Kape Technologies flags higher-than-expected full-year revenue
By Josh White
Date: Tuesday 18 Jan 2022
(Sharecast News) - Digital security and privacy company Kape Technologies reported a "landmark" 2021 in a trading update on Tuesday, in which it achieved "significant" strategic progress and delivered a "record" financial performance.
The AIM-traded firm said revenue for the full year was now expected to be substantially ahead of previous guidance at around $230.5m, representing an 89% increase over 2020.
Adjusted EBITDA was expected to be in line with guidance at $77m, representing a 97% increase.
Kape said it generated strong organic growth during the year, with revenues excluding the ExpressVPN acquisition reaching $212.5m, which was 5% ahead of the upper range of previous guidance.
The board said that robust performance had enabled the company to accelerate investment in product development, future-proofing its position as a market-leader and underpinning its growth prospects.
Kape said it was continuing to expand, with 2021 seeing growth across all divisions.
The group's subscriber base increased 158% to 6.5 million, of which 0.5 million paid subscribers were added organically, representing 18% growth.
At the same time, Kape said it was able to reduce its average customer acquisition costs.
On the operational front, Kape completed two strategic acquisitions of Webselenese in March, and ExpressVPN in December.
The directors said the acquisition of Webselenese was "highly strategic", describing it as a "key pillar" in its strategic roadmap to become a world leader in consumer digital privacy and security.
It said it would bring Kape closer to the consumer by providing insights and expertise that support its product development roadmap, and ensure that the company was ahead of the market in consumer trends, in turn providing a competitive edge.
In December, Kape completed the acquisition of ExpressVPN, one of the most recognised brands in the digital privacy space, with the integration of that said to be "firmly underway".
As announced at the time of the transaction, the acquisition of ExpressVPN delivered "significant" additional scale for Kape, as well as providing cross-sell and revenue opportunities across the platform.
The company said the acquisition was expected to be highly earnings accretive, with group revenues for 2022 expected to be between $610m and $624m, and adjusted EBITDA expected to be between $166m and $172m.
"2021 was an exceptional year for Kape, where we executed on two transformational transactions in our roadmap to become a world leader in consumer digital privacy and security," said chief executive officer Ido Erlichman.
"That we managed to do this in tandem with exceeding our performance targets and continuing to deliver sustained organic growth speaks volumes to the quality and dedication of our team."
Erlichman said the company was planning to continue its growth trajectory in 2022, with Kape now serving over 6.5 million paying customers.
"We believe this is only the start of our journey to providing a truly secure and private digital experience."
Kape said it would report its results for the year ended 31 December on 22 March.
At 1406 GMT, shares in Kape Technologies were down 1.84% at 400.5p.
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