Earnings call transcript: Team Internet posts steady H1 2026 results as margins improve

Team Internet Group PLC released its H1 2026 earnings results, which aligned with market expectations. The company reported net revenue of $61 million and adjusted EPS of $0.0324. Its market capitalization stands at $137 million, indicating the stock is currently undervalued according to InvestingPro analysis, which projects a higher fair value.

The stock is included in InvestingPro's list of most undervalued stocks. While total revenue decreased by 33% year-over-year to $179 million, the company attributed this decline to the discontinuation of Google's AdSense for Domains product. The company highlighted a higher-quality revenue mix, improved gross margin, and the return of operating profit.

Adjusted EBITDA was $9.5 million, which was lower than H1 2025 but higher than H2 2025. Operating profit reached $3 million, marking the first full-year operating profit since H1 2024. Adjusted EPS was positive but not disclosed in the summary. Net debt increased to $117.6 million as of June 30, 2026, up from $87.6 million at year-end 2025.

DIS net revenue grew by 8% year-over-year, while Comparison net revenue jumped 38% year-over-year. Full-year revenue for the past 12 months was $481.9 million, reflecting a 40% decline as the company transitions away from lower-margin products. Management described the results as meeting consensus expectations and noted that the report was in line with what analysts had anticipated.

The company expects improved cash generation in the second half of 2026 due to better operating performance and the absence of significant one-off tax and working-capital items. Management expects net debt to decrease to around $100 million by the end of the year, which aligns with consensus estimates of $94 million. The company's strategic review of DIS is at an advanced stage, with multiple parties showing interest.

There are no plans for M&A or dividends in 2026, which should facilitate deleveraging. CEO Michael Riedl affirmed that the company delivered on its promises, emphasizing the notable improvement in gross margin from 28% to 34%, a 6 percentage point increase, and the return to operating profit in Search after a challenging period.

CFO William Green noted that Search entered the second half of the year in a stronger position compared to the beginning of the year.