Dotdigital Group, the AIM-listed AI-powered marketing platform provider, said revenue, profit and cash all came in line with FY26 market expectations for the year ended 30 June.
Group revenue rose 8% to £90.9m from £83.9m, or 9% on a constant-currency basis, with gross margin improving to 80% from 79% as the mix shifted toward higher-margin core customer experience and data platform (CXDP) business.
Forward-looking contracted annual recurring revenue (ARR) for the core CXDP business increased 18% to £85.4m from £72.6m, or 8% organically, with the organic growth rate improving from 6% at the half-year stage.
Cash fell to £17.1m from £36.2m a year earlier after Dotdigital paid an initial $30m for the acquisition of Alia, which lifted its ARR to £10m from £6.9m in the four months since acquisition.
Social Snowball, bought the previous year, grew ARR 33% to £5.4m, triggering an expected first-year deferred consideration of approximately $1m payable in FY27.
Excluding acquisitions, Group revenue was flat, reflecting the exit of a low-margin messaging contract and the unwinding of a strong prior-year comparator, both now fully reflected in the FY26 numbers.
"We enter FY27 with greater revenue visibility, a broader market opportunity and a more focused organisation," said chief executive Milan Patel, adding that market conditions "remain mixed" but the board is confident in delivering FY27 expectations.
Panmure Liberum analyst Harvey Robinson, in a note, said the FY26 trading update was in line and highlights that organic contracted ARR in the core CXDP business accelerated to 8%. Robinson repeated a Buy rating with a 115p target and cites the new CRO's reshaped go-to-market as the catalyst to accelerate organic sales over the medium term.
News Intelligence what this means for the company
Dotdigital delivered FY26 results in line with market expectations, with group revenue up 8% to £90.9m and gross margin improving to 80%. The headline growth driver was contracted ARR rising 18% to £85.4m, but this masks a slowdown in organic growth: core CXDP ARR grew only 8% organically, though the organic rate did improve from 6% at the half-year. The $30m Alia acquisition and prior Social Snowball buy accounted for most of the ARR uplift; excluding acquisitions, group revenue was flat due to the exit of a low-margin contract and tough prior-year comparisons.
Results confirm Dotdigital is executing its acquisition strategy and improving gross margins, but organic growth remains modest at 8% and cash fell sharply to £17.1m from £36.2m after the Alia deal. Management signals confidence in FY27 despite 'mixed' market conditions, but visibility depends on whether organic ARR growth can accelerate beyond the current trajectory.
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