CLOUDCALL CloudCall Group plc
Interim Report
Contents | |
Key performance indicators ................................................................................................................ | 6 |
Financial review ............................................................................................................................... | 10 |
Consolidated Statement of Comprehensive Income…………………………………………………………................ 13 | |
Consolidated Statement of Financial Position…………………………………………………………………………………. 14 | |
Consolidated Statement of Changes in Equity………………………………………………………………………………… 15 | |
Consolidated Cash Flow Statement………………………………………………………………………………………………. 18 | |
Notes to the Financial Statements………………………………………………………………………………………………… 20 |
0 | CloudCall Group plc |
Registered number: 05509873 |
CloudCall Group plc
Interim Report
Financial highlights
- Total revenues up 13.4% on a constant currency basis1 (10.4% FX adjusted) with recurring and repeating revenues representing 93.9% of total revenues2 (H1 2020: 95.4%)
- Closing annualised run-rate revenue2 increased by 20% to £13.4m (H1 2020: £11.2m)
- Total reported H1 revenues £6.4m (H1 2020: £5.8m)
- Total customer numbers up 21% to 1,591 (H1 2020: 1,317)
- Gross margin increased to 81% (H1 2020: 80%)
- Net retention rate 100% (1H 2020: 85%)
- Gross cash of £8.4m with a further £2m available via the Group's existing debt facility with Shawbrook Bank and £1m expected from R&D tax credits in the coming weeks
- Adjusted EBITDA3 loss of £2.56m (H1 2020: loss of £1.69m) as the Group continued its' strategy to invest in those areas that will drive future revenue growth
- Revenue growth now starting to overtake cost growth establishing an accelerating pattern to push the business to break-even
Operational highlights
- A number of CRM integrations planned for release in Q4 2021 effectively doubling the Group's addressable market from sweet spot CRMs
- Strong recovery in Recruitment industry driving new business sales acceleration across the period and a strong sales pipeline for the remainder of the year
- SaaS metrics improving and continuing to demonstrate the effectiveness of the CRM-based go- to-market strategy:
- LTV:CAC > 5x
- Lead to demo conversion rate of 30%3 | Demo to close ratio of 61%3
- Continuing investment in product features and development with automated SMS, call transcription functionality and a significantly enhanced mobile-app in the pipeline
- Investment in internal systems and processes now delivering efficiencies within the sales, customer onboarding and account management departments
- Constant currency revenue has been calculated by applying a fixed USD:GBP exchange rate of 1.3 and AUD:GBP exchange rate of 1.92 to both 1H 2020 and 1H 2021 revenues.
- Recurring revenue is that related to contracted subscription-based products. Repeating revenue is related to pay-as-you-go (PAYG) telephony and SMS revenue which, whilst not directly contracted, has a high degree of visibility and predictability. Annualised run-rate revenue (ARR) = total monthly revenues multiplied by 12 months. To account for normal monthly and seasonal fluctuations, both the non-recurring revenue (NRR) and PAYG income have been calculated on a rolling 6-month average for the purposes of calculating ARR.
- Adjusted EBITDA represents earnings before interest, tax, depreciation, amortisation and share based payment expenses.
- As measured against leads which were generated in 2020 but closed in 2021. This is considered to provide a more accurate representation of conversion rates as a larger proportion of 2021 leads will still be within the sales cycle.
1 | CloudCall Group plc |
Registered number: 05509873 |
CloudCall Group plc
Interim Report
Chief Executive's review
Introduction and operational highlights
2020 was a challenging year for CloudCall and many of our customers, however, I am pleased to say that this seems firmly behind us, and the business is once again thriving. What is more, the Group has now reached an inflection point with revenue growth running in excess of growth in operating costs thus underpinning our drive towards EBITDA break-even and future profitability.
The recruitment sector, which represents over 50% of our revenues, has bounced back at an astonishing rate and sales to new customers have been accelerating throughout Q1 and Q2. In addition to this, we have also witnessed considerable growth from our existing customer base who have been increasing the services they buy from us. Many of our KPI's are now running well above pre-COVID-19 levels which demonstrates the effectiveness of the Group's CRM based go-to-market strategy and the relevance of the Group's product offering in today's distributed working environment.
I remain as passionate as ever about the value of CloudCall's services to our customers and the efficient way we reach those customers. The strong lead conversion rates and other compelling SaaS metrics we are consistently achieving only increases my belief that we are in the right market with the right product at the right time. With a strong growth strategy centred on increasing our addressable market, delivering new product features and increasing internal efficiencies and scalability, I remain hugely excited for what CloudCall can achieve.
Our growth strategy
CloudCall's growth strategy is very simple. We know from our current performance that our unique CRM-based product and partner-ledgo-to-market strategy is effective, as evidenced from our strong lead conversion metrics. Delivering strong revenue growth and ultimately profitability is a matter of 3 things.
Firstly, increasing our addressable market by launching more CRM integrations and working with our new CRM partners to generate good quality lead-flow from their customers.
Secondly, continuing to deliver exciting and relevant new product enhancements that continue to bring tangible benefits to our customers, allowing us to increase existing customer revenues and continue to deepen our penetration with existing partners.
Finally, improving our internal systems and processes to enable us to scale up and deliver strong revenue growth without having to increase operating costs accordingly. These efficiencies are vital to enable us to deliver strong revenue growth with much lower levels of cost growth.
More CRM partners = more addressable market = more customers
CRM systems continue to be at the centre of everything that we do as it is our belief that communications are significantly more effective when driven by the data a business holds about its customers and prospects. We believe that this approach is a key differentiator for the Group as our software provides customers with both an integrated communications solution and a powerful tool for extracting more value from their CRM systems. An integrated multi-channel communications system such as CloudCall can utilise data stored in the CRM to improve communications workflows, as well as providing reporting and analytical capabilities to drive efficiencies and generate insights for improving
2 | CloudCall Group plc |
Registered number: 05509873 |
CloudCall Group plc
Interim Report
performance. Identifying key information from within these communications and then pulling that back into the CRM in the right places enables customer knowledge to be captured that might otherwise have been lost.
The deep focus on CRM integrations and the strengthening of relationships with CRM partners underlies the Group's go-to-market strategy and this continues to deliver strong lead to demo and demo to close ratios. A key element of the Group's growth strategy is therefore focused on increasing the number of CRM partner relationships. There is a vast and ever-growing number of CRM systems in global circulation and the business is continually assessing them in order to identify those CRMs and vendors which meet CloudCall's criteria for providing a successful partnership. We refer to these as our "sweet spot" CRM partners. I am pleased to report that excellent progress has been made on this front with a number of new sweet spot CRM integrations planned for release in Q4 2021, effectively doubling the Group's addressable market of users from sweet spot CRMs. Given the Group's track record of strong lead conversion from these CRMs, this increase in addressable market is anticipated to drive a further uplift in sales volumes thus supporting FY 2022 growth targets.
Product development drives upsell opportunities, increases revenue per customer and improves retention rates
During 2021 so far, the Group has continued to invest in its underlying product offering with significant development being undertaken to enhance existing functionality as well as generating new features which will ultimately provide upsell opportunities.
Since launching our SMS messaging service, take-up has consistently increased with usage growth increasing by 250% in 2021 alone. Messaging is becoming an increasingly important part of any communications mix and the business has dedicated a large amount of resource into developing and improving our SMS product.
Going forward, our recently launched SMS automation features will provide customers with even greater opportunities for efficiency and improved customer engagement that can only come from harnessing the intelligence held within the CRM and communications. Now CloudCall users can set rules and events that will automatically trigger SMS messaging according to filed values in their CRM, and this opens up a raft of compelling use cases, not only for companies in recruitment and property sectors, but all our customers. Due to CloudCall's unique architecture, we will be able to quickly deploy this new functionality across the majority of our CRM integrations in due course.
Finally, we anticipate that our new mobile-app will be launched in Q4 of this year providing an enhanced service and greater functionality for our customers, including the ability for users to access much more of CloudCall's CRM integrated capability directly from their mobile phone.
Efficiency gains provide a pathway to more profitable growth and EBITDA break-even
As well as investing within our external product offering, the business has continued with its programme to overhaul and improve internal systems and processes. I am pleased to report that this investment is now starting to pay off with planned efficiency savings in sales, onboarding and account management processes starting to feed through. As time-consuming processes become more automated, the teams can focus more of their time on customer relationships and sales opportunities thus driving revenue generation without an associated uplift in costs. In addition to this, development work is being
3 | CloudCall Group plc |
Registered number: 05509873 |
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Cloudcall Group plc published this content on 14 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 September 2021 06:41:02 UTC.
