Trustpilot Stock Rises Strongly as Review Website Beats Profit Expectations After Strong First Half
- The company has improved its profit forecasts after an increase in reserves
- Shares rose 11% on Tuesday morning to 92.25p.
Shares in Trustpilot rose sharply on Tuesday morning after the group said it had beaten profit expectations following an excellent first half of the year.
The review website updated earnings guidance beyond the upper range of market expectations after a 16 percent rise in bookings to $99.2 million.
Actions on Trustpilot They rose almost 11 cents to 92.25 pence on Tuesday morning.
Excellent first half: Online review website Trustpilot has raised its profit expectations
Revenue increased 16 percent, from $73.4 million to $84.6 million in the first half of the year, and ended June with annual recurring revenue of $180 million, a 17 percent increase in currency constant.
Profitability was “above expectations” with core profits of $5.7 million, against a loss of $5.4 million in the first half of 2022.
However, the group reported a first-half loss of $2.5 million, compared with a loss of $9.2 million a year ago.
Founder Peter Holten Muhlmann, who stepped down as CEO earlier this month, said: “Our business delivered a strong performance in the first half, enabling us to move towards adjusted Ebitda profitability and positive free cash flow before than originally planned.”
As of June 30, 2023, Trustpilot had net cash of $82.7 million and no debt, reflecting positive free cash flow in the period.
“While in the first quarter we experienced the effects of the uncertain macroeconomic environment, which affected new business and retention bookings, we subsequently saw more encouraging performance in the second quarter that continued into the third,” Holten Muhlmann said.
‘Accordingly, we maintain our outlook for steady foreign currency revenue growth throughout the year, but, with higher operating leverage in the second half, we anticipate that adjusted EBITDA (before the impact of capitalization of commissions sales) will exceed the current range of market expectations.
“The board remains confident that the business will generate sustainable growth and operating leverage over the long term and in the significant and growing long-term market opportunity.”
UK revenue rose 12 percent year-on-year to $33.4 million and bookings rose 9 percent to $38.4 million.
There was an “encouraging acceleration” in North America, where revenue rose 9 percent to $18.1 million and bookings grew 11 percent to $21.1 million.
Europe and the rest of the world increased revenue 23 percent to $33.1 million, while bookings rose 19 percent to $38.6 million.
Adrian Blair, who took on the role of CEO earlier this month, said: “This is an exciting time to be joining Trustpilot and I look forward to working with the team as we further scale the business and continue to deliver sustainable growth and profitable along with product innovation. .’
Dan Ridsdale, director of technology, media and telecommunications at Edison Group, said: “The company has found itself in something of a middle ground between growth and value.
“The growth rate has not been high enough to capture the attention of structural growth technology investors, while the company needs to improve margins for conventional investors focused on profitability to see value, although the interim results of Today they show a better way to follow in this sense. .
‘All eyes will be on new chief executive Adrian Blair to understand what changes he may be considering, but as he has only just joined it is unlikely there will be much discussion at this stage.
“One of the main questions will probably be your opinion on the US operation, which is subscale in a competitive market and where growth is lagging (revenue increase of 9 percent in the first half).”
