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Team Internet's FY2024 results (badged as a trading update to allow sufficient time for the company’s auditor PWC to complete its audit) reveal a company in transition, with a -4.1% decline in gross revenue to $802.8m and adjusted EBITDA down -4.7% to $91.9m. A steep -82.1% drop in operating profit to $8.2m stems primarily from $36m in impairment charges related to itsShinez I.O. subsidiary.
Despite these headline figures, several indicators suggest underlying resilience. The company delivered record operating cash flow of $99.1m with improved cash conversion at 108%, while maintaining decent gross margins at 23.4%. Management's decision to suspend the final dividend signals a prioritisation of deleveraging over short-term shareholder returns.
Performance by segment tells a transformation story. While Search revenue declined -11.1%, both the domain name management, identity and software solutions (DIS segment) and high-growth digital advertising (Comparison) segments demonstrated growth trajectories – up 7.4% and 42.5% respectively. These growth segments now contribute 51.2% of net revenue, up from 43.9% in FY2023, representing an important step in portfolio diversification.
The company's strategic reset in Search appears to be a calculated acceleration of an inevitable pivot rather than a reactive measure. Management's projection of a return to double-digit EBITDA growth by 2026 hinges on AI-driven efficiencies and the continued expansion of higher-growth segments.
Shares remain some c.-48% down on where they were six months ago. For investors, the key question remains whether Team Internet can successfully navigate this transition period while maintaining cash generation as it reshapes its business model for sustainable growth in a rapidly evolving digital marketplace.
