21 July 2020
Kape Technologies plc
("Kape" or the "Group")
Kape (AIM: KAPE), the digital security and privacy software business, is pleased to provide a trading update for the half year to 30 June 2020.
The Group continued to trade strongly through the first half, in line with management's expectations. Kape benefitted from higher demand for its privacy-based software solutions due to increased remote working and a full six months of contribution from PIA.
H1 2020 revenue is expected to be c. $59.0 million (H1 2019: $29.9 million), up 97%, and 12% on a proforma basis. Recurring revenue represented c. 90% of Group revenue. Adjusted EBITDA1 is expected to be c. $16.1 million (H1 2019: $5.8 million), up 180%. Adjusted EBITDA margin increased to 27.3% (H1 2019: 19.4%).
R&D remains a central focus for Kape, with our mission to support consumers' broadening digital privacy requirements. Kape's end-market continues to experience strong growth, with CyberGhost's new privacy suite introduced during the period to address individuals' increasingly complex privacy demands.
The integration of PIA has advanced ahead of management's projections with significant progress already made in integrating marketing and customer service functions, infrastructure and R&D capabilities. The Group is on track to achieve the synergies as outlined within the presentation provided at the Capital Markets Day in June 2020.
The continued expansion of our services to existing customers as well as an increase in the number of new customer wins further supports the Board's high degree of confidence that the Group will deliver revenues of between $120-$123 million and Adjusted EBITDA of between $35-$38 million.
Ido Erlichman, Chief Executive Officer of Kape, commented:
"We have made a strong start to 2020, as evidenced by the 97% growth in revenues and 180% increase in Adjusted EBITDA delivered in the first half of the year. This performance is underpinned by the rapid and successful integration of PIA, our continued dedication to product development, and the increased awareness and relevancy of our products worldwide.
"We believe Kape has never been better positioned to grow as we seek to further broaden our global reach. Our continued investment in our talent and products is placing Kape at the forefront of the expanding digital privacy and security ecosystem."
1 Adjusted EBITDA is a non-GAAP measure and a company specific measure which excludes other operating income and expenses which are considered to be one off and non-recurring in nature.
Kape Technologies plc
Ido Erlichman, Chief Executive Officer
Moran Laufer, Chief Financial Officer
via Vigo Communications
Shore Capital (Nominated Adviser & Broker)
Mark Percy / Toby Gibbs / James Thomas
+44 (0)20 7408 4090
N+1 Singer (Joint Broker)
Harry Gooden / George Tzimas
+44 (0)20 7496 3000
Vigo Communications (Financial Public Relations)
Jeremy Garcia / Antonia Pollock
+44 (0)20 7390 0237
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014
Kape is a leading 'privacy-first' digital security software provider to consumers. Through its range of privacy and security products, Kape focusses on protecting consumers and their personal data as they go about their daily digital lives.
To date, Kape has over 2 million paying subscribers, supported by a team of over 350 people across eight locations worldwide. Kape has a proven track record of revenue and EBITDA growth, underpinned by a strong business model that leverages our digital marketing expertise.
Through our subscription-based platform, Kape has fast established a highly scalable SaaS-based operating model, geared towards capitalising on the vast global consumer digital privacy market.
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