Dotdigital Group plc
(“Dotdigital” or the “Group”)
FY23 Trading Update
Double-digit growth and strong cash generation
Dotdigital Group plc (AIM: DOTD), the leading ‘SaaS’ provider of an omnichannel marketing automation and customer engagement platform, is pleased to provide the following trading update for the year ended 30 June 2023 (FY23). The trading performance in this statement is based on unaudited management accounts.
Highlights
| · | Robust trading across all regions expected to deliver 10% growth in revenue to £69.1m (2022: £62.8m), slightly ahead of consensus market expectations1 |
| · | Continued progress against strategic pillars: |
| o Recurring and repeating revenue as a percentage of total revenue maintained at 94% (2022: 94%) | |
| o Return to growth in the US region following stabilisation and investment | |
| o ARPC2 continued its upward trend, growing by 11% to approximately £1,622 per month (FY22: £1,461 per month); | |
| o Functionality recurring revenue (from license fees, data and enhanced bolt-on functionality) grew 11% to £24.9m (2022: £22.3m);o Revenues from customers using a data connector from strategic partners up 8% to £31.2m (2022: £28.9m) | |
| · | Adjusted EBITDA, operating profit, and profit before tax3 are all expected to be in line with market expectations1; |
| · | Strong cash generation through the period with cash balance of £52.7m on 30 June 2023, providing the flexibility to invest in the organic and acquisition growth strategy; |
| · | Intention to pay an increased final dividend in line with market expectations4; |
Overview
The Board is pleased to report double-digit revenue growth in FY23, driven by healthy demand across the Group’s diverse customer base and growth in all regions.
As projected at our interim results in March 2023, investments made in the US team has delivered a growing pipeline and acceleration of sales, resulting in a return to growth in the region.
Alongside this, EMEA and APAC have performed well. We are particularly pleased to see our investments in Japanese markets bear fruit, with a solid partner network established and key appointments leading to numerous customer wins in Q4.
Building out Dotdigital’s Customer Experience and Data Platform (CXDP) has been the key focus of our product and development team in the year. As reported on 25 May 2023, we initiated a series of enhancements to our platform, enabling the Group to harness artificial intelligence and machine learning capabilities to improve campaign content and deliver actionable insights to our customers. These enhancements have been well-received.
Outlook
The Group has closed FY23 strongly with positive trading momentum across all regions. We are continuing to invest in our technology stack to further increase the capabilities and scale of our CXDP platform. Alongside this, we also continue to appraise prospective acquisition targets to complement our organic growth.
While cautious of the uncertainty from the wider economic environment, our business model has been built to perform in different market conditions, giving us confidence in our ability to drive steady growth, in line with market expectations.
Milan Patel, CEO of Dotdigital, commented:
“Performance in FY23 was robust, with trading momentum building through the first half and accelerating in the second. The progress we are making can be attributed to the strength and resilience of our business model, the strategic investments we continue to make in the platform and the strengthening of our teams across all regions.
“Wider market uncertainty has prompted a shift to retention marketing among our customers. In this environment, Dotdigital’s platform insights and omnichannel engagement represent a key tool for organisations placing a greater focus on customer engagement. The Group continues to develop CXDP capabilities, with a view to capturing the growing demand for a greater depth of analytics and personalised user experiences delivered by rich datasets, artificial intelligence and machine learning.
“The outlook is positive, and we retain our confidence in scaling our platform and delivering continued growth through FY24 and beyond.”