FY25 results: revenue surged, cash piled up, platform momentum built
Pinewood Technologies Group PLC (LSE: PINE) posted a strong second year as a standalone software group. Revenue rose 29.8% to £40.5m, with gross profit up 23.0% to £34.7m and underlying EBITDA up 17.1% to £16.4m. Cash at year end jumped to £34.1m, helped by the March 2025 equity raise and solid operating cash generation.
While statutory figures were noisy, the core “underlying” performance – excluding one-offs – remained steady, with underlying profit before tax at £8.8m. Total Contract Value (TCV) reached £64.5m, giving visibility on future incremental revenue from signed contracts.
| Key metric | FY25 | FY24 | Change |
|---|---|---|---|
| Revenue | £40.5m | £31.2m | +29.8% |
| Gross profit | £34.7m | £28.2m | +23.0% |
| Underlying EBITDA (margin) | £16.4m (40.5%) | £14.0m | +17.1% |
| Underlying PBT | £8.8m | £8.5m | +3.5% |
| Underlying operating profit | £8.3m | £8.4m | (1.2)% |
| Cash at 31 December | £34.1m | £9.3m | +266.7% |
| Recurring revenue | £33.7m (83.2%) | 86.5% | Mix shift |
| Net customer churn | 2.5% | not disclosed | Very low |
| TCV (future incremental revenue) | £64.5m | not disclosed | New disclosure |
What drove growth: Seez AI, cross-sell and sticky customers
Management credits the step-up to the acquisition of Seez AI in March 2025, new customer wins and cross-selling into the installed base. Recurring revenue was £33.7m, representing 83.2% of total – a high-quality mix even if slightly lower than FY24 due to the Seez consolidation.
Churn stayed exceptionally low at 2.5%, reflecting how embedded Pinewood’s platform is across sales, aftersales, accounting and CRM. In plain English: once a dealer is on Pinewood, they tend to stay.
North America update: system testing live, OEM integrations progressing
This is the big prize. Pinewood is now testing its system in Lithia’s US dealerships. After successful testing, Lithia will start adopting Pinewood.AI as the central platform across its US dealers. Pinewood has engaged with OEMs covering about 90% of Lithia’s North American dealers, with multiple integrations already underway.
Why it matters: the North American Dealer Management System (DMS) market is $2.4 billion, with a further $4.1 billion in add-ons like CRM and service tools, plus $2.8 billion across commercial vehicles, RVs, motorbikes and boats. Capturing even a sliver could be transformational. Pinewood also bought out Lithia’s majority stake in the North America JV in July 2025, aligning control and economics ahead of scale-up.
Seez AI integration: data moats and product velocity
Seez AI is being integrated across vehicle sales and aftersales, with cross-sell already landing. Management emphasises a differentiation from generic large language models – combining AI with Pinewood’s deep, proprietary automotive data and OEM integrations built over 20+ years.
The platform continues to evolve, notably with a Business Intelligence module and embedded Data & Analytics dashboards. This product cadence likely supports the ultra-low churn and creates more avenues for upsell.
Margins and the “underlying vs statutory” noise
Gross margin reduced to 85.7% (from 90.4%) mainly due to the Seez consolidation and higher cloud hosting costs in the mix. Underlying admin costs stepped up to £26.4m, driven by higher amortisation/depreciation and investment in people, leaving underlying operating profit broadly flat at £8.3m.
On a reported basis, Pinewood booked an operating loss of £9.4m, but a £60.8m non-underlying gain on remeasuring its previously held stake in Pinewood North America pushed statutory profit before tax to £49.7m. Other non-underlying items included acquisition costs, share-based payments, and early-stage North America expenses. For valuation, investors will likely focus on the underlying trajectory.
Cash, balance sheet and investment
Year-end cash of £34.1m provides a helpful cushion. The group also has access to a £10m revolving credit facility to February 2027, which it does not expect to need based on current forecasts. Net assets rose to £204.2m, reflecting goodwill and other intangibles following acquisitions.
Pinewood invested £13.6m in development (with £10.5m capitalised, a 77% rate) to ready the platform for hyperscale North American deployment, OEM integrations and ongoing architecture/security. That spend underlines the growth push, though the capitalisation rate is a metric worth tracking.
Implementations and post-period moves
- Lookers rollout is “progressing well” and due to finish in Q4 2026.
- Marshall Motor Group rollout now slated to commence in H2 2026 (previously expected Q1 2026).
- Acquisition of the final reseller in the Netherlands completed on 25 February 2026 for £3.3m, expected to add approximately £0.7m to £0.8m of incremental annual EBITDA.
Outlook: 2026 guidance intact, 2028 target reiterated
The Board expects FY26 underlying EBITDA to be in line with market expectations of £21.3m. The medium-term goal of £58-62m underlying EBITDA by FY28 is reaffirmed, with around 85% of projected EBITDA growth covered by signed contracts. That coverage, alongside £64.5m of TCV, gives unusually strong visibility for a software roll-out story.
My take: what’s positive
- Clear North American momentum with live system testing and broad OEM engagement – the right indicators ahead of scale-up.
- Healthy recurring revenue of 83.2% and tiny net churn at 2.5% – a sticky, high-quality base.
- Cash position of £34.1m supports continued investment without leaning on the RCF.
- Seez AI integration and new analytics modules deepen the product moat and cross-sell potential.
What to watch
- Timing risk on US rollouts – pilots first, then adoption. Any slippage would press FY26/FY27 growth.
- Margin mix – gross margin dipped to 85.7% post-Seez; watch hosting efficiency and pricing as US scale builds.
- Capitalised development (77%) – appropriate for platform build, but investors should monitor conversion to revenue and cash.
- Implementation cadence – Lookers completion in Q4 2026 and Marshalls commencing in H2 2026 are key milestones.
Jargon buster
- EBITDA: earnings before interest, tax, depreciation and amortisation – a proxy for operating cash profit.
- Underlying: excludes significant one-offs to show the core trading performance.
- Recurring revenue: subscription-like income from ongoing contracts.
- TCV: Total Contract Value – future incremental revenue from signed contracts.
- Churn: the net percentage of customers leaving in a period – lower is better.
- DMS: Dealer Management System – core software used by auto dealers.
- OEM: Original Equipment Manufacturer – the car makers.
Bottom line
These are solid results with clear strategic traction. The US is the make-or-break vector, and Pinewood is hitting the right prerequisites – OEM integrations, dealer pilots, and a product tuned for hyperscale. With FY26 guidance intact at £21.3m underlying EBITDA and a bold but covered route to £58-62m by FY28, execution now matters more than narrative. If North American adoption follows testing, the earnings step-change could be meaningful.
For the company’s presentation replay, see Pinewood’s investor page: https://pinewood.ai/investors/results/
