Pebble Beach Systems Beats FY25 Expectations with Strong Revenue and EBITDA Growth

Why this beat matters to shareholders

• Slightly ahead of expectations on both revenue and adjusted EBITDA is a credibility boost after operational efficiency moves in early 2025.
• Higher recurring revenue mix (c.64% excluding hardware) points to better visibility and resilience through cycles.
• Streaming market traction complements the core broadcast base, expanding the addressable market for Pebble’s automation stack.
• Rapid deleveraging and a path to net cash bolster the investment case and may reduce interest costs over time.

What’s not disclosed – and what to watch

• The beat is modest rather than blockbuster: “slightly ahead” of consensus (£12.2m vs £11.5m revenue; £4.2m vs £4.0m adjusted EBITDA).
• Absolute scale remains small, so contract timing can still move the needle. High quality recurring revenue helps, but project revenue – including third-party hardware – adds variability.
• Results emphasise adjusted metrics. That is common in software, but investors should compare adjusted EBITDA with EBITDAC to gauge reliance on capitalised development. The full disclosure of capitalised R&D isn’t provided here (not disclosed).
• Net debt is quoted excluding IFRS 16 lease liabilities. Useful for banking covenants, but keep lease obligations in mind when the detailed accounts land.
• Gross margin percentages are not disclosed. The Board does guide to “further improvements in gross margin” in 2026 and beyond, but numbers will come with April’s full-year results.
• Cash conversion looks strong in FY25, but the detailed cash flow statement will be available with the results towards the end of April 2026.

Operational focus is paying off

Pebble flagged strategic actions early in 2025 to tighten operational efficiency and concentrate on core products. The FY25 outcome suggests those moves stuck: better margins, faster cash generation, and reduced debt.

That focus, paired with high levels of contracted revenue, underpins management’s confidence for 2026. The Chairman highlights the opportunity across both the core broadcast market and the newer streaming markets – particularly live events and advertising, where reliable automation is non-negotiable.

Outlook for 2026: recurring growth and margin improvements

The Board expects continued recurring revenue growth and further gross margin improvements through 2026 and beyond. With net debt already down 48% to c.£2.0m and a net cash target by year-end 2026, Pebble enters the new year in a stronger financial position.

Investors should look for confirmation of gross margin gains, cash conversion, and the pace of SLA growth when the full-year numbers arrive towards the end of April 2026. Any commentary on pipeline in streaming and the mix of software licences versus third-party hardware will also be key.

My take: a clean, confidence-building update

This is a solid trading update. The beat is not extravagant, but the quality is good: higher recurring revenue, stronger underlying profitability (backed up by EBITDAC), and meaningful debt reduction. That combination typically commands a higher level of investor confidence.

On the cautious side, the company remains relatively small, and the heavy use of adjusted measures means April’s full detail will matter. But if Pebble sustains SLA growth and continues to convert profit into cash, the path to net cash by end-2026 looks credible – and the equity case improves accordingly.