13 January
2025
Eagle Eye Solutions Group
PLC
("Eagle
Eye" or the "Company")
H1 FY25 Trading Update &
Notice of Results
Landmark OEM agreement and
accelerated SaaS transition
Eagle Eye, a leading SaaS and
AI technology company that creates digital connections enabling
personalised, real-time marketing at scale, provides an update
on the Group's trading for the six months ended 31 December 2024
(the "Period" or "H1 FY25").
H1
Financial Summary
|
|
H1
FY25
|
H1
FY24
|
%
change
|
|
Group Revenue
|
£24.2m
|
£24.1m
|
+0.4
|
|
SaaS Revenue
|
£19.5m
|
£17.7m
|
+10.4
|
|
Professional Services Revenue
|
£4.4m
|
£5.2m
|
-16.4
|
|
SMS Revenue
|
£0.3m
|
£1.2m
|
-77.5
|
|
Recurring revenue
(subscription fees and
transactions)
|
82%
|
78%
|
+4ppt
|
|
Adjusted EBITDA*
|
c.
£5.9m
|
£5.9m
|
-
|
|
Adjusted EBITDA*
margin
|
c.
24%
|
24%
|
-
|
|
Net cash at 31
December**
|
£11.8m
|
£7.8m
|
+51%
|
Highlights
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·
|
Major new partnerships agreed,
including a five-year global original equipment manufacturer
("OEM") agreement with a global leader in enterprise software
applications. The agreement will see elements of the AIR platform
directly integrated into the vendor's offerings, providing
confidence in revenue acceleration in future years and a strong
endorsement of the world-class quality of Eagle Eye's
software.
|
|
·
|
Other new partnerships and teaming
agreements agreed with EPAM, Infosys, Zonal, Purple and
Ecrebo.
|
|
·
|
High renewal levels across the
customer base, representing over £16m of
Annual Recurring Revenue (ARR) and £43m in total contract
value, provide a strong foundation of
recurring revenue, on multi-year contracts.
|
|
·
|
New wins secured in the Period
include a leading UK retailer, Waterstones Booksellers, Côte,
Transa Backpacking in Switzerland and RONA in Canada.
|
|
·
|
Good SaaS revenue performance driven
by growth with existing customers. The Group expects to report
double digit growth in ARR as at 31 December 2024.
|
|
·
|
Significant reduction in
Professional Services in H1, which will continue in H2,
as Eagle Eye accelerates its strategy to develop
into a high margin, fully scalable, SaaS business.
|
|
·
|
Continued cost control has delivered
a healthy H1 EBITDA margin and strong cash performance.
|
Outlook
|
·
|
The Board continues to expect double
digit SaaS revenue growth, however FY25 & FY26 Revenue is now
expected to be c. 15% and 18% below current market expectations,
respectively***, primarily due to the significant
reduction in Professional Services revenue alongside lengthening
sales cycles due to the macroeconomic climate. However, forecast
EBITDA margins are expected to improve to approx. 24% & 25%
respectively, due to an increasing proportion of SaaS revenue,
mitigating the
impact on profitability.
|
|
·
|
The newly agreed global partnership
is a game changing opportunity for Eagle Eye. It provides
confidence in substantial revenue growth acceleration from FY27 and
we are, therefore, solidifying our confidence in our 3-5 year
journey to £100m revenue and increasing our target EBITDA margin to
30%.
|
|
·
|
The business continues to grow ARR,
profitability and cash reserves, has a blue-chip customer base on
multi-year contracts, and increasing market reach through major
global partners. As such, the long-term outlook is increasingly
positive, and the Board is confident in Eagle Eye's ability to
achieve its ambitions.
|
Tim
Mason, Chief Executive of Eagle Eye, said:
"We are delighted to announce this morning a landmark
agreement with one of the world's leading enterprise
software vendors, providing Eagle
Eye with a platform for growth at a rate far greater than that
which could be achieved alone. The speed with which we have
achieved this first major partnership, just months after stating
our medium-term goal is to achieve 50% of new ARR through partners,
underlines the world-leading power of our software.
"Accelerating our Win rate remains a key focus and the new
partnerships will assist in this, alongside the appointment of a
US-based Chief Revenue Officer. Our growing SaaS revenue and margin
profile provides us with the means to increase investment into our
sales team, while maintaining our strict financial discipline, to
better enable the conversion of our considerable sales pipeline. We
are more confident than ever that we have the right building
blocks: industry leading software; a growing blue chip customer
base; and now major global partners, to build Eagle Eye into a
world-leading SaaS business."
H1
Financial and Operational performance
Group revenue was steady at £24.2m
(H1 FY24: £24.1m) incorporating double digit growth in EagleAI and
overall SaaS revenue, alongside the ongoing decrease in
Professional Services and SMS revenue, as the business continues
its evolution into a fully scalable, SaaS business.
SaaS revenue increased 10% to £19.5m
(H1 FY24: £17.7m), as the Group continued to successfully expand
its use with existing customers. ARR is expected to show double
digit growth, reflecting major multi-year contract renewals with
Loblaw, Neptune Retail Solutions and E.Leclerc.
In total, renewals have been signed
in the Period representing over £16m of ARR and £43m in total
contract value.
The Group also deepened its
engagement with Pret a Manger, JD Sports, E.Leclerc and Morrisons.
While the Win rate was lower than anticipated, as a result of the
timing of new customer conversions, Eagle Eye secured wins in the
Period with a leading retailer in the UK, Waterstones Booksellers
Limited, Côte, RONA in Canada and Transa Backpacking in
Switzerland.
Adjusted EBITDA* remained flat at
approximately £5.9m (H1 FY24: £5.9m), representing an EBITDA margin
of 24% (H1 FY24: 24%).
The Group had a strong cash
performance in the Period, generating a cash inflow of £1.4m (H1
FY24: £1.5m outflow), resulting in a net cash position of £11.8m at
31 December 2024 (30 June 2024: £10.4m). The new, and increased,
three-year £10m revolving credit facility with HSBC Innovation Bank
agreed in the Period provides the business with security and
flexibility over its financing options across the medium term as
the Company executes on its growth strategy.
Strategic initiatives to accelerate Win and SaaS
transformation
Eagle Eye continues to progress its
four areas of focus to enable the business to more successfully
convert its strong sales pipeline, while accelerating its SaaS
transformation. These are: an increased focus within the sales
organisation on 'Win'; an increased focus on Alliances to expand
the Group's reach; the productisation of its technology; and
ongoing innovation, particularly within EagleAI.
To accelerate these initiatives, the
Group will now invest further into its sales team, including the
appointment of an experienced CRO based in the US, bringing greater
enterprise SaaS sales experience. This will be funded via the
implementation of cost reduction initiatives and increasing
SaaS-based EBITDA margins.
The business has made excellent
progress in achieving new partnerships in both of the areas
identified:
|
·
|
New Systems Integrator partnerships,
providing increased scalability through a decreased reliance on
Professional Services, and a new channel to generate sales
opportunities:
|
|
|
o
|
A partnership with EPAM, a leading
global provider of digital engineering, cloud and AI-enabled
transformation services, and a leading business and experience
consulting partner
|
|
|
o
|
A Global Teaming agreement with
Infosys, a global IT services and consulting company,
and
|
|
·
|
New technology partnerships, adding
value to our existing customer base, facilitating smoother sales
processes and additional referrals:
|
|
|
o
|
Zonal, Purple and a global
partnership with Ecrebo, a global technology company delivering
targeted point of sale marketing
|
Alongside these, we are delighted to
have separately announced today a major
five-year global OEM agreement with a global leader in enterprise
software applications, which will see elements of the AIR platform
directly integrated into the provider's offerings, to be sold by
their sales force. This is the first OEM agreement secured by Eagle
Eye and represents a significant global expansion opportunity for
the Group, providing entry into new sectors and geographies. Once
the product is live, the agreement is expected to provide a
significant contribution to Group ARR. We
continue to increase the productisation of our technology to
support these partnerships and this will now accelerate in
conjunction with the partner.
As well as these initiatives, the
Board has commenced a cost review to identify immediate areas of
optimisation and assess the overall cost base to support the
ongoing move to a SaaS focused business. This is expected to
facilitate investment into the sales engine of the business, while
providing for an increased EBITDA margin opportunity over
time.
Notice of results
The Group expects to announce its
results for the six months ended 31 December 2024 on 18 March
2025.
Notes:
All financials are based on
unaudited figures
*EBITDA has been adjusted for the
exclusion of share-based payment charges along with depreciation,
amortisation, interest and tax from the measure of
profit.
** Net cash is defined as cash and
cash equivalents less financial liabilities.
***
In so far as the Board is aware, as at 10 January
2025, consensus market expectations for FY25 and FY26 were for
Revenue of £56.4m and £64.0m, and adjusted EBITDA of £12.7m and
£15.0m, respectively.
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 which is
part of UK law by virtue of the European Union (Withdrawal) Act
2018. The person responsible for arranging release of this
announcement on behalf of Eagle Eye is Lucy Sharman-Munday, Chief
Financial Officer.
Enquiries:
|
Eagle Eye Solutions Group plc
|
Tel: 0844 824 3686
|
|
Tim Mason, Chief Executive
Officer
|
|
|
Lucy Sharman-Munday, Chief Financial
Officer
|
|
|
|
|
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Investec Bank plc (Nominated Adviser and Joint
Broker)
|
Tel: +44 20 7597 5970
|
|
David Anderson / Nick Prowting /
James Smith
|
|
|
|
|
|
Shore Capital (Joint Broker)
|
Tel: +44 20 7408 4090
|
|
Corporate Advisory: Daniel Bush,
David Coaten, Lucy Bowden
|
|
|
Corporate Broking: Henry
Willcocks
|
|
|
|
|
|
Alma Strategic Communications
|
Tel: +44 20 3405 0205
|
|
Caroline Forde, Hannah Campbell,
Kinvara Verdon
|
|
About Eagle Eye
Eagle Eye is a leading SaaS and AI
technology company enabling retail, travel and hospitality brands
to earn the loyalty of their end customers by powering their
real-time, omnichannel and personalised consumer marketing
activities, at scale.
Eagle Eye AIR is a cloud-based
platform, which provides the most flexible and scalable loyalty and
promotions capability in the world. More than 1 billion
personalised offers are executed via the platform every week, and
it currently hosts over 500 million loyalty member wallets for
businesses all over the world. Eagle Eye is a certified member of
the MACH Alliance and is trusted to deliver a secure service at
hundreds of thousands of physical POS destinations worldwide,
enabling the real-time issuance and redemption of promotional
coupons, loyalty offers, gift cards, subscription benefits and
more.
The Eagle Eye AIR platform is
currently powering loyalty and customer engagement solutions for
enterprise businesses all over the world, including Asda, Tesco,
Morrisons, Waitrose and John Lewis & Partners, JD Sports, Pret
a Manger, Loblaws, Southeastern Grocers, Giant Eagle, and the
Woolworths Group. In January 2024, Eagle Eye launched EagleAI, a
next-generation data science solution for personalisation, already
being used by leading retailers worldwide including Carrefour,
Auchan and Pattison Food Group. Web -
www.eagleeye.com