Programmatic ad company engage:BDR (ASX: EN1) has followed up Monday’s news regarding strong revenue growth with an interim financial performance update including a comparative analysis between March 2020 and the same month in the previous year.
engage:BDR has now achieved its strongest first quarter since listing on the ASX in 2017 with interim first-quarter revenues of $4.33 million.
The company did confirm its latest figures were unaudited although first-quarter results showed that engage:BDR generated $1.55 million in revenue in January, $1.72 million in February and is already over $1 million in March.
In December 2019, the company generated its best revenue figures for the entire year, hauling in $2.45 million in ad revenue and $921,000 in profit.
From the revenues generated, engage:BDR said it earned $558,000 in profit in January, $704,000 in February and $456,000 so far in March.
According to the company, despite the impact of the COVID-19 pandemic, March 2020 is expected to result in “similar revenue when compared to December 2019” with management expecting preliminary gross margin to be significantly stronger – around 43% compared to 36% with revenue forecast to be “within 10%” of December’s figure.
On a year-on-year basis, this month’s revenue figure has already surpassed $1 million and now exceeds last year’s figure by 310% with over two weeks still to go in the current month.
The ad company declared it had beat March 2019’s revenue figure within the first 12 days of this month, thereby indicating sequential growth in the company’s market performance including more customers and ad spend.
The results published today could also be significant because the advertising industry traditionally expects 65-70% of its revenues in the second half of the year. Not only is this the tendency within the broader industry, but it’s exactly what engage:BDR experienced in 2019.
“Management expects 2020 to produce similar revenue seasonality, as experienced in 2019 and all prior years,” the company said.
An additional factor set to play a key role in engage:BDR’s long-term fortunes is the development of its NetZero publisher payments platform.
The ad company raised $26.25 million in September last year, including both debt and equity funding, with a view to advance NetZero and address the ongoing issue of long delays faced by publishers before they get paid by advertisers.
According to engage:BDR co-founder and executive chairman Ted Dhanik, the terms under which publishers invoice their advertising partners before payment are worsening to the point of publishers being asked to wait for up to 120 days for payment after they invoice their advertising partners.
engage:BDR said it has developed a means of publishers being paid on the same day they invoice advertising partners, which will allow it to offer better interest rates on loans.
However, instead of generating income from interest, Mr Dhanik said his company is trying to drive more publishers to its programmatic advertising platform with incremental revenue being the ultimate target.
NetZero will operate via web, mobile and connected TV publishers in North America, Australia and Europe, although engage:BDR said it plans to vet all participants before approval.