Skillcast Group (SKL) H2 2025 earnings summary

Executive summary

• FY2025 revenue rose 16% to £15.3m; ARR grew 19% to £13.8m, driven by subscription growth and new client acquisitions.

• EBITDA increased 202% to £1.5m as operational gearing lifted gross margin to 75.7%; free cash flow reached £3.7m.

• Subscription revenue has grown more than 20% in each of four years since IPO; medium-term priorities include organic growth and the Rule of 40.

Financial highlights

• Subscription revenue grew 21% to £13.3m, representing 87% of revenue; total revenue increased 16% to £15.3m.

• Gross profit rose 19% to £11.6m and gross margin expanded 2.1 points to 75.7%.

• EBITDA was £1.5m, up from £0.5m; profit before tax increased 197% to £1.6m.

• Free cash flow was £3.7m; year-end cash was £12.7m, up from £9.1m, with no bank debt.

Outlook and guidance

• Medium-term objective: ARR growth of ~20% p.a. and EBITDA margin moving toward 20%, consistently achieving the Rule of 40.

• FY2026 ARR continued to grow; new-client acquisition moderated in Q1, with improvement expected, while win rates reached 15% amid slower client decisions.

• FY2026 EBITDA was trading in line with expectations, supported by operational gearing, productivity gains and AI adoption; no specific forecast was given.

• A 5% price increase was accepted without increased churn; net retention remained above 100%.