Provider of one of the highest performing marketing solutions for brands, agencies, and platforms, engage:BDR Limited (ASX:EN1) has been garnering a lot of media and investor interest off late. The reason is not alone centred around EN1’s delivery of the strongest yield and monetization technologies to its clientele of world-class publishers, but also the Company’s revenue momentum in the recent few weeks- breaking records.
The below explains EN1’s solid revenue stance-
Continuing its record-breaking revenue momentum, the Company’s latest report is icing on the cake as EN1 has achieved its strongest first quarter and March to date since ASX listing.
Let’s deep dive-
EN1’s March & Q1 2020 Trading Update
In its latest trading update and commentary for March 2020 financial performance with a comparative analysis of the prior year, same period, EN1 intimated market participants that its March 2019 revenue has been outshined by 211% in March 2020. The revenue in March 2020 was up by 18% relative to February 2020 and amounted to $ 2.02 million. This marked EN1 achieving its strongest March to date since ASX listing.
On the quarterly update front, the Company’s Q1 2020 revenue soared by 147% over Q1 2019. The Q1 2020 revenue amounts to $ 5.3 million or 247% of Q1 2019 total of $ 2.04 million. This demonstrates a year over year growth of 147%.
Revenue Trends & Current Stance Amid COVID 19
Conventionally, the advertising industry expects 65% to 70% of its revenues in the second half of the year (July – December). This is consistent with EN1’s results, as in 2019 its revenue split was 34% / 66%. Following the same trend, the Company’s Management is anticipating that in 2020, EN1 will produce similar revenue seasonality, as experienced in 2019 and all prior years.
Let’s gaze over another event that has been impacting every business sector- the pandemic COVID 19. As a stay in place orders imposed in the US by the Government, approximately 85% of the US population is in a state of lockdown. Consequently, many brands have reduced their marketing budgets in the meantime, as consumers have not been able to transact with them under such circumstances.
This further means that the ad exchange did not see an increase in demand in the last few days of Q1 2020. April starts a fresh quarter, and the trend depicts that demand is relatively lighter in the first three weeks of the first month.
At the back of this, EN1’s management stated that it does not have an indication or a statistically relevant data to project the expectations from Q2 2020 but has intimated that it will consistently report the same to shareholders, as and when it can.
However, there is one outlook that the Company has affirmed- the AdCel executive team expects revenue to be up by 25% in April 2020, which is likely to be driven by new NetZero publishers going live and maintaining stable, uninterrupted international demand.
New Financing Opportunities
Meanwhile, EN1 is leveraging from some decisions made in the current economic scenario. Due to substantial interest rate reductions, the US Government’s USD 2.2 trillion stimulus program and the Company’s 2019 solid audited financial results, EN1’s management has applied for several new financing opportunities (none involving equity).
Moreover, the management is presently working with a huge tier-1 Australian bank in the application process (3-4% APR). Besides this, it also qualifies for US SBA loans under the CARES Act and has applied with UMB Bank US (2-3%).
The Company’s stock quoted $ 0.016 on the ASX on 9 April 2020 (AEST: 1PM), with a market capitalisation of $12.93 million.
It will be interesting to gauge this premium mobile advertising marketplace as it unfolds its growth trajectory in the coming days and see if the revenue momentum can continue to build up investor sentiment positively.
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