dotdigital Group (DOTD) H1 2025 earnings summary

Executive summary

• Global operations with hubs in the UK, New York, and Sydney, serving EMEA, North America, and APAC, with 500 employees focused on product, sales, and marketing.

• Achieved solid business performance with growth in all regions, larger customers, and higher-value deals.

• Accelerated product development focused on mobile-first channels, customer experience enhancements, and new social integrations.

• Positive trading momentum into H2, on track to meet full-year market expectations, with long-term growth prospects supported by recurring revenue.

• Product innovation included the trial of a native WhatsApp channel and new TikTok and LinkedIn integrations.

Financial highlights

• Revenue grew 10% year-over-year to £42.4m for H1 FY25, with recurring and repeating revenue at 95% of total and contracted recurring revenue at 80%.

• Adjusted EBITDA margin at 33%, with adjusted EBITDA of £13.8m, up from £12.4m year-over-year.

• Gross margin remained strong at 78%, with ARPC up 12% to £1,916/month.

• Net cash balance reached £45.7m, up from £37.1m a year earlier, with no debt and strong working capital management.

• Free cash flow of £3.6m and net operating cash inflow increased 33% to £12.1m.

Outlook and guidance

• Good revenue visibility for H2 and the next financial year, supported by high recurring revenue and a robust balance sheet.

• Trading in H2 is in line with expectations; FY25 guidance: revenue £86.2m, adjusted profit before tax £18.1m, adjusted EBITDA £26.7m.

• Priorities include driving growth with large client wins, expanding Fresh Relevance adoption, launching WhatsApp channel, and exploring acquisitions.

• Board remains confident in long-term growth prospects and continues to assess selective acquisitions.

• Ongoing acquisition strategy, with capital available for M&A or potential shareholder returns if not deployed.