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

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