Software Circle (SFT) H1 25/26 earnings summary

Executive summary

• Achieved 15% year-over-year revenue growth to £10.2m for the six months ended 30 September 2025, with strong organic and acquisition-driven performance.

• OEBITDA rose 33% to £3.1m and aEBITDA increased 44% to £2.3m, reflecting improved operational efficiency and margin expansion.

• Group now comprises eleven VMS businesses, with annualised run-rate revenues of £24m and aEBITDA margin of 25%.

• Two acquisitions completed: Artificial Intelligence Finance Limited (AIF) in August and Broker Information Services Limited (BIS) in October, forming the first platform in the Professional and Financial Services segment.

Financial highlights

• Gross profit increased 24% to £7.8m, with gross margin improving to 76% from 70% year-over-year.

• Operating loss of £0.8m versus a profit of £1.4m last year, mainly due to higher non-cash amortisation and absence of prior year’s exceptional credit.

• Operating cash flow per share rose 150% to 0.5p.

• Cash and cash equivalents at period end were £4.8m, down from £12.7m last year, reflecting acquisition payments and debt servicing.

• Net debt position of £7.1m compared to net cash of £2.4m last year.

• Earnings per share (EPS) was (0.3)p, down from 0.3p year-over-year.

Outlook and guidance

• Targeting £15m annualised aEBITDA (Gate 5) as the next milestone, with a focus on compounding OCFPS and maintaining disciplined capital allocation.

• Expecting annualised revenue of £24m and aEBITDA margin of 25% post recent acquisitions.

• Pipeline for further acquisitions remains healthy, with continued focus on recurring revenue and operational fit.