Fonix (FNX) H2 2026 earnings summary

Executive summary

• FY26 trading performance exceeded market expectations, driven by strong growth in core product lines, especially mobile payments and messaging, and international expansion into Portugal, Switzerland, and France, with a sixth European market in progress.

• Maintains long-term client relationships, with top 10 customers averaging over 9 years per contract.

• Increased ordinary dividends for the sixth consecutive year and completed a £2.4 million share buyback during FY26.

Financial highlights

• Gross profit rose 12.9% to £21.0m, up nearly 13% year-over-year, driven by UK media and new Portuguese market.

• Adjusted EBITDA increased 11.0% to £16.2m, aligned with gross profit but slightly lower due to investment in new hires, especially in France.

• Revenue grew 15% to £83.3m; adjusted profit before tax up 8.4% to £15.5m, with growth lagging EBITDA due to increased amortization and lower interest income.

• Total Payment Volume (TPV) reached £303m, up 8% year-over-year, despite loss of low-margin gambling customers.

• Over the last eight years, gross profit and EBITDA have grown at 19% and 23% CAGR, respectively.

Outlook and guidance

• Return to double-digit growth expected to continue, supported by innovation and new market expansion, with international markets expected to contribute revenue in FY 2027 and growth ramping up through FY 2030.

• UK market remains mature; future growth expected to be steady but not at recent high momentum.

• France expected to reach break-even in 18 months, with ongoing modest investment as market develops.

• Conservative guidance maintained, aiming to over-deliver where possible.

• Strong broadcaster pipeline across multiple European territories, with significant further upside anticipated in France and Switzerland.