FADEL Partners, Inc., a developer of cloud-based brand compliance and rights and royalty management software, has released its half-year trading update for the six months ended 30 June 2024 (1H24). The company reported total revenue of $5.3M, with recurring revenue declining 21% to $3.4M, partly due to renewal license revenue on certain contracts shifting into 2H24. Conversely, service revenue increased 90% to $1.9M in 1H24, reflecting the successful start of a new IPM customer implementation and professional services in support of expansionary regional rollouts for existing IPM customers.
The adjusted EBITDA loss increased in 1H FY24 to $3.6M, primarily driven by an increased level of investment in go-to-market costs and the relatively flat level of revenues. The company anticipates its FY24 revenue to be within the range of $14.8M to $15.8M, with an adjusted EBITDA loss between $2.3M and $1.9M. FADEL expects a closing cash position of between $1.3M and $1.9M at year-end.
FADEL introduced a key SaaS metric of Annual Recurring Revenue (ARR), which increased by 3% to $9.3M in 1H24. The company closed approximately $0.7M in new ARR during this period, surpassing the total new ARR closed for the entire full year 2023. FADEL also launched LicenSee™, a cloud-based platform for automating royalty management for mid-market consumer product licensees, and its BrandVision offering continues to attract enterprise clients.
The company has expanded its sales and marketing teams since its IPO in April 2023, showing early signs of success in an expanded pipeline of both new logos and existing customer opportunities. FADEL is cautiously optimistic about the returning confidence in customer budget releases for professional services projects, evidenced by growth in its services revenue stream during 1H24.
Effective 14 February 2024, FADEL appointed a new Chief Financial Officer, Ian Flaherty, a CPA in the United States. Ian has held various financial management positions in publicly listed companies.