Microlise FY25 results explained: steady revenue growth, weaker profits, and a deliberate reset for 2026
Microlise has delivered a set of full-year results that are best described as mixed. Revenue moved up, recurring income improved, cash generation was strong, and the direct customer business kept growing. But profit took a clear step backwards, the statutory numbers stayed in the red, and management has effectively told the market that 2026 will be an investment year rather than a margin recovery year.
That matters because Microlise is trying to shift the story away from short-term earnings pain and towards higher-quality growth. The question for investors is simple: do you believe the extra spending in 2026 will produce a better business in 2027 and beyond?
Microlise FY25 key numbers retail investors should focus on
| Metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | £84.0 million | £79.5 million | 6% |
| Adjusted Revenue | £84.0 million | £81.0 million | 4% |
| Recurring Revenue | £58.8 million | £53.1 million | 11% |
| Annual Recurring Revenue (ARR) | £59.2 million | £56.6 million | 5% |
| Adjusted EBITDA | £8.3 million | £11.3 million | (27%) |
| Adjusted Profit before Tax | £2.7 million | £6.5 million | (59%) |
| Operating Loss | £(2.4) million | £(2.3) million | (4%) |
| Cash and cash equivalents | £16.7 million | £11.4 million | 47% |
The headline point is that Microlise hit revised expectations for FY25. The company says market consensus was around £84 million of revenue and £8.3 million of adjusted EBITDA, and it delivered exactly that.
That is reassuring in one sense, but it does not change the fact that profitability has deteriorated sharply. A business can meet lowered expectations and still leave investors with a tougher message than they hoped for.
Direct customer growth was the bright spot in Microlise FY25 results
The best part of these results is the direct customer business. Direct customer ARR rose 12.1% to £44.2 million, while direct customer recurring revenue grew 16%. That is important because direct customers appear to be the higher-quality, higher-margin part of the business.
Microlise also added 417 new customers, up from 375 in FY24. Net Revenue Retention, or NRR, for direct customers was 108%, which means existing customers still spent more overall than a year ago even after churn, downgrades and contract changes.
That 108% is lower than last year’s 113%, so this is still growth with a bit less punch. Even so, anything above 100% is generally healthy for a software-led business because it shows the installed base is still expanding.
Geographically, Australia and France were called out as strong areas. That is encouraging because it suggests Microlise is not relying solely on the UK to grow.
OEM weakness hit margins hard – and that is the main problem
The weak spot was OEM revenue. OEM stands for original equipment manufacturers, basically large vehicle-related partners rather than end fleet customers. ARR from OEM customers fell 12.8% to £15.0 million from £17.2 million.
That drop had a real effect. Adjusted EBITDA fell 27% to £8.3 million, and the adjusted EBITDA margin dropped to 9.9% from 14.0%.
Microlise blamed lower OEM volumes, delayed direct customer deployments and a tougher market backdrop. There was also mention of tariff disruption, macro weakness, cyber-related delays at some customers, and ongoing supply chain issues.
My view is that the company is being fairly open here. The problem is not that demand has disappeared across the board. It is that the revenue mix has moved against them, and the more profitable recovery investors wanted has not arrived yet.
Statutory losses still matter, even if Microlise prefers adjusted numbers
Management understandably focuses on adjusted measures, which strip out exceptional items such as cyber-related impacts and restructuring costs. That can be useful, but retail investors should not ignore the statutory result.
Microlise reported an operating loss of £(2.4) million and a loss before tax of £(2.5) million. Basic earnings per share were a loss of 1.87p.
There were still exceptional costs in FY25, including £2.4 million of restructuring costs and £0.3 million of additional cyber-related costs. The group also received £1.2 million of exceptional other income from insurance recoveries and says it remains confident the cyber incident will be fully covered by insurance, although the timing of full recovery is not fully recognised upfront.
So yes, the adjusted figures give a cleaner view of trading. But the statutory losses remind you this business is still working through real disruption and real cost pressure.
Microlise cash generation and dividend show balance sheet strength
If there is one area where Microlise looks sturdy, it is cash. Adjusted cash flow generated from operations rose 29% to £13.3 million, and reported operating cash flow was £11.9 million.
Cash and cash equivalents ended the year at £16.7 million, up from £11.4 million. On top of that, the company has a £30 million undrawn debt facility, made up of a £10 million committed revolving cash flow facility and a £20 million accordion with HSBC.
That gives management room to invest without looking financially stretched. The proposed final dividend is 1.30p, up from 1.24p, which suggests the board still has confidence in the underlying cash profile.
That said, some investors may question whether a progressive dividend makes sense while profits are under pressure. Reasonable people can disagree on that one.
Microlise FY26 outlook looks like a soft profit warning dressed as an investment year
This is the part of the announcement that will likely drive the market reaction. Trading in the first quarter of FY26 is said to be in line with board expectations, which sounds fine on the surface.
But then comes the more important line: Microlise expects FY26 revenues to be slightly below current market expectations and adjusted EBITDA to be at the lower end of current market expectations. Consensus was understood to be £87.2 million to £87.5 million of revenue and £11.2 million to £12.0 million of adjusted EBITDA.
In plain English, that is a cautious outlook. Not a disaster, but it is still a mild downgrade versus what the market had pencilled in.
The reason is deliberate. Microlise is accelerating investment in products, cloud infrastructure, its transport management solutions, its mid-market offer and sales capacity. The size of that investment programme was not disclosed, but management was clear that some of the £5 million annualised cost savings from restructuring will be absorbed by this new spending.
What Microlise investors should make of these results now
I think this is a credible but demanding update. The positives are real: direct customer momentum, growing recurring revenue, strong cash conversion, a healthier balance sheet, and operational action taken through restructuring.
The negatives are also real: falling profits, a lower margin, ongoing statutory losses, weaker OEM demand, and FY26 guidance that is softer than the market hoped for. Put bluntly, investors are being asked to wait longer for the payoff.
The investment case now rests on whether Microlise can turn today’s stronger direct customer base into a more scalable, higher-margin software business over the next couple of years. If it can, 2026 may end up looking like a sensible year of reinvestment. If it cannot, these results will look like another year where growth did not properly convert into profit.
For now, the business looks financially solid but operationally in transition. That is not a bad place to be. It is just not the same as being in full flow.
