The question

In its full-year results on 3 November 2026, the board said it expected to meet market consensus for the year to June 2027, which it put at £104.7 million of revenue, £32.8 million of adjusted EBITDA and £22.3 million of adjusted pre-tax profit.

On the company's own FY26 figures, the consensus implies Revenue growth of roughly 15%, EBITDA growth of about 12% and adjusted pre-tax profit up around 15%. These percentages are calculated from the company's FY26 figures and are not company guidance. Part of the uplift should come from owning acquired businesses for a full year; the rest requires faster organic momentum than FY26 delivered.

The starting point

Dotdigital (LSE:DOTD), based in London, sells a customer experience and data platform that helps retailers and other brands run email, SMS and other Marketing campaigns. It serves more than 9,800 brands in 150 countries.

For the year to 30 June 2026, group revenue rose 8% to £90.9 million, or 9% at constant currency. Recognised Recurring Revenue increased 14% to £76.8 million, about 84% of the total, and adjusted EBITDA rose 10% to £29.4 million, a 32% margin. Annual recurring revenue, a forward-looking measure of contracted subscriptions, finished 18% higher at £85.4 million, including 8% organic growth. Organic revenue, excluding acquisitions, was reported as flat.

Where the extra revenue could come from

Three factors stand out. First, Alia, the Shopify-focused audience-growth tool bought for an initial US$30 million in March 2026, had grown ARR by 45% to £10.0 million by the year end; FY27 will include twelve months of its revenue rather than about four. Second, Social Snowball, an earlier acquisition, lifted ARR by 33% to £5.4 million. Third, the core platform needs to convert its improving organic ARR trend into recognised revenue.

Product launches are meant to support that. In July the company introduced LSE:DOTD Loyalty, initially for Shopify merchants, and Agents in LSE:DOTD, a natural-language interface for carrying out platform tasks, alongside a server that links the platform to customers' chosen large language models. Chief executive Milan Patel said the Business entered FY27 with greater revenue visibility, a broader market opportunity and a more focused organisation.

Why it matters

Meeting consensus would show that last year's acquisitions are adding growth rather than simply replacing slower core sales. Management has also pointed to Margin improvement in the second half as Investment moderates, which matters because adjusted pre-tax profit rose only 2% in FY26 despite higher EBITDA. It would also test whether a rising recurring share, 84% of revenue against 80% a year earlier, produces steadier earnings, and whether a gross margin that edged up to 80% from 79% leaves room for pricing pressure.

Risks and dependencies

Management has described the trading environment as mixed, and retail marketing budgets can be cut quickly. The strategy leans heavily on the Shopify ecosystem, creating platform dependence. Integrating new products and scaling sales carry execution risk. Cash fell to £17.1 million from £36.2 million, largely because of the Alia payment, leaving less headroom while any further Acquisition consideration remains outstanding.

What the consensus numbers imply

Revenue of £104.7m against £90.9m in FY26 is an increase of £13.8m, or about 15%. Adjusted EBITDA of £32.8m against £29.4m is an increase of 12%, which means the adjusted EBITDA margin would fall to about 31.3% from 32.3% on those figures, a sign that investment continues. Adjusted pre-tax profit of £22.3m, up about 15%, grows faster than EBITDA, which suggests lower depreciation, Amortisation or finance costs are assumed to contribute. The recovery in adjusted pre-tax profit growth is significant because it rose only 2% in FY26.

Acquired and organic growth

The gap between 8% reported growth and flat organic revenue in FY26 shows how much of the increase came from acquisitions. For FY27 the pattern changes because Alia contributes for a full year, adding revenue that was included for about four months in FY26. Its ARR of £10.0m, up 45%, is a meaningful addition to a group with ARR of £85.4m, and Social Snowball's ARR of £5.4m, up 33%, adds further. Together the two acquisitions represent about 18% of group ARR, so the group's reported growth depends heavily on how those businesses perform and how they are integrated.

Organic ARR growth of 8% gives a more direct measure of the underlying business. If organic ARR growth stays at or above 8%, the platform's recurring revenue should continue to expand even without further acquisitions.

The recurring revenue base

Recurring revenue of £76.8m, about 84% of the total, provides a base that is relatively predictable, because it is made up of subscriptions that customers renew. A rise from 80% to 84% suggests that new business is mostly subscription-based and that non-recurring revenue is shrinking. A platform serving more than 9,800 brands in 150 countries also has a broad customer base, which helps to limit dependence on any single customer, although a reliance on the Shopify ecosystem creates a different concentration.

Capital and product investment

The fall in cash to £17.1m from £36.2m, largely because of the Alia payment, shows the cost of acquiring growth. The new products, Loyalty and the natural-language agent interface, are intended to add features that customers can purchase on top of the core platform. Their effect on revenue is not yet visible, so the trading update for the half to December and the subsequent interim results will be the first evidence of whether they are adding to recurring revenue.

Customer concentration and renewal

A subscription platform earns revenue each month or year as customers renew. Retention is therefore as important as new sales. A group serving thousands of brands has a spread of customers, which means the loss of any one is unlikely to affect results greatly, but a general slowdown in online retail could reduce Demand for the platform's services.

Platform businesses also report annual recurring revenue, which captures the value of subscriptions in force at a point in time. Because it is a snapshot, it can differ from revenue recognised over the year.

What to watch next

The next scheduled marker is a trading update covering the half to 31 December 2026 followed by interim results; no dates have yet been announced. Investors will look for organic ARR growth holding at or above 8%, early revenue from the loyalty and agent products, and evidence that second-half margin improvement is on track, together with a clearer split between acquired and organic revenue growth.