ASX-listed Enero forecasts a revenue decline of 30% to 50% for Hotwire's performance marketing unit, ROI, as technology clients increasingly use AI to do work the agency used to be paid for.
The warning came in a briefing to analysts on Enero's full year earnings.
CEO Ian Ball described Hotwire as "a business in transition," with net revenue down 19% to $63.3 million for the year to June.
"What we're seeing in the ROI business is that that serves core technology players, and as AI enters the market, those players are adopting AI to do more of the work that historically the ROI agency would have done," Ball said.
The shift is forcing Hotwire to deliver services at lower cost
To simplify its operating model, Enero is folding ROI more tightly into Hotwire rather than running it as a standalone unit.
"We're expecting a revenue reduction of around 30% to 50% for FY27," Ball said.
"We will be taking the capabilities that they have and integrating them more closely into Hotwire to deliver an operation that has a materially lower cost base, that has a simpler operating model, that's more tightly integrated with Hotwire, and as a result minimises the impact of that what we expect to see as a continued revenue decline in that business."
Group-wide, Enero has planned for FY27 revenue 5% to 15% below the June 2026 half year run rate.
Hotwire's core US business, the network's largest unit, stabilised over the past six months, while Central Europe continued to underperform.
The agency appointed Grant Toups as global chief executive in January, and Enero is in the final stages of appointing a new leader for the US business along in key European markets.
Ball said the same AI disruption reshaping ROI's client base was also opening opportunities elsewhere in Hotwire, with the agency expanding beyond its traditional core technology focus into adjacent sectors such as fintech and consumer tech.
"As AI pervades the market, being a tech-focused PR, comms, and performance marketing business, we are addressing a much bigger market going forward," Ball said.
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