Trustpilot Group plc (TRST) Earnings Call Transcript & Summary

Good morning. I'm Peter, I'm the Founder and the CEO of Trustpilot. Today is our first Capital Markets Day. I'm very, very thankful that you're all here. This is a fantastic opportunity for us as a team to really get into a much more richer detail than we're able to during the normal course of the year. So I have my entire team with me. I'm incredibly happy with them. I hope when the day is over, you really get to see why. So before we get into the formal agenda, I just want to kick us off with some of the things that I'm just personally really excited about with Trustpilot. I think as some of you have noticed, we live in a world with a high degree of economic uncertainty. So for us as people, for consumers, when was there ever a bigger need to know that when we spend our money, that we get what the companies are promising us. I think in the last decade, we lived in a world where it was very hard to know what we could trust online. So in that uncertainty, when was there ever a better time to bring trust to the Internet economy? And so with Trustpilot, we have such an enormous opportunity ahead of us. We are creating something that is relevant for billions of people across the world, something that is relevant for millions, if not tens of millions of companies. The other thing that I'm incredibly excited about is our ability to capture that opportunity. I think all of you on your way here, in London, has seen how Trustpilot is everywhere. The more people are using Trustpilot, the more businesses want to use Trustpilot. And the more businesses are using Trustpilot, the more people become aware of Trustpilot, the more people are using Trustpilot. So we have these very powerful network effects. And what happens in every market we're in is that they get more and more powerful, and that creates fantastic unit economics for Trustpilot. The bigger we get, the better we get. So we have a very high margin. We have 100% retention rate. We have a very strong CAC to LTV. And being so well funded from the IPO with such a robust business model, we have a very clear pathway to profitability. As you saw this morning, we announced we are profitable on an adjusted EBITDA basis in 2024. So we can capture the opportunity and we can do so with our own means. So let's talk about how we do that. That takes me to today's agenda. So I'll start talking about just how powerful Trustpilot is for people and for businesses and go more in depth with the network effect that drives us forward. Our Chief Trust Officer, Carolyn, will talk about the one thing that really sets us apart, and that's our position on Trust. Tim and Alicia will cover our go-to-market and our marketing strategy. And then our CFO, Hanno, will tie it all together and show you our pathway to profitability. So let's get started. So let's start with the beginning. I started Trustpilot in 2007, and I really started it for 2 people. The first was my mom. So when mom buys something on the Internet, I'd like her to get a good experience every single time. I don't like the idea of mom getting scammed out there. And if she should be so unfortunate to get a bad experience, I want her voice to matter. I want businesses to listen and improve. And so I created Trustpilot as a place where she could read the opinions of other people before she bought online and is a place where she could share her own opinion. The other person I was solving a problem for was actually myself. So at the time, I was running a small online electronics retailer. And we had a problem, we were getting a lot of traffic. Unfortunately, not a lot of people bought it. Maybe they fear we were just a bunch of kids in an apartment selling cables, which unfortunately was true. And so we realized we had a trust problem. And so I created a Trustpilot as a place where we could invite our customers to share their opinion, to share what it was like being a customer in our company. But crucially, I realized it had to take place at an independent third party because otherwise, it just wouldn't be trusted. And so with that, it turned out, I had created something that wasn't just relevant for myself or from my mom, but for people in, virtually, every country on this planet. That's the opportunity we want to capture. So what can you do as a normal person using Trustpilot? You can really do 2 very simple things, yet I think they're actually somewhat profound. So the first thing you can do is that you can share your opinion of what it's like to be a customer in a company. So what's so special about that? It's special because there are so many places on the Internet where if you share your opinion of a business, the business owns your opinion. The business can delete your opinion if they don't like it or they could just prevent you from leaving your opinion in the first place or they can edit your opinion and then show it in a marketing campaign. On Trustpilot, you can share your opinion not if and when and how a business wants you to, but when you want to, and share your experience as long as it lives up to our guidelines. And that takes me to the second point. So on Trustpilot, we apply very rigorous processes and very sophisticated technology to allow you to know that you can actually trust the content. So you can actually find useful, trusted information on Trustpilot. And it sounds like such a simple thing. But in today's world, that is actually very special. And so for that reason, when you write a review on Trustpilot, when you share your experience on Trustpilot, people listen, businesses listen. And that means you do matter. And that is why people keep coming back sharing their experiences and that is why people coming back and reading other people's experiences. And so when we create a place that's the place that consumers prefer to get trusted information from their peers, we're creating something that every business wants to be a part of. We are creating the standard in the market. So what can you do as a business? Again, the basics are simple, but very powerful. I fundamentally believe that as a business, if you succeed with 3 things, you can really achieve greatness. The first, you must have a superior insight into what the customer experience in the marketplace is what customers want, right? You must have that insight. What customer experience can we deliver? The second is you must have an ability to deliver on that promise. And third, you have to be famous for it. So with Trustpilot, we allow you to invite all your customers to share their opinion. We allow you to learn from all those opinions so you can really know what you do well, but also what you could do better so you can keep delivering better experiences. And then crucially, we allow you to show the sum of all those experiences to the entire world everywhere where you meet your potential customers in a way your customers trust. And it turns out that if you do that, all your channels perform better, your marketing becomes more efficient, so you can earn more for less. Your website converts better, so you make more revenue. And I think also, it's what we hear, employees in your business are proud to be there. So how do we actually make money? We have a freemium software-as-a-service business model. As a free business, you can invite your customers to share your opinion. You have -- we have very, very simple ways to show that you're rated on Trustpilot. You can, of course, respond to reviews. You can then upgrade to our standard package, which gives you the opportunity to invite many more of your customers to share their experience, and we view very sophisticated ways of showing how you're doing across your marketing, across your website. And finally, you get access to our customer insights modules. Then depending on the type of company you are, you can buy our value-adding add-ons. So for example, if you're an online retailer, you can take advantage of our product reviews module. If you're one of the large delivery companies sending millions of packages every month, we have a case where a business, once we send a text message to all of their customers 2 minutes after they got their item, they want to be able to track the performance of all the delivery personnel, of all their warehouses. They want to be able to embed that performance and make it accessible in all their systems, make it accessible to all their employees. And finally, when they compete against other delivery companies, they want to be able to show how they're doing. So they're buying unlimited invitations. They're buying tailored design. They're buying integration with tech partners. They're buying AI analytics and they're buying enhanced support. And so not only have we been able to add more add-ons and modules and enrich the functionality of Trustpilot, we're also able to make it better. And so you're really seeing that we are creating a product that is very sticky and that we have been able to consistently increase the financial retention rate over time. Finally, I just want to make you all aware that the freemium model is actually a huge strategic advantage for us. Every time a business is using us for free, they are making Trustpilot more known. They're inviting customers to review them on Trustpilot. They're linking to us, maybe showing our logo. They're engaging on Trustpilot. And that is what makes Trustpilot become the standard in the market. And that is ultimately the premium position in the marketplace. Software can be replicated, being the market standard is a lot harder to replicate. So just to bring it to life, what we do for businesses, I just have 2 case studies I want to show you. The first is Custom Ink. So Custom Ink is one of these companies where they can put everything on print. They can put print on your cup, on your T-shirt, on your hoodie. And they're the market leader. But they're the market leader in a business that's flooded by new start-ups, incumbents coming in and saying, "Oh, we think we can do a job that's just as good." So of course, Custom Ink turns to Trustpilot, and they begin to invite all their customers to share their experience on Trustpilot. And that really allows them to show all the potential customers that they are doing a better job than the incumbents. It allows me to show they are the market leader. Moreover, they're also using Trustpilot to really look at what is the feedback they're getting on their products. So when a product starts to get bad reviews, they discontinue that product. And that allows them to maintain their leadership and the customer experience. Then conversely, Vecteezy, they're an up-and-coming brand. They're the challenger brand. They're in the stock imagery industry. If you're familiar with that industry, it's really characterized by some very powerful businesses, some elephants, you can say, that are very well known. So when you go up against the business like that, that can be difficult. Their strategy is to differentiate themselves on the customer experience. They think they do a better job. And so again, they use Trustpilot and they embed the Trustpilot stars and the Trustpilot star rating in all their marketing on their websites. And they get a 10% improvement on the performance of those channels because now people can see, "Oh, it's not just a startup, they're doing really well." And that takes me to the second part of my presentation today, the network effect. Because the more businesses are using Trustpilot, the more known we become with consumers. And just want you to be mindful of this. Every time you see that Trustpilot star rating, whether you're on the plane and looking at the magazine or you're turning on your television or you're browsing a website, just be mindful, we didn't pay for that. The business has paid us for that. And that creates an extremely powerful accelerant to get us to that place where we are the standard. So we're now at a place where we're being shown 7.8 billion times in the online world alone every single month. The other part of the network effect is the consumer-facing website. And so what happens is that when businesses invite their customers to share their opinion, people share the review of that business, but then they can also review other companies that they've had an experience with and they do that. These reviews then show up in search engines where people find them. We rank extremely well in search engines. And they then also share their opinion of that business and maybe they share their experience of other companies also who then find themselves and become free users and users of our product. And so we're now at a place where, as you can see on this chart, very clearly, we are getting more and more reviews of more and more companies. Every month, we're now at a clip where we're getting 15,000 businesses added to the platform every month. As you can imagine, that is a fantastic source of leads for us. And the beautiful thing with the network effect is that the network effect is always on. The network effect is not driven by us having to pay Google ads. The network effect works for us when we sleep, the network effect works for us every day and function as an accelerant and as a moat depending on the stage of the market we're in. It also creates a lot of predictability in the business where you should think of Trustpilot as a funnel where businesses get reviewed, they sign up, they become customers. It's a fantastic predictability. And that takes me to the conclusion of my part before I give the word to Carolyn. I'm proud that we're creating something that is truly purpose-driven. We are creating something that is better for consumers, creating something that is better for the economies and something that improves the society we live in. We have a very resilient, differentiated product that adds an enormous value to the businesses that are using it. We're really benefiting from the scale and from our network effects. That creates a very powerful business model with very strong unit economics, and that takes us to a very clear pathway to profitability. So that was it for me. I give the word to our awesome Chief Trust Officer, Carolyn.

Thank you, Peter. Well, good morning, everyone. Thanks for coming along on such a hot day. I'm from Scotland, actually. So for me, it's unbearable. Right, now without wishing to state the obvious, the online world clearly has the ability to bring us all together, and that's great. But we're also all too aware of the challenges that, that also brings. It's really hard to know who to trust online and consumers are really struggling with this. You see it every day in the media, all that stories that appear there. And consumers are therefore looking for the tools and information that they need to feel confident in their online interactions. And I'm happy to say that this is where Trustpilot comes in. Our focus on trust, on protecting the community that exists on our platform and on making sure that the information that you see there is reliable is what truly sets us apart from others. In May, we published our second transparency report. Now hopefully, some of you have had an opportunity to have a look at that before you came along today. But it's a great read, so I would say that. But it is a great read, and I would encourage you all to have a look if you haven't had time to do that. It seeks to set out in a really digestible way the work that we do in this area, the strive for continuous improvement in our fraud detection and efficiency in our operations. And we will publish that every single year so that our stakeholders can really build that understanding about why Trustpilot is just so special. Now I know some of you, well, know more about Trustpilot than others. So I'm going to start today by taking you all through the core principles that we use when we operate our platform. It's our focus on these principles of openness, neutrality, equality and transparency that really sets us apart from our competitors. They show that we operate as a responsible platform and they enable us to fulfill our mission of becoming that universal symbol of trust. So why do we believe that a Trustpilot review is more valuable than others? Well, part of the reason for that is this principle of openness. It makes our reviews more trustworthy and I'll explain why. Trustpilot is a consumer-led platform, not business-led. Consumers can decide when they want to leave a review. Businesses can't selectively ask people to leave reviews and create a manipulated version of themselves on Trustpilot. And they also can't change reviews that have been written about them. And importantly, for any business, what this means is that they get full holistic feedback about how they're doing. They can genuinely talk to their consumers and understand how to improve their business and there is huge value in this engagement loop. Consumers don't expect companies to be perfect, but what they do expect is to see companies engaging well when there are issues. And as a result, this principle builds a real underlying strength to the network that we have. It encourages that virality and stickiness that we truly seek as a business. Now our second principle is that of neutrality. Businesses and consumers come to Trustpilot to help each other. But what's really important is that Trustpilot remains independent of both. Businesses and consumers both accept guidelines when they agree to -- when they use the Trustpilot platform, and we hold both to account against those guidelines. But in a recent content integrity satisfaction survey, we were told by a number of our respondents that it's this principle of neutrality, this stance that we take that really makes people feel that they can trust Trustpilot. Now both businesses and consumers also have access to flagging tools, and they use that to tell us where they think that a review breaches our guidelines. This forms a really valuable part of the multifaceted approach that we take to protect the platform and we continuously work to refine and improve that. In the last year, you can see some evidence of our improvement here because we have managed to improve the flagging accuracy rates for both businesses and consumers. In the case of businesses, it's been 14% improvement. And in the case of consumers, it's been a 4% improvement. And this is all done to make sure that our reviews are genuine, that the platform can be trusted. And with that, consumers come to our platform and businesses follow and so does the revenue. Now very closely connected to the principle of neutrality is that of equality. As we consider the reviews that are flagged to the content integrity team, every single review that is flagged is looked at in the same way, it's treated the same. And this, importantly, brings a sense of fairness to those using the platform, it brings consistency. And of course, with consistency, that brings scalability in our case. Now this scalability is clearly important to ensure that we minimize cost growth relative to our revenue. Our focus on scalability and a consistent approach has led us increasingly use automation to manage the flagged reviews that we receive. We've reduced the proportion of manual content integrity work from 25% in mid-2019 to around 10% by May this year. And we've also got some great highly skilled outsources now in place, and that means that we can turn resources up and down as we need them according to our operational needs. And efficiency initiatives like this have allowed us to reduce our overall cost per ticket between 2019 and 2021 by 34% despite the growth in review numbers. And our ongoing investment in areas such as enforcement, which better protects the platform and improve customer service, both of which mean that, overall, we will end up with less tickets there in the first place, mean that we anticipate seeing this trend continue into 2023. Now finally, the principle of transparency. Now this is a really vital factor in building trust amongst the community. And we bring transparency to those on the platform through a variety of trust signals that we display. Now trust signals are things that are valuable to businesses and consumers as they look to interpret the information that they see. So every business on the platform has a business transparency page, and you can go there to see information, trust signals such as how they invite people to leave reviews, how they respond to those reviews and whether they have taken the time to provide some form of identification to help reassure people that they're a genuine business. Now in January, very excitingly, we also launched consumer verification. This lets consumers verify their identity by using their photographic ID and bank-level secure technology to show that they're a genuine person. Now this is an industry-leading feature and it was introduced because consumers in the U.K. and the U.S. told us that given the level of concern about misinformation online, they would be prepared to do this, to provide some reassurance to others and some confidence in our online transactions. They also confirmed that they would be more likely to buy from businesses where they can see that the reviews have been left by genuine people. And I'm really pleased to say that this has been hugely popular. To be honest, it surpassed our expectations. We launched in January. And by the end of May, 60,000 consumers had already taken the time to do this. And I think what this shows is this willingness to help each other that exists in Trustpilot. It's that sense of altruism within our community that makes us so powerful. And consumer verification now provides a really valuable trust signal to those people looking at reviews. Now moving on slightly. Of course, underpinning all this is the technology that we use to make sure that the content on our platform can be relied upon. As you've already heard today, Trustpilot reviews are extremely valuable. And unfortunately and inevitably, that means that there will be some that seek to try and manipulate that and post fake reviews. Now our ability to detect that is fundamental in terms of us being recognized as that symbol of trust. So we use automated software that goes over every single review that comes on to the platform. And we also use very specialized software for certain specific problems, which I'll come on to tell you a little bit more about later. But the volume of data that Trustpilot has provides a significant moat around us as a business. We've been collecting this data for years. It's not easy to replicate. And it means that we have really reliable patterns of behavior to train our models. And due to the popularity, we get more and more data all the time. And that means we can continually improve our ability to detect fake reviews. In our transparency report published in May, we told people that we had removed 2.7 million fake reviews in 2021. To put some context around that, that's about 6% of the reviews that were posted on to the platform. And it was also around the same proportion that we removed in 2020, which shows that we are effectively managing our ability to scale our detection abilities alongside our growth in our platform. And we've also improved the accuracy of our detection in that time. We have 3% less false positives in that period, which is also great. And of the fake reviews that were removed, close to 70% of those were removed by our automated technology requiring no human intervention. So in terms of specific problem areas, I'm going to talk about review sellers, the dreaded review sellers, which I'm sure you've all heard about and seen in the press again. But for those that aren't aware, these are individuals or groups of individuals who offer fake reviews for a purchase online. Businesses buy them to artificially inflate their own reputation or damage the reputation of others. And they are a growing source of fake reviews. They're also a particular focus for regulators globally. However, we have a tool. It's a great tool. It combines behavioral analysis with data collected from multiple external sources to identify clusters of negative behavior. And what this does is let us see a really clear picture between the people that are writing the reviews and the businesses that are buying them. And we've got such a high degree of accuracy with this, 99.6%. This then gives us the confidence to go and work with other marketplaces and social media platforms and request that review selling accounts are removed en masse. So we're cutting them off the source. And it also lets us take other enforcement action. You may have seen some of the coverage around the recent action that we have been taking particularly that around Global Migrate, which was an immigration adviser that have been really -- some horrible stories taking advantage of consumers. And they've purchased 56 fake reviews from review sellers and written quite a number of their own fake reviews as well. Now in most cases, I should emphasize people do use the platform as it's meant to be used. It's minimal. The cases where we see people trying to manipulate, they are very much in the minority. But increasingly accurate fraud detection is enabling us to then automate the action that we take. It's important that we still tackle it even if it is in the minority. In the last year, by introducing automation into our enforcement team, we've significantly increased the volume of action that we've been able to take. And very importantly, we've been able to take that action quicker. For instance, we issued 121,000 warnings to businesses and 99% of those were issued using our automated technology with no people involved in that process. And that's due to the confidence we have in our ability to detect. We then applied 2,637 consumer warnings onto the platform. I don't know if you've seen these, but they warn consumers where we think a business is up to no good. And as you might imagine, businesses normally respond to that and don't do anything else in the future. But where they do, it's vital that we take action. We need to avoid any reputational damage associated with not doing so. And it also discourages misuse over the longer term. But even more importantly, it continues to enhance our reputation as that company trying to improve trust online. Now another scenario that we frequently deal with these days is that of media storms. I don't know how familiar people are with those, but they're situations where a business receives a significant influx of reviews that just aren't genuine. It normally comes about in response to some sort of media attention. And frequently, people will go to other social media platforms to call people to come and write fake reviews about certain businesses. We are able to detect anomalies and patented behavior so reliably, given our data and depth of data, that we can then automatically notify our investigations team who will jump on this. A couple of examples to try and bring this to life for you have included Manchester United. You may recall that a number of the fans are unhappy with some of the things that they were doing. And they began a social media campaign to boycott the club sponsors. Similarly, when Russia invaded the Ukraine, there was a lot of negative sentiment about businesses that were associated with Russia and maintained links with Russia. And in both of these situations, we saw a very sudden and significant increase in negative reviews of certain businesses. We were very quickly able to spot this and place consumer alerts on all businesses impacted. And that let consumers understand what was happening. And it also protected the integrity of our platform. And because of the speed that we were able to do this, it also means that Trustpilot are not dragged into any of the negative press attention that can arise in these sorts of situations. Now I'm going to move on slightly, everybody's favorite topic, that of regulation. You'll have all seen much increased regulatory scrutiny of platforms in recent times and also consumer protection. It's been in the media, it's there most days, to be honest. But regulators tend to head in the direction of increasingly protecting consumers. And as you heard from Peter, that is really closely tied to the vision that he originally had when he set Trustpilot up. So we tend to be very well aligned or even ahead, actually, in some cases. And we spend a lot of time building very positive relationships with regulators. We build these relationships for a couple of reasons. Firstly, it lets us anticipate where they're headed. It means that we're not caught behind the curve and associated with any negativity around that. And it also lets us really influence their thinking, make sure that the solutions they propose are practical and things that we can really do. But we see 2 largely global themes emerging now. So theme one is increasing pressure on platforms to tackle harmful and illegal content. Theme two, they expect to see people combating businesses that are unfairly misleading consumers. Now you've already heard me talk about the work that we're doing on fraud detection, tackling review sellers, taking action where we need to do so. So I'm very confident that we're meeting these expectations. We have seen the CMA and the FTC taking action against other platforms and businesses manipulating consumers and review sellers. But our discussions with regulators have been extremely positive. And indeed, we're actually often used as a source of information as they do their investigations, that's the extent of the relationship that we have. But that current regulatory focus and those positive relationships really confirm why our ongoing focus on trust is the right focus. The leadership position that we have built with respect to promoting trust and transparency online is a significant differentiator for Trustpilot. And I would anticipate that in years to come, this continued regulatory focus will put more and more pressure on other platforms. Well, thank you very much for listening to me today. If there were a few points that I could ask you to take away from my session, they would be that trust really is at the heart of who we are as a business. It's our differentiator. It's why businesses and consumers use us. And that is really based upon those operating principles that I talked you through. That's where our strength comes from. Also, at the core of that strength is our ability to spot and take action against any abuse of our platform. And we're getting better and better at that all the time. This is underpinned by that volume of data we have and the challenges others would have to be able to compete with that. And regulator and public interest actually is firmly focused on reviews. I think that's set to stay. But I think our leadership position in trust not only derisks the business, but positions us in the best spot possible for future growth. Thank you very much. Peter and Derek, would you like to come up for Q&A?

Thank you. So we're going to be taking questions live from the floor, but we also have the ability to take questions from the webcast. So if you are listening via the live stream, just push the button and submit your question, we'd be happy to take it. We have a couple of very helpful people in the room, [ Carmen and Panda ], who are going to be handing out the microphones. So if you have a question, I'd like you to raise your hand, wait for a microphone, state your name and affiliation, if you would, and fire away. The question is now really for Peter and Carolyn about what you've heard so far, and we'll have another full Q&A session this afternoon after you've heard the final presenters. Do we have a starter from the floor? Right over here.

I'm Bharath from Berenberg. With regards to the accuracy rate that you mentioned for the fake review removal process, how has that trended over the years? And you also mentioned other sources of data that you're using for detecting these fake reviews. What are these other sources of data, please?

Okay. So the trend is improving. It's been consistently improving for the last few years in terms of accuracy, and that's something that we will continue to improve. We, certainly -- there's more we can do there, but it is definitely improving and it's good, the performance has been good. Your second question, sorry, remind me, just related to?

The software that you use.

Software that we use, where the data comes from. Well, the data that we actually look at that's external, it's more -- we look at behaviors that are going on, on other platforms on the Internet. So we pull information around certain things like individuals, the IP addresses, those sorts of things, and we're able to produce this picture using what we can gather from external sources and our own behavioral data and the expectations that we would see as to how people would typically behave. And then we can see unusual patterns of behavior. So that's how it works.

Sorry, just a quick follow-up there. Are you facing any privacy-related like issues when you're trying to be more accurate in your fake review detection process?

No, absolutely not. We're not.

James Burt of Berenberg. On Slide 10, you were talking about the various sort of pricing models and with regards to the add-ons. Just wanted to know what the view is in terms of how you're pricing those or thoughts around pricing and then cost to deliver, and therefore, the margin profile you'd expect to follow through after that.

Sorry. Can you ask that question one more time?

Sure. On Slide 10, when you're looking at the model and referring to the add-ons...

Freemium model, yes.

In terms of how I suppose those are looking to be charged or monetized and whether some you'd expect to sort of come at a higher margin to the business.

In terms of their pricing for the modules, partially they are determined by what value we think they offer to the business. And the pricing also differs per country. We also have some pickers, where, for example, if you're using other than more countries, you pay more than for -- you said, in a single country. And if you're a larger company, you pay more than if you're a small company. I think in terms of our margin profile, I think the more we can improve the modules, the better that becomes.

We've got a question over there.

It's Ciaran Donnelly from Liberum. A couple for myself, please. Just in terms of the comments around being breakeven in terms of adjusted EBITDA. I believe consensus kind of looking for a loss-making in that year, where is the kind of outperformance in your mind versus current consensus expectations to deliver that? And also, if we just think, I guess, from your comments this morning in terms of the growth opportunity, why would you not take the opportunity to reinvest some of that profitability back into growth given the opportunity?

Yes, let's cover that after Hanno's section.

Okay. Just one for Carolyn then. Just on, I guess, most extraordinary measure of terminating contracts with potential customers. Could you give us any figures around that in FY '21 and what that was versus FY '20?

It is minimal. And the reason for that is not that we're not doing the right thing. But -- and I'm talking in the hundreds, low hundreds. There's been a decline -- well, actually, there's been an increase in the number that we've terminated, but that's because of our increasing ability to detect as opposed to anything else, but it's still low. And the reason for that is there are various steps that we take prior to that, like quite a few steps. And most businesses will engage with those earlier steps and will stop. It's very, very rare where a business won't.

This is Varun from JPMorgan. One question on the investments required to maintain the integrity of reviews on your platforms. You talked about pushing for consumer verification. And you also had a data point where you said that 70% of the reviews -- fake reviews are removed automatically, but the number of reviews are scaling. So is the amount of human effort required to review the review is also going up? And does that mean more investments in terms of building your team to review the content?

Yes. Well, I mean, as reviews grow, there will always be a need to do some of the work we're doing. I mean that's the nature of the business that we're in and running a responsible platform there. But we have lots of levers that we can pull to make it more efficient. We are not done with our work there at all, and I'm going to refer to a funnel as well. It's always a funnel. But if you sort of imagine, it is a bit like that. So as it goes through a process where there are things like flagged reviews, there's stages upfront around how reviews are flagged, efficiency is there, which means that, that's more accurate, so fewer get through. And so then the way we tackle those, for example, in terms of tools we provide to the team, how we educate the team, bringing down outsource of costs. There's all these different tools that we can pull, and we haven't yet worked all along that system to make it absolutely perfect, and that's what we're doing.

Jessica Pok from Peel Hunt. I've just got 2 questions, Carolyn, please. The first is, obviously, we're getting more and more media coverage over fake reviews. And yourselves, you've stepped up your game in terms of tackling the fake reviews. And as kind of there's more consumer interest around it and people know more about what you're doing, and actually, as you step up your game, are you finding the activity has slowed down? Or actually, it's just been increasing in line with the number of reviews? And then the second question, Carolyn, you mentioned that some of the processes is being outsourced. Can you talk about what exactly is being outsourced versus what's been done in-house?

Yes, of course. So first question, sorry, my mind is like...

Are we're seeing an increase in the number of fake reviews in line with just the growth in reviews?

No, it's not. I mean we're getting better and better at detecting all the time, and we use tools to remove. So it's not. We're improving our accuracy, and we are removing more at source through the enforcement action that we're taking against review sellers, for example. So the position is definitely improving. I think actually with the interest levels that you referred to is provide a real opportunity for us actually to stand out. And you may have seen, I mean, we're often called to go and be interviewed and do various things, and we've been held up as the people that are doing this well. And that is something that's really come about, I say, in the last year to 18 months. So that's been great to see. Second question?

Which parts to be outsource?

Outsource, right. So when I joined back in 2019, we didn't actually have any outsources at all. It was all managed internally. And we've moved to that model so that we can turn it up and down as we make other operational improvements. So all the improvements I just talked about wanting to make through that pipe, we'll be able to then turn that resource down. The way we've set it up is that the outsources can affect -- we've made them do in the end just about everything that can be reported to us, apart from the enforcement. And we are gradually now shifting them also to be able to do that as well. And that, of course, we're just trying to reduce the number of tickets all the time. So the more people you can have doing that, then there should be less coming on. So gradually, we'll drive these numbers of tickets, fake reviews down, and so there will be an improvement all the way along, but they can do just about anything really.

It's Daud Khan from Peel Hunt. Giving Carolyn a rest here and asking Hanno a question. On your slide around sort of the freemium SaaS model, I think when we look kind of globally at businesses that have kind of created that model successfully, there's this element of kind of micro marketing through the platform for the businesses where they effectively they trigger their own upgrades. i.e., a message comes up and says, "Have you thought about this module because you've reached your limit, et cetera." Can you talk about the -- Carolyn has talked about the automation of kind of the fake reviews, et cetera, can you talk about the automation through the process of a customer going through the freemium phase, to the first paid phase, to the upgrades?

So first of all, you're right, like the product is a great sales channel because when a business is using the free product, they are already familiar with us, they're already using it, they're probably already collecting reviews. So what we do in the product is that we suggest in various modules. And that's actually been -- if you look at the evolution of our pricing strategy, we used to have this free and then a good, better, best. And that made it hard to do that upsell because people -- a small business would self-identify as it would belong in a, I can say, the first tier and a big business would be in the best tier. So but now, for example, if you're an online retailer, using Shopify, we can say, "Hey, why don't you use our product reviews module. You just have to click here." Or if you're a larger company, we can say, "Hey, we can see that you're looking at -- spending a lot of time reading the reviews, why don't you look at the Insights product?" So it's something we're doing and it's something I think we have a lot of potential for in the future to do better also.

We've got a question here.

Avi, Anavon Capital. Two for me. One, is the review mix different in terms of positive versus negative reviews in businesses that are free or standard, et cetera? And that when they start soliciting more reviews from their customers, does their review mix improve or not because they're not just getting people who are frustrated or something like that? So is there a big difference, which could be used as a selling point? And then my second one is, when you say you have a -- you've driven a 5% increase in web traffic, a 10% increase in conversion in those case studies, how demonstrable is that in the sense that these businesses obviously are doing a lot of other stuff as well of marketing campaigns and so on? How much do the customers agree with you that, yes, I attribute this 10% increase in conversion to the fact that I'm using Trustpilot now?

Okay. So if I'll take the first -- sorry, the second question on conversion rate, and then Carolyn, you can cover the differences that they're in, in the star ratings. So overall, it's actually fairly easy and straightforward for our business to measure the impact of Trustpilot. If you have -- what you're using is you use an A/B split test. And so what you do is that you have exactly the same website and then you get traffic from the usual sources. And then you show half of the website with Trustpilot to your audience and the other half without Trustpilot to the audience. And then the software can give you within -- you can say, for example, 99.9% certainty, Trustpilot increased your basket size this much. It increased the conversion this much and it increased overall sales by this much. We also saw Google do a study for Google Seller Ratings, where -- that we support them and where they measure -- well, you can imagine how many businesses are using that. And they measured a 17% increase in the efficiency of the same ad when it got the stars. And then when more people click on it, you pay less, you get a higher quality score. And so the overall improvement on revenue was in that study, a 22% increase. What you see is that small businesses tend to get much larger increases. So for example, we saw companies selling used high-end watches. And so they got a, I think, a 55%, 70% increase where people were like, is that real? Whereas if you're an enormous retailer that people have heard about already, you get a much smaller percentage, but on a bigger revenue line.

And on your point around the different trust score or stars, it's not whether someone is paying or not paying that makes the difference. The difference comes into effect where -- and actually between paying -- and if people are engaging, whether they're paying or not paying, the scores are very, very similar. It doesn't matter. If people aren't engaging at all on the platform and you compare that to people that are, that's where the difference comes in. But that underlines the importance of Trustpilot, why we're there and the importance of taking part in that engagement loop.

Yes. And it's important for us, like you shouldn't be able to pay your way to a good score. But if you write awesome responses to negative reviews, that should count.

Yes.

Over here.

Will Wallis from Numis. You started verifying people as real people. How are you -- what sort of performance are you seeing in terms of how people are reviewing who are real people versus -- verified as real people as opposed to the community as a whole? And do you -- how are you using that data? How are you aggregating that data? Or do you have any other plans in how you aggregate data from verified real people as opposed to just everybody who's leaving reviews?

So on your performance point, it's still really early days with this. So we aren't -- we have yet to understand fully the impact of this in terms of how it performs on the platform and also the full potential of it. I actually think where we will start to use those verified consumers is a very engaged audience that we have, which will be hugely valuable in helping us in the future in terms of how we think about the product, what they would like to see, getting that feedback, really strengthening that community that we have on the platform. So that's really what we'd like to see. From a privacy point of view and the data, we don't keep that. It's actually a third party called Verisk that do the verification and they destroy that information after 7 days. So we have no access to that information.

So you -- in terms of how you use the aggregated data, you're still making decisions, it haven't actually -- you're not actually using aggregated real-person data. You know they're a real person, but you're not then aggregating that?

Yes, exactly. Yes.

We are showing it on the website that this is a verified user. And then over time, as we look at which reviews are we showing before other reviews, we will likely going to show verified reviews first. And that also then gives the user an incentive to contribute more because they're seen more.

We've probably got time for a couple more questions before we break. We've got one over just on the center table here.

[ James Horton ] from Canaccord. I just want to pick up on Will's question there, actually. It strikes me that a reviewed user is very valuable to the businesses on Trustpilot for obvious reasons. And so I would also think that a reviewed user reviewing one business is actually a valuable commodity for other businesses on the Trustpilot platform. Is there a potential in the future to reward those consumers who are willing to verify themselves and, by doing so, provide better quality reviews, and prove that they are good, valuable consumers by offering things like discounts or credits with any of the companies on the platform?

Yes. We are currently working on exploring various ideas for engaging those users as our community. And that could include things like that. We have to tread the line very carefully, but over -- not offering incentives to leave reviews. So we have to be very mindful of that, which we will do. But we will certainly look at ways that we can engage those consumers. They're very valuable, as you say.

Great. Well, we do have one question from the webcast. Oh, we've got one here. Okay.

It's George Webb from Morgan Stanley. I guess one of the topics I thought about a long time since the IPO is that in the free tier, you give quite -- it feels to me at least, you've quite a lot of functionality or way around reviewing and inviting reviews onto the platform. And I guess that's a deliberate method and one way to get the ecosystem to build. Does there come a point in any markets where you start to pair back some of that functionality because you felt you've reached enough kind of market awareness? And how far are you away from that decision point in any of your markets?

So it's a very relevant question. It's -- obviously, we constantly look at how much we want in the free tier. On the one hand, if you look at it strategically, if we make the free tier really useful, tons of businesses start to use it. And that gives us a lot of content. And that makes -- even if those free users don't become customers, then other businesses want to become customers. On the other hand, if we give too much, people don't want to upgrade. So the way we're currently looking at it is that we're actually running pricing experiments most of the time, in particular in that lower end of the market where we are experimenting with various price points and various configurations. So for example, there is a different price configuration for a very small online retailer that is successful versus if you go to the services industry, they need another pricing structure. So it's something we're looking at all the time, and that's as close as I can get to today.

Can I just a follow up on that? Would you be willing to fragment that tiering system by geography? Or would you want to keep it standardized on a more global scale?

I like the pricing structure to be global. I don't think we need another pricing structure for other countries. But you do notice that for -- in the markets where we are less known, we charge less and we charge more in the markets where we are known. And I could well imagine that in the future, we could also have different price depending on the industry.

Great. Well, in the interest of balance, I will take one question from the webcast before we break. I think this one is probably for you, Carolyn. "Can you give some feedback on the response to your more aggressive actions against misbehaving businesses?"

The response has been really positive. I think it's been very positive in terms of those opportunities that I referred to earlier as us being held up as this consumer champion, the people that are willing to do the right thing and build trust online. So that's been really, really positive. And I mean it's early days for some of these. We won't do them or we won't be suing people where we don't need to. We're not in the business of doing that at all. It's for businesses that are really manipulating consumers in a bad way, such as that immigration business that was quite shocking. And so we'll reserve the situations for that. But it's a very positive thing to do.

Yes. I think long term, this can save us a lot of money because if we get known as a place where if you write fake reviews that has consequences, you won't do it.

Yes.

Great. Well, I think this is probably an opportune time to take a break. We -- in the schedule, I think, we'll be back in the room at 12:15. And meanwhile, if you make your way to the lobby, there will be some lunch available and a chance to chat to the trustees that are here. Thank you.

Thank you.

Thank you. [Break]

Good afternoon, everyone. My name is Tim Hilpert, I joined Trustpilot 16 months ago as Chief Operating Officer. And I have the great pleasure today to tell you more about our go-to-market strategy and especially our go-to-market strategy for the U.S. This first slide summarizes what I would like you to walk away with from this presentation. The first thing is that we have built a strong foundation in every market that we operate in. The second piece is that we have a fantastic opportunity ahead of us, especially in the U.S. but also in Europe. Our value proposition is just as relevant in the U.S. as it is in Europe. And in the U.S. alone, there are so many more businesses that could benefit from Trustpilot. If I take all of those things combined, I have a lot of confidence that we are really, really well positioned to capture that opportunity that is ahead of us. Let's look at that opportunity in a bit more detail. What you see here is the total serviceable addressable market in the U.S., in the U.K. and in Europe, our core markets. If you look at that total across the world, that splits about half and half into the U.S. on the one side and the U.K. and Europe combined on the other. What you also see are 2021 bookings by our reporting regions. So North America, the U.K. and then Europe and Rest of World combined. With this data in mind, it is very, very clear that we have a massive potential for Trustpilot. This massive potential stems essentially from the fact that literally any business, regardless of region, size or industry can become a Trustpilot customer. Alicia and Hanno will talk in their presentations more about our achievements and our plans for Europe. I will focus the remainder of this presentation on the U.S., the single largest market we're operating in. And whilst the U.S. is unique in terms of its size and potential, many of the core principles that make Trustpilot succeed apply in the same way. What is common across all of our markets is our growth model and our value proposition. At its core, what makes Trustpilot special is that we are building a flywheel where consumer brand and consumer activity drives business adoption and vice versa. And this flywheel fuels the growth of the Trustpilot ecosystem that we often illustrate with this funnel on the right-hand side. And if you think about any go-to-market strategy that we, as a business design, we seek to find efficient and effective ways to either grow the top of that funnel or improve the conversion all the way from each step to the next in that funnel. You may ask how far we have come in the U.S. in building this flywheel, and let me go there next. This chart here has 2 key takeaways that are relevant to the state of the flywheel in the U.S. On the left-hand side, you can see that we are continuing to build a consumer brand in the U.S. In fact, we have continued our growth all the way throughout 2021. What you see here is Google Trends data specific to the U.S. for Trustpilot and for other review management platforms active in the market. And what you can clearly see from this chart is that we are setting ourselves apart by building this brand and that we continuously make progress. The second takeaway is on the right-hand side, and it's that our North American consumer activity adjusted for population tracks very much the same pattern that we've seen in the U.K., albeit about with a 5-year time lag. So the consumer activity in North America in 2021 is very much comparable to the consumer activity that we saw on Trustpilot in the U.K. in 2016. Let's look next at how this consumer activity sort of converts into commercial progress. What you see here is the percentage of customers that had unprompted reviews on Trustpilot before becoming paying customers. And in the U.K., that percentage grew from 46% in 2017 to 79% in 2021. In North America, that percentage grew from 25% in 2017 to 56% in 2021. And again, you can see when you compare the 2021 number, in this case, with the 2017 number, that is very, very similar and that the U.S. tracks the U.K. performance, in this case, with about a 4-year time lag. The next 2 metrics and sort of hard data, is also something that our teams feel that we are actually making significant progress. One of these indicators for our teams is the kind of companies that decide to join our U.S. business. On this slide, you can see some of the great brands that joined Trustpilot in the U.S. in 2021. These are some of the leading brands across a variety of industries. And our team in the U.S. is incredibly proud of working with these great companies. This feeling is quite similar to what I hear from some of our U.K. colleagues who've been around with us for a few years because they would talk about how it felt a few years back when big name brands would start joining Trustpilot. The other positive, and say, more qualitative indicator that we see is the level of co-marketing that we can observe in the U.S. I assume that many of you at least here, physically in the audience, are London-based. And you're probably used to seeing companies of all sorts, including their Trustpilot stars in their marketing, for example, in the tube. And that kind of co-marketing is something that we also see grow in the U.S. And as we were preparing for this presentation, one of our long-term finance team members who actually had a lot of value in creating this event, he was talking about his personal view, and I'd like to share that view, which was, essentially, as I quote, "In the past, you may have heard about Trustpilot on the radio in the U.S.," he's New York-based, "but nowadays, you see it on TV and you see it a lot on Instagram." So with this data and this qualitative insight, I think you can see that we have built a fantastic foundation for our flywheel. So how do we take it from here? Let me now move to our new go-to-market strategy for the U.S. Previously, we approached the U.S. just like any other market the same way. But given the size of the U.S., we have decided to adopt a different approach going forward. Instead of going in all in once and try to reach critical mass across all industries and essentially across the entire market, we've decided to split the large U.S. market into industries and to try to reach critical mass enhanced network effects for our brand in selected industries first rather than across the board. The simple underlying idea behind this strategy is that momentum builds momentum and that we can create network effects earlier because we reach critical mass earlier than with our previous approach. This idea is illustrated on this chart in a schematic way where the highlighted boxes on the right represent the industries that we target and where we reach critical mass. And as we do that, we get network effects, the brand grows, and we're moving to more of these industries. And step-by-step, we grow one industry or, as it is here, one box at a time to cover the entire market. You may argue that, hey, there is a key hypothesis that is underlying this strategy. And that is that industry needs to matter for building network effects and creating critical mass. And the good news is that our research as well as our experience as a company actually sort of suggest that, that is, in fact, the case. What you see here is how U.S. customers of review management platforms have discovered the review management platforms that they use. Of these companies that we surveyed, be they Trustpilot customers or customers of other platforms, 37% had found their future management -- future review management platform, either based on the reputation in the industry or based on recommendations often from industry peers. What you also see is the proactive outreach by the platforms, be that via online advertising or through sales reps, only accounts for 20% or roughly half of what the industry presence drives. So it's pretty obvious that industry matters. Indeed, it matters a lot and word of mouth in the industry. This is also very much in line with our own experience even with our previous less targeted approach. So let me share an example of that from our U.S. team. You may be familiar with a company called ZipRecruiter. It's a publicly listed company that operates a 2-sided marketplace, connecting job seekers with employers. ZipRecruiter became a customer of Trustpilot in 2013. And they've continued to grow their use of Trustpilot ever since then. What we've noticed is that once ZipRecruiter started using Trustpilot more and their co-marketing was picking up, we saw a domino effect kicking in for us in the industry. Peers of ZipRecruiter were observing how ZipRecruiter was creating trust. And so what we saw was deals coming in much more rapidly in the business and recruitment services industry than in others. And there are many stories like that around Trustpilot, both in the U.S. and in Europe. And it is this effect that makes us confident in our targeted industry-by-industry approach. And you're probably wondering by now which are the industries that we're going to select, such as recruitment and business services for ZipRecruiter. Together with an outside consulting firm, we conducted a very comprehensive quantitative and qualitative study of the U.S. market opportunity. We analyze the market size, the relevance of the Trustpilot value proposition and the competitive landscape by industry using market data, conducting dedicated qualitative and quantitative surveys as well as using our Trustpilot historical usage data. In the first step of that, we met essentially a huge database of all of the businesses in the U.S. against 133 industries. And out of those, we then identified the 50 highest potential industries based by their market attractiveness and our competitiveness. The easiest way to understand how we selected these 50 is to take an example. Let me take an example of 4 consumer financial services industries that we have selected for us. So here, we have consumer financial services broken down into 4 industries. I'm somewhat simplifying here, but all 4 of those were selected based on the 4 criteria on the chart. The first and arguably most important dimension is the value of service reviews. Think of consumers selecting their providers in any one of those consumer financial services spaces. They have to decide who the best insurer is for them or whom to invest their money with. And they typically don't take these decisions very often. Actually, it's rather rare. And these decisions matter to them. They matter a lot, and they have limited transparency into as to what service to expect. Now with this consumer perspective in mind, this pretty much easily shows why for businesses, service reviews create so much value in these types of situations as they allow them to showcase the quality of the service. The second dimension is market size and growth, very classic industry criterion looking at how many business are in an industry that obviously makes it more attractive or when you think of growth, how many new businesses are created in an industry. The third one is the traction with Trustpilot. What we would look at is, do we have more existing customers from this industry relative to our platform average? Or do companies in this industry retain better than the platform average. And last but not least, the fourth dimension is the positive spillover effect. You can think of it as the potential for co-marketing and hence, growing the Trustpilot brand. The Trustpilot brand really grows with its customers. And so as brands -- so brands that interact quite often with their customers or are very much investing into customer acquisition and marketing. They're more attractive to us because we grow with them. The value of service dimension is so relevant. Let me illustrate that with one more specific example, LendingTree. For the ones from the U.S. here in the room or on the webcast, you're probably aware of this publicly listed company. For the ones that are from outside the U.S., let me give you a little bit of background. LendingTree is a leading online marketplace for all kinds of borrowing needs, whether that be home loans, small business loans or auto loans and the like. Simply put, what LendingTree does is it empowers consumers to be shopping for financial services in a very similar way like you would shop for airline tickets or hotel space. LendingTree first signed as a customer in 2014 with us. And they have seen a good traction on Trustpilot. Today, they have more than 11,000 reviews. A key challenge for consumers when borrowing money is to judge what that borrowing experience is going to be like. It can actually be quite cumbersome and even painful. And this is where service reviews become so important for LendingTree. LendingTree uses Trustpilot to highlight the quality of the borrowing experience in their brand reputation. And after adding one of our products, the TrustBox widget, to their application pages, they saw an improvement in the conversion rate on auto loans of 6%. Also revenues per visitor were going up 2% to 4% as they were adding more TrustBoxes to more of their key pages. LendingTree also feature customer feedback throughout their marketing channels, such as in social media advertising or in their remarketing e-mails. I think this illustrates quite powerfully the power of service reviews. So you might ask 50 industries, well, how are you going to do that? By now, I've hopefully convinced you that we have a very clear and granular understanding of which of the industries are that are most promising to Trustpilot and how to drive further growth in the U.S. You may ask whether this approach is feasible and efficient. And in order to efficiently target these industries, we have decided to target them in waves of 3 to 5 industries at a time. This approach has a couple of key benefits for us. The first one is that our go-to-market functions like sales, customer success, marketing and in some cases, product, they can coordinate their work much better. If you're thinking about 3 to 5 industries, that's very doable. The second benefit is that we learn quickly. As we're moving into an industry and we observe results, we can decide whether we double down on that industry or whether we will be moving faster to another industry just based on the results that we see. And I'm happy to say that we've already changed the approach on how we grow our business in the U.S. The sales team there is currently spending about 3 to 4x the amount of time on the targeted industries relative to the previous approach. And the initial feedback from our sales representatives is overwhelmingly positive. What they like is that they can learn from each other. They can share talk tracks. Another piece that they like it makes their day-to-day life easier. Their preparation for calls is more consistent, and it's faster. And they spend less time validating whether a customer is a good fit for Trustpilot and more time on the specific contact and their specific needs. This approach also promotes teamwork because if one of our sales reps wins a customer in a target industry, that makes our proposition so much more valuable for all of them, it makes it easier for them to win additional businesses in the same industry. This is the way how we're going to build momentum. We're going to cover the 50 industries, 1 industry at a time, and we'll be building -- we'll be benefiting from the network effects earlier than with our previous approach. Let me close this presentation where I started it. Trustpilot has built a strong foundation in the markets that we operate in. We have a massive opportunity for growth in both Europe and especially in the U.S., where our flywheel tracks the U.K. by about 4 to 5 years. Our new go-to-market plan, combined with a strong team on the ground in the U.S., will help us to grow quickly and efficiently. And it is tailored to the U.S. market since the U.S. is such a large market. We believe that the U.S. is, in fact, exceptional due to its size and that the horizontal approach continues to be relevant in our other markets. To this end, our CMO, Alicia Skubick, will provide you with an update on our brand marketing campaign and our brand strategy as we plan to increase the go-to-market efficiency and effectiveness in these markets. And I will come back after Alicia's presentation, then we'll jointly take your questions. Thank you.

Hi. My name is Alicia Skubick, and I'm the Chief Marketing Officer at Trustpilot. I joined Trustpilot in October. And prior to that, I've spent much of my career delivering high growth and purpose-driven technology companies. I was so excited about the opportunity to join Trustpilot because the purpose and the mission is incredibly clear, and they're a force for good in the world. Secondly, there is a huge runway for growth on a global level, not just to build a category, but to build a global iconic brand, delivering shareholder value. Also, I was a customer of Trustpilot twice in my previous companies, where I saw incredible ROI on my marketing initiatives. The product works. And so what I'm going to talk to you about today is applying a proven path to bookings growth, using brand from my own personal playbook and that of really well-established companies. First, I'm going to talk about the opportunity that we have at Trustpilot to build our brand what would this mean for consumers, businesses and Trustpilot. I'm next going to review the impact that brand awareness has in our more mature markets and how increasing this in other markets will deliver scalable and repeatable growth. Lastly, I'm going to share the campaign strategy and the thinking behind it. So let's start with the Trustpilot brand. We got an incredible amount of free marketing. 84,000 businesses every single day promote our business. We see almost 50 million review invitations every month. And we get almost 100 billion TrustBox impressions this year alone. Just think about that with cost and marketing dollars. We've actually calculated it. It's tens of millions of dollars. So that's one of the reasons why I'm here. We already have this incredible platform with visibility and traction, but building on this platform, we now need to deliver nonlinear growth. So I'm going to talk to you about how we're going to do that. Our mission is to be the most trusted and the most used reviews platform in the world. And we believe that this achievable mission unlocks the rapid growth of our business and why people think more about and say more about the brands that they use. And how frequently people think about us, use us and what they say about us is key to our growth. Brands are built through awareness and affinity. When a brand is well known, loved and trusted, momentum builds, consumers use and recommend more. Businesses value what their customers are saying and adopt the product more. And what would this mean to consumers, to be the most trusted, most used? You can see, these are reviews from actual consumers on Trustpilot. It would mean that Trustpilot is the place and trusted source when making important purchase decisions in every market and if there's a place for consumers to go that gives them confidence. Consumers will have a more powerful voice and community to share their experiences, help other consumers and help businesses improve. And this matters to businesses. If consumers choose Trustpilot as the place that they go to read and write reviews, because they trust the content, businesses need to engage with the platform, too. As you heard in Tim's session, our consumer usage directly translates to business adoption. When consumers leave reviews, businesses buy Trustpilot. And so by building trust with customers and prospects and delivering incredibly strong ROI and marketing investments for businesses, Trustpilot has become an essential part of the open commerce technology stack. By using our brand, businesses get better click-throughs, better conversion rates and more trust. And so you've seen this graphic, but it is crucial to understanding Trustpilot. More reviews mean more consumer adoption, means more business adoption means more reviews. That's the cycle. And to ignite this proven Trustpilot flywheel, we must be known and loved. This is also known as brand awareness and affinity, and it's that simple. Consumers engage and promote your brand because they really believe in you. And when consumers believe in Trustpilot, they use us more, they trust us more, and they trust what we say. And higher brand awareness drives a more efficient and profitable business. In established markets like the U.K. and Denmark, we've seen a strong correlation between high brand awareness and increased unit economics, including acquisition, retention and average customer value. For example, in the U.K., aided awareness has reached 76%, which is incredibly good. And this brand awareness has dramatically improved our U.K. unit economics compared to group, where we have a lifetime cost to acquire of 5.1x compared to group of 3.7x. In other words, when people know us, business is biased. And in the U.K. and Denmark, where we have high awareness, the brand has grown organically. We've increased sales head count, benefited from customer co-marketing and targeted what we call the bottom of the funnel. And for those of you who don't know marketing lingo, this means Google search, events and webinars. And it's a strategy for harvesting existing demand, and it works. But it doesn't drive awareness quickly, and it only delivers linear growth. And to get to where we need to get to, we need a more scalable approach. So bringing this all together, we're going to make people know us and love us through a full funnel brand campaign. This is a repeatable and scalable way to increase revenue and deliver attractive unit economics. And again, for those of you less familiar with marketing speak, full funnel marketing builds demand at the top of the funnel and then converts prospects to paying customers at the mid and the bottom of the funnel. Our plan is to test this in a specific market through an integrated media campaign, including TV, video, outdoor, radio and social media. This is incredibly exciting for me and a strategic moment for the company. And so we've chosen Italy as our test market and why? The conditions are perfect for what we're looking to achieve. The e-commerce market in Italy is nascent, but growing at 29% per annum and forecasted to grow at $10 billion a year until 2025. The market is also primed with over 80% of Italian consumers habitually reviewing online reviews before making a purchase. And we've achieved momentum in our brand awareness. It's already one of our fastest-growing markets. And we're the first provider of reviews there. So in other words, we have first-mover advantage. You heard Tim talk about a sales-led vertical approach in the U.S. But what we've seen in smaller European markets like the U.K. and Denmark, with a less targeted approach, we get the network effects quickly, and this brand strategy will help us to jump-start the market and get to similar dynamics like the U.K. even faster. And just think about what we will know once we've run this campaign. We'll know how to enter new markets efficiently, and we'll know how to drive repeatable and scalable top line revenue growth. And we didn't invent this strategy. I've done this throughout my career, and it works. But also, here are 2 successful businesses who've also used this approach. Etsy, like Trustpilot, is a 2-sided platform whose investment in brand globally has driven a 23% annual growth in sales since 2019 and helped them achieve 98 million buyers in 2021. And Canva's test and learn brand strategy in the U.S. has helped them achieve 500,000 paying customers and $1 billion in annual revenues. And this is an incredibly well-executed and measurable campaign. Here, you can see the breakdown for the timings of the campaign and how we're going to measure it. The campaign is going to run from September to November. And after the second month, we expect to see uplift in lead business indicators, such as brand search, consumer and business site traffic, freemium users and demo requests. After the third month, we'll start to see the uplift in brand awareness, and we'll see meaningful commercial impact that we'll assess after 6 months, and that's really around acquisition and retention. The estimated payback for the media spend is about 18 months, so we expect April 2024. And we expect to achieve similar CAC ratio levels for this campaign as our current BAU levels. And we're measuring the impact of the campaign through a detailed campaign dashboard. We're working cross functionally across teams to make sure that we're measuring this organically and holistically. As we head into next year, we'll have the data we need to prove how successful a campaign has been. And it's going to be visible in our lead gen, our inbound, shorter sales cycle, accelerated bookings growth and ultimately, better retention rates. Here an overview of the campaign media. The focus is on TV, video-on-demand in YouTube as well as out-of-home, social media and digital display banners. We've developed specific assets for these formats. And one of the most important parts of planning a marketing campaign like this is frequency, so how often are people in Italy going to see this campaign. And then how -- what's the reach, so how many in the market will see it. This campaign will reach 82% of the Italian market, and they will see it 9x. This is incredibly good coverage. Right. So I have a question for you. Have you ever trusted the wrong hairdresser? Because I do know someone who has. So this is an example of the creative work. It's still in rough format. We're testing it in market, and we've seen great results. It's a dual-sided campaign, really focusing on both businesses and consumers, and it's designed to have really strong cut-through or impact and create a conversation. The idea is to show what happens when you don't check Trustpilot before you buy. And for businesses, they need to ensure they're providing the right trust signals to their customers. To develop the campaign, we've been working closely in partnership with our agency. We first interviewed consumers. What does trust mean to you? Have you ever been let down by a business? How did that feel? And what we were looking for is that universal moment of truth. That moment everyone has experienced when you've made the wrong decision. God, I wish I'd checked. We then look to capture that in high-impact moments, a child's haircut, a wedding photographer, your WiFi provider. And this is an example of the TV scripts. We also tested this with audiences. TV is an incredible part of the media mix, especially in markets like Italy. So we focus on making sure we have a very compelling AV platform. And I talked about testing this with audiences. Feedback from our focus groups have been very positive. In fact, it's the best feedback I've seen in a focus group in my career. I'll give you a chance just to read the comments. We interviewed both businesses and consumers. Reading that, I am just even more excited for this launch. So there's a few things I'd love for you to take away from this session. First is that we have an incredibly strong foundation, growing via powerful network effects and benefiting from brand amplification from our business customers. This is very difficult for others to come close to as the costs would be astronomical. Now is our chance to use well-proven marketing strategies to dramatically increase our top line growth, while maintaining compelling unit economics. Thank you. And I'll invite Derek and Tim to come up to stage.

Right. Well, thank you very much. We've got about 15 minutes for Q&A, after which we'll break briefly for a coffee break and then return for Hanno's final session. But we'll begin again by taking questions from the floor. And if you wouldn't mind putting your hand up and come, and we'll be able to help. Daud?

It's Daud from Peel Hunt. A question on the marketing front. So when you made a comparison between the historical approach and the go-forward approach, I'm thinking in terms of kind of a multitouch sort of marketing attribution model. When you think about the past, how much of that was kind of generated through inside sales calls, outbound to win new customers on to the platform versus the sort of the split you'd expect going forward, where it will be driven by the marketing touch points?

Yes, it's a good question. So what we're looking to do is test that through the campaign. Our expectation is that the inbounds will grow. We'll still expect to see the outbound happening, and that's been an important part of our strategy. But we expect to see those, the inbounds will increase dramatically.

Okay. Jessica?

Yes. Jessica Pok from Peel Hunt. The first one's for Tim. You've talked about the waves and launching the waves one after another. What has to be seen before you launch the next wave? And is it timing? You wait a month before you launch the next wave or some metrics to be hit before you launch the next wave. You've talked about 50 industries. When do you expect you can approach all of the 50 industries? And then the second one for Alicia. The marketing campaign. Am I right that it's already been launched in Italy or you're launching in October? And when you launch the fuller campaign, how many countries can we expect you to be launching this approach?

Should I start? Yes. Thank you for the question. I think in terms of how we move from one wave to another, we're quite tactical and operational about it. When you look at what is the sales team doing right now, it is measuring how long does it take to convert. Do we see conversion cycles come down. So far, we see that. If we're going to look at what is our conversion rate in the industry, what is it -- what time does it take to identify new prospects. And I think as we're seeing those efficiencies come down, we'll be adding more new industries. Similarly, we're still tactical in the sense that, for example, this summer, we know historically that travel is a service or is an industry that picks up demand for our service in the summer. So we've already started to look at travel as well to benefit from that seasonality. There was a second question. Yes, the second question was for how long is it going to take. I believe that this strategy will actually -- will keep us going for quite some time. I think the impact that I see is we see it first in the team, we already see that. We can see that today. The second part will be in penetration by industry. So that's something that we're going to monitor. Think of it as our percentage of potential in each industry. And then financials sort of will come through, then sort of like slightly later after that. But in my mind, this is a strategy that can actually last for quite some time, given the size of the U.S. market and given where we are as a company and our penetration today.

And then for the second question. So the campaign hasn't launched. It launches in September, and it'll I'll run through November. And so we'll be able to give more guidance as we're in the campaign and seeing the output. For now, we're looking at Italy and we're going to look at what happens there. We're really excited about what we expect to see coming out of that, and then we'll talk about any additional markets after that.

We have a question from Ciaran.

Yes. It's Ciaran Donnelly from Liberum. A couple for me, just for Tim. On Page 38, I'll be really interested to hear how you define critical mass. Is that a constant level in each industry? Or is there a delta? And two, am I reading this right in saying that you're saying you have reached critical mass in 6 industries already? From Page 38 on the right. And three, I guess, if we looked at the funnel that you have and what 550,000 reviewed domains, have you done any analysis to see how many of those domains are within the 50 industries you have identified?

Yes. Thank you. And I hope I'll cover all 3 questions. Let me start with Slide 38 in the 6 industries. This is illustrative schematically to illustrate the idea. There is no hard data behind the exact number of boxes. I think the first question was when do we know that we have reached critical mass. There's not a hard sort of percentage data. We have been looking at sort of like we've been done -- we've been doing a similar analysis in the U.K. and trying to see sort of where as a percentage where we would see a tipping point. And what I would say is like we're pretty far away from what that could be based on U.K. experience in the U.S. I think the indicators that we'll be using is mostly things like sales cycles, things like how much inbounds are we seeing from an industry, much like the ZipRecruiter story that I shared, right? I mean like we saw the inbounds coming in from others in the recruitment and business services industry. And I think those are going to be the indicators for us that we're saying, "Hey, yes, we have reached critical mass in an industry, but it's not a hard number." And then the third question was, help me again?

Just on the 550,000 review domains, how many sit within the 50 industries within North America?

Yes. So we looked at sort of when we look at our Trustpilot traction, this was one of the indicators that we used, was how many of the businesses are actually already on Trustpilot. In all fairness, in the U.S., most of our opportunity is still also to come on to Trustpilot in the U.K., which we did in similar analysis, almost all of our potential would already be on Trustpilot.

I have another one next.

This is Varun from JPMorgan. One question on your go-to-market efficiency. Can you talk about that, how you driving an improvement in your go-to-market efficiency? Is it more digital? And then what gives you confidence that your unit economics in U.S. will reach the level of more mature markets like the U.K. given your different approach?

Yes. So on the go-to-market efficiency question, we have a number of ways of improving that, right? One is, clearly, that I think -- I mean you've covered quite well in your presentation is how strong our brand is. That is one of the drivers already, that is needing to go to market efficiency. For us, I think it's -- initially, we're looking at what is our CAC relative to the bookings that we're bringing in. And when I look at sort of more operational metrics, it's about the activity and the success of our sales team. And then on the other hand, it is our marketing investments and how much does it cost us to create a lead and what is the ultimate revenue coming from that. I think what gives us confidence in the U.S., I think the main piece for me that gives me confidence around the U.S. is that our value proposition is just as relevant as it is in Europe. When I was observing focus groups with consumers, what we're delivering as a company is just as relevant to them as it is -- as I heard exactly on the same focus groups here for the U.K. When we look at businesses that use us, like, for example, LendingTree that measures the impact, you can see the impact. So I think that gives me confidence that there's no structural difference with the U.S. except for its size. I think that is something that we did have to adjust for, the size of the U.S. market with our approach of essentially, from a consumer perspective, see Trustpilot often enough. It's just a very, very long way. So we're trying to find ways to shorten that way with this industry-based approach that we're now going with our sales-led model. And then we're going to continue to learn. But I think this is going to give us a big benefit for quite some time.

Great. We have a question from Patrick.

Yes. Patrick O'Donnell, Goodbody. Just two questions. When you look at the U.S., in particular for Tim, in relation to the type of people you need in terms of that sort of go-to-market strategy, have you had to sort of -- have you found it difficult in terms of the recruitment phase to get the right people in on the sales side to go after this opportunity? And secondly, on the marketing side, when should we see what we're seeing in Italy lay over into the U.S.?

On the recruitment side, I think it's too early to say what the impact of the strategy is. We literally started executing the strategy with our sales team in April. So recruitment is one of the key things to do in a commercial organization. These are young colleagues often that are learning with us. And so finding the right talent, training them the right way, incentivizing them the right way. Those are all things that are part of our operations. And it's also fair to say that the stronger our brand is, the stronger our employer brand is. The U.S. is somewhat of a more difficult place for us to finding the right talent than it is here in London. But historically, that has not been holding us back. And I think that's also where -- like we're not a huge business. So for us, if we want to grow a lot in terms of our sales team in the U.S. right now, the absolute numbers are actually not all that big. And so it's not a constraint that will hold us back at this point. Do you want to take the marketing question?

Yes. So the second question. So when will we see a similar campaign in the U.S.? So I think we're testing Italy to see the impacts. And again, we're really excited about what we're going to see for the U.S. Tim talked about the network effects that we need to start seeing in the verticalized approach. So I think right now, we're really focused on making Italy incredibly successful, making the U.S. incredibly successful with that vertical approach, and we'll come back over time for any further plans.

Any more questions from the floor? I've got a quick question from the webcast then. And I think this one might be for you, Tim. Does your confident, new go-to-market strategy indicate upside to our growth expectations for the U.S.?

I think that is for the person who asked [indiscernible] because I think this is the right approach for us at this stage in the U.S. How that translates into expectations, so I think that is not for here now.

Any more questions? Well, if there are no more questions from the floor, I suggest we take a quick 10-minute break. I think there's some coffee available. Get right back on track, and we've got the financials next. Thank you. [Break]

Thank you, Derek. Good afternoon, I'm Hanno obviously. And today, I want to highlight a few topics to help you in your understanding of Trustpilot's business model. And for those of you that haven't skipped ahead in the presentation, I'll be focusing on 3 key themes. Firstly, that we have a proven track record of bookings growth at efficient unit economics. Secondly, that our high retention rate and diverse customer base underpins our predictability and resilience. And lastly, all our individual markets become highly profitable over time. And today, I'll share more detail on the U.K. specifically. These factors support our long-term margin outlook and our updated guidance for breakeven adjusted EBITDA in 2024. I also want to emphasize that on the back of our successful IPO last year, we're fully funded through profitability. And as a reminder, we reported a cash balance of $93 million at the end of 2021. So let's get into it. As you can see, we've been able to generate very consistent bookings, ARR and revenue growth even through the disruption due to COVID in early 2020. To be clear, we define bookings as the annual contract value signed, either new or renewed, in a period. It's therefore a leading indicator of future revenue. In 2021, we recorded almost $150 million in bookings, up 27% year-over-year, and we ended the year with $144 million in ARR, calculated at December 31 spot exchange rates. The growth in bookings resulted in $131 million in revenue, up 24%. And just keep in mind that all these growth rates that I've been talking about and will be talking about throughout the deck are at constant currency. We generate revenue mainly in pounds, euros and U.S. dollars. Looking at 2021 in more detail, we saw a strong performance in all regions. In North America, bookings growth was 15%, an acceleration from the 3% we reported in 2020, and revenue was $31 million, an increase of 9% over the prior year, reflecting the 2020 bookings growth, which had been affected by the pandemic. North America's regional growth continues to be slower than other regions. And partly, this is due to the retention rate there, which is on an upward trend, but still catching up with the group average, and I'll come back to that later. In our largest market, the U.K., we achieved another year of strong growth with bookings and revenue both up 27%. The U.K. continues to be a great example of the strong network effects and unit economics that our business can achieve at scale. I'm excited to take a closer look at that with you today. In Europe and the rest of the world, bookings grew by 35% to $55 million, and we reported $48 million in revenue, up 32% year-on-year. I want to take a minute more on Europe as it's worth highlighting in this context. Almost 90% of the bookings in the Europe and rest of the world regions are derived directly from Continental Europe, with the balance coming mainly from Australia and a mix of 50 other countries. Within Continental Europe, the markets contributing the most significantly today are Denmark, where the business was founded, France, Netherlands, Italy, Sweden and Germany. Together, they accounted for 38 million of bookings. These 6 economies have a combined GDP of over $10 trillion, which is 3x the size of the U.K. And yet they currently only generate the equivalent of 2/3 of our U.K. bookings. As Tim mentioned earlier, we estimate the serviceable addressable market, or SAM, in that region to be more than $7 billion. This should give you a sense of the tremendous potential that we see in these largely underpenetrated European markets. That potential is also obvious when you look at the number of cumulative reviews per country. You can see that Denmark has more reviews than France and the Netherlands, more than Germany, even though they're smaller countries, respectively. So there's plenty of room for significant growth. The balance of our activity in Europe, slightly over $10 million in bookings last year, is largely concentrated in Spain, Belgium, Ireland and Norway. And here, I want to stress that we're confident that we will see all our markets reach the relative scale and unit economics we see in the U.K. today. Globally, we have a very diverse customer base. As you can see, our top 10 customers by annual contract value make up less than 1% of revenue. And the top 500 combined only account for 15% of total bookings. We are diversified geographically and our customers are of many different sizes, from small businesses, to businesses with well over $50 million in revenue, which is true in all our regions. This broad diversification has led to strong predictability and resilience in times of economic uncertainty, for example, through the start of COVID in the first half of 2020. So let's look at this predictability in more detail. A large part of our revenue comes from a high returning customer base, many of whom have been with us for a number of years. And if you squint your eyes and look at the orange or yellow cohorts in this chart, you can see that churn tends to happen mainly during the first year. Now this is largely driven by customers that never actively use the product, even though they signed the contract. In recent years, we've made good improvements in what we call activating our new customers, and therefore, retaining them at a higher rate. Obviously, this is one of the drivers of our improving retention rates, so let's take a closer look. We have been able to increase our net dollar retention rate by both reducing gross churn and increasing account expansion. And we're pleased that even in 2020, we didn't see meaningfully increased gross churn. We did have some pressure on that account expansion as we offered concessions to long-term customers in particularly hard-hit industries such as travel, for example. But coming out of that in 2021, we were able to get back on to our trajectory of improving retention rates toward our stated goal of surpassing 100% net dollar retention rate for the group. And we know this is achievable as we're already past these levels in our largest market, the U.K. Network effect and brand awareness in this market enable us to have lower churn and larger account expansion. For reference, in the U.S. in 2021, the net dollar retention rate was 91%, yet improving steadily. But this is providing a headwind to total U.S. bookings growth, while the retention rate in the U.K. provides an additional tailwind for growth. We employ a land-and-expand strategy with our modular pricing that Peter talked about earlier and typically sell a customer on the standup platform with 1 or 2 modules and then add modules over the contract duration. But let me also walk you through another example of how we can expand accounts that highlight Trustpilot's unique opportunity. In this case study, we have a large multinational enterprise customer who first signed up in the U.K. given the strength of our brand here. After a successful proof of concept with a U.K. online store, we initially added the German domain, which doubled the annual contract value and then subsequently added an additional 12 European domains in year 3. So now we have grown an account from an already meaningful GBP 30,000 per year to a significant annual contract value of GBP 220,000. And there are plenty of opportunities to continue growing the account further, both in terms of geographies and as well as product modules. And so this example shows how our strength in the U.K. landing these customers as well as the presence in Continental Europe provides a fantastic opportunity for Trustpilot. And this is, by the way, also true for U.S. customers who sometimes start with us in Europe or the U.K. and then we add the U.S. domain later, which over time will help us penetrate that market. Overall, we've been very successful at increasing unit economics for the group from an LTV to CAC ratio of 2.8x to 3.7x on the back of improving gross margins, higher retention and reduced CAC. These metrics allow us to continuously invest in customer acquisition as we're confident about the payback and the return we're going to get from that investment. And keep in mind, the LTV to CAC ratio does not factor in net account expansion nor any second order network effects that we're seeing in our markets. As mentioned before, at scale, these metrics look even better due to the virality, higher brand awareness, which results in more efficient customer acquisition through an inbound model, higher margins and higher retention rates. In the U.K., for example, our LTV to CAC ratio has gone from 4.2x to over 5x in the same period. Let's look at how our customer acquisition actually flows through the P&L. We incurred sales and marketing expense in the first year to generate bookings. Bookings then amortized as revenue over the next 12 months, which is associated with cost of sales. And thanks to Trustpilot's virality that we touched upon throughout the day, we have an efficient customer acquisition model, and we're also able to deliver the service at high gross margins of over 80%. That number, by the way, includes not only the cost to host the website and the software, but also the entire teams that onboard support, retain, upsell and cross-sell customers. So it's a fully loaded number. And I want you to keep that in mind as you benchmark us against other software businesses because not everyone includes all these costs. At scale in the U.K., the net dollar retention rates are exceeding 100%, and we therefore generate a revenue stream into perpetuity that drops through at high gross margins, and each cohort has a high lifetime value, as we just discussed. While the year 1 P&L impact of new customer acquisition is negative, the subsequent years generate high margin, and we achieved an 18-month payback period. In each of our markets, we then layer these cohorts on top of each other with sales and marketing expense or customer acquisition costs spent upfront and the gross margin flowing through thereafter, which combined gives us an ever-increasing contribution margin. And here's the chart you've all been waiting for that shows what it looks like for the U.K. over time. As you can see, each year, the incremental revenue from prior year's bookings covers more and more of the sales and marketing expense incurred to acquire a new customer and therefore, were driving up the contribution margin over time. In the U.K., we've seen it to go from about 30% in 2018 to 57% in 2021, while continuing to deliver meaningful bookings and revenue growth. So we have a highly profitable underlying business in the U.K., and each of our markets is following a similar trajectory over time. So how does the U.K. compare with other markets? In 2021, the U.S. was at levels of the U.K. in 2018, that is around 30% contribution margin. And this will improve steadily as more and more renewal revenue covers the incremental sales and marketing spend. The group as a whole as well as the Europe and the rest of the world region is around 45% already. And we're, therefore, very confident in our ability to drive highly attractive long-term margins, which I will get to a little later. First, though, let me touch upon our ability to become cash flow breakeven and to achieve breakeven adjusted EBITDA in 2024, as we just guided to this morning. The main underlying free cash flow items not reflected in adjusted EBITDA are customer prepayments, that's change in deferred revenue; lease prepayments, which in the reported cash flow would be split between operating and financing cash flow; as well as CapEx, which consists largely of capitalized software development costs and some one-off office build-outs. Our customers tend to be on annual contracts, which provide good forward revenue visibility. And they also, on average, prepay us 6 months in advance, which results in positive working capital contribution. That, combined with a capital-light model, leads to strong cash conversion. Our response to the uncertainty of COVID in 2020 demonstrates how quickly the business can swing cash generation, in this case, by $20 million in a single year and actually from one quarter to the next. This chart shows you the quarter-by-quarter development of our adjusted EBITDA and underlying unlevered free cash flow in 2019 and 2020, highlighting the immediate impact of our response to COVID in the first half of 2020, given the tremendous uncertainty at the time. A large portion of our cost base is people-related costs, and that has scaled with hiring. And so by adjusting our hiring plan, we can quickly pivot to profitability. Moreover, our new customer acquisition costs are increasingly weighted towards discretionary marketing spend, which we can also toggle in response to changes in demand in light of, for example, a changing macroeconomic environment. Long term, we're committed to driving operating leverage even as we continue to grow the top line. As I walked you through earlier, each of our markets is becoming increasingly profitable over time, covering an ever larger share of sales and marketing expenses. And so this allows us to drive up contribution margin. In times where we invest to accelerate the top line, we front-load sales and marketing expense, which has a short-term negative P&L impact, but long-term results in higher growth and bookings. We believe these investments are worthwhile pursuing, given the vast market opportunity ahead in all of our regions. As we look at our margin development over time, I want to point out a few times, a few items. Sales and marketing spend were artificially low in 2020 and 2021 due to COVID and the inability to ramp up hiring again quickly afterwards. And as we know, we had guided for a step-up in 2021, and we're now catching up on some of that spend. And we're also testing a brand campaign in the back half of this year, as Alicia walked you through, and that's reflected in our sales and marketing guidance for this year. Similarly, G&A was deflated in 2020 as we had closed offices and cut back on the HR function, which we built back up in 2021 in anticipation of more hiring coming into this year. We also added a meaningful amount of back-office costs in connection with the IPO and being a public company. And then as everybody, we overall saw inflationary pressure on wages. And so some of these costs will anniversary this year, but we're absolutely committed to generate meaningful operating leverage in 2023 and 2024, in particular, in the G&A function and to achieve adjusted breakeven adjusted EBITDA in 2024. And based on our ability to control investments as well as the high gross margin and strong forward visibility of revenue, we're absolutely confident we'll be able to control our path there. Moreover, given the healthy balance sheet, we reported a cash balance of $93 million at the end of the year. We're fully funded through profitability and won't need to raise additional capital to achieve our goals. Long term, we believe the group can achieve U.K. style margins, where we already saw 83% gross margin, a healthy 103% retention rate and 57% contribution margin in 2021 while still growing bookings and revenue. So to summarize, in 2021, we saw good momentum across our business, further emphasizing our proven track record of growth. The business is resilient and highly predictable. Underlying profitability in each of our markets can scale to U.K.-like metrics. And therefore, we have a clear path to breakeven in 2024 and operating leverage. We're fully funded and able to capture the massive opportunity ahead. And before I invite the rest of the team up, I just want to say thank you to everybody that's involved in this, setting this up. And yes, we'll open it up for questions now.

Great. Thanks, Hanno. Now everybody gets to sit down, except for me. So we've got the entire team on the stage, and we'd be welcoming questions from the floor. As usual, please raise your hand, and we'll get a microphone to you. And if you could just say who you are and who you work for, that would be great. Why don't we start just here?

It's George Webb from Morgan Stanley. Just starting on a financial question, Hanno. On the U.K. business, sales and marketing has gone down from over 40% of sales to 23% in 2021. Firstly, how do you expect that to trend from here? I think it's interesting that you're already under your long-term expectation at the group level of sub 25% in the U.K. despite only having 3% market share of your addressable market. Is that replicable in other countries? Or is this something specific with the U.K. that you think won't be able to be achieved elsewhere?

Thanks, George. I think what you -- if you look at the numbers in 2020 and 2021, in particular, they shouldn't be seen as sort of a near-term target given that we said we actually had to plan to invest more in sales and marketing in 2021 and then ended up falling short of our own ambitions in terms of hiring, et cetera. So I think near and medium term, we would look to accelerate sales and marketing investments. And keep in mind, as we invest in the sales and marketing, for example, through brand campaign or through hiring salespeople, oftentimes, the P&L impact happens before we see the bookings. For example, if we hire additional sales reps, we pay them a salary for the first 6 months, but we don't expect them to deliver meaningful bookings contribution. And so there's always a lead lag in terms of investments relative to bookings impact.

And maybe just one follow-up, Hanno, on a different area. You've mentioned fully funded on the kind of capital side of things. And can you kind of update us on any plans for using that for M&A or technology acquisitions or anything on that line?

No, I think -- I mean, look, especially looking ahead into a potential macroeconomic uncertainty, we feel it's prudent to lay out a chart, a path towards profitability and self-financing on the core business, and then we'll look at the balance sheet at that point in time and see where we want to deploy the capital.

Right. Okay. We've got a question just over there.

I have a question on the growth from the additional modules. It looks like most of your growth is coming from new domains, different regions for the same customer. So can you help us understand your growth expectations from these additional modules? And as to the question we asked earlier as well, what's the range of these additional modules in terms of pricing? That's the first question.

So from a -- if you look at purely at the net account expansion in the retention rate, it's split between price increases on existing contract and product feature as well as additional products. And that can be additional domains in the same country, that can be additional domains in a different country, and it can be additional modules, of course. And so I wouldn't categorically say that most of the growth comes from additional domains in different countries. I think that's not true. It's a pretty diverse and multiple avenues for growth in terms of growing accounts. I was just highlighting a specific example that is somewhat different from the typical land and expand here, sell an additional modules because we thought it highlights the unique European or international opportunity for Trustpilot.

Sure. And is there a range of pricing for these additional modules? Or is it like very -- the range is too broad and you wouldn't want to talk about it now?

I mean I think -- I'm not sure we've disclosed it publicly, where each module sits. But sure, there is, depending on the value that we believe it adds to customers as well as the size of the customer, the revenue, the potential ROI, et cetera, we discriminate on pricing. And we're constantly evolving our pricing. And so one of the things we're looking at is, for example -- as you know, we changed the pricing. Peter mentioned this, from this good, better, best pricing to the standard platform and the modules. Now we're looking at what value does each module deliver. Are we pricing it right in the market? We're looking at adoption metrics. We're looking at, can we, at some point, go to usage-based pricing for some of these modules? It's an evolving topic for us.

Sure. One last question for me. In the split on sales and marketing across U.S. and, let's say, the rest of the world, would you provide any indication to that or...

No. But I think you can start backing into it given the contribution margins I've given for each of the markets.

We've got a question from Patrick.

Just looking at the U.K., you keep going back to the U.S. reaching kind of U.K. levels of saturation over time. Suppose you mentioned that you're at that 103% level now, I just wondered what would be a sort of a peak level that you think you can get to in the U.K. Do you think there's further room to go in terms of pricing and module content, given the strength of the market?

I'm happy to take that. We always think we can become even better. One of the nice things about Trustpilot is the bigger we get in the market, the better it gets. And so actually, we also deliver more value to our customer by being more known in the market, and the brand becomes more valuable. And so I think Carolyn talked about how valuable is a Trustpilot review relative to a non-Trustpilot review. And that only changes over time. And then secondly, I think we don't -- we haven't even explored volume-based pricing, but obviously, our customers are growing with us and becoming larger customers so we can charge them more over time. And so there is definitely room to continue to drive the retention rates up.

Jess?

And I've just got 2 questions. The first for Hanno. The breakeven target on EBITDA for FY '24, can you talk about what's baked into that in terms of the marketing campaign? Especially the brand marketing campaign because you're rolling that in Italy this year. And kind of what are your expectations to get to that number in '24 and your spend over the next 2 years?

So I don't think at this point, we're giving sort of detailed forward guidance on each P&L item. But if you look at -- so the business has a natural drift towards better margins and better profitability each year. And so we'll look to redeploy money into sales and marketing, but by retaining customers at ever higher rates, we're generating this incremental revenue each year that follows -- flows through at high margins that we can then redeploy into, for example, additional marketing spend. And especially if we get scale in operating leverage on G&A and the product function, there's a larger share every year that we can reinvest and still achieve breakeven adjusted EBITDA.

Okay. And the second question is on the net dollar retention. You've given us what you've achieved in the U.K. In Europe, can you talk about kind of some color on the different markets? In some of the mature markets, are you already seeing -- what kind of proportion you're seeing over 100% for net dollar retention rate?

I mean if you look at if you look at the overall group number and then you look at the U.K., and I've given the U.S. at 91%, you can back into the fact that many of the European markets are at pretty high levels as well.

Do we have any more questions? Over here. Ciaran and Varun.

Ciaran Donnelly from Liberum. I guess, just firstly, on the long-term goal of reaching over 100% net dollar retention. If we look at '21 versus kind of '18 to '20, in the U.K., you did about 8% net expansion, got to 16% in '21. What should we think is a steady state for the group going forward in terms of net expansion? And I guess, secondly, following on from that, as we go into, let's say, a consumer downturn, how sensitive do you think businesses are going to be to that net expansion number and your ability to deliver that 100% retention through the cycle?

So in terms of steady state for the group, I think we've been able to drive gross retention up or reduce gross churn. And again, if you look at where we lose customers, it typically happens in the first year, if they don't use the product. And so off the customers that don't actively use the product in the first year, the retention rate is only 50%, which is actually pretty high if you think about it. They don't use the product, and they still renew at a 50% rate. But we've been focusing on driving up activation and onboarding of customers. And so the more we get to an inbound model and the more we get to a model where customers use the free product actively already before we sell them, the easier it is for us to drive up that gross retention rate initially. And then obviously, we need to continue to show value, and that should further reduce gross churn. And then on top of that, we'll be able to grow accounts over time, and that will allow us to -- I firmly believe will allow us to actually expand our net expansion steady state or long term. So there's a lot of room for growth still there. Now near term, in a recession, what we saw in 2020 was that some hard-hit industries like travel, when in the lockdown, they went to 0 revenue, they came to us and say, "Hey, I really can't pay you this quarter," and we gave them some concessions. But we -- since we have these long-term relationships, a lot of them came back or we made some downsells. But if you have a more broad-based recession that doesn't impact industries so specifically and so absolute, other than companies going out of business, I would think that the businesses that stay in business will have an ever bigger need to showcase to customers that they're trustworthy because consumers will be more frugal and consumers will be more discerning in their purchasing. And so they may want to look at Trustpilot first before they spend their money online. And so we feel we're pretty well positioned to weather this.

And just two, I guess, just around your ability, as you outlined, to turn on and off profitability. What is the drive to become profitable in FY '24 if the opportunity in the market is so great and therefore, actually kind of getting to that critical mass level that was outlined, you can potentially do it at a quicker rate? And two, maybe for Peter. If we look back during COVID and the actions taken in the U.S., particularly around sales, if we do go into a deeper recession, what would you look to do around potentially turning on or off that profitability to reflect a harder recession?

Do you want to start with the first one?

Yes. So I mean, obviously, we always balance growth and level of investments. But I think I said this to someone today out there. There's only so much you can actually invest into sales and marketing efficiently and then eventually it becomes inefficient. And so there's only so many salespeople you can hire at any given point in time and then also ramp them up and make them efficient. We're testing and marketing brand campaign now. We'll see, but there's -- that also we wouldn't just spend hundreds of millions of dollars on sales and marketing, but the hope that this will translate into bookings. I mean that's -- if you look at Trustpilot over the many years that we have been growing the business, we've been always pretty measured in our investments and prudent, I would say. And so this business has a natural drift towards profitability, and we're just now committing to actually achieving it in 2024. I think in this current environment, with uncertainty looming, it's a very prudent thing to do, to be at least in a self-financing environment. And then we can redeploy incremental profit into sales and marketing and growth, and we have plenty of ability to capture the opportunity.

Yes, we want to grow. We are excited about the opportunity, but we want to grow efficiently, and we don't want to raise money.

And just in the scenario where it is a harder recession than anticipated.

I think I've become very humble in looking into the crystal ball. Like I see a lot of snow. I don't see a lot of -- like who knows what will happen? But actually, I've also become incredibly confident in our ability to deal with what happened. Like so we experienced COVID, and I don't hope it will be as bad as it was when that was at its worst. Who knows? Let's see. If it does, we'll deal with it. There are a couple of things we can do immediately. By the nature of the SaaS business, the second we stop investing into hiring new salespeople and ramping them up and they're very inefficient, like that alone gives us a huge cash buffer. And then, of course, we can look at efficiencies in the business just like we did in COVID. But actually in COVID, what we saw was that, that turned out, that was an overreaction on our side because in times of uncertainty, consumers flock to Trustpilot. So we were actually seeing one of our biggest growth opportunities because everybody was using us. And I think -- so the more pressure people feel, the more they go to Trustpilot. And the more people are on Trustpilot, the more businesses want and need to use it. So we had all these conversations with companies where they said, "Hey, these are very hard economic times. We're not sure." And then we can just show them this graph like where consumer adoption on their side just goes up and up and up. And then we become a must-have and not a nice-to-have product.

Okay. A question -- Varun first.

Most of my questions are answered. Just one quick follow-up. I'm not sure if I'll get a straight answer from you. But in terms of your underlying assumptions around regional profitability as factored into your '24 guidance, can you maybe comment on that? So you mentioned that the U.S. is probably 3 or 4 years behind the U.K. So what are the profitability assumptions that you've baked in as part of your guidance?

Yes, I'm not going to give you a straight answer. Again, I think if you look at 2021 as a bit of an outlier in terms of sales and marketing expense relative to what we actually wanted to spend, we've got -- given you guidance for this year that we're going to materially increase that in order to capture the growth in the future. And then it's going to be, again, sort of operational efficiency on G&A and operating leverage on G&A and tech, in particular, that then gets you to that breakeven adjusted EBITDA.

Chris, do you have a question?

You gave us an example of one of your larger customers going to in excess of GBP 200,000 a year contract value. I was just wondering if you could give us a bit more color into the evolution of that relationship. Is it the product of spontaneous decision-making on the part of 15 different people, country managers? Or was that the product of being able to go to an enterprise-level conversation? And how many more opportunities might there be of that nature?

When something -- oh, Tim.

No. Go ahead, Peter.

I just want to say when something like that happens, it's not coincidental that 15 people in the business in 15 countries at the same time decide that they need Trustpilot. That is, of course, a relationship we build and then expand. And I think, in particular, where we have potential is in these large businesses because they prefer to use the same software across all their countries, and we happen to be the provider that covers all the countries. And so that's both an advantage for us as we do account expansion. It's also an advantage for us as we expand into new markets because, let's say, hypothetically, we want to turn on a new market tomorrow, we have thousands of businesses with a presence there that we can call right out of the gate.

And then what -- for these larger customers, what budget is that you're -- what budget is it that you are sort of tapping into? Is that their marketing budget or...

Yes, typically marketing. Increasingly also, support.

We have a question from Daud.

Yes, just quick question really. In terms of the retention rate or the churn, how much of churn is due to business closure? That's part one of the question. And then part two is, when you see customers churn not due to business closures, do you ever see them return after the second year? So is there any kind of metrics that you have? Obviously, it might not be the right part of the cycle or whatever it might be, but they churn off, but they might be a free user, they might come back. So just a couple of those things.

Yes. We -- if I take just the first part of the question, I think others are -- sorry, the last part of the question. Yes, we definitely see some businesses churn. Then they see the impact of churning off Trustpilot, and that's not a good impact, and then they come back. So for sure, yes, we see that.

And yes, I think the -- in the later years, it's mostly churn due to business closures. And then as I mentioned earlier, in the first year, it's not active -- or it's basically not a usage of the product. I mean the two main reasons are not usage of the product, so you don't get the value. And then the other reason is going out of business. And then that's sort of the two main churn reasons.

Do we have any more questions? Okay. Should we have one from the webcast? So a question for Peter really -- perhaps. I see other review platforms promoting their solutions increasingly as differentiated on Trust. Is this becoming a problem?

I don't see that. I just don't. I mean, in some sense, I spoke with some person who said, what's the definition of high performance? And one of those definitions is that other people begin to copy what you do. So from that sense, that's probably a good sign if people think we're on to something. But I clearly think we're the market leader. I don't see other businesses where I think that's a real challenge.

That might be a good point, Peter, to -- us wrap up. I don't know if you have few final words to say.

No, just I hope you stick around a little bit. I've had an opportunity to talk with a lot of you. I know my team had an opportunity to talk with a lot of you also. We have Mieke, our new Chief Commercial Officer. We have Donna, our fantastic Chief People Officer in the room. We have Angela from the Board. I think I saw Rachel also. I'm not sure where you are, Rachel. And a lot of our trustees. And so I'm keen just to hear all your questions. We all are. And then finally, just say thank you for your interest, and thanks to Albus Dumbledore for letting us use the room today and the good people of JPMorgan, of course. But it's been awesome. And yes, let's -- yes, stick around. Let's get a coffee and talk some more. Thank you.