Fadel Partners (FADL) H1 2026 earnings summary

Executive summary

• Revenue grew 4% year-over-year to $4.8 million in H1 2026, driven by a 25% increase in license and support revenue, offsetting a 19% decline in services revenue.

• Gross profit rose 28% to $2.9 million, with gross margin improving to 61% from 49% due to a higher mix of recurring, higher-margin revenue and operational efficiencies.

• Operating expenses fell 15% to $4.1 million, reflecting cost discipline and restructuring benefits, resulting in a 53% improvement in adjusted EBITDA loss to $1.1 million.

• Annual Recurring Revenue (ARR) increased 11% year-over-year to $9.4 million, with net revenue retention at 104%.

• New customer wins and expansions, especially in IPM Suite and Brand Vision, contributed to ARR growth.

Financial highlights

• License and support revenue: $3.1 million (+25% YoY); services revenue: $1.8 million (-19% YoY).

• Gross profit: $2.9 million (+28% YoY); gross margin: 61% (+12pp YoY).

• Adjusted EBITDA loss: $1.1 million (53% improvement YoY).

• Cash and cash equivalents: $1.9 million at period end, with access to an undrawn $1.0 million credit facility.

• Net loss after taxes: $1.57 million; basic and diluted loss per share: $0.09.

Outlook and guidance

• Management expects full-year 2026 revenue, adjusted EBITDA loss, and cash to be in line with market expectations.

• Focus remains on recurring revenue growth, cost control, and cash management amid enterprise sales cycle risks and macroeconomic uncertainties.