Dotdigital Group Reports Strong Interim Results with 10% Revenue Growth
Why we think this is good
Dotdigital Group has delivered a robust performance in the first half of FY25, with double-digit growth across key financial metrics. The 10% increase in revenue to £42.4m, coupled with an 11% rise in adjusted EBITDA to £13.8m, demonstrates the company's ability to grow profitably. The high proportion of recurring revenue (95%) and increased ARPC provide stability and indicate strong customer retention. Growth across all geographic regions, particularly in North America and APAC, shows successful expansion efforts. The upcoming launch of the WhatsApp native channel and potential for selective acquisitions present exciting growth opportunities. However, the mention of challenging economic conditions in end markets warrants some caution, preventing an extremely positive outlook.
Key Points
- Group revenue increased 10% to £42.4m
- Adjusted EBITDA up 11% to £13.8m
- Adjusted profit before tax growth of 12% to £10.0m
- Net cash balance of £45.7m, up from £37.1m in H1 FY24
- ARPC increased 12.1% to £1,916 per month
- Growth in all geographic regions, with international revenue at 32% of total
- Upcoming launch of native WhatsApp channel
- Continued focus on potential selective acquisitions
Summary
Dotdigital Group's interim results for H1 FY25 showcase strong financial performance and strategic progress. Revenue increased by 10% to £42.4m, with recurring revenue at 95% of total revenue. Adjusted EBITDA rose 11% to £13.8m, while adjusted profit before tax grew 12% to £10.0m. The company's net cash position strengthened to £45.7m. Operationally, Dotdigital saw growth across all geographic regions, with international revenue now representing 32% of total revenue. The company continues to execute its product roadmap, with the upcoming launch of its native WhatsApp channel presenting a significant opportunity. Despite challenging economic conditions, Dotdigital remains confident in its long-term growth prospects, supported by market trends favoring data-driven, personalized marketing solutions. The recent broker target of 150.00p from Canaccord Genuity suggests potential upside from the current share price of 86.60p.