Eckoh (ECK) H1 2025 earnings summary

Executive summary

• Revenue declined 10% year-over-year to £16.8m, mainly due to reduced one-off revenue from the shift to cloud-based SaaS solutions and prior large renewals in North America.

• North America now represents 51% of group revenue, with 68% of its revenue cloud-delivered and 100% of new client wins for cloud deployment.

• Group recurring revenue rose to 91% (from 83%), reflecting the ongoing SaaS/cloud transition and strong renewals.

• Adjusted operating profit was £3.6m, down 10% year-over-year, but operating margin improved slightly to 21.6%.

• A recommended cash acquisition by Eagle UK Bidco Limited (Bridgepoint) was announced, subject to shareholder and court approval.

Financial highlights

• Gross profit was £14.5m, down 7% year-over-year, but gross margin improved to 86% (from 83%).

• Adjusted EBITDA was £4.5m, down 8% year-over-year.

• Net cash increased to £10.4m, up £3.2m year-over-year.

• Basic EPS was 0.09p (down from 0.43p); adjusted diluted EPS was 0.95p (down 7%).

• Total contracted business fell 39% to £14.9m, reflecting fewer large renewals.

Outlook and guidance

• Second half expected to be stronger for new business wins, with a robust North America pipeline.

• Cloud transition and SaaS model expected to further improve recurring revenue, margins, and earnings quality.

• UK & Ireland revenue expected to stabilise in FY25, with modest growth from FY26.