ASX-listed Enero, which includes BMF, Orchard, Hotwire and OBMedia, today issued a profit warning and announced staff cuts, with revenue hit by structural changes in the adtech market.
In a trading update, the company said it now expected full year revenue to June this year to be down 10% to 12%, with net revenue between $167 million and $170 million.
Shares in Enero closed Friday 16% lower at 65 cents.
The company said Adtech platform OBMedia, in which Enero has a 51% stake, has been impacted by a recent decision by Google to shift the industry to its newer Related Search on Content (RSOC) product, de-emphasising its AdSense for Domains.
RSOC seeks to improve the end user experience increasing conversion for advertisers. Google has indicated additional features are expected to be rolled out which may create additional revenue opportunities and the opportunity for expanded inventory.
OBMedia will be cutting staff. The initial change this week will remove around $7 million of annual costs.
The company expects to report OBMedia full year net revenue of between $28 million and $30 million, a 35% to 39% fall.
Enero's Technology, Healthcare and Consumer Practice "continues to drive improved performance," benefiting from several key client wins and positive momentum in Australian agencies.
However, Hotwire continues to be impacted by challenging and dynamic market conditions in the global technology sector. In response, Hotwire has been "re-balancing its resource mix" and capacity to protect margins.
OBMedia last month changed CEOs. Raja Gupta stood down to be replaced by Mike Lynn, a founder and shareholder in WOAM, which co-owns OBMedia with Enero.
Enero in February reported net revenue down 12% to $88.3 million in the half year to December. Net profit after tax was down by more than half to $3.2 million.
The company said the results were hit by subdued economic conditions and by challenging technology and adtech markets.
Enero has objected to the above coverage.
The full text of the company's trading update to the ASX, April 4, 2025:
Enero Group Limited (ASX: EGG) (Enero) today provides a trading update, as a result of structural changes in the ad tech market impacting OBMedia’s performance in FY25 H2.
For the 12 months ending 30 June 2025 (FY25), Enero expects to report the following on an underlying basis:
- Net revenue (1) of between $167 million and $170 million, representing 10% to 12% year-on-year decline
- EBITDA (1) (excluding significant items) of between $22 million and $26 million, representing 30% to 40% year-on-year decline
On an economic interest (2) basis for FY25, Enero expects to report the following:
- Net revenue (1) of between $153 million and $155 million, representing 7% to 8% year-on-year decline
- EBITDA (1) (excluding significant items) of between $18 million and $20 million, representing 22% to 31% year-on-year decline
OBMedia
OBMedia results in FY25 H2 have been impacted by the recent decision by Google to shift the industry towards its newer Related Search on Content (RSOC) product, de-emphasising its AdSense for Domains (AFD) monetisation product. RSOC seeks to improve the end user experience increasing conversion for advertisers, creating an opportunity to grow the overall market including for RSOC feed holders such as OBMedia. Importantly Google has indicated additional features are expected to be rolled out which may create additional revenue opportunities and the opportunity for expanded inventory.
RSOC has been tested by OBMedia, however as a new product, it is yet to reach the scale of past AFD revenue. With support from Enero, OBMedia is capitalising on its deep industry expertise and business partnerships to jointly establish a new operating model to scale-up the RSOC business.
To prudently manage expenses during this transitionary period, OBMedia will be undertaking staff reductions in FY25 Q4. The initial change actioned this week will remove around $7m of annual cost from the OBMedia business whilst retaining its key strategic capabilities.
Enero expects to report OBMedia net revenue of between $28 million and $30 million, representing 35% to 39% year-on-year decline and EBITDA of between $9 million and $12 million, representing 49% to 64% year-on-year decline for FY25.
Technology, Healthcare and Consumer (THC) PracticeIn FY25 H2 the THC Practice continues to drive improved performance and is expected to deliver revenue growth compared to FY25 H1 (prior half) and FY24 H2, benefiting from several key client wins and positive underlying momentum in the Group’s Australian agencies.
Hotwire continues to be impacted by challenging and dynamic market conditions in the global technology sector. In response, Hotwire has been re-balancing its resource mix and capacity to protect margins.
As a result, the THC Practice is expected to improve its EBITDA margin in FY25 H2 from 16% at FY25 H1 and 14% at FY24 H2 with a continued focus on future margin management. ---END--- This release was authorised by the Board of Directors.
1. Net Revenue is gross revenue recognised in accordance with AASB15 less directly attributable cost of sales. EBITDA is profit before interest, taxes, depreciation, amortisation and any significant items.
2. Economic interest reflects 51% economic interest in OBMedia
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