Growens S.p.A. (GROW) Earnings Call Transcript

Good afternoon, everyone, and thanks for joining the call covering the first half of 2026. Joining us today are Mr. Monfredini, our Chairperson, along with Mr. Gorni, our CEO, and they'll go on to share their comments on the data. I'd like to remind you that this call is being recorded and will be posted on our website very soon, and that any questions you have can be sent to our investor relations email address, investor.relations@growens.io. Many thanks for being here, and I'll now hand things over to Matteo to comment on the most recent data. Thank you very much.

Thank you, Micaela. One second, please. Thanks. All right. Good afternoon, everyone, and welcome to this Growens investor call, where we'll discuss the consolidated results for the first half of 2026. Our Board of Directors approved the consolidated half year report as of 30 June 2026 yesterday, 15th September, and we published the related press release on our website shortly after that. Today I'd like to take you through those figures in somewhat more detail, beginning with the income statement. Let's begin with revenues. Consolidated revenues in the first half of 2026 came in at EUR 40.3 million, an increase of 11.5% from EUR 36.2 million in the same period of 2025. That's a market acceleration relative to the growth rates reported in recent periods, and it's worth noting that both of our business lines drove it together, rather than just one. The SaaS component, led by Beefree, rose 12% to EUR 7.7 million, which is about 19% of total revenues. The CPaaS component, our Agile Telecom business unit, also posted 12% growth, reaching EUR 32.2 million and accounting for roughly 80% of the total. Other revenues were basically marginal at EUR 0.4 million, down 20.5%, which reflects the reduction of some non-recurring items compared with last year.

Recurring revenues came in at EUR 30.3 million, which is 76% of total revenues, and they grew 17.4% year-on-year, while recurring revenues hit EUR 7.7 million, up 12%. Going further down the profit and loss, gross profit was EUR 10.5 million, up 10.3%, with revenue incidence of 26.1%, roughly stable against last year's 26.2%. Cost of goods sold rose 11.8% to EUR 29.3 million, basically matching the growth in CPaaS traffic volumes. On the operating cost side, I'm pleased to point out that total operating expenditure actually fell by almost 4% to EUR 9.3 million from EUR 9.7 million in the first half of 2025, even with revenues up more than 11%. That shows the cost discipline we've been concentrating on. Sales and marketing cost increased by 5.8% to EUR 3.6 million, still supporting Beefree commercial growth. Research and development cost, including both OpEx and capitalized component, declined by 7.1% to EUR 3.25 million, with the OpEx line down 11.6% and capitalized development down 2.9%, while general and administrative costs dropped by 8.3% to EUR 4.2 million. Consequently, consolidated EBITDA turned positive at EUR 1.2 million, or 3% of revenues, a strong turnaround from the EUR -0.2 million we reported in the first half of 2025.

That's really the main takeaway from today's results. Revenue growth and cost discipline are finally moving in tandem, something we haven't seen for some time, and both of our business units played a part in that improvement, which I'll walk through shortly. Depreciation and amortization came to EUR 2.26 million, a rise of 7.6%, largely driven by growth in research and development amortization, which hit EUR 1.9 million, up 11.2%, in line with the capitalized development investment we've put into Beefree over recent years. IFRS 16 related amortization was broadly flat at EUR 0.26 million. Earning before interest and taxes improved substantially, reaching EUR 1.1 million from negative — sorry, to EUR -1.1 million from EUR -2.3 million, an improvement of almost 54%. Net financial income more than doubled, to EUR 0.15 million from EUR 0.07 million, helped by the return on our liquidity. Consequently, earning before taxes rose by almost 60%, to EUR -0.9 million from EUR -2.2 million. Taxes for the period total roughly EUR 0.45 million combined, comprising EUR 0.32 million of current taxes and EUR 0.12 million of deferred taxes. As always, these allocated figures are derived from aggregating the individual taxation of each legal entity within the group.

On a consolidated basis, net results show a loss of EUR 1.36 million — an improvement of 42.7% versus the EUR 2.37 million loss posted in the first half of 2025. Within that figure, EUR 1.32 million is attributable to the group, while roughly EUR 43,000 relates to minority interest. Let's examine each business unit a little more closely. Agile Telecom generated revenue of EUR 32.6 million, up 13%, with EBITDA of EUR 1.4 million, up 21.3%. That validates the strategy we've been following, which centers on operating profitability together with growth. At Beefree, revenues came in at EUR 7.6 million, up 7.4% in euro terms, or 9% at constant exchange rates. The unfavorable foreign exchange drag was limited at this point, at under 2 percentage points. Beefree's EBITDA was negative EUR 0.46 million, an improvement of nearly 67% against the EUR -1.4 million we reported in the first half of last year. Annual recurring revenue hit $18.4 million as of June 2026, compared with $16.9 million a year prior. We're still on track toward our goal of positive cash flow for Beefree by 2028, and we keep shifting research and development resources toward the opportunity that artificial intelligence creates in content creation — for designers and, increasingly, for AI-assisted users themselves.

Moving on to the balance sheet overview. Total assets came in at EUR 60.1 million, an increase of 6.6%, versus EUR 56.4 million as of the end of 2025, with total equity of EUR 30.5 million, a decline of 3.2%, largely driven by the net loss for the period. Non-current assets rose to EUR 22.4 million. Inside that, intangible assets stand at EUR 7.2 million, up 3.8%, while goodwill remains flat at EUR 8.5 million. Current assets were up 6.3% at EUR 37.7 million, and within that, trade receivables fell 11.7% to EUR 10.9 million, which simply reflects the Agile Telecom connection dynamic. Cash, meanwhile, rose 68% to EUR 3.6 million. On the liabilities side, current liabilities were up 17.9% to EUR 24.8 million, mostly explained by a rise in short-term bank payables from EUR 3 million to EUR 6.3 million, while trade payables actually declined 4.5% to EUR 11.2 million. Okay. And now lastly, the consolidated financial position as of 30 June 2026, which exceeds EUR 9.2 million in cash, down against the net position of more than EUR 11 million booked at the end of 2025. That change is mainly explained by the increase in short-term bank financing I just referred to, along with continued investment in capitalizing research and development costs, mainly tied to Beefree, and by the usual seasonal dynamics in net working capital.

Cash and cash equivalents now stand above EUR 16.7 million, which is 8.4% higher than at the end of 2025. In summary, the first six months of 2026 represent a turning point for group profitability. Revenue growth and cost discipline are working hand in hand to push EBITDA back into positive territory, and our balance sheet stays solid enough that we can continue putting money into innovation and into the quality of our product with full autonomy. That's everything from me. I'll now pass things over to our CEO, Nazzareno Gorni, who will give an update on the key business developments. Thanks for your time.

Thanks a lot, Matteo. At this point I’ll hand things over to Nazzareno. Specifically, I’d like you to talk about Beefree’s growth trajectory and the forecasts, to the extent that can be shared today, and also with respect to the various product lines that make up Beefree. Many thanks.

Thank you, Micaela. If we begin with Agile Telecom, which is the faster one, there haven't been many developments, since as you're aware, that business is quite mature and so is the industry. No technology or business disruption is occurring, so we're simply carrying on with business as usual. Actually, inside Agile we have a new project under exploration — a new platform that might allow Agile Telecom to boost its marginality even further by serving smaller clients. That's something still in progress, and we can't share more right now. For Beefree, naturally, the biggest factor this year revolves around AI. AI is shifting things considerably from several angles. To begin with, it's altering the way clients search for new solutions. It's also changing the barriers for entering our market, because building software has become far easier today. Plenty of different solutions now let designers produce email templates and landing pages using very different tools. On top of that, this uncertainty leaves our prospects, particularly on the SDK side, more hesitant about signing new contracts and kicking off new developments with our Beefree SDK. In that context, naturally, the effect lands on our growth, which isn't as strong as it was in earlier periods and earlier years.

It's still nearly double digits, so that's not bad, but it isn't what we had expected or forecasted. What are we doing about this? First, what we've already done: we rebranded Beefree App as RGE Studio later last May, at the end of May. This is also a strategy that pushes RGE Studio, the new product, more toward mid and large enterprise clients. This is a way to address the market change, since casual users who just need to create one template and are then happy with that will probably today use other systems, free systems or LLMs such as GPT, Claude, that provide a good enough solution for them. While large enterprise clients also require more sophisticated solutions with more advanced use cases, with personalization, accessibility, compliance requirements, workflow approvals. All those requirements translate into still interesting demand for our RGE Studio solution. That is why we completed this rebranding and this shift toward the higher tier. On top of that, we also implemented some changes in organization, both how the team is organized, but also we are going to change our go-to market leaderships. We introduced already, we have already appointed a new CRO, Customer Revenue Officer, and we are looking for a new head of sales.

I believe this adjustment can assist us in reworking how we approach the market. A few months back, we also finished the repricing of our Beefree SDK. That effort is still underway, since enterprise customers take more time—they may face contractual limits or have longer contracts, so the process can stretch out. Naturally, we shipped the MCP—Model Context Protocols—and it reached general availability in September, letting other agents and LLMs leverage our solutions without going through the standard interface. This is quite novel, and it comes at no cost to our SDK clients. However, whenever they use this MCP, it will generate new API calls, and we bill for those API calls. As a result, we anticipate growth in that type of usage.

Thanks a lot.

I haven't finished. Here's the thing —

All right, thanks. Please continue.

I'd also like to share some thoughts on what we're going to do. Right now we're working on repricing as well as price and packaging for RGE Studio, since we believe there's value to capture from a different price and packaging. We're working on this during this quarter and the next one, and we hope to release the new price and packaging starting next year. Regarding strategy for this new AI world, our approach is that, since clients are now using different tools, the path to reach a final outcome always involves jumping from one tool to another, depending on the task — translation, generate text, generate image, generate LLM template, validation. It's no longer linear, and our position in this new world is to be available and usable in any possible order flow combination. That means our editor will be available on the major LLMs, and on this project we already have a beta working. We will allow agents with our MCP to use our tools without a usual UI. We also believe that the final manipulation is still important. Anyway, in any case, if you create something outside, at the end, if you want to adjust and make manual adjustments, I believe this is a capability that still is important to have, and this is where we are also investing, so as to improve the user experience for this final manipulation phase.

Beyond that, we're building out additional enterprise capabilities aimed at stronger governance—especially as AI agents and people work side by side, we want traceability, compliance, and guardrails in place for those AI agents. One item we've already shipped as part of this new enterprise feature set is version control—enterprise version control—which gives our SDK client greater control over the new updates we're releasing. That's it. Thanks.

Thanks again. I believe we've addressed nearly every question received up to now. There's just one matter left: could you say a few words about where Growens stands on M&A — whether as a seller or as a buyer? Many thanks.

No. Right now there isn't any active M&A process running on either the sell side or the buy side, though we do keep an opportunistic stance. When opportunities come up, we're open to looking at them. I also notice a question regarding Agile Telecom — specifically, whether we'd be willing to sell that business unit. What I'd say is that it comes down to valuation. Agile is expanding on both its top line and its margins, but the industry overall is contracting. Getting a strong multiple and a good valuation is difficult in an industry like this. We won't sell simply to make our investment case simpler, and we stay opportunistic until a good valuation comes our way.

Thank you so much, Nazzareno. I notice another question has come in, though I'm honestly not sure we can take discussions here. My suggestion would be to simply send an email to the investor relations platform address. If not, I can attempt to permit the question. I'm unable to. All right, here we go. We've got them now. Let me bring up a few topics. The first one concerns Beefree's ARR. Overall, it hit $18.4 million as of June. Could you speak to it either qualitatively or quantitatively — whatever you prefer to share — regarding how much ARR expansion is needed in the second half of the year to hit the target disclosed in the guidance calls of $21 million-$23 million? Where do you anticipate that acceleration coming from?

Right. To reach the target we shared, the remaining gap in ARR is under EUR 2 million — meaning we need an acceleration in average customer value as well as in expansion and new business. We've put some initiatives in place, such as the repricing and the new GTM strategy, and we're going to roll those out over the last two quarters, and our hope is that this gets us to the target. Naturally, that's challenging, of course, since the context is challenging — not just our usual GTM activities, but the market is challenging too. But we're doing whatever it takes to get there. Those are the initiatives I mentioned: the new GTM leadership and the new GTM initiatives we're putting in place, plus the repricing.