Earnings call transcript: Moltiply Group Q2 2025 sees revenue surge, stock falls

Moltiply Group SpA reported robust financial results for the second quarter of 2025, with revenues reaching 169 million euros, marking a 55% year-over-year increase. Despite strong financial performance, the company’s stock fell 6.22% following the earnings announcement, closing at 44.2 euros. According to InvestingPro data, the stock has shown significant volatility with a beta of 1.5, indicating higher sensitivity to market movements. The market reaction may be influenced by future earnings guidance, which suggests a challenging outlook.

Want deeper insights? InvestingPro subscribers have access to 8 additional key tips about Moltiply Group, including crucial valuation metrics and growth indicators.

Key Takeaways

• Moltiply’s Q2 2025 revenues increased by 55% YoY to 169 million euros.
• The stock price dropped 6.22% post-earnings, closing at 44.2 euros.
• Future earnings guidance indicates potential challenges ahead.
• The company is expanding its international presence and investing in AI.

Company Performance

Moltiply Group demonstrated significant growth in the first half of 2025, with revenues totaling 302 million euros, a 40% increase compared to the previous year. The company’s EBITDA rose by 37.5% to 77 million euros, while EBIT surged 50% to 48.49 million euros. Net income saw a modest increase of 7% to 22 million euros. InvestingPro data reveals the company maintains a healthy current ratio of 1.15 and has consistently paid dividends for 18 consecutive years. The company’s performance is bolstered by its strategic acquisition of Verivox in Germany and its focus on AI and digitalization.

Financial Highlights

• Revenue: 169 million euros in Q2 2025 (+55% YoY)
• EBITDA: 77 million euros in H1 2025 (+37.5% YoY)
• EBIT: 48.49 million euros in H1 2025 (+50% YoY)
• Net Income: 22 million euros in H1 2025 (+7% YoY)

Outlook & Guidance

Looking ahead, Moltiply expects the performance trajectory of Q2 to continue through Q3 and Q4 2025. The company remains optimistic about the mortgage market until the end of the year. According to InvestingPro forecasts, EPS for FY2025 is expected to be -$0.85, with the next earnings announcement scheduled for November 12, 2025. Synergies from the Verivox acquisition are expected to materialize in the next 2-3 years.

Get exclusive access to Moltiply’s comprehensive Pro Research Report, along with 1,400+ other top stocks, through an InvestingPro subscription.

Executive Commentary

Marco Pescarmona, Chairman, expressed satisfaction with the Verivox acquisition, stating, "We are super happy with the Verivox acquisition." CEO Alessandro Fracassi highlighted the dual nature of AI, remarking, "AI is at the same time a big opportunity and a big threat." These comments underscore the company’s strategic focus on leveraging new technologies while navigating potential risks.

Risks and Challenges

• Regulatory changes in lease taxation could impact cost structures.
• The negative EPS forecast suggests potential profitability challenges.
• Competitive pressures in the e-commerce price comparison market.
• Macroeconomic factors affecting the mortgage and insurance sectors.
• Potential disruptions from AI in core business areas.

Moltiply Group’s strong financial performance in Q2 2025 is offset by a cautious market reaction, reflecting concerns over future profitability and industry challenges. The company’s strategic initiatives and international expansion may provide growth opportunities, but investors remain wary of the potential risks and headwinds.

Full transcript - Moltiply Group SpA (MOL) Q2 2025:

Conference Call Operator: Good afternoon. This is the conference call operator. Welcome and thank you for joining the presentation of Multiply Group’s first half 2025 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Marco Pescarmona, Chairman, Mr. Alessandro Fracassi, CEO, and Mr. Francesco Masciandaro, CFO. Please go ahead.

Marco Pescarmona, Chairman, Multiply Group: Thank you and welcome everybody. This is Marco. We will rely, as usual, on the document present on our website, and we will jump straight to page 18 of the presentation with the H1 highlights. In the first half of 2025, the group posted revenues of €302 million, that’s up around 40% year on year. This comes for 55% from Maverick, from the broking division, and 45% from the Multiply BPM Tech division. In terms of EBITDA, it’s €77 million in the first half, which is up 37.5% year on year, and it comes for 62% from Maverick and 38% from the BPO part. EBIT is €48.49 million, that’s up 50% year on year, and this comes for 68% from Maverick and 32% from BPO.

In terms of the faster development of the EBIT compared to the EBITDA, this is due to the fact that we finished amortizing some of the TPA coming from the 2000 acquisitions, and we have not started yet. We will do it at the end of the year, so it will be visible, I think, in the last quarter. We have not started yet amortizing the assets from the TPA of Verivox, which will be anyway sizable given the size of the transaction. We think it’s better to understand the current performance, the actual performance of the business, to focus more on the EBITDA because of this, or at least normalize the EBIT for the TPA effect. The income is €22 million in the first half of 2025, which is up 7% compared to 2024.

The reason why the net income doesn’t follow the same strong growth of the other figures is that, first of all, we have a higher interest, also because when we closed the, when we refinanced the old debt, we had to recognize some costs linked to the closing of the old debt. More importantly, we have almost €10 million of adjustments of put and call liabilities for minorities on some businesses that are performing quite well. One of these is, for instance, Switch, but there are other things. These are recognized in the income statement. The only case when we were not recognizing in the income statement the adjustment of the put and call liabilities was Lercare, which had a different treatment. Now, all the future put and call liabilities, you’ll see them through the income statement.

Looking at the quarter alone on page 19, in the quarter, revenues are €169 million, up 55% year on year. That’s 58% from Maverick and 42% from Multiply BPM Tech. Here, you remember, we are consolidating Verivox from an income point of view from the beginning of Q2. This benefits also from the consolidation of Verivox. EBITDA is $42 million in the second quarter. That’s up 46% year on year, and it comes 64% from Maverick and 36% from Multiply BPM Tech. EBIT is up 60%. It’s the same explanation as before as to why it’s growing faster than EBITDA. Net income also, same story. We did a bit of the adjustment of the put and calls, the calculations with the half year when we knew that we were able to better assess the performance of our businesses.

Looking at Maverick alone, Maverick on page 20, Maverick in the first half has revenues of $165 million. That’s up 60% year on year. EBITDA of $48 million. That’s up 62% year on year. EBIT of $33 million, up 75% year on year. You see the margins in the first half are expanding in terms of EBITDA. If we look at the second quarter, you’ll see the margins are instead declining because we are consolidating Verivox, which is quite large and has margins that are significantly lower than our average. In the second quarter of the year, we have revenues of $98 million. That’s up 88% year on year. An EBITDA of $27 million from Maverick. That’s up 79%. You see the EBITDA margin is 27.4% in Q2 2025 compared to 28.8% in Q2 2024. In the first half, the EBITDA margin was expanding. In the second quarter, it’s declining.

This is basically the impact of the dilution of Verivox. We are super happy with the Verivox acquisition. The only pit is that we were starting to show, as we had explained many times, an expansion of the EBITDA margins of Maverick on an organic basis. This will be masked by this big dilution from Verivox. This is what we’re going to say in terms of figures, in terms of comments and outlook. We had a very, very strong growth in the first half, both organic and also because of the consolidation of Verivox. In terms of comments on the different businesses in Italy, we had credit broking that continued to grow. Growth was quite good also in Q2, but slower than in Q1 as the mortgage market basically peaked at the beginning of 2025, and then it’s still growing, but slower.

The remortgages were the peak demand for remortgages was also concentrated at the beginning of the year. Insurance broking is a much more stable business. It continues to grow in a very nice way, but at a steady rate. It’s been growing this year also with stable insurance premiums, so without inflation in prices of insurance. Telco and energy comparison had a good performance, a strong performance, I would say. It’s benefiting mainly because of the acquisition of Switch, which was done at the end of Q2 2024. Until now, we are benefiting from the change in the consolidation area. It’s not only that we acquired Switch, but also that we were able to combine it with our existing energy and telco business. This, of course, had some synergies.

Finally, e-commerce price comparison, which is the area where we have been suffering a little bit, or at least feeling some pressure, is stable year on year in terms of revenues with margins slightly down. There are no particular news. We continue to have some pressure on the results, not catastrophic as we have seen from the comments, but pressure, yes. We are looking forward to a decision by the European Commission on the enforcement of the Digital Markets Act, which will hopefully open up the market and translate into growth for us. In terms of our international businesses, we have strong growth on a like-for-like basis, driven by Spain and also by France. Netherlands is doing okay, but it’s mainly an energy business. Energy in the Netherlands, as well as in Germany, is not being a strong market.

One update is that we have a new local CEO, and that will allow us to move faster and do more things. We think we have a good opportunity there as well. In Q2 2025, we acquired, actually a few days earlier, but we acquired Verivox. Thanks to this acquisition, now more than half of Maverick’s revenues are from outside of Italy. The outlook is that the weight of the international part will possibly even increase as things evolve. If we look at the group, especially if we look at the foreign business, the foreign business is mainly insurance and energy. We are doing credit, but we are not doing too much in terms of credit in international markets. Of course, we will develop that as well. Our Maverick division is very diversified both now in terms of geographies and products.

We think that’s positive because we can go to all sorts of markets with good stability overall. In Germany, with Verivox, Verivox had, let’s say, a solid performance, but weaker than. We were down compared to the previous year. This is in a situation or because of a weaker energy market, even if we start to see some improvements very recently. By the way, we had in our Q1 estimates an earnout liability of €15 million for Verivox. We reduced it to €10 million in our current estimates. Of course, this could be a different figure because it’s very difficult to know now for a business that has a peak season that is very concentrated in the last quarter what the end-of-year results will be. So far, this is the adjustment that we have made. We have started working together with the team in Verivox.

This is really the priority of Maverick. We think we are happy with the acquisition. We think it’s a very interesting market, and we are working. Finally, in terms of outlook, basically, we have had a big change from Q1 to Q2 in the consolidation area. The most reasonable outlook for now is that the following quarters will be a continuation of what we have seen in Q2 in terms of numbers, let’s say, of course, adjusting for seasonality. For instance, typically, Q4 is a stronger quarter, possibly significantly stronger than Q3. It’s easier to make a comparison now and start looking at things and building expectations based on what we have done on Q2 than on the previous year because of this big change in the consolidation area. With this, we are finished with the comments on Maverick, and I hand it over to Alessandro for BPM Tech.

Alessandro Fracassi, CEO, Multiply Group: Yes. Thank you, Marco, and good afternoon, everyone, or good morning if you are on the other side of the ocean. You know we are on page 23. Our H1 financials for the Multiply BPM Tech divisions, we saw a growth year on year in the first half of 22.6%, growing from €111.4 million last year to €136.7 million this year. The EBITDA growth is at 10%, raising from €26.5 million last year to €29.1 million in 2025. There was a slight reduction in the EBITDA margin in terms of percentage from 23.7% to 21.3%. This is mainly because, if we have to comment on the difference in the growth of revenues, which as you can see, is very strong, and in EBITDA, which again, I believe is still strong, but it’s half of it.

It’s due to the dilution effect on percentage margin that we have for the growth of the paranotary business connected to the refinancing. I have always been commenting about this in the past. As I mentioned at the beginning, basically at the end of last year, it is currently not only we have the mix effect, but here we have a stronger effect because there is also a price effect on the notaries because of the new law on the so-called fair compensation. The average ticket of a refinancing in terms of notary fees has grown very significantly, while our margin on the fees that we charge to the banks has remained in euro terms stable. That has basically created a dilution effect on our margin. These are all variable costs, so there is nothing bad about this. No negative read in this fact.

Obviously, this mix effect now is particularly significant as the mortgage business and the paranotary mortgage business is also growing very fast. For the EBIT, we have a growth from €13.5 million to €15.5 million. That’s a 15.4% growth rate year on year. Here, the growth and the EBIT margin also shrinks a little bit from 12.1% to 11.4%. The growth here is stronger at an EBIT level than an EBITDA level, for the same reasons that Marco commented at a group level, that some of the acquisition of 2020 are now getting finished their amortization phase. If we now focus on page 24, on the Q2 financials, we see again a growth in revenues that is strong, 25.3%, moving from €56.3 million to €70.5 million in Q2 2025 relative to the year before. The EBITDA shows a growth of 9%, growing from €13.8 million to €15 million.

The margins, again, for the reasons that I commented on the semester results, shrink a little bit from 24.4% to 21.3%. Again, no negative news here in our opinion. The EBIT grows from $7 million to $8.1 million in the quarter. That’s a 15.5% growth year on year. In terms of marginality at the net income level, we basically have the same numbers that we have at the semester level. We go down from 12.5% to 11.5% in terms of percentage margin. That closes basically the quantitative part. Let’s get into the comments. I believe these are very positive results. We have achieved very strong growth in revenues compared to last year. Also, the EBITDA remains in double-digit growth. This is mainly more than 70% of the growth is organic.

The part of the growth that is not organic is coming from our business connected to services in the retirement part, the Mia Pensione, the one that we acquired at the end of 2024. There is also a little bit from the acquisition of Evolve, but very, very small EBITDA contribution. The performance is driven basically by mortgages, lease, which is always a strong contribution, and also the wealth business line. Instead, obviously, the claims and the real estate have showed, as expected, a gradual normalization after extraordinary peaks of the previous year. Let me just give the outlook for the overall in the division. Obviously, there will still be various trends and differentiated trends among the business lines.

I think it’s reasonable to expect that the positive performance year on year that we saw in the first semester will continue also in the second half of the year, obviously net of usual seasonal factors. The presence of August, for example, in the second and the third quarter. Let’s dig a little bit more into the different business lines. Multiply mortgages is obviously one of the growth engines, and this will continue. We have reasonable visibility on the fact that it’s continuing. Obviously, it will not be forever, but let’s say for the rest of the remainder of the year. Here, the growth is both in the paranotary business. I’ve already commented a lot, but also in some of the new clients that we acquired in the previous year.

Now they’re becoming more and more confident in extending credit also through our support, and so they are increasing their budgets and also their results. We remain positive here. Instead, for Multiply Real Estate, we have seen, obviously, at this point, the end of the EcoBonus incentives. We are seeing a growing business in the real estate valuations, also because we acquired new customers and the market is growing, but this growth will not be sufficient to compensate the other effect. The second part of the year will be better than the first part. In the real estate business, we also report the business that is cadastral services for NPL services. This part also, instead, is, let’s say, cyclically weak. It is not contributing positively to the growth of this business line.

Considering this, we are both looking at new forms of growth, new services that we can offer here, but we are also looking at some opportunities to rationalize the cost base. We already started. We’ll continue in the remaining part of the year. You know, we’re not worried, but it’s good discipline to obviously have the costs and revenues trends try to go in parallel. Multiply loans had a good performance. Actually, you know, it’s stable in terms of revenues, but margins are actually a little increasing because of some mixed effects. We are substituting contracts that had lower margins with contracts that had better margins. I actually expect this to be even better in the second part of the year. Anyway, substantial stability for Multiply loans. Claims, you know, we said that obviously both the revenues and margins are decreasing.

You remember that, you know, at the end of 2024, we also had the closing of a lot of complex and, you know, claim processing, which also had very high margins. That thing is not there anymore. You know, we expect to have results both in terms of revenues and in terms of EBITDA higher than the one we’ve done in 2023. There is a peak in 2024, but there is an underlying growth trend. We continue to invest in efficiency of the processes and the speed of the processes, also because we expect next year to start seeing some of the impacts of the compulsory insurance for businesses in relation to natural events. That will bring, you know, we do expect to have more business.

There is a little of constraint, and we have seen that when there was a peak in terms of appraisers and loss adjusters in the market. It is important to be able to increase capacity. This is a variable cost capacity, so there is no problem in getting ready for it. That’s one of the things that we are concentrating on. Multiply Wealth has a nice growth, and that will continue for at least the next semester. This is also connected, obviously, to good performance in the markets, but also to a large IT project that we are doing for one of our main clients. That will also go beyond 2025. Having said that, it’s a positive outlook for the next semester.

We will also understand in this semester what will be the impact on our business on the announcement of the project that is called the new bank that Absamoot, which is our most important client in this business line, has announced. As you know, in partnership with the FSI Fund, it was announced at the end of May. We still are evaluating timing and nature of the impact of this process. We still need to understand how this thing will go on. We’ll keep you posted. Finally, Multiply Lease confirms as a very stable engine of growth. Contribution and revenues and EBITDA were high in H1, and we expect that to go on also in H2.

By the way, we will have to focus a lot during H2 in efforts for next year as there are some new regulatory changes in the way that basically taxes, circulation taxes, what in Italian we call bolle auto, are going to be managed. There are going to be differences between new cars and old cars and existing cars on how this thing gets taxed in terms of timing. A lot of complexity. Each time you hear the word complexity in these businesses, it’s actually good news for us because it means that we will have to deal with this complexity on behalf of our clients, and obviously, we get rewarded for managing this. I think this more or less ends my comments, and then I’ll be available for questions. Before that, let me hand it back to Marco for comments on the financial positions.

Marco Pescarmona, Chairman, Multiply Group: Thank you, Ale. On page 28, we have the net financial position. I would say no particular surprise here. The reported net financial position is negative €467 million. Basically, that’s an improvement compared to the negative €515 million at the end of the first quarter when we had already acquired and paid for Verivox. The improvement is the effect of cash generation of the business and the fact that we did an accelerated book building for 1 million shares that many of you have seen, and the proceeds of which are freely available, in particular for M&A, which is a positive effect under our current pool financing contract. The other positive aspect of the current net financial position is that under our financing terms, we go from a spread on the loan, on a margin on the loan of 2.45% to 1.95% from the second half of the year.

We have been able to move to a much more favorable bracket in terms of cost of financing. We still have the same participation in money. Net of debt, we are at €353 million. Just as a reminder, in the past, we had loan contracts which considered the many shares equivalent as an adjustment, as a cash-like adjustment to the net financial position. This is not the case of the pool financing, but of course, the parameters are significantly wider. We are happy with the new setup as well. Something that is going to have a little bit of impact, much of it expected to the net financial position, is also the fact that this is linked to BPO. Maybe Alessandro will want to add something. Basically, we acquired a 40% minority in our company that was providing notary services.

We paid €8 million in July, and we paid, but we already acquired it, the deferred payment of €7 million in July of next year. This was not expected because this was not contractual. This was just negotiated. We now own 100% of the company. You see, of course, the cash outflow in the third quarter. Secondly, in the third quarter, and this was instead expected and well known, we acquired 37.9% of Lercare. You remember, Lercare is the company that does insurance claims where we had the founding family at 49%. We had to put in a call on the 49%. Instead of buying 49%, we ended up buying 38%, 37.9%. The family still keeps, we keep for another three years, they’re at 12% that we will acquire at the end of that period.

Basically, the sum of the outflow plus the future liability is, I mean, it’s equal to what we were expecting to pay already at the end of Q1, ballpark.

Alessandro Fracassi, CEO, Multiply Group: Yeah, maybe Marco just needs to comment briefly business-wise. These are both good news. Especially the second point, with the Lercare family, we were able to relaunch the partnership. We are happy to have them still as shareholders and involved in running the company. This has been a very positive partnership in the end, very successful investments. We are happy that this has been the outcome. We look for further growth in an area, as I mentioned before, claims, where the opportunities are there, and they are secular opportunities given the regulatory changes that are more interesting than just commercial opportunities as in other cases. Thanks, Marco.

Marco Pescarmona, Chairman, Multiply Group: Thank you. I think this ends our presentation, so we can open the floor to questions.

Conference Call Operator: This is the conference call operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you change your mind and wish to remove yourself from the question queue, you may press star and two. Anyone who has a question may press star and one at this time. We will pause for a moment as participants are joining the queue. The first question comes from the line of Gabriele Venturi from Banca Accors. Please go ahead.

Analyst: Good afternoon. Thanks for taking my question. First one, if you could please clarify what the Maverick growth rate would have been without Verivox consolidation. If you could please clarify if you can give us an update on when you expect synergies and efficiencies of Verivox to get to full regime. Second one, in July and August, we witnessed a strong mortgage market in Italy. If you can give us some more color if you are seeing a strong momentum also for your business. Last one, if you can give us more color on your Google lawsuit situation given the recent news flow about Google. Thank you.

Marco Pescarmona, Chairman, Multiply Group: Okay. Thank you, Gabriele. I will address the first and the third, and then we will comment together, I and Alex, on the mortgage market. Now, Maverick, I would say, in the first half report, we disclosed that Verivox did $34 million of revenues in the second quarter. Keep in mind that this is a business with significant seasonality, with first and fourth quarter significantly stronger than second and third. In terms of revenues, $34 million comes from Verivox. In terms of EBITDA, what I could say is, we said it’s weaker. You could make your estimates. I would say, if you look at the EBITDA growth of the first quarter, which didn’t have Verivox, you could expect, based on our comments, that the second quarter still had very significant EBITDA growth, but lower than in the first quarter.

When we will see the impacts of the synergies and so on. First of all, let’s say this is something that takes time. The contribution to performance of Verivox will change quarter by quarter based on the seasonality. I expect normally a strong fourth quarter by market dynamics. It depends on how the energy market is doing in Germany, especially if people can save by switching energy contracts. It is looking now a bit better, especially in gas, than a few months ago. Finally, it depends on how we operate the company, if we are able to transfer best practices, if we are able to, I don’t know, improve the efficiency or effectiveness of the company. This last part will take time. There are many things on which we are working. We think it’s quite promising, but it’s not something you are able to do in a few months.

It’s a shame that in Spain, in France, we are still working. I think you’ll start seeing things for this year. You might see a bit of the benefits, but not too much of our interventions because it takes time. You might see benefits of seasonality of market dynamics if you’re lucky. Next year, progressively, you’ll start seeing also, hopefully, the impact of the work that we are doing. It takes patience, I would say, to see a good portion of the potential improvement, at least the short-term potential improvement. You have to wait for a couple of years. The Google lawsuit, basically, we filed, and then this is in front of an Italian court, and there are no updates. This will have the normal developments. We’ll meet in front of a judge. We’ll exchange memos.

This will have a lot of steps before we have any visibility of a potential outcome. We will not be able to comment on these steps because it’s very difficult to read anything into them. Until we have a decision, we will not be able to say anything. The decision should come normally in an Italian court for something like this in two or three years. You know, we have to see. We will know better the timing when this gets up to speed. No news and don’t expect any news, at least from a court for a couple of years, I would say. In terms of the mortgage market, our view is that it peaked in, but also the market info that we have seen is that it peaked in Q1 and then remained strong, but slowing down in the following months.

July is normally also for us a strong month. I don’t know what data you are referring to because I don’t think there is anything public, at least regarding July and August. I don’t know if Alessandro has anything to add. Anyway, July is when people close mortgages normally.

Alessandro Fracassi, CEO, Multiply Group: Let’s say, apart from the news, we had given a positive outlook on mortgages, and we do it not only based on our numbers, but also based on our early signals. Obviously, it takes time before a mortgage closes. That’s just, you know, so we see it some weeks, if not months, in advance, depending on the different businesses. It’s true that normally July and the first days of August tend to be strong in terms of closings. You can expect, for example, people to move, especially during the months where it will not rain or you’re moving. That’s why there is normally a stronger performance in those months. Again, we continue to be positive, at least until the end of the year.

Marco Pescarmona, Chairman, Multiply Group: Thank you.

Conference Call Operator: Once again, if you wish to ask a question, please press star and one on your telephone. The next question comes from the line of Alexandra Arsova from Equita. Please go ahead.

Analyst: Hi. Good afternoon. Thank you for taking my questions. Four questions on my end. The first one is a follow-up on the Google lawsuit and also the compliance with the Digital Markets Act. I know it’s a separate thing. The two things are separate. If, let’s say, the remedies proposed by the European Commission work and Google complies, do you see that this situation will increase or decrease the likelihood for you to win the lawsuit against Google and get some, let’s say, damages in terms of, I mean, monetary compensation? The second one, maybe another question on the risk on your e-commerce business coming not anymore from Google, but rather from the new artificial intelligence chatbots like ChatGPT or others. I was reading that maybe in the U.S., people are starting to search for e-commerce products, not more on Google, but directly on ChatGPT or other chatbots like ChatGPT.

Do you see it as a risk for turbo pricing, or do you see some measures that you can take to avoid this risk or to maybe make more money from this? The third one is on insurance premia in the insurance broking business. I was wondering, since the growth there was strong also in the second quarter, any sentiment on any kind of normalization of the growth in insurance premia in the third quarter or beyond? The last one is maybe on the fees you get from, especially from banks in mortgages, both in BPO, but also in the broking business in Maverick. Now that mortgages are definitely picking up, recovering, and banks are in a very, let’s say, good shape, do you see any room for renegotiating upward the fees you get from the banks? Thank you.

Marco Pescarmona, Chairman, Multiply Group: Okay. Thank you, Alexandra. Let’s start in order. Google, with the adjustments that Google will have to do to comply with the Digital Markets Act, we start making much more revenue and much more money in terms of profits. Potentially, yes, this could have an impact. This is a market where Google Shopping probably has more than 90%, well above 90% market share. I think that even with this, this is a market also with a lot of network effects. Even with very good remedies, I think it will be very difficult to go back to a situation resembling the original situation when the abuse started. I would say, yes, the bigger the improvement, if there is any, to the market now with, hopefully, compliance of Google with the new regulation, then potentially, the lower the final component of the damages.

Again, because of structural reasons, I don’t think it’s likely to completely revert. There will be an improvement, but Google will remain because of the network effects structurally dominant. It will be an adjustment, not a change of paradigm. In terms of the second question, e-commerce and generative AI, it’s true that in particular ChatGPT, but others as well, are working and dedicating a lot of attention to e-commerce. I would say chatbots are actually quite good, or at least make a better job than us in many cases at recommending choices. If you want to know, if you need a five-kilo or a seven-kilo dishwasher, sorry, laundry machine, and then if you want it class A, class B, class C, whatever, ChatGPT can give you good advice.

Choosing the type of product and possibly the specific product that you want is something that I see these chatbots being able to do better and better. What is different is whether once you have selected a specific product, finding the very best offer and the very best offer, by the way, from a reliable provider, someone that will deliver, that will accept returns for real and so on. This is something that I don’t see ChatGPT and others able to handle for a long while. I think that we could see more traffic from ChatGPT and the likes and reduce our dependency a bit from Google. We are still at the beginning of this.

There is, of course, a risk also of threat of ChatGPT trying to, you know, you have read about that in the U.S., they’re trying to strike agreements, not even with e-commerce merchants, but directly with the producers of the products so that, you know, you compare, etc., and then you buy directly from Nikon or from Apple or from whatever the provider is of that product. That would be a threat, but I think it’s a stretch, especially in a market like Italy, where you have lots of small providers able to source at very attractive prices. Where you have the issue of guaranteeing the reliability of those providers, I think we still have an important role. Again, the diversification of our customer, of our traffic, could be the benefit. It’s sadly to say the traffic we are getting from generative AI is visible, but still small.

Insurance premia, they are now stable. They’ve already been stable for years.

Alessandro Fracassi, CEO, Multiply Group: Marco, sorry. If I can comment also one second on this. We really don’t know what the behavior of the providers of, you know, the generative AI will be in terms of tweaking what the generative AI does. I mean, the whole Google thing comes from the fact that at a certain point, Google, from, you know, trying not to be evil, you know, and giving the best possible results, started tweaking, you know, the results and putting new things in there and changing the model. As of today, generative AI is trying to deliver the best and controlling the hallucination. Once they start thinking about how to, you know, to monetize maybe these things, their behavior is really unpredictable because it will depend on, you know, what kind of path they will go under.

Not necessarily will they do what is the best thing for the product, and they might, you know, go and diverge into something different, leveraging the fact that people believe that this is the best thing, that they, you know, the best, you know, intelligent answer to the question. We really don’t know.

Marco Pescarmona, Chairman, Multiply Group: The work of TurboPrice is a very difficult job, even if it doesn’t look like it on the outside. Assembling the catalogs of thousands of merchants and just figuring out what is what, and if it’s the same product, a different product, a different size, a different whatever, that’s already very difficult. It’s unlikely that this would be doable with a generic approach. It’s really country-specific, business-specific, with a lot of intelligence and customization, merchant-specific, and so on. Back to the third question, insurance premia. We have started seeing stability this year in general, at least in the countries that I have at the top of my mind. We have been able to grow despite no longer having the impact of the premium inflation. I think that the outlook is we’ll continue to grow.

Of course, maybe this year we are growing maybe a bit less than last year just because we don’t have the premium inflation. We have been able to grow in that environment, and we continue to be able, we think, to grow in that kind of environment. In terms of fees from banks, I would say in general, banks are printing money across the board. Hopefully, we should be able to—we’ve been able to do this a little bit already—but we should be able to improve our fees or at least try to improve our fees. Hopefully, but I don’t know if this is happening, maybe even for BPO, it will be easier because they’re really printing money. Complaining and trying to negotiate things when you’re making that much money is a bit awkward.

I think we are all happy that our clients are not under pressure, that they’re doing very well, and we’ll try to help them to grow and be effective with their operations.

Conference Call Operator: As a reminder, if you wish to register for a question, please press star and one on your telephone. We now have a question from the line of Tommaso Nieto from Kepler Chevreux. Please go ahead.

Analyst: Hello and good morning. Thank you a lot for taking my questions. Most of them were already answered, but I would have two. The first one is on the performance of Spain and France. If you can, please give us more color on that and what was their contribution on the margin expansion? The second one, if I may, and sorry, maybe we already talked about it in the last conference call, but can you repeat us what are your thoughts on AI, in particular on mortgage BPO, if banks could start thinking about or internalize the origination? Is it something you are concerned about, or maybe perhaps this automatization of the process is just an upside for you? Thank you.

Marco Pescarmona, Chairman, Multiply Group: Thank you. I’ll start with Spain and France. We do not disclose our performance for the individual countries. In Spain, we file a public annual report, but that’s at the end of the year. In France, there is no obligation in such sense, so we don’t do it. We don’t do it in Germany either. It’s hard to say to give a precise feedback. I would say Spain is the bigger of the two, and where we see the strongest performance. We don’t know if it’s the market. Certainly, it’s helping the work that we have done. We see an improvement both in terms of top and bottom line, I would say. We cannot go into much detail because we don’t give that kind of disclosure. Alessandro, if you want to pick up the last one.

Alessandro Fracassi, CEO, Multiply Group: Okay. Here, if we look, it really depends on what is the timeframe in answering this question. First of all, we see in a lot of our businesses, AI at the same time as a big opportunity and at the same time as a big threat. Obviously, there are some banks that are doing things with us. Let’s take out GenAI for a second. What we have been telling banks in the last 15 years is that if you come with us, normally you would pay 50% of your cost base, right? Sometimes we were not able to do, and still, some banks have said no, or even if they said yes, they said they were not able to generate the full advantage of this because to generate the full advantage, they would have to integrate their system with our systems so that these disadvantages could all be generated.

Now you have GenAI, which I understand could generate even larger savings. Still, what are you going to do with the people and how are you going to integrate your systems into these GenAI models? Are you going to do it? It’s really, theoretically, yes. Practically, first of all, the mortgage underwriting, it’s a complex process. I will not sit here and tell you that never is going to happen through GenAI. Let me tell you, I don’t think it’s going to happen with you dumping all the documents into ChatGPT and telling them, come up with the underwriting. That will not work, at least not in the foreseeable future. Then you have to get into and really divide,

Conference Call Operator: You know, in different steps and do all that part. This is what we are working on. This is where we are starting to obtain results. You know, again, this is the opportunity for us. Obviously, there will be some banks that are going to look at trying to obtain this, but we haven’t seen any banks succeeding till now while we are starting to generate some results and, you know, sharing, obviously, the advantages that we are able to generate with our clients. That’s the route we are on and what we’ll try. You know, I don’t have a crystal ball on ChatGPT 6, or, you know, Claude 5. We’ll see.

I think everybody that has really tried, as we are trying, to really scale up beyond proof of concepts has realized that these things are difficult and that the real environment is an environment made of, you know, the real ecosystem of IT ecosystem, for mortgages, but for a lot of projects, it’s, you know, an ecosystem where you still have, you know, AES-400 mainframes, a patchwork of systems, a very, very complicated environment. Obviously, if you have a completely, you know, in a theoretical define, whatever, well, all the old information is just in one system, you know, there and everything is there available. Yeah, I can see that, you know, the GenAI can be, you know, very effective, but that is not the ecosystem that it’s out there.

You know, again, my comment is always, we have built for 20 years of business based on the fact that we were able to digitalize all the documents at the beginning of the process and have the whole workflow in a digital format that helped us being much more effective than people handling paper. You know, digital documents and scanning documents were much easier to put in place than GenAI, and it took banks and/or insurance companies like, you know, 15 years to do that. We’ll see what the runway for this thing is. We are working very hard on this, and this is really our top priority.

Marco Pescarmona, Chairman, Multiply Group: It makes a lot of sense. Thank you.

Alessandro Fracassi, CEO, Multiply Group: Gentlemen, there are no more questions at this time.

Conference Call Operator: Thank you, everybody, for participating in our call. We’ll be available, as always, for one-to-ones, or we’ll speak to you at the next opportunity. Thank you.

Marco Pescarmona, Chairman, Multiply Group: Thank you. Thank you very much. Bye-bye, everyone.

Conference Call Operator: Bye-bye.

Analyst: Bye-bye.

Conference Call Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may now disconnect your telephone.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.