Profitability up as growth stagnates: Team Internet
Only 1% year-over-year growth in Q1, but profitability up sharply.
Team Internet Group (AIM: TIG, OTCQX: TIGXF, formerly called CentralNic) revealed its Q1 earnings today.
The high-growth revenue of past years has now dwindled, but profitability is up.
Team Internet stated gross revenue of $195.9 million increased just 1% in Q1 compared to a year ago.
Still, operating profit jumped 44% to $11.1 million, and the firm noted a 62% increase in profit following tax at $4.7 million.
In the Online Marketing segment, visitor sessions increased 19% to 6.0 billion for the trailing twelve months. Revenue per thousand (RPM) for this period decreased to $91. For all of 2023, the RPM was $95.
In its annual note released earlier this year, Team Internet stated it expected the RPM to stabilize. While it has fallen further, it’s notable to note that the firm has some control over RPM since it makes its money through advertising arbitrage. It can add segments and topics that make a lower RPM, and as long as these are higher than its cost of traffic, it still turns a profit. So, RPM might not be the most valuable number by which to judge its traffic business.
The firm stopped focusing as much on growth by buyout over the past couple of years and instead has shifted to profitability and returning capital to shareholders through stock buybacks and dividends. It will pay a 2.0 pence dividend on May 28.
