engage:BDR generates year-on-year growth of more than 200%
engage:BDR (ASX:EN1 and EN1O) has provided a promising trading update and commentary for its March 2020 financial performance, including a comparative analysis of the March 2019 quarter.
March 2020 revenue grew to just over $2 million, representing a 211% increase compared with March 2019.
Additionally, March results reflected an 18% month on month increase.
The strong result underpinned a robust March quarter result that featured revenue of $5.3 million, up 247% on the previous corresponding period, and representing year-on-year growth of 147%.
The following table provides a summary of the aforementioned results, but it should be noted that all figures are unaudited, as all financials are pending audit. All figures are in Australian dollars.
Anticipated second half skew in revenues
To put these results into perspective, the advertising industry traditionally expects 65-70% of its revenues in the second half of the year (July – December), as experienced by EN1 in 2019 (34%/66%).
Management expects 2020 to produce similar revenue seasonality, as experienced in 2019 and all prior years.
Due to approximately 85% of the US population currently in lockdown (stay in place orders), many brands (not specific to EN1) have temporarily reduced their marketing budgets, as consumers cannot transact with them at the moment.
As a result, the ad exchange did not see demand ramp-up as usual in the last days of the quarter.
April starts a new quarter and typically, demand is lighter in the first three weeks of the first month.
Management does not have an indication or statistically relevant data on what to expect in the June quarter, but will update shareholders consistently.
The AdCel executive team expects revenue to increase 25% in the month of April, due to new NetZero publishers going live and maintaining consistent, uninterrupted international demand.
New financing opportunities
In light of significant interest rate reductions, EN1’s 2019 audited financial results and the US government’s US$2.2 trillion stimulus program, management has applied for several new financing opportunities, none of which involve equity.
Management is currently working with a large tier-1 Australian bank in the application process (3 to 4% APR).
Additionally, EN1 qualifies and has applied for US SBA loans under the CARES Act, with UMB Bank US (2 to 3%).
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