H1 2026 at a glance: recurring revenue up, headline profit down
Beeks Financial Cloud Group has reported an H1 where commercial activity was brisk but accounting timing worked against the numbers. Annualised Committed Monthly Recurring Revenue (ACMRR) – the forward-looking run-rate of contracted monthly fees annualised – rose 15% to £32.80m. Yet revenue and profit stepped back because fewer deals were recognised upfront and more contracts shifted to revenue share.
Here are the headline figures investors care about:
| Metric | H1 FY26 | H1 FY25 | Comment |
|---|---|---|---|
| Revenue | £14.65m | £15.79m | Down 7% on timing of deployments |
| Gross profit | £4.50m (30% margin) | £6.03m (38% margin) | Margin hit by mix and pre-go-live costs |
| Underlying EBITDA | £4.12m (28% margin) | £5.74m (36% margin) | Reflects lower upfront revenue |
| Underlying PBT | £(0.69)m | £1.89m | Loss due to deployment timing and model shift |
| Statutory PBT | £(1.87)m | £0.46m | Largest add-back is non-cash share-based payments |
| Underlying EPS | -0.75p basic, -0.68p diluted | 2.61p | Swings with profit |
| ACMRR | £32.80m | £28.50m | Up 15%, underpinning visibility |
| New contracts (TCV) | £11.9m | £9.7m | Up 23%, £7m signed in December alone |
| Gross cash | £6.96m | £7.31m (Dec-24) | Broadly maintained |
| Net cash | £3.29m | £6.57m | Lower after upfront investment |
What drove the dip: timing and the revenue share pivot
Two mechanics explain most of the softness. First, revenue recognition. Only £0.57m of upfront deployment revenue was booked this half compared with £3.30m a year ago. Beeks signed a flurry of Proximity Cloud contracts late in the period, so the upfront portion will mainly land in H2.
Second, the growing use of revenue share in Exchange Cloud. Under this model, Beeks earns a cut of client activity rather than a larger fixed upfront fee. It reduces early revenue while still incurring set-up costs, but management expects it to deliver greater medium-term revenue as usage scales. Early signs are encouraging: live sites are moving into monthly profitability ahead of plan, with Kraken’s deployment becoming profitable in March 2026.
Quick jargon check:
- ACMRR – Annualised Committed Monthly Recurring Revenue, a proxy for contracted run-rate revenue.
- TCV – Total Contract Value signed over a contract’s life.
- Proximity Cloud – Beeks’ managed private infrastructure at or near an exchange’s data centre.
- Exchange Cloud – a multi-tenant cloud inside an exchange’s colocation, increasingly on revenue share.
Commercial momentum: new exchanges, late-December wins and an AI launch
Beeks signed £11.9m of new TCV in H1, including £7m in December 2025, with £6m of that coming from Proximity Cloud. Around half of the Proximity value is expected to be recognised in H2, providing a clear near-term uplift.
Exchange Cloud continues to build strategically. Seven exchanges are now signed, four on revenue share, with two new wins in the period:
- TMX Datalinx in Canada.
- nuam, integrating the stock exchanges of Santiago, Colombia and Lima.
Both are expected to go live in H2 FY26. Meanwhile, ASX went live as planned in H1 and is anticipated to reach monthly profitability during H2. The remaining phase of Grupo Bolsa Mexicana’s disaster recovery site is also due to go live in H2.
On the product front, Beeks launched Market Edge Intelligence, an AI analytics platform that brings predictive insight into the colocation edge. The proof-of-concept client, one of the world’s largest banks, is now in contractual discussions. If converted, this higher-margin software could add an extra earnings lever beyond infrastructure.
H2 setup and guidance: revenues weighted to the second half
Management expects H2 FY26 to benefit from approximately £4.5m of revenue recognition tied to late H1 contract wins, plus the remaining BMV deployment and the go-live of two Exchange Cloud contracts. The Board’s outlook is for full-year performance in line with expectations, supported by the higher ACMRR base and a strong pipeline. The caveat is the usual one for enterprise deployments – timing with major institutions can be unpredictable.
Margins, cash and investment: laying track for growth
Gross margin fell to 30% from 38%. Over half of the drop reflects the lack of upfront deals in H1, around 2% reflects infrastructure investment ahead of launches, and the remainder is mainly mix effects from revenue share. With deployments due to go live in H2 and data centre terms under review, margins should rebuild as utilisation improves.
Cash generation remained solid: operating cash flow before working capital was £4.37m, and after working capital £2.94m. Gross cash stood at £6.96m and net cash at £3.29m after funding deployments with a £1.5m property-backed loan and £2.0m of asset finance. Gross debt is modest at 0.4x underlying annualised EBITDA.
Investment stayed purposeful. Beeks spent £3.2m on infrastructure and hardware, lifted inventory to £3.4m to manage supply chain constraints, and capitalised £1.1m of development costs. It also made a £0.8m strategic minority investment in Liquid-Markets-Solutions for ultra-low-latency networking tech. Headcount rose to 116, with roughly half the additions in sales and pre-sales to support the enterprise pipeline.
Why this update matters for investors
- Quality of revenue is improving. A 15% rise in ACMRR to £32.80m gives better visibility and stickier earnings.
- Revenue share could be a long-term positive. It lowers early revenue but should scale with client activity, evidenced by Kraken’s early profitability.
- Exchange footprint is widening. Seven exchanges signed, with recognisable venues and expansion potential, and limited competition noted by the Board.
- AI angle emerging. Market Edge Intelligence adds a software-led, potentially higher-margin component to the stack.
What could go wrong: the short list of watch items
- Deployment timing risk. H2 is heavily loaded; any slippage would push revenue and profit to the right.
- Volume sensitivity. Revenue share relies on trading activity, which can be variable across cycles.
- Margin rebuild depends on utilisation. Pre-go-live costs and data centre commitments need to be absorbed by new workloads.
- Cost discipline. Administrative expenses rose 19% with headcount expansion; benefits must translate into bookings and faster conversions.
My take: constructive momentum, H2 delivery now key
This is a classically awkward half for a scaling infrastructure provider: strong sales progress and a bigger recurring base, but fewer upfront recognitions and higher set-up costs. The commercial narrative is positive – £11.9m of new TCV, more exchanges on platform, and a credible AI product taking shape – and the cash position remains sensible given the investment phase.
The investment case hinges on execution over the next six months. If the c.£4.5m of deferred recognition lands, new exchanges go live, and margins begin to normalise, the move to revenue share and the growing ACMRR should translate into the “enhanced profitable revenue growth” management is guiding towards. I’m constructive, with the clear ask that H2 turns pipeline and deployments into recognised revenue and margin recovery.
