REG - dotDigital Group plc - Acquisition of Social Snowball and Trading Update

dotDigitalAnnouncement

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RNS Number : 4605O  dotDigital Group plc  26 June 2025

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26 June 2025

 

Dotdigital Group plc

("Dotdigital" or the "Group")

 

Acquisition of Social Snowball and Trading Update

 

Influencer, affiliate and referral marketing platform strengthens Dotdigital's
all-in-one offering

 

Dotdigital Group plc (AIM: DOTD), the leading SaaS provider of an all-in-one
customer experience and data platform (CXDP), is pleased to announce the
acquisition of Social Snowball Holdings, Inc. ("Social Snowball"), a US-based
influencer, affiliate and referral marketing platform for e-commerce brands
("the Acquisition").

 

The Company today also provides an update on current trading and outlook.

 

Acquisition Highlights

 

 ·         Adds complementary capability to Dotdigital in the fast-growing influencer,
           affiliate and referral marketing segments.
 ·         Social Snowball is available through Shopify with over 1,500 active
           subscription-based customers, including G Fuel, Blume and True Classic,
           strengthening Dotdigital's Shopify channel partner foothold.

 ·         Extends capability of Dotdigital's all-in-one CXDP platform, strengthening the
           Group's competitive positioning and increasing its total addressable market
           ("TAM").

 ·         Provides Dotdigital with an enhanced value proposition to enable Average
           Revenue Per Customer ("ARPC") expansion through cross-sell and up-sell
           opportunities.

 ·         Expected to be immediately earnings enhancing, with a complementary SaaS
           business model and an equivalent margin profile to the existing Group.
 ·         The total consideration for the Acquisition is up to USD $35m, comprising an
           initial cash payment of USD $20m and an earnout, dependent on performance, of
           up to USD $15m.

 

Social Snowball and the Influencer, Affiliate and Referral Market

 

Based in Miami, Florida, Social Snowball (www.socialsnowball.io
(http://www.socialsnowball.io/) ) is a platform that helps e-commerce
businesses grow by turning prospects, customers, influencers and affiliates
into brand advocates - people who promote products in exchange for commission
or rewards. Advocates are each given a unique, trackable link or code to share
with their audience. When someone makes a purchase using that link or code,
the advocate earns a commission or other reward, creating a trusted,
performance-based marketing channel for the brand.(1)

 

Social Snowball helps businesses increase revenues and expand their reach,
build trust and drive measurable results, all without significant upfront
marketing spend. Social Snowball automates the entire process, from onboarding
through to tracking and payout from a single dashboard. A key competitive
advantage of Social Snowball is it has been built from the ground up with
analytics at its core, enabling brands to measure and track when influencer,
affiliate and referral activity converts to revenue, allowing clear ROI
visibility beyond just clicks and views. Social Snowball was founded in 2020
by Noah Tucker who will remain with Dotdigital and continue to lead Social
Snowball from its base in the US.

 

As social media and e-commerce continue to dominate consumer behaviour, this
channel is becoming an increasingly core part of the modern marketing mix,
with over 63% of brands planning partnerships with influencers in 2025 and
over 25% of companies allocating more than 40% of their marketing budgets to
influencer marketing(2).

 

For the financial year ended 31 December 2024 ("FY24"), Social Snowball
reported a 200% increase in revenue to USD $3m, with run rate revenues greater
than USD $5m at the time of Acquisition. In FY24 the company reported a loss
before tax of USD $0.4m and has grown to be cash flow positive during the
first half of 2025. The company had net assets of USD $0.3m in April 2025 and
has no debt upon Acquisition. All figures are unaudited.

 

Acquisition Rationale

 

The Acquisition is expected to be immediately earnings enhancing, providing a
highly complementary addition to the Group's CXDP platform. Social Snowball
strengthens Dotdigital's cross-channel marketing automation capabilities and
creates a unique value proposition as the first company to bring these
capabilities together. It also expands the Group's reach into the fast-growing
influencer, affiliate and referral market, with affiliate marketing software
projected to grow to an estimated USD $5.77 billion by 2032, a compound annual
growth rate (CAGR) of 18.2%(3), driven by growth in the wider global
influencer market and the shift toward performance-based marketing.

 

The combined offering is expected to create new high-margin, recurring revenue
by opening up additional customer acquisition opportunities as well as through
cross-selling of add-on, highly relevant functionality across the enlarged
base, driving greater retention and increased revenue per customer. In
addition, Social Snowball's integration with Shopify is expected to strengthen
Dotdigital's foothold in the e-commerce platform's ecosystem, further
diversifying the Group's partner channel and supporting its expansion among
e-commerce merchants, which represented 30% of Group revenue in H1 FY25.

 

Consideration

 

The total consideration for the acquisition is up to USD $35m, comprising an
initial cash payment of USD $20m and up to USD $15m in contingent cash
consideration over two years, payable if Social Snowball maintains its
historical growth rate at sufficiently accretive margins for the Group. Should
performance targets be achieved, resulting in the maximum total consideration
being paid, the revenue multiple will equate to less than two times run rate
revenues. The initial cash payment and contingent consideration will be funded
through the Group's existing cash reserves.

 

Current Trading & Outlook

 

The Board remains focussed on driving high margin, high quality recurring SaaS
revenue through the continued development of its leading all-in-one CXDP
platform. In line with its growth strategy, the Board has decided not to renew
a non-core, low-margin £4.4m per annum transactional SMS contract due to
unprofitable pricing requirements. The Board expects FY25 revenue to be in
line with market consensus on a constant currency basis and after adjusting
for a £0.7m current year revenue impact of this contract non-renewal. The
full revenue impact will take effect in FY26, however, given the low-margin
nature of the contract, the impact to current FY25 and FY26 market
expectations (before taking account of the Acquisition) for adjusted EBITDA
and adjusted PBT will be minimal (4). The Board believes this decision aligns
the Group's business model and resources to support the scaling of its
innovative, higher margin solutions within fast growing market segments.

 

Underpinned by a robust balance sheet, the Board continues to explore
strategic M&A while assessing targeted investment aligned with its
strategic priorities, including strengthening go-to-market leadership and
reinforcing the operational foundations of the business to support the Group's
long-term growth ambitions.

 

A further update on trading for the year ended 30 June 2025 will be announced
in late July.

 

Noah Tucker, Founder and CEO of Social Snowball, commented: "We are excited to
be joining forces with the Dotdigital team. What sets Dotdigital apart is the
Group's clear strategic vision, strength of product offering and a culture
that deeply aligns with our own. From the onset, it was clear that this was
the right fit for both our team and our customers. I look forward to working
together and helping more customers increase revenues, expand their brand
awareness, boost engagement and drive growth."

 

Milan Patel, Chief Executive Officer of Dotdigital, commented: "This
acquisition marks another milestone in our CXDP vision. Social Snowball brings
a highly complementary asset to our product portfolio, enhancing our market
position as a one-stop-shop for seamless, cross-channel marketing automation
and creating valuable cross-sell opportunities. Against an evolving landscape,
we are seizing the opportunity with innovative technologies to help
enterprises adapt quickly, personalise at scale, and build trust with their
customers through authentic, data-driven engagement. We are delighted to
welcome Noah and his team to the Dotdigital family, and we look to the future
with confidence."

 

 

(1) A demo of Social Snowball can be viewed here
(https://www.youtube.com/watch?v=0IDVQdo1834)

(2) Influencer Marketing Hub, Influencer Marketing Benchmark Report, 2025
(https://influencermarketinghub.com/influencer-marketing-benchmark-report/)

(3) Credence Research, Affiliate Marketing Software Market, 2025
(https://www.credenceresearch.com/report/affiliate-marketing-software-market)

(4) Market consensus at the time of publication is:

FY25: revenue of £86.1m, adjusted EBITDA of £26.6m and adjusted profit
before tax of £18.4m

FY26: revenue of £92.8m, adjusted EBITDA of £28.7m and adjusted profit
before tax of £19.8m

 

For further information please contact:

 

 Dotdigital Group Plc                                    Tel: 020 3953 3072

Milan Patel, CEO

Tom Mullan, CFO                                        investorrelations@dotdigital.com (mailto:investorrelations@dotdigital.com)

 Alma Strategic Communications                           Tel: 020 3405 0210

 Hilary Buchanan                                         dotdigital@almastrategic.com

 David Ison

 Sarah Peters

 Canaccord Genuity (Nominated Advisor and Joint Broker)  Tel: 020 7523 8000

Bobbie Hilliam

 Elizabeth Halley-Stott

 Cavendish Capital Markets Limited (Joint Broker)        Tel: 020 7220 0500

Jonny Franklin Adams, Corporate Finance

 Sunila de Silva, Equity Capital Markets

 Singer Capital Markets (Joint Broker)                   Tel: 020 7496 3000

Shaun Dobson, Corporate Finance

 Jen Boorer, Corporate Finance

 

About Dotdigital

Dotdigital Group plc (AIM: DOTD) is a leading provider of cross-channel
marketing automation technology to marketing professionals. Dotdigital's
customer experience and data platform (CXDP) combines the power of automation
and AI to help businesses deliver hyper-relevant customer experiences at
scale. With Dotdigital, marketing teams can unify and enrich their customer
data, identify valuable customer segments, and deliver personalised
cross-channel customer journeys that result in engagements, conversions, and
loyalty.

Founded in 1999, Dotdigital is headquartered in London with offices in
Manchester, Southampton, New York, Melbourne, Sydney, Singapore, Tokyo and
Cape Town. Dotdigital's solutions empower over 4,000 brands across 150
countries.

 

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