Gamma Communications (GAMA) H1 2025 earnings summary

Executive summary

• Achieved 12% year-over-year revenue growth to £316.6m, with strong contributions from acquisitions and organic expansion, notably in Germany.

• Adjusted EBITDA rose 14% to £70.9m, and Adjusted EPS increased 13% to 47.9p, both in line or slightly ahead of expectations.

• Maintained a market-leading position in the UK and Germany, with 90% recurring revenue and a consistent gross margin above 50%.

• Over £50 million returned to shareholders in H1, with £60 million expected by year-end through dividends and buybacks; interim dividend up 14% to 7.4p.

• Profit before tax fell 10% to £43.5m due to £7.3m in exceptional costs, mainly from the Starface acquisition and Main Market listing.

Financial highlights

• Revenue rose to £316.6 million (+12% year-over-year); adjusted EBITDA reached £70.9 million (+14%).

• Adjusted EPS increased 13% to 47.9p; recurring revenue comprised 90% of total revenue.

• Gross profit margin improved to 54.3% (from 52%), driven by high-margin German cloud business.

• Net debt position of £21.6 million after Starface acquisition and buybacks, with strong liquidity via £130 million RCF.

• Adjusted cash conversion at 90%, with £64.1 million returned to shareholders YTD.

Outlook and guidance

• Full-year 2025 adjusted EBITDA expected in line with consensus (£139.4–143.1 million); adjusted EPS slightly ahead.

• 2026 headwinds of £6 million in gross profit from PSTN and connectivity, offset by £6–8 million in UK operational savings; £3m exceptional restructuring cost.

• Confident in long-term growth drivers, including AI, expanded product portfolio, and further European expansion.