Special Report: Video and display advertising provider engage:BDR has had another stellar quarter with revenue surging.   

engage:BDR’s (ASX:EN1) revenue from March alone has eclipsed that of March 2019 by 211 per cent.

The video and display advertising provider said revenue for the month of March jumped to $2.02m compared to the prior corresponding period — it even beat February by 18 per cent.

March was when the COVID-19 pandemic really began to bite around the world, but engage:BDR has shown it could be one of the defensive stocks that will prosper during the economic turmoil. 

Total revenue in the March quarter was $5.3m or up 160 per cent on the same quarter in 2019.

The company said this was its strongest first quarter and month of March since listing on the ASX in December 2017.

 

Revenue seasonality 

The advertising industry traditionally expects 65-70 per cent of its revenues in the second half of the year, July through December, as was experienced by engage:BDR in 2019 when it took 34 per cent of revenue in the first half and 66 per cent in the second.

Management expects 2020 to produce similar revenue seasonality.

Due to about 85 per cent of the US population currently under stay-in-place orders, many brands, though none specific to engage:BDR, have temporarily reduced their marketing budgets as consumers cannot transact with them at the moment.

As a result, the ad exchange did not see demand ramp-up as usual in the last days of the quarter.

April starts a new quarter and typically demand is lighter in the first three weeks of the first month. Management does not have an indication or statistically relevant data on what to expect in Q2 yet but will update shareholders.

The AdCel executive team expects revenue to increase 25 per cent in April due to new NetZero publishers going live and maintaining consistent, uninterrupted international demand.

 

Taking advantage of the new normal

In light of significant interest rate reductions, engage:BDR’s 2019 audited financial results and the US government’s $2.2 trillion stimulus program, management has applied for several new financing opportunities, none of which involve equity.

Management is currently working with a large Tier 1 Australian bank in the application process.

Additionally, engage:BDR qualifies and has applied for US SBA loans under the CARES Act, with UMB Bank US.

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.

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