FD Technologies expects revenue of £296M for FY23

FD Technologies plc (LON:FDP) today issued a trading update for the year ended 28 February 2023.

Group revenue is expected to be approximately £296 million, representing growth of 12%, despite the strengthening of the dollar against sterling in H2.

Group EBITDA is expected to be approximately £35 million, with strong performances at KX and First Derivative offset by a weak demand environment at MRP.

Strong cash management in H2 resulted in a net cash position at the year end of £0.4 million, compared to net debt of £7.4 million at end August 2022.

KX delivered a strong performance, ahead of guidance, with revenue of approximately £80m and ARR of £65m, a 39% increase on the prior year.

Recent KX successes include the general availability of kdb Insights Enterprise on Microsoft Azure, the industry’s first Data Timehouse, together with new customer wins including Syneos Health and PSE, the Polish national electricity transmission system operator.

First Derivative delivered revenue of approximately £174m, representing growth of 18%, ahead of our guidance for the year; MRP revenue was approximately £41m, a decline of 19%, primarily due to macro-economic conditions.

In terms of outlook, the company forecasts KX to achieve ARR growth of at least 35% in FY24.

First Derivative continues to perform well, with revenue growth in excess of 10% expected combined with a meaningful improvement towards our three-year target of a 15% EBITDA margin. At MRP, the company expects the lower cost base to deliver an improvement in EBITDA for the year.

Seamus Keating, Group CEO, said:

“KX and First Derivative have performed strongly, with both revenue and EBITDA ahead of our expectations, as each business strengthened its market position.

KX in particular has made strong commercial and strategic progress, driven by our market-leading ability to deliver 100x the performance at one tenth of the cost of alternative solutions. These advantages are particularly compelling for hyperscale cloud providers, resulting in a range of initiatives which we are progressing with our partners that provide further confidence in our outlook.

First Derivative also performed strongly and continued to deliver impressive revenue growth of 18% for the period. We continue to see multi-year strategic growth drivers that will underpin demand for our services.

We have set ourselves ambitious but sustainable growth targets for the years ahead which will ensure we are focused on driving high-quality recurring revenue growth from an expanding list of customers across a wide range of industries, while generating long term value for shareholders.”