FD Technologies (GYQ) H1 2025 earnings summary

Executive summary

• Achieved strong H1 FY25 performance, executing strategic transformation to focus on high-growth KX software and divesting non-core assets, including MRP and First Derivative for £230m.

• KX delivered ARR up 8% to £74.6m, ACV of £7.4m, and built a robust sales pipeline, with recurring revenue up 13%.

• Focused on sustainable growth through disciplined investment, cost reduction, and prioritization of high-growth verticals.

• KX to become the sole continuing operation, positioned as a high-growth, AI-driven analytics software business.

• Approximately £120m of net divestment proceeds to be returned to shareholders via tender offer and special dividend.

Financial highlights

• Group revenue was £118m in H1 FY25, down 7% year-over-year; KX revenue up 5% to £39.5m, First Derivative revenue down 12% to £78.8m.

• Adjusted EBITDA was £10.5m, down 26% year-over-year, reflecting increased R&D and go-to-market investments.

• Net debt at H1 was £19.8m-£20m, expected to be eliminated post-divestment.

• Group gross margin increased to 44% (H1 FY24: 41%); KX gross margin at 83%-90%.

• Operating cash flow of £12.2m in H1; cash conversion of adjusted EBITDA at 116%.

Outlook and guidance

• FY25 bookings expected at £16-18m; ARR growth of 11%-15%; churn to normalize to 5%-7% over time.

• ARR CAGR targeted at ~25% through FY27/28; positive cash EBITDA targeted for FY27.

• KX retains £54m from divestment proceeds to fund growth and financial stability.