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Engage:BDR poised to grow revenue with strong client and partnership base

Snapshot

As more people work from home, EN1 expects app and CTV traffic (online advertising targeted to relevant content channels/audience groups) to grow at a very aggressive rate.

Engage:BDR Ltd - Engage:BDR poised to grow revenue with strong client and partnership base

Quick facts: engage:BDR Ltd

Price: 0.017 AUD

ASX:EN1
Market: ASX
Market Cap: $13.09 m
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  • Revenue growth continues

  • Programmatic partnerships

  • Adcel and NetZero opportunities

  • Positioned for profitability

Revenue growth

Engage:BDR Ltd (ASX:EN1) has developed proprietary AI (artificial intelligence) and machine learning technologies which automate and maximise the transaction of digital video, native and display advertising and influencer marketing for advertisers, their agencies and the app publishers who display these advertisements.

The company has seen the revenue from its innovative advertising solutions in March 2020 eclipse the previous year, growing to $1.06 million.

Mid-month results are showing a 39% improvement over February of $1.72 million - more than three times greater than February 2019.

In March, daily revenue has increased by 19% with ad inventory growing and EN1 expects it to continue to grow in the only two sectors it operates in – mobile apps and connected television (CTV).

The company expects its preliminary gross margin to be significantly stronger (around 43% versus 36%) and revenue to be within 10% of the December 2019 result.

Programmatic partnerships

EN1 has signed two large scale programmatic partnerships, EMX Digital and RevContent.

Both companies generate 100’s of millions of dollars each annually and are expected to be strong contributors and revenue drivers for the EN1’s programmatic exchange.

EN1’s programmatic ad exchange reXer, also recently signed new buyer Reset Digital onto the platform, with the integration completed and the buyer currently spending $7,000 daily.

Reset Digital is an American programmatic buyer led by management from global brands including Mcdonald's Corp (NYSE:MCD), Procter & Gamble Co (NYSE:PG), Campbell Soup Company (NYSE:CPB), Subway and other large U.S. advertising organisations.

This addition brings the company’s total programmatic integrations to 220.

How programmatic advertising works

Adcel acquisition

EN1 acquired the app advertising platform AdCel in 2018 and initially anticipated about $235,000 in incremental monthly revenue for AdCel upon full integration.

However, on about 15% test traffic, AdCel is currently seeing $3,500 per day, which is about 300% higher than expected.

AdCel is integrating onto the platform, AdvancedApp, an app publisher with the large utility app title ‘Advanced Download Manager’, which has a total of around 15 million active users.

NetZero solution

The company’s NetZero solution provides publishers same-day-after invoicing payment, allowing publishers to improve their cash flow without the expensive costs of factoring – offering the same benefits that today’s leading non-venture capital lenders offer without the significant cut and risk most pose.

The solution is available to qualified app and web publishers in North America, Australia and Europe.

The company’s first NetZero publisher integration, MysteryTag, is currently in the Apple App Store queue for review and publishes many popular game titles, totalling around 1 million active users.

Another new NetZero client is PanSoft, with several game and utility titles, totalling about 5 million active users.

This combined volume translates to about $220,000 in incremental monthly revenue for AdCel upon integration and could triple AdCel’s current revenue, when compared to January 2020.

AdCel will be exclusively integrated with these publishers which will include AdCel’s mediation software development kit (SDK) directly on every device where the publisher’s apps are installed.

EN1's brands cover programmatic advertising, mobile, CTV and influencer marketing

New Publishers

EN1 is also boarding two new large-scale app publishers in iFunny with more than 10 million active users, and Treble which has about 2 million active users.

These two new publishers are not on the NetZero program, they are new to the EN1 exchange and are expected to contribute significant volume and revenue.

Positioned for profitability

As more people work from home, EN1 expects app and CTV traffic (online advertising targeted to relevant content channels/audience groups) to grow at a very aggressive rate.

Advertiser demand has already increased within the e-commerce category, as consumer buying is significantly increasing online.

The company expects advertisers with e-commerce channels to ramp up spending and increase ad budgets as work from home strategies continue to be deployed.

EN1 is on track to achieving nearly 3 times its quarter one 2019 result for quarter one 2020 and is expecting consistent monthly revenue growth.

Financial outlook

Expenses are expected to continue to be reduced as contracts are currently being renegotiated with infrastructure providers (ad scanning, bandwidth, collocation, etc).

In addition, the company is working to refinance its convertible notes facility and when this is achieved, EN1 would cease issuing shares for this as well.

The company believes it has never been better positioned for exponential revenue, profitability and market share growth.

Focus for 2020

EN1 expects revenue, gross margins, EBITDA and NPAT to continue to increase in 2020 as a result of its client and partnership mix.

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