REG - Fadel Partners Inc. - Trading Update

Fadel PartnersAnnouncement

31/01/2024 07:00

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RNS Number : 4424B  Fadel Partners Inc.  31 January 2024

31 January 2024

Fadel Partners, Inc.

('FADEL', the 'Company' or, together with its subsidiaries, the 'Group')

Full Year Trading Update

 

Results expected to be in line with full year market expectations, with YOY
revenues up 10%

Strategic cost initiatives put in place to reach EBITDA breakeven earlier than
previously guided

 

Fadel Partners, Inc., the developer of cloud-based brand compliance and rights
and royalty management software, provides a pre-close trading update for the
year ended 31 December 2023 (FY23), based on unaudited management accounts.

Financial highlights for FY23

 ·             Revenue in-line with market expectations, up 10% to $14.5m (FY22: $13.2m)
 ·             Recurring revenue increased by 31% to $11.4m (FY22: $8.7m)
 ·             LBITDA expected to be less than $2.0m reflecting a focus on efficient use of
               resources

Strong full year revenue growth

2023 revenue increased 10% year on year to $14.5m, in-line with market
expectations. Our recurring revenue (defined as License/subscription and
Support revenue) increased 31% to $11.4m (FY22: $8.7m), in part due to a
number of notable net new software license wins with clients including
PepsiCo, Kimberly-Clark, Sanofi and Philip Morris and in part due to a number
of annual license contract renewals/upgrades.

This continued revenue growth is particularly pleasing given the uncertain
macro-economic climate that some of our customers faced and our services
revenue for FY23 also finished strongly and is expected to be $3.1m (FY22:
$4.5m).

Since our IPO, we have successfully executed against our strategic objectives
through investing in technical innovation and growing our sales and demand
generation teams.  The launch of Brand Vision to the market in 2023,
alongside strategic enhancements to PictureDesk, Content Tracking and IPM
Suite, have all consolidated our position as a leader in the digital content
services and intellectual property market and enabled the Group's revenue
growth through new client wins. The period has also seen us further embed our
expanded product range in existing blue chip customers, including Hasbro,
Abrams Books, Media Participations, Hachette Livre, Macmillan Learning, Philip
Morris and PepsiCo with more recurring product licenses, upgrades and
subscription support and professional services being sold.

We have hired c.40 new employees into the Group since the IPO in multiple
geographies and across all disciplines. This includes the hires of a VP of
Growth Marketing, who has built up the 'Demand Generation' team and a Chief
Revenue Officer, who has developed structures and processes around our
go-to-market sales efforts. These strategic hires have bolstered the number of
leads and opportunities in our pipeline and significantly increased
demand-generation activities as we plan to drive more growth in sales leads in
2024 and beyond.

 

Continued strategic investment in conjunction with disciplined cost management

In line with our prudent approach to managing all aspects of our business and
an ongoing assessment of the wider macro environment, we have been disciplined
with overall spend and allocated capital strategically. We expect to report
LBITDA of less than $2.0m (FY22:  $1.5m). Our balance sheet remains healthy,
with net cash of approximately $3.0m at the year end.

The Group's full year results for the year ended 31 December 2023 are expected
to be announced in April 2024.

 

Tarek Fadel, Chief Executive Officer of FADEL, commented:

"2023 was another milestone period for FADEL. We delivered a successful IPO
and then began the process of building the business for the next phase of our
growth journey. The successes in the year have further consolidated our
position as a leader in the digital content services and intellectual property
market and provide a strong platform to take advantage of significant market
opportunities available to us. It has also become increasingly clear that many
of our existing and prospective customers require the solutions provided by
both of our product families and we are delighted about the future prospects
for the Company. The growth in recurring revenues, the opportunity to increase
our revenues from our existing and prospective clients and the encouraging
pipeline, alongside resuming delayed professional services engagements,
underpins our revenue growth plans for 2024. Further, our prudent management
of costs should ensure we reach EBITDA breakeven earlier than we had planned."

This announcement contains inside information for the purposes of the retained
UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").

 

For further information please contact:

 Tarek Fadel, Chief Executive Officer                                  Via Alma Strategic Communications

 Vicary Gibbs, Chief Financial Officer

 Cavendish Capital Markets Limited (Nomad & Broker)                    020 7220 0500
 Jonny-Franklin Adams, Emily Watts, Abigail Kelly (Corporate Finance)
 Tim Redfern, Sunila De Silva (ECM)

 Alma Strategic Communications                                         Tel: +44(0)20 3405 0205
 Josh Royston                                                          fadel@almastrategic.com
 Andy Bryant
 Robyn Fisher

 Matthew Young

 

The Group's Nominated Adviser and Broker, finnCap Ltd, has now changed its
name to Cavendish Capital Markets Limited following completion of its own
corporate merger.

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 solutions, being IPM Suite (rights and royalty management for
publishers and licensing) and Brand Vision (an integrated platform for Brand
Compliance & Monitoring that includes Content Services, Digital Rights
Management, AI-Powered Content Tracking, a Brand Monitor, and 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, Lebanon, France,
Canada and India. Founded in 2003 by Tarek Fadel (Chief Executive Officer),
FADEL has since grown to a team of 131 full time employees, plus an additional
pool of c.40-50 contractors.

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

 

 

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