Quick take: ARR up 19%, debt-free, revenue growth holding steady
KRM22’s FY2025 trading update shows a business moving in the right direction. Annual Recurring Revenue (ARR) rose to £7.6m, up 19% on a constant currency basis, and the company finished the year debt-free with £5.2m of cash. Revenue increased 11% to approximately £7.5m.
The drag? Adjusted EBITDA softened to £0.7m (from £1.0m), and new contracted ARR of £1.6m was slightly below last year’s £1.7m. Still, the balance sheet reset following the £9.2m fundraise in November 2025 puts KRM22 on a cleaner footing to pursue growth.
Key numbers at a glance
| Metric | FY2025 | FY2024 | Comment |
|---|---|---|---|
| ARR (reported) | £7.6m | £6.6m | £6.4m at constant FX for FY2024 |
| ARR growth (constant FX) | 19% | n/a | Driven by cross-sell and price increases |
| New contracted ARR | £1.6m | £1.7m | Slightly lower year-on-year |
| Total revenue (recognised) | ~£7.5m | £6.8m | +11% |
| Adjusted EBITDA | £0.7m | £1.0m | Down year-on-year |
| Gross cash | £5.2m | £1.0m | Improved after £9.2m fundraise |
| Net cash / (debt) | £5.2m | (£3.5m) | Now debt-free |
ARR growth explained: cross-sell and price rises, plus a dash of FX
ARR is the annualised value of subscription contracts – a key yardstick for SaaS-style businesses. Because roughly 50% of Group ARR is denominated in US dollars, KRM22 highlighted a 7% GBP:USD move in 2025 and provided constant currency figures to strip out FX noise. On that basis, FY2024 ARR restated to the year-end 2025 exchange rate was £6.4m, not £6.6m.
From there, ARR grew by a net £1.2m in 2025 to £7.6m. The drivers were clear and largely within management’s control:
- Cross-sales: £1.1m from selling more of Risk Manager, Limits Manager, and Market Surveillance into the existing customer base.
- Price increases: £0.5m from contractual uplifts across the same applications.
- Churn: £0.4m reduction, mainly from two institutional customers cancelling Market Surveillance – although both signed new multi-year contracts for other KRM22 applications.
In short, the strategy of deepening wallet share with current clients is working, and pricing is holding. The churn is noteworthy, but the re-commitment to other modules softens the blow and suggests a product-mix shift rather than a lost relationship.
Revenue and profitability: steady top line, softer EBITDA
Total revenue recognised came in at approximately £7.5m, up 11% year-on-year. That is a healthy clip for a niche capital markets risk software business.
Adjusted EBITDA was £0.7m versus £1.0m in FY2024. Adjusted EBITDA is a measure of underlying operating profit before interest, tax, depreciation, and amortisation, often used to judge operating performance for software companies. The step down suggests either increased investment, cost pressure, or mix effects – the update does not provide detail. It will be one to revisit when the audited results land in May 2026.
Balance sheet reset: £9.2m raise and a clean, debt-free position
The November 2025 fundraise of £9.2m, combined with receipt of a three-year licence fee payment from a customer, leaves KRM22 with £5.2m cash and no debt at year end. Net cash equals gross cash at £5.2m, a stark improvement from £3.5m of net debt 12 months earlier.
Management emphasises that this removes the distraction of a complex balance sheet and restrictive covenants, allowing focus on growth. The stated plan is to invest in sales, marketing, and development to expand the risk management suite and deliver multi-asset solutions for capital markets clients.
Product dynamics: surveillance churn offset by broader suite adoption
The two institutional customers that cancelled Market Surveillance licences are the main churn contributors. Importantly, both signed new multi-year contracts for other KRM22 applications. That points to stickiness at the account level but underlines competitive and regulatory dynamics around surveillance tooling.
Meanwhile, cross-sell into existing customers delivered the bulk of ARR expansion. That is often a more efficient route to growth, and KRM22’s product set – Risk Manager, Limits Manager, Market Surveillance – lends itself to bundling across trading and enterprise risk use cases.
Management tone and the 2026 setup
CEO Dan Carter calls 2025 a “solid performance”, highlighting ARR growth to £7.6m, £1.6m of new contracted ARR, and the strengthened year-end cash balance. He points to a strong sales pipeline, a robust balance sheet, and clear strategic priorities as the springboard into 2026.
Given the improved financial position and the focus on expanding multi-asset capabilities, the pieces are in place. The question for 2026 is execution: converting the pipeline, managing churn, and translating ARR momentum into improved profitability.
Why this update matters for investors
- ARR momentum is intact: +19% at constant FX to £7.6m, underpinned by cross-sell and pricing power.
- Balance sheet strength: debt-free with £5.2m cash post the £9.2m fundraise and an upfront three-year licence payment.
- Revenue growth: 11% top-line expansion to approximately £7.5m.
- Watch-outs: adjusted EBITDA down to £0.7m and new contracted ARR slightly below last year’s £1.7m; some churn in Market Surveillance.
- FX reality: with about half of ARR in USD and a 7% GBP:USD move in 2025, constant currency analysis is essential for clean trend reading.
What to watch next (results due May 2026)
- Full audited detail behind the EBITDA movement and any investment ramp in sales, marketing, and development.
- Further colour on churn trends in Market Surveillance and cross-sell traction across Risk Manager and Limits Manager.
- Conversion of the “strong sales pipeline” into new contracted ARR through 2026.
- Cash utilisation and runway now that the company is debt-free, and any impact from upfront multi-year licence payments on reported revenue and cash flow.
- FX sensitivity, given the USD-heavy contract base, and any hedging or pricing approach.
Bottom line: constructive progress with a cleaner balance sheet
This is a positive, if not perfect, trading update. ARR growth and a debt-free position are clear positives; a dip in adjusted EBITDA and modest churn are the trade-offs. With cash in the bank and a stated focus on multi-asset solutions, KRM22 now has a simpler platform to execute its growth strategy into 2026.
Note: All figures are preliminary and subject to audit.
