Trainline H1 Earnings Call Highlights

Key Points

• Profitability improved despite soft sales: First-half net ticket sales were £3.3 billion and revenue fell 1% to £233 million, but adjusted EBITDA rose 7% to £100 million and adjusted EPS increased 10% to 13.8 pence. Trainline reiterated full-year guidance.
• Trading conditions diverged by market: U.K. Consumer net ticket sales grew 0.4%, while international sales fell 4% amid weaker travel demand and disruptions. International Consumer nevertheless moved from an £8 million EBITDA loss to a £6 million profit.
• Regulation and capital returns remain in focus: Trainline is seeking stronger safeguards in the proposed GBR retail code and continues to engage with regulators over booking-fee presentation. It also launched a £100 million share repurchase program, expected to run through next September.

Trainline LON: TRN reported a resilient first-half performance for fiscal 2027, with adjusted EBITDA and earnings per share rising despite broadly flat net ticket sales, softer international travel conditions and continued regulatory uncertainty in the U.K.

Chief Executive Officer Ian Brown, who joined the company less than two months ago, said his initial review had reinforced his view of Trainline’s underlying strengths. He cited the company’s scale, with 27 million customers and almost 2 million daily app users, as well as its rail technology platform, carrier integrations and data assets.

“The underlying strengths… showed in the first half, with the business delivering a robust performance despite multiple headwinds,” Brown said.

Profit Growth Despite Revenue Pressure

Chief Financial Officer Pete Wood said group net ticket sales totaled £3.3 billion in the first half, while revenue declined 1% to £233 million. The revenue decline largely reflected a lower U.K. revenue take rate after an industry refund-policy change reduced refund transactions and associated refund-fee revenue.

Gross profit increased 1% to £195 million, supported by lower payment-processing settlement rates following renegotiations with payment providers. The company also reduced customer-service costs through the use of WhatsApp and voice AI for customer contacts.

• Adjusted EBITDA rose 7% to £100 million.
• Adjusted earnings per share increased 10% to 13.8 pence.
• Total operating expenses and capital expenditures fell 5% year over year.
• Adjusted free cash flow was £45 million, while leverage stood at 1.2 times at the half-year end.

International Consumer moved from an EBITDA loss of £8 million in the prior-year period to a £6 million profit. Wood said all of Trainline’s international markets were profitable during the half on a post-transaction-fee basis.

The company reiterated its full-year guidance, including net ticket sales of between £6.2 billion and £6.45 billion, underlying revenue of £440 million to £455 million, and EBITDA of about 2.9% of net ticket sales. International Consumer is expected to be approximately break-even for the full year.

U.K. Demand Offset by Industry Headwinds

U.K. Consumer net ticket sales increased 0.4% to £2.1 billion. Wood said the result reflected underlying rail demand and fewer refunds, but was affected by train operators favoring their own retail channels, the expansion of Project Oval and disruption from hot summer weather and rail-network issues.

Trainline continued to invest in its U.K. customer proposition, particularly digital Railcards. The number of customers holding a digital Railcard in the Trainline app rose 26% year over year to more than 3 million. The company said it holds more than one-third of the Railcard market and that Railcard holders transact more than four times as frequently as non-holders.

Trainline also introduced Trainline Flex, combining an Advance ticket with insurance allowing customers to cancel for any reason. Insurance and advertising contributed to a 22% increase in U.K. ancillary revenue.

Wood cautioned that pressure on U.K. rail pricing could persist. The U.K. government has not yet clarified whether regulated fares will rise next year, but Wood said Trainline’s planning assumption is that there will continue to be pressure on fares, whether through a formal freeze or other reforms.

International Strategy Focuses on Profitability Ahead of Competition

International net ticket sales declined 4% to £579 million. The business faced softer foreign travel amid geopolitical tensions in the Middle East, weaker consumer sentiment in Spain following rail accidents, and heat- and strike-related network disruption during the summer.

Trainline also reduced marketing spending as it balanced growth and profitability ahead of future rail-market liberalization. Wood said the larger reduction in international marketing had already occurred and that future changes would likely be more incremental.

In Southeast France, net ticket sales increased at a double-digit rate, sustaining momentum after Trenitalia expanded in the market. Trainline said French Railcard sales rose more than 70% year over year, while international ancillary revenue from insurance and hotels helped raise the international take rate by more than 30 basis points.

The company expects new competition to create future aggregation opportunities. SNCF is expected to launch services in Italy from mid-2028, while Velvet is targeting a summer 2028 launch in France. Trainline estimates that the relevant European markets represent a £12 billion total addressable market by 2030.

However, Wood said Spain is currently experiencing “significant negative growth” following recent rail incidents and earlier accidents. He said the company expects near-term weakness but does not view the country’s high-speed rail market as permanently negative.

GBR Safeguards and CMA Investigation Remain Key Issues

Brown said Trainline views the Office of Rail and Road’s draft Retail Code of Practice as a positive step because it establishes a regulatory framework for Great British Railways’ dealings with retail-market participants. The draft code calls for fair, transparent and non-discriminatory access to fares, products, systems and data.

Trainline is seeking stronger safeguards, including economic transparency and mechanisms to ensure equivalent treatment between GBR’s online retail operations and independent retailers. Brown said the company also wants the ORR to have early visibility of funding for GBR’s retail activities and the ability to act before market harm occurs.

Separately, Wood said Trainline continues to engage with the Competition and Markets Authority and the ORR over the presentation of booking fees. He emphasized that the CMA investigation concerns how fees are displayed rather than whether Trainline can charge them. The company expects the investigation to conclude by January, although Wood noted that the process remains ongoing and outcomes could range from zero impact to a different amount than its current provision.

Trainline announced a new £100 million share repurchase program in September. Wood said the company expects to complete the program over the period through next September, subject to normal factors including cash availability, working-capital movements and closed periods.

About Trainline (LON:TRN)

Trainline's ambition is to bring together rail, coach and other travel services into one simple mobile experience so travellers can easily find the best prices for their journey and access smart, real-time travel information on the go. By making rail and coach travel easier, our aim is to encourage people all over the world to make more environmentally sustainable travel choices. As most rail and coach tickets continue to be sold offline at the station, and as customers and governments commit to more environmentally friendly modes of travel, we see significant growth opportunities for Trainline over the long term.

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