REG - Fadel Partners Inc. - Update to FY 25 Trading Expectations

Fadel PartnersAnnouncement

07/11/2024 07:00

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RNS Number : 2701L  Fadel Partners Inc.  07 November 2024

Fadel Partners, Inc.

 

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

 

Update to FY 24 Trading Expectations

 

FADEL, the leading provider of cloud-based brand compliance and rights and
royalty management software, provides an update to trading expectations for FY
24.

As noted in the Half Year Trading Update on 31 July, 2024, the timing of new
business deal closings, new products entering the sales pipeline, and the
variability in IPM Enterprise license revenue recognition under U.S. GAAP have
added complexity to achieving accurate revenue forecasts.

These complexities have continued and the Board now revises its revenue
forecast down to $13.0m, with an EBITDA loss forecast of approximately $4.0m.
This revision is primarily due to the following reasons. Firstly, the Company
has received notification of the loss of a significant RFP-based new customer
opportunity that was anticipated to close in Q4-24. Additionally, an existing
large Enterprise customer informed us of a delay into 2025 of a major
technology upgrade project that was expected to drive incremental Services
revenue in Q4-24. Lastly, as referenced in our Half Year Trading Update, we
have been in discussions with a publisher customer, based in France, regarding
overdue accounts receivable. Although the customer has now agreed to pay all
outstanding invoices for previously completed work and has committed to our
multi-year project roadmap, the negotiation has resulted in a reduced estimate
for Q4 service revenue associated with the next phases of their multi-year
implementation.

Despite these revenue challenges, we are reaffirming our expected forecasted
cash balance to be in excess of $1.3m as of 31 December 2024.

New and Renewal Sales Progress Update

While revenue expectations for FY 24 have been reduced, we can report
improvement in our go-to-market trends compared to FY 23. As of today, we have
secured $1.3m in gross new License ARR bookings year-to-date, which is more
than twice the $0.6M gross new ARR booked for the full year 2023. This growth
spans multiple product lines. This year, we have added five net new IPM
customers (including both Enterprise and LicenSee), four net new Brand Vision
Rights Cloud customers, and five Brand Vision upsell opportunities, primarily
driven by the adoption of our new Content Tracking module.

With our largest customer renewals scheduled for the final quarter of the
year, we are pleased to confirm that for each customer we have received at
least a verbal commitment to renew, with several agreements in final review
stage or already signed. We therefore do not anticipate risk of logo churn
related to these in-process renewals.

FY 25 Cash Outlook

We plan to give guidance for FY 25 following the release of our FY 24 results
in early 2025. Preliminary cash forecasts for 2025 give us confidence that we
will have sufficient cash to fund business operations throughout the year.
This expectation is based on recent customer wins, expected new business in
2025 from today's sales pipeline, and the introduction of cost-saving
initiatives beginning immediately. In addition we continue to have access to
our existing $1m credit facility against which we have not yet drawn in 2024.

The Company will issue a further Trading Update in January following the
year-end.

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, Abigail Kelly, Rory Sale (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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