Sparks

PCI-Pal reported H125 revenue of £10.57m (+26% y-o-y, +13% excluding deferred revenue adjustment), adjusted EBITDA of £0.95m (H124: -£0.07m) and adjusted EBIT of £0.18m (H124: -£0.73m).  Exit ARR increased 21% y-o-y and 8% h-o-h to £16.8m. TACV (total annual recurring revenue of all signed contracts) was £20.3m at period end, up 16% y-o-y, with new ACV of £1.91m (+19%) signed in H125 and reaching £2.7m by the end of February. Net revenue retention (NRR) was 102% and churn was 5%, up 1pp y-o-y.

The company has three new strategic partnerships taking effect in FY25: the first with Zoom (signed in Q424), the second is an extension to the marketplace partnership with Five9 Inc, and the third is with RingCentral (signed Q125, named today), a major vendor in the UCaaS (unified communications-as-a-service) and CCaaS (contact centre-as-a-service) markets. The RingCentral integrated partnership is expected to launch imminently in North America and Europe with the rest of the world thereafter.

Management did not explicitly give guidance for FY25, highlighting strong momentum in new business sales in H1, expansion of the partner network, and the continued investment in growth. We do not expect any changes to consensus estimates, which forecast revenue growth of 24.7% in FY25e and 13.8% in FY26e with adjusted EBIT margins of 4.0% and 2.7% respectively. The stock has fallen back since reaching a high of 72p after the January trading update and now trades on a P/E of 61x FY25e and 76x FY26e.