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Deezer (DEEZR) reported its Q2 2025 earnings on July 30, showcasing a mixed financial performance that saw a slight revenue increase but a negative earnings per share (EPS). The company reported a revenue of €267.1 million, marking a 1.3% increase at constant currency, while the EPS came in at -€0.06. According to InvestingPro data, the company’s trailing twelve-month revenue growth stands at 4.14%, with a market capitalization of €170.03 million. Despite the negative EPS, Deezer’s stock price showed resilience, experiencing a minor increase of 0.81% during market hours, closing at €1.24. InvestingPro analysis indicates that Deezer’s stock currently trades near its Fair Value, with a notable beta of -0.18, suggesting it often moves contrary to market trends. The company confirmed a flat to slightly declining revenue outlook for the full year 2025, maintaining a focus on innovation and strategic cost reductions. InvestingPro subscribers have access to 7 additional key insights about Deezer’s financial health and market position.
Key Takeaways
- Revenue grew by 1.3% year-over-year, reaching €267.1 million.
- Deezer achieved a positive adjusted EBITDA of €2.1 million, rebounding from a €5 million loss in H1 2024.
- Stock price increased slightly by 0.81% following the earnings announcement.
- The company reduced operating expenses significantly, contributing to improved financial health.
- Deezer launched several new AI-driven product features, enhancing user experience.
Company Performance
Deezer demonstrated resilience in Q2 2025 with revenue growth and cost reductions. The company capitalized on innovation, launching an AI music tagging system and new customization features to enhance user engagement. Despite a decline in its subscriber base from 10 million to 9.2 million, Deezer showed strength in the French market with an 8.2% increase in subscribers. The company continues to differentiate itself through AI transparency and strategic partnerships.
Financial Highlights
- Revenue: €267.1 million, up 1.3% year-over-year
- Adjusted EBITDA: €2.1 million, compared to a €5 million loss in H1 2024
- Cash position: €60 million as of June 2025
- Marketing expenses: Reduced to 7.1% of revenue from 8.1% in H1 2024
Earnings vs. Forecast
Deezer reported an EPS of -€0.06, deviating from market expectations. However, revenue aligned with forecasts, reflecting stable operational performance despite the EPS miss. The company’s strategic focus on cost control and innovation may have mitigated the impact of the EPS shortfall on investor sentiment.
Market Reaction
Following the earnings release, Deezer’s stock price experienced a modest increase of 0.81%, closing at €1.24. This movement suggests that investors were cautiously optimistic, likely encouraged by the company’s revenue growth and cost management efforts. The stock remains within its 52-week range, with a high of €1.86 and a low of €1.15.
Outlook & Guidance
Deezer confirmed a flat to slightly declining revenue outlook for the full year 2025, while targeting positive adjusted EBITDA and free cash flow. The company plans to continue investing in product innovation and strategic partnerships to drive long-term growth.
Executive Commentary
CEO Alexis Lanternier emphasized the importance of 2025 as a pivotal year for innovation and growth, stating, "2025 is a pivotal year, a year of innovation that lays the foundation for the next phase of profitable long-term growth." Lanternier also highlighted Deezer’s focus on user retention and access to a comprehensive music catalog, reinforcing the company’s commitment to enhancing the consumer experience.
Risks and Challenges
- Subscriber base decline: The reduction in total subscribers poses a challenge to sustaining revenue growth.
- Competitive pressures: Deezer faces intense competition in the streaming industry, requiring continuous innovation.
- Economic conditions: Macro-economic factors could impact consumer spending and subscription renewals.
- AI content regulation: The rise in AI-generated music uploads may necessitate regulatory compliance, impacting operations.
Q&A
During the earnings call, analysts inquired about the DJ Club’s role in user retention and the transparency of the AI music tagging system. Executives emphasized that cost savings are structural, not one-time measures, underscoring the company’s strategic focus on sustainable financial health.
Full transcript - DEEZER (DEEZR) Q2 2025:
Sergey, Conference Call Coordinator: Good day and welcome to today’s Deezer Half Year Results twenty twenty five Conference Call. My name is Sergey and I’ll be your coordinator for today’s event. Throughout today’s recorded presentation, all participants will be in a listen only mode. Later, we will conduct a question and answer session. And now, I’d like to hand the call over to Alexis Lanternier, CEO to begin today’s presentation.
Thank you.
Alexis Lanternier, CEO, Deezer: Good morning, everyone, and thank you for joining us for H1 twenty twenty five results conference call. I’m Alif Lanternier, CEO the of Geezer. Today, Karl and I will present Geezer’s twenty twenty five H1 results. I will start with the key highlights of the semester and Karl will then go into more details on our H1 performance. After that, we will discuss our 2025 outlook.
At the end of our presentation, we will answer your questions. Let’s move to slide four. We delivered strong progress in the 2025, marking our second consecutive semester of positive adjusted EBITDA, a significant financial milestone that reflects the disciplined execution of our strategy and confirms dealer entry into a new cycle of sustainable profitability. On the revenue side, the performance is in line with our expectations reaching €267,100,000 up 1.3% at constant currency or minus 0.3% at current currency. The standout business highlight for the semester was the acceleration in our direct subscriber base growth.
We achieved plus 5.5% year over year growth on a like for like basis reaching 5,300,000 subscribers. This momentum was particularly strong in France where like for like subscribers rose to 8.2% year over year. On the operational front, we continue to improve efficiency. Gross margin increased by €1,000,000 year over year and we achieved a €6,100,000 reduction in fixed cost. These efforts resulted in adjusted EBITDA of €2,100,000 compared to a loss of €5,000,000 in H1 twenty twenty four.
We also delivered positive free cash flow for the period. Our cash position remains solid standing at €60,000,000 at the June. Moving to slide five. As I mentioned in my introduction, we have now delivered positive adjusted EBITDA for the second consecutive semester, considering our path towards full year profitability in 2025. This strong improvement was driven by two key levers, smarter and more efficient marketing spend and continued strict cost control across the organization.
This performance reflects the structural transformation of diesel financial profile and give us confidence in our ability to deliver our fiscal year guidance, namely a full year positive EBITDA and another year of positive free Let’s now spend a few minutes discussing the key business highlights of this first half of the year. Let’s move to slide seven. As I mentioned during our full year 2024 result presentation, we entered a new strategic cycle with 2025 being a pivotal year for the year. We are driving breakthrough innovation and laying groundwork for profitable sustainable growth.
Our strategy is built on three core pillars enhancing the fan experience, empowering artists and scaling our business with partners, all while maintaining strict focus on cost control and efficiencies. For fans, we’ve been rolling out new features designed for the needs of younger generation with greater personalization and customization capabilities, more control over our recommendation algorithm and richer social experiences. We are also creating new ways for fans to connect directly with each other and with their favorite artists. For artists, we expanded the use of our AI capabilities with groundbreaking solution to collect artist rights and content, while continuing our progress on innovative models that ensure fair artist remuneration. For partners, we have strengthened long term distribution partnerships, signed new deals with particular focus on standardized models.
We have also reinforced our expanded our white label offerings with deal renewals and expansion into new verticals with great traction. Throughout this initiative and in PAIL, we are maintaining strict financial discipline as you saw in H1 and remain on track to deliver positive adjusted EBITDA in 2025. Moving on to slide eight. On the fan pillar, we are executing on this focused strategy to differentiate Dizzer as we launch a range of innovative features focused on driving increased value and engagement among younger audiences. We have launched new customization features like Playlist Covers customization, a fully customizable favorite tab and enhanced algorithm controls tools such as the slide or algo settings to give users even more control over their listening experience.
We also introduced My Disannounce and Universal Sharing helping fans better understand and celebrate their unique music basses with friends. We have piqued fan artist connection via the DJ Club offering exclusive access, presale and VIP experiences with more than 1,000,000 contest entries over the past twelve months. These initiatives are already delivering results as our direct subscriber base grew eight percent year over year in France at the June. Moving on to slide nine. In the first half, user took a big step forward in AI and launched the world’s first AI tagging system for music streaming, reinforcing our strong commitment to transparency and fairness in the digital music space and setting a new standard for the music industry.
Our analysis showed that nearly 18% of music uploaded daily more than 20,000 tracks is fully AI generated. By clearly tagging all albums that include AI generated content, we are gaining fans full visibility while protecting artist remuneration and ensuring a trusted listening experience. Besides, these are the first update to Publishing Rights remuneration model since the dawn of music streaming with its collaboration with SASE. This reflects again our ongoing commitment to fairness in the artist remuneration model and the fight against royalty fraud. Moving on to slide 10.
On the partnership front, we are delivering on two key priorities strengthening our core distribution partnerships and expanding our service offering into new verticals. First, we reinforced our existing distribution partners. In the first half, we’ve been in major long term agreement with Orange and Bouygues demonstrating our ability to maintain strong lasting relationship. We also extended our core offering to new market partners like Molotov TV and fitness park in the retail space building on what we do best. Also, we expanded our white label and music as a sales offers.
We renewed our partnership with Sonos in The U. S. And are ramping up Diesel business, our new music solution for brands and commercial Recent clients includes Dunkin’, Converse and UGC, who can now create tailored music experience for their customers. This concludes the section on business highlights. And now I will hand it over to Karl for the final section.
Thank you, Alexey, and good morning, everyone. Let’s discuss our H1 twenty twenty five results and move to slide 12. Our subscriber base amounted to 9,200,000 at H1 twenty twenty five compared to 10,000,000 in H1 twenty twenty four on a like for like basis. Two separate trends explain this figure. On the right hand side, as anticipated, we can see the continued decline in partnership subscribers.
This is mainly due to the conversion of the first cohorts of Medif from trial accounts to premium accounts. After hitting a high in H1 twenty twenty four, we started converting in Q3 twenty twenty four impacting the overall partnership subscriber base. That being said, we reached 3,900,000 subscriber in H1 twenty twenty five, up from 3,600,000 in H1 twenty twenty three. So despite the decline, we remain ahead past levels. On the left hand side, we can notice the positive trend in Direct, up 5.5% year over year on a like for like basis.
Direct performance continues to be driven by steady subscriber growth in France over the past semesters. In 2025, we saw a clear acceleration from the last two quarters, up 6.3% at the end of Q1 and ending at 8.2% year over year on a like for like basis. Strong momentum reflects our strategic focus on core markets like France and confirms the early positive impact of our new strategic road map driving user engagement. Looking at the rest of the world, the trend is now stabilizing after several quarters decline at 1,800,000 subscribers. This base is now profitable even without new marketing spend.
Turning to ARPU. We improved ARPU in partnerships by 3.6% year over year on a like for like basis, while direct ARPU slightly decreased by 1.8% year over year mostly due to mix effects on the back of the success of our family offers. Moving on to slide 13. In the 2025, we reported revenue of $267,100,000 up 1.3% year over year at constant currency and broadly stable at current rates. Looking at the segment breakdown on the left hand side of the slide.
Our direct revenue grew by 1.2%, reflecting the continued growth of our subscriber base in France. Other revenues, which mainly include advertising and ancillary revenues grew by a strong 77%, thanks in particular to the strong performance of our white labeling solutions. This growth more than offset the anticipated decline in partnerships revenue, primarily due to the transition of Mediplus users to premium offers as previously mentioned. Now turning to the geographic view on the right hand side of the slide. In France, revenue increased by 4% year over year supported by the solid momentum in direct subscription.
In the rest of the world, revenue declined by 6.2%, largely due to Meli Impact. This was partially offset by the gradual ramp up of the RTL partnership as well as good traction from licensing agreements including Zen by Geeter and Samsung Australia. Moving on to slide 14. In the first half of the year, we maintained a disciplined approach to cost control, which allowed us to reduce our operating expenses by over €6,000,000 year over year. We achieved a €3,000,000 reduction in marketing and trial spend by targeting our investments more efficiently.
As a result, marketing expenses represented 7.1% of revenue down from 8.1% in H1 twenty twenty four. In parallel, staff and G and A expenses were reduced by 3,000,000,000 now accounting for 16.6% of our revenues compared to 17.9% a year ago. This strong cost discipline was a key contributor to the improvement in our operational performance over the period. Moving on to slide 15. Now let’s look at the significant progress we’ve made in improving profitability.
In the 2025, we delivered a strong uplift in adjusted EBITDA reaching $2,100,000 which is an improvement of $7,100,000 year over year compared to H1 twenty twenty four. This marks our second consecutive semester of positive adjusted EBITDA and this confirms the structural trend in the improvement of diesel’s financial profile. Looking at the bridge on this slide, the key drivers behind this performance were €1,000,000 increase in gross profit supported in part by the positive contribution of our way saving solutions for hardware and media partners and also our continued cost discipline with €6,000,000 in operating expense reduction during the first half. Together, these levers have enabled us to significantly improve profitability without compromising on our strategic investment. Moving on to slide 16.
Now turning to our cash position. At the June 2025, we maintained a robust cash position of $60,000,000 with net cash of $48,200,000 which is up $1,000,000 versus the 2024. Looking at the bridge, this performance reflects a positive contribution from adjusted EBITDA €2,000,000 and a €1,000,000 improvement in working capital. This chart clearly highlights the benefits of our low CapEx model along with limited lease liabilities and low net interest expense, all of which contribute to the strength of our financial profile. Importantly, our cash position also factors the €3,000,000 repayment of the French space guaranteed loan during the period.
This solid liquidity position gives us the flexibility to continue executing on our strategy while maintaining our financial discipline. I will now let Alexis conclude the 2025 outlook. Thank you, Karl. Let’s move to slide 18. Looking ahead to the rest of 2025, we are far exceeding our full year guidance.
From a revenue perspective, following a year of strong growth in fiscal year twenty twenty four and with no expected increase in ARPU, we confirm flat to slightly declining revenue year over year. On the bottom line, we reconfirm our target of delivering positive adjusted EBITDA in 2025, Achieving a positive EBITDA in H1 despite a flat top line clearly demonstrates the resilience and scalability of our model and strengthens our confidence in delivering the same performance for the full year. We also expect to generate positive free cash flow in 2025 marking our second consecutive year of positive cash generation, a key milestone on our journey towards sustainable profitability. From a strategic standpoint, we’ll continue to execute on our road map in H2 with proactive product launches and new business models, while maintaining a disciplined and focused approach. 2025 is a pivotal year, a year of innovation that lays the foundation for the next phase of profitable long term growth.
Thank you for your attention. Karl and I will now open session for questions.
Sergey, Conference Call Coordinator: Thank you. The first question is from Silvia Kumio from Deutsche Bank. Please go ahead.
Silvia Kumio, Analyst, Deutsche Bank: Thanks. Good morning, everyone. A few questions from my side. The first on strategic initiatives. The Diesel Club is delivering exclusive access and experiences.
Do you plan to monetize these? And just wondering if you expect this to contribute to revenue in the medium term for not only fund engagements? And beyond the Dizzy Club, what other initiatives do you have planned for the rest of this year to engage the super funds? Then secondly on the AI music tagging systems, can you give more color about where this AI generated music originates? Is it primarily from platforms like Sono and Audio?
Or how do you define the 100% AI music? And does this classification mean that the tracks receive no royalties at all even if they become popular? And then final question on the profitability. On the gross profit, we noticed an improvement that’s largely driven by the other segment, while the direct and partnership segments saw a little bit of a contraction. So can you talk about the factors behind this?
Thank you.
Alexis Lanternier, CEO, Deezer: Thank you for your questions. I will take the first one. So in the Visa Club monetization is driving a significant engagement from our user with 1,000,000 applying to different contests that enable to win private access to events. As this is on the contest basis, it’s obviously free I mean part of the premium subscription. So you have to be a premium member.
Our core focus here is retention. We are in the business of retention. That’s the most valuable activity to do is to retain the existing user we have. And so that’s really the objective of the Teaser Club. We are working on solution to for super fans and connecting our list with super fans that could come as an additional fee, but we don’t have yet anything to announce on that front.
On the AI tagging topic, I think you’re right. The question of how do you define AI music is not 100% straightforward. So we’ve been very clear on definition for us. It’s indeed the songs that are 100% created by AI just with the prompts and that are coming from the apps that you mentioned. There is a few dozen of them.
And basically the way it works that we train our algorithm on those specific app and we identify those So that’s how it’s trained and that’s the definition of what we call AI. So it’s 100% AI. As soon as artists are creating and adapting and so on then it’s not considered as 100% AI. And to your point of what if it’s popular, I think what is really reassuring for the music industry is that right now we don’t see a lot of popularity from those songs, but it could happen. And we are first and foremost a consumer platform.
And so we want to make sure that anyone will be able to access the full catalog of worldwide music through Dizzer as those songs are indeed available on Deezer. It’s just that we want transparency to also protect the music industry and the artist. And so that’s why we’re labeling the songs that are 100% AI, but there is no nothing preventing people that wants to listen to them to listen to them. And I will hand it over to Karl for your last question. Thank you, Alexis.
On the gross margin, you’re right. The improvement in gross profit in H1 twenty twenty five was largely supported by the strong performance of the other segments notably our weightlifting solution. I think this reflects the successful execution of our strategy to diversify our revenue streams. Meanwhile, the gross margin in Direct and Partnership declined slightly. This was driven by a few factors, especially a mix effect in Direct, especially the increasing share of our distribution channels through app stores, which are slightly lower contribution margins, but where we’re seeing very good traction from a commercial standpoint as well as one off impacts.
Overall, we think those impacts will be leveled off in H2. So we are very confident about our gross margin.
Silvia Kumio, Analyst, Deutsche Bank: Thank you.
Sergey, Conference Call Coordinator: Thank you. And we invite all the attendees connected on the webcast to submit your questions using the webcast platform. And at the moment, we have no further questions on the phone lines. We’ll pause for just a moment to allow your time to submit your questions on the webcast. Thank you.
And type in your question and click send. And meanwhile, we have a follow-up question from Sylvia Kumeo from Deutsche Bank. Please go ahead.
Silvia Kumio, Analyst, Deutsche Bank: Thanks. In the meantime, just have another question on the sustainability of the cost savings benefiting your adjusted EBITDA. Operating expenses decreased by €6,000,000 in H1. How confident are you that these cost savings are sustainable into the second half of the year? And are there areas where you can increase the cost savings?
Just anything that can help us think about the margin progression in H2 would be helpful. Thanks.
Alexis Lanternier, CEO, Deezer: Sure. So I’ll take that one. On the cost reduction, what we delivered in H1 twenty twenty five is not the result of one off cuts, but rather the outcome of deliberate and structural adjustment aligned with our new strategic priorities. We are constantly streamlining our operations, focusing our investment on the most efficient channels and realigning our resources to support our scalable initiatives like for instance what we refer to white labeling, personalization etcetera. And our marketing and G and A reduction really reflect increased discipline and better targeting not an underinvestment.
So while some fluctuation may occur depending on our growth dynamics, we’re very confident about our overall cost base now more efficient better aligned with long term profitability objective and clearly a path that we are going to continue to drive efficiency.
Sergey, Conference Call Coordinator: Thank you. And it appears there are currently no further questions on the webcast and neither on the phone lines. This I’d like to hand the call back over to Alexis Lanternier for closing remarks.
Alexis Lanternier, CEO, Deezer: Thanks everyone for joining.
Sergey, Conference Call Coordinator: Thank you. This concludes today’s conference call. Thank you for your participation. And gentlemen, you may now disconnect.
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