This article first appeared on GuruFocus .
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Prime Members:Reached 8.1 million, an 8% increase year-on-year, with 173,000 net adds in the quarter and 611,000 over the last 12 months.
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Cash EBITDA:EUR23 million, down from EUR39 million in Q1 FY 2026, in line with plan and ahead of consensus.
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Adjusted EBITDA:EUR28.9 million for the quarter.
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Cash Revenue Margin:Decreased 2% year-on-year, with Prime revenue margin growing 1%.
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Prime Revenue Margin:Grew 1% in the quarter, driven by a 5% growth in gradual Prime revenue margin (recurring subscription revenue).
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Total Revenue Margin:EUR165.5 million, down 4% year-on-year from EUR172.6 million, reflecting a deliberate shift in mix.
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Non-Prime Revenue:Reduced 19% year-on-year as the company deliberately deprioritizes transactional non-member volumes.
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Variable Costs:Increased 13% year-on-year to EUR110.4 million, driven by the launch of new products and geographies.
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Fixed Costs:Up just EUR0.2 million to EUR26.3 million, with savings partly offsetting a stronger tech workforce.
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Reported EBITDA:EUR24.4 million, down from EUR44.1 million last year due to guided investments.
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Adjusted Net Income:EUR4.7 million for the quarter.
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Net Income:EUR0.2 million, down from EUR13.6 million in Q1 FY 2026.
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Net Cash from Operating Activities:Increased by EUR1.1 million to EUR25 million.
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Working Capital:Inflow of EUR2.5 million against an outflow of EUR15.3 million in the same period last year.
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Capital Expenditure (CapEx):Invested EUR18 million, mostly in software capitalization.
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Cash and Cash Equivalents:EUR73 million, net of bank overdrafts, up from EUR51.3 million a year ago.
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Total Liquidity:EUR237.1 million.
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Net Financial Debt:Reduced by EUR14.6 million.
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Financial Result:Improved by EUR7.3 million to a net expense of EUR5.8 million.
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Income Tax:EUR4.5 million, down by EUR1 million year-on-year.
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Share Buyback:EUR38 million executed to date under the EUR100 million program, with EUR62 million still committed by September 2027.
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FY 2027 Outlook:On track to reach 8.5 million Prime members with 600,000 net adds, EUR167 million in Adjusted EBITDA (pre investments), and EUR115 million in Cash EBITDA (post investments).
Release Date: September 01, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Prime membership grew 8% year-over-year to 8.1 million, with 173,000 net adds in Q1, aligning with the company's strategic plan.
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Cash EBITDA of EUR23 million and Adjusted EBITDA of EUR28.9 million exceeded sell-side consensus, despite being a peak investment quarter.
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Prime now generates 77% of cash revenue margin and 90% of cash marginal profit, underscoring the strength and predictability of the subscription model.
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Recurring subscription revenue grew 5% year-over-year, demonstrating the success of the monthly installment strategy and diversification into new products and geographies.
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Cash position improved to EUR73 million (net of overdrafts), up from EUR51.3 million a year ago, with net financial debt reduced by EUR14.6 million.
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Capital returns are robust: EUR38 million of the EUR100 million buyback executed, with 15 million shares canceled in the past year and authorization to cancel up to 9 million more.
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New geographies (rest of world) grew 5% in revenue margin, now representing 27% of total, and rail in Spain already accounts for a double-digit share of new Prime members.
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The company reaffirmed FY 2027 guidance of 8.5 million Prime members and EUR167 million Adjusted EBITDA, with a clear path to positive Cash EBITDA growth from Q4.
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Long-term roadmap targets 13 million Prime members and over EUR270 million Cash EBITDA by FY 2030, a 33% CAGR from FY 2027, with a track record of meeting previous plans.
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AI and technology investments are driving efficiency, allowing the company to scale with less headcount growth, as evidenced by fixed costs rising only EUR0.2 million.
Negative Points
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Cash EBITDA declined to EUR23 million from EUR39 million in the prior year, primarily due to deliberate investments in new geographies and products.
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Total revenue margin fell 4% year-over-year to EUR165.5 million, driven by a 19% reduction in non-Prime revenue as the company deprioritizes transactional business.
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Variable costs increased 13% year-over-year to EUR110.4 million, reflecting higher acquisition spend in new markets and products, which pressured margins.
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Prime revenue margin growth was only 1% in the quarter, despite a 5% rise in recurring subscription revenue, due to the impact of intermittent Ryanair content access.
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Net income dropped to EUR0.2 million from EUR13.6 million in the prior year, reflecting the same investment-driven cost increases.
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The company faces an unusually high comparison base in H1 FY 2026 for net adds, which may limit near-term growth visibility.
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Average basket value is slightly down (low single digits) due to mix shift toward rail, which has lower ticket prices than flights.
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The investment phase is expected to continue, with Cash EBITDA margins bottoming out in Q3 FY 2027 before recovering, indicating prolonged margin pressure.
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Intermittent access to Ryanair content remains a headwind, though the company has de-risked its plan, it still impacts revenue comparisons.
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Leverage is expected to peak during the investment phase, though the company is comfortable with it, but it may concern some investors.
Q & A Highlights
Q: How does the intermittent access to Ryanair's inventories continue to impact your business, and how do you expect this to evolve moving forward? A: Dana Dunne (CEO) stated that access to Ryanair content remains intermittent and unchanged. However, the company has de-risked its plan for this, factoring it into guidance for FY 2027 and the FY 2030 targets. He emphasized that results no longer depend on Ryanair and that the focus is on executing the growth plan, as demonstrated by the current quarter's results.
Q: You've reiterated positive year-on-year Cash EBITDA growth from the fourth quarter of FY 2027. What are the key building blocks behind that inflection? Low acquisition intensity, cohort maturity, revenue growth, or operating leverage? A: Christoph Dieterle (CFO) identified two key drivers: cohort maturity and operating leverage. As cohorts built up, especially with the monthly model, move into year two, they generate superior margins exceeding 50%. Additionally, the comparison base normalizes in the second half of the year, as the intermittent Ryanair access began in the prior year's second half, removing the year-on-year drag.
Q: Historically, Prime cash marginal profit margins have improved sequentially in Q2 versus Q1. Should this also be the case this year, or could additional marketing investments in new markets derail this trend? A: Christoph Dieterle (CFO) explained that the shape of FY 2027 will be driven by the investment schedule, not normal seasonality. He reiterated that Cash EBITDA margins will bottom out in Q3 2027 before turning to year-on-year growth in Q4. The recovery is driven by cohort maturity, where year-two members come in at near-zero CAC and above 50% Cash Marginal Profit.
Q: Could you provide any indication on which percentage of your net adds are coming from new Prime markets and which from traditional markets? Any comment on ramping up trends by market? A: Dana Dunne (CEO) did not disclose the exact split but noted that "rest of world" revenue (new geographies like Mexico, UAE, Poland) grew 5% to EUR43.9 million, increasing its share of total revenue from 24% to 27%. He highlighted that rail in Spain, the most mature market, already accounts for a double-digit share of new Prime members there, with Italy and France following a similar path.
Q: Your variable cost for Prime is 61% of revenue versus 47% last year. Is this attributed to investment in new markets and products, and how long should the elevated period last? A: Christoph Dieterle (CFO) confirmed the increase is driven almost entirely by acquisition costs in new geographies and products, which lack an organic base and rely more heavily on paid acquisition. He reiterated that this investment is per plan and within the group-level LTV to CAC boundary of 2 to 3 times. The company expects to return to positive Cash EBITDA growth as of Q4 2027.
Q: In light of the recovery in your share price, can you comment on the pace of share buybacks going forward and thoughts on potentially redirecting focus towards deleveraging? A: Christoph Dieterle (CFO) stated the pace of buybacks is unchanged, with EUR38 million executed and EUR62 million still committed under the EUR100 million program. He explained that repurchasing equity is structurally more accretive than paying down debt, given the attractive fixed coupon of 4.875% on the 2030 notes. Dana Dunne (CEO) added that the share price is significantly undervalued, making buybacks a clear priority.
Q: Has there been any impact from macro headwinds, and if the ROI from new customer acquisition turns out to be not high enough, will you outperform on Cash EBITDA guidance or return more cash to shareholders? A: Dana Dunne (CEO) explained that as a point-of-origin, subscription-based model, results are insulated from destination shifts or consumer spending levels. He confirmed the discipline of a 2x-3x LTV to CAC hurdle for all spending and noted the cost base is roughly 80% variable, providing a controllable dial. He expressed comfort with the current track and guidance for both Prime members and Cash EBITDA.
Q: I noticed Uber has entered the rail market in certain European markets. Can you compare and contrast the Prime rail offering versus Uber? A: Dana Dunne (CEO) differentiated eDreams as a subscription-led business offering proprietary features like Cancel for Any Reason and Price Freeze, which are not available elsewhere. He highlighted superior customer service and high NPS scores. He noted the unit economics, particularly LTV to CAC, are extremely attractive in the rail market, making it a powerful winning model, as evidenced by strong growth in Spain, Italy, and France.
Q: How are current trends in European airline capacity, fare levels, and preference for shorter-haul travel influencing booking frequency and basket value? What impact are these dynamics having on supplier economics? A: Dana Dunne (CEO) reiterated that as a subscription business, the engine is the number of Prime subscribers and their lifetime value, not individual transaction values or fare levels. He stated that supplier economics, GDS incentives, and NDC adoption are not what the company's economics rest on. The focus remains on the long-term relationship with the customer and the recurring touchpoints, which drive the subscriber base of 8.1 million.
Q: Can you comment on your key customer demographics in existing and new markets? How does AI use from these customers change their perspective on what eDreams offers? A: Dana Dunne (CEO) stated that AI leadership allows the company to offer features and functionality at a faster pace, ingesting massive data to create individualized experiences. This plays to their advantage in discoverability through agentic search and contributes to a very high Net Promoter Score and good LTV to CAC. He noted the company is an AI-first and AI-led company, which helps in new markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
