Craneware (CRW) H2 2026 earnings summary

Executive summary

• Fiscal 2026 results were below expectations due to 340B market headwinds and a cybersecurity incident, but recurring revenue remained resilient at $185m ARR with 100% NRR and customer retention above 90%.

• Revenue expectations for fiscal 2027 have been reset to align with ARR, providing greater certainty amid ongoing market and operational uncertainties.

• A comprehensive cost base review is underway to align expenses with revised revenue and support future growth, with a commitment to 30%+ EBITDA margins.

• The Microsoft partnership is expected to accelerate AI and sales initiatives.

Financial highlights

• Revenue for fiscal 2026 was $206 million, flat year-over-year (FY25: $205.7m).

• Adjusted EBITDA was $67.1 million, up 3%, with a 33% margin.

• Annual recurring revenue (ARR) was $185 million; net revenue retention (NRR) at 100%.

• Operating cash conversion was 98% of adjusted EBITDA.

• Year-end cash stood at $54.8 million, with $56 million undrawn RCF and $100 million accordion facility available.

• Bank debt increased to $43.5 million, partly to fund a $25 million share buyback.

• Total dividend for the year maintained at GBP 0.32 per share.

• Adjusted basic EPS was 116.8 cents.

Outlook and guidance

• Fiscal 2027 revenue guidance reset to $185 million, matching current ARR, reflecting market and operational uncertainties.

• Margin expected in the mid to high-20% range for fiscal 2027, with a return to 30%+ margins targeted for fiscal 2028.

• No anticipated drop in ARR for fiscal 2027; NRR expected to remain at 100%.

• Growth expected to resume in fiscal 2028 as market clarity improves and cost initiatives take effect.

• Ongoing investment in innovation and product launches to drive future cross-sell and upsell opportunities.