Company Announcement TextMagic AS 2023 6 months consolidated unaudited interim report
TextMagic Group's revenue grew 6% in the first half of 2023 compared to the same period last year. TextMagic's SMS platform revenue growth rate has slowed significantly in 2023 due to a combination of factors. Our primary market, the US, is undergoing significant changes to SMS regulations, resulting in restrictions on SMS campaigns. Demand, which increased during the peak of the Covid pandemic, has now come to an end. Rising interest rates, inflation and the impact of the economic environment have had a negative impact on our customer portfolio, resulting in a decline in business volumes.
At the end of May we changed the price list for the TextMagic SMS platform. In June, we launched a regulatory development on the TextMagic SMS platform to simplify the process for customers to register campaigns and brands. As of July, mobile apps with enhanced functionality and a new logo are available for both Android and iOS users. We plan to launch a version with a new user interface in the third quarter.
The development of the Touchpoint customer service platform is on schedule and the product will be launched in the fourth quarter of 2023. As a result, we have been proactively engaged in marketing activities. In the first half of the year, much attention was paid to the integration of artificial intelligence (AI) technologies. In the third quarter of 2023, Touchpoint customer support modules will be piloted across the Group, marking an important step in our product development.
The second quarter was an important milestone in TextMagic's strategy to develop, acquire and manage software solutions for business customers. On June 1, Voog, a website and e-commerce management platform, was acquired for EUR 1.1 million. As part of the acquisition, 100% of the shares in Edicy OÜ were acquired from 16 shareholders.
Group sales results for 6 months of 2023
The unaudited consolidated total revenues of the group for the first half year of 2023 amounted to EUR 6,779 thousand (H1 2022: EUR 6,404 thousand). The financial results of the Voog platform have been consolidated from the date of acquisition and the impact on the group's revenues was EUR 60 thousand.
TextMagic SMS platform's sales results
H1 2023 | H1 2022 | Change | |
Unaudited revenue (thousand) | €6,719 | €6,404 | +5 % |
Volume of SMS messages (thousands) | 136,409 | 137,029 | 0 % |
Active users* | 32,611 | 30,699 | +6 % |
Average revenue per user (ARPU)** | €206 | €209 | -1 % |
* An active user is any unique paying customer who has used TextMagic SMS platform services during the reporting period.
**ARPU is calculated as Unaudited revenue / Active users.
TextMagic Group's adjusted prognosis for 2023
Due to the changes in the SMS regulations and the impact of the general economic environment, we have revised our forecasts for 2023. Profitability is impacted more than previously forecast by additional development and marketing activities to support growth. In addition, general price increases have impacted the cost base more than originally forecast. The revised forecasts also include the impact of the Voog platform on the Group's results.
- Revenue: 14.74 M € (+6.6%*)
- Investments to software products (capitalized development costs): 6.43 M € (+45.1%*)
- EBITDA (operating profit plus amortization and depreciation): 5.28 M € (-18.3%*)
- Net profit: 1.26 M € (-53.5%*)
*Compared to 2022 results
TextMagic AS's consolidated unaudited interim report for the 6 months of 2023 is attached to the release in PDF format.
CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS FOR 6 MONTHS OF 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(in thousands of euros) | 30.06.2023 | 31.12.2022 | 30.06.2022 |
Non-current assets | |||
Property, plant and equipment | 172 | 191 | 150 |
Intangible assets and goodwill | 54,641 | 51,944 | 51,085 |
Total non-current assets | 54,813 | 52,135 | 51,235 |
Current assets | |||
Trade and other receivables | 24 | 1 | 2 |
Prepayments | 157 | 130 | 107 |
Cash and cash equivalents | 5,569 | 9,145 | 7,555 |
Total current assets | 5,750 | 9,276 | 7,664 |
TOTAL ASSETS | 60,653 | 61,411 | 58,899 |
Liabilities | |||
Current tax liabilities | 196 | 102 | 151 |
Trade and other payables | 810 | 890 | 564 |
Payables to shareholders | 0 | 2,550 | 0 |
Contract Liabilities | 1,737 | 1,546 | 1,428 |
Total current liabilities | 2,743 | 5,088 | 2,143 |
Total liabilities | 2,743 | 5,088 | 2,143 |
Equity | |||
Share capital | 850 | 850 | 850 |
Share premium | 51,242 | 51,242 | 53,792 |
Other reserve | 2,236 | 1,651 | 884 |
Foreign currency translation reserve | (16) | (35) | 4 |
Retained earnings | 2,703 | 1,226 | (93) |
Current year profit/loss | 805 | 1,389 | 1,319 |
Total equity attributable to owners of the parent | 57,820 | 56,323 | 56,756 |
Total equity | 57,820 | 56,323 | 56,756 |
TOTAL EQUITY AND LIABILITIES | 60,563 | 61,411 | 58,899 |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
(in thousands of euros) | 01.01.2023 - 30.06.2023 | 01.01.2022 - 30.06.2022 |
Revenue | 6,779 | 6,404 |
Other income | 40 | 268 |
Work performed by the entity and capitalized | 3,061 | 1,653 |
Goods, raw materials and services | (2,231) | (2,104) |
Other operating expenses | (867) | (687) |
Employee expenses | (4,123) | (2,407) |
Depreciation, amortization and impairment of non-current assets | (1,777) | (1,744) |
Other expenses | (88) | (58) |
Operating profit | 794 | 1,325 |
16 | 0 | |
Profit before tax | 810 | 1,325 |
Income tax | (5) | (6) |
Profit for the period | 805 | 1,319 |
Other comprehensive income | ||
Items that are or may be reclassified subsequently to profit or loss | ||
Foreign currency translation differences | (20) | (10) |
Other comprehensive income for the period, net of tax | (20) | (10) |
Total comprehensive income for the period | 785 | 1,309 |
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of euros) | 01.01.2023 - 30.06.2023 | 01.01.2022 - 30.06.2022 |
Cash flows from operating activities | ||
Profit for the period | 805 | 1,319 |
Adjustments for: |
0 | |
Financial income | (16) | 0 |
Depreciation and amortization | 1,777 | 1,744 |
Other adjustments | 263 | 275 |
Total adjustments | 2,024 | 2,019 |
Changes in trade and other receivables | (25) | 75 |
Changes in contract liabilities | (18) | (30) |
Changes in prepayments | (28) | 22 |
Changes in trade and other payables | (49) | (590) |
Net cash from operating activities | 2,709 | 2,815 |
Cash flows from investing activities | ||
Payments for acquisition of subsidiary, net of cash acquired | (1,100) | 0 |
Payments for property, plant and equipment | (12) | (91) |
Payments for software development costs | (2,643) | (1,192) |
Net cash used in investing activities | (3,755) | (1,283) |
Cash flows from financing activities | ||
Payments to shareholders | (2,550) | 0 |
Net cash from financing activities | (2,550) | 0 |
TOTAL CASH FLOWS | (3,596) | 1,532 |
Cash and cash equivalents at the beginning | 9,145 | 6,035 |
Effect of movements in exchange rates on cash held | 20 | (12) |
Cash and cash equivalents at the end | 5,569 | 7,555 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(in thousands of euros) | Share Capital | Share premium | Other reserves | Unrealized exchange rate differences | Retained earnings | Total equity | ||
Balance as of 31.12.2021 | 850 | 53,792 | 153 | 14 | (94) | 54,715 | ||
Profit of the period | 0 | 0 | 0 | 0 | 1,319 | 1,319 | ||
Other comprehensive income for the period | 0 | 0 | 0 | (10) | 0 | (10) | ||
Other changes in equity | 0 | 0 | 731 | 0 | 1 | 732 | ||
Balance as of 30.06.2022 | 850 | 53,792 | 884 | 4 | 1,226 | 56,756 | ||
Profit of the period | 0 | 0 | 0 | 0 | 1,389 | 1,389 | ||
Other comprehensive income for the period | 0 | 0 | 0 | (39) | 0 | (39) | ||
Other changes in equity | 0 | (2,550) | 767 | 0 | 0 | (1,783) | ||
Balance as of 31.12.2022 | 850 | 51,242 | 1,651 | (35) | 2,615 | 56,323 | ||
Profit of the period | 0 | 0 | 0 | 0 | 805 | 805 | ||
Other comprehensive income for the period | 0 | 0 | 0 | 19 | 0 | 19 | ||
Other changes in equity | 0 | 0 | 585 | 0 | 88 | 673 | ||
Balance as of 30.06.2023 | 850 | 51,242 | 2,236 | (16) | 3,508 | 57,820 |
Additional information:
Priit Vaikmaa
TextMagic AS, CEO
investor@textmagic.biz
https://investor.textmagic.com/
Attachments:
TextMagic AS_2023. aasta 6 kuu konsolideeritud auditeerimata vahearuanne.pdf
TextMagic AS_2023 6 months consolidated unaudited interim report.pdf
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TextMagic AS published this content on 15 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 August 2023 04:53:08 UTC.