Pureprofile Ltd - Delivering Record Revenue and EBITDA for FY22
Pureprofile Ltd
Delivering record revenue and EBITDA for FY22
Pureprofile Ltd (ASX:PPL) is a data analytics, consumer insights and media company underpinned by proprietary technology, servicing business decision makers in brands and media companies as well as market researchers. Pureprofile has reported a 39% increase in FY22 revenues to $41.7m and a 28% increase in EBITDA to $4.0m. EBITDA was at the low end of the company’s guidance range of $4.0m to $4.4m but included the absorption of additional costs associated with investment in five new commercial heads and associated support which the company expects to see translate into revenues from FY23. Q4 revenues were $10.9m, up 29% on the previous corresponding period (pcp) and Q4 EBITDA was $1.0m, flat on pcp but up 50% on Q3. The company ended the quarter with $5.3m in gross cash, suggesting a net cash position of $2.3m. We have aligned our FY22 forecasts with the unaudited results but our FY23 forecasts are under review pending the release of the FY22 audited results in late August. Our DCF-derived valuation has now included a higher risk-free-rate (3.5% versus 2.0%) and sits at $0.10/share, fully diluted for in-the-money options and performance shares. On the current share count, our base-case valuation is $0.12/share.
Business model
Pureprofile generates its revenues from providing data analytics and consumer insights derived from its actively managed panels of digital members accessed through its proprietary technology platform. Pureprofile also has a media arm which executes advertising campaigns for clients. In a world where privacy is increasingly valued, consumer insights and profiles generated through online panels allow businesses to gain the ability to segment, target and engage with their audiences without consumer privacy issues. In exchange, consumers are directly financially rewarded for their information and responses, and indirectly through more relevant content and personalised experiences.
Strong finish to FY22, investment ready for FY23
PPL reported Q4 revenues of $10.9m, up 29% on the pcp, and EBITDA of $1.0m, flat on the same period in FY21 but up 50% on Q3 FY22. FY22 revenues lifted 39% to $41.7m and EBITDA 28% to $4.0m. Pleasingly, Pureprofile delivered EBITDA within its guidance range of $4.0m to $4.4m while still investing in talent to drive future revenue and earnings growth. Revenues from Data & Insights outstripped our forecasts, particularly from outside Australia, while Pure.amplify revenues were largely in line with our expectations. The SaaS platform increased revenues 57% in Q4, which was a slower rate of growth than delivered for the full year. We have aligned our FY22 forecasts to reflect the full year revenue and EBITDA reported. Our FY23 forecasts are under review pending the FY22 audited results which will be released in late August.
Base-case DCF valuation of $0.10/share fully diluted
We use the discounted cashflow methodology to value PPL and arrive at a fully diluted DCF of $0.10/share, based on a WACC of 13.6% (previously 12.3%) and a higher risk-free-rate to reflect the rise in the 10-year Treasury bond rate. On the current share count of 1,107.0m, our base-case valuation is $0.12/share. In our view, continued demonstration of strong revenues growth, a sustained return to profitability, and further evidence of margin expansion should underpin PPL’s share price in the near term.
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- Pureprofile Ltd - Delivering Record Revenue and EBITDA for FY2222 Jul 2022