Q1 2026 snapshot: ARR up to £38.6m and cash generation impresses
Quartix Technologies has kicked off 2026 with a tidy set of Q1 trading numbers. Annualised Recurring Revenue (ARR) rose to £38.6m on a constant-currency basis and free cashflow was a punchy £2.7m, leaving cash at £8.2m at quarter end. Revenue and profit are in line with market expectations for the full year.
There is a but: new customer acquisition and new subscriptions were lower than a very strong Q1 last year. Even so, the installed base kept growing across every territory and net revenue retention moved sharply higher, which bodes well for the rest of the year.
Key Q1 2026 metrics investors should note
| Measure | Q1 2026 | Trend / Note |
|---|---|---|
| ARR (constant currency) | £38.6m | Up £1.6m in the Period; +£4.1m (+12%) on a trailing twelve month (TTM) basis |
| ARR growth source | £1.1m | From new business in the Period |
| Net revenue retention | 98.1% | Up from 95.7% over the 12 months to 31 March 2026 |
| New subscriptions | 19,301 | -13% year on year |
| New customers acquired | 2,021 | -8% year on year |
| Total subscription base | 339,491 | +9% TTM |
| Total customer base | 33,443 | +8% TTM |
| Free cashflow (Q1) | £2.7m | Includes a £0.55m corporation tax refund and a £0.35m timing benefit |
| Cash at 31 March 2026 | £8.2m | £1.1m UK corporation tax payment now expected in Q2 2026 |
ARR is the value of contracted recurring software subscriptions and excludes other services. Constant-currency calculations use closing rates at 31 March 2026 of $1.332/£ and €1.148/£.
ARR and retention: recurring revenue engine is humming
The headline is solid: ARR reached £38.6m, adding £1.6m in the quarter. That growth is around 20% lower than Q1 2025’s unusually strong showing, but the mix matters – £1.1m came from new business, not just price or upsell, which is healthy.
Net revenue retention – a measure of how much revenue Quartix keeps and expands from existing customers after churn – rose to 98.1% from 95.7%. That is meaningful. Higher retention lowers the pressure on new sales to sustain growth and typically supports margin and cash generation.
Customer and subscription trends by country
Despite softer new sign-ups, the installed base kept expanding in every market on a TTM view. The stand-outs this quarter were Italy, Spain and Germany for unit growth, while the UK/Ireland and the USA had slower sign-up activity compared with last year’s strong comparator.
| Country | ARR (£m) | ARR growth (TTM) | Sub base (units) | Sub base growth (TTM) | Customer base | Customer base growth (TTM) | New subs (Q1) | New subs growth (Q1) | New customers (Q1) | New customers growth (Q1) |
|---|---|---|---|---|---|---|---|---|---|---|
| UK/EI | 20.28 | +8% | 168,204 | +4% | 11,993 | +1% | 6,422 | -28% | 428 | -13% |
| France | 10.48 | +14% | 94,762 | +12% | 10,012 | +6% | 6,431 | -10% | 647 | -5% |
| USA | 3.38 | +5% | 29,642 | +1% | 4,023 | +3% | 1,558 | -25% | 236 | -12% |
| Italy | 2.12 | +39% | 22,061 | +40% | 3,457 | +38% | 2,583 | +33% | 355 | +4% |
| Spain | 1.38 | +32% | 15,948 | +30% | 2,675 | +20% | 1,470 | +13% | 240 | -12% |
| Germany | 0.93 | +45% | 8,506 | +20% | 1,224 | +19% | 811 | +6% | 113 | -23% |
| Other | 0.04 | not disclosed | 368 | not disclosed | 59 | not disclosed | 26 | not disclosed | 2 | not disclosed |
| Total | 38.61 | +12% | 339,491 | +9% | 33,443 | +8% | 19,301 | -13% | 2,021 | -8% |
Territory takeaways
- UK/Ireland: the largest revenue base but new subs were down 28% year on year, so the focus on sales and marketing efficiency is key here.
- France: healthy TTM growth with only a modest dip in Q1 sign-ups. A steady market.
- USA: softer quarter for new business (-25% new subs), with low unit growth on a TTM basis (+1%).
- Italy, Spain, Germany: the growth engines. Italy’s +33% new subs and Germany’s +45% ARR growth on a TTM basis are eye-catching. Spain also delivered double-digit TTM gains.
Cashflow quality: strong, with some timing help
Free cashflow of £2.7m was very strong for Q1. Management flags two non-operational boosts: a £0.55m corporation tax refund tied to the FY23 tax return and a £0.35m timing benefit from a Q1 tax payment that actually left the bank in April. Cash closed at £8.2m.
One item to keep on the radar: the £1.1m UK corporation tax payment previously expected by 31 March 2026 is now anticipated in Q2 2026 due to HMRC processing. That means some of the cash strength will unwind next quarter, but the underlying cash generation still looks healthy given the recurring nature of the revenues.
4G and 2G replacement programmes: operational housekeeping continues
Quartix reports good progress on the 4G upgrade programme in France, which remains on schedule to complete this year. Replacement of 2G tracking systems in the UK is continuing as previously guided. No cost or revenue impact is disclosed, but smooth execution here helps protect service quality and retention.
Outlook and market expectations for 2026
Management describes a solid start and remains confident of achieving market expectations. Prior to this update, the Company believed consensus for 2026 to be revenue of £40.3m, Adjusted EBIT of £10.1m and free cashflow of £4.7m.
Constant-currency reporting helps to strip out FX noise, using closing rates at 31 March 2026 of $1.332 and €1.148 to pounds sterling. With net revenue retention at 98.1% and an expanded installed base, Quartix has a decent platform to hit those numbers if new business momentum steadies after the tough Q1 comparator.
My read: balanced positives and watch‑outs
- Positives: ARR grew to £38.6m, retention improved to 98.1%, and free cashflow was strong. International diversification is working, with Italy, Spain and Germany now meaningful contributors to growth.
- Negatives: new subscriptions (-13%) and new customer acquisition (-8%) were light versus last year’s strong quarter, particularly in the UK/Ireland and USA. Some cashflow benefit was timing related and a £1.1m tax outflow lands in Q2.
Overall, this reads as a steady quarter for a recurring revenue business. The core engine – ARR and retention – is heading the right way. If sales execution improves through the year, especially in the UK/Ireland and the USA, the full-year targets look achievable.
What to watch next quarter
- Re-acceleration in new subscriptions and customer adds, particularly in the UK/Ireland and USA.
- Net revenue retention holding near 98% as the 4G/2G upgrades complete.
- Cashflow after the expected £1.1m UK tax payment hits in Q2.
- Ongoing traction in Italy, Spain and Germany to diversify growth away from the UK/Ireland.
In short: a measured but confident start to 2026. The recurring revenue story remains intact, and the cash generation is encouraging even after adjusting for the tax timing quirks.
