Kape Technologies has reported first half revenue a touch ahead of the guidance given in July’s trading update with Adjusted EBITDA in line with the suggested $5.8 million. The results show strong progress in growing SaaS revenues with the number of subscription users increasing by 24% to over 1 million and the retention rate improving again to a very healthy level. The first half also saw further investment in customer acquisition paying off with ZenMate and Intego – now both fully integrated into the Group - benefitting. New product launches and high-profile successes by Intego’s macOS security analyst team helped augment Kape’s market positioning. We note that this business model continues to enhance Kape’s ongoing revenue visibility and that Kape is growing market share. We make no change to our numbers as the Board expresses confidence in meeting stretching market growth estimates.
The strong demand for Kape’s core software products, produced a 24.2% increase in the Group’s revenue to $29.9 million and a 21.3% increase in Adjusted EBITDA to $5.8 million in the first half of 2019.
The period saw improved performances from both of last year’s acquisitions, Intego and ZenMate, which are expected to benefit further from an acceleration of digital marketing in future periods. There was also good complementary organic growth resulting from increased brand awareness for CyberGhost and ZenMate. These results emphasise that Kape continues to demonstrate that it is able to integrate acquisitions efficiently and then enhance their performance.
Kape performed well against its KPIs, with the most notable feature being a significant improvement in the user retention rate to 82% from 74% at the end of December 2018. This remains a key focus for the Group going forward.
The Group continues to execute on its strategy of accelerating SaaS adoption through organic and acquisitive means. This is being achieved by leveraging its user acquisition expertise to sell its expanding suite of cybersecurity products.
As Kape continues to pursue organic growth and to assess further potential acquisitions, the interim outlook statement notes the Board’s confidence in meeting market expectations for growth in FY 2019 and beyond. Consequently, we leave estimates unchanged.