Trustpilot shares plummet another 20% as customer review platform’s losses widen despite uptick in bookings business
- Revenues rose 29% to $131.4m, but pre-tax losses more than doubled to $26.6m
- Total cumulative reviews surged 39% to 167m; active customers up 34%
- Company said it would ‘meaningfully re-accelerate’ investment in 2022
Shares in customer review platform Trustpilot tumbled 20 per cent on Tuesday, with surging sales unable to prevent widening annual losses.
Trustpilot, which makes money from businesses subscribing to its software services and from advertising, saw revenues rose 29 per cent to $131.4milion in 2021.
Bookings, which it says provides a key indication of future revenues, surged 27 per cent to $149.6million, thanks to a strong performance in the UK and Europe and an acceleration in the US.
Trustpilot posted a jump in revenues last year, but losses widened due to IPO and other costs
More people flocked to its website to leave reviews about businesses and services last year, with total cumulative reviews rising 39 per cent to 167million.
The company also closed the year with 84,000 monthly active businesses on its platform, which marks a 34 per cent jump on 2020.
However, pre-tax loss more than doubled to $26.6million in 2021 because of one-off costs related to its stock market listing and remuneration expenses.
The company, which made its debut on the London stock market in March last year, incurred $10million in IPO-related costs in 2021.
It also dished out a further $10million in share-based compensation, while also facing additional expenses from the partial reopening of its offices.
Losses may continue to mount up as the company said it would ‘meaningfully re-accelerate’ investment in 2022 to ‘capture the exciting growth opportunities we see for the business and accelerate bookings growth in 2023 and beyond’.
Trustpilot shares fell 19.8 per cent to 129.80p in late morning trading.
The stock has tumbled by around 60 per cent since the start of the year and has more than halved in price since it listed at 265p a year ago.
However, the board said they remained confident in the outlook for the business and forecast revenues to grow in line with expectations this year.
Like many other companies, Trustpilot warned of cost inflation and said it anticipates expenses ‘will remain at broadly similar percentages of revenue throughout the current year, with overhead leverage to come after’.
‘With the successful financial result and strong bookings performance we achieved in 2021, including a 26 per cent increase in ARR, we expect to deliver constant currency revenue growth in line with current management expectations in 2022,’ it added.
Trustpilot shares are now worth less than half of their IPO price