Results for the six months ended 31 August 2021

FD Technologies (AIM: FDP.L, Euronext Growth: FDP.I) today announces its results for the six months ended 31 August 2021.

Seamus Keating, CEO of FD Technologies, commented: “I am very encouraged by the increasing momentum across the business since we announced our accelerated growth strategy in May 2021. The opportunity for KX to deliver continuous intelligence remains enormous, and we are excited by the traction we are achieving across industries. Our cloud-first platform, KX Insights, was launched during the period and we have already signed new enterprise customers who, importantly, are already getting value from their investment. The investment in our go-to-market strategy is also starting to deliver returns, evidenced by accelerating growth in recurring revenue, partner engagement, industry accreditation and strengthening pipeline. We have signed three times as many subscription deals as we did in the same period last year. Both First Derivative and MRP are performing strongly, driven by good demand from both existing and new customers.

The outlook across our businesses is positive, with each business unit expected to meet or exceed its full year growth target. We are particularly excited by the growing evidence that KX Insights can make real-time decision-making easy to implement for organisations. With its increasing ease of use, deployment freedom and interoperability, backed by our investment in leadership and go-to-market capability, we see KX as strongly positioned to build a market-leading position in continuous intelligence.”

Business Highlights

• Key investment targets met including a 52% increase in the size of the KX go-to-market team, delivering on technology development milestones and upgrading systems and processes
• Total of 41 KX subscription deals in the period (H1 FY21: 14), a threefold increase on the prior year period as we focus on growing recurring subscription revenue
• Signed 12 new customers across financial services, automotive, manufacturing, utilities and healthcare, all of which have significant expansion potential
• Launch of KX Insights, our cloud-first platform, during the period with six customers signed during the period, including a global enterprise deal with Alpine F1, using Microsoft Azure for actionable intelligence on and off the track
• Executing the shift to high-value recurring revenue in KX, with Net Retention Rate increasing to 102% from 99% at the year end
• Reduced the sales cycle and the deployment effort required for KX, accelerating the time to value for our customers as we focus on growth in annual recurring license revenue
• Increased strategic engagement with major cloud partners, with multiple pipeline deals for KX Insights with Microsoft Azure, Amazon Web Services and Google Cloud
• Recognition from industry analysts Forrester and Gartner of KX’s strengths in real-time streaming analytics

Financial Highlights

Financial Highlights

• Financial performance in line with expectations following the announcement of our accelerated growth strategy
• Growth metrics trending upwards through the period, with c.60% growth in KX ARR achieved by end of October; advanced pipeline provides confidence in achieving full year target
• Revenue growth of 18% in First Derivative, delivered through a combination of improving market conditions, focus on key areas of expertise and enhancements to our leadership and go-to-market strategy
• MRP platform revenue growth of 17%, driven by rebound in activity from existing customers and new client wins
• Adjusted EBITDA down 31% to £14.9m, driven by previously announced investment in KX in line with our strategy
• Net debt at period end of £11.7m, with 62% reduction from prior period reflecting our continued focus on working capital

After the period end, the Group sold its stake in associate RxDataScience Inc. We are currently assessing the fair value of the initial and deferred consideration which will be reported at year end. The proceeds from the sale eliminate the Group’s net debt position, with the acquiror committing to a KX license subscription agreement.

Current trading and outlook

• The investments made to date in sales and marketing, R&D and scaling the Group are on track and showing encouraging early returns, providing a positive outlook across our businesses with greater visibility from higher levels of recurring revenue
• The Board reiterates revenue guidance for the current financial year in the range of £255m to £260m, with adjusted EBITDA in the range of £31m to £33m.

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About FD Technologies

FD Technologies is a group of data-driven businesses that unlock the value of insight, hindsight and foresight to drive organisations forward. The Group comprises KX, the leading technology for real-time continuous intelligence; First Derivative, which provides technology-led services in capital markets; and MRP, the only enterprise-class, predictive Accounts Based Marketing solution. FD Technologies operates from 15 offices across Europe, North America and Asia Pacific, and employs more than 3,000 people worldwide.

For further information, please visit www.fdtechnologies.com and www.kx.com

Results presentation

FD Technologies will publish a pre-recorded presentation today at 07.05 GMT on its website at https://fdtechnologies.com/investor-relations/presentations/. The Group will also host a live results Q&A session for analysts at 09.30 GMT today.

Read the full RNS release here