dotdigital Group (DOTD) Trading Update summary

Acquisition details and strategic rationale

• Acquired Social Snowball, a US-based influencer, affiliate, and referral marketing platform, for up to $35m, with $20m upfront and up to $15m earnout based on performance.

• Social Snowball strengthens the all-in-one CXDP platform, expanding capabilities in influencer and affiliate marketing and increasing total addressable market.

• The acquisition is expected to be immediately earnings enhancing, with a SaaS model and margin profile similar to the existing business.

• Social Snowball has over 1,500 active Shopify-based customers and enhances cross-sell and up-sell opportunities.

• Integration with Shopify further diversifies partner channels and supports expansion among e-commerce merchants, which made up 30% of H1 FY25 revenue.

Social Snowball performance and market context

• Reported 200% revenue growth in FY24 to $3m, with run rate revenues exceeding $5m at acquisition.

• Achieved cash flow positivity in H1 2025, with net assets of $0.3m and no debt at acquisition.

• Operates in a market projected to grow at an 18.2% CAGR to $5.77bn by 2032, driven by influencer and performance-based marketing trends.

• Over 63% of brands plan influencer partnerships in 2025, with more than 25% allocating over 40% of marketing budgets to this channel.

• Social Snowball’s analytics-driven platform automates onboarding, tracking, and payouts, providing clear ROI visibility.

Trading update and outlook

• Decision made not to renew a non-core, low-margin £4.4m annual SMS contract, aligning focus on higher-margin solutions.

• FY25 revenue expected to align with market consensus, adjusting for a £0.7m impact from the contract non-renewal.

• Minimal impact expected on FY25 and FY26 adjusted EBITDA and PBT due to the low-margin nature of the discontinued contract.

• Board remains focused on high-margin, recurring SaaS revenue and continues to explore strategic M&A and targeted investments.

• Further trading update for the year ending 30 June 2025 will be provided in late July.