Team Internet's Strategic Shift Fuels H1 Growth and Strengthened Balance Sheet

Team Internet Group reported H1 growth and a strengthened balance sheet due to a transformation strategy. The company has modernized its product portfolio, entered new markets, and streamlined its cost base. Each business unit is contributing to growth, and the search division has successfully transitioned to the Related Search On Content (RSOC) model. Net debt has been brought below £100 million and continues to decrease. The company remains focused on cash generation and debt reduction while reinvesting in platforms and maintaining capital expenditure.

Team Internet Group PLC (TIG) has reported a strong first half of 2025, characterized by a strategic transformation that has led to resilient cash generation, increased adoption of the Related Search On Content (RSOC) model, and international e-commerce sales. Despite a decline in gross and net revenue due to a planned transition away from legacy monetization, the company has secured significant new contracts and achieved international scaling in its comparison segment.

Key highlights from the report include:
- Revenue and Profitability: Gross revenue fell by 36% to $263.9M, driven by Google's decision to auto-opt advertisers out of its AdSense for Domains program. However, adjusted EBITDA of $24.6M (down 47%) reflects disciplined cost cuts, maintaining a 9.3% EBITDA margin [2].
- RSOC Transition: The search segment transitioned to RSOC, showing strong market validation. The share of RSOC in gross revenue surged from 4% to 24%, indicating early traction [2].
- Cost Management: The company incurred a $4.7M restructuring expense and plans to reduce the 2026 cost base by $24M, offsetting revenue declines and reducing net debt to $93.3M [2].
- Net Debt: Net debt has fallen to $93.3M, providing strategic flexibility during the transition [2].
- Market Sentiment: Analysts have rated the stock as a Hold with a £66.00 price target, while Spark's AI Analyst rates it as Neutral [1].

The company's focus on sustainable growth, margin improvement, and shareholder value creation is evident in its strategic pivot towards RSOC and cost-cutting initiatives. The upcoming September 2025 results webinar will provide critical insights into the pace of RSOC adoption and the effectiveness of cost-cutting measures [4].

Investors should monitor the rate of RSOC's gross revenue contribution and the success of cost-cutting initiatives in sustaining EBITDA margins. If the company can navigate the transition without compromising its balance sheet, the long-term growth story anchored in a modernized monetization model and diversified segments could justify the current volatility.

References:
[1] https://www.tipranks.com/news/company-announcements/team-internet-group-reports-strategic-transformation-and-resilient-growth-in-h1-2025
[2] https://www.ainvest.com/news/strategic-turnaround-potential-revenue-softness-strong-ebitda-performance-2509/
[3] https://www.investing.com/news/transcripts/earnings-call-transcript-team-internet-q2-2025-sees-stock-dip-amid-restructuring-93CH-4218097
[4] Notice of Results | Company Announcement, [https://www.investegate.co.uk/announcement/rns/team-internet-group-plc--tig/notice-of-results/9042252]