Trading Update

Strategic cost initiatives put in place to reach EBITDA breakeven earlier than previously guided

Fadel Partners, Inc., the developer of cloud-based brand compliance and rights and royalty management software, provides a pre-close trading update for the year ended 31 December 2023 (FY23), based on unaudited management accounts.

Financial highlights for FY23

• Revenue in-line with market expectations, up 10% to $14.5m (FY22: ​ $13.2m)
• Recurring revenue increased by 31% to $11.4m (FY22: $8.7m)
• LBITDA expected to be less than $2.0m reflecting a focus on efficient use of resources

Strong full year revenue growth

2023 revenue increased 10% year on year to $14.5m, in-line with market expectations. Our recurring revenue (defined as License/subscription and Support revenue) increased 31% to $11.4m (FY22: $8.7m), in part due to a number of notable net new software license wins with clients including PepsiCo, Kimberly-Clark, Sanofi and Philip Morris and in part due to a number of annual license contract renewals/upgrades.

This continued revenue growth is particularly pleasing given the uncertain macro-economic climate that some of our customers faced and our services revenue for FY23 also finished strongly and is expected to be $3.1m (FY22: $4.5m).

Since our IPO, we have successfully executed against our strategic objectives through investing in technical innovation and growing our sales and demand generation teams. The launch of Brand Vision to the market in 2023, alongside strategic enhancements to PictureDesk, Content Tracking and IPM Suite, have all consolidated our position as a leader in the digital content services and intellectual property market and enabled the Group's revenue growth through new client wins. The period has also seen us further embed our expanded product range in existing blue chip customers, including Hasbro, Abrams Books, Media Participations, Hachette Livre, Macmillan Learning, Philip Morris and PepsiCo with more recurring product licenses, upgrades and subscription support and professional services being sold.

We have hired c.40 new employees into the Group since the IPO in multiple geographies and across all disciplines. This includes the hires of a VP of Growth Marketing, who has built up the 'Demand Generation' team and a Chief Revenue Officer, who has developed structures and processes around our go-to-market sales efforts. These strategic hires have bolstered the number of leads and opportunities in our pipeline and significantly increased demand-generation activities as we plan to drive more growth in sales leads in 2024 and beyond.

Continued strategic investment in conjunction with disciplined cost management

In line with our prudent approach to managing all aspects of our business and an ongoing assessment of the wider macro environment, we have been disciplined with overall spend and allocated capital strategically. We expect to report LBITDA of less than $2.0m (FY22: $1.5m). Our balance sheet remains healthy, with net cash of approximately $3.0m at the year end.

The Group's full year results for the year ended 31 December 2023 are expected to be announced in April 2024.

Tarek Fadel, Chief Executive Officer of FADEL, commented:

"2023 was another milestone period for FADEL. We delivered a successful IPO and then began the process of building the business for the next phase of our growth journey. The successes in the year have further consolidated our position as a leader in the digital content services and intellectual property market and provide a strong platform to take advantage of significant market opportunities available to us. It has also become increasingly clear that many of our existing and prospective customers require the solutions provided by both of our product families and we are delighted about the future prospects for the Company. The growth in recurring revenues, the opportunity to increase our revenues from our existing and prospective clients and the encouraging pipeline, alongside resuming delayed professional services engagements, underpins our revenue growth plans for 2024. Further, our prudent management of costs should ensure we reach EBITDA breakeven earlier than we had planned."

About FADEL Partners Inc.

The Group's main country of operation is the United States, where it is headquartered in New York, with further operations in the UK, Lebanon, France, Canada and India. Founded in 2003 by Tarek Fadel (Chief Executive Officer), FADEL has since grown to a team of 131 full time employees, plus an additional pool of c.40-50 contractors.

For more information please visit the Group's website at: www.fadel.com.