Bidstack Group PLC (AIM:BIDS, OTC:FTBGF) reported good growth in sales and profit margins for the past year but said this will be put in the shade by revenue for the coming two years.
The in-game advertising technology group reported revenue of £2.6mln for the calendar year, up 53% on the previous year but below previous expectations, as it had flagged in a year-end statement.
From March and over two years a revenue stream of US$30mln of advertising spend has been secured as a guaranteed minimum, Bidstack said, which will be “significantly second-half weighted” to reflect the onboarding and ramping up of the contract throughout the year.
Arrangements as part of December’s two-year sales partnership deal with mobile games platform Azerion will be implemented and rolled out over the coming months, the company said.
On top of that, the multiple ad format deal with "one of the world’s leading AAA game publishers" is expected to see significant demand by advertisers and brands to use Bidstack’s in-game technology to advertise one of the world's largest sporting games franchises.
Gross profit margin improved to 36% in the past year, versus 13% the year before, which it said reflected scaling and focusing on higher-margin opportunities, meaning gross profit was up more than fourfold to £0.95mln.
The loss after tax was £6.2mln versus £6.3mln, in line with estimates, with the cash balance of £7.1mln at year-end, thanks to the £10.9mln fundraising last July.
“Landing two transformational deals at the end of the year has substantiated our strategy and given the business clarity of focus and a supportive partner to grow with,” said chief executive James Draper.
“Securing a two-year deal worth US$30mln of guaranteed revenue for our media business driven by a third-party sales team allows the company to now turn its attention to multiple other use-cases for our software.
“The market is starting to mature from a media-buying perspective and Bidstack's margin, which is now consistently above 30%, strengthened further during the period.”
He added that, having taken a look at how the business and industry could look in 2025, the company is holding conversations about granting access to its platform for non-media sales use, to provide data on the video gaming landscape.
With technical development of the platform, Draper said the group will soon have access to software-as-a-service revenue over and above media-sales revenues, which over time, is intended to diversify Bidstack's exposure to any single revenue stream.
“Our technology and services address a significant global audience. We are clear from the deals we have won that our software platform offering is at the leading edge of the in-game advertising industry. Our alignment with the right partners means we are well placed to benefit as our market continues to mature,” he said.