Full year results for the year ended 28 February 2023
FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) announces its results for the year ended 28 February 2023.
Business highlights
Strong performances by KX and First Derivative
- KX exceeded its targets with annual recurring revenue (ARR) up 39% to £65.3m (FY22: £47.0m) and net revenue retention of 119% (FY22: 106%); incremental annual contract value (ACV) increased by 93% to £18.7m (FY22: £9.7m)
- Launched the industry’s first Data Timehouse, positioning KX as the engine for real-time analytics in the cloud and delivering up to 100x the performance at 1/10th of the cost of alternative solutions
- Significant progress with a range of existing and potential partners, including the general availability of kdb Insights Enterprise on Microsoft Azure and an agreement to partner with AWS
- Continued our drive to accelerate time to value for customers, as well as making our technology easier to adopt and use; our progress is reflected in continued growth in Industry, which accounted for more than 30% of ACV
- Momentum set to continue in the current year, benefiting from growing demand for real-time analytics as the foundation for AI-driven business innovation, the strengthening of KX leadership and growing market recognition for the return on investment that KX delivers
- First Derivative delivered revenue growth of 18%, also ahead of target, benefiting from multi-year strategic growth drivers, particularly relating to regulatory compliance and digital transformation
- Weaker demand environment continued at MRP, with revenue down by 19%; cost base aligned to protect EBITDA in the current year
- Providing guidance for FY24 revenue in the range of £315m to £325m, with adjusted EBITDA in the range of £38m to £40m with continued investment in KX to drive future growth.
Seamus Keating, CEO of FD Technologies, commented: We are pleased with a year of strong execution on our strategy, with KX and First Derivative beating our expectations for FY23.
KX in particular has made strong commercial and strategic progress. Our price to performance advantage is particularly compelling for the hyperscale cloud providers, as evidenced by our partnerships with market leaders Microsoft and AWS. We have a range of initiatives that we are progressing with these and other partners that provide confidence in our outlook.
First Derivative also performed strongly in FY23, delivering impressive revenue growth of 18% for the period. We continue to see multi-year strategic growth drivers that underpin demand for our services.
We have set ourselves ambitious but sustainable growth targets for the years ahead which will ensure we are focused on driving high-quality recurring revenue growth from an expanding list of customers across a wide range of industries, while generating value for shareholders.
Financial summary
| Year to end February | 2023 | 2022 | Change |
| Revenue | £296.0m | £263.5m | 12% |
| Gross profit | £122.3m | £106.1m | 15% |
| (Loss)/Profit before tax | (£1.2m) | £9.0m | NM |
| Reported diluted (LPS)/EPS | (14.4p) | 22.9p | NM |
| Net cash* | £0.4m | £0.3m | 24% |
| Adjusted performance measures | |||
| Adjusted EBITDA** | £34.8m | £31.0m | 12% |
| Adjusted diluted EPS | 35.3p | 32.3p | 9% |
| Performance against Key Performance Indicators | Target | Actual | |
| KX annual recurring revenue (ARR) growth | 35-40% | 39% | |
| KX net revenue retention (NRR) | 110% | 119% | |
| First Derivative revenue growth | 15% | 18% | |
| MRP revenue growth | 10% | (19%) |
* Excluding lease obligations
** Adjusted for share based payments and restructure and non-operational costs
Financial highlights
- Group revenue up 12% to £296m (up 6% at constant currency), led by good performances at KX and First Derivative, both above full year expectations, balanced by a reduction in revenue at MRP
- KX revenue growth of 25% to £80.2m (FY22: £64.4m), with recurring revenue up 47% to represent 72% of total KX revenue (FY22: 61%) and reductions in both lower margin services revenue and lower value perpetual license revenue as we continue to focus on growing our recurring revenue
- First Derivative revenue £174.3m, up 18% (FY22: £148.0m), driven by our strategy to deliver more value from our domain and technology expertise and our push into complementary areas such as software engineering
- MRP revenue down 19% to £41.5m (FY22: £51.1m), resulting from lower spending on demand generation by our enterprise customers
- Adjusted EBITDA up 12% to £34.8m (FY22: £31.0m), following investment in people and systems, including the successful implementation of an Oracle ERP system, to enable the Group to scale
- Net cash £0.4m (FY22: £0.3m) resulting from focused cash management
Read the full RNS release here
