dotdigital Group plc (AIM: DOTD), the leading ‘SaaS’ provider of an omnichannel marketing automation and customer engagement platform, announces a trading update ahead of the Company’s half year results for the six months ended 31 December 2019 (“H1 2020”).
The trading performance reported in this statement is based on unaudited management accounts. The Group is pleased to report a strong first half performance driven by continued execution of the organic growth strategy, namely ongoing product innovation, geographic expansion and growth through strategic partnerships.
· Organic revenue from Continuing Operations up by c.15% to £23.1m (H1 2019: £20.1m) driven predominantly by strong direct sales to new and existing customers
· R&D continues to underpin dotdigital’s growth strategy with recurring revenues from enhanced product functionality growing by 32% to £7.4m from £5.7m in the comparative period
· Adjusted EBITDA1 and adjusted profit before tax from Continuing Operations expected to be in line with market expectations
· Operating profit from Discontinued Operations2 at breakeven post completion of restructure;
· ARPU3 up by 14% to £999 per month (H1 2019: £876 per month) driven by an increase in existing client spend and new customers taking a wider array of modules and channels
· Cash balance at 31 December 2019 of £22.5m (H1 2019: £16.6m)
· Enhanced AI capabilities in period:
· Launch of Commerce Intelligence, targeted to the needs of commerce customers including machine learning based Commerce Personas and Persona movement reporting
· Further enhancements to AI powered product recommendations capabilities
· Improved end user experience interface with new online landing pages and forms feature, including easy access to our product recommendations and consent management capabilities, driving better return on investments for our customers
· Further channel functionality added to Engagement Cloud, including a new chat solution and additional SMS capabilities
· International sales represented 34% of total sales (excluding Discontinued Operations), up from 30% in the comparative period in line with our vision to increase geographic diversification
· Organic international revenue up by 33% to £7.9m (H1 2019: £6.0m)
· EMEA region continued double digit growth, at approximately 11%
· US revenue grew organically c.18% to $5.1m, (H1 2019: $4.3m) driven by acquisition of higher value customers and growth of existing customers
· APAC sales, channel team expansion and Asia presence drove revenue from the region, which grew organically c.51% to AUS$2.5m, (H1 2019: AUS$1.6m) following investment in the region in the prior year
· We continue to build pipeline and enhance our value proposition for our connectors into both ecommerce platforms and CRM (Customer Resource Management) software
· Sales through connectors into our strategic partners increased 4% to £10.7m (H1 2019: £10.3m), impacted by ramp up times of new staff. However, Magento connector revenues grew 16% in the reported period
· Magento/Adobe relationship continues to go from strength to strength with Engagement Cloud live chat now bundled into the core code base of Adobe Experience Manager and therefore available with all Magento downloads
· Our move into omnichannel through acquisition enabled this increased integration
· Continued investment in new hires in all regions with increased focus on building strategic partnerships
Notice of Half Year results
dotdigital Group plc will announce its Half Year results for the period ended 31 December 2019 on 25 February 2020.
Milan Patel, CEO of dotdigital, commented: “The first half was a period of strong trading for dotdigital, with the continued execution of our organic growth strategy – centred around technology innovation, geographic expansion and strategic partnerships – delivering positive results. We saw good growth in our international markets, in particular APAC following the investments made in the region last year, and pleasing success monetising new product functionality as customers deepened and expanded their engagement with our platform, adding to our recurring revenues.
Looking forwards, the market opportunity remains substantial, with a growing number of brands recognising the critical value of harnessing customer data and insights to create personalised, omnichannel marketing campaigns. Against this backdrop, and with a robust strategy and business model, powerful technology platform and highly talented team in place, we find ourselves in our strongest position to date, and are confident of continuing to build on the momentum in the business as we move into the second half.”