Release Date: October 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ebiquity PLC (FRA:YO4, Financial) has experienced a strong tailwind in new business activity from Q2 onwards, leading to an improved trajectory for the second half of the year.
- The company has a full pipeline, providing a strong start into 2025, with 88% of full-year expected revenue already secured.
- Ebiquity PLC has successfully reorganized its operating model to become more scalable, focusing on technology-enabled services and global consistency.
- The company has made significant progress in rolling out its GMP365 data management platform, with increased client activity and identified delivery hour savings.
- Ebiquity PLC has expanded its client base with new global logos such as Airbnb and UBS, and has extended relationships with existing clients like Disney and BMW.
Negative Points
- Ebiquity PLC faced a disappointing first half of the year, with a 7% decline in revenue compared to the previous year, impacting profits and compressing margins.
- The company experienced challenges in North America, failing to convert new business opportunities and losing clients, which affected growth in the region.
- There were increased operating expenses due to dual running of old and new models, impacting financial performance during the transition period.
- Net debt remained stable at GBP15.3 million, contrary to expectations of a reduction, due to lower trading performance and exceptional cash outflows.
- The transition of Benchmarking services onto the GMP365 platform has faced obstacles, requiring modifications to cater for local market nuances, delaying expected efficiencies.
Q & A Highlights
Q: What new valuable services for clients are being developed from the data lakes?
A: Nick Waters, CEO, explained that Ebiquity is exploring the potential of training large language models on their extensive data lakes to create new value propositions for clients. This could help advertisers gain insights to better negotiate with platforms like Meta. However, this is still in the early stages, and investment in engineers and capabilities is limited.
Q: What does the evolution of Digital Media Solutions to digital governance mean other than a name change?
A: Nick Waters, CEO, clarified that the change involves packaging multiple solutions into a single governance program, allowing clients to select modules that suit their needs. This approach simplifies the sales process compared to offering individual solutions.
Q: What is the growth driver in Asia Pacific leading to an unprecedented increase in potential business, and is it largely China-driven?
A: Nick Waters, CEO, stated that the growth is not primarily China-driven. While China has been challenging, growth has been achieved through hard work. The increase in business is more attributed to the Singapore team covering more markets and better outbound marketing efforts.
Q: Post rationalization and transformation, what is envisaged as the approximately stable headcount versus today?
A: Nick Waters, CEO, mentioned that the strategic intent is to increase revenue without a commensurate increase in headcount. The focus is on improving operating margins and delivering services more efficiently, allowing the same number of people to handle more business.
Q: How does Ebiquity apply AI to support clients, and what are the future plans?
A: Nick Waters, CEO, explained that currently, AI is not directly supporting clients but is used internally to improve data processing efficiencies. Future plans include innovating client-facing products and solutions using AI, but this is contingent on available resources and progress in internal machine learning capabilities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
