EU and US could reach trade deal this weekend - Reuters
PensionBee Group PLC reported a significant 22% increase in revenue for the second quarter of 2025, reaching £10 million. The company achieved profitability in the UK, marking a milestone with £300,000 in profits for the quarter. Despite these gains, the group’s adjusted EBITDA remained marginally negative. According to InvestingPro data, the company maintains strong financial health with a current ratio of 5.96, indicating robust liquidity position. The company’s market capitalization stands at $547.24 million. The company continues to show robust growth, with a two-year revenue compound annual growth rate (CAGR) of 37% on a last twelve months basis.
Key Takeaways
- PensionBee’s Q2 2025 revenue increased by 22% to £10 million.
- Assets under administration reached approximately $9 billion.
- The UK market achieved profitability with £300,000 in earnings.
- Group adjusted EBITDA was slightly negative.
- PensionBee targets over £100 million in revenue within 3-5 years.
Company Performance
PensionBee’s performance in Q2 2025 highlights its continued expansion and strategic growth, particularly in the UK market where it achieved profitability. The company’s assets under administration have grown significantly, reaching approximately $9 billion. This growth is bolstered by a two-year revenue CAGR of 37%, reflecting the company’s strong market positioning and successful customer acquisition strategies. InvestingPro analysis shows impressive revenue growth of 39.41% over the last twelve months, with a healthy gross profit margin of 52.51%. For deeper insights into PensionBee’s financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Financial Highlights
- Revenue: £10 million, up 22% YoY
- Assets under administration: £6.3 billion (approximately $9 billion)
- Profitability in UK: £300,000
- Adjusted EBITDA: Marginally negative
Outlook & Guidance
PensionBee is targeting a group revenue of over £100 million within the next 3-5 years, with an adjusted EBITDA margin of approximately 20%. Long-term goals include achieving revenue above £5 billion and an adjusted EBITDA margin of around 50% over the next 5-10 years. The company plans to spend approximately $5 million on marketing in the US this year as it seeks to increase its brand presence and market share.
Executive Commentary
CEO Romy Savova emphasized the company’s mission, stating, "We exist to help our customers prepare for and enjoy a happy retirement." She also highlighted the company’s long-term ambition to build lifelong relationships with customers. CFO Christophe Martin reiterated the financial goals, aiming for significant revenue and margin improvements over the next few years.
Risks and Challenges
- Market Competition: The pension market is highly competitive, with significant players in both the UK and US.
- Economic Conditions: Macroeconomic pressures could impact customer investment behavior and asset growth.
- Regulatory Changes: Potential changes in pension regulations could affect operations and product offerings.
- Expansion Costs: Increased marketing and operational costs in the US could pressure short-term profitability.
Q&A
During the earnings call, analysts inquired about PensionBee’s US market expansion strategy and the rationale behind increased marketing expenditure. The company detailed its focus on engaging with employers for its Safe Harbor IRA product and clarified expectations around customer acquisition costs. With the next earnings report scheduled for August 14, 2025, InvestingPro subscribers can access additional ProTips and detailed financial metrics to make informed investment decisions. The platform offers exclusive insights through its comprehensive Pro Research Report, covering over 1,400 US equities with expert analysis and actionable intelligence.
Full transcript - Pensionbee Group PLC (PBEE) Q2 2025:
Moderator/Host: Q2 Results Investor Presentation. That is recorded meeting, attendees will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated on the right hand corner of your screen. Simply type in your question and press send. If you’d like to answer a question verbally, please just type a question mark in the call and open your mic.
Company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it’s appropriate to do so. Before we begin, we’d like to submit the following poll. Thank you. I would now like to hand you over
Romy Savova, CEO, PensionBee: to Good afternoon. Good afternoon. I’m Romy Savova, the CEO of PensionBee. Welcome to our q two twenty twenty five results presentation.
Today, we are pleased to share our progress over the quarter as we continue executing on our vision to build a global leader in the consumer retirement market. For those of you who are new to the PensionBee story, we exist to help our customers prepare for and enjoy a happy retirement. We operate in the enormous defined contribution pension market, representing over $30,000,000,000,000 in assets and close to 100,000,000 consumers in The UK and US alone. Our customer focused offering helps consumers to feel retirement confident. We enable our customers to combine their old retirement accounts into a new online account.
We enable them to make contributions, to invest in line with their objectives, with money managed by the world’s largest asset managers, and ultimately to withdraw and spend their retirement savings. Our long term ambition is to build lifelong relationships with our customers. This approach not only delivers value to them throughout their retirement journey, but also drives predictable, scalable revenue for our business and strong returns for our investors. In q two twenty twenty five, we sustained strong momentum by continuing to grow our customer base in The UK and laying robust foundations for long term growth in The US. We acquired 11,000 new invested customers and assets under administration reached £6,300,000,000 or close to $9,000,000,000.
Group revenue for the quarter increased by 22% to £10,000,000. In The UK, we increased our marketing expenditure, hitting record brand awareness levels and materially expanding our new customer pipeline for ongoing growth in invested customers in h two twenty twenty five. We are successfully attracting a younger demographic, mirroring our strategy during similarly volatile macroeconomic conditions in 2022. In The US, we have established and continue to grow our brand awareness through national channels and enhance our product offering through transfer automations and retirement planning tools. Our Safe Harbor IRA is being well received as multiple employers are nearing the final discussion stage to adopt our consumer centric offering and longer term consultant led prospects representing circa 20,000 potential new customer accounts.
Group adjusted EBITDA was marginally negative this quarter, while PensionBee UK achieved profitability of £300,000 for the quarter and £3,200,000 on an LTM basis. These successful results were driven by strong revenue and improved operating leverage. We remain confident in our US expansion and are on track for full year UK adjusted EBITDA profitability. In The UK, we continue to invest in marketing over the first six months of 2025, increasing spend by 30% year on year to £7,600,000 in order to capitalize on our UK growth opportunity. This investment drove record levels of both prompted and unprompted brand awareness, which were 5925% respectively, making PensionBee one of the most recognized pension providers in the country.
Brand investment is a long term endeavor, yet we were pleased to see it contributing to the successful onboarding of approximately 11,000 new invested customers over the quarter. Brand investment has also resulted in an increased pipeline of customer registrations and transfer requests, which will translate into further growth in invested customers in the second half of this year, distinguishing the 2025 compared to 2024. Our industry leading technology platform continues to scale effectively, driving operational efficiency and the consistent delivery of excellent customer service. We delivered an 18% productivity improvement over the second quarter with approximately 1,500 invested customers per staff member in The UK while maintaining our industry leading customer satisfaction rates as reflected in our excellent trust pilot rating and customer and AUA retention rates of over 95%. Looking forward to the second half of the year, we expect to deliver substantial innovations to support long term growth and productivity.
The incremental introduction of a new customer interface will modernize and enhance customers’ product experience while simultaneously supporting long term efficiency in future product development. Beatrix, the company’s AI internal copilot, continues to drive significant efficiencies across customer service and other operational teams. The focus remains on completing the technical underpinning for customer deployment in the near term. Turning now to The US. Our focus on building brand awareness and trust is a top priority, and we are growing national brand channels that scale with a focus on social media, customer advocacy through the press, and search.
Our multichannel campaigns are generating strong traction across platforms such as YouTube, Meta, TikTok, and LinkedIn, where we see exponential growth in our follower base. We’re pleased to see prompted brand awareness in The US already registering at 5%. As our US product news product parity with our UK product and we complete our transfer automations, we will soon be ready to supercharge our brand while investing in customer growth. From a brand perspective, in the second half of the year, we will launch advertising campaigns in 12 metro areas with Connected TV through ESPN, Hulu, Warner Brothers, and Peacock. We will support this campaign on YouTube.
In three of the 12 metros, New York, Chicago, and Seattle, we will deploy out of home advertising, billboards, and radio advertising on commuter corridors. Simultaneously, we are in process of developing a range of distribution partnerships focused on our core consolidator target audience and also our self employed audience. These partnerships are structured on an invested customer completion basis, thereby representing the most attractive economics for PensionBee. To meet our long term goals, the overall objective is to continue maintaining the growth of our US trajectory above the trajectory we followed in The UK from a customer and a way perspective. Our US product continues to be developed.
And over the course of the last quarter, we advanced our transfer automations and core functionality in line with our objectives. We expect to achieve predominant parity with our UK product by the end of the year. As of q two twenty twenty five, we have released transfer automations in a live testing environment that will be capable of handling over 50% of our requested transfers. Finally, over q two, we have continued to develop our safe harbor IRA for employers, offering a consumer oriented solution in a market that is desperate for innovation. Our research uncovered exorbitant fees that erode customer accounts to zero, including by sweeping up to 4% of interest out of these customer accounts.
We successfully deepened engagement with consultants and employers around our safe harbor IRA offering, which offers a more consumer friendly proposition for employers and employees. With a number of employers now nearing the final discussion stage and PensionBee participating in consultant led processes representing circa 20,000 new customer accounts. This business line is demonstrating growing traction. I would now like to hand over to Christophe Martin, our CFO, who will cover the financial update for the quarter.
Christophe Martin, CFO, PensionBee: Thank you very much, Rumi. Helen, welcome to everyone to the finance section of our Q2 twenty twenty five results. Turning focus to our UK performance. Scalable cost base drives operating leverage and profitability. We delivered a two year revenue CAGR of 37% on an LTM to June 2025 basis while maintaining strict cost discipline.
This resulted in achieving UK adjusted EBITDA profitability of circa £3,000,000 on an LTM basis, giving us confidence in continued profitable growth of The UK business in line with our public commentary for The UK. Over the q two twenty twenty five, we continue to deliver predictable and recurring revenue growth. The underlying reason for our predictable and recurring revenue is fundamentally a high retention rate of greater than 95% of customers. Our average customer is around 40 years of age and therefore still building up their retirement saving with us for decades to come. As a result, existing cohorts are growing over time on an underlying basis, excluding markets.
Growth of existing cohorts combined with efficient new customer acquisition generates a consistent AoE growth over time on an underlying basis. We have seen a resilient revenue margin of mid-60s basis points consistently at those levels over the last six years, which translates strong ARA growth into consistent, predictable and recurring revenue growth. From a long term perspective, the scalability of the technology platform becomes even more apparent as evidenced in the decline of our cost base as a proportion of revenue. As we scale the business, which can be seen on the long term trend on the left hand side of this of this page, we drive adjusted EBITA margin in the long term, which can be seen on the right hand side. In conclusion, the scalability of our business and our efficient cost control allows us to bring costs down consistently as a proportion of revenue, as shown historically, thereby positively improving adjusted EBITA margin.
With regards to our guidance in the short to medium term, spending around three to five years, we target the group to generate revenue of above GBP 100,000,000 and the group adjusted EBITDA margin of circa 20% by year five. In other words, over that time horizon, we see The UK to contribute the vast majority of revenue and profits to the group. In the long term, spending five to ten years, we expect the group to generate above $0.02 £5,000,000,000 in revenue and target a group adjusted EBITDA margin of circa 50. Over the time horizon, we see the two segments to contribute equally to the group guidance. For 2025, while The UK business will be running on a profitable growth basis, The US business receives state suite reimbursement for the marketing expenditures and will be run on a strict cost discipline basis during the building phase.
I will now hand back to Romy for conclusions and closing remarks.
Romy Savova, CEO, PensionBee: Thank you very much, Christoph. We’re pleased to report another quarter of growth and look forward to engaging with investors on the questions that are coming through.
Moderator/Host: Fantastic. Thank you very much indeed for your presentation. Ladies and gentlemen, do please continue to submit your questions using the Q and A tab And as you can see, we’ve had a number of questions come through. So perhaps I can just start with the first one here. Perhaps one for you, Christophe, in the first instance.
Ben, thank you. What do you expect to see as a normalized margin? And at what level of AUA do you expect to see the operational gearing dropping to bottom line profit at a group level?
Christophe Martin, CFO, PensionBee: Yes. I’m very happy to to take this one. So the so let me start maybe with the group guidance. So the group guidance that we made public is an indication of the normalized long term margin over the next five to ten year period where we target again over or around 50%. I think as we would scale from that point onwards, it would not be unreasonable to expect that it could potentially go above that point.
I think if you look at it from the journey from now to to that point, there are differences in terms of the two segments of how they contribute to the margin and profitability because they’re also at different stages in their in their growth cycle. So with The UK, for instance, The UK is obviously at profitability, and we drive and grow the business profitable. Here, you could expect that we are investing the incremental profit that we generate over the next few years back into the business because The UK market alone is still enormous with £1,300,000,000,000 of reserve pension, and we have, you know, over 6,000,000,000 of that. So we have a market share that is way that is well below 1%, and we have a very unique positioning in the market. So there’s still a long runway for us to actually deploy capital with very attractive unit economics and build our market share.
So for that reason, we would probably spend a lot into growth to further scale The UK business. That means that the margin, as a consequence, will be will remain at the current levels, if you will, because of that. Once we reach around £17,000,000 of marketing spend, the marketing budget will grow a little bit slower. And I think at that point, you could potentially expect that the you will see much stronger margin improvements from that point onwards. The US is the second segment, of course.
This is currently in the building phase as we have mentioned. The j curve that we have to go through in The US is is is much shallower, if you will, compared to The UK. This is due to synergies that we generate on one side of the technology stack as well as the marketing expenditure. To your question around the scale of the business, I think you could reasonably expect that the margin potential to get closer to, let’s say, a run rate stage to be around, you know, $2,025,000,000,000 pounds of AOE from that point onwards, we’ll probably expect the margin to come through much, much more stronger. I hope that answers the question.
If there’s anything else, I’m happy to dive into further details.
Moderator/Host: Super, Christophe. Thank you very much indeed. Gautam, thank you for your questions. A couple of parts to these. Let’s start with the first one.
US progress. Is The US ramp up in line with your expectations? Have you started signing customers in The US? What is the milestone customer number in The US when you start to report and when are you starting to report this metric?
Romy Savova, CEO, PensionBee: Some great questions around growth and development in in The US, and I think really echoes along quite nicely from the comments Christophe made around group guidance. The The US business is very much in its buildup phase both with respect to the direct to consumer offering, but also with respect to the safe harbor IRA offering. And on the direct to consumer side, we’ve laid out a very clear road map around the level of product expansion that we expect to be delivering in the first half and then also in the second half with a real critical focus on making sure that our transfer automations are working in in the way that we have grown accustomed to them working in in The United Kingdom. And so we’ve made great progress on on that front. We have around 50% of the transfer automations in a live testing environment.
That means that they can handle simple transfer requests, and therefore, we are indeed onboarding some customers that are going through that. But there is additional build work to be done here to handle for some of the edge cases that we also see, and we really think that that is quite a precondition before we start ramping up the marketing spend in in The US. What you can see, though, is that for the limited amount of marketing spend that we have had, and I think it totals to around $2,000,000 over the past year, we’ve already established a 5% brand awareness, which is exceptionally high given the kind of trajectory that we had in The UK, for example, where we were at around 17% in in 2021. So kind of five to six years after after operations having spent having spent a lot more. So from a brand building perspective, it’s it’s definitely going faster.
From a kind of product development perspective, it’s also going faster. In The UK, it took us a year and a half to get our first customer, and we have already, you know, kind of passed that milestone in in The US. So I would say, yes, on track with the expectation that we will be developing The US at a faster trajectory than we developed The UK at at around a similar time.
Moderator/Host: Thanks, Rami. The second part of the question we’ve got here, number two, I’m gonna combine with Adam Adam, thank you for your question as well. If if I may just read them both out, both relating to marketing. The first reads, how should we think about marketing spend in The UK and US going forward? Should we anticipate higher or lower cost ramp up in the coming quarters?
And Adam’s point, marketing spend rose 30% year on year with customer growth steady. How are you thinking about long term acquisition efficiency and ROI?
Romy Savova, CEO, PensionBee: Yeah. Very, very happy to take that one. In The US, perhaps we can we can start there. We have spent around $2,000,000 so far, and we expect to spend a total of $5,000,000 for the year. So that gives you a sense of the trajectory for the second half.
We expect to be ramping up spend significantly with that spend being reimbursed by our partner State Street, and we have highlighted some of the areas in the presentation where that will be deployed. There’ll be a focus, of course, on the kind of bread and butter paid performance channels that we have, but also a continued focus on building brand awareness because we think that getting to national level of recognition within The US will be just as important for us as it was in in The UK. And then coming to The UK, we have indeed increased our UK marketing budget around 30% on a year on year basis just looking at the first half. Quite a lot of that increase has come through in the second quarter, and so we can already see some of the results of that not only in the invested customers that have come through, but also in the pipeline that we have built through new registrations and new transfer requests that we expect we will continue to convert into the second half of the year. And when we really think about 2025, h two twenty twenty five, we think it will look quite different to h one to h two twenty twenty four, which was a period where we had quite a constricted marketing spend kind of coming on for a full for a full two years.
So we do expect to continue growing the marketing budget and to continue growing the invested customer base as a result of that.
Christophe Martin, CFO, PensionBee: Yeah. I think the the only thing to to add further is that within q two, when if you look at the individual months, so April, May, June, you see actually each month on a year on year basis, we saw an increase in incremental customers joining the platform. I think there were a few I think there are basically two factors. Really, one of them is, as Rumi mentioned, the increased yearly marketing spend. But then also there was another, let’s say, external factor that was impacting us too.
You may recall on the second of April’s announcement around liberation day at the trade the trade negotiations that subsequently impacted capital markets and volatility that also had a further impact on sentiment of customers so that customers, you know, in that particular month may have, you know, observed that and remained a little bit more on the fence. I think now the last few the the demand subsequently as this have normalized, we see that to to reside and actually normalize. So this is one of the impact that, let’s say, they spent early in the quarter. Didn’t see immediate conversion, but we see, you know, that now slowly coming through. And that is the second, let’s say, consideration
But then again, as Romy said, the first one is then the year on year growth in marketing. And so the expectation for h two wouldn’t be stronger as as just mentioned.
Moderator/Host: Fantastic. Thank you, both. Colby, thank you. Could you expand on the safe high harbor IRA offering and the discussions with The US employers? Do you expect to convert the 20,000 new customer accounts post the finalization of this process?
Romy Savova, CEO, PensionBee: Yes. Very happy to take this one. And then I do believe we have a live question from from William as well that’s that’s coming through. On on the safe harbor IRA, there are essentially two kinds of employer segments that we are seeing at the moment. The one is kind of quicker to onboard employers.
These processes are not necessarily consultant led. They tend to be for employers that are perhaps smaller in size and are much more attuned with rapid decision making, and we are very much in the final discussion stages with a number of employers of that magnitude. The second type of employer that we see is sort of very large consultant led, RFP led kinds of employers, and this is really where the 20,000 customer number is is stemming from. We are currently in the process on a number of RFPs that collectively will result in around 20,000 invested customers if we win those processes. And so while there is no guarantee that we will win these RFPs, we think it’s a really important metric to share with you to illustrate the size of the customer pipeline within this business and as a sheer kind of example of how quickly we have been growing the Safe Harbor IRA business line given we only launched this a couple of months ago.
Moderator/Host: Fantastic. That’s great. William, mate, she’d like to verbally ask a question. If you just bear with me one second, let me just request to turn on your microphone. Accept that request, please.
Fantastic. William, your microphone’s live. Please ask your question. William, if you could just please ask your question, that’d be fantastic. We’re not hearing you, William.
Perhaps what we’ll do is we will move on and come back to you in a moment. Okay. Let’s just move on to the next question here, Colby. In the second half of full year ’25, do you expect to see a step up in invested customer accounts growth in The UK driven by the change in strategy to a high number of low value accounts this year?
Romy Savova, CEO, PensionBee: I will take the question, but perhaps modify some of the the the understanding. So we we certainly do expect to see a growth in invested customers in the 2025 and certainly compared to the 2024 where we were coming off a period of constricting marketing spend for two years in a row. In the second half of twenty twenty five, not only do we expect to keep our marketing spend elevated compared to the second half of last year, but also we will continue to benefit from the increased spend of the first half of twenty twenty five, much of which came through in the second quarter. In terms of the the value of the accounts, one of the stats that we’ve shared within the presentation is is around the age of the customers. We saw in the first half of this year that the customer cohorts that we onboarded were a little bit younger compared to the customer cohorts that we onboarded in the first half of twenty twenty four.
And as you know, within pensions, even a year of pension contributions makes around the £3,000 difference to to average account sizes. So you can kind of think of every year as counting for a £3,000 difference in the average incoming customer size. Now that being said, over the longer term, of course, younger customers are expected to remain on the platform for longer as it will take them longer to decumulate and longer for them to begin accessing their pension in in the first place. But but, yes, we do expect to see trend of growing customers into the second half. We are now that sentiment has normalized a little bit kinda seeing a return of customers over the age of 50 with slightly higher sentiment and propensity to transact.
And and so, you know, we we will see where the second half shakes out, but certainly growth in customer numbers overall.
Moderator/Host: Fantastic. Thank you very much indeed. Okay. We’ve got another question here. In the latest net customer ad, how has the cat trended?
Romy Savova, CEO, PensionBee: It’s a great question. We won’t know that until later on this year. So a lot of the marketing spend that we do, because transfers are not instant, they can take two, three, four months and and so on. We we will see the CAC established over time. We’ve guided, you know, for quite a while that we expect it to be at around the two hundred and fifty pound mark and that the lifetime value as a a proportion of the CAC continues to remain very attractive on that basis.
Moderator/Host: Fantastic. Thank you very much indeed. William, I think as well, if you wanna type in your question or pop it on afterwards, the team can pick that up. That concludes all the questions that we’ve had through. So look, thank you both for updating investors today.
And of course, any further questions that do come through, the company will have the opportunity to review those questions and publish responses where appropriate to do so on the Investor Meet company platform. Can I please ask of attendees not to close the sessions and I’ll be automatically redirected to provide your feedback in order that the team can better understand your views and expectations? This will only take a few moments to complete, and I’m sure will be greatly valued by the company. On behalf of the management team of PensionBee Group, Percy, we’d like to thank you for attending today’s presentation. That concludes today’s session, and good afternoon to you all.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.