Craneware’s H1 FY26: revenue up 6%, EBITDA and EPS in double digits
Craneware has posted a tidy first half. Revenue rose 6% to $105.7m, with adjusted EBITDA up 10% to $33.4m and adjusted profit before tax up 14% to $23.5m. Adjusted basic EPS climbed 16% to 58.7 cents, while statutory profit before tax increased 29% to $13.0m.
Management points to strong expansion sales, rock‑solid retention and an accelerating 340B “Shelter” opportunity as reasons to expect a stronger second half. They have also flagged a $25 million share buyback and lifted the interim dividend by 11% to 15.0 pence.
Key numbers at a glance
| Metric | H1 FY26 | YoY change |
|---|---|---|
| Group revenue | $105.7m | +6% |
| Adjusted EBITDA | $33.4m | +10% |
| Adjusted Profit before tax | $23.5m | +14% |
| Statutory Profit before tax | $13.0m | +29% |
| Adjusted Basic EPS | 58.7 cents | +16% |
| Basic EPS | 28.6 cents | +38% |
| Annual Recurring Revenue (ARR) | $184.2m | +4% |
| Net Revenue Retention (NRR) | 103% | Flat |
| Total cash and cash equivalents (incl. cash in transit) | $71.2m | -1.5% |
| Total bank debt | $23.4m | -26% |
| Interim dividend | 15.0 pence | +11% |
Notes: Cash at the balance sheet date was $40.9m, with a further $30.3m cash in transit, totalling $71.2m. Undrawn facilities include $76m RCF and a $100m accordion facility.
What’s driving the performance: Trisus platform, 340B Shelter and Microsoft
The strategy remains simple and effective: land customers on the Trisus cloud platform and expand from there. Expansion sales made up 88% of ‘new’ sales, with retention above 90% and NRR at 103%. Importantly, sales to new customers jumped to 12% of new sales (H1 FY25: 2%) as Craneware displaced competitors – a useful lead indicator for future upsell.
On pharmacy, the 340B Shelter offering again delivered, while the team rapidly built a 340B Rebate module when the pilot was announced. The pilot’s subsequent postponement meant Craneware chose not to activate licences it had sold, which tempered reported revenue and ARR growth in the half. Those licences can be switched on if the pilot resumes, and management sees a “significant Shelter opportunity” in H2 FY26.
340B rebate pilot pause: softer ARR today, bigger H2 opportunity
- Platform revenues deemed non‑recurring rose to $14.6m (H1 FY25: $7.1m), largely reflecting 340B Shelter.
- Contracted recurring revenues recognised in the period were $87.0m (H1 FY25: $87.9m). ARR still grew 4% to $184.2m, but would likely have been higher had the rebate pilot proceeded and licences been activated.
- Management expects high expansion sales and the Shelter pipeline to support a better second half and full‑year delivery in line with expectations.
AI roll‑out: Trisus Assist traction and two new solutions
AI is moving from slideware to software. Trisus Assist, co‑innovated with Microsoft, is now used by more than 200 customers, boosting engagement, renewals and wins. In H2 FY26, Craneware plans to extend AI into two high‑value workflows:
- Trisus Assist for Labor Productivity – predictive demand forecasting and staffing optimisation inside Trisus Labor Productivity.
- Reimbursement Intelligence – AI‑powered contract structuring and reimbursement modelling embedded in Trisus.
The Microsoft partnership looks like a real go‑to‑market catalyst, with co‑sell momentum, Azure Marketplace work and enablement under way. Two new AI solutions are slated for launch at HIMSS26 in March.
Sales mix, retention and pipeline quality
Craneware’s “delight and grow” approach is visible in the numbers. NRR at 103% and customer retention above 90% point to a sticky base. The company cited several competitive takeouts across hospital sizes, from academic medical centres to critical access hospitals, with the Business of Pharmacy Optimisation Suite performing particularly well.
The longer‑term expansion runway remains sizeable. With roughly 40% of US hospitals already customers, management’s “white space” analysis suggests over $1.6bn of addressable revenue potential within existing customers alone. That gives context to the steady ARR build and the focus on cross‑sell.
Cash, dividend and a $25 million buyback: what it signals
Cash and cash equivalents were $71.2m including cash in transit, with total bank debt down to $23.4m. Operating cash conversion over the last 12 months was 85% of adjusted EBITDA (H1 FY25: 110%), reflecting first‑half seasonality and 340B timing, with collections improving early in H2.
The Board declared a 15.0p interim dividend (ex‑dividend 19 March 2026, record 20 March 2026, payable 16 April 2026). Following last year’s capital reduction – which increased distributable reserves – Craneware also intends to start a $25 million share buyback, with details to follow. In my view, the higher dividend and buyback together signal confidence in cash generation and the medium‑term outlook, while keeping ample firepower for R&D and optionality for M&A.
Jargon buster (quick and simple)
- ARR – Annual Recurring Revenue: the annualised value of contracted, recurring revenues at period end.
- NRR – Net Revenue Retention: revenue kept from existing customers over 12 months, after churn and including expansions.
- Adjusted metrics – figures that exclude non‑cash items like acquired intangibles amortisation and exceptional costs to show underlying performance.
My take: positives, watch‑outs and what to track next
What I like
- Quality of growth: double‑digit adjusted EBITDA and EPS, with margin up to 32% (H1 FY25: 30%).
- Customer metrics: NRR at 103% and >90% retention show durable demand and cross‑sell health.
- New logos: 12% of new sales now from new customers (H1 FY25: 2%), opening future expansion lanes.
- Balance sheet: $71.2m cash including cash in transit, $23.4m debt, $76m undrawn RCF and a $100m accordion facility.
- Capital returns: 11% dividend hike plus a planned $25m buyback.
- AI pipeline: more than 200 customers on Trisus Assist, with two additional AI solutions landing in H2.
What to watch
- ARR acceleration: ARR grew 4% vs revenue at 6%. Activation of rebate‑module licences and further Shelter recurring conversion are key to closing that gap.
- Revenue mix: Platform revenues deemed non‑recurring rose to $14.6m. The pace at which these become recurring will influence visibility and multiple.
- Cash conversion: 85% over 12 months is fine, but investors will want to see this lift as H2 collections flow through.
- Legislative timing: The 340B rebate pilot postponement muted H1 contribution. Any resumption would be a catalyst; continued delays would defer ARR uplift.
- R&D spend: Up 13% to $29.8m with 28% capitalised, backing the AI and 340B roadmap. The payback should show up in sales momentum and ARR mix.
Bottom line
This is a steady, quality half from Craneware. The combination of sticky customers, rising competitive takeouts, accelerating AI product roll‑out and a visible pharmacy opportunity underpins management’s confidence for H2 and full‑year delivery in line with expectations. The dividend uplift and $25 million buyback add a clear shareholder return layer, without compromising investment capacity.
For the next leg, watch for ARR re‑acceleration as Shelter revenues convert to recurring and the rebate licences switch on, plus evidence that the new AI modules translate into tangible expansion sales and margin leverage. If those pieces land, the path to faster growth looks credible.
