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Registered number: 06060169 (England and Wales)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their Strategic Report for the year ended 31 December 2024. This Strategic Report has been prepared for Optimizely Ltd (the 'Company').
Optimizely provides the industry’s leading Digital Experience Platform, combining content and commerce management with patented AI-powered experimentation, personalization and customer data management. More than 10,000 businesses worldwide use Optimizely’s solutions to deliver more than 1 billion digital experiences every day.
Sales are made through a combination of direct sales and marketing activities across North America, Europe, APJ and MEA; alongside an extensive network of more than 700 solution partners in over 30 countries. The Digital Experience Platform service is targeted at both digitally mature enterprise organizations with large-scale customer bases looking to drive continuous experimentation and optimization of their digital experiences, as well as mid-market organizations looking to get started quickly with smaller digital experiences and leverage AI to scale faster. Optimizely's solutions are primarily purchased as a single subscription and delivered through the cloud via Software-as-a-Service ('SaaS'). Optimizely's core strategy revolves around addressing the fragmentation of the MarTech stack, a challenge that has escalated as the market expanded from hundreds to thousands of companies over the last decade. This fragmentation raised ownership costs, decreased technology adoption, and led to uneven marketing technology performance. Through strategic acquisitions, Optimizely aims to consolidate and improve the efficiency of marketing technologies, emphasizing the critical role of content in digital experiences. Optimizely's strategy merges creativity with data-driven decisions through experimentation and optimization, enabling marketers to predict outcomes with greater accuracy. Optimizely's Digital Experience Platform is a single subscription service that includes everything the customer needs without having to purchase servers, licences, support or hosting separately. Optimizely's solution can be easily integrated into an organization's existing technology environment, leveraging our marketplace of more than 120 pre-built third-party integrations. Optimizely combines stability and scalability of commercial products with proactive guidance and support through our dedicated customer success teams, in-person and online training & certification, and our active online community with more than 40,000 developer members.
During the year, turnover have increased by £3.4m (15%) due to the increased support provided to other group companies, resulting in a £3.4m (16%) uplift in intercompany revenue and a reduction in subscription revenue from UK customer contracts of £46k (13%) as the Company moves away from procuring any new UK contracts and more towards marketing, development, customer success and administrative functions across the group.
The loss for the year, after taxation, amounted to £1,353,452 (2023: £3,690,939).
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Although the above KPIs are monitored by management and the directors, the Company no longer contracts with any new customers in the UK entity. Whilst new customer contracts will be prominent in other group entities, the Company will be monitored more as a marketing, development, customer success and administrative function.
The principal risks facing the group are the retention of skilled employees and the financial risks explained below.
Retention of skilled employees The business must maintain a high level of technical expertise within its staff. The risk is mitigated by trying to maintain low staff turnover through investment in training and ensuring staff compensation and benefits are commensurate with the markets in the locations where employed. Product The Company must continue to offer products at the forefront of its technology and mitigate this risk by continuing investment in research and development. Credit risk The directors operate a credit approval policy that seeks to prevent shipment of software to resellers or customers whose accounts are high risk. Credit control regularly reports to management and reviews are undertaken to ensure risks are minimized. Inflation and interest rate risk In addition to the specific risks above, the impact of inflation and rising interest rates globally may impact the discretionary spend of customers and management will continue to monitor it closely. Currency risk The Company has minimal exposure to foreign exchange differences with more than 90% of costs in GBP (£). Although the Company does experience year to year fluctuations on its long term debt which is denominated in other currencies. Data protection Regulation of data collection, data security and user privacy continue to evolve globally, which may impact the ability to collect data and optimize the performance of digital experiences. The directors and management are confident that the impacts of data regulation are manageable by the group, and given our software relies on the use of 1st party collected rather than 3rd party collected user data, the Company aligns positively to the market direction of consent-driven digital experiences.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
As discussed above, the Company is largely a sales, marketing, development, customer success and administrative company that provides support to the overall group. Therefore, future development will be measured by sales generation and support provided by UK based employees.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
Certain information required to be included in the Directors' Report has been included in the Strategic Report in accordance with Section 414C (11) of the Companies Act 2006.
The directors who served during the year were:
The loss for the year, after taxation, amounted to £1,353,452 (2023 - loss £3,690,939).
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 DECEMBER 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 OPTIMIZELY LTD
We have audited the financial statements of Optimizely Ltd (the 'Company') for the year ended 31 December 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 OPTIMIZELY 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 OPTIMIZELY 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 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 OPTIMIZELY 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
Date:
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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BALANCE SHEET
AS AT 31 DECEMBER 2024
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BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 27 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Optimizely Ltd is a private company limited by shares and incorporated in the United Kingdom and registered in England and Wales under the Companies Act 2006. Its registered office and place of business is 60 St Martins Lane, 4th Floor, Covent Garden, London, United Kingdom, WC2N 4JS. The nature of the Company's operations are set out in the Directors' Report.
2.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 3).
The following principal accounting policies have been applied:
The Company is in a net liability position. This is primarily as a result of the net amounts owed to group undertakings, which the directors have confirmed will not be repayable until the Company has sufficient resources to do so.
The Company has received written confirmation from its parent company, Epsilon Group New Holdings Limited, that it will continue to provide financial support for a period of at least 12 months from the date of signing these financial statements. In assessing the Company's ability to continue as a going concern, the directors have considered the availability of financing from the parent company and are confident the Company will be able to meet its liabilities as they fall due. For these reasons, the directors continue to prepare the financial statements on a going concern basis.
Functional and presentation currency
Transactions and balances
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Turnover represents amounts receivable for term subscriptions and set up fees, net of VAT and trade discounts. Term subscription income relates to use of the Company's software products. Turnover is recognised on a straight line over the service period of the subscription.
Intercompany turnover is made up of transfer pricing income under a cost sharing agreement. Transfer pricing income is recharges to entities within the group under a cost pool methodology, whereby global costs are allocated to each group entity based on the proportion of worldwide revenue earned. Turnover is recognised when all of the following conditions are satisfied:
∙the amount of turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the service agreement;
∙the costs incurred under the service agreement can be measured reliably.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.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.
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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan. Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. Long-term debtors are measured initially at amortised cost and subsequently at amortised cost using the effective interest method. Long-term amounts owed by group undertakings are unsecured and interest is charged at an amount of 6% per annum.
Short-term creditors are measured at the transaction price. Amounts owed to group undertakings are intercompany loans measured at cost. These loans are unsecured and repayable on demand.
Long-term creditors are amounts owed by group undertakings, measured initially at amortised cost and subsequently at amortised cost using the effective interest method. These are unsecured and interest is charged at an amount of 6% per annum.
Share premium account represents the excess of the issue price over the par value on shares issued less transaction costs arising on issue.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities are addressed below. Share based payments The directors review the outstanding share options annually to assess the probability of vesting and exercise. The directors have concluded that the share options granted to employees are likely to vest and as such an expense has been recognised in the Statement of Comprehensive Income. Recoverability of intercompany debt The Company assesses the amounts recoverable from group undertakings on an annual basis. This assessment includes a review of the position of other group companies and their ability to repay the debts due, together with balance confirmations from each entity. As at 31 December 2024, no impairment or allowance was recorded against these debts and they were deemed fully recoverable.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
There were no factors that may affect future tax charges.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Share premium account
Capital contribution reserve
As per terms of the Company acquisition, Episerver Group AB agreed to repay the indebtedness of the Company by the way of an advance that corresponded to the indebtedness. The remaining capital contribution reserve is in relation to the share options granted to UK employees over the shares in the parent company, see note 17.
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Plan 2 – Performance share plan
This scheme was introduced on 21 March 2019. In accordance with the terms of the plan, if certain performance conditions are met, then certain employees may be granted ordinary B Bonus shares in Epsilon Group New Holdings Limited. The number of shares granted is fixed, and the grant of all shares is triggered once all performance measures approved by the shareholders at a previous annual general meeting are met. These performance measures include continued service and improvements in share price. The shares are subscribed at a price of $0.71 per share. All shares granted vest in 5 equal tranches on each anniversary of the grant date. There were no options granted during the year for this plan (2023: Nil). The number options outstanding as at 31 December 2024 under this plan was 580,887 (2023: 580,887). The Company recognised expenses of £Nil (2023: £36,451) related to the share based payment transactions in the year. The inputs into the Black-Scholes model are as follows:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Epsilon Group New Holdings Limited is the parent 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 3rd Floor, 37 Esplanade, St Helier, Jersey, JE1 1AD, Channel Islands.
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