FD Technologies Faces Revenue Plateau in FY24 Despite KX Growth

FD Technologies, the global leader in financial technology, has announced its financial results for the fiscal year ended February 29, 2024 (FY24). The company reported a total revenue of £248.9 million, representing a 2.2% decline compared to the previous year's revenue of £254.6 million.

The fintech leader is composed of two main divisions: KX, a software platform that boosts AI-driven innovation, and First Derivative, a consulting service that drives digital transformation in financial services and capital markets.

In FY24, KX revenue experienced an increase of 11.4%, came in at £79.1 million from £71.0 million in FY23. Recurring revenue within the KX division also saw a rise of 19%, accounting for 86% of the total KX revenue (FY23: 81%). On the other hand, First Derivative revenue for FY24 amounted to £169.7 million, reflecting a 7.6% decrease compared to £183.6 million in the prior period.

The company's gross profit for the year remained relatively stable at £105.7 million, compared to £105.3 million in FY23. However, operating costs for FY24 rose by 3.6% to £108.3 million, up from £104.5 million in FY23.

FD Technologies experienced a decline in adjusted EBITDA, with a drop of 30.6% from £33.3 million to £23.1 million on a yearly basis. The adjusted EBITDA margin also decreased from 13% to 9%. Additionally, the adjusted diluted LPS for FY24 were 0.7p, contrasting with the adjusted diluted EPS of 36.3p in the previous year.

Furthermore, the company's net debt increased significantly, reaching £14.4 million, a 289.2% surge compared to £3.7 million in FY23.

(Source: FD Technologies)

Seamus Keating, CEO of FD Technologies, commented: "FY24 presented challenges within our businesses but we made significant strategic progress and we enter FY25 with clarity and focus on the exciting opportunities ahead. While KX's ARR growth was below our expectations for the year, we have addressed the operational challenges and are well placed to execute on the enormous addressable market in the industries we are targeting. First Derivative managed its cost base to ensure that despite the caution in its customer spending, it maintained margins. In the early months of FY25, the market has remained subdued but with stable activity levels.

"Looking to FY25, the conclusion of the structure review provides a clear path to value creation for shareholders while the operational improvements, focus on repeatable use cases and growing opportunity in AI provide confidence that KX will deliver stronger, sustainable growth."