Trustpilot Group (LSE:TRST) Q2 2026 Earnings Call

0:00 Good morning everybody and thank you for joining us today for Trustpilot's half year 2026 results call. The presentation will commence shortly. After the presentation we will conduct a question and answer session. If you wish to ask a question you will be able to submit these via the ask a question button on the Sparklife page. I would now like to hand the call over to Adrian Blair Chief Executive Officer to open the presentation. Please go ahead.

0:30 Good morning, everyone. Thank you for joining us on the webcast today for Trustpilot's first half 2026 results. Hanno and I look forward to walking you through what was an excellent first half with strong growth and strategic progress. Before we get into the numbers, I want to put on record my sincere thanks to our outgoing CFO Hanno Dam for his extraordinary contribution to Trustpilot over the last 11 years. Hanno has been instrumental in taking a startup into the era of profitable growth we're now in. I'm sure I speak for everyone on this call and wishing Hannah well for the future. Following on from that I'm delighted to introduce our new CFO Marcus Roy who joined us yesterday following an extremely successful five years as CFO of The Economist Group. Welcome Marcus.

1:15 Thanks Adrian and good morning everyone. I'm delighted to be joining Trustpilot as CFO and look forward to meeting many of you in the coming days. I'm honoured to play a part in the business's future success. We'll now pass back to Adrian and Hanno to take you through today's results. Thanks Marcus and welcome on board.

1:33 Given Master's short tenure, Hanno of course will be supporting me on today's call. As usual, I'll run through operational highlights before handing over to Hanno for the financials. I'll then finish up with a deeper look at strategic progress. Three headlines for today's results. First, the businesses delivering financially. We grew bookings 18% in constant currency with particularly outstanding performance in North America up 27%. This drove adjusted EBIT data increase by 46% to $26.3 million and a margin of 17.4%. Second, we're winning in enterprise. Annual recurring revenue from customers paying over $20,000 a year grew 35% with a host of new product features, increasing our appeal to large businesses across sectors.

2:25 Third, AI is deepening our influence. Trustpilot is the number one cited review platform globally according to research by SEER Interactive. We saw a more than 400% year-on-year increase in chat GPT citations. Let's take a deeper look now at operational performance. As you know, a strong growth flywheel underpins our business. In essence, Trustpilot products collect customer feedback and turn it into impact on the actions of people and businesses. Because the feedback has impact, people are motivated to write it and businesses want to engage with Trustpilot. Increasingly, that impact extends to AI as well as people. In H1, our users submitted 20% more reviews year on year and our data set expanded to 394 million active reviews.

3:16 Just after the period closed in July, we celebrated crossing the major milestone of 400 million reviews on the platform. Impressions of our brands on other websites grew 15% year on year and Trustpilot reviews received 29 billion Google impressions in the first half. This flywheel of more consumers writing and reading reviews, more businesses deeply engaging with the platform continues to reinforce itself around the world and underpins all the growth you'll hear about today. So bookings grew 18% on a constant currency basis with healthy growth across focus markets, including an outstanding performance in North America. Key verticals driving growth in the period included lending, insurance, health and wellbeing and utilities.

4:05 Gross retention remained at the record 87% level we delivered in 2025. On the new sales side, enterprise momentum is excellent. We're increasingly seeing large multinational brands prioritise AI search optimisation. We recently won Expedia as a customer and spending time with businesses like that has made clear to me that they understand LLMs need relevant, authoritative and recent review data to recommend their offerings. Customer logos pay more than $20,000 per year, grew 29% year-on-year and we also saw significant growth in customer signing contracts over $100,000 in the half. As this enterprise base expands, it becomes much more relevant to view our growth through a global lens. With large multinational customers, we're seeing a natural shift in how some of these accounts manage their billing relationships, a dynamic I'll come back to on the next slide.

5:03 Because of the inherent operating leverage in our model, This top line growth translated into a 46% increase in adjusted EBITDA to $26.3 million, delivering a margin of 17.4% up 2.8 percentage points year-on-year. Later, Hannah will take you through where we're seeing the operating leverage come through in more detail. Let me now touch on each region individually. Starting with the UK, where we delivered bookings of $64 million up 11% on a constant currency basis. The net retention rate here remains above the group average and with a 60% contribution margin the UK continues to demonstrate the highly cash generative profile the wider group can grow into its scale.

5:48 Sales growth was particularly strong among customers paying more than $20,000 per year, up 27% year-on-year. Notable customer wins included Halfords, Space NK and EE. Growth was particularly strong in the telecoms, automotive and electronics verticals which all grew well in excess of 20%. Our business in the UK is incredibly diversified across the economy with revenue above $1 million in 41 separate industry verticals and the top 10 accounting for just 39% of total ARR. With overall market penetration still low at around 5%, the runway for growth remains significant in both the number of customers and the revenue per customer.

6:34 A growing number of our largest enterprise customers are moving their billing relationships overseas as they expand internationally. Expedia is a good example, a global deal won by a UK team but billed out of the US and therefore captured in our North America bookings figure. Overall, this had a 1-2 percentage point impact on reported UK growth it's a reminder that particularly on the enterprise side customer billing location is not a perfect proxy for underlying market penetration given how these multinational accounts actually operate turning now to Europe and the rest of the world we delivered strong bookings growth of 19% at constant currency 68 million dollars with growth across the region in both number of customers and average contract values DACH that is Germany, Austria and Switzerland delivered a particularly strong performance up 30% in constant currency year on year. As a result of this sustained momentum our DACH ARR has now surpassed 20 million dollars and Germany is our third biggest country after the UK and the US.

7:37 We recorded our best ever H1 sales from customers paying more than $20,000 per year and the share of bookings from that cohort in DACH was up 5 percentage points to 59% We continue to win enterprise accounts across the region, including BendingSpoons and EasyBank in Italy. Moving to North America, which comprises the US and Canada. We delivered outstanding bookings growth of 27% on a constant currency basis. As I touched on earlier, this top line figure is also supported by the expansion of our multinational base with billing relationships in North America. We saw excellent new business momentum and new business sales up 76% year-on-year. Both sides of the flywheel strengthened in the half with organic reviews up 50% year-on-year and the number of paying customers 11% higher year-on-year.

8:29 We welcome notable enterprise clients in the half including Bed, Bath & Beyond, Intact Insurance and Sunrun. I'll now hand you over to Hanno to take you through the financials in more detail.

8:42 Thank you, Adrian, and good morning, everyone. We delivered another strong half for bookings, EVDA growth, margin, and continued cash generation. Let's go through the numbers in more detail. Bookings grew 18% in constant currency to $171 million in H1, continuing a clear and consistent track record of top line growth. Our LTM net dollar retention rate was 101%. As you can see on the right, we continue to scale profitably. Adjusted EVTA grew 46% to a record $26.3 million, a record margin of 17.4%, which is up 2.8 percentage points year-on-year at the top end of our guidance, and we delivered $60 million of adjusted free cash flow in the period.

9:31 Our LTM gross dollar retention rate remains strong at 87% through H1. Since 2023, we have placed significant focus on improving gross retention and delivered a three percentage point improvement over the past three years. Within that, it's worth highlighting the UK's particularly strong gross retention rate of 88%. Net expansion of 14% brought net dollar retention to 101% from 103% in the LTM ending H125 as we completed the annualization of previously flagged package migrations. Retention rates of 100% plus reflect the strength of our growth flywheel, product innovation, and our enterprise strategy. This chart shows the compounding power of our subscription model with each new cohort of bookings stacking on top of a highly retentive expanding existing base.

10:24 The mixed shift towards our highest margin enterprise segment continues to accelerate. Customers paying us over $20,000 a year now represent 47% of total bookings, up from 27% back in H1 2023. The underlying unit economics of these accounts also remain excellent with gross dollar and net dollar retention for the segment well ahead of the group. Momentum in the US has been particularly notable here. The proportion of ARR coming from customers paying over $20,000 a year in the US is now approaching similar levels to the UK, which stands at 49% of ARR, albeit the US is coming from a much lower base. That's a real marker of how quickly North America is scaling and how our value proposition there is strengthening.

11:13 Let's look at the income statement from a management view down to adjusted EBITDA excluding stock-based compensation, DNA and non-recurring items. As always, an IFRS statement and reconciliations are in the appendix. We delivered revenue of $151.4 million and a gross margin of 83% up 0.8 percentage points year-on-year, reflecting infrastructure and hosting optimizations as volume scales partially offset by continued investment in our customer success teams following the sales reorganization. Sales and marketing was $41 million or 27% of revenue in line with H125. We continue to make investments into new customer acquisition and are improving efficiency every year.

11:58 Technology and content improves to 23% of revenue down half a percentage point as revenue growth outpaced our continued investment in technology capabilities including our nearshore engineering partnership and new AI adoption capabilities. We rolled out Claude across our tech product and finance team towards the end of the period and we see this as a foundational investment with potential to expand to additional teams in H2 which we expect to build efficiency gains over time. G&A was 14% of revenue down 1.2 percentage points, reflecting the underlying cost discipline. Whilst this slide presents the income statement as management views, it's worth spending a few minutes explaining the non-recurring items on the face of the income statement.

12:43 We excluded the previously announced Italian regulatory fine, which we are robustly appealing. We also excluded a provision relating to a historical US sales tax exposure. We identified this following revised external advice on state indirect tax nexus rules where sales tax hadn't been applied to certain customer invoices. This has resulted in a $2.6 million restatement of prior period and $0.8 million in the current period. The adjustment has no impact on current period trading performance adjusted EVDA or our FY26 guidance. We delivered record adjusted EBDA of $26.3 million, up 46%, and a margin of 17.4%, up 2.8 percentage points year-on-year, which keeps us firmly on the path to our 25% adjusted EBDA margin target in 2028 and 30% in 2030.

13:37 The clearest measure of underlying performance is cash generation. We delivered $60 million of adjusted free cash flow, up 5% year-on-year. Our cash flow is very seasonal, with H1 burdened by the company bonus payment and H2 typically much stronger, so it makes sense to look at it for the entire fiscal year. Last year we also benefited from a rent-free period in the London office and higher interest income on our cash balances, while this year we paid more cash taxes as the business becomes more profitable. Adjusted diluted free cash flow per share was up 13% to 3.9 cents. As we said before, for the full year we expect our free cash flow margin to be slightly below our adjusted EBTA margin. We closed the period with $21.9 million in cash after returning $25.8 million to shareholders through buybacks in H1, plus a further $16.5 million purchased by our Employee Benefit Trust.

14:33 Moving down the P&L, the non-cash IFRS stock-based compensation charge was $9.8 million up from $6.3 million a year ago. This consists of an $8.2 million non-cash charge reflecting the annualization of high-performance RSUs, our new ShareSafe scheme, new senior leadership LTIP awards, and accelerated executive severance agreements. Additionally, the charge includes an associated social security charge of $1.5 million. Despite this higher charge, total diluted share count continued to fall, down 5% year-on-year to $424 million, as grants were more than offset by forfeitures, employee benefit trusts, utilization, and our ongoing buyback program. We anticipate a similar SBC charge in H2 given new execs joining the team.

15:23 This brings me to the capital allocation framework, which remains consistent and unchanged. First, we invest in organic growth. $13 million were invested in the business in H1, deliberately deploying capital into go-to-market, product innovation and trust and content integrity. Second, we retain flexibility for strategic M&A that can accelerate our roadmap. Finally, we return excess capital to shareholders, having executed $25.8 million of buybacks during the first half. We're halfway through executing the £30 million program we announced in March, which consists of £7.5 million EBT purchases and £22.5 million of outright buybacks. As of September 11th, we've completed £15 million. We will complete this program prior to announcing another share buyback.

16:11 As noted in the statement, we also recently identified a technical point relating to demonstrated distributable reserves impacting certain share purchases on the prior buyback program. buyback programs, which we will remediate in Q4. More details can be found in the statement in note 10. Since we started our buyback program in 2024, we have returned $141 million to shareholders and repurchased 11% of the shares outstanding at the program's start. Turning to the outlook, following a strong first half, we maintain our guidance for high-teens constant currency revenue growth for the full year, alongside a 2-3 percentage point increase in adjusted EBTA margin. We remain confident in delivering sustainable growth and operating leverage over the long term, given the significant market opportunity ahead of us.

17:00 Finally, as this is my last results presentation, I want to take this opportunity to reflect on my tenure at Trustpilot. It's been about 11 years since Peter, the founder, and I met for the first time in New York to talk about Trustpilot and its massive potential. During this time, Trustpilot has grown 11-fold from $30 million ARR at the end of 2015 to circa $330 million today, and we have taken it from loss-making to approaching 20% EBITDA margin and created an amazing business. The opportunity ahead remains vast, and with the AI tailwind, we're just getting started. I feel privileged to have helped lead such a fantastic organization and remain incredibly bullish on TrustSource for future. And with that, I'll hand back to Adrian. Thanks.

17:44 Thanks, hello. So in 2026, as we said in March, we have three clear priorities, scaling trust, accelerating with AI and growing enterprise, all in service of one goal to build trust in the age of AI. Let me take each of these in turn starting with trust. We think about this in three parts. First, review integrity. Our focus remains on an AI-led moderation approach complemented by human expertise. We're continuously strengthening top of funnel detection to ensure the content on Trustpilot remains authentic and reliable. We removed 3.9 million fake reviews in the first half, a 28% increase year on year, with the vast majority of those removed entirely automatically.

18:30 second business misuse we're continuing to take steps to remove ineligible businesses and warn consumers about bad actors by bringing together fraud technology and engineering teams to build a dedicated rules engine spam domain model we're seeing exceptional results our automated systems remove domains into tech policy breaches at scale and we've reduced threat response times down to a matter of hours as we've seen As a result, we've seen 83% year on year increase in business profile warnings, reflecting the growing strength of our detection and enforcement approach. These warnings do more than to command consumer attention as they actively signal to large language models that a brand may be untrustworthy.

19:17 The third strand of our approach to trust is regulatory and policy engagement. We continue to see the regulatory landscape around reviews evolving as bodies like the CMA and FTC moved into enforcement of rules they introduced in recent years. We welcome this and are well equipped to navigate this changing environment. For a deeper dive into the entire trust and safeguarding ecosystem, I encourage you to take a look back at the replay of the May 2026 Trust Capital Markets event that's available now on our investor site. Moving to the second priority of accelerating with AI. Large language models prioritise the relevance, ranking and recency of reviews A recent research study from SEER Interactive showed that Trustpilot is the number one cited review platform globally. Research from Forrester in July highlighted that Trustpilot often outranks owned and paid media, heavily influencing large language models, opinions of brands and how they show up in results.

20:19 As you can see on the slide, we recently reached a SEMrush domain authority score of 100, the maximum possible, up from 95 last year, and a score that belongs exclusively to the world's most authoritative sites. This is calculated on a logarithmic scale, making a five-point jump at the top end extremely substantial. Where a business has no Trustpilot profile at all, AI is increasingly highlighting the absence of independent validation as a real trust gap. By contrast, having an active profile drives up to 75 times greater citation visibility than having none at all, making Trustpilot essential for any business looking to enhance their AI visibility.

21:06 Turning to our third priority of accelerating with enterprise. We're driving an unprecedented level of product innovation velocity with two major B2B release for Windows plan for 2026, alongside continuous feature improvements in between. In April, we released AI search analytics and in-app review collector, invitation optimizer and custom dashboards. We also launched a new lower cost digital only starter pricing plan. While still early, this is already showing good momentum. We have a second major release window this month focused on helping our customers get AI recommended. I want to highlight two specific updates here that are particularly important for enterprise customers. First, multi-domain user management.

21:51 Previously, user management was focused on individual domains, but to help large enterprises operating across large domain portfolios, we're now launching a centralized space to operationalize feedback. This allows tracking of sentiment and performance side by side across every brand in one view. Second, review collection by QR codes. This allows businesses to capture feedback in the moment, creating a faster feedback loop and building review volume. By tagging these codes with specific location IDs, customers will be able to track performance across physical touch points. And in between, we're continuing to ship updates, including our refreshed product review pages, which I'll cover next, and our expanded Shopify partnership.

22:37 Back in June, we announced Trustpilot is now a Shopify key product partner and through our upgraded Shopify 2.0 app, merchants can seamlessly embed Trustpilot directly within their native ecosystem. We've had a basic product review offering for a long time and have just released a couple of major upgrades. First, a universal product catalog pulls all product variants such as size or color into a single aggregated score and product review pages give each product its own Trustpilot profile page. These product review pages are currently available across all English speaking markets and we're rolling them out in all other languages from the 1st of October. It's important to note that product reviews are not just for retail. Most businesses divide what they do up into different offerings, for example, a bank with different accounts, or TUI who are using product reviews for specific holiday offerings.

23:31 We tested these across a wider cohort of over 400 businesses during the beta trial and saw an over 15x average increase in AI citation growth, generating 2.4 million chat GPT citation requests. Product reviews are an opportunity for many different customer types to become more visible in AI search, particularly in comparison inquiries. They're available as an add-on module, for those already on paid plans. Our focus on large enterprise customers continues to deliver financially. Customers paying over $20,000 a year have grown as a compound 34% annual rate since H1 2023 and ARR from this segment is up 174% over the same period. Ultimately the tangible financial impact of the product innovation we've just been discussing is showing up directly in these numbers Given the immense value customers get from the product. We're also seeing strong regional app performance, particularly in the US, where $20,000 plus customer growth is up 43% year on year.

24:38 As product value and AI visibility grow, our ability to attract and expand these large high value enterprise accounts accelerates alongside it. To ensure we continue accelerating this enterprise momentum and scale efficiently, we recently reorganized our sales operations. On the customer acquisition side, we introduced a new outsourced business development model. By shifting top of funnel lead generation to external specialists, internal sales teams can now focus on converting qualified pipeline and closing new relationships. On the customer value side, we split our existing roles to better serve the growing customer base. We introduced a dedicated customer success role focused entirely on onboarding and product adoption. Alongside them, we now have dedicated account managers with a deep commercial focus on cross selling, upgrading and driving net revenue retention growth.

25:34 It's early days and changes of this sort always take time to bed in. But we believe this model sets us up best to scale into the opportunity ahead. Now to bring all this to life, the enterprise momentum, the product value and the importance of independent trust signals, I want to highlight a fantastic recent example from Navy Federal Credit Union near Washington DC. What stands out most to me is how their Chief Marketing Officer Pam Peligian describes our partnership. She notes that when it comes to brand metrics, trust is at the absolute top of the pyramid. but a brand can no longer just tell people trust me they have to provide independent proof that's exactly what Trustpilot delivers with a short video now to play for you to play here we are a credit union founded we're 92 years young

26:33 founded to serve active duty veterans and their families and we offer a full suite of retail banking products we talk about brand metrics trust is at the top of the pyramid trust is the metric that matters the most and we talk a lot about it has to be earned not given I can't say trust me we have to earn it so putting our own data on the website that says we say 95% of our members are happy we felt like we can have a lot of credibility so we wanted to make sure that we went to a third party outside which is how we got to Trustpilot to say help us we want the data that we get from our members to be visible to people and without those metrics that really showed we had done what we promised to from a third party Trustpilot it was hard for somebody to believe large language models are becoming a really important way that people decide who they can trust how have you seen the feedback that you're getting on Trustpilot play into those large language models and help you there well it shows up because it's a third-party endorsement it's not just us saying what the service was like but it is exactly our members saying what it was like so it will show up in those different models and what we have found is you know a lot of our content still matters third-party content matters influencers matter as well as third-party endorsements which for us the Trustpilot is a very high source of credibility have you had to summarize the impact of Trustpilot on

28:05 Navy Federal in just one sentence what would it be it would be earned trust it's proof that we did what we said we would

28:23 So to wrap up before we open the line for your questions. Financially, we achieved 18% constant currency bookings growth, while increasing adjusted EBITDA by 46% and margin by 2.8 percentage points. Strategically, we firmly established Trustpilot as the leading AI trust signal, with the number one cited review platform globally, backed by perfect domain authority score of 100. We're moving faster than ever to capitalize on this accelerating product innovation. The enterprise focus is proving highly effective with ARR from customers paying more than 20K up 35% year-on-year. We're excited about the trajectory we're on, the value we're delivering to businesses and consumers, and the huge market opportunity ahead as AI continues to grow.

29:10 We remain well positioned for the second half of the year. And with that, thank you all. We're now ready to take your questions. We will now begin the question and answer session. If you wish to ask a question, please use the ask a question button on the SparkLive page. We will pause for a moment to allow the queue to assemble. Our first question comes from Olivia Venciago at Barclays. Can you walk us through why no upgrade in the full year guidance and how we should Think about shape in H2. Can you walk us through Dynamics region in EBITDA margin?

29:58 Think UK is accredited, but is US still defaulted? When should this change?

30:07 Well, I think we've been given pretty clear guidance of 2% to 3% percentage point margin improvement for the full year, and we're well on track on this. In the half year, we had 2.8 percentage points. improvement on the margin and we're well on plan to deliver this as well as reaffirming the guidance for the full year and the Longer term output of course of 25% percent EVGA margin in 2028 and 30 by 30 and As you think about seasonality between h1 and h2 obviously we talked about the sales reorganization happening in h1 the h1 margin tends to be lower than the h2 we typically have sort of a steady margin progression and In the business if you followed it for for a while, you'll sort of see that trend Basically repeating every year and so I don't think the progression should be should be a surprise to anyone and I mean we talked about regional profitability I think if you and contribution margin highlighting the strength in the UK in particular but we also talked about the US being very profitable on a contribution margin basis and if you reallocate your product and tech and G&A expenses I think you'll also find that the implied EBTA margin for each of these regions is break even or positive Thank you. Our next question comes from hi, there's a couple of questions here.

31:43 So number one, adjusted free cash flow fell from 85% to 61%. What level do you regard as normalized once billing benefits exceptional bonus, UK tax credits and lease payments settle?

32:00 Yeah, like I said, in the prepared remarks, I think it makes sense to look at cash flow in a trailing 12 month or a 12 month basis really, or rolling 12 month basis. and it's always around a point lower than the adjusted EBITDA margin. Last year, obviously we had some H1 benefits with the free rent, the interest income as we've utilized balance sheet cash to buy back shares and brought it down to more appropriate levels for the scale of business. Has come down And that has impacted the free cash flow as business continues to grow that will be a less and less relevant factor in overall cash generation of course and the The working capital benefits of the prepayments are sort of now at a normalized level which will sort of offset capex And so if we are modeling I think using adjusted EBTA margin and then taking a point off of that is at the proxy for free cash flow for the full year is a good starting point and then taken into account the seasonality.

33:05 So obviously the implied H2 margin will be materially higher than the H1 margin given those seasonalities. And the second question, what was the parent company's distributable reserve balance in the newly filed interim accounts? and how much headroom will remain after completing the current £22.5 million buyback?

33:31 So I don't have the headroom off the top of my head. I think we're in the process of doing another interim dividend from AS, our Danish operating entity, to the plc in September and then we'll continue to file updated plc financials. and those will then cover the remainder of the existing buyback and provide additional headroom and then sort of as we progress through through the year and The time will continue to do interim dividends to generate the tribunal reserves up at PLC and then utilize those for buybacks And third question trust violence spent forty two point five million dollars on conventional buybacks and EBD purchases EPT purchases against 16 million of adjusted free cash flow What minimum cash and liquidity buffer will the board maintain and what level of eb deeper ebt purchases should we model going forward So we we don't sort of look at ebt purchases and buybacks as Materially different.

34:41 I think we look at it combined that's why I reference the 30 million program at the beginning of the year and the split between those two is So that we're certainly sort of gnostic to that the EBT obviously provides a great way to offset dilution from From satisfying share grants that have been issued in the past and that are vesting and to mop up excess liquidity upon vesting when Employee vesting happens and there's shares sold for tax to cover the taxes and so I wouldn't sort of break those out separately and Like we in at the beginning of the buyback program in 2024 We had a ton of cash on the balance sheet as a result of the IPO and the business became profitable and cash flow positive So we generated more and more cash and we've used excess cash From free cash flow, but also from the balance sheet to to bring down those balances And obviously I'm not going to get pinned down on the number.

35:36 What's the right right amount of cash? We're managing this the business as you pointed out earlier, has seasonality in cash flow. So in H1, we probably need a higher cash balance. And in H2, we're continuing to generate more and more cash flow. And so I think we're sort of actively considering this as the business progresses and grows and continues to become more and more profitable and cash-generative. Thank you. Our next question is from Joe George at JPMorgan. Could you please talk about the disconnect between the very strong adjusted EBITDA growth plus 46% year-on-year and the slower SCF growth 5% year-on-year. How confident are you for the free cash flow conversion through full year 26 as a whole?

36:30 Thank you. I'm not sure what's more to say beyond the question I just answered and the prepared remarks, but I can continue it. to emphasize that obviously we have good forecast ability of our free cash flow and in the back half of the year we are accruing expenses for example for the company bonus which is a burden on EBITDA but it's not a cash out flow and in the in the first half of the year all that cash flows out of the business we also have obviously visibility around the timing of tax payments etc and we have good forecast ability on our lease payments and so I'm very confident with the guidance I gave you for the full year free cash flow of about point below adjusted EBTA and then the implied meaningful uptick in free cash flow in the second half.

37:22 Thank you. Our next question is from Gareth Davies at DB. Sometimes when a shift in sales model you get a little short-term disruption. has there been any detrimental impact in the more established businesses as a result of the sales team shift?

37:40 So look I think our teams have done an exceptional job of performing strongly through the period and you know you can see that in our results 18% constant currency bookings growth that means you know I joined business almost exactly three years ago I remember sitting here reporting a couple of days after joining first half of 2023 we had grown by 16% constant currency bookings so we've actually we're actually going faster now than we did back then now of course you know with the sales reorganization every moment of time and energy that's spent on that is time that isn't spent talking to customers so there's always some opportunity costs and as I say these things are always are always something that an organisation has to has to go through and get out the other side of so we've been doing that but I'm just impressed that the team has performed strongly through it and as I say these changes are all about setting ourselves up for scale on the new business side because we've got a vast opportunity to go into and we need a mixed model to go after that so I think about the combination of digital acquisition which we've expanded with the launch of our starter plan that's going very well I think about genetic AI I think about outsourcing and of course in-house capability that we still have so

39:10 we've got this kind of mixed approach to go after an opportunity that is that is absolutely fast and and then on the customer success side we've got an increasingly diverse and complex portfolio of products as discussed on this call a lot of new product coming up so we really need that segmentation of roles between CS that is all about helping the customer use the product and account management that is more about the commercial side and the renewals. So I think we've done a good job of executing that in the period delivering strong results at the same time and setting ourselves up for the future most importantly. And we have a follow-up from Joe George at JP Morgan.

39:58 What gives you the confidence that requisite controls are in place to ensure no further provisions will be required in relation to historical US sale taxes?

40:07 Yeah, thanks George. So Joe, so we've done a lot of work obviously in the house leading up to the provision that we made. We retained external advice from a big four firm and we looked at this together with our auditors and gone through sort of this on a state by state basis. and looked at sort of the historical invoicing that we had done and where we should have applied taxes. And so we feel that we have a robust provision now on the balance sheet that will cover the potential past liabilities. Thank you. Our next question comes from Jessica Park at Peel Hunt.

40:56 Is there an incremental cost for having outsourced business development capacity capability? Can you give me color on the shape of the $100,000 contracts and what they normally consist of e.g. multiple international domains, deeply contact integrations? How are the new clients using your platforms at this level?

41:18 yeah happy to talk to both of those Jessica so in terms of outsourcing the the model is more efficient in the sense that you you can do more activity at lower cost and As I said in my earlier answer the whole rationale of this is to have a model that is Suited to the scale of the opportunity when we when we look at the size of our addressable market across crossing geographies we're still very very low penetration rates particularly in the US but also in the UK and our other focus markets so we've got a very very long way to go we've got you know multiple multiple industries with businesses that have a need for Trustpilot and we need a cost-effective way to go out and capture that as I say that's not all about outsourcing it's also about digital acquisition we're increasingly looking to AI and how we can use AI to go after it more efficiently along with along with substantial in house teams as well.

42:24 But it's all about cost effectively addressing that scale opportunity. And then secondly, you asked about customers paying more than $100,000 a year. So what gets businesses to that to those sorts of price points are a combination of a few things. first of all the sheer scale and size of the customer meaning that our product is going to have very significant impact on them then we've got the grade of the product they're buying so typically businesses at that scale would be on our enterprise plan which contains all of the key features and is the most expensive then you've got territories countries and then you've got domains or brands that the business wants to use us across typically once a customer gets to that level they're using this across the full value proposition so we talk about when we speak to businesses we talk about build trust grow and improve and so you collect feedback you respond to it to build trust with customers you showcase your feedback in the Trustpilot brand to help your business grow and and then you look at our analytics products to help you improve and typically a customer at that level will be using us across all of those things making us very important both on the marketing side and on the customer experience side for the customer thank you we have a couple of questions in from Sean Keely so I'm going to break these up number one Clearly, you can provide visibility of citation uplifts for brands with an active Trustpilot

43:57 profile. Where do you get that data from? Does it come in directly from Google or OpenAI, for example?

44:04 Yeah, so the answer to that is we do two things. First, we look at external sources, like SEER Interactive, which I talked about a couple of times in the prepared remarks. And secondly, and this is where the 75% figure comes from, we look at our own server logs, which tell us every time we get a request, from one of the large language models now those internal server logs aren't a perfect representation of citations because the models are training on our data they're not just doing real-time inference and what that means is they're very often citing Trustpilot without it actually hitting our server logs so the data we see in our server logs is a small subset of overall citations but we combine those two things the external sources and our internal server logs to give us a good impression of what's going on the consistent theme across all of that is the relevance recency ranking are the key things so in other words having a large enough volume of reviews such that the LLM can surface an answer using reviews that is exactly relevant to the user's query then having reviews that are recent so if your reviews are stale and you know many months old then it's much less likely to get cited by a large language model and thirdly ranking which is the authority of the source effectively which is where Trustpilot

45:37 itself with that domain authority of 100 we're talking about the authority of us as a source becomes important so all of that means that basically the more feedback and the more frequent feedback companies are getting the more likely they are to be showing up in large language model search and follow up from Sean. Is there more that you can do to support brands looking to assess their return on investment on their spend? For example, click through from AI overviews, subsequent purchase behavior or even trying AI search patterns into spend on the other paid media sources.

46:19 Yeah, so we are doing more with customers in this area. You'll have seen an ROI study that we did a while back with Forrester that showed a 401% ROI on average on customers investment in Trustpilot but we are doing more particularly with larger customers to help them really quantify the ROI and it isn't of course as straightforward as simply things like traffic metrics because so much of the value is from citations or from the growth that they're driving through featuring Trustpilot in their own media so getting a higher ROI on media budgets so it's not as simple as just looking at for example how much traffic they're getting through Trustpilot but when you add up all these sources it's really substantial value creation and we think that's only increasing as AI takes off Thank you. And the final question. Can you run us through in some detail what has happened with distributable reserves and what the likely impacts are and if you expect to be able to plan or launch a further buyback in the future?

47:34 Yeah, so the impact on the financial performance is nil. It's a technical sort of issue that we need to cure, but it doesn't change any of the numbers or any of the cash balances or whatever. And also, I think what's really important to note and state for the record is that the total amount of buybacks do not exceed the total amount of distributable reserves that were available in the period. I think what happened is largely an issue around when and what we demonstrated in the PLC filings in terms of available distributable reserves. and then having done subsequent interim dividends that were not reflected in the filings while the buybacks were ongoing and utilizing those reserves which happened to other companies as well in as you'll see in the note 10 in the context of the first buyback we actually executed the buyback prior to having the reserves which were then subsequently generated through the share capital reduction in May of 2024 And that was all that was due to a sort of a technical accounting Mistake where we had erroneously included share based compensation reserves in the amount of retained earnings that we deemed distributable which upon further review we identified as a Long and they shouldn't have been included and so we was we thought at the time that we had demonstrated sufficient reserves when in fact We hadn't and we should have filed interim updates on those PLC financials to also demonstrate them

49:08 And so obviously we will now remediate this. There's a well-trodden path on remediation in the UK and once it's all remediated will continue to Obviously the business is generating profit and retained earnings and we can demonstrate such

49:26 With plc interim financials and four-year financials that will continue to file and that will then allow us to continue to do buybacks Like if the keyboard knows this has no impact on our trading and on our actual cash or anything to do with future performance And a couple of questions from David Nolan now from Morgan and Stanley. Number one, North American new business sales were up 76% year on year. Is that level of acceleration broad based and sustainable or did H1 benefit from unusually strong large deal timing?

50:12 So we were thrilled by the pace of growth. I think a few things to to unpick. So first of all, the market opportunity for us is vast. And the growth flywheel as we call it is clearly accelerating. So when we look at all of our flywheel metrics where there's review volume or trust box impressions they're absolutely flying in the US so we can really see the proposition and the proposition catching on there and we saw a very significant very significant growth in the enterprise segments there was a tailwind from some of those billing relationships that we mentioned shifting from from the UK to the US but overall we expect we expect to continue to perform very strongly in the US which is which is a huge opportunity for us and the second question from David Nolan group NDR is a hundred and one percent while larger customers historically have stronger retention and expansion as enterprise mix increases should we expect Group NDR to trend back up from here in financial year 2027?

51:27 Yeah so there's a lot going on under the hood with with NDR as you correctly point out the enterprise segment has the most attractive NDR and that's part of the reason why it's strategically our priority and our fastest growing segment and we also as we mentioned launched in the period digital acquisition of our starter plan so that's having a very beneficial increase at the low end on logo growth but those low end logos obviously have lower net revenue retention rates and the way I look at it is we always target NRR of 100% and what's great about the business today versus a few years ago is it's off a base of gross retention that is far healthier so we're at 87% GRR where a few years ago that number was 84% And that is a much healthier basis on which to deliver long-term sustainable NRR.

52:31 What gives me confidence in it is the level of product innovation in the business. We talk, for example, about product reviews, which is an add-on module that customers need to buy with huge value associated with it. So that's the sort of thing we're going to continue to do to bridge the 87% GRR with the 100% plus NRR that we aim to deliver going forward. Thank you. We're going to go back to Gareth Davies at DB. Excepting that the UK is selling globally and would be healthy teams including that benefit, the 11% felt a little sluggish. Penetration only 5%. What gives you the confidence that this is a business that can still grow teams or should now see this as a single digit 10% growth profile looking forward? How much does the uncertain macro backdrop impact?

53:29 Well, think about some of the stats we've been sharing today, Gareth. I mean, we saw enterprise growth of, what, 27%. We can see our GRR, gross retention in the UK, is exceptionally strong above the group average, 88%. NRR is also ahead of the group average and the contribution margin as Hanno pointed out is really exceptional at 67% and what I've also pointed out today is how incredibly broad based that growth is in the UK so we've got we've got over 40 different industry verticals where Trustpilot makes at least million dollars of ARR in the UK if you think about that for a second you know I used to run a business where we built the entire company off one of those industry verticals which was the accounting vertical we've got you know paying customers more than a million there are in more than 40 different industries and that's why we you know were very clear that the UK penetration is still extremely low around five percent the business has a very long way to go here and the way we look at growth across regions is always to optimize group performance as we say so the question I think to ask is you know how are we going to deliver long-term mid-teens bookings growth globally for Trustpilot and that's ultimately what we're aiming for and optimizing for rather than the growth of any particular market and as we've seen in the US a few years ago it was

55:02 growing more slowly now it's accelerated and so individual markets will fluctuate but we always aim to deliver and optimize the group performance at the end of the day. I should also add we've got next week our biggest ever customer event in the UK coming up Trustpilot Horizon where we'll be launching some of our new B2B products that I mentioned on this call that's had an absolutely fantastic take up so we're still very bullish about this market and pushing hard to acquire more new customers Thank you and a final follow up from Gareth in the US can you talk a little around sub-sector momentum any sub-sector stand out as particularly strong any new areas of focus that have opened up sure yeah happy to do that so we saw great growth in insurance in well-being in software technology so we're starting to see as in the UK that our growth is catching on across different industries often the way it works is one or two leading companies in the sector will start using Trustpilot others will see that and then it will catch on within that within that industry so we're still more concentrated in the US than we are in the UK for example so financial services in the US you know insurance credit banking

56:32 absolutely fantastic vertical for us but that that is gradually broadening and as I say you know we saw great growth in software well-being and parts of retail like appliances and electronics doing extremely well too. But you know one of the lovely things about this company and running it is we're constantly choosing between attractive options you know we have many different paths to deliver growth and that includes different verticals within the US market. Thank you. And a couple of questions from Chris Lewis. Number one, on revenue, H1 came in at 19% constant currency against a full year high team's guide. Given the revenue base for H2 is largely locked in by H1 bookings, is the implied H2 deceleration a statement about booking momentum?

57:36 No, I mean I think it's a reflection on this year's bookings performance. I mean, as you rightly point out, revenue in the back half is largely a function of bookings last year and year to date. and I think the guidance remains high teens for revenue and our bookings growth is mid-teens growth guidance and so I think we'll and then adjust the DBTA margin improvement of two to three percentage points I don't think it sort of speaks to or implies any massive deceleration in any of these metrics Thank you. And Chris's second question. ChatGPP citations were up 400% plus year on year, 75 times citation visibility for active profiles. Where does that show up commercially?

58:32 Is it converting into higher win rates or shorter sales cycles or price? Is there evidence AEO is expanding willingness to pay or is it mainly a retention argument so far?

58:44 So in a sense it's all of the above I mean when we talk about 35% growth in customers paying more than 20k almost every conversation we'll have had with those businesses involves a year at some level large language models how they're how they're showing up is it supporting willingness to pay absolutely you know it's helping it's helping in those conversations it's helping with our with our GRR I think it's just being it's just becoming a core part of our proposition of how we go to market and you know it is the great thing is we're not saying anything that is going against the flow if you look at any kind of best practice around answer engine optimization what everybody says is you should be engaging with real customer feedback out in the open in a way that larger language models can actually access so we're helping businesses to do that in practice and we're operating the world's largest open customer feedback platform so yes it's a it's a fantastic time to be doing that Thank you, and final one from Chris. On the US, you've given a 60% contribution margin for the UK. Can you give the equivalent for North America, or at least the direction of travel?

1:00:10 Yeah, I think we've given a number at the full year, and we'll probably update it again at the full year, but it's continuing to improve as the business grows. Keep in mind, though, in particular in periods of very strong new business growth, The margin expansion is not as quick because the new business obviously comes at a higher acquisition cost Which is reflected in the sales and marketing costs while the retention costs are all reflected in our gross margin And so we're extremely pleased with the performance of the US the 775 percent plus new business growth that we've seen year-to-date which is testament to the ability to monetize the AO tailwinds and But in periods of strong new business growth the margin expansion is less pronounced Given that sort of that comes with sales marketing expense and commission expense that are Higher in the period while the revenue from those bookings will sort of then follow subsequently and then drive to the margin and retention in the subsequent years Thank you. Our next question comes from Roger Phillips at Investec.

1:01:25 Why did you do a sales reorganization in H1 in the first instance? Is top of funnel so good now that Trustpilot has critical mass in the US that you can afford to outsource new business generation? Or is pipeline conversion something to be improved with internal sales resource? In other words, can you phase this direction completely in different ways? So what was the reasoning? Thank you.

1:01:50 Yeah, I mean, I think I've already commented on why we did this part that you're referring to on new business, which is all about having a go-to market that is suitable, that's designed for the scale of the opportunity. And as I say, it's not only about outsourcing, it's having a mixed model. The mix is digital outsourcing, in-house, and we're starting to see good results from adding some AI into that mix as well so it's a mixed model but outsourcing was the new component for us in h1 that this we all entailed I think as it speaks to the US it just highlights the need for something like this which is you know we're talking about the largest economy on the planet we believe we've got a proposition that is accessible to ultimately dozens of different industries across that economy we're never going to have a large enough group of people in a place like New York which is most where most of our team are based to go off the as much of that opportunity as we can.

1:03:00 So it's all about finding the most scalable, cost effective way to address an opportunity of that size. And as I said, it's ultimately a mixed approach mixing digital outsource and in house, which is what we've now got. Thank you. And our final question today is a follow up from Sean Keeley. In terms of product plans from here, what's next in the business information, research or operational insights part of the offering? Are there steps that you could take, e.g. to allow customers to access your audience for market research purposes?

1:03:39 So, as we said, we've got a lot coming up. this year we've got a major event next week where we're planning to announce some of these enterprise features that we've talked about on this call particularly multi-domain in the product is important for some of the largest brands because they'll be operating lots of different domains on Trustpilot at the moment they have to log in separately for every one now they'll be able to see an overview with all of their brands we are improving our analytics products as well you know you mentioned you mentioned how we planning to deepen those well we're looking at search query insights so when people are typing something into into a large language model what insights can a business get about that that's going to help them with with product development for example so that's the sort of thing we're working on at the moment and we've got a lot of ideas for 2027 and you know no doubt we'll have we'll have another very busy agenda for next year there are no further questions so that concludes today's results presentation thank you all for joining have a nice day