Half-year Results

Trustpilot Group PLC

Sep 13 2022 08:00 BSTSource: RNS

RNS Number : 1948Z

Trustpilot Group PLC

13 September 2022

Trustpilot Group plc

13th September 2022

RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2022 ("H1 FY22")

Revenue up 25% year on year ("YoY") at constant currency ("cc"), with further improvement in net dollar retention rate to 100%; reiterating revenue outlook for FY22 and path to breakeven adjusted EBITDA in FY24

Financial highlights

• Total revenue in constant currency increased by 25%, reported total revenue grew by 18% to $73 million in H1 FY22 (H1 FY21: $62 million), reflecting the FX translation effect of the strengthening of the US dollar against sterling and the Euro during the period

• Annual recurring revenue (ARR)* increased by 23% cc to $149 million (H1 FY21: $134m)

• Bookings* increased 22% cc to $87 million (H1 FY21: $75 million), versus a strong performance in the prior-year period (H1 FY21: +28% cc)

• Bookings in the UK, Europe and RoW regions increased by 27% cc, with +8% growth in North America

• The Group reported a loss for the period of $9 million (H1 FY21: loss of $17 million), with adjusted EBITDA loss of $5 million (H1 FY21: profit of $4 million)

• Last Twelve Months ("LTM") net dollar retention rate* improved to 100%, (H1 FY21: 97%)

• Operating cash flow was $(8) million (H1 FY21: $(12) million, the improvement largely reflecting non-recurring IPO-related costs in the prior-year period

• Strong balance sheet with $73 million net cash (FY21: $93 million), including an $8 million FX translation effect, and commitment to breakeven adjusted EBITDA and underlying unlevered free cash flow for FY24

Strategic and operational highlights

• Strong growth in strategic KPIs

• Total cumulative reviews* increased 32% to 190 million

• Number of active domains* increased 29% to 94K

• Average monthly review invitations reached 53 million (H1 FY21: 44 million) with 8.1 billion monthly TrustBox impressions (H1 FY21: 7.4 billion)

• Step up in deterrents, detection accuracy, and additional measures introduced to frustrate efforts to manipulate the platform, have led to a year-on-year reduction in the number of fake reviews flagged and removed

• Launched industry-leading consumer verification tool to further promote trust online

• Early signs from newly implemented US go-to-market strategy have been encouraging, with evidence of shorter sales-cycles and higher average deal sizes in our target verticals

• Strengthened leadership team with the appointment of new Chief Commercial Officer

Outlook

We reiterate our revenue outlook for FY22, which is underpinned by prior-period bookings growth. While we have not seen any significant changes in overall customer demand in our end markets in H1 FY22, we continue to monitor the uncertain macroeconomic environment closely and we think it is prudent to take a more cautious approach to our assumptions for new business growth and retention near-term. However, we benefit from a flexible operating model and expect to see significantly more operating leverage in the second half of the year than previously anticipated. We remain confident of the significant and growing long-term market opportunity.

Financial summary

$ 000's	H1 FY22	H1 FY21	(+/-) % actual	(+/-) % constant currency**
Bookings*	86,675	75,478	15	22
LTM Net Dollar Retention Rate*	100	97	3	-
ARR*	149,349	134,172	11	23

Revenue	73,410	62,448	18	25
EBITDA**	(6,592)	(11,576)	(43)	(35)
Adjusted EBITDA**	(5,435)	3,769	(244)	(249)
Underlying unlevered free cash flow**	(14,272)	(2,749)	419	1,379
Operating cash flow	(7,676)	(11,956)	(36)	(25)
Loss for the period	(9,240)	(17,177)	(46)	(39)
Adjusted loss**	(8,083)	(3,700)	118	131

EPS (cents)	(2.2)	(4.4)	(49)	(42)
Adjusted EPS (cents)**	(2.0)	(0.9)	108	120

* Key performance indicator (KPI) - further detail available on page 13; ** Alternative performance measures (APM) - further detail available in Note 3.

Constant currency basis

Given the Group operates in multiple currencies, Trustpilot believes illustrating period-to-period comparisons on a constant currency basis is meaningful to see differences before the impact of currency fluctuations. The Group's constant currency calculations are performed by applying the monthly average exchange rates from the last month in the most recent period to prior periods at the transactional level, which provides a like-for-like comparison excluding the effect of exchange rate fluctuations.

Peter Holten Mühlmann, Founder and Chief Executive Officer, commented:

"We are pleased by our half-year results which demonstrate the continued strength of our business, both financially and strategically. The momentum we are seeing in consumer and business engagement in each of the regions in which we operate has been particularly encouraging. Our success is founded upon our focus on trust, and we continue to benefit from viral network effects as more and more consumers choose to share their experiences on Trustpilot."

Enquiries

Trustpilot Group plc

Tulchan Communications

Derek Brown, Head of Investor Relations

Peter Holten Mühlmann, CEO

Hanno Damm, CFO

https://investors.trustpilot.com

investor.relations@trustpilot.com

James Macey White

Ed Cropley

Matt Low

Tel: +44 20 7353 4200

Results webcast and conference call

Trustpilot will host a webcast and conference call for analysts and investors at 09:00 (BST) today. To register to access the webcast and presentation materials please visit https://investors.trustpilot.com. A replay of the webcast will be made available on the investor website later today.

About Trustpilot

Trustpilot was founded in 2007 with a vision to create an independent currency of trust. A digital platform that brings businesses and consumers together to foster trust and inspire collaboration. We are free to use, open to everybody and built on transparency. Trustpilot hosts reviews to help consumers shop with confidence, and deliver rich insights to help businesses improve the experience they offer. The more consumers use our platform and share their own opinions; the richer the insights we offer businesses; and the more opportunities they have to earn the trust of consumers, from all around the world.

Trustpilot has over 900 employees and is headquartered in Copenhagen, with operations in London, Edinburgh, New York, Denver, Melbourne, Berlin, Amsterdam, Milan, and Vilnius.

Chief Executive's Review

Summary

We are pleased by our half-year results which demonstrate continued strength of our business from a financial and strategic perspective. In the first half of 2022, the Group delivered revenue of $73 million, an increase of 18% year-over-year on a reported basis, or up 25% at constant-currency. Our reported results reflect the translational FX headwind that resulted from the material strengthening of the US dollar against sterling and the Euro during the period. We ended June with annual recurring revenue of $149 million, up 23% at constant-currency.

We operate a subscription software business model whereby we invest to drive bookings growth near-term which leads to revenue growth in subsequent periods. In addition, network effects are driving growing consumer and business engagement with the Trustpilot platform and this also supports future bookings and revenue growth. Consequently, due to prior-period bookings growth we typically have good revenue visibility at the beginning of each trading period.

In the first half of the year, bookings increased to $87 million, up by 22% at constant-currency. The continued strong bookings growth in the UK (+27% cc), Europe and RoW (+27% cc) was offset by lower growth in North America (+8% cc), where our performance was affected by a challenging recruitment market as well as some organisational change as we implemented a new go-to-market strategy, which is expected to help drive more efficient growth in the region in future. Growth in adoption of Trustpilot continued to be strong, exceeding 30 per cent growth in the number of total cumulative reviews in each of the UK, Europe, RoW, and North America regions, and a 27 per cent increase in the number of reviewed domains in North America.

The Group reported a loss for the period of $9 million (H1 FY21: loss of $17 million), a decrease due to one-time transaction costs in H1 FY21, with adjusted EBITDA loss of $5 million (H1 FY21: profit of $4 million) due to investments in business operations. The Group maintained a strong balance sheet with $73 million net cash (H1 FY21: $91 million), after an $8 million negative currency translation effect.

Furthermore, we were encouraged to see a further improvement in our LTM net dollar retention rate, which rose to 100% in the period, compared to 97% a year ago and 99% for the last full financial year.

We also hosted our first capital markets day for investors, where we provided additional information on regional profitability, thereby outlining our path to long-term, profitable growth and our expectation of adjusted EBITDA breakeven for the Group in 2024. Additionally, we unveiled more detail about our new go-to-market strategy for North America, and the returns we expect to achieve through the highly-targeted brand investment campaign in Italy, planned for the second half of the year.

Our strategy

We believe that trust is the foundation on which commerce is built. For consumers, this means knowing you are going to get a great experience and being able to share that experience to help others. For businesses, this means being able to win and retain customers through gathering independent, verified reviews and engaging with consumers to establish a trusted relationship. This matters more than ever and is enabling our business customers to differentiate themselves by showcasing their reviews and TrustScores. We believe there has never been a greater need for a universal symbol of trust. At Trustpilot, we are creating a platform that we believe will eventually be used by billions of people and millions of companies.

It is central to our strategy to be the global reviews site most used by consumers, and to be the most trusted. At Trustpilot, we design for trust and transparency so that consumers can use and rely on our reviews platform for reassurance that they are dealing with businesses that are trustworthy. The more that consumers engage with Trustpilot, through reading and posting trusted reviews, the greater the reason for businesses to use Trustpilot. As more businesses engage with their customers on the Trustpilot platform, the more useful it becomes to consumers and businesses. This virality between the consumer and business sides of our platform, where one drives and reinforces the other, lies at the heart of Trustpilot's organic growth opportunity.

Progress against our strategic objectives

At 30 June 2022, the total cumulative number of reviews submitted to the Trustpilot platform exceeded 190 million, compared to 144 million a year ago. At 30 June 2022, over 811K domains had been reviewed on Trustpilot's platform, compared to 626K in H1 FY21 and 714K as at 31 December 2021.

We measure our performance as indicated by various usage metrics. These include the number of businesses actively using our platform, either as free active users or as paying business customers. A business qualifies as actively using our platform if its domain has at least one invited review and/or TrustBox impression in a given month. We also monitor the number of review invitations businesses send to their customers.

The number of total active domains on Trustpilot, which includes both free users and paying business customers, increased by 29% to 94K as at 30 June 2022, compared to 73K a year ago; the number of paying business customers increased by 14% to 24K, after churn. We have also seen strong growth in the number of monthly review invitations sent by businesses, which averaged over 53 million per month in the first half of the year, an increase of more than 21% year-on-year. These metrics are significant as they demonstrate the viral network effect in action, and typically act as a good indicator of future growth in subscribing business customers, and ultimately bookings and ARR.

We continually assess our strategic progress with respect to trust and transparency. We measure the number of fake and misleading reviews we detect and remove, as well as our response times in investigating reviews flagged by consumers or businesses as potentially fake, misleading or in breach of our guidelines. In 2021, we removed 2.7 million reviews that were determined to be fake or misleading, the majority of which were detected automatically by our proprietary artificial intelligence algorithms, designed to ensure the integrity of the content on the Trustpilot platform.

In the first half of the year, the number of fake reviews flagged and removed declined year-on-year, reflecting the improvements we have made in the accuracy and efficiency of our fraud detection technology, and the success of the measures we have taken to deter attempts to post fake reviews, this includes the step up in legal enforcement we announced in the period, the release of a two-hour delay to posting reviews that increases friction for anyone those who may be seeking to manipulate the platform, and a substantial increase in the number of reviewer accounts blocked for breaching our guidelines.

We strengthened our executive leadership team with the appointment of Mieke De Schepper as Chief Commercial Officer, responsible for developing and delivering Trustpilot's global commercial strategy. Leading Sales, Customer Success and Commercial Partnerships, Mieke brings to Trustpilot significant international commercial experience.

Our market

Establishing trust is a key factor for business success. In an uncertain world it is more important than ever for consumers to be confident that the business they are transacting with is trustworthy.

Trustpilot provides an open platform, which creates a place where businesses and consumers can gain actionable insights and collaborate. Consumers can share feedback, at any time, about any business with a website and review feedback left by other consumers.

Trustpilot facilitates better purchasing decisions for consumers, and provides them with the opportunity to help other consumers by recommending businesses, products, services, and locations based on their genuine experiences. Businesses use Trustpilot to actively engage with consumers that are reviewing their products and services. Importantly, any business can use Trustpilot's basic services for free, where they can view and respond to consumer reviews.

The open and collaborative nature of Trustpilot differentiates it from other review platforms that typically only allow consumers to leave reviews when a business invites them to, and only allow businesses to interact with consumers when they pay for that capability.

In addition to its free service, Trustpilot also provides several paid subscription modules for businesses, providing increasing levels of functionality and offered on a software-as-a service basis. These tools enable Trustpilot's paying business customers to invite more reviews, manage those reviews, to derive high-value, actionable insights from them, and to showcase their TrustScores across their marketing channels. In this way, Trustpilot can generate strong returns for businesses in raising their profiles, building and demonstrating their trust credentials, and increasing traffic, conversion, marketing efficiency, and ultimately revenues.

Trustpilot is relevant across a wide range of industries and for online and offline businesses around the world, with an estimated 13 million businesses globally (excluding China) that could potentially become Trustpilot customers (Trustpilot-commissioned study in Q4 2020).

By fostering trust through direct, open, and collaborative engagement between businesses and consumers, Trustpilot's platform helps businesses improve the experience they offer their customers. This self-reinforcing cycle between businesses and consumers creates a powerful viral network effect, which is a key driver of Trustpilot's organic growth. Illustrating this network effect, during the first half of the year an average of 16K new domains were added to the Trustpilot platform per month, while an additional 23 million new consumer reviews were posted to the platform in the period.

Regional performance

The United Kingdom (UK) contributes c.41% of revenue, Europe and Rest of World (RoW), which is dominated by Europe, contributes c.37% of revenue and North America contributes c.23% (H1 FY21: UK contributed c.40%, Europe and RoW c.36% and North America c.24%).

In the UK we saw 27% cc revenue growth in the period, reflecting strong prior-year bookings growth and the strength of our brand. Bookings in the region continued to grow strongly, increasing by 27% cc in the period.

For Europe and RoW, we reported a 31% cc increase in revenue in the period compared to a year ago, with particular strength in Europe. Bookings grew by 27% cc.

North America revenue increased by 13% over the prior year period with bookings up 8%. Bookings growth in North America continues to reflect a below-average retention rate compared to other regions, but new business bookings in the region were also affected by challenging labour market conditions which impacted our near-term ability to achieve target headcount levels, particularly in sales and marketing.

Trust and Transparency

Our focus on trust - the work we do to protect the community we have on the Trustpilot platform, and the integrity and reliability of the information that people see, is what we believe sets us apart from others.

Trustpilot is founded on the principle of being open to all. We believe that this leads to reviews being more trustworthy. Consumers don't need to be invited to leave a review. Trustpilot seeks to prohibit businesses from selectively asking people to leave reviews, and businesses can't manipulate the reviews that have been written about them.

Importantly for any business, this means they see a full picture of the feedback they are receiving from consumers, hence they can engage with consumers to genuinely understand and improve. This engagement loop is valuable, because we believe that consumers aren't looking for a perfect company, but they are looking for businesses that engage when there are issues. Furthermore, businesses and consumers help one another on Trustpilot, but importantly Trustpilot remains independent of both. As a result, this builds an underlying strength to our network - encouraging the virality and stickiness that we seek.

In May, we published our second Transparency Report, which is available for download on our website. It sets out, in a digestible way, the work we do in this area, the strive for continuous improvement in our fraud detection, and efficiency in our operations. Last year, we removed 2.7 million fake reviews, equivalent to just under 6% of the 47 million reviews posted to Trustpilot in 2021, with the majority of fake reviews removed by our automated fraud detection technology.

We released consumer and business verification tools. The process requires both parties to safely and securely verify their identities, using the same technology utilised by banks, healthcare providers and educational institutions. So far, we have seen strong uptake with tens of thousands of consumers choosing to prove their identity in order to signify to others that they can be trusted.

Our focus on scalability and a consistent approach has let us increasingly use automation to manage flagged reviews. We have reduced the proportion of manual content integrity work from 25% in mid-2019 to 11% by May this year, and our use of outsourcers lets us quickly flex our resourcing requirements when necessary.

Efficiency initiatives like this have allowed us to reduce our overall 'cost-per-ticket' between 2019 to 2021 by 34%, following the strong growth in review numbers. We anticipate that our investment in areas such as enforcement to better protect the platform, and improved customer service, will also result in fewer tickets longer term. This trend was evident in the first half of this year in which we saw a reduction in the total number of reviews flagged and the number of reviews removed either automatically or manually, while the number flagged automatically increased.

Sustainability

The purpose that drives us as an organisation is ambitious and challenging, but we also believe it is inherently worthwhile. Our strategy with respect to sustainability will support this purpose over the long term.

In May we published our first sustainability report, which is available to download from our website. In it, we identified the sustainability issues that matter most to our various stakeholders, these included content integrity, diversity equity and inclusion, privacy and security, and compliance and ethics.

These are the matters that underpin our purpose, people and reputation, and as a result we are developing a more formal strategy to guide our performance on environmental, social and governance (ESG) matters going forward.

With respect to content integrity, our ambition is to manage the technology and behaviour - across employees, consumers, customers, and suppliers - that maintain the authentic, credible, and unbiased reviews on the Trustpilot platform.

We also place a high priority on creating an inclusive workplace environment, for people of all backgrounds, with equal opportunities in recruitment, selection, training, development, and promotion. Ensuring all employees feel valued and respected in a culture of belonging, where they don't feel they have to fit in, and where they can be themselves.

Privacy and security are also key, and necessitate a focus on protecting the data that resides in the Trustpilot digital ecosystem, using cybersecurity, data privacy (including consumer, customer, and employee data), data security, and appropriate information-sharing procedures.

Furthermore, in pursuit of high standards of compliance and ethics we are adhering to codes and regulations across our activities and countries, and training staff on relevant policies and procedures.

We are committed to understanding climate change and the environmental impact we have as a business. In H1 FY22, we undertook a review of our disclosures in respect of climate-related risks and opportunities set out in our 2021 Annual Report and established an action plan to enhance our reporting against the recommendations of the Task Force on Climate-Related Financial Disclosures ("TCFD"). As part of our action plan, we intend to take a number of steps to ensure greater consistency with the TCFD recommendations, including carrying out a climate-related risks and opportunities assessment in 2022.

Outlook

Peter Holten Mühlmann, Founder and Chief Executive Officer, Trustpilot

12th September 2022

Finance Review

Overview

The first half results for 2022 saw bookings* growth of 22% in H1 FY22 (28% in H1 FY21) resulting in Annual Recurring Revenue ("ARR")* of $149 million as of 30 June 2022. Revenue growth of 18% or 25% on a constant currency basis** was driven largely by Rest of World (RoW) and UK markets. Loss for the period reduced from $17 million (-28% of revenue) to $9 million (-13% of revenue) principally due to non-recurring costs relating to the the initial public offering of the Company's shares (the "IPO") in March 2021. Adjusted EBITDA** fell from $4 million (6% of revenue) to $-5 million (-7% of revenue) driven by investments across the Group partially offset by revenue growth.

Revenue

Revenue in H1 FY22 grew to $73 million, an increase of 18% over the prior year or 25% on a constant currency basis. The actual growth rate was impacted by a strengthening US Dollar relative to the British Pound and Euro when compared to the constant currency growth. Revenue continues to consist of over 99% recurring revenue from software subscriptions, amortised over the subscription term.

ARR and bookings

Annual Recurring Revenue ("ARR") and bookings serve as leading indicators of revenue in subsequent periods. ARR is measured as a value at a point in time while bookings reflect the annual contract value of deals signed within that period. As of 30 June 2022, ARR was $149 million, an increase of 23% on a constant currency basis over the prior year value of $134 million. H1 FY22 recorded bookings of $87 million, an increase of 22% on a constant currency basis over the prior year bookings of $75 million.

Regional growth trends

As described above, regional bookings growth serves as a leading indicator of subsequent period revenue growth. For this reason, H1 FY22 regional revenue growth reflected prior year bookings growth. UK and RoW revenue growth remained strong with 27% and 31% growth respectively in H1 FY22 on a constant currency basis, while the 13% revenue growth reported for North America reflects weaker bookings growth in the prior year period.

Bookings growth accelerated on a constant currency basis in all regions in H1 FY22 compared with the prior year period. The bookings growth was particularly notable on a constant currency basis in RoW and UK, with RoW growing 27% in H1 FY22 (36% in H1 FY21) and the UK growing 27% in H1 FY22 (27% in H1 FY21), while North America grew 8% in H1 FY22 (18% in H1 FY21).

* Key performance indicator (KPI) - further detail available on page 13

** Alternative performance measures (APM) - further detail available in Note 3

$ 000's	H1 FY22	H1 FY21	(+/-) % actual	(+/-) % constant currency
Bookings
UK	35,290	29,750	19	27
North America	18,976	17,574	8	8
Rest of the world	32,409	28,154	15	27
Total bookings	86,675	75,478	15	22
Revenue
UK	29,890	25,137	19	27
North America	16,609	14,692	13	13
Rest of the world	26,911	22,619	19	31
Total revenue	73,410	62,448	18	25

Cost of sales

Cost of sales, which includes network operating costs as well as the costs incurred to onboard, support, retain and upsell customers, was $13 million, an increase of 23% on a constant currency basis (15% on a reported currency basis), driven primarily by investments into the retention and expansion of existing customers ahead of future revenue recognition. These investments, primarily into incremental staff, have been effective at raising the LTM Net Dollar Retention Rate from 97% in H1 FY21 to 100% in H1 FY22. Similar to the bookings and revenue dynamic, improvements in retention bookings in the current period will be reflected in revenue in the subsequent period. As a share of revenue, cost of sales declined from 19% in H1 FY21 to 18% in H1 FY22.

Sales and marketing costs

Sales and marketing costs increased in H1 FY22 to $29 million, a increase of 45% on a constant currency basis (37% on a reported currency basis) compared with the prior year H1 FY21. This increase was driven by significant headcount ramp up in the sales and marketing function after reducing headcount to preserve cash during the COVID-19 pandemic, as well as an acceleration in marketing program spend in H1FY22. As a share of revenue, sales and marketing increased from 34% in H1 FY21 to 40% in H1 FY22.

Technology and content costs

Technology and content costs grew to $20 million, an increase of 46% on a constant currency basis (34% on a reported currency basis) over the prior year H1 FY21. Technology and content investment continued both into staff and into purchased software and professional assistance. Average technology and content headcount in H1 FY22 grew to 248 compared with the prior year H1 FY21 of 203. The focus of these efforts remains primarily on product and engineering as well as securing the integrity of our content. As a share of revenue, technology and content costs grew from 24% in H1 FY21 to 28% in H1 FY22.

General and administrative costs

General and administrative costs were $21 million, a decrease of 24% on a constant currency basis (a decrease of 30% on a reported currency basis) over the prior year period. The decline in general and administrative costs was driven primarily by no non-recurring IPO-related costs compared with prior year costs of $10 million, and a decrease in share-based compensation (including associated social security credit of $2 million; H1 FY21: charge of $2 million) to $1 million compared with prior year costs of $6 million in H1 FY21. IPO-related costs consisted primarily of accounting, legal and advisory services to enable the March 2021 listing on the London Stock Exchange. As a share of revenue, general and administrative costs declined from 48% in H1 FY21 to 29% in H1 FY22. Excluding transaction costs and share based compensation, general and administrative costs increased from $12 million to $18 million, primarily driven by further investments into the People team and the Legal and Platform integrity teams as well as public company costs (such as Risk & Audit fees, Investor Relations, etc.). H1 FY22 also saw a normalisation of travel and entertainment, facilities and other costs which were suppressed by pandemic restrictions in the prior period. In addition we saw heightened inflationary pressure across the entire cost structure.

Cash flow

Cash outflow from operating activities in H1 FY22 decreased to $8 million compared with a cash outflow from operations in H1 FY21 of $12 million. Non-recurring IPO-related costs represented the largest driver of the cash outflow decrease.

Capital expenditure continues to primarily consist of capitalised development costs and in H1 FY22 increased to $3 million (H1 FY21: $2 million).

Cash outflow from financing activities total $1 million comprised primarily of cash outflows from the principal elements of lease payments, partially offset by equity inflows from share issues (H1 FY21 cash inflow from financing activities of $56 million comprised primarily of equity inflows from the issue of new shares as well as proceeds from employee warrants exercised at IPO).

Balance sheet

Meaningful movements in the Group balance sheet when compared to 31 December 2021 consisted primarily of cash decrease of $20 million driven by operating cash outflow of $8 million, investing cash outflow of $3 million, financing cash outflow of $1 million, and a decrease due to exchange rate changes on cash and cash equivalents of $8 million. Equity decreased $11 million primarily due to the loss for the period. Current liabilities fell to $49 million as of 30 June 2022 (FY21: $57 million) due in part to the utilisation of labour accruals (resulting in a decrease of $9 million) related to annual bonus payouts and social contributions, partially offset by growth in contract liabilities ($2 million) driven by growth in bookings. Non-current liabilities grew to $15 million as of 30 June 2022 (FY21: $13 million) as a result of new long term leases signed in Melbourne and Edinburgh.

Foreign exchange

The Group does not hedge foreign currency profit and loss translation exposures and the statutory results are therefore impacted by movements in exchange rates. The use of constant currency translation illustrates underlying activity by neutralising the impact of currency fluctuations. Constant currency translation is applied by utilising the monthly average rate from the most recent period then applying that rate to all historical periods being compared.

Going Concern

The Group incurred a loss of $9 million in H1 FY22 compared with a loss of $17 million in H1 FY21. The Group has cash and cash equivalents of $73 million as of 30 June 2022 compared with a balance of $93 million as of 31 December 2021. The Group has access to an undrawn revolving credit facility of up to $30 million. The Group has not breached any associated covenants and does not forecast a breach in future periods.

In consideration of going concern, management prepares forecasts of revenue growth with associated costs and cash requirements. In addition to forecasting expectations, management prepares downside scenarios meant to illustrate the impact of reasonable worst case performance and the resulting impact to the financials, with and without mitigating actions. Even under these downside scenarios there is sufficient liquidity to finance Group operations. Management does not believe there to be any reasonable downside scenario which would cause the Group to have insufficient liquidity to be considered a going concern in the forecast periods.

Hanno Damm

CFO, Trustpilot Group plc

12th September 2022

Operating metrics

Trustpilot utilises a range of key performance indicators ("KPIs") to assess its performance, and this document contains certain operating measures that are not defined or recognised under IFRS. Trustpilot considers bookings, LTM Net Dollar Retention Rate, annual recurring revenue, number of reviewed domains, number of claimed domains, number of active domains, number of subscribing customers and total cumulative reviews to be the KPIs used by Trustpilot to help evaluate growth trends, establish budgets and assess operational performance and efficiencies.

Trustpilot believes that these KPIs provide alternative measures by which to assess the operating performance of the Group and, together with IFRS measures, are useful in evaluating the Group's operating performance. The KPIs used in this Financial Statements should not be considered superior to, or a substitute for, measures calculated in accordance with IFRS. The following table presents Trustpilot's KPIs for H1 FY22 and H1 FY21:

	H1 FY22 000's	H1 FY21 000's	(+/-) % actual	(+/-) % constant currency
Bookings
UK	35,290	29,750	19	27
North America	18,976	17,574	8	8
Rest of the world	32,409	28,154	15	27
Total bookings¹	86,675	75,478	15	22
LTM Net Dollar Retention Rate (per cent)²	100	97	3	-

KPIs at period end
Annual Recurring Revenue³	149,349	134,172	11	23
Number of reviewed domains⁴	811	626	29	-
Number of claimed domains⁵	617	481	28	-
Number of active domains⁶	94	73	29	-
Number of subscribing customers⁷	24	21	14	-
Total cumulative reviews⁸	190,000	144,000	32	-

¹ Bookings is defined as the annual contract value of contracts signed or renewed in a given period. Nearly all of Trustpilot's contracts with customers have a duration of 12 months - and, in the event a contract length exceeds a 12 month term, the value is adjusted to the 12-month equivalent for the purpose of calculating bookings. Bookings are a leading indicator of future revenue.

² LTM Net Dollar Retention Rate is defined as the annual contract value of all subscription renewals in the last twelve months divided by the annual contract value of subscriptions expiring in the last twelve months. LTM Net dollar retention includes the total value of subscriptions with existing subscribing customers, and includes any expansion of contract value with existing subscribing customers through upsell, cross-sell, price expansion or win back. Twelve months of data is used as nearly all subscriptions are twelve months in duration, ensuring the appropriate alignment of renewal activities.

³ Annual recurring revenue is defined as the annual value of subscription contracts measured on the final day of a reporting period.

⁴ Number of domains that have been reviewed on Trustpilot's platform as at 30 June (including domains subsequently removed from the Trustpilot consumer website).

⁵ Number of claimed domains that have been reviewed on Trustpilot's platform as at 30 June (including domains subsequently removed from the Trustpilot consumer website) and have been claimed by the domain owner.

⁶ Number of domains, in the months of June, that received an invited review or were the subject of a TrustBox impression during the month.

⁷ Number of customers with a paid subscription for services on Trustpilot's platform as at 30 June.

⁸ Number of reviews hosted on Trustpilot's platform as at 30 June (including reviews subsequently removed or deleted).

Principal risks and uncertainties

We continually identify, review and manage existing and emerging risks that threaten our business model, performance and/or future prospects. As part of our risk framework, risk responses are agreed with business stakeholders and reported to the Audit Committee and the Board. Control of each of our principal risks is critical to the ongoing success of the business.

Macroeconomic environment

The ongoing impact of major global events such as the war in Ukraine, coupled with inflationary pressures and the expectation of significant interest rate rises, indicate that there will be sustained macroeconomic and geopolitical uncertainty for the foreseeable future. In response, we are regularly reviewing the actual, emerging and potential impacts on our principal risks as the macroeconomic and geopolitical backdrop evolves. There remains a risk that significant inflation, particularly in our key markets such as the UK and the US, could increase costs and the scrutiny of some customer spending decisions, having an adverse effect on our financial results. However, trust is also a valuable commodity in times of financial constraint and we remain confident in our ability to deliver continued growth. We have also assessed the impact of fluctuations in currency exchange rates on operating cash flow and the impact is not material.

We are closely monitoring the impact of the war in Ukraine and the subsequent impact on global food supplies and energy prices, and took action early on in order to manage our exposure to these risks. Please refer to our statement on page 43 of our Annual Report & Accounts for the year ended 31 December 2021 (the "2021 Annual Report"). While we continue to monitor the associated risks, none are considered to meet the threshold to be included as a principal risk.

Covid-19

While some uncertainty remains, the risk associated with the impact of the pandemic on our business, including our people, our customers, our supply chain and other key stakeholders has materially reduced due to the easing of government restrictions and widespread rollout of vaccinations. The risk of a resurgence of a new variant of coronavirus or other future pandemics remains, but is difficult to quantify.

Principal risks

In H1 FY22, we began a comprehensive enterprise risk review, identification and assessment programme. This has allowed us to evaluate the management and trends of each of our principal risks. Since we last reported on risk in our 2021 Annual Report there have been no additions to our principal risks and uncertainties, however three risks are trending upwards (risk is increasing):

• Risk 3: 'Changing and varied regulatory landscape' remains trending upward for the remainder of 2022 as pressure on platforms to do more to tackle harmful and illegal content, fake reviews and unfair/misleading business practices increases, leading to increasing regulation and regulatory scrutiny, particularly in the UK, Europe and the United States. We continue to closely monitor developments, including assessing the impact of the EU Digital Services Act and developments in the UK such as the Online Safety Bill and consumer law reforms targeted at combating fake reviews. We continue to engage with and contribute to the conversation on a range of digital and technology issues to raise awareness of Trustpilot and the positive work that we are doing, and in May 2022 we introduced product changes to help businesses meet the requirements of the 'Omnibus Directive'. We are also currently responding to Ofcom's call for evidence in connection with Online Safety, as the UK Government looks to appoint Ofcom as the regulator for online safety in the UK.

• Risk 8: 'Inability to recruit and retain a right-sized and highly skilled workforce' remains trending upward as external market conditions are expected to remain challenging for the remainder of the year. Our workforce and culture are core to our continued success and we are responding by reviewing and refining the entire recruitment process as well as our Employee Value Proposition, which will be launched in the second half of 2022.

• The challenging market conditions and any subsequent impact on our ability to recruit and retain a skilled workforce could also negatively impact Risk 5: 'Failure to innovate' which has moved from stable in the 2021 Annual Report to trending upwards. This incorporates the risk that we fail to develop new products and services, or adapt to consumer or market trends. This is now increasing in likelihood as our ability to innovate and develop the product could be affected if we experience attrition of knowledgeable team members in key product development or leadership roles, or fail to attract new talent.

In H1 FY22 we were successful in defending ourselves in the class action filed against us in the Southern District of New York relating to Trustpilot's customer renewal practices. However, we are also experiencing an increase in the volume of cases brought against us by French businesses in relation to the French Consumer Code ("FCC"). We remain confident in our ability to defend these cases and we believe that the changes to the platform we have already made are sufficient to ensure compliance with the FCC. As such, although we believe the outlook for the 6 months ahead remains stable, we are closely monitoring our exposure to Risk 4: 'Litigation and disputes'.

Our principal risks are summarised below. Further details about each of these risks can be found on pages 40 to 52 of our 2021 Annual Report:

1. Failure to maintain a high level of confidence in our commitment to Trust & Transparency could lead to a reduction in the number of consumers using our platform, the number of businesses subscribing to our services and, consequently, a decrease in revenue (stable)

2. Activities of businesses and consumers, such as posting illegal or harmful content or creating and promoting false and misleading reviews could negatively impact Trustpilot's brand and reputation (stable)

3. Failure to meet the requirements of a changing and varied regulatory landscape (increasing)

4. Trustpilot is subject to litigation and disputes including defamation, libel, consumer protection, intellectual property, commercial disputes and other matters (stable)

5. Failure to innovate new technologies or products and services, or adapt to consumer or market trends (increasing)

6. The competitive environment becomes increasingly challenging, including established competitors and new market entrants (stable)

7. Reliance on search engine relationships to enhance our products and services and to drive traffic for Trustpilot and our customers (stable)

8. Inability to recruit and retain a right-sized and highly skilled workforce to deliver our objectives and build the culture we want to see (increasing)

9. We may experience privacy or security breaches whether as a result of our own internal failures or an external cyber attack (stable)

Condensed consolidated statement of profit or loss

$'000	Note	H1 FY22	H1 FY21
		(unaudited)	(unaudited)
Revenue	4	73,410	62,448
Cost of sales		(13,445)	(11,676)
Gross profit		59,965	50,772

Sales and marketing		(29,129)	(21,265)
Technology and content		(20,426)	(15,205)
General and administrative		(21,231)	(30,129)
Other operating income		462	391
Operating loss		(10,359)	(15,436)

Finance income	6	5,272	4,874
Finance expense	7	(4,091)	(6,694)
Loss before tax		(9,178)	(17,256)

Income tax	8	(62)	79
Loss for the period		(9,240)	(17,177)

Earnings per share (cents)
Basic earnings per share	9	(2.2)	(4.4)
Diluted earnings per share	9	(2.2)	(4.4)

Adjusted earnings per share*	9	(2.0)	(0.9)
Adjusted diluted earnings per share*	9	(2.0)	(0.9)

*Alternative performance measure (APM) - further detail available in Note 3.

Condensed consolidated statement of comprehensive income


$ '000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Loss for the period	(9,240)	(17,177)
Other comprehensive income/(expense)
Items that may be subsequently reclassified to profit or loss
Exchange rate differences on translation of foreign operations	(5,602)	451
Other comprehensive income/(expense) for the period, net of tax	(5,602)	451
Total comprehensive expense for the period	(14,842)	(16,726)

Condensed consolidated balance sheet

		As at
		30 June	31 December
$ '000	Note	2022	2021
		(unaudited)
Intangible assets		6,530	6,338
Property, plant and equipment		2,238	1,484
Right-of-use assets		13,271	12,312
Deferred tax assets		229	311
Deposits and other receivables		2,277	2,383
Total non-current assets		24,545	22,828

Trade receivables		6,544	6,176
Income tax receivables		1,064	856
Prepayments		3,393	3,134
Deposits and other receivables		3,323	2,870
Cash and cash equivalents		73,467	93,177
Total current assets		87,791	106,213

Total assets		112,336	129,041

Equity and liabilities
Share capital	10	5,029	5,576
Share premium	10	64,708	70,994
Foreign currency translation reserve		6,927	4,648
Merger reserve		148,854	148,854
Accumulated losses		(177,075)	(170,618)
Total equity		48,443	59,454

Lease liabilities		11,361	9,552
Provisions		476	517
Other payables		2,754	2,962
Total non-current liabilities		14,591	13,031

Lease liabilities		2,709	3,504
Provisions		428	670
Income tax payables		148	69
Contract liabilities		29,534	27,616
Other payables		13,670	22,861
Trade payables		2,813	1,836
Total current liabilities		49,302	56,556

Total liabilities		63,893	69,587
Total equity and liabilities		112,336	129,041

Condensed consolidated statement of changes in equity

$ '000	Note	Share capital	Share premium	Foreign currency translation reserve	Merger Reserve	Accumulated Losses	Total
		(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Equity at 1 January 2022		5,576	70,994	4,648	148,854	(170,618)	59,454
Loss for the period		-	-	-	-	(9,240)	(9,240)
Other comprehensive income		-	-	(5,602)	-	-	(5,602)
Total comprehensive income/(expense) for the period		-	-	(5,602)	-	(9,240)	(14,842)
Transactions with owners
Employee share scheme issues		22	1,079	-	-	-	1,101
Contribution of equity - Transaction Cost		-	(53)	-	-	-	(53)
Share-based payments	5	-	-	-	-	2,783	2,783
Exchange difference on share capital and premium		(569)	(7,312)	7,881	-	-	-
Total transactions with owners		(547)	(6,286)	7,881	-	2,783	3,831
Equity at 30 June 2022		5,029	64,708	6,927	148,854	(177,075)	48,443

Condensed consolidated statement of changes in equity

$ '000	Share capital	Share premium	Foreign currency translation reserve	Merger Reserve	Accumulated losses	Total
	(Restated)	(Restated)	(Restated)	(Restated)
	(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Equity at 1 January 2021	773	177,842	(20,304)	-	(151,312)	6,999
Loss for the period	-	-	-	-	(17,177)	(17,177)
Other comprehensive income	-	-	451	-	-	451
Total comprehensive income/(expense) for the period	-	-	451	-	(17,177)	(16,726)
Transactions with owners
Warrants (exercised) pre group reconstruction	10	596	-	-	-	606
Exchange difference on share capital and premium pre group reconstruction	(23)	(6,977)	7,000	-	-	-
Impact of group reconstruction	4,345	(171,461)	18,262	148,854	-	-
Warrants financing facility	-	-	-	-	61	61
Exercise of share-based payments	292	7,189	-	-	-	7,481
Issues of shares	244	64,102	-	-	-	64,346
Contribution of equity - Transaction Cost	-	(1,114)	-	-	-	(1,114)
Share-based payments	-	-	-	-	3,585	3,585
Exchange difference on items recognised directly in equity post group reconstruction	26	(4,145)	4,119	-	-	-
Total transactions with owners	4,894	(111,810)	29,381	148,854	3,646	74,965
Equity at 30 June 2021	5,667	66,032	9,528	148,854	(164,843)	65,238

Details of the restatement are set out in Note 1

Condensed consolidated cash flow statement

$ '000	Note	H1 FY22	H1 FY21
		(unaudited)	(unaudited)
Loss for the period		(9,240)	(17,177)
Adjustments to operating cash flow	13	5,512	9,284
Changes in net working capital	13	(3,191)	(2,862)
Interest received		7	4
Interest paid		(723)	(1,205)
Income taxes paid		(41)	-
Net cash flow from operating activities		(7,676)	(11,956)

Purchase of property, plant and equipment		(1,348)	(227)
Payments for intangible asset development		(2,135)	(2,037)
Net cash flow from investing activities		(3,483)	(2,264)

Principal elements of lease payments		(1,973)	(2,484)
Repayment of borrowings		-	(13,000)
Proceeds from share issue		1,057	71,706
Cash flow from financing activities		(916)	56,222

Net cash flow for the period		(12,075)	42,002
Cash and cash equivalents at the beginning of the period		93,177	50,387
Effects of exchange rate changes on cash and cash equivalents		(7,635)	(997)
Cash and cash equivalents at the end of the period		73,467	91,392

1. General Information and basis of the preparation of the half year report

Trustpilot Group plc is a public company limited by shares, incorporated on 8 February 2021, domiciled and registered in England & Wales with company number 13184807, and having its registered office at 5th Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG, United Kingdom (the "Company").

The activity of the Company and its subsidiaries (together, the "Group") consists of developing and hosting an online review platform that helps consumers make purchasing decisions and businesses showcase and improve their service. Revenue is generated from selling its software as a service.

This interim financial report for H1 FY22 follows the same accounting policies as the 2021 Annual Report. This interim financial report does not include all of the notes of the type normally included in an annual financial report and should therefore be read in conjunction with the 2021 Annual Report.

These condensed interim financial statements were approved for issue on 12 September 2022.

Basis of preparation

This interim financial report for H1 FY22 has been prepared in accordance with Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and UK-adopted International Accounting Standard 34 'Interim Financial Reporting'. These interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The most recent statutory accounts for the year ended 31 December 2021 for Trustpilot Group plc were dated 22 March 2022, and adopted by the annual general meeting of shareholders on 25 May 2022.

The 2021 Annual Report was filed with the Registrar of Companies. The auditors' report on the accounts in the 2021 Annual Report was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

The condensed financial statements have been prepared on a historical cost basis.

The condensed financial statements have been rounded to the nearest thousand.

The condensed financial statements are presented in US Dollars ("USD").

The financial statements are not materially impacted by seasonality due to revenue recognition amortisation over subscription term. There are no material changes in estimates in the period.

The condensed consolidated interim financial statements were approved by the Board of Directors on 12 September 2022 and have been reviewed and not audited by PricewaterhouseCoopers LLP, the auditors, and its report is set out at the end of this document.

The accounting policies adopted are consistent with these of the previous financial year end corresponding interim review period, except for the estimation of income tax (see Note 8) and the adoption of new and amended standard as set out below.

Going concern

The directors of the Company (the "Directors"), in their detailed consideration of going concern, have reviewed the Group's revenue projections and cash requirements for the 18 months following the date of approval of the financial statements, which they believe are based on prudent interpretations of market data and past experience.

As at 30 June 2022, the Group has a cash balance of $73 million with no debt on the balance sheet. In addition to cash on the balance sheet, the Group has access to a revolving credit facility for up to $30 million, available in multiple currencies. The revolving credit facility is subject to both balance sheet and revenue to plan covenants, both of which are considered in the course of scenario planning.

The Directors have carried out a robust assessment over the going concern period. Multiple scenarios were considered including modelling severe but plausible downside implications tied to specific risks identified in the Principal risks section of Finance Review. These risks were trust degradation and adverse changes in the regulatory landscape.

Having considered the downside scenarios given that the credit facility will remain undrawn and there will be no breaches in covenants, the Directors have a reasonable expectation that the Group has adequate resources to continue to operate for at least 18 months from the date of signing these financial statements. As a result, they continue to adopt the going concern basis in preparing the consolidated financial statements, in accordance with the Companies Act 2006 applicable to companies reporting under IFRS.

Significant events

The significant events for the Group in the interim period were:

• Reported total revenue grew by 18% to $73 million in H1 FY22 (H1 FY21: $62 million).

• During the H1 FY22, the previously reported US litigation claim was successfully defended and the proceedings have now been concluded. A summary of the history of the claim is set out in the Note 11.

• During the H1 FY22 the group has signed three new leases for its offices in New York (total commitment of $16 million over 7 years), Edinburgh (total commitment of $5 million over 13 years) and Melbourne (total commitment of $1 million over 4 years). The New York lease is effective from September 2022 and therefore no right-of-use asset or lease liability is recognised as at 30 June 2022.

Basis of consolidation

The consolidated financial statements include the parent company, Trustpilot Group plc and its subsidiaries. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.

Prior year adjustment to the Consolidated Statement of Changes In Equity at 30 June 2021

We have reassessed the presentation of the reserves following the IPO Restructuring which has led to change to the share capital, share premium, foreign currency translation reserve and merger reserve due to the impact of foreign exchange. There are no differences to overall equity. There are also no differences to the 31 December 2021 audited financial statements.

$ '000	Share capital	Share premium	Foreign currency translation reserve	Merger reserve	Accumulated losses	Total
	(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)	(unaudited)

As previously presented
Exchange difference of share capital and premium	(23)	(5,501)	5,524	-	-	-
Impact of group reconstruction	4,371	(177,082)	-	172,711	-	-
	4,348	(182,583)	5,524	172,711	-	-

As restated
Exchange difference of share capital and premium pre-IPO	(23)	(6,977)	7,000	-	-	-
Impact of group reconstruction	4,345	(171,461)	18,262	148,854	-	-
Exchange difference on items recognised directly in equity post group reconstruction	26	(4,145)	4,119	-	-	-
	4,348	(182,583)	29,381	148,854	-	-

Impact of restatement
Exchange difference of share capital and premium pre-IPO	-	1,476	(1,476)	-	-	-
Impact of group reconstruction	26	(5,621)	(18,262)	23,857	-	-
Exchange difference on items recognised directly in equity post group reconstruction	(26)	4,145	(4,119)	-	-	-
	-	-	(23,857)	23,857	-	-

Change in the presentation of finance income and finance expenses

In line with the statutory accounts for the year ended 31 December 2021, the Group has changed the presentation of finance income and expense in the condensed profit and loss account for the period H1 FY22 and its prior year comparatives. Finance income and finance expenses are disclosed separately in the condensed profit and loss account and further detailed out in notes to the financial statements.

New standards and interpretations

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2022 reporting periods and have not been early adopted by the Group:

• Classification of Liabilities as Current or Non-current -Amendments to IAS 1 (effective from 1 January 2023 - deferred from 1 January 2022 ) - The narrow-scope amendments to IAS 1 Presentation of Financial Statements clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g. the receipt of a waver or a breach of covenant). The amendments also clarify what IAS 1 means when it refers to the 'settlement' of a liability. The amendments could affect the classification of liabilities, particularly for entities that previously considered management's intentions to determine classification and for some liabilities that can be converted into equity. They must be applied retrospectively in accordance with the normal requirements in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

• Definition of Accounting Estimates - Amendments to IAS The amendment to IAS 8 (effective from 1 January 2023) - Accounting Policies, Changes in Accounting Estimates and Errors clarifies how companies should distinguish changes in accounting policies from changes in accounting estimates. The distinction is important, because changes in accounting estimates are applied prospectively to future transactions and other future events, but changes in accounting policies are generally applied retrospectively to past transactions and other past events as well as the current period.

• Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12 (effective from 1 January 2023) - The amendments to IAS 12 Income Taxes require companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities. The amendment should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, entities should recognise deferred tax assets (to the extent that it is probable that they can be utilised) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with:

- right-of-use assets and lease liabilities, and

- decommissioning, restoration and similar liabilities, and the corresponding amounts recognised as part of the cost of the related assets.

The cumulative effect of recognising these adjustments is recognised in retained earnings, or another component of equity, as appropriate. IAS 12 did not previously address how to account for the tax effects of on-balance sheet leases and similar transactions and various approaches were considered acceptable.

These standards are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

Amendments to IAS 16 and IAS 37 became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

Financial instruments

There are no changes in the business or economic circumstances that affect the fair value of the Group's financial assets and liabilities. There are no transfers between levels of the fair value hierarchy used in measuring the fair value of financial instruments. The Group does not hold any level three financial instruments. There are no changes in the classification of financial assets as a result of a change in the purpose or use of those assets.

2. Critical accounting estimates and judgements

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Group's accounting policies.

The judgements and estimates, as well as the related assumptions made, are based on historical experience and other factors that management considers to be reliable, but which by their very nature are associated with uncertainty and unpredictability. These assumptions may prove incomplete or incorrect, and unexpected events or circumstances may arise.

Critical accounting estimates are expectations of the future based on assumptions, that to the extent possible are supported by historical trends or reasonable expectations. The assumptions may change to adapt to the market conditions and changes in economic factors etc. The Group believe that the estimates are the most likely outcome of future events.

The critical judgements and estimates, including the assumptions are consistent, with the exception of changes in estimates that are required in determining the provision for income taxes, with the those described in the year ended 31 December 2021 financial statements and should be read together with the 31 December 2021 published accounts.

3. Alternative performance measures

The Group utilises a range of alternative performance measures ("APMs") to assess its performance and this document contains certain measures that are not defined or recognised under IFRS. The Group considers EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted profit, Adjusted EPS, Underlying unlevered free cash flow and constant currency basis to be APMs that provide meaningful, additional measures of Group performance.

The Group believes these APMs provide alternative measures by which to assess the operating performance of the Group and, together with IFRS measures, are useful in evaluating the Group's operating performance. The APMs used in these Financial Statements should not be considered superior to, or a substitute for, measures calculated in accordance with IFRS.

EBITDA

EBITDA is defined as earnings before interest, tax, depreciation, amortisation. Depreciation and amortisation includes any non-cash impairment charges functioning as accelerated depreciation or amortisation. Trustpilot believes EBITDA is meaningful as a profitability measure before non-cash activity, financing and tax impacts.

$ '000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Operating loss	(10,359)	(15,436)
Depreciation and amortisation	3,767	3,860
EBITDA	(6,592)	(11,576)

Adjusted EBITDA and Adjusted EBITDA margin

The Group measures the overall performance by reference to Adjusted EBITDA which is a non-IFRS measure. The Group believes Adjusted EBITDA is a meaningful representation of core operating profit as it adjusts for certain non-recurring or non-cash items with associated taxes. While some non-cash items such as depreciation, amortisation and share-based compensation are recurring, management finds the exclusion of these costs from Adjusted EBITDA to be meaningful given their non-cash nature, consistent with similar firms within our sector. The following definition of Adjusted EBITDA was also determined based on what management believes provides the best comparability to the same metric provided by similar firms in our sector.

Adjusted EBITDA is defined as EBITDA adjusted to exclude share-based compensation, including associated cash settled social security costs, non-recurring transaction costs such as restructuring costs, which relate to one-time costs associated with a material organisational change such as severance payments.

Adjusted EBITDA margin is defined as adjusted EBITDA (as described above) to a percentage of total revenue.

Adjusted EBITDA

$ '000 other than per cent	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Operating loss	(10,359)	(15,436)
Depreciation and amortisation	3,767	3,860
EBITDA	(6,592)	(11,576)
Non-recurring transaction costs	-	9,830
Restructuring costs	-	-
Share-based compensation, including associated social security costs	1,157	5,515
Adjusted EBITDA	(5,435)	3,769
Adjusted EBITDA margin (per cent)	(7.4)	6.0

Adjusted EBITDA fell from $3,769 thousand in H1 FY21 to $(5,435) thousand in H1 FY22. Adjusted EBITDA margin fell from 6% in H1 FY21 to -7% in H1 FY22. The decline in Adjusted EBITDA and Adjusted EBITDA margin were driven by investments across the Group partially offset by revenue growth. Included in the H1 FY22 share-based payments is a non-cash charge of $2,864 thousand and associated social security credit of $(1,707) thousand.

Non-recurring transaction costs relate to professional and legal fees associated with corporate financing activities, in H1 FY21 this consisted exclusively of IPO-related costs. IPO-related costs consisted primarily of accounting, legal and advisory services that were expensed as the services were provided, largely between the fourth quarter of 2020 and the first quarter of 2021.

Functional distribution of adjustments

H1 FY22	Group	Sales & Marketing	Tech & Content	General & Admin
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Operating loss	(10,359)
Depreciation and amortisation	3,767	-	1,315	2,452
Share-based compensation, including associated social security costs	1,157	-	-	1,157
Adjusted EBITDA	(5,435)

H1 FY21	Group	Sales & Marketing	Tech & Content	General & Admin
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Loss before net financial items	(15,436)
Depreciation and amortisation	3,860	-	1,227	2,633
Non-recurring transaction costs	9,830	-	-	9,830
Share-based compensation, including associated social security costs	5,515	-	-	5,515
Adjusted EBITDA	3,769

Adjusted profit/(loss)

Adjusted profit/(loss) was introduced to enable an adjusted earnings per share (adjusted EPS) figure to be reported. Adjusted profit/(loss) and adjusted EPS serve to illustrate performance without the impact of certain non-recurring or non-cash items with associated taxes. Additional detail for adjusted EPS can be found in note 9.

$ '000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Loss for the period	(9,240)	(17,177)
Non-recurring transaction costs	-	9,830
Share-based compensation	1,157	5,515
Tax impact of above adjustments*	-	(1,868)
Adjusted loss	(8,083)	(3,700)

*Tax impact excludes share-based compensation. The tax rate was 22% in H1-22 and 19% in H1-21.

Adjusted EPS

Adjusted earnings per share (adjusted EPS) was introduced to illustrate earnings per share adjusted for certain non-recurring or non-cash items with associated taxes.

Adjusted basic earnings per share is defined as earnings or losses after taxes adjusted to exclude share-based compensation, including associated social security costs, non-recurring transaction costs related to the one-time IPO preparation costs and restructuring costs, divided by the weighted average number of ordinary shares outstanding for the period.

Adjusted diluted earnings per share is defined as earnings or losses after taxes adjusted to exclude share-based compensation, including associated social security costs, non-recurring transaction costs related to the one-time IPO preparation costs and restructuring costs, divided by the weighted average number of ordinary shares outstanding for the period as well as all potentially convertible securities. The impact of potentially dilutive ordinary shares is excluded when they would be anti-dilutive.

$ '000, except per share	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Ordinary shares	414,426	394,605
Adjusted loss	(8,083)	(3,700)
Adjusted loss per share (cents)*
Basic	(2.0)	(0.9)
Diluted	(2.0)	(0.9)

*Given the Group incurred losses in H1 FY22 and H1 FY21, the impact of potentially dilutive ordinary shares have been excluded as they would otherwise be anti-dilutive in accordance with IAS 33.

Underlying unlevered free cash flow

The Group introduced underlying unlevered free cash flow as a new APM in FY22 to illustrate profitability net of capital expenditures and working capital as these are factors needed to maintain and grow the company. Underlying unlevered free cash flow is operating cash flow, adjusted for non-recurring transaction costs, restructuring costs, interest, tax and foreign exchange gains and losses, principal lease payments and capital expenditure.

$'000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Operating cash flow	(7,676)	(11,956)
Non-recurring transactions ¹	-	12,449
Restructuring costs	-	-
Interest, tax and foreign exchange gains and losses ²	(1,140)	1,506
Principal lease payments	(1,973)	(2,484)
Capital expenditure ³	(3,483)	(2,264)
Underlying unlevered free cash flow	(14,272)	(2,749)

¹ Non-recurring transactions represents cash paid for IPO related costs in H1 FY21

² Interest,tax and foreign exchange gains and losses consists of interest received, interest paid, income taxes paid and foreign exchange rate gains and losses

³ Capital expenditure includes consists of purchase of property, plant and equipment and payments for intangible asset development

4. Operating segments

For management purposes and based on internal reporting information, the Group is organised in only one operating segment, as the information reported includes operating results at a consolidated group-level only. The costs related to the main nature of the business, being the Group´s online review platform which serves the Group customers, are not attributable to any specific revenue stream or customer type and are therefore borne centrally. The results of the single reporting segment, comprising the entire Group, are shown in the consolidated statement of comprehensive income. These reflect a single business segment for the sale of company subscription plans, generally for a period of 12 months, where the invoicing varies from monthly to yearly.

The Executive Leadership Team is the Chief Operating Decision Maker ("CODM"), which is made up of the senior leadership across the respective functional areas, responsible for the strategic decision making and for the monitoring of the operating results of the single operating segment for the purpose of performance assessment.

Whilst Group operations are distributed globally with a large presence in Denmark and shares are listed on the London Stock Exchange, the UK and North America are the Group's primary markets where revenue generated consists of approximately 41% and 23% (H1 FY20: UK: approx. 40% and North America: approx. 24%), respectively. Other geographical locations besides the UK and North America are defined as 'Rest of the world' where no individual country exceeded more than 6% of the consolidated revenue in H1 FY21 (H1 FY20: 7%).

Trustpilot has customers in many regions around the world but is organised globally from an operation perspective. For this reason, while operating assets may be recorded in Denmark for example, they will be supporting customers around the world. Therefore, a single operating segment is reported with revenue disclosed by region based on the location of the customer. Non-current operating assets are similarly based on geographic location. The measurement of liabilities by geographic location is not included in this disclosure as this information is not regularly reviewed by the CODM for decision making purposes.

The following table displays external revenue (based on customer location) and non-current operating assets by geographic area:

$ '000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Revenue
UK	29,890	25,137
North America	16,609	14,692
Rest of the world	26,911	22,619
Total revenue	73,410	62,448
Non-current operating assets
UK	14,257	14,551
North America	797	2,405
Rest of the world	9,262	7,839
Total	24,316	24,795

Non-current assets consist of intangible assets, property, plant and equipment, right-of-use assets and deposits.

5. Share-based payment plans

The Group currently operates three share schemes: Employee Warrants, Long Term Incentive Plan and Restricted Share Plan.

For the six months ended 30 June 2022, the Group has recognised the following warrant expense in the condensed consolidated statement of profit or loss.

Expense by equity plan type

	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
	$ '000	$ '000

Warrants	1,442	3,423
Restricted Share Plan	1,065	37
Long Term Incentive Plan	357	136
	2,864	3,596
Deferred tax	(81)	(11)
	2,783	3,585

Employee Warrants

The fair value at grant date is determined using a Black-Scholes model that takes into account the share price at grant date, the exercise price, the risk free interest rate for the term of the warrants, the expected volatility and the term of the warrant (the expected maturity).

Prior to the admission of the Company's entire issued ordinary share capital to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange's main market for listed securities on 26 March 2021 ("Admission"), Trustpilot A/S (the former parent company of the corporate group) operated a long-term incentive warrant program under which warrants in Trustpilot A/S were granted at market value, free of charge. Each warrant conferred a right to subscribe for 1 common share in Trustpilot A/S. The warrants were granted to two categories of recipients: (i) to employees of varying seniority throughout the Group; and (ii) to selected senior employees of the Group and certain board members of Trustpilot A/S.

In connection with the IPO, Trustpilot A/S restructured its warrant program. On 26 March 2021, all outstanding warrants in Trustpilot A/S (as of 26 March 2021: 818,784) were cancelled and replaced by new warrants in the Company in the proportion 1 to 78.

Movements in the number of share options outstanding and their related weighted average exercise

prices in the six-month period ended 30 June 2022 are as follow:

Total movement in Employee Warrants

	H1 FY22		H1 FY21
	Number of warrants	Weighted avg exercise price	Number of warrants	Weighted avg exercise price
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
	# '000	$ '000	# '000	$ '000

Opening Balance	35,041	0.78	60,013	0.36
Granted	-	-	6,603	1.35
Exercised / Released	(1,665)	0.62	(23,276)	0.25
Forfeited	(1,186)	0.98	(2,680)	0.79
Closing Balance	32,190	0.69	40,660	0.56
Number of warrants exercisable at 30 June 2022	15,285	0.49	15,215	0.43
Weighted average remaining contractual life as at 30 June 2022	6.59 years		7.35 years

Employee warrants contributed $1,442 thousand to the share-based compensation expense in the H1 FY22 (H1 FY21 $3,423 thousand).

Long Term Incentive Plan

A Long Term Incentive Plan ("LTIP") ensures the alignment of incentives for management and the performance of the Group. Incentives are established across three complementary measures of shareholder return performance, revenue growth and trust to ensure balanced priorities for management for the long term advancement of the Group.

In H1 FY22, conditional awards over 2,366,146 (H1 FY21 1,215,246) ordinary shares in the Company were granted to management under the LTIP.

The LTIP is administered at the discretion of the remuneration committee of the Board (the "Remuneration Committee") and no individual has a contractual right to participate. The LTIP awards granted in H1 FY22 will ordinarily vest on 5 April 2025 (except from one grant which will vest on 20 June 2025), subject in each case to the award recipient's continued service and the Remuneration Committee's assessment of the extent to which the award's performance measures are satisfied. Settlement of any vested portion of the awards is expected to be satisfied by the issue of new ordinary shares in the Company upon the vesting date.

Executive directors of the Company are subject to a two year post-vesting holding period for the shares they receive (net of shares equal to any tax liability and nominal cost of acquisition). Targets for each of the three performance measures are set with a lower bound and upper bound. If performance falls below the lower bound there will be no vesting. If performance meets or exceeds the upper bound it will result in 100% vesting. Performance between the lower and upper bounds will result in vesting between 25% and 100% on a straight-line basis, as further detailed below.

Total shareholder return ("TSR") performance measure

The vesting of 55% (the "TSR Part") of the LTIP awards granted in H1 FY22 is subject to the Group's TSR performance over a three year period that commenced on 5 April 2022 relative to the TSR performance over the same period of the constituents of the FTSE 250 Index (excluding investment trusts and the Group) as at 5 April 2022. 25% of the TSR Part will vest for median ranking performance, rising on a straight-line basis up to 100% vesting of the TSR Part for upper quartile ranking (or better) relative TSR performance.

Annual recurring revenue ("ARR") performance measure

The vesting of 25% (the "ARR Part") of the LTIP awards granted in H1 FY22 is subject to the compound annual growth rate ("CAGR") in the Group's ARR over the period 1 January 2022 to 31 December 2024. 25% of the ARR Part will vest for CAGR in ARR over the measurement period of 20%, rising on a straight-line basis up to 100% vesting of the ARR Part for CAGR in ARR over the measurement period of 30% (or better).

Trust performance measure

The vesting of 20% (the "Trust Measure Part") of the LTIP awards granted in H1 FY22 is subject to targets set for the average of Trustpilot's own TrustScores (i.e. the star ratings of reviews gathered for Trustpilot on the Trustpilot platform) taken at the end of 2022, 2023 and 2024 respectively. The TrustScore Part target will be stepped between an average TrustScore of 3.5 and 3.75 (at which point 50% of the TrustScore Part will vest), rising on a straight-line basis up to 100% vesting for an average TrustScore of 4.2 (or better).

As an additional condition, no part of such LTIP awards will vest unless the Remuneration Committee is satisfied as to overall Group performance over the period until vesting - and, as required by the UK Corporate Governance Code, the Remuneration Committee will retain a power to moderate the vesting levels from awards if this is appropriate in all of the circumstances, including consideration of shareholder experience.

Settlement of vested awards is expected to be satisfied by the issue of new ordinary shares in the Group. LTIP awards contributed $357 thousand to the share-based compensation expense in the H1 FY22 financials (H1 FY21 $ 136 thousand). Targets and fair value treatment are summarised as follows:

Measure	Fair Value Method	Weighted Avg Fair Value	Lower Bound	Upper Bound
TSR	Stochastic Model	0.98	Equal to Median	Upper Quartile or Greater
ARR	Black-Scholes	1.65	CAGR of 20%	CAGR of 30% or Greater
Trust	Black-Scholes	1.68	Average Trust Measure of 3.5	Average Trust Measure of 4.2 or Greater

Fair Value Factors	Input April 22 grant		Additional Chaffe April 22 Input (Executive Director)		Input June 22 grant
Closing share price on date of grant (pence)	148.30		N/A		99.40
Price (pence)	1.00		148.30		1.00
Expected term	3.00 yrs		+2.00 yrs holding period		3.00 yrs
Risk-free interest rate	1.56	%	1.54	%	2.45	%
Expected dividend yield	-	%	-	%	-	%
Expected volatility	34.53	%	35.43	%	35.09	%

Note: Chaffe model used to fair value the impact of the two year holding period for Executive Directors

Total movement in LTIP	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
	# '000	# '000
Opening Balance	1,101	-
Granted	2,366	1,215
Exercised / Released	-	-
Forfeited	-	(114)
Closing Balance	3,467	1,101
Number of LTIP exercisable at 30 June 2022	-	-

Restricted Share Plan

The Restricted Share Plan ("RSP") is offered to selected employees and aligns the interest of award recipients with shareholders and serves to help retain employees over the vesting periods. Vesting periods are subject to the condition of continued service only rather than performance measures.

In H1 FY22, conditional awards over 3,912,532 (H1 FY21 209,422) ordinary shares in the Company were issued to employees under the RSP. Vesting typically takes place over a three year period with settlement of each vested portion of the awards expected to be satisfied by the issue of new ordinary shares in the Company upon the vesting date.

The RSP is administered at the discretion of the Remuneration Committee and no individual has a contractual right to participate. The cost of acquisition of the awards when vested is 1 pence per each share, equal to the nominal share value, and the fair value is determined using a Black-Scholes model. RSP awards contributed $1,065 thousand to the share-based compensation expense in the H1 FY22 financials (H1 FY21 $ 37 thousand).

Fair Value Factors	April 2022 Grant		June 2022 Grant
	(unaudited)		(unaudited)
Closing share price on date of grant (pence)	110.60		99.40
Price (pence)	1.00		1.00
Weighted average contractual life	2.93		2.78
Risk-free interest rate	1.56	%	2.45	%
Expected dividend yield	-	%	-	%
Expected volatility	34.53	%	35.09	%

Total movement in RSP

	H1 22	H1 21
	(unaudited)	(unaudited)
	# '000	# '000

Opening Balance	814	-
Granted	3,913	209
Exercised / Released	(76)	-
Forfeited	(106)	-
Closing Balance	4,545	209
Number of RSU exercisable at 30 June 2022	-	-

6. Finance income

$ '000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Foreign exchange rate gains	5,265	4,870
Interest income	7	4
	5,272	4,874

7. Finance expenses

$ '000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Foreign exchange rate losses	(3,368)	(5,175)
Financing costs	(65)	(11)
Interest expense	(255)	(1,072)
Lease interest expense	(403)	(436)
	(4,091)	(6,694)

8. Income tax

$ '000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Current tax	(86)	(424)
Current tax - prior year adjustment	-	351
Deferred tax	205	(6)
Deferred tax - prior year adjustment	(57)	-
Total tax charge/(credit)	62	(79)

Current tax charge / (credit)	-	-
Deferred tax charge / (credit) - equity	(81)	(11)
Total tax charge / (credit) - equity	(81)	(11)

Income tax disclosure

In line with the requirements of IAS 12, the deferred tax assets and liabilities are offset as they have a legal right to set off and relate to income tax with the same taxation authority.

Income tax expense is recognised at interim based on management's estimate of the effective annual income tax rate expected for the full financial year.

The estimated average annual tax rate for 2022 is 1%, compared to the average annual tax rate for 2021 of 2%.

9. Earnings per share

"(EPS)" for the Group is calculated in accordance with IAS 33. The following types of EPS are reported:

(i) - Basic earnings per share

Group earnings or losses after taxes, divided by the weighted average number of ordinary shares outstanding for the period.

(ii) - Diluted earnings per share

Group earnings or losses after taxes, divided by the weighted average number of ordinary shares outstanding for the period as well as all potentially convertible securities. The impact of potentially dilutive ordinary shares is excluded when they would be anti-dilutive.

	H1 FY22	H1 FY21¹
	(unaudited)	(unaudited)
Weighted average number of shares (000s):
Ordinary shares	414,426	394,605

¹ As part of the IPO Restructuring, all outstanding common and preference shares in Trustpilot A/S were exchanged in the proportion 1 to 78 for ordinary shares in the Company. In accordance with IAS 33, the pre-IPO share count has been recalculated using a multiplier of 78 to illustrate comparable total share count.

In addition to the ordinary shares above, Trustpilot Group plc had potential shares outstanding that would be dilutive if the Group generated positive income for the period. As of 30 June 2022, total potential shares was 19,574 thousand, of which 11,563 thousand relate to employee warrants and 8,012 thousand relate to restricted shares. As of 30 June 2022, vested potential shares amounted to 9,265 thousand employee warrants and zero restricted stock units.

$ '000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Loss for the period	(9,240)	(17,177)
Adjusted loss²	(8,083)	(3,700)
Loss per share (cents)³
Basic	(2.2)	(4.4)
Diluted	(2.2)	(4.4)
Adjusted loss per share (cents)^{2 3}
Basic	(2.0)	(0.9)
Diluted	(2.0)	(0.9)

² Alternative performance measures (APM) - further detail available in Note 3.

³ Given the Group incurred losses in H1 FY22 and H1 FY21, the impact of potentially dilutive ordinary shares have been excluded as they would otherwise be anti-dilutive in accordance with IAS 33.

10. Share capital

	30 June 2022		31 December 2021
Shares issued and fully paid:	Number of shares	Nominal value ($ '000)	Number of shares	Nominal value ($ '000)
	(unaudited)	(unaudited)
Common-shares	415,488,584	5,029	413,747,356	5,576
Total shares issued	415,488,584	5,029	413,747,356	5,576

The share capital of the Company as of 30 June 2022 consists of a single class of ordinary shares, each share having a nominal value of GBP 0.01. The ordinary shares carry no right to fixed income. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

	Number of Shares	Share Capital	Share Premium
		Nominal value ($ '000)	Nominal value ($ '000)
	(unaudited)	(unaudited)	(unaudited)
Changes in share capital
Opening balance at 01 January 2022	413,747,356	5,576	70,994
Employee share scheme issues ⁽¹⁾	1,741,228	22	1,079
Contribution of equity - Transaction cost	-	-	(53)
Exchange difference on items recognised directly in equity	-	(569)	(7,312)
Ending Balance 30 June 2022	415,488,584	5,029	64,708

⁽¹⁾ From 01 January 2022 to 30 June 2022 (inclusive), 1,741,228 ordinary shares were issued in the Company to satisfy the exercise of warrants and vesting of restricted stock units in the Company, resulting in a share capital increase by $22 thousand and share premium increase of $1,079 thousand. Further detail related to these schemes is disclosed in note 5.

11. Contingent liabilities

Subsidiaries of the Group are parties to various litigation claims from time to time. The outcome of claims pending are not expected to constitute risk for economic outflow of material importance to the Group's financial position. As previously reported in our financial statements for the year ended 2021, two of the Group's subsidiaries were parties to a litigation claim in New York. However, the claim was successfully defended and the proceedings have now concluded. A summary of the history of the claim is set out below.

In January 2021, a complaint was filed in the United States District Court for the Southern District of New York against Trustpilot Inc. and Trustpilot A/S (the plaintiffs later dropped the claim against Trustpilot A/S). The plaintiffs alleged that Trustpilot designed its email systems so that a reminder email about renewal of Trustpilot subscriptions would be sent from a trustpilot.net email address and go directly to the recipient's junk email folder and that, as a result, Trustpilot customers paid for Trustpilot subscriptions that they would not have renewed had they received the reminder email.

The claim was dismissed in its entirety by the court on 29 June 2021. On 14 July, the plaintiffs filed a 'motion to reconsider' the dismissal of the case. Trustpilot filed its opposition to this 'motion to reconsider' on 28 July 2021. On 14 October 2021, the plaintiffs' 'motion to reconsider' was denied. The plaintiffs filed a notice of appeal on 15 November 2021 and the case was transmitted to the Second Circuit Court of Appeals. The appeal was heard in New York on 16 May 2022 and, on 13 June 2022, the court dismissed the appeal and released its ruling. The plaintiffs had 14 days to request an en banc review of the ruling, but declined to do so. Therefore, the proceedings have now concluded without any material adverse effect on Trustpilot's results of operations and cash flows.

12. Related parties

During the H1 FY22, there were no material transactions with related parties.

In the comparative period, H1 FY21, there were the following transactions with related parties:

(a) On 16 February 2021, 50,000 redeemable preference shares of £1 nominal value each in the Company were issued to Peter Mühlmann Holding ApS (the incorporating shareholder of the Company) for the purposes of the Company having sufficient capital to obtain a trading certificate. Pursuant to a resolution by the board of directors of the Company on 22 March 2021, the shares were redeemed and cancelled on 14 April 2021 by the repayment to Peter Mühlmann Holding ApS of £50,000.

(b) On 26 March 2021, in connection with the IPO, a restructuring of the corporate structure of the Group was completed immediately prior to Admission (the "IPO Restructuring"). The IPO Restructuring included: (i) a horizontal merger of Trustpilot A/S and Trustpilot Galaxy A/S (with Trustpilot A/S as the continuing company), (ii) a share for share exchange whereby each shareholder in Trustpilot A/S exchanged their shares for newly issued ordinary shares in the Company (resulting in Trustpilot A/S becoming wholly owned by the Company, and the Company becoming the parent company of the Group); and (iii) the replacement of warrants in Trustpilot A/S by warrants in the Company (and consequent cancellation of warrants in Trustpilot A/S).

13. Cash flow specifications

$ '000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Adjustments to operating cash flows
Income tax	62	(79)
Amortisation and impairment of intangible assets	1,381	1,131
Depreciation of tangible assets and right-of-use assets	2,386	2,729
Finance income / (expense)	(1,181)	1,918
Share-based compensation	2,864	3,585
	5,512	9,284

$ ´000	H1 FY22	H1 FY21
	(unaudited)	(unaudited)
Changes to net working capital
Increase in trade receivables	(821)	(18)
Increase in other assets	(733)	(1,158)
Increase in prepayments	(583)	(163)
Increase/(decrease) in trade payables	1,055	(58)
Decrease in other liabilities	(6,134)	(4,763)
Increase in contract liabilities	4,025	3,298
	(3,191)	(2,862)

Statement of Directors' responsibilities

Each of the directors of Trustpilot Group plc confirms to the best of his or her knowledge that:

a. the condensed consolidated interim financial statements have been prepared in accordance with UK-adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority; and

b. the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority, namely:

i. an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed consolidated interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and

ii. disclosure of related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the 2021 Annual Report that could do so.

The maintenance and integrity of Trustpilot Group Plc website (investors.trustpilot.com) is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that might have occurred to the interim financial statements since they were initially presented on the website.

The directors of Trustpilot Group Plc are listed in the 2021 Annual Report and there have been no changes in the list of directors for the reporting period. A list of current directors is maintained on the Trustpilot Group Plc website: investors.trustpilot.com.

By order of the board of directors of Trustpilot Group plc

Hanno Damm

Chief Financial Officer

12 September 2022

Independent review report to Trustpilot Group plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed Trustpilot Group plc's condensed consolidated interim financial statements (the "interim financial statements") in the Half Year Report 2022 of Trustpilot Group plc for the 6 month period ended 30 June 2022 (the "period").

Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

The interim financial statements comprise:

• the Condensed consolidated balance sheet as at 30 June 2022;

• the Condensed consolidated statement of profit or loss and Condensed consolidated statement of comprehensive income for the period then ended;

• the Condensed consolidated cash flow statement for the period then ended;

• the Condensed consolidated statement of changes in equity for the period then ended; and

• the explanatory notes to the interim financial statements.

The interim financial statements included in the Half Year Report 2022 of Trustpilot Group plc have been prepared in accordance with UK adopted International Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Basis for conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the Half Year Report 2022 and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed. This conclusion is based on the review procedures performed in accordance with this ISRE. However, future events or conditions may cause the group to cease to continue as a going concern.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The Half Year Report 2022, including the interim financial statements, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the Half Year Report 2022 in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. In preparing the Half Year Report 2022, including the interim financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Our responsibility is to express a conclusion on the interim financial statements in the Half Year Report 2022 based on our review. Our conclusion, including our Conclusions relating to going concern, is based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion paragraph of this report. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

PricewaterhouseCoopers LLP

Chartered Accountants

East Midlands

12 September 2022

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