Calnex FY26 results analysis – revenue growth is real, profit growth is better, and the strategy is starting to show
Calnex has put out a genuinely solid set of FY26 results. Revenue rose 19% to £21.9 million, profit before tax jumped 73% to £1.2 million, and basic earnings per share more than doubled to 0.83p. For a small AIM tech business that has been trying to broaden itself beyond traditional telecoms, that is the kind of update investors wanted to see.
The bigger point is this: the numbers suggest Calnex is no longer just talking about diversification. It is now getting paid for it. Growth from digital infrastructure and government and defence helped drive the year, while telecoms stayed steady rather than falling over.
Calnex FY26 key figures – the numbers that matter most to shareholders
| Metric | FY26 | FY25 | Change |
|---|---|---|---|
| Revenue | £21.9 million | £18.4 million | 19% |
| Gross profit | £16.6 million | £13.8 million | 20% |
| Gross margin | 76% | 75% | 1 percentage point |
| Underlying EBITDA | £1.8 million | £1.2 million | 53% |
| Profit before tax | £1.2 million | £0.7 million | 73% |
| Basic EPS | 0.83p | 0.38p | 118% |
| Closing cash | £9.3 million | £10.9 million | (15%) |
| Cash at 22 May 2026 | £11.2 million | Not disclosed | Post year-end improvement |
| Total FY26 dividend | 0.99p | 0.95p | 4% |
One quick note on jargon: EBITDA means earnings before interest, tax, depreciation and amortisation. Calnex uses an “underlying EBITDA” measure that still charges amortisation of development costs, which is a bit unusual compared with some companies, but the reconciliation is clearly shown in the RNS.
Why Calnex revenue growth looks encouraging – hyperscaler demand and defence orders did the heavy lifting
The standout feature in these final results is where the growth came from. Calnex said increased orders in government and defence, plus a significant repeat Sentry order from a leading hyperscaler in the second half, drove the improvement.
That matters because hyperscalers are the giant cloud and data centre operators. Winning repeat business here is usually more meaningful than a one-off test order, because it suggests the product is proving useful in live infrastructure environments.
Government and defence also moved up to 21% of orders by value, from 15% last year. Digital infrastructure stayed strong at 49% of orders, while telecoms fell to 30% from 36%. That tells you the mix is changing in the direction management wants.
- Digital infrastructure orders: 49% of total
- Government and defence orders: 21% of total
- Telecoms orders: 30% of total
- Repeat business: 79% of orders on a three-year average basis
My view: this is positive. Calnex is proving that its products are relevant outside its legacy telecoms base, which should make future revenue less cyclical and less dependent on one market recovering.
Calnex profitability improved nicely – high gross margins and operational leverage are doing the work
Revenue growth is good, but profit growth was even better. Gross margin improved to 76%, and profit before tax margin rose to 6% from 4%. That is a decent sign of operational leverage – in plain English, more of each extra pound of revenue is dropping through to profit.
Administrative expenses excluding depreciation and amortisation rose to £11.1 million from £9.3 million, which is not surprising given the extra hiring and commercial investment. Even so, the business still expanded its underlying EBITDA margin to 8% from 6%.
That is a healthy direction of travel. Calnex is not yet delivering huge profits, but it is showing it can grow without wrecking margins.
Calnex balance sheet, cash and dividend – strong finances, but there are a couple of catches
The balance sheet remains a real strength. There is no debt, and the company finished the year with £9.3 million of cash. Better still, because some shipments landed late in the fourth quarter, cash had risen to £11.2 million by 22 May 2026 as receivables were collected.
That said, there are two things worth watching. First, reported closing cash was down from £10.9 million a year earlier. Second, the company invested £6.4 million in R&D, up from £4.8 million, including £0.8 million to secure early access to silicon for its next-generation 1.6Tb/s synchronisation product.
That spending is not necessarily bad. In fact, for a specialist test equipment company, it is probably essential. But investors should remember that a lot of development spend is capitalised, meaning it goes onto the balance sheet first and is then amortised over time. That can make current profits look smoother than the cash flow.
The dividend increase is modest but welcome. The proposed final dividend is 0.68p per share, taking the total for FY26 to 0.99p, up from 0.95p.
Calnex risks in FY27 – customer concentration and higher investment are the main watchpoints
This was a good year, but it was not flawless. The biggest risk in the numbers is customer concentration. One customer accounted for 25% of total orders and 22% of revenue in FY26, while the top 10 customers made up 56% of orders in the year.
That does not mean trouble is coming, but it does mean the business can be lumpy. A delayed order or a pause from one major account can move the needle quickly.
There is also a near-term profit trade-off coming. Management has been very clear that FY27 will be a year of targeted investment in product launches, partner channels and customer development, with the expected payoff weighted more towards FY28.
- One customer accounted for 22% of FY26 revenue
- Top 10 customers accounted for 56% of FY26 orders
- Capitalised R&D rose to £6.3 million
- FY27 spending is expected to increase
So if you are looking for a straight line of rising margins next year, the company is not promising that. It is effectively saying: we are spending now so we can grow faster later.
What Calnex management is signalling for FY27 and FY28 – confidence, but with a delayed payoff
The outlook statement is upbeat, and fairly specific in tone. Management believes FY27 investment will support stronger growth in FY28 as products are commercialised. The areas called out were SNE network emulation, next-generation Sentry for data centre assurance, and 1.6Tb/s synchronisation technology.
That makes strategic sense. If Calnex can deepen its position in AI-linked data centre testing and US government programmes, it has a much bigger runway than old-school telecoms alone would offer.
I also like the route-to-market progress. The shift away from Spirent Communications as a channel arrangement could have been messy, but Calnex says it navigated the transition well, expanded its partner network, and added a partnership with Viavi. That should help distribution and credibility.
Final verdict on Calnex FY26 results – a good set of numbers with enough substance behind them
Overall, I think this is a positive update. The headline growth is strong, the profit progression is better than the revenue number alone suggests, and the business appears to be gaining traction in exactly the markets investors would want to see: hyperscale data centres, digital infrastructure, and government and defence.
The negatives are real but manageable. Customer concentration is high, cash dipped at the year end before recovering, and FY27 is likely to carry heavier investment. But with £11.2 million of cash post period end, no debt, and 76% gross margins, Calnex has room to fund that next phase.
For retail investors, the simple takeaway is this: Calnex looks like a small tech company that is starting to execute properly on its diversification story. If it can convert the current product roadmap and customer interest into commercial wins, FY28 could be the year that really matters.
