# Silverbullet reports strong revenue growth, positive cash flow position

- Link: https://www.directorstalkinterviews.com/silverbullet-reports-strong-revenue-growth-positive-cash-flow-position/4121171221
- Published: 2024-09-11T07:16:22+01:00
- Author: Amilia Stone

**Silver Bullet Data Services Group plc** (LON:SBDS), Silverbullet, a provider of
AI driven digital transformation services and products, is pleased to announce interim
results for the six months to 30 June 2024.

_Cash generated from operations, current record bookings and committed revenue,_
_on target to achieve an EBITDA positive run rate from October onwards._

**Financial Highlights**

|  | **Six months to June 2024** | **Six months to June 2023** | 
| ** ** |  |  | 
| **Revenue** | **£4.4m** | **£4.2m** | 
| **Gross Profit** | **£3.3m** | **£3.3m** | 
| **EBITDA\*** | **(£0.9m)** | ** (£1.2m)** | 
| **Reported Loss before tax** | **(£1.6m)** | **(£1.8m)** | 
| **Earnings Per Share** | **-0.08p** | **-0.10p** |

*See note 3 of notes to the interim accounts

**Highlights**

·      Confident of achieving an EBITDA positive run rate from October onwards

·      Continued strong revenue growth over 2023, excluding one-time discontinued
business

·      Repeatable services business up 32% for H1 24 versus H1 23

·      4D AI revenues up 17% for H1 24 versus H1 23

·      4D AI integrations into other platforms expected to drive further strong 
growth in H2 24

·      Global and US Client revenues increased to 57% versus 47% in H1 23

·      Cash generated from operations of £0.2m in H1 24 (-£1.3m H1 23)

·      Narrowing EBITDA loss

·      Total bookings and committed revenues as of 31 August 2024 are £8.6m (versus
£7.1m in the period to 31 August 2023, 21% increase) year-on-year being greater 
than last year’s full-year revenue of £8.3m

**Ian James, Silver Bullet Data Services Group** **Chief Executive, commented:**

“_We are delighted with the continued progress and positioning of the Company, as
well as our strong revenue growth entering the second half of the year. With the
objective of achieving a consistent positive EBITDA run rate, the Board took the
decision in the first half to focus on higher margin long-term repeatable business
and decided to discontinue previous lower margin projects. The second half of the
year started particularly strongly with new global contracts and, as a result, we
have strong visibility on full-year revenues, having already surpassed the total
revenue for FY23 by the end of August FY24. At the same time, we continue to carefully
manage our investments in talent and operational costs._

_“With the Company reporting a positive cash flow position in the first half of 
FY24 and confident of achieving an EBITDA positive run rate from October onwards,
the Board remains particularly optimistic about the future of the business._“

**Chief Executive Officer’s Report**

Silverbullet is pleased to announce a positive performance for the first half of
2024, meeting management’s expectations for the period combined with a particularly
strong start to the second half. Alongside revenue growth, the Company has achieved
key milestones, including reaching positive operating cash flow in the first half
and total bookings of £8.6 million by the end of August which already surpasses 
the total revenue recorded for the entire FY23 whilst maintaining a consistent cost
base.

The Company’s growth and key milestones demonstrate its focus on building long-term,
repeatable business, particularly with global and US clients. Notably, revenue contributions
from these regions increased to 57%, compared to 47% during the same period in FY23.
This strategy is driving robust growth by expanding the scope of work with existing
clients and securing over 20 new scalable, long-term client engagements in the first
half of the year.

During this period, the Company achieved overall revenue growth of 5.1% compared
to H1 2023, reaching £4.4 million. With a focus on achieving a positive EBITDA run
rate, the Board took the decision to focus on higher margin long-term repeatable
business and decided to discontinue previous lower margin projects. As a result,
after discontinuing several one-off clients from the previous year, who were not
deemed repeatable, the Company saw a like-for-like growth of 32% in its CX services
business and 17% in its 4D AI division, compared to the first half of FY23. This
success stems from deepening engagements with both new and existing clients across
its three key markets: the US, UK, and APAC, as companies accelerate their data-
driven marketing transformations.

In February, the Company announced an extended contract with Mars Petcare US (“Mars”),
which provides pet nutrition, health, and veterinary services as part of Mars, Incorporated.
Silverbullet extended its partnership with Mars for the third consecutive year, 
from January to December 2024. In this extended collaboration, the Company will 
be broadening its support to Mars across three primary workstreams, specifically
dedicated to the implementation of AI driven first party customer data intelligence.

In March, Silverbullet announced new contract wins and renewals worth, in aggregate,
£1.7 million. It secured a renewed contract with Heineken, a Global Dutch multinational
brewing company with a presence in over 70 countries and ownership of 165 breweries.
As Heineken’s trusted data services partner, Silverbullet will serve as a multi-
regional resource for first-party data services, overseeing the implementation of
a comprehensive first-party customer data strategy and implementation. In addition,
Silverbullet successfully renewed its 2023 contract and secured a new contract with
a leading pub retailer and brewer in the UK. Silverbullet is collaborating closely
to deliver transformative solutions, leveraging AI and digital strategies to enhance
their operations.

As customer data, enhanced by AI, becomes increasingly vital to businesses, Silverbullet
is well-positioned as a leading Data-Driven Customer Experience (CX) company. Operating
at the heart of the data ecosystem, Silverbullet enables clients like Heineken, 
Mars, Sony, and Omnicom to drive marketing transformation by unlocking the value
of first-party customer data, marketing technology, and AI-powered advertising tools.

With growing consumer demand for data privacy, Silverbullet helps its clients communicate
with their customers in a privacy-first manner, while maximising marketing ROI through
optimised use of data and marketing technology.

**The business is comprised of two divisions:**

**Customer Experience (****CX) Services Suite**

_Strategic Consultancy & Managed Services_

·      Our strategic consultants combine key digital capabilities with industry 
expertise, bridging the gap between marketing data and technology in complex client
environments.

**Customer Experience (****CX) Product Studio**

_4D AI & Silverbullet Cloud_

·      Rooted in privacy and driven by powerful AI and the industry’s most robust
data, the Silverbullet Cloud is made up of a portfolio of owned and operated data
tools and platforms which empower global brands to personalize every single customer
journey, driving better ROI for digital marketing spend.

**CX Services:**

Silverbullet’s Customer Experience (CX) Services division achieved impressive growth
of 32% (excluding discontinued one-off clients) during the period, with revenues
increasing to £2.9 million. This growth was driven by securing additional contracts,
expanding the scope of work with existing global and US clients, and winning 20 
new clients. Notably, multi-brand international clients like Heineken, Mars, and
Omnicom Group continue to adopt more services from Silverbullet, benefiting from
the Group’s expanding service offerings, product suite, and growing geographical
footprint.

Compared to the same period last year, the Company’s top three clients experienced
revenue growth of 19%, 41%, and 60%, respectively. Additionally, Silverbullet secured
a major contract with a global confectionery company, granting the company a worldwide
mandate to lead its data transformation strategy.

Silverbullet’s partnerships with global enterprise marketing software companies 
such as Salesforce, Treasure Data, and Braze continue to thrive. These partnerships
enable clients to build long-term, transformational data infrastructures that can
be systematically replicated with the support of Silverbullet’s CX services and 
Cloud data products across new geographical markets and brands. This expansion, 
in turn, provides Silverbullet with a robust pipeline and significant opportunities
to further grow services with both new and existing clients.

**4D, AI Contextual Data Platform and Silverbullet Cloud**

4D, Silverbullet’s AI contextual data targeting and insights platform, has delivered
continued growth in the period, with revenues growing by 17% versus H1 2023 to £
1.5m, with bookings by the end of August exceeding the total revenue booked in whole
of FY 23. This has been driven by a combination of the managed service offering 
in the US market, and the increasing recurring revenue generated by 4D integrations
in partner technology platforms. These 4D data revenues from partner integrations
increased 33% year on year and have established a strong platform for scaling in
second half of the year and into FY25. During the period the company secured seven
data integrations with scaled partners in the digital advertising space.

Multiple clients regularly used the platform in the period, including Coca Cola,
Marriott, Disney, Sunkist and Burger King providing a solid foundation for growth
moving forward.

**Board Changes**

In April, Chris Ellis joined Silverbullet as Group CFO and Company Secretary. Chris
Ellis is a qualified chartered accountant and an accomplished, target-driven senior
executive with extensive experience gained from leading complex global private equity
and publicly owned businesses. His industry expertise spans Financial Services, 
Healthcare, Technology/SAAS, and Oil & Gas sectors, ranging from enterprises with
turnover exceeding $1.5 billion and 2,500 employees to smaller businesses with turnovers
less than $100 million and 50 employees.

AnnaMaria Khan-Rubalcaba was also appointed as a new Non-Executive Director, who
brings extensive senior-level experience in marketing technology and AI services.
AnnaMaria serves as Chief Executive of HYD, an Omnicom Group Digital Product Agency,
for over five years, from January 2019 to the present. Prior to her role as Chief
Executive, she held the position of Managing Director, where she contributed to 
the operational and managerial aspects of the agency. Her insights have already 
proved invaluable to Silverbullet’s progress in AI and further development of its
4D data platform.

**Outlook**

We are pleased with the continued progress and positioning of the Company, as well
as our strong revenue growth, driven by a focus on long-term, repeatable engagements
with global and US clients. As privacy regulations tighten, with 75%_(1) of the 
world’s population now covered by privacy-first legislation, we are seeing increasing
global demand for Silverbullet’s data products and CX services.

The Company remains committed to delivering world-class value to both current and
new clients through data-driven business transformation. We will also continue to
expand our integrations with partner technology platforms and grow the licensing
of our 4D AI data offering. In August, we secured a significant contract for 4D 
AI integration with one of the world’s largest programmatic self-service advertising
platforms, which handles US$9.6 billion in annual transactions.

We have strong visibility on full-year revenues, having already surpassed the total
revenue for FY23 by the end of August FY24. At the same time, we continue to carefully
manage our investments in talent and operational costs.

With the Company reporting a positive cash flow position in the first half of FY24
and confident of achieving an EBITDA positive run rate from October onwards, the
Board remains optimistic about the future of the business.

Source: 1) IAPP Global Privacy Laws Analysis

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