Diaceutics ARR Jumps 75% as Revenue Visibility Strengthens

Diaceutics has delivered a strong first-half trading update, with faster recurring revenue growth, better customer retention and a much larger contracted order book.

The headline figure is a 75% increase in annual recurring revenue, or ARR, to £28.8 million. ARR measures the annualised value of recurring contracts at a particular point in time. It is not the same as reported revenue, but it can provide useful evidence about future income visibility.

Alongside that growth, Diaceutics PLC expects to report H1 2026 revenue of £17.5 million and adjusted EBITDA of £1.1 million. The balance sheet remains debt-free, with £8.1 million of cash.

For investors, this update is about more than top-line growth. The quality, predictability and profitability of Diaceutics' revenue appear to be improving together.

Diaceutics H1 2026 key figures

Metric	H1 2026	Comparison	Change
Revenue	£17.5 million	£14.6 million	20%
Constant currency revenue growth	22%	Not disclosed	Not disclosed
ARR	£28.8 million	£16.4 million	75%
Net revenue retention	146%	118%	28 percentage points
Gross ARR churn	9%	19%	10 percentage point improvement
Gross margin	87%	83%	4 percentage points
Adjusted EBITDA	£1.1 million	£0.1 million	£1.0 million increase
Contracted order book	£43.7 million	£31.7 million	38%
Cash	£8.1 million	£7.3 million at December 2025	£0.8 million increase
Debt	None	None	No change

All figures are unaudited. Adjusted EBITDA means earnings before interest, tax, depreciation, amortisation and exceptional items.

Why the ARR growth matters

Diaceutics provides data analytics, scientific and advisory services to pharmaceutical and biotechnology companies commercialising precision medicines. Its DXRX platform is designed to help customers connect patients with the appropriate diagnostic tests and therapies.

The 75% increase in ARR is important because recurring contracts should make future revenue more predictable than one-off project work. Constant currency ARR growth was also strong at 69%, showing that the improvement was not simply caused by exchange-rate movements.

Recurring revenue represented 61% of total revenue over the trailing 12 months, up from 58% in the comparable period. That remains some way short of a fully recurring model, but the direction is encouraging.

The customer metrics add weight to the story. Net revenue retention, or NRR, rose from 118% to 146%. This measures how revenue from the existing customer base changes after allowing for upgrades, reductions and customer losses. A figure above 100% means expansion from retained customers more than offset lost revenue.

At the same time, gross ARR churn fell from 19% to 9%. In plain English, fewer recurring contracts were lost. Rising NRR and falling churn suggest customers are staying longer and spending more.

That represents a meaningful improvement in revenue quality compared with a business relying mainly on repeatedly winning fresh projects.

A larger order book supports the second half

The contracted order book reached £43.7 million at 30 June 2026, up 38% from £31.7 million a year earlier.

Of this total, £15.7 million is expected to be recognised as revenue during H2 2026, compared with £9.0 million for H2 2025. When management adds its probability-weighted sales pipeline, Diaceutics says it has 91% visibility over the £46.7 million median analyst consensus revenue estimate for 2026.

This does not mean 91% of the forecast is guaranteed. The weighted pipeline includes potential business that has not necessarily been contracted. Even so, the £15.7 million already contracted for second-half delivery gives the company a firmer starting position.

Investors should also note that Diaceutics expects revenue to be weighted towards H2. Delivering the consensus estimate would produce a 38:62 split between the first and second halves, matching the previous year's seasonality.

That pattern is not new, but it leaves delivery dependent on a busy final six months. Timing changes or project delays could therefore have an outsized effect on the full-year result.

Margins and profit are moving in the right direction

Expected adjusted EBITDA increased from £0.1 million to £1.1 million, while the gross margin rose from 83% to 87%.

Revenue is growing faster than the underlying cost base, which management describes as emerging operating leverage. This means additional revenue is beginning to translate into profit at a faster rate as the platform and workforce support a larger level of business.

That is a positive development following the company's return to profitability in FY 2025.

Diaceutics is still investing selectively in artificial intelligence, sales and marketing. AI is being embedded into the DXRX platform and operating model to improve customer insights, productivity and scalability. However, the announcement does not quantify the expected financial return from these investments.

Customer reach continues to expand

Diaceutics continues to work with 18 of the world's top 20 pharmaceutical companies. Over the trailing 12 months, it supported 54 customers across 99 therapeutic brands, compared with 53 customers and 95 brands at the end of 2025.

The modest increase in customer numbers, alongside much faster ARR growth, indicates that deeper relationships with existing customers are doing much of the work.

Its PMx offering is one example. ARR from the two existing PMx customers increased from £1.4 million to £4.3 million. Longer-duration enterprise contracts could further improve visibility, although having this revenue generated by only two PMx customers introduces concentration risk if either relationship weakens.

Management also sees an opportunity to broaden the company's reach from precision medicine into what it calls the Precision for All market. The potential size of this addressable market was not disclosed in the update.

Cash provides room to execute

Cash increased from £7.3 million at the end of 2025 to £8.1 million at 30 June 2026, with no debt. Diaceutics says it is fully funded to deliver its growth strategy.

The company also has access to an uncommitted and undrawn £2.0 million facility for additional working-capital flexibility. Customer cash collection improved during the period, and no bad debts were recorded.

This is reassuring, particularly while the business continues investing for growth. Still, management lists cash conversion and working-capital optimisation among its priorities, indicating that turning accounting profits into sustainable free cash flow remains an area to watch.

What investors should watch next

The original company announcement supports a broadly positive reading. Revenue is growing, margins are rising, churn is falling and the order book is expanding.

The main test is now execution during the seasonally heavier second half. Investors should watch whether Diaceutics converts its contracted work and pipeline into the £46.7 million consensus revenue outcome, while preserving its improved gross margin.

Further attention should go to cash conversion, the durability of the 146% NRR figure and whether PMx growth broadens beyond its existing two customers.

Management says its 2026 targets remain on track, with interim results expected in late September 2026. If the company can deliver the required H2 revenue while maintaining cost discipline, the shift towards a more predictable and profitable recurring-revenue model will look increasingly credible.