Netcall Share News (NET)

(Sharecast News) - Netcall reported double-digit revenue growth in the first half of its 2026 financial year on Wednesday, driven by expanding cloud adoption and rising AI-related demand, as the AIM-listed software group lifted annual contract value and reiterated a positive outlook for the full year.

Revenue rose 15% to £26.5m in the six months ended 31 December from £23.0m a year earlier, reflecting 11% organic growth and an initial contribution from Jadu, which was acquired in December.

Cloud services revenue increased 34% to £17.9m from £13.4m.

Total annual contract value reached £50.5m, up 28% from £39.4m, while cloud services ACV jumped 42% to £42.6m.

Cloud now accounted for 84% of total ACV, up from 76% a year earlier, which Netcall said strengthened forward revenue visibility. Recurring revenue rose to 83% of total revenue from 79%.

Adjusted EBITDA increased 13% to £6.45m and adjusted profit before tax rose 11% to £5.43m.

Statutory profit before tax fell 31% to £2.54m from £3.69m.

Adjusted diluted earnings per share increased 10% to 2.41p.

Netcall ended the period with cash of £14.8m and net funds of £13.8m, down from £22.0m and £20.9m respectively a year earlier, after £12.7m of acquisition-related payments.

The company said it remained debt-free.

Operationally, Netcall said expansion within its existing customer base continued to drive growth, with cloud net retention steady at 115%, supported by adoption of additional modules and AI features, as well as ongoing cloud migration.

AI adoption accelerated, with AI-related bookings more than tripling year-on-year and contributing a significantly higher share of new ACV, while new customer momentum improved through higher logo additions and higher value per new account.

The acquisition of Jadu was positioned as a strategic expansion of the group's Liberty platform, increasing its digital experience capability and extending coverage to more than half of UK councils, while also providing access to a US partner network.

"We delivered a strong first half, with double-digit revenue growth, improved profitability and clear progress across our key metrics," said chief executive James Ormondroyd.

"Cloud momentum remained a key driver, lifting Cloud ACV by 42% year-on-year and increasing recurring revenue to 83% of the total, enhancing revenue quality and visibility.

"Customer adoption of the Liberty platform continued to deepen, reflected in consistently strong Cloud net retention.

"Adoption of AI capabilities accelerated across agent-assist, voice automation and self-service, contributing to higher customer value as organisations expand their use of Liberty."

Netcall said momentum has continued into the second half, supported by a strong pipeline and a record contracted order book of £92.4m.

"We enter the second half with positive momentum, a strong pipeline and a record contracted order book, and the board remains confident in delivering ongoing progress in 2026," Ormondroyd said.

At 1356 GMT, shares in Netcall were down 0.61% at 102.38p.

Reporting by Josh White for Sharecast.com.