Beeks Financial Cloud Group Plc (LON:BKS), a cloud computing and connectivity provider for financial markets, today reported its unaudited results for the six months ended 31 December 2025.

Revenue for the period was £14.65 million (H1 FY25: £15.79m), reflecting a lower level of upfront Proximity Cloud revenue recognised in the period due to the timing of contract wins secured towards the end of the half, alongside the continued transition of Exchange Cloud contracts towards a revenue share model.

The Group’s Proximity and Exchange Cloud® offerings can result in variability in revenue recognition between reporting periods depending on the timing of infrastructure deployment and the mix between upfront hardware and software elements and recurring services.

During the latter part of the period, the Group secured contract wins with total contract value of approximately £7m, including £6m relating to Proximity Cloud®. Due to the timing of these agreements, the associated infrastructure deployments will primarily occur during the second half of the financial year, with approximately half of the Proximity Cloud® value expected to be recognised in H2 FY26.

Encouragingly, the Group’s recurring revenue base continues to strengthen, with ACMRR increasing 15% to £32.80m (H1 FY25: £28.50m). This growing base of contracted recurring revenue helps underpin visibility for the remainder of the financial year and beyond.

There is a natural lag between contract signing, infrastructure deployment and revenue recognition. During H1 FY26 this lag was more pronounced than usual, resulting in a lower level of revenue recognition in the first half. The majority of these deployments have now been completed, positioning the Group to recognise the associated revenue streams in the second half of the financial year.

In addition, H2 FY26 will see the disaster recovery site for Grupo Bolsa Mexicana de Valores (BMV), the second-largest exchange in Latin America, go live, providing further visibility of revenue recognition in the second half.

During H1 FY26, the Exchange Cloud® contract with Kraken, one of the largest and longest-standing cryptocurrency exchanges, went live. This represents the Group’s first revenue-share Exchange Cloud® deployment and therefore, unlike the Group’s traditional fixed-price Proximity Cloud® and Exchange Cloud® contracts, does not include an upfront revenue element. The contract moved into monthly profitability during March 2026, ahead of expectations, demonstrating the potential of this model as trading volumes grow.

The loss in the period primarily reflects the timing of Proximity Cloud® revenue recognition alongside continued infrastructure investment required to support recently secured contract wins.

Gross profit for the period decreased 25% to £4.50m (H1 FY25: £6.03m), with gross margin reducing from 38% to 30%. Over half of this margin reduction can be attributed to the timing of upfront Proximity Cloud® deals.

The remaining reduction in margin primarily reflects further timing effects. In addition to the lag between contract signing and service delivery, the Group’s deployment model requires infrastructure investment ahead of customer launch. As a result, certain costs are recognised in advance of the associated revenue streams.

The majority of the data centre infrastructure investment required for these deployments was undertaken during H1 FY26. Consequently, capital and operating investment in H2 is expected to be more incremental as customer environments progress towards launch.

With several deployments scheduled to launch in the second half of the financial year, the Board expects revenue recognition and associated profitability to be weighted towards H2 FY26.

The Group also continues to review and optimise its data centre supplier arrangements as part of its normal commercial processes, including securing improved commercial terms and moderating contractual price escalations where possible. These initiatives are expected to support margin improvement over the medium term, alongside the increasing contribution from higher-margin recurring revenue.

Underlying EBITDA decreased by 28% to £4.12m (H1 FY25: £5.74m), with underlying EBITDA margin reducing to 28% (H1 FY25: 36%), reflecting the same margin dynamics noted above.

Underlying loss before tax is defined as loss before tax excluding amortisation on acquired intangibles, share-based payments, exchange rate gains/losses on statement of financial position translation and exceptional non-recurring costs. This decreased to a loss of £0.69m (H1 FY25: £1.89m profit).

Underlying EBITDA, underlying profit before tax and underlying earnings per share are alternative performance measures considered by the Board to provide a clearer reflection of underlying trading performance than statutory measures alone.

Beeks reported a Statutory loss before tax of £1.87m (H1 2025: £0.46m profit) with an underlying loss before tax of £0.69m (H1 2025: £1.89m profit).

Administrative expenses (excluding share-based payments and non-recurring costs) increased 19% to £4.90m (H1 FY25: £4.11m). The increase primarily reflects staff investment with staff costs increasing by £0.45m.

Overall, total headcount increased to 116 employees at 31 December 2025, compared to 102 at 30 June 2025 and 103 at 31 December 2024. Approximately half of the increase was within sales and pre-sales functions, strengthening the Group’s ability to support enterprise sales cycles, expand its global pipeline and convert recent contract momentum across Proximity Cloud®, Exchange Cloud® and Market Edge opportunities.