Dotdigital Group – resilient progress and strong cash generation, 94% ARR, shares 64p, TP 150p

Mark Watson-Mitchell – 09.12.2025

This coming Thursday, 11^th December, will see Dotdigital Group (LON:DOTD), the leading SaaS provider of an AI-powered customer experience and data platform for intelligent, personalised marketing engagement at scale, will be holding its AGM which should point to better times ahead.

On Tuesday, 4^th November, the group declared its Final Results for the year to end-June, proudly proclaiming that it was a “Year of organic growth, enhanced profitability and significant product advancement aligned to market demand.”

The Business

The £197m-capitalised group, which was founded in 1999, is based in London with offices in Manchester, Southampton, New York, Melbourne, Sydney, Singapore, Tokyo, Warsaw and Cape Town. 

Dotdigital's solutions empower over 4,000 brands across 150 countries.

It is a leading provider of email marketing and omnichannel SaaS technology to empower digital marketing professionals.

Its marketing automation platform is used by over 70,000 marketers worldwide, empowering global marketers to achieve outstanding results with superior tools and services.

The group’s customer experience and data platform (CXDP) combines the power of automation and AI to help businesses deliver hyper-relevant customer experiences at scale.

With Dotdigital, marketing teams can unify and enrich their customer data, identify valuable customer segments, and deliver personalised cross-channel customer journeys that result in engagements, conversions, and loyalty.

Management Comment

With the Final Results, CEO Milan Patel stated that:

"We are pleased to report another year of profitable growth alongside meaningful progress on our platform strategy.

New customer wins were complemented by consistently high retention and expansion within our existing base, underscoring the strategic value clients place on our platform as the foundation of their digital marketing strategy.

Customers are consolidating around fewer, more capable systems and demanding clear returns; we are meeting that need.

With advances in AI, data and mobile messaging, the addition of Social Snowball and the integration of Fresh Relevance, our CXDP is broader and more valuable than ever.

With market conditions improving, our pipeline is healthy, our balance sheet is strong and our partner network continues to expand.

We enter the new financial year focused on disciplined execution: expanding usage, growing internationally and delivering innovation that drives measurable outcomes for our customers."

The Equity

There are some 308.5m shares in issue.

Larger holders include Liontrust Asset Management (15.0%), Octopus Investment (14.9%), Ian ‘Tink’Taylor, Co-Founder & President (9.7%), Rathbones (7.3%), Canaccord Genuity Wealth Management (6.0%), Slater Investments (5.0%), and Chelverton Asset Management (3.5%).

Broker Views

The trio of analysts at Canaccord Genuity – Kai Korschelt, Hayley Palmer and Tom Like, rate the group’s shares as a Buy, with a Price Target of 150p a share.

For the current year to end-June 2026 they estimate an increase in revenues to £93.1m (£83.9m), with adjusted pre-tax profits of £19.9m (£19.0m), generating earnings of 5.1p (4.8p) and a dividend of 1.30p (1.21p) per share.

For 2027, they see £100.6m sales, £21.2m profits, 5.4p per share earnings, and a dividend of 1.40p.

The 2028 progression is for £107.6m revenues, with £22.4m profits, 5.7p earnings and 1.50p per share of dividend.

Andrew Darley and Kimberley Carstens, at Cavendish Capital Markets, also have a 150p Target Price.

For 2026 they see £91.9m revenues, £19.6m profits, 5.0p earnings and a 1.3p dividend.

Their 2027 estimates pencil in £100.8m sales, £22.4m profits, 5.6p earnings and a 1.5p per share dividend payment.

At Singer Capital Markets, its analysts Harold Evans, James Musker and Roddy Davison rate the group’s shares as a Buy with a 122p per share Target Price.

Their estimates for 2026 are for £92.0m sales, £20.0m profits, 5.0p earnings and a 1.20p per share dividend.

For 2027 they look for £99.0m of revenues, £22.5m profits, 5.6p earnings and paying a maintained 1.20p per share dividend.

Upon the latest results, the analysts noted:

“high-single-digit growth, improving margins and as a result, accelerating EPS growth of +12%.

These are not the signs of a challenged or languishing company and therefore continue to see material upside to fair value.”

My View

I am impressed by the group’s “6 reasons to invest in Dotdigital” – which declares that it has a clear and compelling strategy; that it has a highly scalable platform and predictable financial model; that it offers attractive industry growth; it shows independence with its successful Dotdigital culture; that it has an experienced management team; and (best of all) it offers sustainable profitable growth.

The group’s shares at 64p are bouncing along the bottom of its 2025 trading range, I now set a Target Price of 80p.

(Profile 09.12.25 @ 64p set a Target Price at 80p)