Bending Spoons S.p.A. Ordinary Shares 2026 Q2 Earnings Call

Hello, everyone. Welcome to Bending Spoons Q2 2026 earnings conference call. With us today to discuss our results are Luca Ferrari, Co-founder and CEO, and Enrico Martinelli, Co-CFO. For the Q&A portion of the call, we will also be joined by Davide Scarpazza, Co-CFO, Francesco Mancone, CTO, and Francesco Patarnello, Co-founder and Head of M&A. Before we begin, let me cover the safe harbor statement. Some of the information you will hear today will consist of forward-looking statements, including those regarding our objectives and outlook. These statements reflect our current expectations and are subject to a variety of risks and uncertainties. Actual results and events may differ materially. For more information, please refer to our registration statement on the Form F-1, including the risk factors described there. We assume no obligation to update any forward-looking statements. During the call, we will discuss both GAAP and non-GAAP financial measures.

You can find the definitions of our non-GAAP financial measures, together with reconciliations to the most directly comparable GAAP financial measures in today's earnings press release, which is available on the Bending Spoons investor relations website, investors.bendingspoons.com. Unless we say otherwise, all comparisons refer to year-over-year results. Now, over to you, Luca.

Thanks, James, and thank you all for joining Bending Spoons' first quarterly earnings call. I will first explain what Bending Spoons is, then I will briefly summarize the quarter. Finally, I will address a question central to our long-term prospects. What could constrain our ability to scale? Our playbook is simple. We acquire digital businesses, undertake deep integrations and transformations to improve them, and reinvest the cash they generate together with incremental leverage in further acquisitions. Underlying this playbook is our long-term aspiration to build what we think of as the perfect operating machine. We have been refining this model since 2013. At its foundation is what we call our platform, which consists of three elements: our people, our proprietary technologies, and our proprietary data. Today, our platform brings together nearly 700 selectively recruited core team members whom we call Spooners.

Powerful internally developed technologies spanning everything from A/B testing to AI model orchestration, and valuable insights accumulated through more than 50 acquisitions and thousands of experiments. Our results to date have demonstrated what we can achieve with this platform. Since the start of 2023, we have deployed nearly EUR 6 billion across 15 acquisitions, consistently applying 25% unlevered and 65% levered IRR hurdles in our underwriting process. Through the execution of our playbook, we have more than tripled revenue, operating income, and adjusted operating income in the 2 years to 2025. I will turn now to Q2 2026, where we delivered a similar level of growth. Revenue increased 126% to $704 million. Operating income increased 139% to $240 million, representing a margin of 34%.

Adjusted operating income increased 150% to $381 million, representing a margin of 54%. Diluted earnings per share was $0.28, up 163%. Adjusted earnings per share was $0.46, up 167%. Operationally, we made encouraging progress in the transformations of AOL, Eventbrite, and Vimeo. During the quarter, we released more than 70 product improvements across these three businesses. We also made substantial progress modernizing their underlying technologies, creating a stronger foundation for a faster pace of product development and monetization improvement.

We continued to strengthen our proprietary technologies, added dozens of Spooners to our team, expanded our sources of financing, completed the acquisition of Tractive for an enterprise value of $759 million, and undertook negotiations to acquire Airtable, with us last week announcing we had reached an agreement to acquire the business for an enterprise value of $1.29 billion. While we are pleased with what we have delivered in Q2, our focus remains on the long term. In particular, given how quickly we have been growing, a natural question is how far Bending Spoons can scale, and what could ultimately limit that growth. We think about this constantly and see at least three potential constraints. The availability of attractive acquisition opportunities, our operational capacity to integrate and transform the acquired businesses, and access to capital at reasonable terms.

To expand our capacity to grow and fulfill our ambitions for Bending Spoons, we continually work to ease these constraints. I will discuss our approach to each in turn and highlight some of the actions we have taken recently. The first potential constraint is the availability of attractive acquisition targets. As we described in our IPO prospectus, our bottom-up analysis has identified more than 1,000 digital businesses that could be attractive targets over the next several years. Collectively, those businesses generate nearly $400 billion of estimated revenue in 2025. We therefore do not currently view target availability as a material constraint, at least for the next few years, and our acquisition pipeline is as strong as at any point in our history.

However, to maximize our prospects of generating attractive returns for many years to come, we believe it's important to continue expanding our addressable market and broadening the range of businesses within this addressable market with acquisitions we can underwrite with conviction. We approach this deliberately. Ideally, for any acquisition of material size, the core economics should be familiar to us, and any new capability the business brings should have the potential to be reused across our platform. Tractive is a good example. It's the market-leading pet tracking and health monitoring service, and we were attracted to the business due to the growth potential of the category and the opportunities we saw to continue improving the product offering, broaden distribution, and optimize marketing. Tractive primarily generates revenues through subscriptions, an area in which we have extensive experience.

However, it also incorporates a physical device, giving us an opportunity to deepen our capabilities in areas such as hardware design, device connectivity, supply chain management, and support for an installed base. Success with Tractive would give us confidence in further expanding our addressable market. Airtable provides another example. Airtable is a no-code, low-code platform that enables teams to organize data and manage critical workflows. The strength of its brand and product, its positive revenue trajectory, and the still sizable opportunity in the category all contributed to our decision to acquire the business. A substantial portion of Airtable's revenue is generated through the self-serve channel, again, an area very familiar to us. However, the pending acquisition would also create an opportunity for us to deepen our experience serving enterprise customers through direct sales.

Enterprise SaaS is included in our EUR 400 billion addressable market estimate, and we already have a foundation in this area through Brightcove and Vimeo. At the same time, further enhancing our platform in connection with direct enterprise sales will improve our ability to constantly underwrite more acquisitions of this kind going forward. The second potential constraint is the operational capacities required to undertake the deep integrations and transformations that are often needed to achieve our return objectives. AI is becoming increasingly important in expanding that capacity, and during Q2, we made further progress incorporating AI into our day-to-day work. One example is Alt-Spooner, a personal AI agent that we developed during the quarter and made available to every Spooner in early July. It operates within each user's existing access permissions and can work with that person's authorized history and connected accounts.

Alt-Spooner runs on open-weight models that we host ourselves, and its model-agnostic architecture allows us to use and compare different models, including closed-weight ones, as their performance and economics evolve. During its first three weeks of general availability, Alt-Spooner processed more than 100 billion tokens. The speed of adoption and its effectiveness have been encouraging. I personally had some wow moments with Alt-Spooner. During Q2, we also introduced AI-enabled interactive tasks into parts of our recruiting process. Our testing indicates that these tasks provide a predictive input into candidate assessment. They also make our recruiting process more scalable. These initiatives build on the broader, sophisticated, and longstanding use of AI across our platform, and our overall progress in expanding operational capacity can be seen in our productivity metrics. In Q2, revenue per Spooner exceeded EUR 4 million on an annualized basis.

We're also undertaking increasingly large transformations without a comparable increase in the number of Spooners deployed. For instance, around 60 Spooners worked on Vimeo during Q2, broadly in line with the number of Spooners who worked on the Evernote transformation in 2023. This is despite Vimeo being roughly four times the size of Evernote in revenue terms and a more complicated business from both a technical and operational perspective. Even with these efficiency gains, Spooners are likely to remain our scarcest resource. Therefore, we'll continue to invest in our ability to attract, select, retain, and develop exceptional talent at scale. We'll also continue to make aggressive trade-offs as we deploy resources to what we judge to be the highest return activities. Most often, this is the integration and transformation of recently acquired businesses.

Finally, we can't rule out the possibility that from time to time, we'll have to slow down our acquisition activity in light of operational capacity constraints. The third potential constraint is access to capital. Through the actions taken during Q2 and after quarter end, both the scale of the resources available to us and the breadth of our financing options have improved. During Q2, we entered into new EUR-denominated term loan facilities totaling EUR 255 million and increased our EUR-denominated revolving credit facility by EUR 460 million for a total of $1.58 billion based on the quarter-end exchange rate. After quarter end, we secured a further EUR 590 million of term loan financing, increased our revolving credit facility by another EUR 30 million, and received net proceeds of $1.10 billion from our IPO.