Final Results

AIM: CER

Cerillion plc

("Cerillion" or "Company" or "Group")

Final results for the year ended 30 September 2025

Strong earnings growth

Well positioned for FY26 - record back-order book and record sales pipeline

Cerillion plc, the billing, charging and customer relationship management software solutions provider, presents its annual results for the 12 months ended 30 September 2025.

Highlights

Financial highlights:

· Key financial performance measures reached new highs

· Adjusted EBITDA margin up to a record 50.9% (2024: 47.4%)

· Total new orders up 25% to a record £47.6m (2024: £38.1m)

· Back-order book up 21% to £56.9m (2024: £46.9m). This is made up of £47.4m of sales contracted but not yet recognised (2024: £37.7m) and £9.5m of annualised support and maintenance revenue (2024: £9.2m). It is anticipated that c. 33% of the £47.4m will be recognised within 12 months, helping to underpin the current financial year

· New customer sales pipeline6 up 5% to a new high of £275m at 30 September 2025 (30 September 2024: £262m)

· Very strong balance sheet with net cash5 up 15% to £34.4m (30 September 2024: £29.9m)

· Final dividend of 10.6p per share proposed (2024: 9.2p), bringing the total dividend for the year to 15.4p per share (2024: 13.2p), an increase of 17% 

Operational highlights:

· Record value of major new contracts signed:

- £25.3m of agreements, signed with an existing European customer, to onboard its newly-acquired, tier-1 mobile base and to extend support, managed services and the Evergreen programme for the existing bases; and

- $11.4m (£8.5m) contract signed with new customer, Ucom, a leading provider of telecommunications services in Armenia.

· Two major new implementations completed for:

- Virgin Media in Ireland; and

- Paratus, a leading provider of connectivity solutions in Southern Africa.

· Significant increase in R&D to support product development, as reflected in the latest product release

· Continued investment in resource across geographies to support ongoing growth

· Pipeline of new business opportunities stands at a record high and includes substantial potential deals

· Cerillion remains well-positioned for further growth in FY26 and beyond

Louis Hall, CEO of Cerillion plc, commented:

"We made significant progress over the financial year and I am delighted with our two major new wins, which took new orders to a new high of £47.6m. These new orders are further proof of the quality and strength of our offering.

"We continued to invest in the business to support future growth. In particular, we increased R&D spend, focusing further on AI, and expanded our resources in delivery, sales and marketing.

"Cerillion remains well-positioned and we enter the new financial year with a record back-order book and exciting prospects in the new business pipeline. The Company's very strong financial foundations support our growth plans and we view future prospects with great confidence."

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About Cerillion

Cerillion has a 26-year track record in providing mission-critical software for billing, charging and customer relationship management ("CRM"), mainly to the telecommunications sector but also to other markets, including utilities and financial services. The Company has c. 70 customer installations across c. 45 countries.

Headquartered in London, Cerillion also has operations in India and Bulgaria as well as a sales presence in Belgium, the USA, Singapore and Australia.

The business was originally part of Logica plc before its management buyout, led by CEO, Louis Hall, in 1999. The Company joined AIM in March 2016.

Notes

Note 1 Recurring revenue includes support and maintenance, managed service, Skyline and third-party hardware and hosting revenue reported in the year.

Note 2 Adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA") is calculated by taking operating profit and adding back depreciation & amortisation and share-based payment charges.

Note 3 Adjusted profit before tax is calculated by taking reported profit before tax and adding back share-based payment charges.

Note 4 Adjusted basic earnings per share is calculated by taking profit after tax and adding back share-based payment charges and is divided by the weighted average number of shares in issue during the period.

Note 5 Net cash is made up of cash and cash equivalents.

Note 6 New customer sales pipeline is the total, unweighted value of all qualified sales prospects.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S REPORT

Introduction

Cerillion has continued to make very pleasing progress, and in the year under review we signed a record value of new orders at £47.6m. This is c.25% higher than the prior financial year and included our most substantial win in the Company's history to date, which was with an existing European customer to on-board its newly acquired tier-1 mobile customer base. This composite deal, agreed in two stages, is worth a total of £25.3m over five years. We also secured a major new customer in Ucom, a leading provider of telecommunications services in Armenia. This agreement, signed in the first half, is worth $11.4m (£8.5m) over five years. Both wins represent important new references for us and the full financial benefits will come through in the new financial year and beyond. The Company's key financial metrics reached new highs. Revenue increased to £45.4m (2024: £43.8m) and adjusted profit before tax rose to £21.8m (2024: £19.8m), up 10% year-on-year.

As ever, we continued to invest in our technology and increased our overall R&D spending in the year. Our focus was on AI tools and composable user interfaces. The latest version of our software suite, Cerillion 25.2, launched in October 2025, now enables customers to interact more effectively and efficiently with their end customers using our new AI Agents. This long-term programme of product evolution and improvement remains a major focus.

We also invested in our operational teams and made a number of senior hires in delivery roles. In addition to this, we also expanded our sales and marketing team, with new hires in the USA, Europe and Asia. Continuing to invest in talent is important as we grow and develop the business.

The pipeline of potential new customer sales remains very strong and includes some substantial opportunities. At the financial year-end the total, unweighted value of this pipeline stood at £275m (2024: £262m), a new high. We believe this reflects the strength of our technology and the ongoing requirement for telecommunications providers to improve efficiencies, drive flexibility and maximise the benefits of their investments in 5G and fibre roll-out.

We enter the new financial year with confidence in Cerillion's growth prospects. We have a record back-order book and the pipeline of potential new business opportunities is substantial, with some exciting prospects. Backed by a very strong balance sheet, with significant net cash, we believe that the Company remains very well-positioned to make further progress in the new financial year and beyond.

Financial Overview

Total revenue for the year to 30 September 2025 rose by 4% to £45.4m (2024: £43.8m), which reflects the timing of contract wins. As is typical, existing customers (classified as those acquired before the beginning of the reporting period) accounted for a very high proportion of total revenue, generating 93% of the overall result (2024: 85%).

Recurring revenue1, which includes support and maintenance, managed service, Skyline and third-party hardware and hosting revenue, increased by 3% to £15.9m and comprised approximately 35% of total revenue (2024: £15.5m, 35%).

The Group's revenue streams are categorised into three segments: Software revenue; Services revenue; and revenue from Other activities. Software revenue principally comprises software licences (for both Cerillion and third-party products), related support and maintenance fees, and managed services fees. Services revenue is generated by software implementations and ongoing account development work. Revenue from Other activities includes the reselling of third-party hardware, hosting fees and rebillable expenses.

Gross margin was slightly ahead of the prior year at 81.5% (2024: 80.5%), mainly reflecting higher day rates on key implementation projects, favourable licence revenue mix and lower third-party costs.

Operating expenses increased only slightly to £16.7m (2024: £16.5m). The rise resulted from higher headcount and inflation, offset by favourable foreign exchange and higher capitalisation of development costs. Personnel costs within operating expenses were 8% higher at £10.2m (2024: £9.5m).

Adjusted EBITDA for the year increased by 11% to £23.1m (2024: £20.7m), driven by higher revenue, favourable foreign exchange and higher day rates on key implementation projects. This also reflected a £0.3m tax credit for R&D costs relating to the new, merged R&D expenditure credit scheme, the benefit of which was shown within the tax line in the prior year. The Board considers adjusted EBITDA to be a key performance indicator for Cerillion as it adds back key non-cash transactions, being share based payments, depreciation and amortisation.

Investment in new product development continued with a 34% increase in R&D effort versus the prior year. The amount capitalised during the year was £1.8m (2024: £1.3m) and the amount amortised was £1.1m (2024: £1.0m). Expenditure on tangible fixed assets was £0.4m (2024: £0.2m). Operating profit increased by 12% to £20.6m (2024: £18.4m).

Adjusted profit before tax rose by 10% to £21.8m (2024: £19.8m) and adjusted earnings per share increased by 8% to 56.5p (2024: 52.2p). On a statutory basis, profit before tax increased by 10% to £21.7m (2024: £19.7m) and earnings per share increased by 9% to 56.3p (2024: 51.7p).

Cash Flow and Balance Sheet

The Group continued to generate strong cash flows and closed the financial year with net cash5 up by 15% to £34.4m (30 September 2024: £29.9m). This was after £4.1m of dividend payments (2024: £3.5m). Total debt at the financial year-end remained £nil (2024: £nil).

Dividend

The Board is pleased to propose a 15% increase in the final dividend to 10.6p per share (2024: 9.2p). Together with the interim dividend of 4.8p per share (2024: 4.0p), this brings the total dividend for the year to 15.4p per share (2024: 13.2p), an increase of 17%.

The dividend, which is subject to shareholder approval at the Company's Annual General Meeting on 19 February 2026, is payable on 24 February 2026 to those shareholders on the Company's register as at the close of business on the record date of 16 January 2026. The ex-dividend date is 15 January 2026.

Operational Overview

We completed two major implementations during the financial year. The first of these was for Virgin Media Ireland, when in July 2025 we went live with the mobile customer base. This project involved complex integration with a number of upstream and downstream systems, utilising the Company's TM Forum Open APIs, and close coordination with a large systems integrator team. We are now working on an additional phase to migrate Virgin Media Ireland's fixed-wire customer base, which we expect to complete in 2026. The second implementation that we completed was for Paratus, a leading provider of connectivity solutions in Southern Africa. This included integration with a new, Nokia 5G mobile network to enable the introduction of mobile services.

We significantly increased our investment in R&D over and above last year's level, with a 34% increase in effort, including an increased focus on AI. The second of the two annual new releases of our product set, Cerillion 25.2, went live in early October 2025 and featured a new Model Context Protocol ("MCP") Server and a powerful suite of AI Agents that brings conversational intelligence to all aspects of a Communications Services Provider's business.

The Billing Agent is at the heart of the new release and is the Company's first fully featured AI Agent. It transforms the way in which Cerillion's customers, and their end-customers interact with financial information, with users now able to ask questions, explore insights and obtain clear explanations about bills, payments and transactions through natural language conversation. Customer service representatives can use it in call centres and end-users may access it via our Self Service portal and Mobile App.

Our new suite of AI Agents represents an advance on our earlier AI Assistants and facilitate intelligent, conversational experiences across all major business domains. They include Sales Agent, Workflow Agent, Catalogue Agent, and Promotions Agent. Each is focused on enabling users to manage complex operations, streamline decisions, and arrive at outcomes faster, through a natural, chat-based interface.

The new MCP Server powers our new AI Agents and provides a foundation for multi-agent collaboration, with the AI Agents integrated with Cerillion's TM Forum-certified Open APIs. This means that our customers have full flexibility to build a connected AI ecosystem specifically tailored to their business needs.

Cerillion 25.2 has also delivered a series of major platform enhancements that further strengthen its position as the industry's most open and composable BSS/OSS2 suite.

The new Service Catalogue is a new module in our suite and is designed to make it easier for customers to define and manage resource-facing services. It has been built on the same publishing engine and lifecycle management framework as our existing Enterprise Product Catalogue, which is used to manage customer-facing products and promotions, and provides a unified approach to configuration and governance, while operating independently to define how services are fulfilled. Used together, the Enterprise Product Catalogue and Service Catalogue seamlessly link product design and service fulfilment, and therefore dramatically reduce the time for our customers to configure, test and launch their new offerings.

Cerillion's Mobile App now uses the same composable technology framework introduced with Cerillion's next-generation Self Service platform, enabling customers to tailor features, user journeys and digital experiences to their exact needs. The Mobile App may be used as a companion to Self Service or on a standalone basis, providing maximum flexibility and utility across digital channels.

The new release also launched a completely refreshed Interconnect Manager. It has a new user interface and cloud deployment capability and delivers a more intuitive experience. It also improves operational efficiency for managing interconnect partner settlements, routing and billing.

In October 2025, the Company achieved its first two TM Forum Open Digital Architecture Component Certifications. This is a key milestone in ensuring interoperability and future-proofing for customers.

We are pleased to highlight the Company's inclusion in two Gartner reports published in late August 2025; "Gartner's Magic Quadrant™ for AI in CSP Customer and Business Operations"* and "Critical Capabilities for AI in CSP Customer and Business Operations"**. We believe our inclusion in these reports reflects our ongoing commitment to embed advanced AI into our BSS/OSS2 suite to help customers streamline operations, enhance the end-user experience and accelerate innovation. Earlier in the year, Cerillion was also included as a Representative Vendor in the "Gartner Market Guide for CSP Customer Management and Experience Solutions", published in June, and in March, we were included in the "Gartner Market Guide for CSP Revenue Management and Monetization Solutions".

We were also delighted to be named as a Major Player in the "IDC MarketScape: Worldwide Customer Experience Platforms for Telecommunications 2025 Vendor Assessment" (doc # US52580525, August 2025). We see this as further evidence of our growing profile in the industry.

The back-order book at 30 September 2025 stood at £56.9m (2024: £46.9m), made up of £47.4m of sales contracted but not yet recognised (2024: £37.7m) together with £9.5m of annualised support and maintenance revenue (2024: £9.2m). We expect about 33% of the £47.4m contracted-but-not-yet-recognised sales will be recognised within 12 months.

*Gartner Magic Quadrant for AI in CSP Customer and Business Operations, Pulkit Pandey, Amresh Nandan, Will Rice, Mounish Rai, 26 August 2025

**Gartner Critical Capabilities for AI in CSP Customer and Business Operations, Pulkit Pandey, Amresh Nandan, Will Rice, Mounish Rai, 26 August 2025.

Outlook

We continue to view the business's growth potential very positively. Our subscription-based product is unrivalled in its approach, and we are pleased with the progress we have made in advancing our offering and improving the Company's profile in our marketplace. The two major wins we secured in the year provide further proof points that will enhance our credentials to compete for larger contracts in the future.

The back-order book, which is at a new high, continues to underpin revenue visibility, and the new customer sales pipeline, also at a record level, includes some very exciting and substantial opportunities, which are at varying stages of the discussion process. We expect to make very good progress over the new financial year and will continue to invest in the business to support growth. Cerillion's very strong balance sheet, with its significant net cash position and very robust cash flows, enables us to think ambitiously and reinforces our continued confidence in the Company's prospects.

Notes

Note 1 Recurring revenue includes support and maintenance, managed service, Skyline and third-party hardware and hosting revenue reported in the year.

Note 2 "BSS/OSS" refers to business support systems and operations support systems.

Gartner Disclaimer:

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GARTNER and MAGIC QUADRANT are registered trademarks of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 September 2025

All transactions are attributable to the owners of the parent.

* Adjusted earnings before interest, tax, depreciation and amortisation ("EBITDA") is calculated by taking operating profit and adding back depreciation & amortisation and share-based payment charge.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 September 2025

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 30 September 2025

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 September 2025

NOTES TO THE ACCOUNTS

1 Critical accounting estimates and judgements and other sources of estimation uncertainty

1 (a) Critical accounting estimates and judgements

The preparation of Financial Statements under IFRS requires the use of certain critical accounting assumptions, and requires management to exercise its judgement and to make estimates in the process of applying Cerillion's accounting policies.

Judgements

(i) Revenue recognition

The Group assesses the products and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a product or service (or bundle of products and services) that is distinct. This assessment is performed on a contract-by-contract basis and involves significant judgement. The determination of whether performance obligations are distinct or not affects the timing and quantum of revenue and profit recognised in each period. Company specific factors considered for this judgement include, but are not limited to, if the customer can benefit from the software without accompanying professional services, hosting of the system, bundling of services, stand-alone selling price and the availability and acceptance by the customer of the same.

Estimates

(i) Revenue recognition

For contracts where goods or services are transferred over time, revenue is recognised in line with the percentage completed in terms of effort to date as a percentage of total forecast effort. Total forecast effort is prepared by project managers on a monthly basis and reviewed by the project office and senior management team on a monthly basis. The forecast requires management to be able to accurately estimate the effort required to complete the project and affects the timing and quantum of revenue and profit recognised on these contracts in each period. Changes in assumptions in relation to project percentage completed in terms of effort could result in a material change to services revenue recognised in the financial year. A 3% increase/decrease in the percentage completed could increase/decrease the Group's revenue by approximately £1,526,000 (2024: £1,601,000).

1 (b) Other sources of estimation uncertainty

(i) Recoverability of trade debtors and accrued income

Management use their judgement when determining whether trade debtors and accrued income are considered recoverable or where a provision for impairment is considered necessary. The assessment of recoverability will include consideration of whether the balance is with a long-standing client, whether the customer is experiencing financial difficulties, the fact that balances are recognised under contract and that the products sold are mission-critical to the customer's business. Refer to notes 13 and 16.

(ii) Calculation of future minimum lease payments

The calculation of lease liabilities requires the Group to determine an incremental borrowing rate ("IBR") to discount future minimum lease payments. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease.

2 Segment information

The Group is organised into three main business segments for revenue purposes.

Under IFRS 8 there is a requirement to show the profit or loss for each reportable segment and the total assets and total liabilities for each reportable segment if such amounts are regularly provided to the chief operating decision-maker. There are no other material items that are separately presented to the chief operating decision-maker.

In respect of the profit or loss for each reportable segment the expenses are not reported by segment and cannot be allocated on a reasonable basis and, as a result, the analysis is limited to the Group revenue.

Assets and liabilities are used or incurred across all segments and therefore are not split between segments.

The following table provides a reconciliation of the revenue by segment to the revenue recognition accounting policy. Revenue recognised on performance obligations partially satisfied in previous periods was £28,621,000 (2024: £25,079,000).

Accounting policy descriptions:

(i) Sale of standard licensed products; (ii) Sale of additional licences and licence renewals; (iii) Ongoing account development work; and (iv) Third-party time, material works, licences and re-billable expenses

(a) Geographical information

As noted above, the internal reporting of the Group's performance does not require that the statement of financial position information is gathered on the basis of the business streams. However, the Group operates within discrete geographical markets such that capital expenditure, total assets and net assets of the Group are split between these locations as follows:

All revenue is contracted within the UK subsidiary Cerillion Technologies Limited and therefore all revenue is domiciled in the UK & Europe segment.

Cerillion receives greater than 10% of revenue from individual customers in the following geographical regions:

3 Operating profit

The impairment losses on financial assets relates to the provisions made against the risk of non-recovery of receivables.

4 Finance income

5 Finance costs

6 Taxation

(a) Analysis of tax charge for the year

The tax charge for the Group is based on the profit for the year and represents:

Periodically, the Group is subject to inquiries from tax authorities. There is currently ongoing discussion with the India tax authority in relation to the period 2021 to 2022. We firmly consider all Group submissions made to be valid and fully supportable and accordingly no provision has been made. If necessary, the Group will record the outcome of any discussion in the period to which such resolution occurs.

Other income in the consolidated statement of comprehensive income relates to a 20% taxable credit on qualifying research and development costs under the new merged RDEC scheme, totalling £324,000. This item is treated as non-cash within the consolidated cash flow statement, as it will discharge part of the corporation tax payable by the Group for the year.

7 Dividends

(a) Dividends paid during the reporting period

The Board paid the final dividend in respect of 2024 of 9.2p per share, on 20 February 2025, and declared and paid an interim 2025 dividend of 4.8p (2024: 4.0p) per share on 20 June 2025. Total dividends paid during the reporting period were £4,131,000 (2024: £3,542,000).

(b) Dividends not recognised at the end of the reporting period

Since the year end the Directors have proposed the payment of a dividend in respect of the full financial year of 10.6p per fully paid Ordinary Share (2024: 9.2p). The aggregate amount of the proposed dividend expected to be paid out of retained earnings at 30 September 2025, but not recognised as a liability at the year end is £3,127,000 (2024: £2,717,000).

8 Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the year.

9 Intangible assets