Pebble Beach Systems has delivered the sort of update shareholders badly wanted after a difficult 2024. Revenue, profit, margins and earnings per share all moved the right way, and crucially this was not just an accounting tidy-up. The business generated solid cash, cut debt sharply and says it is on track to move into a net cash position during 2026.
My read: this is a genuinely strong set of final results. There are still a few wrinkles to watch, but the overall direction is clearly better and the quality of earnings looks healthier than it did a year ago.
Pebble Beach Systems final results 2025 – the key numbers retail investors should know
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Revenue | £12.2 million | £11.5 million | +7% |
| Annual recurring revenue | £6.6 million | £6.1 million | +8% |
| Adjusted EBITDA | £4.2 million | £3.3 million | +27% |
| Adjusted profit before tax | £3.0 million | £1.1 million | +173% |
| Statutory profit before tax | £2.2 million | (£1.3 million) | +267% |
| Adjusted basic EPS | 2.7p | 0.9p | +200% |
| Net debt excluding IFRS 16 leases | £1.9 million | £3.7 million | -49% |
| Total new orders | £13.9 million | £13.6 million | +2% |
For anyone newer to the jargon, EBITDA means earnings before interest, tax, depreciation and amortisation. It is a common way to judge the underlying operating performance of a business. Recurring revenue means income that tends to repeat, mainly support and maintenance contracts in Pebble’s case, and that matters because it gives investors better visibility.
Why Pebble’s profit recovery looks credible rather than cosmetic
The standout feature here is that the improvement runs across the whole income statement. Gross profit rose 8% to £9.5 million, gross margin improved to 78% from 77%, and operating profit came in at £2.6 million versus a £0.8 million loss last year.
That matters because it shows the recovery is not hanging on one metric. Even on a statutory basis, which includes the less flattering bits, Pebble swung from a £1.3 million loss before tax to a £2.2 million profit before tax. That is a serious turnaround.
There was also a big improvement in adjusted basic earnings per share to 2.7p from 0.9p. For shareholders, that is the bit that ultimately tends to drive sentiment. If a company can turn higher revenue into disproportionately higher earnings, the market usually pays attention.
Recurring revenue is doing the heavy lifting
The strongest quality signal in this update is recurring revenue. Annual recurring revenue rose 8% to £6.6 million, while the annualised value of recurring revenue, or ARR, reached £6.7 million. Recurring revenue now makes up around 64% of group revenue excluding third-party hardware, up from 61%.
That is exactly what you want to see from a software business. More repeatable income usually means better visibility, less earnings volatility and stronger cash conversion over time. Pebble is not just selling one-off projects – it is building a base of contracted income.
Pebble cost cuts and R&D refocus boosted margins fast
Management took strategic action in the first quarter of 2025 to reduce the cost base and refocus research and development. The company says annualised cash savings of £2.0 million were achieved, and R&D tied to Internet Protocol, or IP-only, technology was reduced because market uptake has been softer than hoped.
This is one of the most important parts of the announcement. A lot of small-cap tech companies keep spending into weak demand and call it patience. Pebble has done the opposite – it has changed course and cut back where customer demand was not arriving quickly enough.
R&D expenditure as a proportion of revenue fell to 19.5% from 24.3%. Capitalised development spend also dropped sharply to £0.9 million from £2.2 million. That helped profitability, but it also tells you management is being more disciplined about where it puts money to work.
There is a slight sting in the tail. The company incurred £0.8 million of non-recurring costs during the restructure, mainly £728,000 of restructuring costs plus severance and legacy liquidation costs. Even so, the profit improvement was strong enough to absorb that and still show a much better year.
Cash generation, debt reduction and the 2026 net cash target
Pebble’s cash performance was strong. Cash generated from operations was £3.2 million, and cash flow from operations excluding non-recurring items was £4.0 million. Management says 94% of adjusted EBITDA converted to cash, down from 126% last year because some support and maintenance receipts were delayed.
Debt is moving in the right direction too. Net debt excluding IFRS 16 leases fell to £1.9 million from £3.7 million, with £1.0 million of debt repaid during the year. Cash balances nearly doubled to £1.6 million from £0.8 million.
That is why the board sounds confident about reaching net cash during 2026. Important point though – Pebble has not yet reached net cash. It says it remains on track to do so, which is encouraging but not the same thing.
The balance sheet looks better than the current liabilities line suggests
One accounting wrinkle is worth understanding. Because the loan extension with Santander was only signed in April 2026, after the year-end, the full £3.6 million loan had to be shown as a current liability at 31 December 2025.
That makes the current liability position look harsher than the commercial reality. In practice, the facility has now been extended to 28 April 2028 with a repayment schedule of £1.0 million per annum, broadly in line with the previous arrangement. So the refinancing risk looks contained based on what the company has disclosed.
Order growth, streaming wins and where Pebble is finding demand
Total new orders rose 2% to £13.9 million. That is decent rather than spectacular, but the mix improved. Project orders jumped 25% to £6.4 million, while support and maintenance orders fell to £7.5 million from a restated £8.5 million, although a further £0.9 million of renewals were signed just after the year-end.
The more interesting angle is customer type. Pebble added eight new customers in the year, including streaming companies, and highlighted growing demand linked to live events and advertising-supported streaming models. That looks sensible because live sport is an area where automation and playout technology really matter.
The company also pointed to a contract win announced in February 2026 with a Tier 1 US streaming company, worth an initial £1.3 million over five years. For a business of this size, reference wins like that can punch above their weight if they lead to follow-on deals.
No dividend yet, but Pebble is laying the groundwork
Income investors should note there is still no dividend. Pebble says it is currently unable to make distributions because of historic accumulated losses on retained earnings.
The board does, however, plan to start the legal process to create distributable reserves. That would require shareholder approval and court sanction. So dividends are not here yet, but management is at least preparing the ground for them if trading continues to improve.
What matters most for Pebble Beach Systems shares now
- Profitability has improved materially, both adjusted and statutory.
- Recurring revenue is growing and now forms a bigger share of the business.
- Debt is falling fast, with net cash targeted during 2026.
- The strategic reset appears to be working, especially on costs and focus.
- Streaming and live sports look like real growth opportunities.
- Risks remain around order timing, softer support and maintenance order intake, and wider economic uncertainty linked to the Middle East.
My verdict on Pebble Beach Systems final results 2025
I think this is a strong and credible update. The company has not just squeezed costs – it has improved revenue quality, restored profitability and strengthened the balance sheet at the same time. That combination is hard to fake.
The main negative is that support and maintenance orders were lower year-on-year, and the company is still talking about future net cash rather than reporting it already. There is also no dividend yet. But those feel like manageable concerns beside the broader improvement.
For retail investors, the big takeaway is simple: Pebble looks more financially solid, more focused and better placed for medium-term growth than it did 12 months ago. If management can keep converting streaming opportunities into recurring revenue while finishing the job on debt reduction, this could be a much more interesting small-cap software story from here.
