REG - dotDigital Group plc - Trading Update & Notice of Half Year Results

dotDigitalAnnouncement

28/01/2025 07:00

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RNS Number : 8626U  dotDigital Group plc  28 January 2025

28 January 2025

Dotdigital Group plc

("Dotdigital", the " Company", or the "Group")

 

Trading Update & Notice of Half Year Results

 

Positive momentum underpinned by enhanced product offering

 

Dotdigital Group plc (AIM: DOTD), the leading SaaS provider of an all-in-one
customer experience and data platform (CXDP), announces a trading update for
the six months ended 31 December 2024 ("H1 2025"). The trading performance
reported in this statement is based on unaudited management accounts.

 

Highlights

 

 ·             Revenue, adjusted EBITDA and adjusted profit before tax tracking in line with
               market expectations for the full year(1)
 ·             Revenue increased by 10% in constant currency (9% on a reported basis) to
               £42.4m (H1 2024: £38.7m), of which 95% is recurring and repeat (H1 2024:
               94%)
 ·             Contracted ARR growth of 10%, with contracted revenue at 80% of total revenue
 ·             Average revenue per customer ("ARPC") growth of 12.1% to £1,916 per month (H1
               2024: £1,709)
 ·             Revenue through strategic partnerships grew 13% to £18.8m
 ·             Cash balance on 31 December 2024 of £45.7m (31 December 2024: £37.1m), in
               line with expectations

 

Overview

 

The Board is pleased to report that trading and financial performance for the
first half of the year was in line with its expectations. Despite a
challenging macro-economic backdrop, the Group saw good levels of demand from
both new and existing customers, particularly within the higher value customer
cohort of the Group's mid-market focus.

 

The Group's CXDP offering continues to evolve in line with customers'
preference for a comprehensive, all-in-one platform that leverages AI and
sophisticated analytics to deliver effective digital marketing strategies. The
addition of web personalisation capabilities through the acquisition of Fresh
Relevance in the prior year continues to yield positive results, with the
combined offering contributing to higher value customer wins, and continued
sales across the joint-customer bases. This has contributed to growth in
functionality recurring revenue of 15.5% YOY to £17.2m including Fresh
Relevance as customers deepen their engagement within the platform.

 

The Group made substantial progress on its product roadmap in the first half,
with a focus on expanding capabilities to meet evolving market demands. The
launch of TikTok and LinkedIn integrations strengthens the platform's ability
to engage mobile-first users through social media, while the Group's native
WhatsApp feature, currently in trial phase ahead of its planned launch later
this year, represents a significant opportunity. As Meta continues to expand
WhatsApp's use for business communication while maintaining a focus on user
experience, Dotdigital is well-placed to capitalise on its growing importance
for marketers.

 

The Group is pleased to report growth in all geographic regions as it
continues to benefit from a diversified market presence. The Group continues
to secure higher value deals in EMEA, supporting growth of 7%. Encouragingly
in Q2 retention in EMEA improved against the prior two quarters which were
affected by a higher level of administrations in smaller customers. Progress
has been made in APAC with the region growing 19% in local currency, supported
by an increasing number of deals involving Fresh Relevance. The pipeline of
opportunities in the region heading into H2 remains strong. North America
achieved 20% growth in local currency, buoyed by wins with several
higher-value customers, though this exceptional performance is expected to
normalise to more sustainable double-digit levels in the future. There remains
a significant pipeline of opportunity in North America for both regional and
global contracts, reinforcing its strategic importance to the Group's
long-term growth ambitions.

 

In line with its geographic expansion strategy, the Group has introduced
tailored campaign templates and enhanced in-app translation capabilities to
better support the high-potential Japanese market. Further developments
include the launch of improved commerce reporting to meet demand for
actionable insights and performance measurability, dozens of new integrations
that enhance compatibility across customers' technology stacks, and the
strengthening of synergies through the successful migration of Fresh Relevance
to the same cloud platform as the core CXDP.

 

Outlook

 

The Group remains well-positioned to deliver sustainable growth in the second
half. Continued investment in expanding our CXDP and the integration of Fresh
Relevance are driving deeper customer engagement and higher-value wins
globally. While mindful of the uncertain economic climate, the Group's strong
cash position, excellent revenue visibility and significant pipeline of
opportunities across all regions provide confidence in meeting full year
expectations.

 

The Board continues to appraise acquisition opportunities in line with its
strict criteria.

 

Notice of Half Year Results

 

The Group expects to announce its results for the six months ended 31 December
2024 on 25 February 2025.

 

Milan Patel, CEO of Dotdigital, commented:

 

"Our first-half performance demonstrates the growing global appeal of our CXDP
offering and the value it brings organisations seeking comprehensive,
data-driven digital marketing solutions. We set out at the start of the year
to capture higher-value opportunities while strengthening retention and, at
the halfway point in the year, we are in a strong position on both fronts.

 

"We are confident in our prospects and ability to deliver full year results in
line with market expectations. Thanks to the hard work and talent of our
people, our offering stands as one of the most compelling in market. Supported
by a growing pipeline of opportunities across our target territories, we are
well-positioned to build on the momentum in the business, delivering further
progress in the second half and beyond."

 

 

(1) Consensus market expectations for the year to 30 June 2025 at the time of
publication are as follows:

-       Revenue £86.2m

-       Adjusted profit before tax £18.1m

-       Adjusted EBITDA £26.7m

 

For further information please contact:

 

 Dotdigital Group Plc                                    Tel: 020 3953 3072

Milan Patel, CEO

Alistair Gurney, CFO                                   investorrelations@dotdigital.com (mailto:investorrelations@dotdigital.com)

 Alma Strategic Communications                           Tel: 020 3405 0210

 Hilary Buchanan                                         dotdigital@almastrategic.com

 David Ison

 Kieran Breheny

 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

 Alex Bond, 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
Croydon, Manchester, New York, Melbourne, Sydney, Singapore, Tokyo, Amsterdam,
Cape Town, and Warsaw. Dotdigital's solutions empower over 4,000 brands across
150 countries.

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