Cliq Digital AG

Good afternoon, and welcome to the CLIQ Group’s Full Year 2024 Results Presentation. I am Sebastian McCoskrie and I’m head of CLIQ’s Investor Relations.

As usual, I will be hosting today’s earnings call. Luc Voncken, our CEO will present CLIQ’s strategic and operational highlights in 2024.

Thereafter, Management Board member, Ben Bos, will walk you through the group’s financials and outlook. After the results presentations, I will then read out the questions you have kindly sent in via e-mail.

Ladies and gentleman, please take note of the disclaimer shown and that this call is being recorded. The visual audio and/or transcription of this call may be published, including any of the data arising there from.

If you have any objection, please disconnect at this time. Let me now hand over to our CEO, who will begin today’s results presentation.

Luc, the stage is yours.

Thank you, Sebastian, and good afternoon, ladies and gentlemen. In our many years of management experience, Ben and I have encountered various challenges, made numerous tough decisions, and weathered some very difficult storms.

But last year was truly a perfect storm for Cliq and for us, both as leaders and as shareholders. In 02/2024, we suffered our first sales decline after five strong years of consistent and predominantly double-digit sales growth, as well as our steepest sales drop since 2013.

The market conditions changed against us, and our marketing and product strategy needed to be revitalized and adjusted. Accordingly, we had to correct our 2024 full year outlook several times, and the share price came under significant pressure.

In a nutshell, we needed to transform our company to face new challenges. Primarily, we needed to clearly focus on our profitability.

To do so, we launched our transformation program, Fit For Future. Fit For Future came at a cost as you know.

We had to let a number of our colleagues go in order to save costs. And as a result, our headcount was reduced by 22% from 170 at the end of 2023 to 132 at the year-end 2024.

The group wide transformation incurred also one-off costs that are typically disclosed as so-called special items. Here you can see our normalized earnings development, which resulted in an EBITDA margin of 9% before special items.

Unfortunately, much lower than in the previous years. Admittedly, it would have been great to be able to show faster progress while executing Fit For Future, but it's not an easy nor quick feat to transform Cliq.

We did protect our EBITDA margin as best as possible. However, EBITDA came down significantly as well as our free cash flow, but we remained debt free.

To be completely transparent, we need to show our financials also after special items. On a reported non normalized level, here, our generated EBITDA was €10 million with a margin of 4% and room for improvement.

Bottom line, we were further hit by our situation. The challenging market conditions as well as the significant decline in 2024 in the Group's market value resulted in a goodwill impairment of €27 million.

And this led to an overall net loss of €28 million for the group and, subsequently, a negative EPS of €4.75. But at Cliq, we don't give up easily.

We prefer to see a glass half full rather than half empty. Ladies and gentlemen, the news is full of 2025 being a year of economic pressures, geopolitical shifts, and overall rules and uncertainties.

Accordingly, we will navigate this increasingly complex environment with the current and refresh marketing and product strategy, which includes new marketing channels, new digital products, and new monetization models. Ladies and gentlemen, let me now zoom in on our business model and refresh your understanding of who we are and how we do business.

We are first and foremost a marketing company. To be specific, a data driven online performance marketing group that sells digital products to consumers worldwide.

And what do we want to do? Build an all-in-one digital content world that people just love.

It's as simple as that. No rocket science.

And how do we do it? In a nutshell, we turn curiosity and interest into sales.

We literally monetize eyeballs. To do so, we have, as you can see here, four interlocking strategic pillars in our business model.

Customer acquisition is key and the main pillar at Cliq, and our strategy is to widen it with the help of our omnichannel approach. This enables us, like a fisherman, to throw out a larger net to catch more and ideally bigger fish customers.

We use our content as hooks to attract customers, and, of course, we track meticulously our progress and successes to learn from past experience and thus improve our business. In the second place, the digital products or services are also an important pillar in Cliq's business model.

In addition to our bundled content streaming services, we have been developing new digital products to also help attract new customers and diversify our revenue streams. New and exciting AI driven services, software tools, and quizzes are just some of the products we are now also selling online.

As I just mentioned, attracting eyeballs is key, but also monetizing them is business critical for us. With AVOD, advertised-based video-on-demand, we are adding to our paid subscription monetization model a new way of generating income for Cliq.

In return for watching ads and providing us with their data usage consent, customers will be able to stream our bundled content services also for free. And last but not least, our tech pillar, a foundation which we pride ourselves on and one that ultimately give us a competitive edge and deep proprietary insights into our customers' behavior and our marketing campaign successes.

Altogether, these four strategic pillars from the best possible business model for Cliq and its future growth. Operationally, Cliq's value chain works as follows.

We license all, not buy or produce, our content from partners to ensure good cost control and maximum flexibility. We bundle this content into attractive digital products and sell these bundles to our customers with the help of online performance marketing.

And this type of direct marketing is our forte. Over many years, we have gathered so much experience, know how, and expertise in performance marketing that it's clear competitive advantage and one that makes us an expert in this field.

Here you can see the different content categories or verticals that predominantly make up our digital products, our bundles. Content is quite essential for us to attract, hook up new customers to our digital products.

It needs to be appealing for customers to hit that sign up button, both for our paid subscription services and our new AVOD model. We always ensure that our content library is constantly refreshed and meets local tastes.

And with our software vertical, here on the right, we offer a wide and attractive range of programs to support day-to-day work, user productions, and graphic designs, as well as to secure device amongst others. But to be clear, currently, our main selling point is not the single content category, but the mix, the verity offered in the bundle for both new and existing customers.

Cliq has numerous selling points and competitive advantages, but let me pick out just a few here and help them satisfy some unclarities. Our products target high-intent impulse buyers in a similar way as supermarkets offer candy in the checkout ales, and we don’t succumb to that urge now and then.

And our way of marketing, our products is direct. We find our customers and not the other way around.

Depending on browsing habits, we can place a compelling shoppable ad banner of our rights in front of a potential and receptive customer's nose. All he or she has to do is hit the sign-up button.

And overall, the economics of our business model are pretty sad. Yes.

on average, Cliq customers sign up for a short time period, but, nevertheless, we generate a beta and operate in free cash flow also for less loyal customers. Ladies and gentlemen, as I mentioned earlier on, the core of our strategy is a data powered and performance driven approach that positions us for future success.

We prioritize conversions, ensuring that every action leads to immeasurable results. And our outreach extends worldwide connecting with diverse audiences in 40 countries.

Our digital products comprise attractive content, which caters to modern and local consumer stasis. Our advertising leverages multiple digital channels to maximize our customer engagement and impact as well as our outreach.

Here, by expanding our reach, we can ensure that our content reaches and resonates with a broader mass market audience. Let's move on to the strategic growth, future prospects, and where Cliq is going.

Cliq’s rapid growth over recent years was on the back of a highly successful business model. However, this model was too reliant on one principal sales channel and one main product.

And in the face of tougher market conditions with greater competition, we needed to recalibrate our strategy, restructure our company, and diversify our sales channels and our product portfolio. So what's the way forward at Cliq?

More marketing, more sales channels, more digital products, and more monetization models. Our Magnificent Seven marketing channels will lead us into a new omnichannel ecosystem where we extend our reach and diversify our sales channels.

Given the crowded and highly competitive traditional streaming entertainment market, we decided to further develop and innovate our range of digital products. We always need to be very careful when discussing our new products and services as there are numerous copycats out there as we have had our fair share of experience with them.

And being copied by them, but as the as the saying goes, imitation is the cheapest form of flattery. Furthermore, we see great opportunity for monetizing customer data obtained during the sign-up process.

Here, the U.S. will be our first market to try out this model.

For those of you participants that have been following us for a while, this slide will be quite familiar. Nevertheless, as a marketing company, our marketing channels are of the utmost importance, and I can't say that often enough.

Here you can see the Magnificent Seven sales channels identified to help us become less reliant on display. Until now, search engine advertising and affiliation have proven to be very worthy and high-converting channels.

Therefore, we are deploying more resources to build up these channels further. Like in the Western, not all of the Magnificent Seven will survive in the end, and B2B partnerships work best with brands.

However, own channels, video and social media have great growth potential, and we shall deploy them as best we can given our current market situation. With our transformation program Fit For Future, we helped fix our foundation.

The program has reduced our operating expenses significantly. Our productivity gains are still to come, a bit of a longer wait than originally expected, but we know what we have to do to tap into our growth opportunities.

So key takeaway, we will still have quite some challenges ahead of us. But and that's the good news, we have a plan, and we will get there.

On that positive note, let me now hand over to Ben to present the financial.

Well, thank you, Luc, and good afternoon, ladies and gentlemen. In the past, I've regularly presented stellar full year financials for Cliq, which was always very gratifying despite not often being appreciated by the stock market.

However, 2024 was a very difficult year. We were under pressure, and we underperformed.

2024 at a glance. EBITDA before special items came in at €21 million, down €29 million or 58% against prior year.

The normalized EBITDA margin was 9%, which was more than 600 basis points lower than in 2023. This was due to the fall in our sales.

Year-on-year, our sales dropped by 26% to €243 million. Why?

Because we lost nearly 40% of our customer base. And to be clear, both tougher market conditions hit the group sales development.

The drop in sales resulted mainly from less customers due to higher churn rate as well as from our reduction in target customer acquisition cost, the so-called CPA. This we especially initiated to protect and increase our margins again.

With lower target CPAs, we bid less for new subscribers who contribute less revenues, but at a healthier margin. By taking this key decision to focus first and foremost on the group's profitability, we were able to stabilize the EBITDA margin development quarter-by-quarter despite the sequential sales decline.

I'll show you this in detail on a later slide. And as a result of the lower reported EBITDA, our total cash flow came in at minus €4 million.

That's nearly €10 million lower than last year. In total, we generated €3 million of operating free cash flow in 2024 and ended the year with €12 million in the bank, €4 million less than one year ago.

In line with the management decision to focus on an increased profitability, revenue in 2024 in North America declined by 50% and in Europe by 52%. As previously mentioned, the card scheme companies charged in customer card tools increased our churn rate across all region.

This resulted in 10% lower average lifetime values, so called LTVs, everywhere. And our LTV in 2024 was down from €85 to €77.

However, there is a regional variance in the payment flow in the countries in Europe and in North America, which affects both the LTV and conversions in general. Hence, our sales in Europe were impacted to a greater extent than those in North America.

Previously, in Europe, we saw customers with an above average LTV as European customers are typically willing to spend more on these types of services. In our smallest regions, Latin America and the rest of the world, revenues increased by 10% and 20% respectively, but this didn't move the overall sales needle.

Ladies and gentlemen, here you can see our income statement with the EBITDA development before and after special items. Since the launch of the Fit For Future in beginning of 2024, we have incurred higher cost, over €11 million to be precise, that are attributable to our group wide transformation program.

These so-called special items include cost of sales, personal and other operational expenses as well as temporary costs for consultants and contractors helping us execute Fit For Future. These temporary costs will be reduced after transformation program ends, which we expect currently will be in Q1 2025, so during the current quarter.

So the normalized income statement, the AP4 special items seen here provides a more accurate and transparent presentation of our normal real core performance. Resulting from the annual impairment test, we corrected our goodwill and recognized an impairment loss of €27 million below EBITDA.

This goodwill impairment was primarily attributable to the challenging market conditions going forward. Additionally, after revision, after useful life of the intangible assets initially developed for the flagship services on the German market, the amortization expenses on intangible assets increased therefore to €6.9 million.

Hence, bottom line, we reported a loss for 2024 of €28 million in total and minus €4.75 per share. Despite the group's loss, Cliq's management and supervisory board proposed to distribute, like last year, a dividend of €0.04 per share for the financial year 2024.

The customer acquisition cost. As mentioned earlier, Cliq's main action to counter the higher churn and the subsequent lower lifetime value of our customers was to align and reduce our target CPA in 2024.

This decision was taken to put a stronger focus on our profitability but also let, on the downside, to less new and higher value customer acquisitions. By lowering the target CPA, we spent 45% less in total on acquiring customers than in the prior year, €75 million to be precise, which of course also resulted in the lower LTV CB, the lifetime value of our customer base.

The customer acquisition costs for the period, EA dose costs related to the revenues recognized in 2024 totaled €97 million. This shows how the accounting practice of capitalizing and amortizing the customer acquisition costs over the customer lifecycle is disclosing the actual financial performance of the group.

At the amortized contract cost, the €97 million were considerably higher than the capitalized customer acquisition cost, which came in at €75 million and finally resulting in a lower valuation on the balance sheet, but more about that later. However, in percent of total sales, the customer acquisition cost for the period were pretty stable at 40%.

Ladies and gentlemen, our sales decreased quarter by quarter, but earnings before and after special items stabilized. The red across here is our profits first business strategy is working and was good and appropriate to countermeasure to the tougher market conditions we face.

Sequential sales decrease decelerated from minus 21% in Q3 to minus 11% in the fourth quarter. Let's go to the Fit For Future cost savings.

As here, we show cost savings from our Fit For Future transformation program since the outset. In total, operating expenses before special items were successfully reduced by a quarter over the course of the year.

Specifically, and broken down on a quarterly basis, personal expenses went down by 34% between the first and fourth quarter, and the other operating expenses by 37%. This shows that our Fit For Future program has had a positive effect on our cost structures.

Ladies and gentlemen, both our free cash flow generation in 2024 and cash position at the year end offer some positive news. Despite tax payment that was double the amount of the previous year, cash flow from operating activities came in at €9 million.

And the decrease in customer acquisition costs and trade payables had a positive impact on the working capital development. Nonetheless, the year-on-year decrease in operating cash flow was mainly due to the revenue decrease and margin contraction.

Cash outflow from investing activities in 2024 was more than €0.5 million to €5 million due to less payments for investments in platform and technical developments. As a result, we generated operating free cash flow of over €3 million in 2024, which was a admittedly €50 million less than last year.

Still the cash outflow from financing activities in 2024 was €7 million and included €6 million in capital return to shareholders via share buybacks and a different distribution. At the end of the year, we remained debt free and our net cash position was €12 million.

With regard to our share buyback program, I'm pleased to say that we successfully completed it on the January 3, 2025. In total, we bought back almost 647,000 Cliq shares, equivalent to almost 10% of the total share capital issued via an independent investment bank, who made the decision on the timing and the amount of the individual etc.

order placements. We paid on average €8.48 per repurchase of shares and in total, it costs us €5.5 million.

The repurchase shares will be used to reduce Cliq's capital through cancellation and or to meet Cliq's obligations arising from stock option plans. Currently, the number of Cliq shares on the market that issued shares net of treasury shares is 5.9 million shares.

Moving on to the balance sheet. Year-on-year, our total assets shrunk to €99 million at the end of 2024 and our equity ratio rose to 72%.

The biggest asset change was due to the goodwill impairment, but more about it on the next slide. The value of our intangible assets decreased by a third, because of higher amortization charges and lesser investments for platform and technical developments, as well as for content licenses.

Furthermore, we saw target CPAs deliberately reduced less customer acquisition costs were de facto capitalized and just the assets value of the contract costs was nearly €0.5 million to €27 million. The increase in trade receivables was largely related to timing difference in the payments schedule compared to prior year and a higher rolling reserve balance.

The sharp decrease in payables reflected mainly the lower total customer acquisition cost, especially at the end of Q4 2024. And as just mentioned, our net cash position at the end of the year was €12 million versus the €16 million we reported the year before.

So as part of the preparation of our annual 2024 financial statements, the carrying amount of our goodwill was tested for impairment in accordance with IFRS and confirmed by an external evaluation specialist and our auditors. Consequently, we had to recognize an impairment loss of €27 million and correct our goodwill value.

The goodwill impairment was primarily attributable to the challenging market conditions going forward, as well as significant decline in gross market value in 2024 as determined by the stock market capitalization. The recognition negatively impacted EBIT and our bottom line.

Our LTV CB, the lifetime value of our customer base represents the future revenue expected to be generated by existing customers over the estimated individual remaining lifetime on the reporting date. At the end of 2024, this value was down 43% year-on-year to €94 million due to a lower number of paying customers, which resulted on the one hand from the higher churn rate and from the decrease in new customer acquisitions on the other.

So to conclude today's presentations, a brief word on our outlook. As previously mentioned and presented, 2024 was a very tough year for us.

And given that market conditions in 2025 remain unstable, we need to be very cautious and conservative regarding our outlook. Consequently, we withdrew the all 2025 sales forecast and adjusted it to better reflect the current developments in the business and our business plan.

Today, we expect an EBITDA in 2025 of between €10 million and €50 million after incurring between around €50 million to €75 million in total customer acquisition costs on the back of group sales ranging between €180 million and €220 million. Furthermore, given the volatile and challenging market conditions in particular, we have decided to suspend the disclosure of a medium-term outlook.

With this measure, Cliq will avoid adverse valuation effects from market uncertainties and unpredictable results as witnessed in 2024. Although we have fixed our foundation with Fit For Future, delivering positive results as well as a streamlined and fully focused organization, 2025 will be a year where we will do our utmost to stabilize our sales decline and get back on a growth path again.

Ladies and gentlemen, that concludes our presentations today. We shall now commence our Q&A session.

Sebastian, our first question, please.

Thank you, Ben. Before we begin, please be aware that we received quite a few of the same questions, so we shall only be answering these once.

Our first questions today are from Joachim Husker [Ph] and directed to Luc.

Luc, what is the status quo of your efforts regarding the Fit For Future transformation program? What significant measures have been initiated to return to a growth path in the future?

And what is the updated planning for the next three years until the end of 2027 at the Clq Group?

Well, thank you, Joachim. Fit For Future has made us more cost efficient, which is necessary in times of declining sales.

So we no longer rely on one main marketing channel or one main product. And today, we have an omnichannel marketing approach, as already explained, our Magnificent Seven, we have new digital products on offer and a further monetization model with the AVOD model recently launched.

And as Ben just also explained, we are fully committed to increase profitability and get Cliq back on track. We used to be a very fast-growing company.

And believe me, we definitely prefer being that again than the company we were in 2024.

Luc, is it possible to adjust the current business model away from short term customer visits to the platform towards longer term customer retention? Or would this require too much investment that Click would not be able to shoulder?

Well, I think it's already in the question. And as a performance marketeer, our business model focuses on meeting the short-term consumer needs, and we are not a streaming provider in the traditional sense.

We focus on customer acquisition via performance marketing and not necessarily on customer retention. And that's a different business model and one that involves way higher content costs.

Ben, what investments are planned for 2025 and the two following years? Is a positive free cash flow also expected in the future, in 2025 and the following years, despite the slump in sales?

Thank you for the question, Joachim. And as you know, we don't give guidance on cash flow.

But cash has been gained and stays also in the future important to us. Some of our analysts are of the opinion that we will be cash flow positive in 2025.

As you just saw in 2024, we had to scale back our investments into tech and content to also focus on protecting our margins. But going forward, we aim to increase our total customer acquisition cost quarter by quarter, which could have a negative impact, if you know our model, on our operating free cash flow.

Ben, how do you intend to regain the trust of the capital market after the multiple reductions in revenue earnings? Is the Management Board prepared to acquire a larger number of shares in Cliq today, given that the share price is seemingly low?

Well, currently, members of Cliq's management and supervisory board are together, the company's principal shareholder was about 9%. But as we have said before, also our separate supervisory and management board and myself practice their own portfolio diversification.

So everybody makes his own decision in there.

And one last one for Ben. In terms of corporate profits, do you prefer a share buyback or a dividend distribution or a mix of the two?

Yes, this is a question which pops up quite frequently, of course. But Cliq is and always has been committed to consistently returning capital to our shareholders.

Our capital return strategy foresees returning capital to shareholders either via the different distribution or share buyback. The decisive factor is thereby are dependent on market volatilities and shareholder preference like institutions.

They typically prefer a buyback, as you know, Joachim, as a capital return measure. Last year's buyback program benefited from the market volatility and Cliq share price underperformance.

For the next AGM, we propose to distribute €04 EPS like last year.

Our next question is from Uwe Siebert [Ph] and directed to Ben.

The Fit For Future program was expected to end in Q1. Will there be more special items coming from Fit For Future in Q1?

And if yes, what is the magnitude of it?

Yes. As just presented, and as of today, we have made significant progress with Fit For Future program.

And then as a result, special items related to it are expected to be lower in 2025 compared to 2024. That said, we remain committed to further optimizing efficiency and we will continue to evaluate opportunities to strengthen our operation.

Ben, when do we see a turnaround return to growth in customers and then in EBITDA?

It's quite a specific question. With our 2025 guidance, we expect to improve our EBITDA margin to range between 4.5% and nearly 8.5%.

All our strategic measures to expand our sales channels, introduce more appealing new digital products and operate new monetization models are geared to increase our new customer acquisitions. And of course, always with a clear focus on profitability here.

But we are cautious with regards to timing, and we also have expected faster progress in 2024, which in the end didn't materialize. But with our product strategy, I think we are on a good path.

Another one, Ben. How did the first weeks in the New Year evolve?

Do we see early signs of recovery?

Yeah, sorry, Uwe, but we typically do not comment on current trading. But as you know, we are communicating with the market and we will be presenting our Q1 results on the May 8.

Ben, how much marketing spend and at which, ROMI, return on marketing investment is planned for the coming months and quarters?

Yeah. The marketing expense is what we call total customer acquisition costs.

And we plan to spend between as I just outlined in our outlook between €50 million and €75 million on marketing 2025. That is, let me calculate about 20% less than last year.

And our Fit For Future program has made us more cost efficient and our Magnificent Seven provide considerably more channels to do our marketing, also to a certain extent to a better price. Regarding your question return on marketing investments, ROMI, we prioritize profitability, and maintain a disciplined approach to balancing LTV, so the lifetime value and the CPA.

That's more important than just focus on the CPA or specifically on the lifetime value. So it's the balance between that.

So while we do not provide specific growing targets, our focus remains on stabilizing margins. And of course, they are where we can increase margins, and this ensuring that every Euro spent on marketing contributes meaningfully to EBITDA growth.

Our next questions are from Andreas Massek [Ph].

Luc, for a year and half the KPIs have been falling sharply every quarter. The Management Board speaks of difficult market conditions as the cause.

What exactly are the difficult market conditions?

Well, first and foremost, the most challenging marketing condition we faced was the drop in customer numbers. The negative effects resulting from the card scheme companies increased churn rate of our customer base across all regions, and this resulted in a lower average lifetime value.

And so in order to protect our margins, we also have to align our target cost per acquisition to this lower lifetime value to assure the profitability on new acquired customers. This, in turn, reduced our marketing spend and also resulted in less new customer acquisitions.

Luc, the forecast for the current year predicts a renewed continuation of the negative trend. Against this background, it must be questioned whether the business model of Cliq Digital still works at all, particularly in Europe.

Why is the marketing strategy, as it was until 2023, no longer successful? And with which alternative marketing tools should a turnaround be achieved?

And by when?

Well, we acknowledge that the forecast reflects ongoing challenges, but we remain confident in the adaptability and long-term viability of Cliq's business model. There's always be and there will be always a sale.

One key factor in the lower forecast is that our customer base at the start of the year is smaller than in the previous years, which naturally leads to lower recurring revenue from existing customers. And this means that even as we work to accelerate new customer acquisitions, the impact on revenue takes time.

Our previous marketing strategy, which had been highly effective for years, has faced increasing limitation due to the rising customer acquisition costs, intensified competition and chances in the digital advertising landscape that have influenced the reach and efficiency of performance marketing campaign. As a result, we have had to adjust our approach to mitigate the decline in sales.

The most important driver is our omnichannel marketing approach, the Magnificent Seven, which significantly broadens our customer acquisition strategy. Instead of relying on a single primary channel, we are now leveraging search engine advertising and partnering with top tier affiliate networks, social media, video ads and e-mail marketing.

As for timing, we expect gradual improvements throughout 2025 with some increases in new customer acquisitions. While market conditions have changed, our strategy is evolving with them.

And by expanding our region, optimizing our marketing mix, we believe Cliq's business model is still relevant and working.

Bernd Kiesling [Ph] has a question for Luc.

When can we expect to be able to present a resilient, profitable business concept that offers growth opportunities?

Bernd, 2024 was a very difficult year for us, and a previously very resilient business model was hit by external factors out of our control. And we reached to these as fast as we could.

Nevertheless, we suffered a major drop in sales and our countermeasures took longer than expected to produce meaningful productivity gains. We have optimized and refreshed our marketing and product strategy with a lot of ad time in that, and we have set the course for new digital products and monetization models.

And we have made inroads in streamlining the organization for cost efficiency. Now it's just a question of time before we can return to our growth path again.

We need to be patient.

Our next questions were from Ralf Marinoni at Quirin for Ben.

Personnel expenses amounted to € 26.4 million in 2024. This figure may have included severance payments and one offs.

Approximately, how high should personnel expenses be in 2025?

Well, thank you, Ralph, for your question. And you are right that staff expenses in 2024 included severance payments and one offs, which we indicated as special items in our presentation.

And as communicated, we've seen a drop in our operational expenses before special items of 25% in 2024, quite significant, I think.

In 2024, business in North America was relatively robust, with sales down by only 15% year-over-year, while decline in Europe was approximately 52%. What does this mean for the strategic direction of the business?

Wouldn't it make sense to focus only on North America?

Well, Rob, North America is our main geographic sales focus as you know, and it will remain so. But our European sales tradition higher LTVs, and therefore, this is a region where we still want to have a meaningful footprint, generating decent earnings.

Another one for you, Ben. Your cash flow from investing activities amounted to €5.3 million in 2024.

Which CapEx do you expect for the current business year? Do you plan to exceed the 2024 free cash flow of €3.4 million in the current business year?

Well, as you know, we are cautious and also in respect to capital expenditures, we do expect that they come in lower in than 2024. So some of last year's investments, particularly in platform development, were related to specific projects.

If you look to the free cash flow, the FCF, our goal remains to generate positive free cash flow also in 2025. But of course, the exact level will depend on market condition, customer acquisition trends and our investments priorities throughout the year.

Our next questions are from Fiona Orford at Edison Group for Ben.

What assumptions on customer numbers and LTV are you making in reaching the €180 million to €220 million full year '25 revenue range? And when do you anticipate the inflection point on customer numbers to be reached?

Is the current CPA higher or lower than that in Q4 '24?

Well, thank you, Fiona, for your questions. And for Cliq it is not just about customer numbers or LTV in isolation.

As I just also explained in one of the previous questions, but rather the balance between this LTV lifetime value and the cost per acquisition that drives our marketing strategy and profitability. Our key focus is ensuring that each new customer contributes positively to our EBITDA by maintaining a healthy margin between this LTV and CPA.

This is a very disciplined approach and it will ensure that every €o spent contributes meaningfully to our bottom line. This disciplined approach was practiced in 2024 and also the years before, when we decreased our target CPAs to be in line with the lower LTV resulting from the higher churn and to protect our margin.

Luc, do you anticipate that the increase in product set to include software will make the offering more sticky? What has been the experience so far with the AVOD model?

And of your Magnificent Seven sales channels, which are outperforming and which are underperforming your internal expectations?

Well, thanks for those questions, Fiona. Software foremost offers a great customer acquisition, hookup.

And our software offering caters to all tastes and requirements and also a different audience. And lots of people do need to secure devices and design graphics and lots more.

If we go to the AVOD, it's still early days, you know, to say anything meaningful about it. And regarding the Magnificent Seven, I said already, search engine, advertising, and affiliation have, in the meantime, become very good sales channels again.

Video and social media still need to be further developed. And B2B, business-to-business, partnerships, are best used for branded marketing campaigns, which currently is not in our focus.

Our last question for today is for Luc and was sent in by Fernando Alonso Lamberti.

Please understand that shareholders have an absolute lack of trust in managers. The objectives are modified recurrently, and in less time, and with more intensity.

I would like you to inform us about the company's best possible prospects.

Well, thank you, Fernando. And we understand that the recent performance and adjustments to our outlook have led to concerns among shareholders.

And of course, we take this feedback very seriously. 2024 was a challenging year.

And while we had to adapt to evolving market conditions, our strategic direction is clear. We are focused on stabilizing the business, optimizing our marketing and product strategy and expanding our monetization models.

We remain fully committed to rebuilding shareholder confidence.

So ladies and gentlemen, that was our last question for this afternoon. Please, should you have any further questions, get in touch with Sebastian.

And thank you for your kind attention and joining our full year 2024 earnings call today. Have a great day further on and all the best for now.

Thank you.