Trading Update

Certain information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon publication of this Announcement, this information is now considered to be in the public domain.

17 December 2021

Bidstack Group Plc

("Bidstack" or the "Company")

Trading Update

Bidstack Group Plc (AIM: BIDS), the native in-game advertising group, is pleased to publish a trading update.

Key Commercial Highlights:

· Due to the recently signed commercial agreements, Bidstack has secured a revenue stream of a guaranteed minimum of US$30 million advertising spend over two years, commencing 1 March 2022;

· Signed a multiple format advertising agreement covering the mobile portfolio of one of the world's leading AAA gaming companies; the arrangement includes exclusivity for one of the publisher's biggest sporting franchises;

· Brand count doubled year-on-year to 70 (FY20: 35);

· Publisher portfolio nearly tripled year-on-year to 58 (FY20: 20);

· Growing global footprint: active in over 30 markets (FY20: 17);

· Implemented 76 ad campaigns in FY21 (FY20: 44); and

· Structural improvement in gross margins, associated with scaling in-game advertising revenue.

FY21 Financial Update

The Board is pleased with the Company's progress, which has prioritised improving the quality of revenues and gross margin alongside strategic investments in key talent and operations. The Company has chosen not to pursue some low margin revenue opportunities and instead has invested in building the foundation for future high quality, higher margin growth areas. The Directors believe that this was the appropriate, long-term approach, as evidenced by the recent agreements with Azerion and one of the world's leading AAA gaming companies.

As a result, and subject to audit, the Board expects FY21 gross margins to have improved significantly, to in excess of 30% (FY20: 13%). As a result, gross and net profits are both expected to be broadly in line with market expectations. Due to delays in completing certain agreements and certain deferrals of ad campaigns, we anticipate revenues for FY21 to be below current market expectations. However, revenue for the year will be significantly higher than last year (FY20: £1.7m).

Year-end cash is expected to be in line with market expectations at approximately £7 million.

FY22 Outlook and Prospects:

· Robust pipeline of additional AAA and independent titles in contract or in active negotiation stage;

· Implementation and rollout of the Azerion agreement announced today; and

· Execution of the multiple ad format deal with one of the world's leading AAA game publishers.

Bidstack has made material progress in recent months resulting in significantly improved revenue visibility leading into FY22. In addition, the gross margin improvement noted above is expected to continue in the coming year. These developments should provide Bidstack with a meaningful step on the pathway to profitability.

The Company intends to give a more detailed update at the time of the publication of its 2021 results.

James Draper, CEO of Bidstack said:

"In the second half of 2021, as the in-game market has started to mature, we have focussed on delivering advertising campaigns that have an accretive impact on gross margins.

"Since our fundraise in July 2021, establishing a pathway towards profitability has been a key focus which comprises a balance between investing for growth and strategic cost control. We have been pleased with the run of network deals across our portfolio, where blended margins have been healthy and have helped drive operational leverage.

"With our network now growing, through the tremendous work of our publisher acquisition team, our portfolio is now diversified sufficiently to attract a broader range of advertising verticals.

"The management team has been working toward ensuring that we capitalise on the solid commercial opportunities ahead of us. The success of the media business, which has led to the announcement of today's transformational deal, will empower the product team to work on a number of technology-only and software-as-a-service deals that are expected to drive additional recurring revenue over and above the Group's advertising revenue.

"I'm pleased to see our Board and executive teams have worked closely to ensure the business is well capitalised with clear revenue visibility going into FY22 and FY23."

-ENDS-

Contacts

Notes to editors

About Bidstack

Bidstack is an advertising technology company which provides dynamic, targeted and automated native in-game advertising for the global video games industry across multiple platforms. Its proprietary technology is capable of inserting advertisements within video games. Bidstack's customers are games publishers and developers (on the supply side), and advertising agencies, brands and media-buying platforms (on the demand side).