Cint Group AB (publ)

STO:CINT

Earnings Call Transcript 2023-Q2

[Operator]

Good morning, and welcome to the Cint Interim Report Quarter 2 Conference Call. My name is Carla, and I will be the operator of today's call. [Operator Instructions]I would now like to pass the conference over to our host, Giles Palmer, CEO, to begin. Please go ahead, when you're ready.

[Giles Palmer, executive]

Thank you, Carla. Hello, everybody. Welcome to our Q2 update, our Q2 announcement. This is my second. I started, took over on the 3rd of April. So I'm, I think, now more than 100 days in, so 100-day plan tech nailed. And here we are talking about our Q2 results. Next slide, please.Next slide, Olivier, please. So mixed results, so the slide that I'd like us to be on right now has titled mixed results with some improvements over the first quarter. So, I've said here that there's an uncertain macro environment. I think that's fair. It's -- we have interest rates uncertainty. We have demand uncertainty. I think my personal view is that we're beginning to come out of this. But I would say over the last 6 months, for sure, that it's been reasonably uncertain. And that has definitely we feel affected performance. We feel that the macro definitely plays a role in the demand side of our business and maybe a bigger role than was expected previously. Difficult to say, but we believe that to be true.Our Media Measurement business is growing very nicely. Congrats to the team on that. We're actually starting to increase our investment into this area of the business because we see -- we seek huge upside and big potential here. On the less positive side, America or the Americas have been weak in Q2. A little bit like Ipsos last night actually, in a related industry or very closely related organization. They saw more weakness in the U.S. than in EMEA on a year-on-year growth basis. Why is that? I'm not entirely sure, but I think U.S. companies are possibly quicker to react to macro uncertainty, they pull back spend maybe more quickly and then increase spend maybe more quickly when confidence grows, but we've seen that in Q2.I'm going to come back to reversals, something that was introduced, I would say, to the market on the Q4 '22 earnings call. And since then, I want to be extremely transparent about where we are as an organization, what we're doing about it. It's one of my top priorities, along with the next point, which is product integration. Until we become efficient and unified with our platform, we will struggle to get to the levels of profitability that I think are inherent or underlying within the business. So, my mantra and my priority as I've come into this role is to accelerate and really focus on product integration and customer migration and I will come back to that again a little bit more.Next slide, please. So, here are the figures. We're still not ahead of where we were in Q2 '22. So, we're still down year-on-year, but down less. So, at least that's one thing, right, if I did a physics degree. So, the differentiation curve is moving in the right direction. And if we continue that forward -- we're not going to give guidance today, but if we continue that forward, we can see growth on the not-too-distant future. But I said we're not going to give guidance, but we're moving in the right direction.Gross margin was good. We're happy with that. Adjusted EBITDA was that's obviously something that's obviously incredibly important when it comes to managing cash flow and Olivier, we'll be able to get it later and reversals. We've been very transparent here. They were at 12% of revenue, less on a complete basis, less than 12%, but it's the revenue reversal, which is the most important figure. So, we're tracking it on a daily basis.Next slide, please. So, let's talk about quality and reversals, that last point. It's 12% in Q2, up from 9% last year. So, this hasn't gone from 0% to 12%. It was always a number and as I said in the last earnings report, an independent consultant did an analysis, a blind analysis without us knowing about it or an independent analysis of Cint and our 2 biggest competitors, which we don't know who they are, but they didn't publish that on quality and reversals. And Cint actually, and this was in Q3 last year. So again, not that different from today. Cint came out as the highest quality of the 3, the lowest number of reversals. So, this is not something where we're out of step with the market, but that does not mean to say that I or anybody inside the organization is happy with this number.And so as I said a minute ago, this is a huge focus for me and the team. We have a large team, the biggest team in the industry working on this, I would say. I mean, I don't actually have all that data, but I'm pretty sure that's true. And they are making really good progress. We have implemented some solutions and some mitigating technology over the last 2 weeks and that looks like it's having a very positive effect. So, I'm optimistic that we're going to be moving into Q3 and Q4, and this number will start to come down. We said that our long-term target is 7% to 8%. I'm hoping that internally, our target is even tougher than that. So, we want to crack this nut. It's not an easy one to crack, but we have really good people on it and it is a clear focus. So, this number I'm reasonably confident will be coming down.Next slide, please. So, the other -- as I said, the other high priority for me is making Cint into one efficient organization. And that means integrating the Cint, Lucid, GapFish, key two sample platforms into one platform, which takes the best of each and creates a super platform that is going to be usable for all of our users no matter what their particular need. And we are making really good progress on it. It's complicated. And it's not just the technology platform that's then got to plug into back-end systems like Salesforce and NetSuite. We need to be clear on where our customer records are. We need to be clear on our billing systems. We're doing this root-and-branch from back to front, and we're going to do it really, really well, but it is a lot of work.So, it's fully planned, the team is working extremely hard on making this happen. And we've made real progress over the last 5 months. So again, congrats to the team working on this. I'm really proud of the way that they're doing. And of course, then we need to -- or as we launch this unified platform, we migrate our customers from the existing platforms to the new one. This is going to start in Q4, 2023, so this year with customers for whom Cint manages their experience. So, we don't need all of the functionality of the self-serve user interface for that for us to be able to migrate those customers because that -- the one of that is coming out in Q1, Version 1 of that self-serve UI is coming out in Q1 next year.So that's when we'll be moving over the bulk of our customers. After that in cohorts, taking a very risk aware approach and making sure that we do it gently at first, slowly at first and then as we make -- as we iron out any issues of, as we migrate customer data, train our customers, onboard them on to the new platform, we iron out any issues very, very quickly, and then we migrate swiftly. So, that's our plan. It is a very detailed plan, but I'm very confident in the team. And this is of course -- obviously, a focus for us. Next slide, please.And as I said last time around, my message to the organization is consolidate, standardize and optimize. We consolidate our organization, we consolidate our platforms, we consolidate our technology, we standardize how we do things and then we take out costs and we take out inefficient processes and get our organization to an efficient and highly profitable place primed for growth. It isn't exactly a sequential thing. We're going to be doing some stuff in parallel. We're going to -- for example, as I said earlier on, we're investing more in our Media Measurement business right now. But until we go -- until we fully consolidate, standardize, and optimize the business, we don't have -- well, during this process -- this process will release funds for us to invest in our go-to-market and in our innovation team. So, this has been my core magic to the team, my core focus for the organization, and I'm glad to say that it's going very well.That's it. It's kind of a short and sweet one for me. No big changes, just clear focus, clear execution and making sure that we move this business in the right direction. And I'm glad I think that's exactly what's going on.Olivier, over to you.

[Olivier Lefranc, executive]

Thank you. So, we should be like on the Slide #9, Q2 financials. So, what you can see here is that our net sales for the second quarter are at EUR 67.8 million, which is down 7% compared to Q2 last year and down 4.8% like on a constant currency basis. Interestingly, our net sales are up like 13% versus Q1, so EUR 67.8 million versus EUR 59.9 million, which is a combination of the seasonality because Q2 is generally stronger than Q1 and also some improved momentum as Giles mentioned earlier.In terms of gross profit, so our gross profit was at EUR 42.6 million in Q2 versus EUR 46.2 million last year. Gross margin is stable at 63% compared to Q2 last year and posting significantly versus Q4 and Q1 of this year due to product mix. So generally speaking, what we observe is that our gross margin, depending on the positive mix would fluctuate between minimum 60% and maximum 63%. That's what we've seen very consistently since the acquisition of Lucid end of 2021.In terms of the adjusted EBITDA, so our adjusted EBITDA is at EUR 9.2 million in Q2 this year versus EUR 13 million in Q2 last year. So, the margin is at 13.5% versus 17.7% last year. So, it's down due to the lower sales and a combination of the lower sales and a relatively fixed cost business. You will see that there is a strong improvement versus Q1, mainly due to the sale seasonality. So, as mentioned earlier, Q1 is the lower quarter in terms of [indiscernible] contribution.Moving to the next slide, please. So with the net sales split. So, here you can see like a breakdown of net sales, I mean, as we presented like in the previous quarter by business segment, by region and by customer type. So, in terms of business segment, what you can see here is that our Media Measurement was at EUR 11.3 million this year versus EUR 8.3 million in the same quarter last year. So, a very significant improvement, 36%, 38% like in constant currency, which is coming from higher volumes with existing clients and some new client gains. So, it's an activity -- it's a business that has been launched by Legacy Lucid a few years ago, and that has been growing consistently since then, as Giles mentioned earlier. And in terms of marketplace, which is our core product, so we've seen a decline of 13% quarter-over-quarter, 10% in constant currency.Moving to the regional split of our net sales. So, America -- North America is, by some distance, the largest part of our revenue, followed by EMEA and Asia Pacific. So, America net sales are at EUR 39.2 million versus EUR 43.2 million last year, which is a decline of 9%, 7% in constant currency. EMEA is down 2%, but plus 1% in constant currency. So, it's quite refreshing to see that EMEA is back to a slight modest growth, I would say, and APAC has been more challenging with net sales down 17%, 10% in constant currency. So, more of a challenge in North America and a better situation in EMEA. And there is limited industry data available, but the largest player published yesterday night, Ipsos and are seeing the same trends in North America and in EMEA that we are seeing. So, it seems to be like an industry pattern.Moving to customer types. So, breakdown of net sales between tech-enabled and the established players. So, what we can see here is that we have like a better performance with the tech-enabled companies than with the established insight companies, which is something that we have seen almost every single quarter since we are publishing this indicator. So, no changes here.Next slide, please. So adjusted EBITDA. So as mentioned earlier, is at EUR 9.2 million versus EUR 13 million last year, so a margin of 13.5% in the quarter versus 17.7% in the same quarter last year. So, a decline in absolute and relative terms due to lower sales volumes, combined with a relatively fixed OpEx. But interestingly, what you will see here is that both our operating expenses and our adjusted operating expenses are relatively flat versus prior year. So, operating expenses are at EUR 42.5 million versus EUR 42.7 million last year. And adjusted total net operating expenses at EUR 33.5 million versus EUR 33.2 million last year, which is -- which demonstrates like a solid cost control in the context of salary inflation and also hosting cost inflation. And in terms of integration costs, we spent like EUR 4 million in the quarter versus EUR 5.5 million in the same quarter last year.Next slide, please. So, now moving to the cash flows. So, in all the companies in market research and Cint is no exception, H2 is a much stronger half than H1 in terms of renew contribution and even more in terms of profit. And operating expenses are steady, except for the payment of the annual bonuses that is happening in Q2, which is the reason why I've mentioned here that Q2 cash flow reflect seasonality. Additionally, they have been impacted like in the quarter by some nonrecurring items that are the payment of some retention bonuses related to the acquisition of Lucid in December 2021. So, we spend like EUR 3.3 million related to this retention bonuses in the quarter and we are done.There are no more like retention bonuses in the pipe. So that's behind us now. And also, we had to pay the remaining GapFish shares of like for EUR 2.5 million and we are done in terms of shares for the time being. So, it's really like a nonrecurring event that is behind us. And if you add these 2 items, you come to EUR 5.8 million, so which explains a substantial part of the net cash -- net negative cash flow in the quarter. Financial covenants have been met in the quarter. And last but not least, I would like to say that our cash balance is expected to stabilize over the coming months as a result of this like increased receipts from sales seasonality and the fact that we are not forecasting any like nonrecurring or one-off payment in the coming quarters.Next slide, please. So, we continue to focus on improving working capital. We've taken some efficiency measures in Q3 last year. And our net working capital remains under control. We've seen like a small increase in the quarter, which is due to the payment of the retention bonuses that I talked about earlier. And we had some successes like with accounts receivable. So, you will see that our accounts receivable are at EUR 87.7 million, an increase of 3% compared to the end of Q1 in the context of a sales increase of 13%, as I mentioned earlier. So in relative terms, that's an improvement. And also compared to last year, EUR 99.8 million, so that's a reduction of 12% versus end of June last year in terms of accounts receivable in the context of a sales reduction of 7%. So, a relative improvement. So, there is still a lot of work ahead of us and room for further improvement in terms of working capital, but things are moving in the right direction.So next slide, and over to you, Giles for the summary.

[Giles Palmer, executive]

Thank you. Thank you. And then go to the slide after summary, short-term key priorities. This is quite a boring report in some ways. I'm keeping very much to a simple script and this is reflecting what we're doing internally, integrate the product, create a consolidated platform and migrate our customers, standardize and optimize our processes to create efficiencies, fix reversals with a very, very clear focus. And as Olivier said, focus on our cash flow and cash management.And then the last point here is return to growth. We're not there in Q2. We are better than Q1, but we're not growing at the moment. And obviously, that is a core ambition for us to get back to growth, consistent growth and not just 1%, but more than 1% growth. So, these are our priorities and we're working extremely hard to make them happen. And that's it, guys, to be honest. It's not a -- we haven't got big announcements to make today. We are just very focused, very heads-down on execution.Thank you very much for your time. Yes, finally, sorry, final slide. This is more about -- I said this in Q1, and this is why I took the job and why I'm optimistic about this company and why I'm working with the team so hard because the underlying thesis here is strong. We're a marketplace business and choice and scale is really important in a marketplace business. And I believe that once we get through these challenges of integrating these companies, we're going to be in a great position to grow and create value long into the future.Thank you very much for your time today. I look forward to seeing you on the next one. There are questions actually, sorry, there are questions on there. Carla, are there any questions that have come through the app?

[Operator]

Yes. We have questions [Operator Instructions] So, our first question comes from Predrag Savinovic from Carnage Bank (sic) [ Carnegie Bank ].

[Predrag Savinovic, analyst]

Thank you, operator. This is Predrag Savinovic from Carnegie not Carnage. First on free cash flow, it's negative this quarter, but you seem quite positive going forward. And you mentioned several one-time effects. You see some improvements in seasonality, temporary effects abating overall. So, I think it's the first time you're quite explicit on being a bit bullish on cash generation at this stage. So, my question is really, do you expect your free cash flow generation to be positive in Q3 and Q4? Can you commit to such a thing? Because everything you talked about in this presentation, it sounds like it at least?

[Olivier Lefranc, executive]

Yes. I mean that really is the expectation. I mean, we want to see like a stabilization of our cash balances followed by some improvement. And in terms of seasonality, I mean, what we have seen consistently in the last year is that Q2 is higher than Q1 in terms of sales. Q3 is slightly higher than Q2 and Q4 normally is our strongest quarter. So, we should see a progressive like improvement of our cash inflows in the coming months.And meanwhile, we don't have like -- we don't have these one-off items that I mentioned earlier that are like retention bonuses. We don't have to buy any last minority shares. So, we don't have like any put and calls and things like this, so and we don't have obviously have to bear any like annual bonuses in the second half of the year. So, the expectation is that we will see a stabilization of our cash balances like in the first time and followed by some improvement like in the second time, that's going to be the expectation for the coming months.

[Predrag Savinovic, analyst]

I think next one for you, Giles, if you could reason a little bit about the -- you mentioned several things in -- with your integration works. You mentioned the confidence level in the company. It's improved quite a bit. If we just take a step back and look at Q1, I think you reflected quite gloomy view of integration in terms of time line. It sounds overall quite a bit more positive today. If you could reason a bit what has changed since then?

[Giles Palmer, executive]

Yes. Of course, It's interesting how you phrase that question, actually because the time line hasn't changed between Q1 and Q2. But what has changed is a belief in our ability to hit on, add some clarity on the time line effect. So what we said in Q1, what I said very clearly was historically, we said integrations on target for the end of 2023 or on plan or I can't remember the words that we used. But something of this complexity needs a very detailed and clear plan with very explicit dependency mapping and tracking, really good risk management and great communication, and that was lacking, right?We didn't have a clear plan. We didn't know exactly when we were migrating customers. We didn't like by cohort. We didn't have all of the back-end systems or the work to integrate back-end systems, fully planned out with dependencies mapped. We had a very, very in-depth 2-day office site in Q1, where all of the leaders in the business [indiscernible] my team, 9 of us got together and spent 3 days digging very deep on what would -- what is required to integrate these companies. And out of that came much more explicit detailed plan with, as I said, clear dependency tracking and risk management. And we've shared those internally, and we're sharing regularly sort of traffic lights on where we are on each of those work streams across the entire company.That level of transparency, that level of detail builds confidence. It builds a sense of people knowing, where we're going and what we're doing, which leads to a sense of purpose, direction and competence, and that's what we've done. So nothing has changed in terms of time lines. It's just really from Q1, we just, we have more clarity, we have more fidelity on what we're doing, when it's happening, who's doing it and how it interacts with other things inside the company. This is complex work, and it's not easy. So that's why it's taking a while for me and the team to really -- to really get on top of it. And there's still more work to be done. But levels of confidence are definitely, in my view, increasing along with the sense of like, wow, there's a lot to do here, and that brings its own sort of anxiety and challenges.

[Predrag Savinovic, analyst]

Okay. Super. I appreciate the detail. It sounds, as if you are in much better shape by the commentary. Another one then, if we look at the year-over-year reversal rates, it is up -- it's same as in Q1, but your like-for-like growth is only minus 5%. I guess the market predicted it to be worse than this. And to me, it looks like a quite a clear quarter-over-quarter improvement in terms of growth pace and even that the market might have stabilized for you, do you agree on this? I think you said some in the intro as well shifting a little bit to the better, but it sounds quite decent going forward, don't you think?

[Giles Palmer, executive]

Yes. Well, it's not where I want it to be, but it's better than it was in Q1. So yes, I agree with that.

[Predrag Savinovic, analyst]

Super. And then just a final one on reversal rates. Let's say they stay consistent at 12% and don't improve near. Does that need to be a headwind even going forward? And please excuse my lack of understanding or misunderstanding, but wouldn't the buyer need be able to mitigate this somehow with higher degrees of surveys. And then on your end, you can hold off that payments to panels unless you see, where reversals land and [ that's ] just pay for accurate completes and so on. Does it have to be -- I mean, even if we would shift to 15%, do you -- can you change your processes or contract somehow that it actually doesn't need to be an issue for you?

[Giles Palmer, executive]

Yes. We can, and I've actually spoken to the team about this. But for me, it's more fundamental, like the experience of being a customer having to go through the results and throw out 15%, it's not at that level right now, but it's horrific, right. We want to be gold standard. We want to be the best, and we want to give our customers a great experience, not an experience, where they just are thinking, oh good, the quality is not where I want it to be.So in principle, from an economic perspective, yes, I don't disagree with you, but it's more fundamental than that for me. It's actually about confidence in our ability to do what we say we're going to do and create the best platform in the industry. So I would be deeply unhappy with that -- with the outcome that you portrayed, even though, as you say, it might not be terrible from an economic perspective.

[Operator]

Our next question is from Daniel Thorsson from ABG.

[Daniel Thorsson, analyst]

Thank you very much, Giles and Olivier. My first question is on the gross margin. I mean, it looked pretty solid here in the quarter, flattish year-over-year up versus Q1 despite higher reversal rates. What is actually driving that? And is this a sustainable level into the coming quarters as well?

[Giles Palmer, executive]

Well, one thing I'd say is that reversal rates don't hit -- don't affect gross margin. So maybe there's a little bit of misunderstanding there. But Olivier, why don't you talk about gross margins?

[Olivier Lefranc, executive]

Yes. I mean the gross margin is stable compared to what it was like in Q2 last year at about 63% and we've seen like an improvement versus Q4 and Q1 this year -- Q4 last year and Q1 this year like because it was at 60%. Now it's back at like 63%. So as I've mentioned like earlier, like in many occasions, we don't see like clearly like a seasonality of a better year. So we have a gross margin that fluctuates between like 60% and 63% depending like on the project mix flat from the quarter to another. So I cannot really say much more than that.

[Daniel Thorsson, analyst]

Okay. Fair enough.

[Olivier Lefranc, executive]

So the expectation is that it should remain at between like this -- like [ to a number ] of 60% minimum and 63% maximum.

[Daniel Thorsson, analyst]

Okay. Fair enough. And then second question on OpEx here. It was pretty flattish year-over-year, but I see that in Q2, you have added a couple of employees versus Q1. What type of roles have you added? And should we expect you to recruit a little bit and increase adjusted OpEx here in the coming quarters?

[Olivier Lefranc, executive]

No. I mean, it's pretty steady here. So I mean, we had like more vacant position at the beginning of the year than we are like just -- in the first quarter than we are like in the second quarter, but we've not like increased our staff like in any part of the organization. And if anything, we remain like [ guys ] like in terms of like cost control and not like creating like additional position or anything like this. So no -- it's really the fact that we have like more vacant position in Q1 than we had like in Q2. I mean, we see some reduced level of attrition.

[Daniel Thorsson, analyst]

Last question is on the competitive landscape. I mean, it may be difficult for you to compare with a year or 2 years ago, but obviously, the whole market has decelerated a bit here. But have you seen any change in the competitive landscape because now you are a very big player in this market, obviously. Is it anything on the sideline popping up?

[Giles Palmer, executive]

No. In fact, I was talking to one of our sales guys yesterday, he was saying that, if anything, we've seen a decrease [indiscernible], he was saying that if anything, we've seen a decrease in competitive narratives in the marketplace, where our customers are, obviously, as all customers, all companies do looking around alternatives all the time, that's nothing new. But they're saying that there's nothing that can really compete or compare with Cint in terms of scale and breadth of offering. So no, is your answer. I hope [indiscernible] they come back and fight me, [ this one is fine ]. But [ as of today ], that's how it plays.

[Operator]

Our next question is from Sara Starovlah from SEB.

[Sara Starovlah, analyst]

Hi, Giles and Olivier. I just have a quick one for me, actually. I noticed you stopped giving the KPI number of customers or the number of customers because you're going through the definition of it. Is this something that you're working on more broadly on other KPIs as well? And should we expect or could we hope for a more granular communication in this regard for the coming quarters?

[Giles Palmer, executive]

Yes. Yes, [ Sara ].

[Sara Starovlah, analyst]

Yes.

[Giles Palmer, executive]

Maybe not next quarter. I would hope that the [ one answer ] that for sure.

[Sara Starovlah, analyst]

And could you give any kind of color on what sort of KPIs you're looking at to introduce?

[Giles Palmer, executive]

Not really. We'll come back to you on that. But a number of customers, definitely, once we figure out how we actually count customers consistently across the business. And I've got a level of confidence that I can believe in the -- on the numbers. But, yes, for sure, in fact, it would be interesting to get maybe you can give us some feedback offline about what KPIs you guys [Technical Difficulty] take those away and try and figure out how to have -- how to deliver.

[Operator]

Our next question comes from Charles Brennan from Jefferies.

[Charles Brennan, analyst]

I've got a couple actually. Firstly, can you talk about what you think the market's been growing at? I'm just trying to get a sense of how much of the performance we're looking at is just market trends versus you potentially losing market share?And then just following up on the competition dynamics, in the statement, you're calling out pricing pressure across the marketplace. If the competitive narrative is easing, where are you getting that pricing pressure from? Is it coming from existing competitors? Is it coming from new competitors? Is it coming from your customers? I don't quite understand the market dynamics there?

[Giles Palmer, executive]

Okay. Well, I can take the second one. It's a marketplace. So the pricing comes from the supply and demand. So where the supply is the panel providers are not seeing the demand that they are hoping for, so [ they start therefore ] that they have -- they are able to deliver against, then there's a competition for the business. So the marketplace is an efficient market, then there's a competition for the business. So the marketplace is an efficient market for pricing.What we've seen is that numbers are complete. They are kind of flat year-on-year. So the argument there though -- all the point there is that, well, suppliers have to fulfill their supply and there's high competition, which is good for customers in the long run, but well, suppliers have to fulfill their supply, and there's high competition, which is good for customers in the long run. So this is the nature of the marketplace.The -- so the second -- the first point about the market, well, I personally can't really answer that question because I don't think that there is a clearly defined market or set of competitors present and certainly not one, where they published public information. So you probably have a better answer to that question than I do.

[Charles Brennan, analyst]

And then, can I just follow up? You started out by suggesting that in the Americas, they are perhaps may be quicker to respond to macroeconomic conditions. I would take that, that they're probably a leading indicator to what potentially happens in Europe. What gives you the confidence that you think that the business has stabilized and why won't we see Europe follow the trends of the U.S.?

[Giles Palmer, executive]

I mean, I get your point about quicker to react, but you just -- you can look at it as larger swings rather than necessarily faster and then Europe trailing. I would potentially think that actually that's just a bigger reaction, not necessarily -- not necessarily sequence. But it's difficult to say, right? We've just seen it with -- [ we've just ] also seen it with ourselves. There's a lot of -- you look at technology companies and some have suffered over the last kind of year with their stock falling and various other things. So it's a complex -- I don't think that there's a simple answer to this question. So I'm sort of, I'm going to duck it in as much as I don't have a good answer that will probably help you.We -- my focus is on creating a fantastic company and putting our best foot forward and then marketing it as increasingly, aggressively. And I control the stuff that I can control rather than sort of trying to become a prediction engine. So I don't really have a great answer to that question, I'm afraid.

[Charles Brennan, analyst]

Okay. I'll do one last one, if I can. Just on the whole customer migration program that starts in the fourth quarter, what are the risks associated with doing that? Is there a big data migration that's required? And if it's going badly, does that equal more cost for you? Or if it goes badly, does it equal less revenue for you? Just how do we think about the risks of that project?

[Giles Palmer, executive]

Well, that's -- [ that's just ] we need more time than a few minutes to answer that question. It's a hugely risky project. You're taking thousands of customers, and you're changing the way that they interact with you. So it's -- and from our point of view, we're trying to upgrade it, we're trying to make it more efficient. We're trying to get more of our customers to be able to do more things themselves. There's a whole underlying strategy behind this new platform and where we're taking it into the future, and this is quite a long list of things.When it comes to risk, we're integrating supply and the back-end systems around supply and there's some risks there. There's some risks from a -- is the new platform robust enough from the back-end perspective to be able to take all of the traffic, there's risks from key man inside the organization, who know how -- they are key people, who know how the platforms work and making sure that we look after them and they are fit and well and able to manage our existing platforms, as we integrate.We're going to be running multiple platforms simultaneously for a period of time. There's risks around that. There's a laundry list of stuff here, Daniel. So it's not a simple project, which is why we've gone so deep in planning, which is why we talk about this every day, which is why we're so keen to make this happen because the complexity that we're carrying, as an organization right now is unnecessarily high compared to what it would be with a single platform. So there are very significant list of risks, and we are actively managing all of them. But if I go on -- I could go on and -- but I don't think that's a good use of everybody's time.

[Charles Brennan, analyst]

And so given these risks, why have you chosen the seasonally strongest quarter of the year to start the project?

[Giles Palmer, executive]

Well, the project was started before I came in. If you're talking about starting customer migration, we're taking the customers for whom Cint manages their accounts. So we are deliberately taking a lower-risk customers first. And yes, Q4 is seasonally the highest, but we're not talking 70% of the revenue here. These are -- and we have -- and then the final point is the earlier we begin, the earlier we finish, the earlier we finish, the more we can move on to creating an efficient optimized business for higher profitability and higher long-term growth, so for all of those reasons.

[Operator]

[Operator Instructions] Our next question comes from Viktor Hogberg from Danske Bank.

[Viktor Högberg, analyst]

Yes. So good to see something about the pacing of growth and revenues throughout the second quarter? Did it improve? Wasn't on the same level? Just anything that could help us understand the dynamics in the quarter?

[Giles Palmer, executive]

It was as expected. The -- we tend to see a little bit highest revenue in the last month of the quarter, and we -- that was what we expected and that's what happened. It was exact -- it was as expected. We were pretty accurate internally on call in Q2, and we were -- we are pretty happy with that -- with where it came at.

[Viktor Högberg, analyst]

Yes. The comparable was slightly easier than in Q1, and it's going to be materially here in the second half that -- what we do know, well, what about the business environment? Can you say anything about things accelerating, you're talking about stabilization and growth in the not-too-distant future, just some points to help us understand the confidence in that other than the comparables getting easier? That would be very helpful.

[Giles Palmer, executive]

Well, sure, I can, to be honest, other than everything that we said so far, yes, that we're not giving guidance, so we're not predicting. We're not giving like detailed predictions on exactly when we expect things to happen. So yes, with that in mind, I kind of like see above, if you like, in terms of what we're prepared to say.All of the work that we're doing is -- well, as I said in the very last slide, is around integration and consolidation, moving customers across, focusing on reversals and getting us into place back to growth. So I hope that the confidence level in the team that I've shown today and that's hopefully coming through on this call gives you a sense of like, okay, well, these guys are on top of the business and that will result in better growth rates going into the future. But we're not saying more than that today.

[Viktor Högberg, analyst]

Okay. Fair enough. And just a follow-on question on the platform migration. Would you expect it to be affecting growth. It sounded like in Q1 that you thought it was neutral to growth over the longer term positive to growth doing this. Would you say that doing it will be neutral to standalone operations, so it might have a negative impact in short term -- starting in the fourth quarter?

[Giles Palmer, executive]

I didn't really understand that. Sorry, can you say that again?

[Viktor Högberg, analyst]

Yes, the platform migration, moving customers, if you would have a negative or neutral impact on operations and growth, when you start doing it? It sounded like in Q1 that you didn't see it as a trade-off between growth and doing the migration, but as a positive on the long-term growth potential doing it. Do you still stand by that?

[Giles Palmer, executive]

Yes. Yes. I do. Yes. I mean, moving customers onto a new platform. There's -- as it was discussed a minute ago, there's risks. So we want to make sure that we take our customers on a fantastic -- on a good -- it was not going to be a fantastic journey, the migration because we're asking them to do stuff that they didn't necessarily volunteer to do, but we're promising, and we're expecting that the outcome, the place that they end up will be better than where they are today.So that's an ask of our customers, which we're very aware of, and we want to make that as painless and as seamless as possible. So our job is to have a -- is to run that process effectively, take our customers with us and then lead them to a place or land them in a place that is better than the place that they're in today, which is the Unified platform, and then we go to full on innovation mode onto the -- within the Unified platform.So it's a journey. And the first leg of that journey is the migration is risky. It's risky for the customers. It's risky for us. And our job is to manage that risk and try and mitigate as much as we can. So if you're looking at it from a purely Cint financial perspective, then yes, there's revenue risk, and that's something that we're very aware of. But in the long term, we and our customers will benefit.

[Viktor Högberg, analyst]

Okay. Last question. On the media measurement, you said that you will increase your investments there. It's the fastest-growing segment, not the largest. What are you doing in terms of increasing investments? What does that entail in terms of costs and actually what you're doing [ this ] today?

[Giles Palmer, executive]

We're adding -- we're adding engineering teams and product people. So we're adding innovation and not tens of people, but not one person. So like a small team or -- to accelerate that business. The commercial leaders in that business and the product leads in that business have got a laundry list of things that they want to do to improve it. We are total believers in them and in that business [ at the ] segment and subject to a clear focus on cash management.My view is that we start to allocate resources reasonably soon, well, now to high potential growth areas. So as I was saying in the presentation earlier on, the core focus is consolidate, standardize and optimize, but that doesn't -- and then move into a much more growth-orientated [ space ], but that doesn't mean that we're not going to be doing something to [indiscernible] an investment in the media measurement business, and the base solutions is one area.

[Viktor Högberg, analyst]

Okay. A final follow-up on that one. I think I recall that the gross margin in the audience -- in the media measurement business is higher than for the Group, and this is growing faster. Wouldn't this have an upwards pressure on gross margin over time above the 63%, you've previously mentioned that's [ the roof ] in gross margin. Is that a short-term comment and the long-term potential is higher than that? Or is the long-term potential still just 63% given the mix change over time?

[Giles Palmer, executive]

Well, I mean, look, the margin is higher and the long -- if the growth rates continue, as they are today, then for sure, the blended margin will go up. We haven't done -- we're not giving sort of '24 guidance. We need to go into a full budgeting cycle for 2024, which we've actually already started. So when we get through that and start thinking about longer-term stuff, then maybe we can add a comment. But right now, that's not something that we're commenting on.

[Operator]

We have no further questions at this time. So I will now hand back to the management team for final remarks.

[Giles Palmer, executive]

Great. That's me. Thank you, everybody. I was -- expected the film to be a short one actually because I didn't think that we had a ton of stuff to announce, but I really appreciate all of your questions and your engagement. And thanks again to my team. who are supporting me a lot, thank you and working extremely hard. And we will look forward to seeing you in 3 months' time. Enjoy the rest of your summer.

[Operator]

This concludes today's call. Thank you all for joining. You may now disconnect your lines.