YouGov reports 30% rise in revenue in preliminary FY2024, final results expected soon

Highlights

• Revenue Surge: YouGov saw a 30% increase in revenue, reaching £335.3 million, driven by strong performance in its Consumer Panel Services.
• Profit Decline: Statutory operating profit fell significantly due to exceptional costs linked to acquisitions and restructuring.
• Cost-Cutting and Innovation: The company launched a cost optimisation plan and is investing in data products, AI capabilities, and sales expansion for future growth.

YouGov (LSE:YOU), the global research and data analytics group, has released its unaudited financial results for the year ending July 31, 2024, as the company’s auditors requested additional time to finalize the audit. While the Group anticipates no material changes, it is publishing these preliminary figures, expecting to provide final audited results shortly. Despite some financial challenges, YouGov delivered significant revenue growth, particularly driven by its Consumer Panel Services (CPS) and ongoing investments in AI capabilities.

Financial Highlights

• Revenue Growth: YouGov posted a revenue increase of 30%, rising to £335.3 million, slightly surpassing its guidance from August 2024. However, underlying revenue growth was slower at 3%, reflecting varied performance across regions.
• Adjusted Operating Profit: Adjusted operating profit rose by 1% to £49.6 million, primarily attributed to the strong performance of CPS. However, profit margins declined by 400 basis points to 15%, driven by weaker sales momentum and increased staffing and technology costs in the first half of FY24.
• Statutory Operating Profit: Statutory operating profit took a sharp fall to £10.9 million from £44.4 million in FY23, largely due to exceptional costs of £38.7 million. These costs were associated with the acquisition of CPS, accounting changes, and restructuring efforts.

Cost Optimisation Plan

YouGov has implemented a cost optimisation plan, initiated after a strategic review of its stand-alone business (excluding CPS). The company aims to reduce costs and improve efficiency to support long-term growth:

• Streamlining Operations: The plan includes reducing support functions, discontinuing under-performing products, and scaling back in non-core regions. The Group also plans to cut third-party supplier costs.
• Cost Savings: YouGov expects annualised savings of £20 million from these initiatives, with £17 million already addressed. The bulk of these savings—about 70%—is expected to materialize in FY25, particularly in the second half.

Product Innovation and Investment Focus

Alongside cost-cutting, YouGov is investing in several key areas for future growth:

• Data Products: The Group is enhancing its data offerings to make its vast resources more accessible and discoverable to clients.
• AI Capabilities: YouGov is expanding its AI-enabled tools to improve both its product offerings and operational efficiency.
• Sales Strengthening: New regional leaders for the UK and EMEA have been appointed to improve sales performance and increase commercial effectiveness.
• CPS Expansion: The company plans to expand CPS's panel capabilities and data collection methods to accelerate its growth potential.

Current Trading and Outlook

• Trading Performance: For the current financial year, YouGov's trading remains in line with expectations, though it reflects slower sales in the second half of FY24.
• Sales Momentum: The Group expects sales bookings to pick up in Q2 and Q3 of FY25 as renewal season begins for its Data Products. Market conditions are expected to improve alongside the launch of new products and features.
• FY25 Forecast: YouGov expects to meet current market expectations for FY25, with performance likely weighted towards the second half due to the ongoing restructuring process.
• Cash Reserves: As of July 31, 2024, YouGov reported a strong balance sheet with £74 million in cash and cash equivalents and an undrawn revolving credit facility of €16 million.

Looking Ahead

In FY25, YouGov will focus on enhancing its core Data Products, advancing its AI capabilities, and strengthening its team of expert researchers and data scientists.