Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fadel Partners Inc (LSE:FADL, Financial) reported a 31% increase in recurring revenue, highlighting strong customer retention and expansion.
- The company successfully introduced new product offerings such as LicenSee, enhancing its portfolio and addressing mid-market needs.
- Significant new client wins including major global customers like PepsiCo and Sanofi, demonstrating the effectiveness of its sales and marketing strategies.
- Expansion into new sectors such as educational publishing, showing adaptability and potential for growth in new markets.
- Strong focus on innovation with multiple new product releases and enhancements planned, keeping the company competitive and relevant in its industry.
Negative Points
- Fadel Partners Inc (LSE:FADL) experienced a 31% decline in service revenue, reflecting challenges in project implementation and delays.
- The company reported an EBITDA loss of $2 million in 2023, indicating ongoing challenges in achieving profitability.
- Despite revenue growth, there was a notable increase in SG&A expenses by 24%, impacting the overall financial health.
- The company had to reduce its 2024 revenue forecast from $17.6 million down to $16.25 million, adjusting expectations due to slower than anticipated growth.
- Fadel Partners Inc (LSE:FADL) faces challenges in revenue recognition timing due to the shift towards a SaaS model, potentially affecting short-term financial reporting.
Q & A Highlights
Q: What have been your first impressions since joining the group?
A: Ian Flaherty, CFO of Fadel Partners, expressed his positive impressions, highlighting the talent within the organization and the strong product-market fit. He noted the company's offerings not only save operational costs but also mitigate audit risks. Despite a temporary reset in revenue expectations, he remains optimistic about the growth potential from the pivot to SaaS products.
Q: How will you accelerate growth in future years?
A: CEO Tarek Emile Fadel outlined the company's growth strategies, focusing on increasing SaaS revenue and offerings, particularly with Brand Vision and LicenSee. He emphasized the importance of being sticky within the current installed base by providing more services, support, and product offerings.
Q: How are you planning to market LicenSee to the large addressable market of licensees? Are there any industry events you can attend?
A: Tarek Emile Fadel mentioned that Fadel Partners would be participating in the licensing expo in Las Vegas and engaging in panel discussions. The company has started actively marketing LicenSee globally, leveraging its existing large licensor user base to reach licensees effectively.
Q: There seems to be a lot of excitement around content tracking. How big can that be?
A: Tarek Emile Fadel believes content tracking has a large addressable market, especially as digital content creation and distribution channels continue to grow. He highlighted the importance of post-production content protection for brands, noting the increasing need for such services as digital platforms evolve.
Q: What milestones and client wins should we expect to see from LicenSee?
A: Tarek Emile Fadel shared that LicenSee has quickly gained traction, with several deals in the pipeline shortly after its launch. The company aims to secure 20 to 30 accounts by the end of the fiscal year, focusing on expanding sales capacity specifically for LicenSee.
Q: Can you provide an overview of the financial performance for FY 2023?
A: CFO Ian Flaherty reported a 10% growth in revenue to $14.5 million and a significant 31% increase in recurring revenue. Despite a larger EBITDA loss due to increased SG&A expenses, the company saw an improvement in net loss and a strong cash position, ending the year with $3 million in net cash.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
