engage:BDR projects $1.5M cash outflow boost

By Justin Ware. Published at May 1, 2019, in Technology

Engage:BDR (ASX:EN1) has provided its report for the quarter ended March 31, 2019.

The quarterly update reflected highly encouraging results for the emerging programmatic tech player, with results including:

  • Net cash from operations improved by A$3.9M (or 69% year-on-year)
  • Cash outflow decreased by A$4.9M (or 57% yoy)
  • Cash balance increased 253%
  • Available financing facilities increased to A$13.5M
  • A$1.5M improvement in cash outflow projected for Q2 2019
  • Q2 expected to deliver positive net cash, targeting cash balance growth
  • April 2019 receipts were A$1.33M (representing 68% of total receipts for Q1)
  • Average daily revenue in April up nearly 200% of Q1
  • April 2019 net cash from operating activities was A$41.4k
  • Run-rate to monthly profitability near, potentially before mid-year
  • Average daily gap to profitability currently A$2-3k gross profit

Daily revenues

Average daily revenue is up nearly 200% in the month of April compared to Q1. EN1 has pointed to its recent deployment of A$1.35 million to activate incremental publishers for its programmatic advertising business. In addition, EN1 is continuing new client onboardings to its IconicReach platforms, with the company expecting both processes to deliver increasing revenue streams throughout the year.

Future revenue

Companies involved in the advertising industry typically experience their lightest revenues during the first and second quarters of the year. EN1’s revenue increased sizeably when it announced preliminary results of its incremental publisher activations on March 18, just 13 days prior to the close of the quarter.

The majority of this incremental revenue growth was attributed to April 2019 and beyond. EN1 initially deployed A$1.1 million to publishers in February and March, which was expected to yield revenue for the balance of the year (which continues to exceed EN1’s expectations).

In addition, another A$250,000 was deployed to publishers before the end of March, for a total result of A$1.35 million, which will produce strong results in Q2.

Profitability

As previously mentioned, the company informed the market that it is close to achieving monthly profitability. EN1 expects to achieve its first accrual-based profitable month around the half-year mark (excluding non-cash expenses).

This estimation is based on the consistency of revenues and margins achieved by the company over the past 45 days, which see it around A$2000-$3000 gross profit away from monthly profitability as current.

At the time of writing, EN1 was up 4.5%, trading at 4.6 cents.


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