Quartix Technologies Exceeds Market Expectations with Strong ARR Growth

Quartix Q3 2025 trading update: ARR accelerates and guidance edges higher

Quartix Technologies has delivered a strong Q3, nudging full-year expectations higher and shifting the trajectory of the business in a positive way. The headline is clear: recurring revenue is accelerating, cash generation is robust, and 2026 looks brighter.

If you are new to the jargon: Annualised Recurring Revenue (ARR) is the annualised value of subscription revenue – a key indicator of forward visibility. Net Revenue Retention (NRR) shows how revenue from existing customers changes over time after churn and upsells. TTM means trailing twelve months.

Key numbers investors should know

Metric	Figure
ARR at 30 Sept 2025	£36.1m
ARR growth (TTM)	£4.3m, up 14%
ARR growth in the Period (9 months)	£3.5m
International ARR mix	47%
Net Revenue Retention (TTM)	97.3% (from 95.7% on 1 Jan 2025)
Cash balance at 30 Sept	£4.6m
Free cash flow (9 months)	~£4.3m
Underlying free cash flow (ex £1.0m 4G/reorg cash costs)	~£5.3m
Subscription base	326,029 vehicles
ARR per vehicle	£111
ARR per employee (FTE)	£220,000
Subscriptions as % of sales	94%
Hardware as % of sales	<3%
Largest client as % of sales	<1%

For context, prior market expectations for 2025 were revenue £36.0m, adjusted EBITDA £7.5m, adjusted PBT £7.1m and free cash flow £4.1m. Quartix now expects to slightly exceed revenue and profit, and has already outstripped the free cash flow line for the full year after just nine months.

Cash flow and gross margins: why the hardware shift matters

Q3 cash flow was particularly strong, helped by the ramp of the latest low-cost tracking system (TCSV17). This shift allows Quartix to run down older TCSV15 inventory and improves the trajectory of gross margins. It also reduces current and future cash costs tied to the French 4G upgrade programme.

After paying a £1.2m interim dividend, cash stood at £4.6m on 30 September. Importantly, free cash flow of ~£4.3m for the Period includes £1.0m of cash costs for the 4G upgrade and reorganisation. Strip those out and underlying free cash flow of ~£5.3m underlines strong cash conversion. Management notes the remaining cash cost of the reorganisation is now immaterial.

My take: this is the right kind of operational leverage – lower device costs feeding margins and cash, without juicing hardware sales. With hardware still under 3% of sales and subscriptions at 94%, the model is leaning into quality revenue.

ARR quality and retention: growth with improving stickiness

ARR rose by £3.5m in nine months to £36.1m, matching the whole of 2024’s ARR growth in just three quarters. On a TTM basis, ARR growth is £4.3m, up 14% from 1 October 2024. NRR has improved to 97.3% from 95.7%, and the company explicitly targets further progress.

Why this matters: ARR and NRR are the heartbeat of a subscription business. Growth at 14% TTM with improving retention points to better upsell and lower churn. International exposure now at 47% diversifies the engine of growth beyond the UK and Ireland.

Where growth is coming from by country

Country	ARR (£m)	ARR growth (TTM)
UK/IE	19.21	10%
France	9.75	15%
USA	3.26	9%
Italy	1.78	40%
Spain	1.19	35%
Germany	0.84	37%
Total	36.06	14%

There is healthy breadth here. The UK/IE and France remain the core, but Italy, Spain and Germany are growing fastest on a percentage basis. In the USA, new subscriptions grew strongly, and new customers rose 40% year on year, showing useful traction.

Customer base now stands at 32,118, with 59,576 new subscriptions and 5,654 new customers added on a TTM basis. For a small-to-medium business-focused model, that is solid pipeline health.

4G upgrade programmes: risk reduced, execution ongoing

France: about 20,000 of the original 50,000 devices remain to upgrade. Only 20% need professional installation; 80% are self-install and will be tackled later as they merely require shipment and swap-out. Quartix will review the remaining provision at year end.

UK: a new 5-year supply contract with the principal network operator brings cost benefits and a clear signal that 2G “sunsetting” is unlikely during this contract. With an estimated 8 million 2G connections at the operator, the company does not expect any material impact from the UK’s 2G to 4G transition for the foreseeable future.

Net result: execution risk in France is manageable, and UK network risk looks materially lower than feared.

Product roadmap: TCSV17, TCSV18 and a faster user experience

Hardware platform: TCSV17 is now in full production. The design has been adapted into a miniature plug-in OBD device for Europe (TCSV18), currently in type approval, with a US variant slated for type testing early next year. The new suite promises better performance at lower cost and will simplify components, working capital and manufacturing over time.

Software platform: a reorganisation has created a focused UI team, already delivering a new, faster web front-end. It was shown internally in September and is due for a customer beta later this year. This code base will underpin the next-generation mobile app as well.

Dashcams: the connected, fully integrated dashcam solution – launched in 2024 – added about £0.5m of ARR in the 12 months to 30 September, largely from UK cross-sell. International potential is now being evaluated. This is a neat upsell lever that also aids customers with training and insurance claims.

Outlook for FY25 and 2026: my