Trustpilot shares jump 15% as a rise in paying customers lifts revenues

Trustpilot shares jumped 15 per cent on Tuesday after the customer review platform reported shrinking losses and a double-digit rise in revenues.

The UK-listed company, which is headquartered in Copenhagen, said its number of paying business customers increased by 14 per cent to 24,000 in the first half.

While it is free for users who want to review a business, Trustpilot makes money by charging companies that want to show the reviews on their website or gain more insight into their customer base.  

Total revenues for the six months to the end of June rose 18 per cent to $73.4million (£63.6million) due to a stronger dollar. At constant currency, growth was 25 per cent.

Pre-tax losses narrowed to $9.2million (£8million) from $17.3million, due to one-off costs in the first half of last year that did not reoccur this year, and it expects to break even in 2024.

Trustpilot said engagement from consumers and businesses alike had been ‘encouraging’.

It saw a 21 per cent increase in the number of monthly review invitations sent by businesses, which it says demonstrates ‘the viral network effect in action’.

Bookings, which provide an indication of future revenues, rose 15 per cent to $86.7million (£75million).

UK bookings rose 27 per cent – the same rate of growth achieved in Europe – which partly offset lower growth in the US, where bookings rose by a smaller 9 per cent. 

Trustpilot blamed slower US growth on a ‘challenging recruitment market’ and ‘organisational change’.

Over 190,000 reviews were left on its site by customers across the globe during the period, almost 50,000 more than last year.

The number of total active domains on Trustpilot, which includes both free users and paying business customers, increased by 29 per cent to 94,000.

Trustpilot shares, which floated in London in March 2021, rose 15 per cent to 71.3p in afternoon trading. 

However, they are still down more than 80 per cent on last year and 73 per cent lower than the IPO price of 265p.

Founder and chief executive, Peter Holten Mühlmann, said: ‘The momentum we are seeing in consumer and business engagement in each of the regions in which we operate has been particularly encouraging. 

‘Our success is founded upon our focus on trust, and we continue to benefit from viral network effects as more and more consumers choose to share their experiences on Trustpilot.’