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A premium marketing technology company, engage:BDR Limited (ASX:EN1) has made a name for itself by developing innovative solutions for advertisers and content owners. The Company has a holistic offering, well recognised by independent measurement companies like comScore and Quantcast.
Currently, from its Management’s standpoint, the Company has never been in a better position for profitability, exponential revenue and market share expansion. It has a strong balance sheet, continues to be profitable and has scaling revenue and margins. The profound access to partnership integrations and significant capital are additional boons.
Last week, EN1 released its impressive financial results for CY19, showcasing a pivotal, successful and profitable year with revenue growth of 50 per cent and gross margins growth of 42 per cent.
To read about these results, Read: engage:BDR Reports Profitable CY19, Client & Partnership Mix Expected to Boost CY20
Just when the market was acknowledging and appreciating the Company’s robust CY19 results and gauging over the promising outlook, EN1 gave market participants another reason to cheer- The Company has achieved its strongest February since ASX listing!
Let’s deep dive-
EN1’s Feb 2020 Trading Update- Consolidated Revenue Over 3x on Feb 2019
In a trading update and commentary highlighting its February 2020 financial performance, released on 3 March 2020, EN1 intimated shareholders that its February 2020 revenue had grown to $ 1.72 million, on a month over month basis (as against $ 170K over January 2020).
- February consolidated revenue was over 322% of February 2019
- Preliminary gross margin was reported at 41 per cent, or $704 K
- Preliminarily EBITDA remained profitable in February 2020
With this, the Company has attained a milestone. It has achieved its strongest February since the ASX listing in 2017. EN1 completed its listing on the ASX on 14 December 2017 post a substantially oversubscribed IPO, initially raising $ 10,000,000 (the IPO closed on 29 September 2017).
EN1’s management believes that the Company’s audited, reviewed and annual results have been significantly better. This has been majorly driven by adjustments that EN1 makes on an on-going basis against its costs of goods sold (media costs).
These adjustments, familiar to many AdTech companies arise due to billing adjustments made by buyers, discrepancies in counts, ad fraud claw-backs that the Company makes and other adjustments which are in the Company’s favour.
In the future, the management expects these adjustments to COGS, being a normal course of the Company’s business, to continue.
EN1’s Promising Outlook
The advertising industry conventionally anticipates approximately 65-70 per cent of its revenues in the second half of the year (July – December). EN1 experienced a revenue seasonality of 34 per cent / 66 per cent in 2019 and expects 2020 to follow a similar route.
Moreover, the Company’s management remains confident to achieve increased revenue, gross margins, EBITDA and NPAT in 2020 on the back of its client and partnership mix.
Major areas of focus for 2020:
- NetZero publisher boarding;
- AdCel growth;
- New integrations for programmatic ad exchange and scale existing.
Stock Performance
With continued positive announcements on the ASX, EN1 has been successful in garnering investor interest on the exchange. This is quite evident from its impressive stock performance lately.
On 3 March 2020, post announcing the strong February 2020 trading update to the exchange, EN1 rose by 10.52 per cent and settled the day’s trade at $ 0.021 with a market cap of $ 16.16 million.
As Exec Chairman & CEO Ted Dhanik stated, EN1 currently has a blank slate and is placed well with a robust balance sheet, key and distinctive partnerships and most prominently, a winning team.
The head start on 2020 with approximately 3 times the revenue relative to 2019 is expected to boost the focus on keeping the momentum growing as EN1 expects greater wins in the coming days!
