**Summary of Alfa Financial Software Holdings PLCs Full Year Results for 2025**
**Financial Performance**
**Revenue Growth** Revenue increased by 15% to £126.7 million in 2025, driven by a 16% growth in subscription revenues, which reached £43.6 million.
**Profitability** Operating profit rose by 17% to £40.1 million, with an operating margin of 31.6%. Profit before tax also increased by 18% to £40.1 million.
**Earnings Per Share (EPS)** Basic EPS grew by 17% to 10.19 pence, and diluted EPS increased by 18% to 10.14 pence.
**Cash Generation** Strong cash generation continued, with a 97% free cash flow conversion rate. Cash reserves increased to £26.4 million.
**Strategic Highlights**
**Subscription Revenue Growth** Subscription revenues grew by 16%, becoming the fastest-growing revenue stream. Annual Recurring Revenue (ARR) increased by 15% to £43.9 million.
**Customer Expansion** Alfa Cloud customers increased to 22, up from 21 in 2024. Net Revenue Retention (NRR) improved to 109%, reflecting strong customer retention and expansion.
**Product Development** Invested £37.7 million in product development, focusing on US Auto Originations, Fleet, and Commercial Finance, to expand market reach and addressable markets.
**Sales and Delivery Momentum** Strong late-stage pipeline with 10 prospects, 5 of which are working under letters of engagement. Delivered 35 go-lives, demonstrating robust delivery execution.
**Employee Growth and Retention** Average headcount increased by 6% to 516, with a high staff retention rate of 97%.
**Dividends**
**Ordinary Dividend** Increased to 1.5 pence per share, up 7% from the previous year.
**Special Dividend** Declared a special dividend of 3.1 pence per share, up 29% from the previous year, reflecting confidence in future performance.
**Outlook**
**Revenue Growth** Expects strong subscription revenue growth and good delivery revenue growth in 2026, despite currency headwinds and macro uncertainty.
**US Market** The US business now accounts for 45% of revenues, creating a headwind for reported results due to current exchange rates.
**Pipeline Strength** Maintains a healthy sales pipeline, with good activity in the early stages, indicating continued demand for Alfas software solutions.
**CEO Commentary**
Andrew Denton, CEO, highlighted exceptional operational and financial performance, achieving a "Rule of 40" target with 17% constant currency revenue growth and a 32% operating profit margin. He emphasized strategic progress in subscription revenues, product development, and AI integration, positioning Alfa for continued growth and market expansion.
**Conclusion**
Alfa Financial Software Holdings PLC delivered strong financial and operational results in 2025, with significant growth in subscription revenues, robust profitability, and strategic advancements in product development and market expansion. The company remains confident in its future prospects, supported by a healthy pipeline and continued investment in innovation.