Fonix FY26 growth beats expectations as European expansion gathers pace

What has Fonix announced?

Fonix has delivered a solid full-year trading update, with gross profit and adjusted EBITDA coming in slightly ahead of market expectations for the year ended 30 June 2026.

The mobile payments and messaging provider reported gross profit of £21.0 million, up 12.9% from £18.6 million in FY25. Adjusted EBITDA increased by 11.0% to £16.2 million, compared with £14.6 million last year.

Adjusted EBITDA is a measure of operating profitability before items including interest, tax, depreciation and amortisation. Fonix also excludes share-based payment charges and includes research and development tax credits within its definition.

Both figures were ahead of consensus expectations, which stood at £20.5 million for gross profit and £16.0 million for adjusted EBITDA.

All financial figures in the update remain unaudited. Full audited results are scheduled for 22 September 2026.

The key FY26 figures

Metric	FY26	FY25	Change
Gross profit	£21.0 million	£18.6 million	12.9%
Adjusted EBITDA	£16.2 million	£14.6 million	11.0%
Total payment volume	£303.3 million	£280.9 million	8.0%
Exceptional expansion-related costs	£0.2 million	Not disclosed	Not disclosed
On-market share buyback	£2.0 million	Not disclosed	Not disclosed

Total payment volume, or TPV, represents the value of payments handled through Fonix's services. This rose by 8.0% to £303.3 million.

Notably, gross profit grew faster than TPV. That is encouraging because it suggests that the value Fonix retained from activity across its platform expanded faster than the underlying payment volumes. However, the precise reasons for that difference were not disclosed.

The adjusted EBITDA figure includes £0.2 million of exceptional legal and consultancy costs linked to preparations for further international expansion. Fonix did not add these costs back, meaning the reported adjusted figure absorbed this spending.

Shareholder returns remain firmly on the agenda

Fonix intends to recommend an increased final dividend under its progressive dividend policy. The policy is to distribute at least 75% of adjusted earnings per share, although the actual final dividend has not yet been disclosed.

Investors will need to wait until the audited results in September for confirmation of the amount.

The company also completed a £2.0 million on-market share buyback in May 2026. A buyback reduces the number of shares in circulation and can increase each remaining shareholder's proportional ownership, although the eventual benefit depends on factors including the price paid.

Taken together, the proposed dividend increase and completed buyback indicate confidence from the board in Fonix's cash generation. However, the update did not disclose year-end cash, free cash flow or adjusted earnings per share, so investors do not yet have the complete financial picture.

Major UK client relationships look durable

Two important contract extensions provide welcome evidence of customer retention.

Global, the media and entertainment group behind Heart, Capital and Radio X, extended its Fonix contract for another three years. The relationship has now lasted almost a decade.

ITV has also extended its agreement for live broadcast interactivity services. That partnership is entering its tenth year and continues to include programmes such as Love Island, Britain's Got Talent, This Morning, ITV Sport and I'm a Celebrity... Get Me Out of Here!

These renewals matter because Fonix said the large majority of group income is recurring. Client retention also remained high, while its platform maintained 100% uptime throughout the year.

For a payments and messaging provider, reliability is fundamental. Any interruption can affect client campaigns, payments and audience participation, so maintaining full uptime is an important operational achievement.

European expansion is moving from plan to execution

Fonix is broadening its international footprint beyond the UK and Ireland, although the newer markets remain at different stages of development.

Portugal

Full commercial services launched in September 2025 with a leading national broadcaster. Fonix continues to engage with further broadcasters, but additional customer launches or financial contributions were not disclosed.

Switzerland

A pilot of interactive services was completed with CH Media during February and March 2026. A second pilot is scheduled for mid-August 2026 and will help determine the pace of development in the market.

This is progress, but Switzerland remains at the pilot stage rather than a fully established commercial operation.

France

Fonix has established a legal entity, hired additional staff and is progressing mobile network connectivity. The board views France as a high-potential market over the coming years, although no launch date, customer agreement or revenue guidance was provided.

Fifth European market

Mobile network connectivity has been established in another overseas European market, with launch targeted towards the end of FY27. Fonix did not name the country.

Overall, Fonix now has five international markets that are live, being piloted or under development. The opportunity is clear, but so is the execution challenge. Legal preparation, network integration, recruitment and customer engagement all need to convert into sustainable commercial activity.

New products offer another growth route

Fonix is also trying to deepen its product range rather than relying only on geographical expansion.

CompsPortal launched with Channel 5 in December 2025 and subsequently won Best Payment Solution of the Year at the UK Business Tech Awards 2026. The product's financial contribution was not disclosed.

RichMessaging, based on Rich Communication Services or RCS, was trialled with two leading broadcast clients during FY26. RCS allows businesses to deliver more interactive and media-rich messaging than traditional text messages.

The board expects a significant increase in RCS activity from the end of the first half of FY27. That could become an important growth driver, but it remains a forward-looking expectation rather than revenue already secured.

PayFlex also continued rolling out across Fonix's client base, although the update provided no adoption or revenue figures.

What should Fonix investors watch next?

The FY26 update contains plenty for shareholders to welcome. Gross profit and adjusted EBITDA grew at double-digit rates, both slightly exceeded expectations, major clients renewed their contracts, and shareholder returns are set to increase.

The main uncertainty is how quickly international investment and newer products will translate into material earnings. Portugal is commercially active, but Switzerland is still piloting, France remains in build-out and the fifth market is not expected to launch until towards the end of FY27.

Investors should watch the audited results on 22 September for the final dividend, cash generation, earnings per share and further detail on market-level progress. The expected RCS ramp-up from the end of the first half will also be an important test of the product growth story.

For now, Fonix enters FY27 with rising profits, high client retention and several routes to expansion. The next step is proving that its growing international and product pipeline can add meaningful scale without weakening the reliable and profitable core business.