Dotdigital Group plc
(“Dotdigital”, the “Group” or the “Company”)
Trading Update and Notice of Half Year Results
Continued organic growth underpinned by recurring SaaS business model
Dotdigital Group plc (AIM: DOTD), the leading 'SaaS' provider of an omnichannel marketing automation and customer engagement platform, announces a trading update for the six months ended 31 December 2021 (“H1 2022”). The trading performance reported in this statement is based on unaudited management accounts.
The Board is pleased to report that it expects to report a first half performance in line with market expectations for the full year.
Highlights
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Group revenue increased c.10% to 30.9m (H1 2021: 28.2m) driven by growth in sales from both new and existing customers |
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R&D continues to underpin Dotdigital's growth strategy, with recurring revenues from enhanced product functionality growing by 22% to 10.8m (H1 2021: £8.9m) |
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ARPC1 up by 19% to 1422 per month (H1 2021: 1196 per month), driven by a continued increase in new and existing client spend |
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Revenue, adjusted EBITDA2 and adjusted profit before tax expected to be in line with market expectations3 |
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Cash balance at 31 December 2021 of 40.0m (30 June 2021: 32.0m) |
Overview
The Group's organic growth strategy, namely ongoing product innovation, geographic expansion and growth through strategic partnerships, delivered solid growth in the first half of the year against a strong comparative period.
The Group secured new sales with both new and existing customers. New wins include Warner Bros, Sunderland Football Club and the British Dental Association.
Underpinning both the Group's consistent double digit revenue growth and over 20% operating margin, is the Group's predictable SaaS business model.
Product innovation
The Group's growth is supported by a focussed R&D investment programme which continues to drive value for both our new and existing customers. Recurring revenue from enhanced product functionality and upgrades increased 22% to £10.8m. The key areas of investment for the Group remain: enhancing our customer data and experience platform capabilities; data visualisations through reporting and analytics; deeper integrations with new and existing technology partners; and our user experience of the platform.
Geographic expansion
Organic international revenue increased by 4% to 9.7m (H1 2021: 9.3m) in the period, with international sales contributing 31% to total revenue (H1 2021: 33%).
EMEA showed solid revenue growth of c.10% in the period to £23.6m (H1 2021: £21.5m). The Group continues to see growing demand in the region for its omnichannel capability, as marketeers increase their focus on relevancy and personalisation to provide the best possible customer experience.
Revenues from the Americas grew organically by c.3% to $6.5m (H1 2021: $6.3m). In a challenging labour market with high levels of wage inflation, the Directors continue to focus on strengthening the management team in the region, most recently with the addition of a new VP of Growth. The recruitment of talent and expanding the employee base is key to improving growth rates within the region.
APAC revenue grew organically by c.27% to AUS$4.4m (H1 2021: AUS$3.5m). The Group's Japan office is now operational and uptake of the Engagement Cloud in Singapore has been encouraging. The Group has continued to develop its presence in Australia despite the challenges posed by lockdowns.
The Group continues to navigate various cost pressures, particularly regarding hiring, across all regions but is confident of actions being taken by management to support the Group's geographic expansion strategy in the second half and beyond.
Strategic partnerships
Sales through connectors into our strategic partners increased by 9% to 13.9m (H1 2021: 12.8m).
Magento connector revenue grew 6%, Shopify connector revenue grew by 47% and MS Dynamics connector revenue grew by 3% compared to the same period in the previous year.
Whilst the Group works through pressures in the US, it continues to build on its work with its strategic partners, both in the ecommerce and CRM platform space, to drive brand awareness across their customer bases through joint go to market plans. In H1, the Group increased its investment in adding new channel managers into its international operations, building on the strong relationships it has with its agency and technology partners that operate within the ecosystem.
The pipeline continues to build with strong momentum as the Group moves into H2.
Notice of H1 2022 Half Year results
Dotdigital Group plc will announce its Half Year results for the period ended 31 December 2021 on 3 March 2022.
Milan Patel, CEO of Dotdigital, commented: “The Group delivered another half year period of double-digit growth, with continued sales momentum across channels from new and existing customers. These results demonstrate a growing interest in our core offering and continued execution of the growth strategy in a structurally growing market.
Our Engagement Cloud platform is one of the most technically advanced yet user-friendly offerings in the market, and the investment we continue to make in our omnichannel capabilities stands us in good stead to capture the full spectrum of opportunities presented by the ongoing shift to digital marketing.
The Group's continued growth is supported by a strong balance sheet, a recurring SaaS business model and healthy sales pipeline, putting us in a strong position as we enter the second half of the year. Whilst cognisant of the fluid global economic environment, the Board is confident in the continued positive performance of the business.”