REG - Fadel Partners Inc. - Half Year Trading Update

Fadel PartnersAnnouncement

30/07/2025 07:00

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RNS Number : 0719T  Fadel Partners Inc.  30 July 2025

FADEL Partners Inc.

("FADEL" or "the Company")

Half Year Trading Update

30 July 2025

FADEL (AIM: FADL), the cloud-based brand compliance, rights and royalty
management SaaS provider, provides a trading update for the six months ended
30 June 2025 ("H1 2025").

H1-25 Financial Highlights

●    Revenue of $4.7 million (H1 2024: $5.3 million), down 11%
year-on-year; gross margin of $2.3 million (H1 2024: $2.7 million), with
margin of 49% compared to 51% in H1 2024, reflecting effective cost control
despite lower revenue. Within the revenue mix:

●     License and subscription revenue increased 1% to $3.45 million (H1
2024: $3.4 million).

●   Services revenue of $1.2 million (H1 2024: $1.9 million), reflecting
fewer implementation projects being initiated by enterprise level clients.

●     Operating expenses reduced by 22% to $4.8 million (H1 2024: $6.2
million).

●     Adjusted EBITDA loss of $2.4 million, a 33% improvement from H1
2024 ($3.6 million).

●    Annual Recurring Revenue (ARR) of $9.9 million as of 30 June 2025,
flat versus 31 December 2024 and up 8% from $9.2 million as of 30 June 2024.

●    Cash and cash equivalents balance of $1.6 million at 30 June 2025 (H1
2024: $1.9 million). The Company also has access to a $1.0 million line of
credit, renewed through May 2026, which remains undrawn.

 

Operating expenses decreased by 22% to $4.8 million in H1 2025 (H1 2024: $6.2
million), with savings realised across all areas of the business. A
significant portion of these efficiencies were driven by the integration of AI
into the Company's development framework, enabling greater automation and the
streamlining of workflows across all divisions and product lines. Notably, the
Company achieved a 30% productivity improvement in R&D, allowing it to
maintain delivery velocity while reducing operating intensity. These
initiatives have supported our investment discipline while enabling a
continued path for long-term growth.

Annual Recurring Revenue (ARR) at 30 June 2025 was $9.9 million, flat versus
31 December 2024 and up from $9.2 million at 30 June 2024, reflecting 8%
year-over-year growth in the Company's recurring revenue base. The increase
was driven by continued expansion in license-based ARR, which grew by 23%
year-over-year, offset by a decline in Enhanced Support Services (ESS) ARR,
where a small number of clients chose to reduce their support tiers as part of
broader internal cost-saving measures. Both license-based revenue and ESS form
part of the Company's ARR profile. Importantly, there was no logo churn in the
IPM or Brand Vision product lines, which together represent over 90% of total
ARR-underscoring the durability and stickiness of FADEL's core platform
offerings.

Looking ahead to the remainder of FY 2025, the Board anticipates that
full-year revenue will be approximately 10% to 15% below market forecasts,
with an expected range of $12.0 million to $12.9 million. The majority of this
shortfall is attributable to lower-than-expected services revenue,
particularly in the first half of the year, due to fewer implementation
projects being initiated by enterprise level clients, given the current
macro-economic environment and uncertainty surrounding the US tariffs. Despite
this anticipated variance, the Company remains on track to achieve its
full-year adjusted EBITDA loss target, which is expected to fall between $1.0
million and $0.8 million, consistent with market forecast. Cash at year-end is
expected to be in the range of $0.5 million to $0.9 million, reflecting the
normal seasonal pattern of lower cash at the year end. The Company also has
access to a $1.0 million line of credit, renewed through May 2026, which
remains undrawn.

Operational Highlights

·   Improving momentum in the mid-market IPM segment, with a significantly
expanded and more diverse pipeline compared to prior periods; the Company has
also recently entered the process on a number of longer-cycle enterprise
deals, with potential to close in late 2025 or early 2026.

·   Launched AI Business Insights for IPM Suite in H1 2025 (released 10
April), offering predictive analytics, natural-language dashboards, dynamic
reporting, and "what-if" forecasting. Early client feedback indicates a 50%+
reduction in royalty processing analysis and improved decision-making for
licensing and finance teams. This capability is expected to enhance customer
value and drive long-term ARR growth through platform upsell and stickiness.

·    Product Approvals module is on track for beta release in September
2025 and a general availability release by the end of 2025. Early client
demonstrations are already underway and strong initial interest. This release
expands FADEL's addressable market by targeting customers that require an
integrated solution combining rights & royalties management with product
approvals workflow capabilities.

·    The strategic review process referenced in the 2024 Annual Report
remains ongoing, with no further update at this time. We will update
shareholders at the appropriate time.

Board and Management Changes

Ian Flaherty has notified the Board of his intention to step down as Chief
Financial Officer and Director of the Company, with his final day of service
to be 5 September 2025. He is currently working closely with the Board and
executive team to ensure a smooth transition of his responsibilities to Mark
Plotkin, who joined FADEL full time on 28 July 2025 and will assume the role
of CFO and Secretary to the Board upon Ian's departure. It is not intended
that Mark will join the Board at this time.

Mark Plotkin, CPA, is a seasoned financial executive with over 25 years of
leadership experience across licensing, publishing, and corporate finance.
Most recently serving as VP of Controllership, Marvel Entertainment, at The
Walt Disney Company. Mark has a proven track record of driving operational
efficiency, implementing financial systems, and aligning strategy with
business goals. A former Chief Accounting Officer at Marvel Entertainment and
Senior Manager at Ernst & Young, he brings deep expertise in GAAP,
internal controls, and financial reporting. Mark is based in New York City.

Notice of Interims

The Company expects to report its interim results for the six months ended 30
June 2025 in September 2025.

For further information please contact:

 

 Tarek Fadel, Chief Executive Officer

 Ian Flaherty, Chief Financial Officer

 Cavendish Capital Markets Limited (Nomad & Broker)       Tel: +44(0)20 7220 0500

 Jonny-Franklin Adams, Isaac Hooper (Corporate Finance)

 Tim Redfern, Sunila De Silva (ECM)

 FADEL Strategic Communications

 Devi Gupta - press@fadel.com

 

About FADEL Partners Inc.

FADEL is a developer of cloud-based brand compliance and rights and royalty
management software, working with some of the world's leading licensors and
licensees across media, entertainment, publishing, consumer brands and
hi-tech/gaming companies. The Group combines the power of rights management
and content compliance with sophisticated content services, AI-powered visual
search and image and video recognition.

FADEL has two main solutions, being IPM Suite (for rights and royalty
management for publishing and licensing) and Brand Vision (an integrated
platform for Brand Compliance & Monitoring that includes Digital Asset
Management, Digital Rights Management, AI-Powered Content Tracking, and a
Content Aggregation platform with over 100 million Ready-to-License Images).

The Group's main country of operation is the United States, where it is
headquartered in New York, with further operations in the UK, France, Lebanon,
Jordan and India.

For more information, please visit the Group's website at: www.fadel.com
(http://www.fadel.com/) .

 

 

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