Irish-listed airline software specialist Datalex experienced a significant boost in revenues during the first half of this year, benefiting from the resurgence in travel following the pandemic. Total revenue for the first six months of 2023 reached $12.9 million (€12.1 million), marking a 24% increase from the $10.4 million (€9.75 million) reported in the same period in 2022.
Services Revenue Surges by 61% Driven by New Customer Activations
This remarkable growth was primarily attributed to the surge in services revenue, which soared by an impressive 61% during this period, surpassing $6 million. Datalex also highlighted an uptick in technology investment by existing customers, driven by the surging demand for air travel in the post-pandemic era.
Increased Technology Investment Spurs Growth in Post-Pandemic Travel Demand
In terms of financial performance, the company reported an adjusted loss in earnings before interest, tax, amortisation, and depreciation (Ebitda) for the previous year of $3.1 million, representing a $1 million increase from the loss reported in the corresponding period in 2022. Total operating costs also experienced a 30% increase, reaching $18 million due to the rise in customer activations.
Adjusted Earnings Reflects a $1 Million Increase from 2022
Datalex clarified that each activation necessitates an initial investment, with the company reaping the rewards from each customer contract after the go-live phase. Notable highlights during this period include the signing of Latin America’s largest airline, LATAM Airlines, in May, where Datalex’s technology is poised to enhance the airline’s new distribution capability (NDC) channels. Moreover, contracts with Air China, Air Transat, Jetblue, and Edelweiss were renewed in the first half of the year.
Total Operating Costs Rise by 30% Due to Customer Activations
In February, SAS announced its decision not to proceed with the NDC product offered by Datalex due to increased cost commitments associated with its Chapter 11 bankruptcy filing in the United States. Subsequently, a US bankruptcy court approved a settlement between SAS and Datalex, resulting in a payment from SAS to Datalex. The court also sanctioned a general unsecured claim by Datalex, which will be addressed through the Chapter 11 process, albeit with an uncertain timing and amount, as reported by the company.
Key Partnerships and Renewed Contracts in the Aviation Sector
Earlier this month, Datalex secured an additional credit facility with Tireragh Limited, providing an extra €5 million in funding. This funding is scheduled for repayment by December next year, with the group already having drawn down €13 million of this funding. The company’s board is actively exploring additional fundraising options.
SAS’s Decision and the Subsequent Settlement with Datalex
As a result of the “robust” growth in passenger traffic worldwide, Datalex is confident in achieving revenue growth of approximately 15% for the entire year. Chief Executive Sean Corkery expressed his satisfaction with the company’s progress, citing the synergy between the airline industry’s recovery and their new transaction-based SaaS contracts. He also highlighted their strategic investments in activating new customers, which are expected to yield additional transactions in 2024.
Confidence in Achieving 15% Revenue Growth for the Year
Notably, Sean Corkery announced earlier this month his plans to retire at the end of the year, and Jonathan Rockett has been appointed as Datalex’s new Chief Executive, set to assume the role in the final quarter of 2023.
