A strong Q4 sees Adveritas’ full year revenue grow by 145pc, as it flags further growth ahead
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Adveritas’ strong quarter and year was underpinned by new customer wins via sales from direct channels and the Google Cloud Marketplace.
Digital ad fraud prevention specialist, Adveritas (ASX:AV1), is having a breakout year with annualised revenue for FY22 topping $2.51 million, up 145% on the previous corresponding period (pcp).
For Q4, revenue grew by 87% above the pcp to $599k, while cash receipts for the quarter increased by 261% on pcp to $610k.
It was an eventful quarter as the company won new contracts with key enterprise clients in the banking, technology, entertainment and betting sectors.
Adveritas also recorded its first ever sale on the Google Cloud Marketplace platform in the quarter, providing it around $210k of annualised revenue.
In addition, the company’s flagship product, TrafficGuard, saw its second product (a mobile app anti fraud offering) added to Google Cloud Marketplace.
All key metrics have been hit with continued growth seen in revenue leading indicators such as new trials, cross-sell opportunities to existing customers, and the number of freemium subscribers.
During the quarter, Adveritas also successfully raised $3 million through the issue of convertible notes, which underpins its healthy pro-forma cash balance of $6.2 million (including the once-off R&D grant of $1.15 million).
Adveritas has delivered a consistent growth rate in revenue every half.
The $2.51 million achieved in FY22 was underpinned by new customer contracts acquired by its direct sales team, as well as through the Google Cloud Marketplace.
In October last year, the TrafficGuard PPC product was admitted to the Google Cloud Marketplace, and it didn’t take long before the platform snapped up its first client, generating US$120k in annualised revenue. Given the amount of spend on Google Ads per year is $147b, there is a large addressable market for TrafficGuard to go after as it rolls this partnership.
“We focused on utilising key channel partnerships to grow our client base, which culminated in our first sale via the Google Cloud Marketplace in May,” said Adveritas CEO and co-founder, Mat Ratty.
Ratty said that TrafficGuard has received significant interest from other enterprises since the company launched its tactical Go to Market strategy, and as a result, he expects to see the growth rate further increase in upcoming quarters.
The Go to Market on the Google Cloud Marketplace was a marketing strategy that was launched in April, driving significant interest from large enterprises from the get-go.
Under the strategy, TrafficGuard is actively promoted by Google Cloud’s independent software vendors and Partner Sales teams to key Google Cloud Platform customers.
In addition, TrafficGuard’s mobile solution, currently being utilised by multiple unicorn clients of Adveritas, has also just been accepted into the Google Cloud Marketplace.
It was the company’s second product that has been successfully added, which ensures that TrafficGuard can offer both products (PPC and Mobile app solution) to clients.
“Our sales and marketing teams are working extremely closely with the Google Go to Market team to ensure accelerated growth,” said Ratty.
“The Google Cloud Marketplace is an important sales channel providing strong opportunities for revenue producing contracts, combined with our direct sales force.”
Adveritas says a key indicator of future revenue growth is the level of freemium subscribers.
Over Q4 FY22, freemium subscribers increased another 7% from Q3 FY22 to over 4,300.
Conversion of freemium subscribers to paying customers remained strong at approximately 11% in Q4.
This was underpinned by platform UI/UX, workflow and user nurturing sequence improvements put in place by Adveritas’ chief marketing officer to maximise self-serve conversions.
The freemium subscriber base provides a paying customer pipeline for the company with significant cross and upsell potential.
It also serves as a rich data set across multiple industry verticals and markets, enhancing the value of the company’s global, proprietary anti-fraud database.
Looking ahead to FY23, Adveritas says it will focus on an aggressive user acquisitions strategy targeting the SME market aimed at monetising its self-service product line.
“We are progressing into other channels to service client needs, including Meta, to further accelerate our global rollout,” Ratty said.
“And with several enterprise trials in progress, we are well positioned to land our first deals via this channel.”
“In keeping with the company’s vision of being a full funnel and omnichannel solution, this puts our sales force in a strong position to upsell and cross-sell other products to our ever growing client base.”
Adveritas advised that its 2022 Annual General Meeting will be held on Friday 18 November 2022 at 9.30am (WST) at the Technology Park Function Centre in WA.
This article was developed in collaboration with Adveritas, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.