Calnex FY26 trading update: revenue up 19%, profits better, outlook confident
Calnex Solutions has delivered a tidy set of FY26 headline numbers and – crucially – is guiding with confidence into FY27 and FY28. Revenue is expected to be up approximately 19% to £21.9m, with profitability improved and gross margins “strong” (no percentage given). The company says it traded slightly ahead of market expectations while continuing to invest for the long term.
The balance sheet remains solid, with £9.3m cash at 31 March 2026 and around £3m of customer receipts due in early FY27 because of shipment phasing in Q4. That timing point helps explain the year-on-year dip in cash from £10.9m at March 2025.
Key numbers at a glance
| Metric | FY26 (unaudited) | FY25 | Notes |
|---|---|---|---|
| Revenue | £21.9m (approx.) | £18.4m | ~19% growth year-on-year |
| Profitability | Improved | — | Exact figures not disclosed |
| Gross margin | Strong | — | Exact percentage not disclosed |
| Cash | £9.3m (31 Mar 2026) | £10.9m (31 Mar 2025) | ~£3m customer receipts expected early FY27 due to Q4 phasing |
What drove the improvement? Diversification and better routes to market
Calnex makes test and measurement kit for network synchronisation, monitoring and emulation – the tools that help telecoms and cloud players validate and tune their networks. Historically a telecoms-focused business, FY26 shows the strategy of diversifying into cloud computing and datacentres, and government and defence, is gaining traction. Management calls the telecoms market “stable”, but growth elsewhere is picking up the slack.
On the commercial side, Calnex has expanded its partner network, added new North American partners, and ramped up partner enablement – essentially arming resellers to sell more effectively. That should extend sales coverage in faster-growing segments and is already contributing to momentum.
Product pipeline aimed at hyperscaler AI and next-gen networking
This update leans into the AI build-out theme. Hyperscalers – the very large cloud providers – are investing heavily in AI capacity. Calnex’s network emulation SNE product is in a “successful discovery phase” with keen interest from that cohort and anticipated revenue in late FY27. A network emulator lets customers simulate complex network conditions to test performance and resilience before they deploy at scale – a valuable capability in AI-heavy datacentres.
Elsewhere, the Sentry product is described as a market-leader in the datacentre space, with significant sales to a hyperscaler in recent years and a next-generation version in the works. In timing-sensitive networks, Sentry’s role in monitoring and assurance is a strong fit.
In synchronisation testing – making sure network timing is accurate, which is critical for 5G and high-speed data – the Paragon Neo-S 800 Gb/s solution has found success in telecoms and datacentres. Calnex is now investing in the next evolution: a 1.6 Tb/s product, targeting launch in FY28, and already getting attention from prospective customers. If executed to plan, that could be a meaningful FY28 growth driver.
FY27-FY28: Investment now, acceleration later
Management is candid that FY27 will be a year of targeted investment. The focus is on key product launches and deepening relationships in growth markets, setting up for “accelerated growth” in FY28 as those initiatives commercialise. That usually implies some near-term pressure on operating costs as R&D and go-to-market spending steps up, though profitability improved in FY26 and gross margins remain strong.
The November 2025 partnership with VIAVI Solutions is another string to the bow. VIAVI is a large player across telecoms, datacentres and defence, and Calnex says the tie-up is already delivering value for customers and should strengthen its go-to-market footprint. With an expanded partner network and more coverage in North America, the sales engine looks better tooled for the task.
Why this update matters for investors
What’s positive
- Clear top-line momentum: approximately 19% revenue growth to £21.9m, slightly ahead of market expectations.
- Profitability moving in the right direction with strong gross margins, even as investment continues.
- Diversification working: traction in cloud/datacentres and government/defence helps offset a stable telecoms market.
- Compelling pipeline: SNE tapping into hyperscaler AI demand (late FY27 revenue), next-gen Sentry, and a 1.6 Tb/s synchronisation tester targeted for FY28.
- Strengthened distribution: broader partner network, new North American partners, and the VIAVI partnership all expand market access.
- Solid liquidity: £9.3m cash at year-end with around £3m of receipts expected early FY27 due to shipment phasing.
What to watch and potential risks
- FY27 is an investment year: spending on product and market development may weigh on near-term margins or cash flow, though no guidance was given.
- Timing of new revenue: SNE-related revenues are expected only in late FY27; meaningful acceleration is signposted for FY28.
- End-market sensitivity: momentum leans on hyperscaler and datacentre budgets; any slowdown could impact the growth cadence.
- Telecoms still “stable”: an upturn here would be a bonus, but it is not assumed in the narrative.
- Limited disclosures: no detailed profit metrics, margin percentages, or order book figures in this update.
Jargon buster (quick and painless)
- Gross margin: the percentage of revenue left after direct costs of making products – a proxy for pricing power and cost control.
- Hyperscalers: very large cloud companies building massive compute and storage infrastructure.
- Network emulation: simulating real-world network conditions to test equipment and applications before deployment.
- Synchronisation testing: verifying timing accuracy across networks, vital for 5G and high-speed data transport.
Upcoming catalyst: full-year results date
Calnex plans to release audited FY26 results on 26 May 2026. Expect fuller detail on margins, operating profit, cash flow, and any updates to the FY27-FY28 timeline.
My take: solid progress, bigger shots lining up
This is a constructive update. Calnex is executing on diversification, keeping margins healthy, and building routes into higher-growth markets. The product roadmap is aligned with where spend is heading – AI-heavy datacentres and higher-speed networks – and the commercial model looks stronger with partners and VIAVI in the mix.
Near term, FY27 investment could mute profitability, and the revenue step-up hinges on late FY27 and FY28 launches landing well with customers. But with cash in hand, a decent pipeline, and early hyperscaler interest, the setup for FY28 looks promising. I’ll be watching for more colour on margins, order momentum, and partner-driven wins when the full results drop in May.
