Positive FY update: Having cake, eating IT

The FY trading update informs us that with a 40% FY26 Adj. EBITDA margin, Beeks once again distances itself from its international IaaS peers and the wider UK tech group, which average 33.9% and 22.1%, respectively. As CEO Gordon McArthur reminds, Beeks ‘now has four differentiated offerings’ and enjoys ‘a strong pipeline across each’. FY27 has begun well, a point telegraphed by record £34m ACMRR. Beeks’ financial model matured in FY26: Proximity Cloud, Exchange Cloud, Public/Private Cloud were joined by Market Edge Intelligence. All are revenue generating; all are selling globally. The only wrinkle in the update is net cash, £0.6m below our initial estimate. This trailed the ‘significant upfront infrastructure investment…to support the new Exchange Cloud deployments’, several of which are now cash flow positive. In this, Beeks follows the wider IaaS industry, which, to reflect the AI imperative, is spending to update infrastructure and the customer offer. Beeks is a long-term secular growth investment play, with a ‘best of breed’ financial model, a strengthening moat and is executing on a global TAM. The debut of Market Edge Intelligence gives its financial model a new rung with software KPIs. In our view, none of this is reflected in a pedestrian 9.3x FY26E EV/EBITDA vs 13x for the IaaS cohort and 10.1x for UK tech peers.

Positive FY update: Having cake, eating IT

Beeks has announced three contract wins across its Analytics, Proximity Cloud and Private Cloud offerings, with a combined total value of c.£1.7m. This sits alongside the Market Edge Intelligence contract win earlier this week, a banner five-year contract with a US$4.8m (£3.6m) price tag at an unnamed ‘major global bank’. These contracts offer ‘expansion potential’ across the customers’ operations and Beeks’ customer base, and given the deployment model, Market Edge Intelligence smacks of a ‘land and expand’ bridgehead for new logos. The brace of contracts signals a structural move into a higher gross profit margin world. Recall at interim results CEO Gordon McArthur stated that Beeks entered H2 ‘with strong momentum’ – here is the £5.3m proof point. We trace the core software functionality back to the £4.2m Velocimetrics acquisition (April 2020), a price tag now dwarfed by these contracts. We make no changes to our forecasts as the contracts support FY26 estimates. Our view: Beeks is a long-term secular growth investment play, ‘best of breed’ financial model, with a strengthening moat and is executing on a global TAM. This is not reflected in the pedestrian 8.0x FY26E EV/EBITDA vs 13x for the peer group.

The leader of the pack: Beeks’ £5.3m payday

Gamma has today delivered strong headline figures for FY25 with revenue and adjusted EBITDA growth of 11% and 13%, driven by Germany and underpinned by resilient organic performance. Germany is showing strong growth and is well positioned to gain from cloud adoption catch-up. Gamma remains a resilient and highly cash-generative business, with the one-off UK gross profit headwinds from PSTN switch-off and ethernet pricing pressure at renewals ending in FY27, and mitigated by the recent restructuring. Management anticipates FY26 in line with market expectations. We leave our FY26 forecasts materially unchanged and introduce FY27 estimates. The market valuation, a prospective PER of 9.3x, appears not to reflect the cash generation, resilience and growth opportunity within Gamma.

Demonstrating resilience and growth

Interim results are in line with guidance, and Beeks reiterates FY guidance. H1 FY26 features continued growth, with Annualised Committed Monthly Recurring Revenue rising by 15% Y/Y to £32.80m. The growth cadence is increasing: +5% Y/Y for FY25, +15% Y/Y now. H1 FY26 also reflects the effect of the new Exchange Cloud revenue-share model and timing of the Proximity Cloud wins, which shunts rev/rec into H2 FY26 and reduces H1 revenue to £14.65m (vs £15.79m last year). That leads to lower Underlying EBITDA, -28% Y/Y to £4.12m. Gross cash was £7m vs £7.4m as at 30 June 2025. CEO Gordon McArthur states that Beeks enters H2 ‘with strong momentum and a customer base comprising some of the world’s largest financial institutions, each with significant expansion opportunity.’ Beeks remains a long-term secular growth investment play, ‘best of breed’ financial model, with a strengthening moat and executing on a global TAM, not reflected in the pedestrian 8.3x FY26E EV/EBITDA.

H1 results in-line, FY guidance reiterated

Beeks’ trading update (for the six months to 31 December) is a comforting balm: H1 trading is ‘in line’ and Beeks reiterates FY26 guidance. This follows a busy period of contract wins, uptake at seven stock exchanges globally and a ‘record strength’ pipeline. CEO Gordon McArthur states that Beeks has ‘record levels of revenue visibility’, and the H2 focus is on ‘executing against a strong pipeline’. In H1, ACMRR swelled to £32.8m, and the growth cadence is increasing; +5% Y/Y for FY25, +15% Y/Y now. In these troubled times for the tech sector, Beeks is a long-term secular growth investment play, with a ‘best of breed’ financial model, strengthening moat and executing on a global TAM. In our view, this is not reflected in the pedestrian 9.6x FY26E EV/EBITDA valuation (UK tech 13x).

Trading update: In-line, doing fine

Thruvision continues to demonstrate the benefit of its diversified portfolio. Recent H1 results showed revenue growth of 36% to £2.6m, however full-year guidance was reduced reflecting the persistent weakness in the UK market for Retail Distribution. This has led us to trim our revenue estimate for the full year from £7.1m to £5.2m. However, post results Thruvision has received a further aviation worker screening Contract Award from Seattle Tacoma Airport under the TSA mandate. This, coupled with expanding international government interest and two recent major additions to the global VAR network, signals a meaningful shift in future revenue potential.

Newsflow underpins pipeline conversion

We have adjusted the balance of our forecasts for FY25, while retaining the key adjusted EBITDA figure of £140.1m. We have also reassessed the prospects for FY26. The recent UK Budget has done little, if anything, to provide certainty to the UK SME market. The prospective PER of 10x appears too low given that the UK challenges merely hinder rather than impair the long-term technology adoption growth story.

Update on UK post budget prospects

The seventh Exchange Cloud contract is the first multi-year, multi-stock exchange contract. The nuam contract, announced 15 December, sets a new industry benchmark by integrating the Santiago Stock Exchange (Chile), Bolsa de Valores de Lima (Peru) and Bolsa de Valores de Colombia under a single market architecture. This becomes Latin America’s first fully integrated multi-country exchange. Once again, we see the revenue share model supporting shorter sales cycles and expanding the Exchange Cloud opportunity. In our view, increased referenceability will help close further pipeline deals. We leave estimates unchanged at this juncture as ‘go live’ is Q3 FY26, with revenue recognition following shortly thereafter. We see Beeks as a long-term secular growth investment play, with a ‘best of breed’ financial model and a pedestrian 10x EV/EBITDA valuation (UK tech 14.1x).

Beeks slays it: First multi-year/multi-stock exchange contract

Today’s brace of contracts (£1.9m and £2m) trail two contract wins last week ($1.5m and £2m) – all underscoring the ‘strong start to the financial year’. The contracts are for Proximity Cloud and Private Cloud, so illustrate momentum across the portfolio and the upside potential afforded by each Exchange Cloud installation. With revenue recognition commencing in H2 FY26, the contracts underpin FY26 estimates, which we leave unchanged. Beeks is gaining from industry tailwinds (cloud adoption, compliance, data sovereignty, cybersecurity, sustainability, analytics, payment modernisation, AI in risk management), which have enabled it to carve out a moat as market leader in cloud infrastructure for financial markets and payments. We see Beeks as a long-term secular growth investment play, with a ‘best of breed’ financial model and a pedestrian 9x EV/EBITDA valuation.

Four contract wins underscore momentum

In FY25, Proximity Cloud revenue grew to £7.8m from £1.6m prior year: Beeks has tapped into a geyser. FY25 ended in line with guidance (14 July trading update, see our note). This banner year featured 26% revenue growth, and improved ‘best in class’ profitability. Beeks guides that it is ‘in line’ to achieve FY26 expectations, so the coming 12 months are set to be another growth year. Confidence is ‘bedrocked’ by the soaring growth at Proximity Cloud, strengthening industry tailwinds and a record Total Contract Value, tipping over £19m. In FY25, Beeks inked eight ‘significant’ Proximity and Exchange deals with a bevy of major names. No change to our view: Beeks is gaining from industry tailwinds (cloud adoption, compliance, data sovereignty, cybersecurity, sustainability, analytics, payment modernisation, AI in risk management), which have enabled it to carve out a moat as market leader in cloud infrastructure for financial markets and payments. This is a long-term secular growth investment play, with a ‘best of breed’ financial model.

FY results: we need a bigger hockey stick

Xaar has confirmed that trading is in line with guidance, and reiterated FY25 expectations (to 31 December). This follows the maturing of recent product launches and the timing of new ones. Xaar announced that all new market initiatives are progressing as anticipated. With these, Xaar is able to brush off some of its prior caution. Pleasingly, part of the growth is due to new orders from a major customer for the launch of its desktop 3D printer. This new segment has the potential to develop revenues in a way similar to wax jetting earlier in 2025 – a revenue stream that soared from £0.6m to £3.3m. While there is an irksome new tax liability (£3-4m) to be paid over the next two years, the taxes can be comfortably paid as they fall due. We are delighted that Xaar is now sure-footed about its H2 prospects. Shares are racing (+73% YTD) but remain on a pedestrian rating.

In-line, doing fine

FY25 proved to be a difficult year for Thruvision, with revenue of £4.2m reflecting the absence of large material orders, together with a strategic review being undertaken and a change in management. Management notes improved momentum, with Q1 FY26 order intake up 145% year on year to £2.3m, driven by a major Asian government contract and sustained repeat revenue in Retail Distribution. Sales activity is high, although conversion of sales leads to orders has slowed over the summer months. Supported by a strong cost discipline, Thruvision is well placed to drive higher revenue, but is heavily reliant on the conversion of pipeline opportunities to achieve its target of cash generation in FY27.