Trustpilot Shares Spiked 14.9% Higher on Upbeat FY 2023 Results

The Trustpilot Group PLC (LON: TRST) spiked 14.9% higher after releasing its final results for the year ended 31 December 2023. The company reported an impressive continuation of its growth trajectory, showcasing significant gains across critical financial metrics. Its revenue surged 18% yearly to $176 million, up from $149 million the previous year.

The increase is notable in nominal terms and when adjusted for constant currency (cc), indicating a solid 17% growth. Such performance highlights the robust demand for the company's offerings and its ability to capitalise on market opportunities.

Annual recurring revenue (ARR), a critical indicator of the company's future revenue prospects, witnessed a remarkable 22% increase yearly, reaching $197 million compared to $162 million in the prior year. Adjusted for constant currency, this represents an 18% growth, underscoring the company's strong and growing subscription base.

Additionally, bookings—a measure of future revenue expected from signed contracts—grew by 18% yearly to $195 million, demonstrating broad-based demand across its offerings. The growth was robust in Europe and the Rest of the World (RoW), where bookings soared by 22%, alongside significant increases of 17% in the UK and 12% in North America.

The company also emphasised its commitment to efficient growth, which has yielded substantial operating leverage over the year. Adjusted EBITDA turned positive at $16 million, a notable improvement from a $4 million loss the previous year.

Furthermore, the company reported a profit after tax of $7 million, reversing a $15 million loss from the previous fiscal year. This financial turnaround indicates the company is successfully executing its strategic initiatives and operational efficiencies.

Cash flow dynamics further illustrate the company's improved financial health. The company's adjusted free cash flow was $14 million for the year, a significant recovery from a $13 million outflow in the previous period. 

The positive cash flow has bolstered the company's net cash position to $91 million, up from $73 million, providing a solid foundation for future investments and growth initiatives. In line with its disciplined capital allocation strategy, the company initiated a share buyback programme of approximately $25 million (£20 million) in January 2024.

The company achieved significant milestones on the strategic front, including a 30% increase in monthly unique users on its platform to over 57 million, up from 44 million in the previous year. The total cumulative reviews grew by 25% to 267 million, with 54 million new reviews added, demonstrating the platform's increasing popularity and engagement.

Trustpilot share price. 

The Trustpilot share price spiked 14.85% to trade at 235.1p from Monday’s closing price of 204.7p.