Key Financial Highlights of 2022

Financial Overview

Overview

During 2022, Bidstack rapidly expanded across the following lead indicators and KPIs:

• Portfolio of game publishers and developers to >250 that includes AAA titles and independent titles;
• Growing offer of ad formats to three, leading with intrinsic in-game, in-menu and the most transacted gaming ad-unit rewarded video;
• Rapid integration of US commercial team providing visibility on sales pipeline;
• Entering new markets outside side of the US and UK through addition of resellers in the Middle East, India and Asia Pacific;
• Progress from the pipeline of enterprise customers licensing Bidstack’s technology as a service.

These growth drivers set a solid foundation for diversification, cross-selling of product suite and scalability of revenue. The investment behind talent acquisition during the year will strengthen Bidstack’s moat and accelerate execution into 2023.

Trading and Outlook

In 2022, Bidstack delivered gross billings of £9.3m (inclusive of all revenues and minimum revenue guarantee) in line with its two-year commercial contract with Azerion, a pan-European digital entertainment and media platform. As a result of the net accounting treatment under IFRS 15, reported revenues for the year was £5.3m (+101%). 

This has also driven the gross margin to rise significantly to 72% (FY21: 36.1%) that reflects the accounting treatment and cost of sales towards servicing the Azerion contract. Excluding this impact, the unaudited adjusted gross margin would be closer to c.40%. 

By geography, the revenue mix was skewed to EMEA due to Azerion’s sales footprint. The shortfall in the US was addressed in Q3 2022 where Bidstack invested behind a proven commercial team.

The US is significant and important as it is the world’s largest advertising market. The integration of the team has been rapid given the depth of experience and relationships. This is evident in the delivery of campaigns for Fortune 500 brands, size of budgets and repeat business. Advertising agencies and programmatic platforms are leaning in and recognise the potential of in-game advertising. 

Going forward, a global reseller network will be rolled out to smooth out seasonality, diversify geographies and leverage specialist gaming agencies as they multiply given the opportunity of the addressable market. This is a cost efficient approach in monetising non-core markets.

The headline operating expenses excluding share based payments was £11.3m (FY21: £8.3m). A provision has been raised to reflect amounts outstanding from Azerion which is a key item. Bidstack has taken appropriate legal advice and intends to claim damages for unlawful termination. Following a preliminary hearing in the District Court in Amsterdam, Azerion has provided Bidstack security in respect of the initial part of Bidstack’s claims. Headcount was at 78 (FY21: 73) by the end of the year. The key areas of investment were related to the onboarding of the US commercial team in addition to product and software engineers to prepare for the implementation of the gaming open marketplace.

At year end, the cash balance held was £8.7m (FY21: £7.1m). This reflects the successful fundraise in October 2022 of £10.5m which included a significant investment by Irdeto B.V. a world leader in digital platform cybersecurity taking a 13.5% stake.