Registered number: 11626116 (England and Wales)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
The directors present their Strategic Report for Pendo.io UK Ltd ("The Company") for the year ended 31 January 2024.
Pendo is a Software-as-a-Service company that helps companies measure and elevate the user experience within their applications by providing product or software usage analytics, in-application feedback, and contextual guidance. Pendo also provides professional services to help customers maximize their product success through leveraging Pendo's application.
Pendo.io UK Ltd (Pendo UK) allows companies to put product at the center of everything they do. Pendo helps teams integrate product intelligence into their organizations to confidently innovate at the speed of changing user needs—taking the guesswork out of delivering the best product experiences.
The Company operates as a subsidiary of Pendo.io, Inc, referred to as 'the Group', and supports the work of the parent company. The Company has two locations, an office in London and Sheffield. The subsidiary is mainly engaged in performing sales and marketing activities that cover Europe, the Middle East and Africa (“EMEA”) region. Additionally, Pendo UK engages in performing contract R&D activities related to the parent company’s platform. The Group generates the majority of its revenue from subscription fees for access to and usage of its cloud-based platform for a specified contract term. Access to the platform is considered a series of distinct services, with continuous transfer of control to the customer, comprising one performance obligation. Related professional services for activities including onboarding and training are also available, although they are not required for the customer to access the platform. Customers typically subscribe to the Company’s SaaS solutions on a self-service basis. Revenue from subscription fees is recognized ratably over the subscription term, which is typically one year, beginning on the date the customer has access to the platform.
∙We have a limited operating history, which makes it difficult to predict our future results of operations.
∙We are dependent upon customer renewals, the addition of new customers, increased revenue from existing customers and the continued growth of the market for our solutions.
∙If we are unable to expand our direct and channel sales capabilities, grow our marketing reach and increase sales productivity, we may not be able to generate increased revenues.
∙Our business is subject to complex and evolving laws and regulations regarding privacy, data protection, content, competition, consumer protection, and other matters.
∙Interruptions or performance problems associated with our technology and infrastructure may harm our business and results of operations.
∙Prolonged economic uncertainties or downturns could harm our business.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
To assist in the monitoring of the Company’s performance, the following key performance indicators are used:
Turnover of £20,657,101 recognised in 2024 (2023 – £22,593,563) showing a 8.57% reduction. Gross profits of £19,228,116 recognised in 2024 (2023 – £20,980,053) generating a 8.35% reduction. The Directors are satisfied with this performance. Future developments The Group expects to continue operating the Company in the same format moving forwards.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
The directors present their report and the financial statements for the year ended 31 January 2024.
In accordance with S414c (11) of the Companies Act 2006 certain information that is required to be included in the Directors' Report has otherwise been included in the Strategic Report.
The directors who served during the year were:
The profit for the year, after taxation, amounted to £654,590 (2023 - £321,428).
The directors have not proposed a dividend for the current year (2023: £NIL).
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
There have been no significant events affecting the Company since the year end.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENDO.IO UK LTD
We have audited the financial statements of Pendo.io UK Ltd (the 'Company') for the year ended 31 January 2024, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENDO.IO UK LTD (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENDO.IO UK LTD (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the responsible individual ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience;
∙we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006 and taxation legislation;
∙we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the Company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures to identify any unusual or unexpected relationships;
∙tested journal entries to identify unusual transactions;
∙assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
∙investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙enquiring of management as to actual and potential litigation and claims; and
∙reviewing correspondence with HMRC.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENDO.IO UK LTD (CONTINUED)
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants and Statutory Auditors
Birchin Court
5th Floor
19-25 Birchin Lane
United Kingdom
EC3V 9DU
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
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BALANCE SHEET
AS AT 31 JANUARY 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 26 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
1.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 2).
The following principal accounting policies have been applied:
The Company is in a net asset position at 31 January 2024. The majority of the Company's turnover is derived from a transfer pricing arrangement with the parent company, Pendo.io, Inc., as such it is reliant upon the continued support of that company in order to continue trading.
Pendo.io UK Ltd has received written confirmation from Pendo.io, Inc. that it will continue to provide financial support for a period of at least 12 months from the date of signing these financial statements. Furthermore, the directors have assessed the ability of Pendo.io, Inc. to provide this support based upon cash flow forecasts and have concluded that the parent will have sufficient working capital to provide the necessary support. For this reason, the directors continue to adopt the going concern basis in preparing the financial statements. Turnover is also recognised on a cost plus 5% basis, in line with the intercompany service agreement with the parent company.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
1.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Goodwill
Intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
1.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash held on deposit by service providers is included within bank and cash balances, as these amounts are highly liquid and repayable without penalty on notice of not more than 24 hours.
Short-term creditors are measured at the transaction price.
Long-term creditors are measured at amortised cost. The directors do not consider the effects of discounting to be material.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
1.Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
1.Accounting policies (continued)
The estimates and assumptions that have a significant risk of causing material misstatement to the carrying amounts of assets and liabilities are addressed below. Amortisation and impairment of goodwill intangible assets Included within these financial statements is Goodwill and other intangible assets arising on the acquisition of MindTheProduct. In accordance with FRS 102, the directors are required to make an assessment of the useful economic life of intangible assets, together with an annual review for imapairment. The directors have determined that there continues to be a value in use for the intangible assets which are generating economic benefits for the wider group, as such no impairment has been recorded in the current year. The directors have deemed the useful life of goodwill and trade name to be 10 years.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
6.Taxation (continued)
On 21 May 2021, Finance Bill 2021 was substantively enacted. The result of this is that the main rate of corporation tax for the UK increased to 25% from 1 April 2023. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
Certain employees were awarded consideration shares as a result of the acquisition of Receptive Software Limited. These shares were immediately settled although they were subject to a right of repurchase should the employee terminate their employment within 12 months of the date of grant.
Included within the capital contribution reserve is an amount of £129,510 which relates to the intercompany payable arising on the acquisition of the net assets of Receptive Software Limited, a former subsidiary which was dissolved in 2020. This amount became repayable to the parent company but was subsequently waived and included as a capital contribution. In the prior year, the parent company contributed an amount of £7,153,086 in relation to the acquisition of MindTheProduct ("MTP").
Pendo.io, Inc. is the parent company of the smallest group for which consolidated financial statements are drawn up of which the Company is a member. The registered office of the parent company is: 301 Hillsborough St, Suite 1900, Raleigh, NC 27603.
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