Verve Q1'26 preview: Execution credibility test begins

Verve will publish its Q1 report on Wednesday, May 27. We expect the report to reflect a seasonally softer start to the year, further dampened by FX headwinds, front-loaded sales force investments, and the lingering impact of the large customer loss from late 2025. Near-term, we are watching two things: whether the company can stabilize cash conversion through its securitization program expansion, and when sales productivity will inflect. Ahead of Q1, we have recalibrated our estimates to reflect a more cautious Q1 outlook, lower IFRS 15 revenue recognition impact, and H1-weighted one-off costs, while maintaining our full-year view largely intact. As such, we reiterate our Accumulate recommendation and leave our target price unchanged at SEK 18.

Q1 pressured by FX, one-offs, and tough comparables

We expect Q1 reported revenue of 140 MEUR, representing ~ 6% like-for-like growth and 28% reported growth, driven largely by the Acardo and Captify acquisitions. Organic growth is expected in the low- to mid-single digits on an FX-adjusted basis (we estimate ~9-10 pp FX headwind), as Verve faces a tough comparison period with Q1'25 organic growth of 16%, and the lingering impact of the large customer loss in Q4'25. We estimate Q1 adjusted EBITDA at 26 MEUR, representing a 19% margin, down from 23% in Q1'25. Further, we estimate reported EBITDA to be softer at 23 MEUR, as we include ~3 MEUR in one-off costs, primarily related to M&A integration for Captify and Acardo. Beyond one-offs, Q1 profitability faces pressure from front-loaded sales force investments of ~10 MEUR concentrated in H1'26. In our view, the most critical aspect of the Q1 report will be the cash flow statement and management's progress on expanding the receivables securitization program, with two additional legal entities planned for H1'26, which is vital to improving cash conversion following weak 2025 performance.

Quarterly recalibration, but intact full-year outlook

Ahead of the Q1 report, we have recalibrated our quarterly estimates within 2026, lowering Q1 and Q2 while increasing Q4 to absorb the shortfall, reflecting H2-weighted phasing rather than a change to our full-year view. Our FY26 net revenue estimate remains broadly intact at 564 MEUR (was 569 MEUR, -0.9%), and our adjusted EBITDA estimate is unchanged at 155.5 MEUR. We have lowered our IFRS 15 revenue recognition estimate from 29 MEUR to 23 MEUR in Q1 and from 130 MEUR to 120 MEUR for the full year, aligning more closely with 2025's 116 MEUR impact. As such, our reported revenue estimates for 2026 decreased by some 2% to 684 MEUR (was 697 MEUR). Additionally, we have included 6 MEUR in full-year non-recurring costs, primarily concentrated in H1, resulting in reported EBITDA of 149.5 MEUR (was 155.4 MEUR) while adjusted EBITDA remains unchanged. The Q1 net revenue reduction was primarily driven by stronger-than-modeled FX headwinds. Our H2-weighted phasing reflects an expected stronger second half, as FX headwinds ease, the impact of the customer loss gradually fades, and new hires reach full effectiveness.

We leave our recommendation and target price unchanged

Verve's valuation multiples remain depressed in absolute terms (2026e*: 6x EV/adj. EBIT and 11x EV/adj. FCFF ). We assess that these low multiples reflect persistent investor doubts regarding the company’s ability to convert earnings into meaningful cash, further weighed down by above-target leverage levels and the challenging sentiment around open-internet ad tech more broadly. For a valuation re-rating to take hold, we believe management will need to deliver tangible evidence of improved cash conversion, validate that the efficiency gains from platform unification are durable, demonstrate clear progress on reducing net debt toward target levels, and restore confidence through a track record of consistent operational execution. If management successfully meets these benchmarks through 2026, we see material upside from current levels. However, the focus remains squarely on management to deliver results, and we believe the stock price is unlikely to meaningfully increase until execution risk diminishes.