Dotdigital Grows Recurring Revenue and ARR as AI Innovation Fuels Expansion

Dotdigital (LSE:DOTD) delivered solid growth for the financial year ended 30 June 2026, with revenue increasing 8% to £90.9 million. Gross margin improved to 80%, reflecting the continued strength of its core customer experience and data platform, which accounted for 84% of total group revenue. The company also recorded double-digit growth in recurring revenue and contracted annual recurring revenue (ARR), strengthening its base of predictable income and supporting revenue, profit and cash generation in line with market expectations.

Recent acquisitions continued to perform well, with Alia and Social Snowball generating ARR growth of 45% and 33% respectively since joining the group. Dotdigital also expanded its artificial intelligence capabilities through the launch of several new products, including its proprietary MCP server, Dotdigital Loyalty and Agents in Dotdigital. Management said these product developments, combined with enhanced commercial execution under the company’s new chief revenue officer, provide confidence in achieving its FY27 targets while accelerating organic growth.

The company’s outlook remains supported by strong profitability, healthy cash conversion and a low level of leverage. Valuation also appears attractive, with a price-to-earnings ratio of 11.95 and a dividend yield of 2.74%. However, technical indicators remain less favourable, as the shares continue to trade below key moving averages and momentum signals point to a bearish, oversold trend.

About Dotdigital Group

Dotdigital Group is a London-based provider of AI-powered marketing automation and customer engagement software. Its customer experience and data platform enables businesses to manage customer acquisition, engagement, retention, loyalty and advocacy across multiple channels. The company serves more than 9,800 customers across 150 countries through offices in Europe, North America, Asia-Pacific and Africa.

Founded in 1999, Dotdigital has built a high-margin, recurring revenue business centred on its customer experience and data platform. The company’s technology combines customer data with intelligent automation, helping brands deliver personalised marketing campaigns while maintaining creative control in an increasingly AI-driven digital landscape.