Gamma Communications (GAMA) H2 2025 earnings summary

Executive summary

• Delivered strong financial performance in FY2025, with significant growth in gross profit and adjusted EBITDA, driven by acquisitions and resilient core business operations.

• Expanded international presence, notably in Germany, and completed key acquisitions (Starface, Placetel, BrightCloud) that contributed to higher margins and revenue diversification.

• Completed UK restructuring and moved to the Main Market, enhancing operational efficiency and saving £7m annually from FY2026.

Financial highlights

• Gross profit up 16% year-over-year to £348.2m; adjusted EBITDA up 13% to £141.7m.

• Adjusted EPS increased 11% to 94.5p; adjusted cash generated by operations reached £131.8m with 93% cash conversion.

• Net debt at £(9.3)m as of year-end, following the Starface acquisition and share buyback; £64.0m returned to shareholders, including £45.1m in buybacks.

• Recurring revenue remained high at 89% of total revenue; gross margin improved to 54% from 52% in 2024.

• Adjusted profit before tax rose 7% to £119.4m; reported profit before tax declined 8% due to acquisition-related costs.

Outlook and guidance

• FY2026 adjusted EBITDA and EPS expected to be in line with current market expectations; capex to remain around 4% of revenue.

• Continued double-digit growth anticipated in Germany; UK SME to face further PSTN switch-off headwinds (~£4m impact in 2026).

• Enterprise segment pipeline strong, with significant contract wins to boost 2026 results, partially offset by ethernet pricing pressure.

• Operational efficiencies from UK restructuring to deliver £7m annual savings from FY2026.