Release Date: June 03, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- FD Technologies PLC (FDRVF, Financial) achieved a substantial increase in bookings, ARR, and cash EBITDA, indicating strong financial performance.
- The company successfully repositioned itself as a high-growth software business by divesting MRP and First Derivative, repaying all debt, and returning GBP120 million to shareholders.
- The strategic repositioning unlocked significant shareholder value, with a recommended cash offer valuing the company at GBP24.50 per share.
- FD Technologies PLC (FDRVF) is well-positioned for growth in expanding markets such as AI-powered research, anomaly detection, and predictive analytics.
- The company reported a 33% year-over-year increase in annual contract value and a 13% growth in annual recurring revenue, demonstrating strong sales momentum.
Negative Points
- The cash EBITDA loss was GBP14.6 million, although improved from the previous year, it still represents a financial challenge.
- Service revenues declined by 60% to GBP3.8 million, reflecting a strategic shift but also a significant drop in this revenue stream.
- The net retention rate decreased slightly to 108% from 110% in the previous year, indicating a slight decline in customer retention.
- General and administrative expenses increased year-on-year due to costs previously shared with First Derivative, impacting overall profitability.
- The company experienced increased churn, primarily in the second half of the year, which could affect future revenue stability.
Q & A Highlights
Q: Can you provide more details on the strategic repositioning and divestments?
A: Seamus Keating, CEO: We successfully separated the group's three businesses and repositioned as KX, a high-growth software business. We divested MRP and First Derivative, repaid all debt, and returned GBP120 million to shareholders. This strategic repositioning has unlocked significant shareholder value.
Q: What are the key financial highlights for FY25?
A: Ryan Preston, CFO: We saw a 33% year-over-year increase in annual contract value, with annual recurring revenue reaching GBP81.8 million, a 13% growth. The cash EBITDA loss improved to GBP14.6 million from GBP18.8 million the previous year, reflecting our focus on efficient growth.
Q: How did the revenue mix change, and what impact did it have on margins?
A: Ryan Preston, CFO: Recurring license revenues increased by 11% to GBP76 million, while service revenues decreased by 60% to GBP3.8 million. This shift aligns with our strategy to focus on software revenue, improving gross margins due to the higher proportion of software, which typically has a margin of around 90%.
Q: What are the expectations for ARR growth and cash EBITDA in the coming years?
A: Ryan Preston, CFO: We maintain our guidance for ARR growth of at least 20% in FY26 and continue to target positive cash EBITDA by FY27. The strong ACV bookings growth in FY25 provides a solid foundation for achieving these targets.
Q: Can you elaborate on the market opportunities and competitive advantages?
A: Seamus Keating, CEO: We are well-positioned for growth in markets driven by AI-powered research, anomaly detection, and predictive analytics. Our technology manages diverse, high-volume, high-frequency data, providing unmatched value and insights. We see growing opportunities in aerospace, defense, industrial IoT, and financial services.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
