Software solutions company Adveritas (ASX: AV1) has posted positive results for the September quarter and has hinted at more good news on the horizon as it continues to expand the client base of its fraud prevention software, TrafficGuard.
The Perth-based company reported cash and receivables amounting to $2.3 million at quarter end and said this will be further boosted by capital raising funds approved by shareholders in October of about $1 million.
In addition, a research and development refund estimated at around $1 million is expected to be received in December.
Subsequent to the end of the reporting period (July to September 2019), the company also announced significant contract upgrades with existing clients Rappi and MUV, which bolstered the current annualised revenue rate to $1.6 million – up 80% in six months and 160% over the year to date.
Adveritas’ TrafficGuard software product uses machine learning to analyse user download behaviour to identify patterns of digital advertising fraud – a problem that is estimated to cost advertisers around the globe about $42 billion this year.
According to the company, its lab researchers uncovered over 3,000 apps with malicious software designed to generate fake ad engagements. TrafficGuard mitigated more than 250 million fake ad engagements resulting from these infected apps during the quarter.
Adveritas also made improvements to TrafficGuard’s portal user interface with additional reporting functionality enabling customers to gain greater insight into their advertising traffic quality in real-time.
The enhanced reporting capability also allows customers to see which channels, regions and campaigns are delivering the highest value users.
Brand awareness and education
In a presentation unveiled earlier in the month, Adveritas identified sector education as a key growth strategy for the company.
It has published various white papers and journal articles aiming to educate the digital marketing sector on ad fraud, including profiling the issue in North America and South East Asia, and explaining the benefits of machine learning technology.
Over the September quarter, the company continued to build awareness of TrafficGuard through case studies, testimonials, and participation in global trade shows and marketing events.
Its marquee client Rappi strongly endorsed the product at the Mobile Growth Summit in New York in July, while Adveritas’ agency client MUV co-hosted an ad fraud awareness session in San Paulo, Brazil.
Adveritas also co-hosted a digital leader’s dinner in the Indonesian capital of Jakarta with its campaign management platform partner Partnerize.
“These events continue to increase awareness of the company’s unique TrafficGuard technology and expand the company’s sales pipelines,” Adveritas stated.
It also expanded the TrafficGuard sales team with new appointments in the US and Brazil, which are expected to strengthen its ability to serve these markets locally.
Adveritas said the mature US digital market, estimated to be worth US$129 billion in 2019, represents a “significant opportunity” for TrafficGuard.
December quarter outlook
Things are already looking good for the December quarter, with Adveritas recently upgrading contract values with Latin American food delivery company Rappi and WPP mobile agency MUV.
“Contracted revenue upgrades from existing clients demonstrate client satisfaction as well as revenue upside potential across the client base,” the company stated.
“As clients become familiar with TrafficGuard and observe its powerful anti-fraud capabilities, more volume tends to pass through TrafficGuard.”
It said this leads to a greater return on investment for the client and a potential increase in contract value for TrafficGuard as clients exceed agreed quotas.
In October, Adveritas also appointed its first business development resource dedicated to generating business in the United Kingdom and Europe.
“New sales contracts are expected during the December quarter, resulting from TrafficGuard’s global sales and marketing efforts,” the company said.