First Derivatives H1 Revenue Gains Marginally, Profit Drops

First Derivatives (LON:FDP) has published its financial results for the first six months ended on August 31, 2020, showing a marginal increase in its revenue, but the profits slumped in double digits.

The total revenue of the financial software and consulting company increased by 3 percent year-on-year for the period to £119.6 million. This number came from two business segments: software, and managed services and consulting.

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The revenue from the software streams contributed 62 percent of the total Group revenue with £74.4 million. The software licensing revenue increased by 12 percent, with a 7 percent uptick in the recurring license revenue and a 56 percent increase in perpetual license revenue. 

In absolute terms, the recurring and perpetual licensing contributed £30.4 million and £4.9 million respectively. The company additionally highlighted that it is transitioning to secure all software licenses on a recurring basis.

FD’s software offerings include its fintech services, MarTech services, and software supplied to the industry.

Managed services and consulting revenue, on the other hand, remained flat at £45.2 million. However, the gross margin in this business dropped to 21 percent from the previous year’s 24 percent.

The pre-tax profits of the company decreased by 12 percent to £7.4 million from the previous year’s £8.4 million. The adjusted EBITDA went down 2 percent to £21.5 million.

Furthermore, the company strengthened its books significantly by reducing its debts. Its net debt is now £30.6 million, compared to £60.2 million in H1 2019.

High Hopes with Fintech Services

“During the period we have demonstrated the Group’s resilience while continuing to focus on the considerable opportunity ahead,” FD chairman Donna Troy said. “It is clear that the use of data, particularly streaming operational data, to drive decision-making will become critical for enterprises, and COVID-19 will accelerate this trend.”

“Kx technology is ideally placed to be the streaming analytics software of choice that customers and partners trust to solve their most demanding and complex data challenges, and it is our mission to capitalize on that opportunity.”

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