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Microlise Group's FY25 profit warning sees revenue and EBITDA misses, but cost-saving measures and steady ARR growth offer some resilience.
This article covers information on Microlise Group PLC.
LON:SAASMicrolise Group has issued a downbeat FY25 trading update. Revenue and profit are now expected to land below market expectations, with the company launching cost-saving measures and signalling a softer OEM outlook into FY26. There are bright spots – recurring revenue is up, APAC is performing well, and cash remains solid – but the near-term picture is clearly tougher than hoped.
The company now expects to deliver FY25 revenue of not less than £84 million, versus market consensus of £91.3 million. Adjusted EBITDA is guided to not less than £8.3 million, versus consensus of £12.7 million. That is a material reset on both the top and bottom line, albeit still modest growth against FY24 adjusted revenue.
| Metric | Guidance / Outcome | Prior reference point |
|---|---|---|
| FY25 revenue | Not less than £84 million | Consensus £91.3 million; FY24 adjusted revenue £81.0 million (c.+4%) |
| FY25 adjusted EBITDA | Not less than £8.3 million | Consensus £12.7 million |
| ARR run rate (FY25) | £59.1 million (+4.5%, +£2.5 million YoY) | FY24 ARR run rate £56.6 million |
| OEM revenue mix (FY25) | ~27% of total revenue | FY24: 33% |
| Annualised cost savings | At least £4.0 million | Exceptional charge c.£1.5 million; ~10% headcount reduction |
| Year-end cash (31 Dec 2025) | ~£11 million | FY24: £11.4 million; undrawn £10 million RCF and £20 million accordion |
Microlise is seeing lower order volumes from global OEM customers in the automotive and construction sectors. The company flags trading disruption tied to tariffs and broader macro weakness. As a result, OEM revenue is expected to be below FY24 and represent roughly 27% of FY25 total revenue (down from 33%). Management is also “cautiously” guiding that FY26 OEM revenue will be below FY25 levels, which is notably conservative.
Direct UK sales have been softer due to delays in a small number of projects. One large project – with a British multinational retailer – was impacted by a cyber-attack earlier this year, delaying the deployment of Microlise’s software and hardware. The revenue associated with these projects is now expected to be recognised in FY26. The work is not lost, but timing has moved out.
Asia-Pacific is the standout, with strong direct sales and the full deployment of the £10.6 million, 5-year WooliesX contract in Australia. The APAC pipeline is “skewed to a small number of larger contracts” – that’s encouraging for scale, but it also means deal timing could be lumpy.
Annual recurring revenue (ARR) run rate is expected at £59.1 million, up 4.5% year-on-year (£2.5 million). That’s steady progress, though not rapid. Combined with softer OEM and UK project timing, it leaves the FY25 P&L under more pressure than previously expected.
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On profitability, adjusted EBITDA guidance has been reset to not less than £8.3 million. To protect margins and refocus spend, Microlise is implementing cost and efficiency measures across the group: at least £4.0 million of annualised savings, an exceptional charge of around £1.5 million mainly for severance, and an expected ~10% reduction in headcount. Management expects these actions to be materially complete before year end.
Year-end cash is anticipated to be around £11 million (FY24: £11.4 million). The group also has an unutilised £10 million revolving credit facility and a £20 million accordion. Importantly, Microlise says it will remain cash generative in FY25 despite the one-off restructuring costs, and excluding the £2.2 million cash proceeds received in H2 FY25 from the sale of its investment in Trakm8 Holdings Plc.
Looking to FY26, management expects overall revenues to increase versus FY25, with improving recurring revenue growth and “materially increased” EBITDA and cash generation after the cost-saving programme. However, they also flag that FY26 adjusted EBITDA is expected to be below current market expectations of £14.9 million. In short, a recovery is anticipated, but not to the level the market had pencilled in.
Microlise has appointed Dean Garvey-North as Chief Technology Officer, succeeding Duncan McCreadie, who is retiring after a decade with the group. Dean will lead technology strategy, product innovation and infrastructure – a timely hire as the group sharpens execution and aims to accelerate product development.
Overall, the update is mixed: operationally resilient but commercially softer than expected. For investors, it likely means a period of reset while we watch for pipeline conversion and margin execution. A further trading update is due in late January 2026, which should help calibrate FY26 expectations.
| Item | Figure |
|---|---|
| FY25 revenue | Not less than £84 million |
| FY25 adjusted EBITDA | Not less than £8.3 million |
| FY24 adjusted revenue | £81.0 million |
| ARR run rate (FY25) | £59.1 million (+4.5%) |
| OEM revenue mix (FY25) | ~27% of total (FY24: 33%) |
| Annualised cost savings | At least £4.0 million |
| Exceptional charge | c.£1.5 million |
| Headcount reduction | ~10% |
| Cash at 31 Dec 2025 | ~£11 million |
| Undrawn facilities | £10 million RCF; £20 million accordion |
| APAC highlight | WooliesX: £10.6 million, 5-year contract fully deployed |
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