Netcall FY25: Cloud and AI shift accelerates growth
Netcall’s FY25 numbers show a business leaning hard into cloud and AI – and getting rewarded for it. Revenue rose 23% to £48.0m, with organic growth of 10%, and cloud services revenue jumped 48% to £29.3m. Total annual contract value (ACV – the annualised value of contracted recurring revenue) climbed 31% to £42.2m, with Cloud ACV up 52% to £33.9m and now 80% of total ACV.
Recurring revenue made up 80% of total revenue, up from 76% last year, improving quality and predictability. The year closed with a record pipeline and a contracted revenue order book of £79m, signalling healthy visibility into FY26.
Key numbers investors should know
| Metric | FY25 | FY24 | YoY |
|---|---|---|---|
| Total revenue | £48.0m | £39.1m | +23% |
| Cloud services revenue | £29.3m | £19.8m | +48% |
| Total ACV | £42.2m | £32.2m | +31% |
| Cloud ACV | £33.9m | £22.3m | +52% |
| Recurring revenue mix | 80% | 76% | +4 pp |
| Cloud net retention rate (NRR) | 118% | 117% | +1 pp |
| Adjusted EBITDA | £9.8m | £8.4m | +17% |
| Adjusted profit before tax | £8.3m | £7.7m | +8% |
| Profit before tax (statutory) | £5.1m | £6.3m | -19% |
| Adjusted basic EPS | 3.75p | 3.57p | +5% |
| Year-end cash | £27.2m | £34.0m | -20% |
| Net funds | £26.1m | £33.5m | -22% |
| Final dividend per share | 0.94p | 0.89p | +6% |
| Contracted revenue order book / RPO | £79.0m / £78.9m | £63.8m | +24% |
Definitions: NRR is how much existing cloud customers spend year-on-year, including upgrades and churn. RPO (Remaining Performance Obligations) is contracted revenue not yet recognised.
What’s driving growth: cloud-first bookings and AI attach
- Cloud dominated new business – 94% of new bookings were cloud. Cloud ACV has expanded fivefold in five years.
- Deeper adoption from existing customers: Cloud NRR of 118% means existing cloud clients spent 18% more on average.
- AI is becoming the norm: around three-quarters of ConverseCX contact centre customers also bought Liberty AI products.
- Segment strength: Intelligent Automation revenue rose 39% to £28.0m; Customer Engagement grew 5% to £19.4m, with Customer Engagement Cloud up 34% to £7.35m.
- New logos accelerated, including councils and NHS trusts, plus early international wins in South Africa, Canada, the US, Australia and New Zealand.
On product, the newer cloud-native ConverseCX is clearly gaining traction, and the AI features – from virtual agents to assisted workflows – are helping drive upgrades and cross-sell.
Revenue quality and visibility step up
Recurring revenue at 80% and Cloud ACV now 80% of total ACV are both strong signals of stickiness. The contracted revenue order book sits at £79m, with RPO at £78.9m and Current RPO of £41.7m. That gives a clearer line of sight on near-term revenue, especially as the pipeline is described as record.
Importantly, Netcall is seeing both “land” and “expand” working: new customers contributed a larger share of ACV growth, while existing customers expanded usage across the Liberty platform.
Profitability and cash: investment weighing, but leverage to come
Adjusted EBITDA rose 17% to £9.8m, though the margin eased to 20.5% (from 21.6%) as the final phase of cloud investment flowed through. Adjusted PBT increased 8% to £8.3m.
Statutory PBT fell 19% to £5.1m, reflecting acquisition effects (amortisation of acquired intangibles £1.16m, post-completion services £0.80m) and higher share-based payments £0.93m. This is the classic accounting delta between adjusted and statutory when you are acquisitive.
Cash ended at £27.2m with no debt. The £6.8m reduction year-on-year mainly reflects £12.5m of acquisition payments. Cash conversion was 103% of adjusted EBITDA (FY24: 164%), with the drop attributed to timing of customer receipts. The final dividend is lifted to 0.94p, in line with the 25% payout of adjusted EPS.
Strategic runway: upsell, migrations and bolt-ons
- Automation attach: When customers add Liberty Intelligent Automation for the first time, ACV typically triples. Today, automation modules reach only around 31% of customers who use engagement modules – a clear upsell gap.
- On-prem to cloud: About 20% of ACV comes from on-premises support contracts. Migrations typically lift spend by around 50% – another multi-year lever.
- M&A execution: Govtech and Parble are integrated and already cross-selling. They added £5.5m to Cloud ACV and brought in £4.90m of acquisition-attributed revenue within Intelligent Automation.
- Cloud investment complete: Management expects operating leverage to improve over time now that the ConverseCX build-out is done.
Add it up and you have multiple vectors for ACV growth – new logos, cloud migrations, automation/AI attach and selective M&A.
Risks and what to watch next
- Adjusted vs statutory gap: Statutory profit dipped due to acquisition-related charges. This may persist while acquisition amortisation and earn-out related costs flow through.
- Margin rebuild: With the cloud investment programme complete, the expectation is margin expansion. Track adjusted EBITDA margin in FY26 to confirm operating leverage.
- Cash conversion: Back to a more normal 103% after a strong FY24. Monitor working capital and renewal timing.
- Legacy to cloud transition: Product support revenue declined to £9.22m as expected. The pace of migration needs to sustain Cloud revenue growth.
- Integration delivery: Early cross-sell from Govtech and Parble is encouraging. Continued execution is key to justify the £12.5m in acquisition payments.
Josh’s take: a solid year with stronger visibility
This is a confident set of results. Growth re-accelerated, cloud and AI are clearly resonating, and revenue quality improved. The order book of £79m and 118% cloud NRR tell you customers are sticking and spending more.
On the flip side, statutory profit and EPS are lower, and the EBITDA margin dipped. That is explainable given the investment cycle and acquisition accounting, but FY26 should show progress on margin as the cloud build costs roll off.
Overall, Netcall looks well placed: strong balance sheet, a platform that benefits from industry-wide cloud/AI adoption, and multiple growth levers still under-penetrated. If management executes on migrations and automation attach – and keeps integrating acquisitions cleanly – the ACV and cash compounding should follow.
