Microlise Group (SAAS) H1 2026 earnings summary

Executive summary

• Achieved solid H1 2026 performance with direct ARR sales of £47.1m, up 12% year-over-year, driving recurring revenue to 76% of group revenue and reflecting a strong recovery from H2 2025.

• Group revenue declined 10% year-over-year to £39.5m, mainly due to lower OEM and non-recurring hardware revenues.

• Strategic focus on accelerating direct business growth, especially in the mid-market and TMS product, supported by targeted investments and restructuring.

• Investment in product, AI, and technology, including Microlise One, supports scalable, sustainable growth.

• Net cash position strengthened to £13.8m at period end, with a £30m undrawn facility and no debt.

Financial highlights

• Direct customer ARR increased 12% year-over-year to £47.1m; group ARR up 4% to £60.8m.

• Recurring revenue now 76% of total, up from 67% year-over-year.

• Adjusted EBITDA margin recovered to 13.2% from 5.2% in H2 FY25; adjusted EBITDA was £5.2m, down 16% year-over-year.

• Gross margin improved to 67.1% from 65.6% year-over-year.

• PAT of £1.0m and basic EPS of 0.87p, both down over 20% year-over-year.

Outlook and guidance

• Revenues and adjusted EBITDA expected to be in line with market expectations for FY 2026 (£82.1m–£84.2m revenue, £10.0m–£11.1m EBITDA).

• Direct ARR growth to accelerate in 2027 and beyond, driven by investments in TMS, mid-market, and GTM teams.

• OEM ARR to decline further in 2027, then plateau; direct business to drive group growth.

• Margin expansion targeted, with ambition to reach 20% adjusted EBITDA, aiming for 25%-30% longer term.

• Board confident in medium-term prospects, supported by recurring revenue visibility and a healthy pipeline.