Engage:BDR soars after strong first-quarter

By Trevor Hoey. Published at Apr 8, 2019, in Technology

In the space of three weeks, shares in programmatic advertising company, engage:BDR (ASX:EN1), have surged more than 150% in response to positive trading updates.

The stock opened strongly on Monday (up +15%), and this run is likely to continue after the advertising services group today confirmed outstanding revenue growth for the first quarter of 2019, as well as noting a promising start to the June quarter.

As indicated below, the $48,000 in daily revenues seen in the first quarter was quite an improvement on previous quarters.

Importantly, the March quarter close was the strongest seen in the past 12 months for the programmatic product and was 323% higher when compared to the start of the first quarter.

Management upbeat regarding June quarter

Co-Founder and executive chairman Ted Dhanik put the strong start to the March quarter in perspective in saying, “The first seven days of Q2 2019 have yielded healthier operating results than expected.

“Management is pleased to note this has been the strongest start for the programmatic product to any quarter in company history with revenue growth of 228% exponentially greater than the start of the first quarter of 2019”.

Noting the global seasonality of the advertising industry, Dhanik said the group would update the market once statistically-relevant data is available about the moving averages, as the last two days have yielded significantly greater scale than previously reported averages.

Second half skew in revenue

The company estimates that between 65% and 75% of annual revenue could be generated in the second half of the year due to holiday spending.

By comparison, the first and second quarters are quiet and they are expected to deliver between 25% and 35% of full-year revenues.

This trend requires engage:BDR to have access to sufficient capital to prepay publishers to stay competitive and gain incremental advertising inventory during the most competitive seasons.

Bearing this in mind management strongly believes access to capital will be available for these peak seasons in 2019, placing the company in a better position that it has been in prior years.

Integration of StartApp

Management expects to update the market shortly on the progress of the StartApp programmatic buyer integration.

Additionally, EN1 will deliver revenue updates with regards to the recent publisher activations and the second group, which is due to start over the next two weeks.

Developments regarding the integration of StartApp, as well as trading updates could potentially provide additional share price momentum.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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