Pebble Beach Systems H1 revenue rises 10% as net debt falls

Pebble Beach Systems Group has delivered an encouraging first half, with higher revenue, improved profitability and a substantial reduction in net debt.

For the six months ended 30 June 2026, revenue is expected to rise by 10% to approximately £6.5 million. Adjusted EBITDA is set to increase to around £2.4 million, while net debt has fallen from £3.3 million to approximately £0.8 million.

Those are solid headline numbers. However, investors need to look closely at the revenue mix. First-half profitability benefited from the timing of high-margin software licence deliveries, and the company expects licences to represent a smaller proportion of revenue during the second half.

Pebble Beach Systems H1 figures at a glance

Metric	H1 2026 expected	H1 2025	Change
Revenue	c.£6.5 million	£5.9 million	Up 10%
Project revenue	c.£3.1 million	£2.6 million	Up 19%
Recurring revenue	c.£3.4 million	£3.3 million	Up 6%
Adjusted EBITDA	c.£2.4 million	£2.0 million	Up 20%
Adjusted EBITDA margin	c.37%	34%	Up 3 percentage points
Net debt	c.£0.8 million	£3.3 million	Down £2.5 million

Adjusted EBITDA means earnings before interest, tax, depreciation and amortisation, excluding non-recurring items and foreign exchange gains or losses. It is a commonly used measure of underlying operating profitability, although it is not defined under standard accounting rules.

The figures come from Pebble's original company announcement.

Software licences drove the strongest growth

Project revenue increased by 19% to approximately £3.1 million, helped by the favourable timing of software licence deliveries.

Pebble's project revenue comes from three sources: professional services associated with implementing its software, perpetual software licences and third-party hardware. Professional services revenue is recognised throughout a project's implementation, whereas licence and hardware revenue is recognised when delivered.

That distinction matters because software licence sales carry high gross margins. A greater proportion of licence revenue can therefore lift adjusted EBITDA faster than overall revenue, which is what happened during the first half.

Revenue rose by 10%, but adjusted EBITDA increased by 20% to approximately £2.4 million. This pushed the adjusted EBITDA margin from 34% to around 37%.

For a software business, that is an attractive level of operating profitability. It also demonstrates the potential earnings impact when Pebble delivers the right mix of projects.

Investors can find further company coverage on the Pebble Beach Systems Group PLC share page.

Recurring revenue continues to move higher

Recurring revenue contributed approximately £3.4 million, compared with £3.3 million in H1 2025. Pebble reported this as an increase of 6% year on year.

This income is derived almost entirely from support and maintenance contracts, known as service level agreements or SLAs. These contracts provide ongoing support to customers after systems have been installed.

Recurring revenue is important because it can make future sales more predictable and reduce reliance on winning and delivering individual projects. At around £3.4 million, it represented just over half of expected first-half revenue.

The growth rate was less eye-catching than the increase in project revenue, but the continued expansion of this base is strategically valuable. Pebble also said it enters the remainder of the year with a solid order book, although the value and timing of that order book were not disclosed.

Net debt is approaching zero

The balance-sheet improvement is arguably the most important part of this update.

Strong operating cash flow allowed Pebble to make further bank debt repayments. Net debt stood at approximately £0.8 million on 30 June 2026, down by £2.5 million from £3.3 million a year earlier.

Management remains on track to move into a net cash position by the end of 2026. Net cash means the company would hold more cash than interest-bearing debt.

Reducing debt lowers financial risk and should reduce the amount of cash absorbed by interest and repayments. It could also give Pebble more flexibility to invest in product development and growth, although the company did not set out any new capital allocation plans in this announcement.

The progress follows the stronger performance covered in Pebble Beach Systems' FY25 results update.

Why the second half could look different

The key caution is that investors should not simply annualise the first-half margin.

Pebble said first-half profitability reflected the phasing of software licence sales. Because these licences carry high gross margins and are recognised on delivery, their timing can produce meaningful variations between reporting periods.

The board currently expects software licence revenue to account for a lower proportion of total revenue in the second half. That could result in a less favourable revenue mix and place the 37% first-half adjusted EBITDA margin under pressure.

This is not necessarily evidence of weakening demand. It may simply reflect when particular contracts reach the delivery and revenue-recognition stage. Nevertheless, it means the quality and composition of second-half revenue will matter as much as the headline sales figure.

Pebble has not disclosed revised full-year revenue or profit forecasts. It said trading was in line with the board's expectations and maintained confidence in the outlook for the year.

What matters in September's results

Pebble expects to publish its half-year results in early September 2026, alongside a further update on trading and prospects.

Investors should watch for more detail on the order book, the pace of recurring revenue growth and the expected split between software licences, professional services and hardware. Cash conversion will also be central to the target of reaching net cash by year-end.

For now, the update offers several clear positives: double-digit revenue growth, a 20% increase in adjusted EBITDA, an improved margin and sharply lower net debt. The main qualification is that the first-half earnings mix was unusually supportive.

The next test is whether Pebble can maintain overall growth and cash generation as high-margin software licences make up a smaller share of second-half revenue.