KRM22 Reports Mixed H1 2025 Results: Revenue Up, Losses Widen
Why we think this is neutral
KRM22's H1 2025 results present a mixed picture. On the positive side, the company has shown strong revenue growth, with total revenue up 10.6% and recurring revenue increasing by 15.4%. The Annualised Recurring Revenue (ARR) also grew by an impressive 20%. However, these gains are offset by widening losses, with the operating loss increasing from £1.0m to £1.3m and loss before tax rising from £1.3m to £1.6m. The gross profit margin has also declined, indicating some pressure on profitability. While the company has managed to increase its cash position, there remains a significant reliance on a convertible loan from TT, which presents a material uncertainty around financial covenants. The company's outlook appears cautiously optimistic, but without specific guidance on costs or revenue projections. Given these factors, the overall sentiment is neutral, as the growth potential is balanced against financial risks and widening losses.
Key Points
- Revenue up 10.6% to £3.6m
- Recurring revenue increased 15.4% to £3.4m
- ARR grew 20% to £7.2m
- Operating loss widened to £1.3m
- Gross profit margin decreased to 77.5%
- Adjusted EBITDA profit increased to £0.4m
- Cash position improved to £1.4m
- Material uncertainty around financial covenants
- New cross-selling opportunities and product offerings
- Cautiously optimistic outlook for 2025
Summary
KRM22, a risk management software provider for capital markets, has released its H1 2025 results showing a mixed performance. The company reported revenue growth of 10.6% to £3.6m, with recurring revenue up 15.4% to £3.4m. Notably, Annualised Recurring Revenue (ARR) grew by 20% to £7.2m. However, the company's losses widened, with operating loss increasing to £1.3m and loss before tax rising to £1.6m. The gross profit margin decreased to 77.5% from 81.8% in H1 2024. On a positive note, Adjusted EBITDA profit increased to £0.4m. The company's cash position improved to £1.4m, but there remains a significant reliance on a £4.5m convertible loan from TT, which presents ongoing financial risks. KRM22 reported progress in cross-selling and new product offerings, but material uncertainty exists around meeting financial covenants. The outlook remains cautiously optimistic, with management working towards a strong close to 2025.