AI firm Albert Technologies to cease its Indirect business, to focus on SaaS
Whereas Albert’s SaaS business continues to grow, the Indirect business became unprofitable in H1 2017 for the first time and the market in which it operates remains extremely volatile.
Autonomous artificial intelligence marketing platform developer and provider Albert Technologies Ltd (LON:ALB) has earlier today unveiled changes to its business operations. In a filing with the London Stock Exchange, the company said it would cease its Indirect business and will focus on its core SaaS business.
The company noted that the ecosystem in which the Indirect business operates has experienced severe and prolonged disruption starting in late 2015. Advertising exchanges cut their inventory levels, many exchanges consolidated or merged and, also, the market started to shift from using open exchanges to private and self-serve exchanges. This disruption cause a loss of supply for major online advertising exchanges and a loss of demand from major media buyers, the consequence of which was a steep decrease in transaction volumes and substantial pressure on margins in the industry.
Albert has sought to minimise the impact of the developments described above, including working to diversify its partnerships and customer base, however the Indirect business became unprofitable in the first half 2017 for the first time and the market in which it operates remains extremely volatile.
The Board therefore believes it would be in the best interests of shareholders to cease the Indirect business by the end of 2017 in order to focus its efforts and resources solely on its SaaS business and to reduce the losses of the company.
The company does not expect any material net costs associated with the closure. The intellectual property utilised by the Indirect business will remain under the direct ownership of Albert.
The SaaS Sales Channel, which offers artificial intelligence-based software, Albert, to brands using an SaaS model, continues its rapid growth with new contract wins and increased pipeline activity, the company said today. Albert expects to generate SaaS revenues of at least US$1.7 million for the year to December 31, 2017, having achieved an annualised run-rate of over US$3 million in the final quarter to date. This revenue performance is ahead of Albert’s initial expectations for 2017 and represents a 9x increase over the previous year.