Trustpilot Group PLC (LON:TRST), a leading global review platform, has provided an update on trading for the financial year ended 31 December 2023.
FY23 highlights
● Revenue +c.17% bookings +c. 16% and ARR +c.18% YoY at constant currency
● Reported Adjusted EBITDA1 ahead of the top end of the range of market expectations2
● Net dollar retention rate resilient YoY at 99% (FY22: 100%)
● Our balance sheet remains strong, with our net cash balance increasing to $91m, reflecting strong cash generation in the period
● Separately announced share buy-back program of up to £20m (c.$25m)
| USD | FY23expected | FY22actual | (+/-) %actual | (+/-) % constantcurrency |
| Total revenue | $176m | $149m | +c.18% | +c.17% |
| ARR3 | $197m | $162m | +c.22% | +c.18% |
| Total bookings4 | $195m | $165m | +c.18% | +c.16% |
For FY23, Trustpilot expects to report Group revenue of $176m, +c.17% at constant currency. We expect to report FY23 annual recurring revenue (ARR) of $197m, compared to $162m in the prior year, representing c.18% constant currency growth year-on-year. Total bookings increased to $195m, up c+.16% year-on-year at constant currency, and the LTM net dollar retention rate was 99% (FY22: 100%).
We continued to manage our business to deliver additional operating leverage in H2, further supported by solid top-line growth. Hence, we expect to report Adjusted EBITDA above the top end of the range of market expectations. In addition, we continue to deliver strong cash generation, and we closed the year with $91m of cash and no debt (30 June 2023: $83m).
Share buyback programme
Separately, Trustpilot announced today a c.£20m share buyback (which would amount to a buyback of up to approximately $25 million at prevailing exchange rates). This reflects our disciplined capital allocation strategy to deliver profitable growth and cash flow generation. Please see the separate RNS announcement for further details.
Adrian Blair, CEO, commented:
“Building on a solid performance in the first half of the year, we achieved further growth and margin improvement in the second half, with profitability and positive free cash flow ahead of expectations for the year. In addition to our focus on delivering sustainable operating leverage, we achieved robust growth in new business and a resilient retention rate across all regions. Following our commitment to return excess capital to shareholders, we announced today a share buyback programme of up to £20m.
The strong performance in FY23 shows the strength of the Group. We remain confident in our ability to sustain growth and improve margins over the long term as we deepen the network effects in our model to capitalise on large and growing market opportunities.”
Notice of results
Trustpilot will report results for the financial year ended 31 December 2023 on Tuesday, 19 March 2024. On that day, an in-person analyst and investor briefing will take place in London at 09:00, which will also be accessible via webcast and conference call. For registration, please visit https://investors.trustpilot.com.
1 Adjusted EBITDA excludes share-based compensation, associated cash-settled social security costs, and non-recurring transaction costs such as restructuring costs. In addition, as previously announced, from FY23 onwards, Adjusted EBITDA also excludes capitalised sales commissions under IFRS 15 – this benefited FY23 Adjusted EBITDA by c.$4m and should be expected to contribute a c.$3m benefit in FY24.
2 On 31 December 2023, the company-compiled analyst consensus stood at mean constant currency revenue and bookings growth of 15% and 14%, respectively, and a mean Adj. EBITDA forecast of $12.4m, with the range of $11.1m – $14.1m.
3 Annual Recurring Revenue = Monthly Recurring Revenue * 12 translated at period closing spot rate.
4 The annual contract value of contracts signed in a given period translated at monthly average rates.
