienced colleague, Filip Lindvall, who will also keep his role of Head of Strategic Development and M&A. If he has not done so already, he will get in touch with you next week after his return from vacation. I am still available for you until the end of this week, and of course, also the IR team, Louis Johannwille and Alena Flemmer, will be there for you if you have any questions. Louis and Alena, thank you so much for your hard work and engagement in these volatile times. You are the best. And now, let's move from the disclaimer page, right to Tobi's initial statement.

Thank you, Ursula, for your great support. We will definitely miss you. So welcome, everyone. Let's move directly to Page 3 of our presentation. We held our CMD where we presented our next level strategy only 9 months ago. At that time, none of us would have thought that our market environment would change so rapidly. As we have already shared in our recent ImmoScout24 research update, von Vermietet.de in July. With rising interest rates and overall geopolitical and macro uncertainty, the dynamics of the German real estate market are changing. Of course, trends differ between city real estate and more rural areas, between new developments and existing objects, or between buy and rent. The more important implication for Scout24 is we are becoming even more relevant via the unmatched marketing power of our leading platform and the value add of our diversified product suite. As a result, our business model is highly resilient in a challenging macro environment and should continue to perform well. Our strong Q2 performance is a testament to this resilience and to the growth momentum of our next level strategy. As we have already preannounced last week, we are raising our guidance for the full year 2022. We are very confident in our top line growth momentum and operating leverage, driving ordinary operating EBITDA and cash flow. Dirk will explain our raised guidance in more detail. Let's just take a minute to explain what we mean by changing market arena, resilient business model and diversified product suite. On the left-hand side of Page 4, we have summarized the key changes we are seeing in the German real estate market. While the market historically has proven resilient, we are seeing the following trends right now. Buyers are faced with increasing interest rates and higher mortgage scrutiny. While interest rates for a 10-year mortgage were at about 1.0% to 1.5% in the beginning of the year, they are now at about 3.2% to 3.6%. This is starting to translate into reduced demand for property purchases. For sellers, this translates into longer standing times and less interested parties in their properties for sale. According to our data intelligence, the demand for properties to sell decreased by 36% in Q2 2022, while the supply increased by 46% in Q2 2022. For agents, longer standing times of properties for sale and less demand translate into a need for increased marketing. Furthermore, quality leads are becoming ever more important. While we see decreasing demand for property purchases, we see increasing demand for rental properties and an increasing supply/demand imbalance, i.e., a scarcity of supply. Our leading value-add product suite addresses these challenges. Let me give you some examples. Via TenantPlus+, we provide the best visibility for rental seekers with regards to available supply, and we make it easier and more efficient for landlords to find the right tenant. Vermietet.de facilitates the exchange between landlords and tenants and dealing with ancillary costs in an environment where energy costs are expected to double or even triple. Our agent premium products and membership editions ensure the right positioning and visibility of objects, hence add to the marketing power of the agent, while our seller lead products make the mandate acquisition more efficient. And last but not least, with increased prequalification and more complex advisory needs, our mortgage lead and advisory products become more relevant. In Q2, we have acquired a small advisory team with 4 FTEs and a further 16 mortgage advisers, which is now part of Scout24, to underpin this enhanced strategy in the mortgage business. So in summary, the market dynamics are changing. We are in a great position with our diversified product suite to capture increased demand from selected customer groups and thus drive attractive revenue growth. This should more than offset any potential softness in other areas going forward, which may arise due to changing markets. Page 5 shows you our strong performance in Q2. On a group level, Q2 revenue totaled EUR 109.7 million, a 14.4% year-on-year increase. Ordinary operating EBITDA of the group came out at EUR 62.0 million, representing a margin of 56.6% and a growth over Q2 2021 of 12.5%. Excluding completed M&A, the organic ordinary operating EBITDA came in at EUR 62.5 million, at a margin of 57.4% and a growth of 13.3% over Q2 2021. In our Professional segment, subscription revenue increased by 8.6% to EUR 63.5 million in Q2. This is a result of strong core membership growth, a dynamic seller leads business and solid Professional customer growth of circa 2% to almost 21,000, in tandem with a 6.3% increase in ARPU. In our Private segment, including for Mieter.de, subscription revenue increased by 58.8% to EUR 14.8 million. This was fueled, in particular, by significant new customer wins, especially for the Tenant+ product, growing our number of Private customers by 56.9% to 297,000. As of today, we have broken the 300,000 mark. Let me just take 1 minute to put this in perspective. This was a business invented by Scout24 in 2017. So within 5 years, we have created a greater than EUR 70 million business with great margins, all based on a truly unique product experience. This speaks to our ability to constantly identify new customer needs, innovate and adapt our product suite. Private ARPU increased by 1.2% to EUR 16.6. The blended estimated customer lifetime value increased sequentially from Q1 by 2.3% to EUR 112. In summary, we delivered a strong performance in Q2 across all metrics on group level and within our Professional and Private segments. Turning to Page 6. Let us now take a look at where we stand on our targets for the 5 value drivers on the basis of the H1 financials. Our performance is a strong testament to the growth momentum of our next level strategy. We are firing on all 5 growth cylinders. Professional membership revenue has increased by 6.7% in H1 year-on-year. Note, this exceeds our midterm 2026 target range of 4% to 6% CAGR. This is mainly the result of successful rate card upgrades and higher demand for visibility products in an environment which is starting to develop from a seller's to a buyer's market. We grew seller leads revenue by 31.6% compared to H1 2021. This is fully on track with our midterm guidance of 30% to 40% annual growth on average until 2026. Compared to Q1, we scaled down the acquisition of leads in Q2 and funneled more leads into the Realtor Lead Engine product. Our mortgage business related revenue increased by 21%, which compares to a 2026 guidance of 18% to 20% growth per year. This is again fully in line, and I already explained what the drivers of this business currently are. On the Private side, the Private subscription revenue, including Vermietet.de grew by 66.9%, with a healthy margin and significantly above midterm guidance of 26% to 28% average growth per annum. As I mentioned before, visibility of seekers and therefore our Plus product suite becomes even more important in the current market environment. Also, the software solution for landlords from Vermietet.de is gaining relevance. We grew the number of registered units on the platform by 80%. We are on track to reach our goal of 4.5 million registered units by the end of 2026. Dirk will now provide more detail on our financial performance at group level and for each of the segments.

Thank you, Tobi, and welcome, everyone. Also, from my side, a big thank you to Ursula. Let's turn to Slide 7, which shows the quarter 2 year-on-year revenue growth in our 3 segments and the respective EBITDA margins. The 9.6% revenue growth in the Professional segment is based, as Tobi has already mentioned, on a strong core membership business, a dynamic seller leads business and an enhanced mortgage leads business. As the Professional PPA business is gaining momentum in the current market environment, these revenues add to the segment revenue growth. Consequently, the ordinary operating EBITDA margin of the Professional segment came in relatively strong at 61% despite this year's additional growth investments. The Private segment showed a revenue growth of 28.4% in Q2, strongly backed by Private subscription revenue, which grew by 58.8%, including Vermietet.de. In Private, we also experienced a revival of our PPA business, creating additional tailwinds. The ordinary operating EBITDA margin of the Private segment has significantly increased to 52.2% in Q2 2022. This has mainly to do with the lower penetration of credit checks as part of a longer subscription term whilst also accelerating the PPA business with longer standing times for listings. The Media & Other segment revenue increased by 13.2% in Q2 2022. This includes the ImmoScout Austria business, which grew strongly by 12.3% as well as our CRM business, FLOWFACT and Propstack, which grew by 11.8%. The 3rd Party Media business showed declining revenues. The ordinary operating EBITDA margin of the Media & Other segment fell by 3.4 percentage points to 35.2%. Let's turn to Page 8 to dive a bit deeper into the Professional segment. As already mentioned, with a strong core business and seller leads growth, subscription revenue increased by 8.6%. As we again managed to increase our number of customers, the quarter 2 professional ARPU increased at a slightly lower rate by 6.3% year-on-year, from EUR 951 to EUR 1,011. In these times, our highly diversified revenue composition comes at a big advantage. With a stronger core business and in the context of the current market developments, we deliberately scaled down on lead acquisitions, hence, the slowed seller leads growth at 13.8%. This is, in addition to the revival of the pay-per-ad demand, adding momentum to the Professional segment's EBITDA growth. Hence, despite additional growth investments, the ordinary operating EBITDA came in at EUR 43.6 million, a 3.6% increase compared to Q2 last year. This results in a margin of 61%. On Page 9, let's take a closer look to the Private segment. I already elaborated on the year-on-year increase of the Private subscription revenue by 58.8% and a significant new customer addition in the second quarter of 2022. In July, we reached the 300,000 customer mark. Speaking of important milestones, the PPA business exceeded the EUR 10 million revenue mark in Q2, increasing by 19.8% year-on-year. We reduced the business with third-party credit checks, leading to a decrease of 11.6% of the Other revenue line. This, amongst others, had a positive effect on the ordinary operating EBITDA margin of the Private segment. In absolute terms, the ordinary operating EBITDA grew strongly by 52.4% to EUR 15.4 million in Q2 2022. This is mainly due to a more efficient Plus product business, the revival of the high-margin PPA business and lower expenses for credit checks. The ordinary operating EBITDA margin came in at 52.2%, which is more than 8.2 percentage points higher than in Q2 2021. Turning to Page 10, let us go through the main ordinary operating items. Own work capitalized increased by 7.4% to EUR 7.2 million in Q2 2022. This translates into a capitalization ratio of 6.6%, which is 0.4 percentage points lower than last year and brings us closer to our Q4 target of around 6%. Personnel costs increased by 9.7%, mainly due to the integration of Vermietet.de employees and regular increases in wages. Marketing costs increased more slowly in Q2 than in Q1. Reason being that we spent less than planned on the acquisition of leads due to rising lead prices and the changing market conditions. This has an impact on the amount of growth investments we had planned for the value drivers this year. In Q1, leads totaled EUR 6.5 million versus EUR 3.7 million in Q2. This has mainly to do with the flexibility we now have given our diversified business model and the current market environment. One important takeaway for you is that in the light of the changing German real estate markets, we will be very focused on return on invested marketing spend, which may result in mix and channel shift. The year-on-year growth in IT cost of 28.4% to EUR 5.4 million results from the integration of Vermietet.de and increased AWS cost, which has been impacted by the euro-U.S. dollar exchange rate. Selling costs increased underproportionately due to the Plus product revenues, mainly due to a lower amount of credit checks sold with Plus subscriptions. Putting it all together, we get to a 12.5% higher ordinary operating EBITDA of EUR 62 million in Q2 2022. The resulting margin is 56.6%. Let's turn to Page 11, where you see the items below the ordinary operating EBITDA. First point to mention here, nonoperating costs decreased by 58% to EUR 2.6 million in Q2 2022. The decrease is mainly due to the lower share-based compensation and M&A-related expenses. The reported EBITDA increased at a higher rate than the ordinary operating EBITDA, coming out at EUR 59.5 million in Q2 2022, 21.4% higher than the year before. Depreciation and amortization increased underproportionately due to the termination of the purchase price allocation amortization of the ImmoScout customer base. The financial result, however, increased with a negative net amount, from minus EUR 2 million to minus EUR 4.1 million, which was driven by the unfavorable performance of our special fund investments due to the adverse global capital market environment. In June, in view of the upcoming share buybacks and the repayment of EUR 100 million term loan, we closed the special fund mandate and transferred the remaining liquidity into our current accounts. Since the closing of the sale of AutoScout24, the overall performance of the managed liquidity was at minus 0.6%, hence, better than if we would have parked the fund in a cash account with negative interest charges. With these developments, the reported net income increased by 21.3% to EUR 26.8 million in Q2. Due to the ongoing share buyback, the basic EPS increase by 36%, testament to our highly accretive capital allocation strategy. Due to the decreasing nonoperating cost in Q2, the adjusted EPS increased by 24.3%. Before I turn to the next slide, let me summarize the main messages for today. First, as we are executing on our next level strategy with a very comprehensive product suite, we are generating attractive sustainable growth momentum. Second, our core membership offering becomes more relevant in the current market environment. Third, we have an unmatched B2C offering. Lastly, based on half year 1 2022 revenue growth with a favorable product and marketing mix, we are benefiting from increasing operating leverage. In the light of these developments and as already preannounced last week, we have raised our guidance for 2022. We are expecting Scout24 Group revenues to increase by 13% to 15% year-on-year versus prior guidance of 11% to 12%. For group ordinary operating EBITDA, we expect 2022 growth of 10% to 12%, a significant increase versus the prior guidance of 6% to 8% year-on-year. Increasing our guidance for 2022, despite an overall challenging market environment, is a testament to the resilience of our business, in combination with our next level strategy, translating into accelerating growth. With that, let's open the line for questions. We would appreciate if you could limit your questions to 2 per speaker. Operator, over to you.

[Operator Instructions] We'll take our first question from Andrew Ross with Barclays.

I've got 2. The first one is about the leads business. And you guys have touched on the reasons behind the slowdown in Q2, but perhaps you could give us a bit more about how you're thinking about both businesses into Q3 and Q4, perhaps talking a bit about the demand from agents, how much it's costing you to acquire traffic and how much you're planning on spending behind both businesses into the second half of the year in the context of the broader market. And then my second question is a, I guess, a bigger picture question, but it's now been 8 months since you did your CMD at the end of last year. And one of the promises in that CMD was to grow margins next year and accelerate EBITDA at a group level. How often are you feeling about that as it stands today, kind of assuming that there's no big deterioration in the end market and the situation as is continues?

Andrew, hi, this is Dirk. I will start off answering the first question on the leads business and then start off with the bigger picture and then leave some room for Tobi to also chime in and give his perspective. So on the leads business, yes, you're right. What we -- we need to keep in mind when we talk about the second quarter, this started in April and went down through June, which was the hot phase of, on the one hand, the Ukraine war, on the other hand, interest rate rises and macroeconomic uncertainties. Against that background, we have taken a deliberate decision to cut back a little bit on transaction-based leads with our immoverkauf business and put that into the lead engine, where we have roughly 5% to 6% of our overall agent base that is taking leads from us. And that was a deliberate decision because we felt a certain amount of uncertainty around what's happening over the year. Are we able to realize the revenues this year, are we able to realize them only next year, how secure are the transactions that we're giving directly to agents when sellers of real estate make up their mind and might not decide to sell at all. So that was basically a deliberate decision. We also cut down on overall marketing and sales costs in order to cope with that, that have been affected. More than 45% of our overall traffic now was organic and only a smaller portion of -- sorry, the other way around, 55% of our traffic was organic and 45% was inorganic, where we came down from 61%. So as you can see from my readings on the second quarter, I would sum it up to, we would say the deliberate decision, we're still very bullish and bought into the transaction business. We continue to believe in what we're doing on the Realtor Lead Engine. And we are seeing first signs of hope and optimism around the development of the leads business for the remainder of the year. On the bigger picture perspective, you were asking about our margin development when we come into '23. I can only state that 9 months down the road of our Capital Markets Day, we've seen more promising signs in the market with regards to execution of our strategy than anything else. And I wouldn't think that we would -- and have found anything that changes our mind with regards to growth rates in 2023. We are scaling up the business faster as we initially thought. And Q2 has shown that we are able to scale that business up at a very decent margin accretion. And therefore, we maintain -- optimistic about what's happening and caveat certainly being that we have some time to issue our guidance for the next year 2023. But at the moment, we don't see a reason to change anything.

Yes, Andrew, this is Tobi. Just to add on what Dirk stated with regards to your second question. When it comes to profitability, you see it's basically a function of 3 levers. We have, the one part, which is obviously a revenue mix function. That is something that we control to a certain extent. I think you saw from this quarter that, certainly, the PPA business is something where we picked up some further skin. So that's good. So that's a trend that we believe will probably continue given the certain macroeconomic environment. The second piece is the investments that we already initiated and they're starting to pay off. And then the third one is that we are scaling within the organization, and we are trying to really keep costs obviously under control, also knowing that there's no certainty as kind of a headwind. So all of these 3 factors, we are pleased with where we are. And we are positive with regards to scaling profitability going forward.

That's helpful. And just to follow up on that first question. I mean it sounds like immoverkauf may be a little slow in terms of revenues that you recognize in Q3 and Q4 because it's taking longer for things to complete and you've cut back on new lead generation in Q2. But we should expect some improvement sequentially on the Realtor Lead Engine, is that a good characterization or not?

Andrew, that's an absolutely fair characterization. I was pointing to Q2 for one main reason, it was a huge -- a period of huge uncertainty. I'm not saying that we have certainty in the business right now. But obviously, home sellers had a huge amount of uncertainty. We see increased standing times. We see slightly sideward-moving transaction prices. And that created, of course, also an impact on immoverkauf. Now early indications from the third quarter tell us that part of those effects, which is overstated and are coming back to usual, the normal again, and we are awaiting how they will finally come out. But as I said, at the current point in time, we remain rather optimistic for the year and then pessimistic.

We'll take our next question from Pete Kujala with Morgan Stanley.

It's Pete from Morgan Stanley. 2 for me as well. Both of them on Vermietet.de. So you mentioned you had roughly 760,000 units at Q2 end. Can you give some kind of indication? Like what percentage of those is currently monetized? And the second question is that what type of landlord profile are you currently attracting? So the landlords that are paying for the product, are they very like large landlords, or do they have a higher-than-average amount of apartments, like 10 apartments or something? So any kind of color on that would be helpful.

Yes, Pete, you've said it correctly. We have been growing, I think, around 18% compared to Q1 on the units we are managing, on Vermietet.de, which is, from our perspective, exactly on track, where we want to be. The type of landlords we're attracting are rather smaller landlords that have 2, 3, 4, 5 units, than larger landlords. Larger landlords tend to rely on other solutions. But we are getting there, I think. Also, with regards to monetization, I said it in the Q1 call, for this year, with Vermietet.de, our focus is not on full monetization of the asset, our focus is on gaining market share in the landlord environment. And that's also in line with what we communicated at the Capital Markets Day, and we continue to do -- execute on that strategy.

All right. And just a follow-up on what you said previously. Can you just repeat? So you mentioned the split between organic and inorganic traffic for leads. So can you repeat that split?

Yes, absolutely. I outlined that we have had, in the first quarter, around 61% of traffic that we acquired inorganically, and that is going down to 45%. So we're coming down from roughly 2/3 inorganic traffic, to below half of our traffic being inorganic.

All right. Great. Yes. And Ursula, best of luck going forward.

We'll take our next question from Christopher Johnen with HSBC.

2 for me, please. So first, on the membership pricing environment, I think most of the increase we've seen this quarter is coming down from -- in terms of service, sort of upgrades. Maybe you could give us a bit more color, if you can, on the composition of the ARPA growth basically and how we should think about pricing momentum with respect to rate cards. I think that, that could be interesting in the current inflationary environment. Second question, related to the agent health. It's been a while since we at least have seen your view on average margins that your typical agent on the platform earns, given that prices seem to be at least not growing as much or going down slightly in some instances. With prices for the agents going up, maybe you could share a couple of views on where you see the health of the agent business currently versus, let's say, in the very near future. I think that would be interesting.

Okay. I will start off, Chris, and then hand it over to Tobi. On the rate card question, we have been quite transparent on the rate cards in the past, with the distribution of our agents in the base, image and acquisition edition. We continue to target a roughly bell-shape curve along the base, image and acquisition edition, which would lead us to around about 25% to 30% being in the acquisition edition. We have, at the moment, around 20% of our agents in that edition. The biggest chunk of our agents is in the image edition, and there is an amount of around 30%, slightly less in the base edition. Now that would change over the course of time. We remain targeted at getting around 25% to 30% of our agents into that edition. Biggest chunk of price development in the ARPU nonetheless came from membership price increases across the board that we did. And I think that should answer the question, and I hand over to Tobi for the financial health of our real estate agent customers.

Chris, a few more comments. So we don't see an increased churn or anything on the agent side, despite obviously the rate card changes that we've implemented. So that obviously turns and points towards the health, the ongoing health of the agent business. What we do see is that reach, audience and branding for agents mattered more than previously. So there's more pressure for agents to really work to sell the inventory that they're getting their hands around. And that hopefully will also put some pressure on those so-called gray market that we've talked about earlier and in prior calls, where certain inventory doesn't even hit any portals or any rent publications. So that will be pressure which we believe will be a good thing for us in the medium term. So in summary, no major news around agent health. We do believe that the more professional agents will benefit from the current business environment. They will put an utmost focus on driving reach and audience, which hopefully will be great support for us.

Well, one follow-up, if I may, on the gray market transaction that you mentioned. Listings obviously have been -- or the year-on-year decline has been decelerating. Is there any sort of figure? I know we probably discussed the same question during or after Q1. Any sort of updated view on how many more gray market or previous -- or prior gray market listings are coming online now. Is there any sort of color you can give there, any estimate?

We don't have the details on the gray market, but what we do see is, obviously, sale listings are going up, and it shows that we are making up some ground compared to prior quarters. We also see that there's a focus more on rent. There is more demand for rent because, obviously, some of the people who wanted to buy can no longer afford or hesitant and now are starting to rent. So there's more pressure there. We do think that there will be a long-term trend on the gray market publications and listings, but we have no certain data points that we can share at this point.

We'll take our next question from William Packer with BNP Paribas.

2, please. So firstly, it was an impressive performance in the PPA segment across both Private and Professional, rebounding to growth after a sustained period of decline. Can you help us unpick for structural versus cyclical dynamics at play? How do you think about the long-term growth of those revenues? And then secondly, it would be helpful if we could talk through the defensiveness of the Scout model a little bit. So among global online classifieds, in both the financial crisis and the COVID crisis, you were particularly defensive. And I suppose there's kind of 2 aspects to that. Firstly, do you think the level of property transactions will again prove defensive even in this potentially quite tough macro backdrop driven by the gas price shock? And then secondly, has the diversification that you have pursued in recent quarters, which is clearly driving healthy growth, but is it maybe more cyclical? How should we think about, for example, Private subscriptions or OTP revenue in a more challenging environment?

Thanks, Will. I'll start off with the first part of your question, with regards to PPA growth. So in both segments, PPA, Professional and Private, we've seen, as you said, impressive growth rates in Q2 compared to Q1 on both and roughly 20%. We believe that this will continue following the change of the market environment. Within the PPA, we, yes, of course, see different developments. Now on sale, we see growth rates of 60% to 70% in the Private, up to 90% in Q2. On rent, we see only slight growth, and that has to do with the fact that following the interest rate changes, economic outlook, the sentiment of the German buyers and potential by real estate and tenants have changed a bit and they are leaning towards being a tenant in the future. That's why the demand for rental objects remains very high. The supply continues to drop, also being a result of the fact that a lot of people tend to stay within their house and not move anymore. And therefore, the biggest chunk of changes that we've seen in the PPA business was on the selling side. And that is structural, and that's why we believe it will continue. And for the remainder, I hand over to Tobi.

With regards to the business model, Will, we believe that we do have the advantage of having created this, what we call, ecosystem for different levers and also the 5 value drivers that we've referred to, that we presented during CMD, that no matter what happens, we will be able to participate, to drive and to support both seekers and on the other side, Professional customers either way. And what that means is what should you expect? Well, we don't know exactly for the next whatever number of quarters, how each of the value drivers will turn out. And we have mentioned and emphasized this in the past. During this call, everything is totally in line or exceeding our CAGR rate that we wanted to generate. There could be quarters where one or the other value driver might be off. But in summary, we feel very confident, and we're trying to prove this by showing these numbers right now, the results, that no matter what happens, whether it's high interest rates, whether it's further pressure on the sale market, whether it's further pressure on the rental market, whether it's the pressure that the administration cannot come up with the new homes, that they aim to build the 400,000 units, we will be able to support and play a more vital role in this market. And the reason for that is that seekers more and more flock towards, in the future, the leading portal and the leading partner who will give them advice and direction, and that's what we are seeing. Otherwise, we wouldn't have seen those growth rates despite the headwinds that we're having. So in summary, I guess, the long-winded answer is we're not certain about all the 5 value drivers going forward for each quarter, but we are very optimistic about hitting our goals and markets because we see that we are needed by seekers, by sellers and by everyone in the marketplace. So that's why we think we are a diversified portfolio, a diversified product suite. And again, even if mortgage rates are increasing, that doesn't mean that the mortgage business is going down completely. Because there will be new challenges, people need to refinance, people need to move out, and it will create a huge pressure for someone to find a new home and we'll be able to help. So again, that's why we feel very optimistic about the future.

And just to come back on the market cyclicality rather than Scout itself. Is there any reason to think that, in a potential macro slowdown, that the German property market wouldn't continue to be relatively resilient versus other European markets in terms of transaction volumes?