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GB Group PLC (GBGPF) Full Year 2025 Earnings Call Highlights: Navigating Growth Amidst Challenges
Release Date: June 10, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
GB Group PLC (GBGPF) reported a revenue increase of 3% on a constant currency basis, indicating growth despite challenging macroeconomic conditions.
The company achieved a 9.5% increase in adjusted operating profit, with margins expanding to 23.7%, showcasing improved operational efficiency.
Cash conversion remained strong at 91.3%, allowing GB Group PLC (GBGPF) to reduce net debt by over 32 million pounds year on year.
The launch of GBG Go, an identity orchestration platform, has already signed customers in key regions and built a strong pipeline, indicating positive market reception.
The company maintained a high level of repeatable revenue streams, with 95% of revenue coming from these sources, ensuring stability and predictability in income.
Revenue growth was slightly below initial expectations, reflecting ongoing challenges in certain market sectors.
The fraud segment experienced a 4% decline in revenue on a constant currency basis, primarily due to timing differences in revenue recognition.
The Americas identity business showed flat performance, indicating ongoing challenges in this region despite operational improvements.
The company anticipates a similar level of exceptional costs in FY26 as it continues transformation initiatives, which may impact short-term profitability.
There is a potential headwind from FX translation expected to affect reported growth in FY26, which could impact financial performance.
Warning! GuruFocus has detected 5 Warning Signs with GBGPF.
Q: Can you provide more details on the strategic review of global fraud solutions and the decision-making process? Also, how is the competitive landscape in the US changing, and what are the pricing dynamics across your products, particularly in the Americas? A: We evaluated various options for our global fraud solutions and decided to structure it as a single global business, focusing on geographic expansion and leveraging our tier-one customer base. In the US, we are focusing on our execution rather than the competition, targeting areas where we have a strong product-market fit. Regarding pricing, we have been proactive, deploying pricing experts to manage significant customer negotiations and renewals, which has helped maintain our gross margin. (Respondent: CEO and CFO)
Q: What are the right sectors for GBG in the US, and how are you managing the transition to a subscription model? Also, how is GBG Go currently priced? A: Our right-to-win sectors include businesses that value global coverage, such as gaming operators. The transition to a subscription model has seen little pushback, as it aligns with market standards. GBG Go is priced with a platform fee and customization based on customer needs, ensuring a productive conversation around their requirements. (Respondent: CEO and CFO)
Q: Can you explain the slowdown in momentum in the second half of the year and the outlook for future growth? A: The second half growth was slower due to lapping a strong Q4 and some customer project volumes in identity. However, we are confident in the underlying momentum for FY26, expecting growth to be second-half weighted. We are focused on building growth levers into the business, and the acceleration in growth expected by analysts aligns with our outlook. (Respondent: CFO)
Q: How are you managing the risk of customer churn with the transition to new strategic products and the introduction of GBG Go? A: GBG Go was developed based on customer feedback, and we anticipate uplift potential rather than churn risk. The platform offers more value, allowing customers to grow with it, which should enhance net revenue retention (NRR). We are focused on ensuring customers receive the best possible value from the platform. (Respondent: CEO and CFO)
Q: What is the strategy behind the move from AIM to the main market, and how will it impact your investor base? A: The move to the main market is intended to increase access to broader pools of capital. We are considering how to make the transition seamless, learning from others who have made similar moves. We have capital optionality, which could be used to address any overhang from the transition. (Respondent: CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
