DotDigital revenue grows as it integrates acquisition

31st Jan 2024 14:12

(Sharecast News) - Customer experience and data software specialist DotDigital reported first-half revenue of £38.7m in an update on Wednesday, marking a 15% increase compared to the first six months of the 2023 financial year.

The AIM-traded firm said that at constant currency, organic revenue increased 11% to £36.9m.

Its adjusted profit before tax for the period aligned with market expectations for the full year, the board claimed, as it made progress in integrating the acquisition of Fresh Relevance.

Cost synergies were ahead of schedule, with the two companies securing their first joint customers.

In addition, functionality recurring revenue, including licence fees, data charges and additional functionality, saw an 8% increase to £13.2m year-on-year.

Organic average revenue per customer was ahead 8% to £1,700, consistent with customer revenue growth.

As of 31 December, DotDigital had a cash balance of £37.1m, reflecting normal working capital cycles, in line with expectations after the acquisition of Fresh Relevance.

DotDigital said its investment in its product portfolio and operations had driven stronger traction with higher-value customers and increased bookings during the first half.

The integration of Fresh Relevance was said to be progressing well, with the development of unified processes and a joint go-to-market strategy.

It said the acquisition had expanded its addressable market and resulted in new direct deals with larger-sized customers.

Existing DotDigital customers had also shown interest in the personalisation platform.

Furthermore, DotDigital said its growth extended across regions, with EMEA and APAC experiencing substantial growth in line with expectations.

North America saw accelerating commercial progress, and revenue from strategic partnerships was continuing to grow, albeit at a more modest rate.

Looking ahead, DotDigital said it was optimistic about trading conditions in the second half of the year.

It said it anticipated continued demand for digital marketing capabilities in the face of broader macroeconomic pressures.

DotDigital said its investment in enhancing its product offering, including AI, personalisation and omnichannel functionality, positioned it well for the future and strengthened its market position.

"We have successfully delivered strong growth, achieved a higher ARPC, and increased bookings in the period," said chief executive officer Milan Patel.

"I am encouraged by the momentum that is building in the US, whilst EMEA and APAC continue to be in great shape, albeit at different stages of development.

"The Fresh Relevance acquisition is every bit the fit we hoped it would be."

Patel said the teams had "gelled well", with the initial work on combining the technology now complete.

"It's testament to the speed and quality of the integration that we are already making meaningful headway together with our combined offering with higher value organisations.

"We are feeling positive going into the second half. Of course, macroeconomic uncertainties are likely to persist but, with strength across all regions, an increasingly compelling product and market trends that work in our favour, we enter it with confidence."

DotDigital said it would announce its results for the six months ended 31 December on 5 March.

At 1341 GMT, shares in DotDigital Group were up 1.24% at 97.8p.

Reporting by Josh White for Sharecast.com.