PCI-PAL (PCIP) H1 2025 earnings summary

Executive summary

• Achieved record new business sales and strong operational performance in H1, with a focus on product enhancements and expansion into product adjacencies.

• Revenue grew 26% year-over-year to £10.57m for H1 FY25, with recurring revenues at 91% of total.

• Transitioned to profitability, with adjusted EBITDA at £0.95m and profit before tax of £0.20m, entering a new growth phase post-settlement of a major patent case.

• Maintains a robust partner ecosystem, with over 700 customers and a strong presence in the UK and North America; 75% of new customers came via partners.

• Renewed a major UK government contract worth over £5 million over three years, with option to extend.

Financial highlights

• Revenue increased 26% year-over-year, with underlying normalized growth at 13% due to prior period revenue deferral.

• Annual Recurring Revenue (ARR) grew 21% to £16.8 million; Total Annual Contract Value (TACV) up 16% to £20.3 million.

• Gross margin improved to 90%, with gross profit at £9.6 million.

• Net cash at period end was £4 million, with an undrawn £3 million debt facility.

• Generated positive operating cash flow of just under £1 million (adjusted basis).

Outlook and guidance

• Strong start to H2 with ACV to end of February 2025 at £2.7m and a growing 12-month pipeline.

• Focus remains on accelerating deployments to convert contracted sales into recognized revenue and maintaining profitability.

• Ongoing investment in growth over dividends, with regular review of dividend policy.

• Plans to expand internationally, launch new products, and consider selective M&A to complement organic growth.

• Strategic refresh underway, leveraging the current inflection point post-profitability.