dotdigital Group (DOTD) H1 2026 earnings summary

Executive summary

• Achieved strong H1 progress with 13% ARR growth (4% organic), increased customer retention, and higher customer spend as platform adoption deepened.

• Recurring subscription revenues from core high-margin business rose to 84% of group revenues, up from 80% in H1-25.

• Completed strategic acquisitions of Alia (March 2026) and Social Snowball, accelerating growth and strengthening AI-driven data capture and Shopify presence.

• Integration of Social Snowball on track, with ARR up 30% since acquisition.

• International diversification continues, with US-originated ARR now over 30% of group total and 40% of ARR from outside the UK.

Financial highlights

• Total revenue for H1-26 was £44.2m, up 4% year-over-year (5% in constant currency); core CXDP recurring revenue grew 11%.

• Gross margin improved to 80% from 78% as business mix shifted to higher-margin CXDP.

• Adjusted EBITDA margin was 31%, and adjusted PBT margin was 20% for H1-26.

• Free cash flow generation remains strong, with £3.0m in H1-26 and cash at period end of £36.1m after acquisition outflows.

• Net retention exceeds 100%; gross retention improved year-over-year.

Outlook and guidance

• Confident in achieving in-line results for H2 and beyond, supported by high visibility in recurring revenues and strong cash generation.

• Multi-product strategy, recent acquisitions, and AI focus to drive further innovation and expansion.

• Effective tax rate expected to normalize to 27%-28% after a one-off peak at 30%-31%.

• Market expects ~25% growth for both Social Snowball and Alia; internal targets for doubling size in two years, but not guiding to that.

• Cashflow generation expected to be H2-weighted; modest overdraft facility being established for working capital flexibility.