KRM22 Reports 20% ARR Growth and Positive Adjusted EBITDA in H1 2025 Interim Results

KRM22 H1 2025: ARR up 20% and adjusted EBITDA stays positive

KRM22 has delivered another tidy half-year, with Annualised Recurring Revenue (ARR) up 20% to £7.2 million and a second consecutive period of positive adjusted EBITDA. The story here is simple: cross-selling is working, clients are sticking around, and the Trading Technologies (TT) partnership is starting to contribute.

Under the bonnet, there are still balance sheet risks to monitor, notably the TT convertible loan and associated covenants, but the operating momentum is going the right way.

Key numbers from the interim results

Definitions: ARR is annualised contracted Software-as-a-Service revenue. Adjusted EBITDA strips out non-cash items and one-offs to show underlying cash profitability.

Cross-sell momentum: Risk Manager and Limits Manager do the heavy lifting

The growth engine is firmly in cross-sell. Of the £1.0 million in new ARR signed in H1, 86% came from existing customers buying additional applications. That is exactly what you want to see in a SaaS business with an integrated suite – high-quality, low-friction expansion within the customer base.

By product, Risk Manager contributed 45% of new ARR and Limits Manager 32%. KRM22 now counts 19 Futures Commission Merchants (FCMs – brokers that handle client futures trading and clearing) on its Trading Risk applications. Integration between Risk Manager and Limits Manager continues to strengthen, letting clients sync live risk metrics with limit approval workflows and audit trails.

TT partnership: surveillance revenues begin to scale

The Market Surveillance application has passed 80 alert types and is now integrated into TT’s surveillance product, combining TT’s AI/ML models with KRM22’s calibrated alerting. The first sales via TT landed in H1 2025. TT’s integrated product is generating both recurring and non-recurring revenues for KRM22 through a revenue share model, and total ARR tied to TT stands at £0.9 million.

Commercially, that’s a nice validation of the partnership route to market. Strategically, it widens the footprint without KRM22 needing to scale a large direct salesforce in every niche.

Profitability and margin trends: EBITDA in the black, FX a drag

KRM22 posted a £0.4 million adjusted EBITDA profit, up from £0.3 million in H1 2024, helped by disciplined cost control and a rising share of recurring revenue (93.1% of total). Recurring revenue recognised grew to £3.4 million, while non-recurring revenue eased to £0.3 million.

Reported losses widened mainly due to a £1.1 million unrealised foreign exchange loss, driven by a 9% GBP:USD move. Gross margin dipped to 77.5% from 81.8%, reflecting higher external sales commissions on new ARR and increased direct costs in Risk Manager. Worth watching, but not alarming if the cross-sell flywheel keeps spinning.

Cash, covenants and the TT convertible loan: what investors should watch

Cash rose to £1.4 million at 30 June 2025 (from £1.0 million at year-end), with £0.9 million of net cash inflow from operations in the half. That operational cash progress matters.

On the liability side, the big number remains the TT convertible loan: £4.5 million plus £1.0 million of accrued interest. All interest payments have been deferred until June 2026, which helps near-term cash. Loans and borrowings are presented as current at £5.1 million, consistent with the facility’s June 2026 end date being within 12 months of the balance sheet date.

The going concern section is frank. There are financial covenants tested quarterly on the TT facility. Breaching a covenant could trigger an event of default, which – if not waived – could see the loan demanded and would put the Group at risk. The Board notes past support from TT and ongoing discussions around longer-term plans for the facility, which could include covenant adjustments, conversion, or refinancing. But there is a material uncertainty flagged until a firmer solution is agreed.

Other items: deferred revenue is £3.4 million (good forward visibility), there is £0.4 million of deferred consideration for the Object+ acquisition (settleable in cash or shares), and net assets are negative at £-2.2 million.

Geography and mix: heavy US exposure, Trading Risk on top

By region, revenue skewed to the USA at £1.775 million, with the UK at £1.330 million, Europe at £0.343 million, and the Rest of World at £0.193 million. By domain, Trading Risk delivered £2.017 million, Corporate Risk £1.433 million, with smaller contributions from Multiple Risk and TT Platform.

Outlook: pipeline, multi-asset expansion and churn control

Since period end, ARR has edged up to £7.4 million. Management calls out a robust pipeline and continued cross-sell into existing clients as the core theme for the rest of 2025. Product work is focused on integrating Risk Manager with Limits Manager, scaling deployments, and extending the suite to additional asset classes to become a genuinely multi-asset risk platform.

Churn was £0.1 million in H1 (and £0.3 million year-to-date at the report date), largely tied to industry consolidation. The service team handled heightened market volatility in April with maintained service levels – always a key factor in retention in SaaS.

My take: quality of growth is improving, but covenants keep the risk dial turned up

What I like

• ARR growth of 20% to £7.2 million, rising to £7.4 million post-period.
• Positive adjusted EBITDA of £0.4 million and £0.9 million operating cash inflow.
• High-quality revenue mix – 93.1% recurring, strong cross-sell with 86% of new ARR from existing clients.
• Clear product momentum – 19 FCMs, deeper integration of Risk Manager and Limits Manager, and a growing surveillance footprint via TT.

What gives me pause

• Material uncertainty on going concern linked to TT convertible loan covenants.
• Cash at £1.4 million is tight relative to current liabilities and the loan maturity profile.
• Gross margin pressure from commissions and Risk Manager costs – acceptable if it drives sustained ARR growth, but worth tracking.
• FX volatility meaningfully affected reported results in the half.

Net-net, the operational story looks better than a year ago, and the cross-sell machine is working. The investment case now hinges on sustaining ARR growth while securing a clean, durable outcome on the TT facility. Nail that, and KRM22 has a credible path to becoming cash generative and profitable.

For the full announcement and prior reports, see the company’s investor page: https://krm22.com/investors