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Financial Modeling

Advertising & SEO agency · FY2026

99 Agency — Integrated Budgeting Model

Key result · Revenue +17.1% to $119.2M; net income +58% to $25.9M

Case study by Blessing Osamudiamen, ACA · Chartered Accountant & Financial Analyst

FY2026 revenue (+17.1%)
$119.2M
Net income (+58%)
$25.9M
Gross margin (from 41.9%)
46.1%
Year-end cash (from $0.6M)
$22.1M

1 · Problem statement

Build a linked FY2026 budget from business drivers for an agency that earned $101.7M revenue and $16.4M net income in FY2025.

2 · Methodology

Revenue built bottom-up by client and top-down by market, then averaged; driver-based costs, working capital and debt; three statements linked with a quarterly balance check.

  1. Revenue: built bottom-up by client and top-down by market, then averaged.
  2. Costs & balance sheet: campaign volumes, headcount, SG&A, assets, working capital and debt.
  3. Master budget: three statements linked, with a balance check every quarter.
  • Excel
  • Master Budget
  • Driver-Based Costs
  • Working Capital
  • Debt Schedule

3 · Key findings

  • EBITDA margin rises from 19.2% to 25.1% as cost of sales and SG&A grow only 8–9%.
  • The two revenue methods sit $23M apart: bottom-up supports +5.9%, top-down +28.4%.
  • Ad revenue absorbs the difference (+23%) against +2% for SEO.

4 · Strategic recommendations

  1. Reconcile the two revenue views — resolve the $23M gap before the budget is approved.
  2. Stress-test ad pricing: the budget implies about 15% higher revenue per ad campaign.
  3. Plan for cash and receivables: receivables grow $10.4M while cash builds to $22.1M.

The “so what?”

The budget balances and links cleanly, but its profit uplift rests on one assumption: 23% growth in ad revenue.

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