Eckoh (ECK) H2 2024 earnings summary

Executive summary

• Achieved record total contracted business of £52.6m, up 52% year-over-year, with strong multi-year renewals and new business wins, especially in North America.

• Cloud transition is improving recurring revenue, margin, and profit, though tempering short-term revenue growth.

• North America focus and realigned commercial strategy are delivering results, with a record pipeline and growing ARR.

• Well positioned to benefit from regulatory drivers (PCI DSS v4.0) and industry trends such as hybrid work and digital shift.

Financial highlights

• Group ARR rose 1% to £30.8m; North America ARR up 6% to $16.8m year-over-year.

• Revenue declined 4% to £37.2m, mainly due to the shift to cloud and lower one-off hardware/implementation fees.

• Recurring revenue increased 1% to £31.3m, now 84% of total revenue (up 430bp).

• Adjusted EBITDA grew 8% to £10.2m; adjusted operating profit up 8% to £8.3m, with margin up 250bp to 22.4%.

• Adjusted EPS up 11% to 2.20p; dividend increased 11% to 0.82p per share.

• Net cash increased to £8.3m from £5.7m; cash generated from operations £7.1m.

Outlook and guidance

• FY25 operating profit margin expected at 23–24%, with margin improvement of £1m+ from FY24 restructuring.

• Continued SaaS/cloud transition to drive cost benefits and efficiency; H1 FY25 revenue to be lower due to timing of renewals.

• Positive start to FY25, with growth underpinned by contracted business, pipeline, and market trends.