Trustpilot Share Price Surged 24.7% on FY 2023 Trading Update

The Trustpilot Group PLC (LON: TRST) share price surged 24.7% after releasing a trading update for the year ended 31 December 2023. The company expects to group revenues for the 2023 fiscal year of $176 million, marking a 17% increase at constant currency compared to last year. 

The company operates a review website and anticipates reporting an annual recurring revenue (ARR) of $197 million compared to the $162 million recorded in the previous year. The ARR represents an 18% growth when compared to the previous year. 

The company’s total bookings rose to $195 million, up about 16% year-on-year (YoY) at constant currency rates, showcasing the company's expanding customer base and recurring revenue streams.

The firm’s Adjusted EBITDA exceeded the highest market expectations, indicating strong performance and financial health. Trustpilot's net dollar retention rate remained stable year-over-year at 99%, only a slight decrease from the previous fiscal year's 100%. 

The resilience in retention rate demonstrates the company's consistent value to its customers and its ability to maintain revenue from existing clients.

The company's financial strength is further highlighted by its robust balance sheet. Trustpilot reported an increase in net cash balance, reaching $91 million. This figure represents a notable improvement in cash generation during the period, reflecting its efficient operations and profitability.

In the latter half of the year, Trustpilot strategically managed its business to generate additional operating leverage, further bolstered by solid top-line growth. Consequently, the company expects to report an adjusted EBITDA surpassing market expectations at the top end.

In a separate announcement, Trustpilot also revealed a share buyback program of approximately £20 million (equivalent to about $25 million at current exchange rates). This move reflects the company's disciplined approach to capital allocation to achieve profitable growth and robust cash flow generation. 

Adrian Blair, Trustpilot’s CEO, commented: “Building on a solid performance in the first half of the year, we achieved further growth and margin improvement in the second half, with profitability and positive free cash flow ahead of expectations for the year. In addition to our focus on delivering sustainable operating leverage, we achieved robust growth in new business and a resilient retention rate across all regions. Following our commitment to return excess capital to shareholders, we announced today a share buyback programme of up to £20m.”

Tustpilot share price. 

The Trustpilot share price surged 24.66% to trade at 181.0p from Wednesday’s closing price of 145.2p.