Dotdigital flags solid first-half performance

(Sharecast News) - Dotdigital reported a solid first-half performance on Tuesday, and said it remained confident of delivering full-year results in line with market expectations, supported by double-digit growth in contracted recurring revenue across its core customer experience and data platform business.

In a trading update for the six months ended 31 December, the AIM-traded group said forward-looking contracted annual recurring revenue from its core CXDP business rose 13% to £75.4m, or 6% on an organic basis, reflecting continued demand from both new and existing customers across all regions.

Recurring revenue recognised from the core platform increased 11% to £37.3m, representing 84% of total group revenues, compared with 80% a year earlier.

Total group revenue, including the lower-margin CPaaS business, rose 4% year on year to £44.2m, or 9% on a normalised basis.

Average revenue per customer increased 7% on a normalised basis to £1,968 per month.

Dotdigital said reported figures were affected by foreign exchange headwinds, with constant-currency growth rates around one percentage point higher across key metrics.

The group noted that the prior-year period represented an unusually strong comparator, driven by the final contribution from an exited CPaaS contract and elevated SMS volumes linked to specific marketing campaigns.

Excluding those effects, management said underlying growth in the core CXDP business remained strong, supported by regional expansion and targeted M&A activity.

Following its acquisition in June, Social Snowball had performed ahead of expectations, with ARR up around 30% on an annualised basis since acquisition.

Average revenue per customer at the business increased to $348 per month in December from $319 at acquisition, while integration was progressing as planned.

Dotdigital said Social Snowball strengthened its Shopify ecosystem offering and provides additional scope for cross-selling and upselling across the wider customer base.

Cash at the end of December stood at £36.1m, down from £45.7m a year earlier, reflecting the $20m consideration paid for the Social Snowball acquisition.

Chief executive Milan Patel said the group had made a solid start to the financial year despite macroeconomic challenges.

"We have made a solid start to the 2026 financial year, despite the challenging macro environment and continue to see customers prioritising platforms that simplify their technology stack and make results easier to achieve and measure," he said.

"That plays to Dotdigital's strengths - a highly recurring revenue model, a broad all-in-one CXDP proposition and a clear focus on helping marketers use data and personalisation to drive outcomes."

Patel added that the group was investing selectively while continuing to assess acquisition opportunities.

"With a comprehensive product portfolio, strong revenue visibility, a strengthening pipeline and a healthy balance sheet, we are confident in the year ahead and the group's continued success," he said.

Dotdigital said it expected to publish its half-year results in early March.

At 1317 GMT, shares in Dotdigital Group were up 5.56% at 72.2p.

Reporting by Josh White for Sharecast.com.

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