AdvancedAdvT Reports 23% Revenue Growth and Strong Cash Position

AdvancedAdvT full-year results show strong software growth, better margins and a bigger cash pile

AdvancedAdvT has delivered a solid set of annual results for the year ended 28 February 2026. Revenue rose 23% to £53.4 million, adjusted EBITDA – a common profit measure that strips out some one-off and non-cash items – climbed 28% to £14.5 million, and the group finished with £96.2 million of cash.

For retail investors, the headline is pretty simple: the underlying software business looks stronger, more recurring, and more cash-generative than it did a year ago. The awkward bit is that reported earnings per share fell sharply, but that was heavily affected by a fair value hit on an investment rather than a collapse in trading.

Key AdvancedAdvT results investors need to know

Metric	FY2026	FY2025	Change
Revenue	£53.4 million	£43.3 million	+23%
Recurring revenue	£43.2 million	£34.8 million	+24%
Recurring revenue as % of sales	81%	80%	+1ppt
Adjusted EBITDA	£14.5 million	£11.3 million	+28%
Adjusted operating profit	£14.3 million	£11.3 million	+26%
Operating profit	£4.5 million	£7.4 million	-40%
Basic EPS	3.4p	8.2p	-59%
Basic EPS on adjusted operating profit	10.5p	8.5p	+24%
Free cash flow	£13.2 million	£11.2 million	+18%
Cash	£96.2 million	£88.5 million	+9%

Recurring revenue growth matters because it makes AdvancedAdvT more predictable

One of the best numbers in this update is recurring revenue of £43.2 million, equal to 81% of total revenue. Recurring revenue means repeatable income such as subscriptions and support contracts, and software investors usually like that because it tends to be more stable and easier to forecast.

That ratio only moved from 80% to 81%, which might not look dramatic at first glance. But management points out that the newly acquired GOSS and HFX businesses had recurring revenue levels of 71% and 73% before joining the group, so lifting the overall mix despite buying slightly lower-quality revenue is a decent achievement.

That tells me the group is not just growing for growth’s sake. It is nudging the whole portfolio towards more subscription-style income, which usually deserves a better market rating if it proves durable.

Why AdvancedAdvT reported EPS fell even though trading improved

This is where investors need to separate the trading business from the accounting noise. Operating profit fell to £4.5 million from £7.4 million and basic EPS dropped to 3.4p from 8.2p, but a big driver was a £5.6 million fair value loss on financial assets.

That fair value loss relates to the group’s 9.8% stake in M&C Saatchi plc, which was valued at £15.4 million at 28 February 2026, down from £21.0 million a year earlier. In plain English, the value of that investment fell on paper, and that flowed through the profit and loss account.

The better measure for the underlying software business is probably the company’s own pre-tax profit before fair value movements, which rose 21% to £13.4 million. I would not ignore the investment loss, because it is real in accounting terms, but it does not tell you the core software operations are weakening. In fact, the opposite seems true.

AdvancedAdvT cash position, buyback and possible tender offer give it options

The balance sheet is a real strength here. AdvancedAdvT ended the year with £96.2 million of cash and generated £13.2 million of free cash flow, while adjusted operating cashflow reached £14.6 million with 100% cash conversion.

That is a strong result. Cash conversion measures how well profit turns into cash, and 100% is the sort of number investors like because it suggests earnings quality is not being propped up by accounting tricks.

The board is putting some of that cash to work through a share buyback programme of up to £10.0 million over 12 months. As at 24 June 2026, it had repurchased 4,869,000 shares for about £7.8 million, with those shares held in treasury.

There is also a potentially bigger capital return on the table. The board said it is considering a further substantial return of capital, potentially through a tender offer, although nothing has been confirmed yet.

The flip side is that there is still no dividend. If you are an income investor, that is a negative. If you are happy for cash to be used for buybacks, acquisitions and product investment, it looks more acceptable.

HFX, GOSS and MatchingCore acquisitions expand the platform and AI capability

AdvancedAdvT was active on acquisitions again. It bought HFX for £5.0 million net of cash acquired, GOSS for £7.4 million net of cash acquired, and MatchingCore intellectual property for £0.5 million.

HFX strengthens the Human Capital Management side with cloud-based workforce management software. GOSS adds a low-code digital platform aimed at public sector digital transformation, which sounds especially relevant given the group’s focus on regulated and mission-critical markets.

MatchingCore is smaller in price but interesting strategically. Management says it adds AI-driven resource optimisation, which should help enhance workforce planning and professional services use cases.

I think these deals make sense on paper because they fit the existing playbook rather than dragging the group into unrelated areas. The risk, as ever, is integration. Management says integration is progressing as expected, but investors will want proof through future revenue growth and margin delivery.

AI strategy looks practical rather than promotional, which is probably the right tone

Plenty of software companies talk about AI. Fewer explain where it actually fits. AdvancedAdvT’s pitch is that AI and automation will be embedded into trusted systems of record – the core software customers rely on to run regulated processes with governance and audit trails.

That is a more believable story than slapping AI on a slide deck and hoping the market cheers. The group invested £9.5 million in research and development, equal to 17.7% of revenue, up from £6.5 million or 15.1% last year.

There are also signs of operational follow-through. The Indian offshore development centre has grown to 37 colleagues, and the group says it is helping deliver product enhancements across the portfolio.

What could hold the shares back despite these encouraging results

• Public sector timing risk – management says decision-making can still be delayed by budget and policy uncertainty.
• Customer churn in mature products – the company says some churn continued in older product lines, even if SaaS growth offset it.
• Acquisition execution – buying businesses is one thing, improving them is another.
• Accounting volatility from investments – the M&C Saatchi stake can swing reported earnings around.
• No dividend – not ideal for shareholders wanting direct income today.

My take on the AdvancedAdvT results for retail investors

Overall, this looks like a good update. The core business appears to be improving in the right places: more revenue, more recurring income, higher margins, strong free cash flow and a very healthy cash balance.

The ugly-looking EPS drop is the main trap for casual readers, but the detail suggests that was driven largely by the £5.6 million fair value loss on the M&C Saatchi investment rather than weak underlying trading. Strip that out, and performance looks materially better.

The valuation angle is not disclosed in the RNS, so I cannot say whether the shares are cheap. But strategically, AdvancedAdvT looks like a company with a clear focus, decent financial discipline and enough cash to keep investing while also returning capital to shareholders.

For me, that makes this RNS more positive than negative. The next thing the market will want is simple: prove that the acquisitions bed in smoothly, keep SaaS growth moving, and show that AI investment turns into commercial gains rather than just good intentions.