dotDigital Group plc - Trading Update
("dotdigital" or the "Group")
FY 2018/19 Trading Update
· Group revenues grew by c. 19% to
· Organic revenue from continuing operations grew by c.15% to
· Adjusted EBITDA2 and operating profit3 from continued operations are expected to be slightly ahead of market expectations;
· Strong cash balance at
· ARPU4 continued its upward trend, growing by 14% from approximately
· Recurring revenue as a percentage of total revenue increased to 86% from 85%;
· Comapi fully integrated and
· Momentum has continued into the new financial year and with our high level of contracted recurring revenues in the core business, management remains confident in its expectations for 2020.
1. Includes both continued and discontinued revenues
2. EBITDA is earnings before interest, tax, depreciation and amortisation and adjusted for acquisition costs and share-based payments
3. Operating profit is adjusted for acquisition costs and share-based payments
4. ARPU means Average Revenue Per User
dotdigital's organic growth strategy continues to be focussed around 3 key areas:
· Product Innovation;
· Geographic Expansion;
· Developing strategic partnerships.
Recurring revenue from enhanced product functionality and upgrades, taken by both existing and new clients, has increased by 39% compared with the same period last year. As marketeers place increasing importance on data and omnichannel features, and become more sophisticated in their marketing strategies, we are confident that we will continue to see an increase in platform adoption of these features. The Marketing Automation tool set has seen the strongest feature adoption compared to the prior year, helping to create customer journeys through the addition of templated programs.
There has also been notable progress made in selling the integrated omnichannel messaging services following the integration of Comapi which has enhanced messaging outside of Email into areas such as push messaging, chat, SMS, RCS (Rich Communication Service) and other messenger services. The pipeline continues to strengthen as we continue to educate Marketeers on the effective use of these new channels.
We have further enhanced our ecommerce offering with the addition of RFM reporting (recency, frequency and monetary), together with automated segments, which are both easy to use and provide increased value and insights around data to our ecommerce customers. We have also added AI (Artificial Intelligence) to our product recommendations and have built an affinity finder solution that will launch soon, as part of our commitment to infuse the platform with artificial intelligence and machine learning.
By using this enhanced offering, the user is able to personalise and target the right person, with the right message, at the right time, through the right channels.
EMEA revenue continued to enjoy double digit growth despite the ongoing impact of GDPR in the first half of the financial year. Message volume growth also moved closer to levels seen prior to the introduction of GDPR. There was strong progress in the Nordics and Benelux, where we continue to build brand awareness through partners in those regions. As we move into the new financial year we will further invest in the Benelux region by building a team and opening an office in
Revenues from the US region were up 27% to
The APAC market outperformed management expectations both by order value of clients and by the number of customers won in the year. The region saw high levels of growth, albeit from a smaller base. The APAC region grew 83% from
Our brand awareness has remained strong in the Magento space; all new Magento customers ship with dotdigital pre-installed and only need to sign a contract with dotdigital to begin using the platform. As we move forward, our respective teams continue to work together on a joint marketing strategy. Signup of customers in all regions remains strong with ARPU improving from our clients. ARPU from Magento clients have been maintained around
Our partnership with Shopify has strengthened by building on our value proposition for ecommerce merchants through connecting into Shopify Flow. This makes it very easy for Shopify customers to segment and then use the dotdigital messaging channels to create personalised and targeted campaigns. This has also allowed a seamless integration of process automation between ecommerce and marketing platforms. We now have 56 clients using the Shopify connector.
In the year we were also named as a Big Commerce global elite partner and work continues in building our strategic relationship and a joint go-to market plan. This will enable us to increase our addressable market across all regions.
As part of our commitment to our B2B Marketing customers, we added dedicated platform and channel management resource to build our strategic relationship with Microsoft for our integration into
With the integrations that we have developed in both ecommerce and CRM platforms we can now address over 50% of the mid-market and enterprise companies in each of those verticals which are looking for a marketing automation platform to enhance their digital marketing.
We remain focused on delivering our strategic objectives of investing in our platform and our people, continuing to drive product innovation, identifying suitable growth opportunities and broadening our product set and international footprint.
The changes made to simplify the business and focus on our core market has enabled us to empower our team to be more agile, making decisions effectively and quickly. Adding strong talent to the business also lays solid foundations to scale the business further.
Whilst we have only recently entered the new financial year, momentum continues into 19/20 and with our high level of contracted recurring revenues in the core business, the Board remains confident in its expectations for the current year.
"I am delighted to announce that the '3 pillars of growth' strategy we have in place has delivered a further year of record profitability and strong cash generation whilst expanding the reach and capabilities of the Group. Our customers see the platform as a mission critical part of competing in today's digital environment. The proven value of our platform, combined with high levels of recurring revenue means I enter the new year with high degree of confidence."
For more information, please contact:
Tel: 020 3770 1502
Canaccord Genuity (Nominated Adviser and Joint Broker)
Tel: 020 7523 8000
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finnCap (Joint Broker)
Tel: 020 7220 0500
N+1 Singer (Joint Broker)
Tel: 020 7496 3000
Prior to this announcement's release, the statement contained inside information for the purposes of Article 7 of Regulation (EU) 596/2014 (MAR) (Market Abuse Regulation).
This announcement contains forward-looking statements with respect to the financial condition, results and business of dotdigital plc. By their nature, forward-looking statements involve risk and uncertainty because they relate to events, and depend on circumstances, that will occur in the future. dotdigital's actual future results may differ materially from the results expressed or implied in these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.
This information is provided by RNS, the news service of the
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