Special Report: engage:BDR not only isn’t feeling a COVID-19 pinch but is steaming ahead with revenue wins.

engage:BDR (ASX:EN1) says it’s not feeling any impact from the coronavirus pandemic and has been set up from its earliest days to handle remote working.

The video and display advertising provider doesn’t anticipate any future interruptions from COVID-19 either.

As of last week, engage:BDR deployed an optional remote working strategy for all employees and enabled access to all systems and software via a company VPN. Currently, 95 per cent of its employees are working remotely.

engage:BDR said its technologies were fully automated and AI-driven, and from the start the company was created and fully deployed from the homes of the three founders, meaning people are not required to be physically present in one location.

It uses battle-tested remote productivity technologies such as Slack, Jira, Zoom, G Suite and Grasshopper, and the company’s management underscored that remote work had been part of engage:BDR’s DNA since inception.

The company generated seven-figure revenues in US dollars before it considered leasing office space. Over the past 11 years of operation, the majority of the company’s staff has been enabled to work remotely.

The entire infrastructure of the company’s platforms and technologies is cloud-based, a cloud that is owned and operated by engage:BDR, not reliant on Amazon, Google, or other popular clouds.

“engage:BDR was born in 2009 from an extraordinary opportunity at the very bottom of the Great Recession,” Ted Dhanik, CEO and executive chairman, said.

“We quickly learned, adapted nimbly and thrived when most were afraid. As the industry evolved, we were fearlessly first on the front line, adapting and influencing the change, controlling our destiny in the ecosystem.

“Today, we are faced with yet another episode of potential change; we have already discovered massive new opportunities to deliver immeasurable value to our clients and partners. I am confident the world will get through this quickly, but in the interim, we will demonstrate how well we perform in environments like these.”


Up and up for revenue, client spending

engage:BDR says none of its clients have reduced their spending, cancelled campaigns or indeed taken any negative actions related to COVID-19 in 2020.

Over the past seven days, daily revenue has increased 19 per cent. Revenue within the past 24 hours has grown 11 per cent.

Ad inventory has grown 9 per cent in the past 24 hours, a statistic engage:BDR says draws attention to exponentially increased advertiser demand, as it is outpacing ad inventory growth.

engage:BDR’s management expects ad inventory to continue to grow, specifically in the only two sectors it operates in – mobile apps and CTV (connected television).

As more people work from home, engage:BDR says its management expects app and CTV traffic to grow at a very aggressive rate.

Advertiser demand has already increased within the ecommerce category, as consumer buying is significantly increasing online, and management expects advertisers with ecommerce channels to ramp up spending and increase ad budgets as work from home strategies continue to be deployed.

engage:BDR does not sell programmatic advertising directly to brands or their agencies, instead it supplies ad inventory to the world’s largest media buyer platforms that brands and agencies licence – ‘trading desks’ and ‘demand-side platforms’.

As a result, the company is not expecting the coronavirus pandemic to impact advertisers or sector-specific impact in categories such as travel and events. All advertisers bid to win ad impressions and many more have the capability of monetising digital advertising.

Additionally, engage:BDR’s ad inventory is also purchased for the upcoming election through its trading desk buyers.


On track for beating 2019

Management expects to deliver continued monthly revenue growth in March, eclipsing February 2020’s result by $500,000, or 30 per cent, and remain EBITDA profitable.

Additionally, the company says it’s on track to achieving nearly three times its Q1 2019 result for Q1 2020.

Management is expecting consistent monthly revenue growth, coupled with quarterly revenue growth, which will enable a significant revenue increase over 2019.

Expenses are expected to continue to be reduced as management is currently renegotiating contracts with infrastructure providers, and about $1.4m of legacy debt over 90 days or more remains on the balance sheet.

Management is not focused on settling these debts in the near-term, and as a result, the company does not expect to issue shares to extinguish these liabilities currently.

engage:BDR says exceptions to this would be settlement opportunities at significant discounts.


Spend money to make money

Due to significant interest rate reductions and the company’s profitable 2019 result, engage:BDR says management has received term sheets for debt refinancing and is working to refinance the current outstanding convertible notes, then terminate all convertible instruments.

NetZero demand has significantly increased incremental revenue, and at the same time, cash requirements which meant the company had to withdraw $450,000 from an existing facility in order to enable the $500,000 month over month revenue growth.

Management is focused on refinancing the facility now, but the company needed to enable the incremental revenue opportunity. There have been two total drawdowns on the facility to date, the first in 2019 for $1.75m and the recent drawdown of $450,000.

READ: Tech: engage:BDR set to book +150pc more revenue than last year


This story was developed in collaboration with engage:BDR, a Stockhead advertiser at the time of publishing. This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.