Microlise Group (AIM:SAAS), a provider of transport management software to fleet operators, reported revenue of £39.5m for the six months ended 30 June, down from £44.1m a year earlier.
The decline reflected weaker OEM revenues, lower non-recurring hardware sales and component availability issues affecting project timing, the AIM-listed company said in its trading update.
Direct Customer annual recurring revenue (ARR) grew 12% to £47.1m, supported by renewals, expansion activity and new business, including a 10-year renewal and expansion deal worth more than £20m in total contract value.
Direct Customer net revenue retention was 106%, down from 114% a year earlier, reflecting previously flagged managed churn, while OEM-related ARR fell to £13.7m from £16.7m on lower renewals.
Adjusted EBITDA margin recovered to 13.2%, up from 5.2% in the second half of last year, with adjusted EBITDA of £5.2m rising 148% sequentially, aided by FY25 restructuring and recurring revenue now making up 76% of Group revenue.
Net cash stood at £13.8m at period end, up from £11.2m a year earlier, alongside a £30m undrawn debt facility.
"Microlise delivered a solid H1 performance, with Direct Customer ARR growing 12%, improved margins versus H2 2025, and a strong net cash position", said chief executive Nadeem Raza.
The Board continues to expect full-year adjusted EBITDA in line with current market expectations, with full interim results due in late September.
News Intelligence what this means for the company
Microlise reported H1 revenue of £39.5m, down 10% year-on-year, but reaffirmed its full-year profit guidance after a sharp margin recovery. Direct Customer ARR grew 12% to £47.1m and adjusted EBITDA margin rebounded to 13.2% from 5.2% in H2 2025, driven by FY25 restructuring and a shift toward recurring revenue (now 76% of group revenue). The decline in headline revenue reflects weaker OEM renewals and lower hardware sales, partially offset by a £20m+ contract win.
The margin recovery and reaffirmed FY26 guidance suggest the restructuring is working, but the 10% revenue drop and falling OEM-related ARR (£13.7m from £16.7m) signal headwinds in that segment. Net cash of £13.8m plus a £30m undrawn facility provides runway, but investors should watch whether Direct Customer ARR growth can sustain momentum as the company laps easier comparisons.
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