Programmatic ad company engage:BDR (ASX: EN1) has achieved its strongest ever first half, reporting a 44% year-on-year revenue growth to $9.04 million.
This is despite COVID-19 impacting the company’s performance, which led it to claim US small business stimulus funds and secure an economic injury disaster loan under the CARES Act to lessen the damage.
The first half was bolstered by the company’s strong first quarter results, which included more than $2 million of revenue generated in March alone.
Engage:BDR chairman and chief executive officer Ted Dhanik said the company implemented several cost-saving measures to get it through the rocky second quarter as COVID-19 swept around the globe.
“We implemented significant operational expense reductions from mid-March 2020, including employee furloughs, pay cuts in the second quarter (including chief executive officer, chief operating officer, the board), tech infrastructural expenses, outside contractors, rent, and in nearly every category,” he said.
Mr Dhanik added that the company’s finance team is focused on finding “equity-free traditional funding” to refinance engage:BDR’s notes and would comment on this more as it developed.
First half results since listing
Since listing on the ASX in December 2017, the company has posted two first half results. The 2019 first half only exceeded 2018’s first half revenues by 3% to total $6.27 million.
This year’s 44% revenue growth boosts the company to a scale never seen before in its history.
The bulk of the growth can be attributed to a record first quarter, when revenues grew by 247% compared to the 2019 first quarter.
The company credited the improvement to a gradual expansion of its operations, including growing the number of large-scale programmatic partnerships.
Second quarter results
It’s important to note the Los Angeles-based company earns money in US dollars, although it reports in Australian dollars for the ASX market.
During the second quarter (April to June 2020), the company reported monthly revenue growing from US$811,000 to US$868,000.
However, the difference was eclipsed by the foreign exchange rate as the Australian dollar strengthened over the quarter – making the company report a consistent monthly revenue of A$1.25 million.
Getting back to normal
Mr Dhanik said the company has begun to recover after the impacts of COVID-19, as demonstrated by the 4% growth in revenue from May to June.
“Early signs of revenue normalisation include a recent daily revenue peak for the last week of June at $50,000 – to see this type of figure appear in daily reports again consistently is very exciting,” he said.
Mr Dhanik added that the first four days of July have been stronger than early June.
“July is the start of a new quarter and typically, the weakest revenue days are in the first month, so this is an early but a warm-welcomed indicator,” he said.
The company has noted that the advertising industry typically expects 65-70% of its revenues in the second half of the year (July to December). This was experienced by engage:BDR in 2019, with the second half making up 66% of its full-year revenue.
It said management expects 2020 to produce similar revenue seasonality as experienced in 2019 and all prior years.