Interim Results

18 November 2025

Calnex Solutions plc

("Calnex", the "Company" or the "Group")

Interim Results

Good progress in H1, delivering revenue growth while investing in areas of strategic opportunity

Calnex Solutions plc (AIM: CLX), a leading provider of test and measurement solutions for the global telecommunications, cloud computing and defence markets, announces its unaudited results for the six months ended 30 September 2025 ("H1 FY26" or "the Period").

Financial Highlights 

Financial Highlights

Operational Highlights

Outlook

Tommy Cook, Chief Executive Officer and founder of Calnex, said:

"Calnex is making solid progress as we continue to evolve in line with the shifting market dynamics across our markets. Our heritage in telecoms standards puts us at the forefront of innovation that is increasingly relevant across diverse end markets, with traction building in defence & government and cloud computing & datacentre markets as we look to understand the market dynamics and discover new opportunities.

We enter the second half with encouraging momentum and a clear strategy to drive growth. Our strong balance sheet enables us to continue investing in our products, team and routes to market to capture the growing demand for network infrastructure testing solutions, and we remain confident in delivering a full year performance in line with market expectations."

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Overview of Calnex

Calnex Solutions designs, produces and markets test and measurement instrumentation and solutions for the telecoms, cloud computing and defence industries. Calnex's portfolio enables R&D, pre-deployment and in-service testing for network technologies and networked applications, enabling its customers to validate the performance of the critical infrastructure associated with telecoms and cloud computing networks and the applications that run on it.

To date, Calnex has secured and delivered orders in 68 countries across the world. Customers include BT, China Mobile, NTT, Ericsson, Nokia, Intel, Qualcomm, Nvidia and Meta.

CEO Statement

Overview

Calnex has delivered good progress in the first half, delivering revenue growth, resilient gross margins and ongoing investment into areas of strategic opportunity. The business continues to evolve in response to shifting market dynamics and is now a substantially more diverse organisation, with product innovation creating multiple avenues of future growth.

The Group has delivered revenue growth of 9% to £8.0m (H1 FY25: £7.3m), a reduced loss before tax of £0.9m (H1 FY25: £1.3m) and stable gross margins of 76% (H1 FY25: 74%). We maintain a healthy balance sheet with a cash balance of £10.3m as at period end (H1 FY25: £8.6m), enabling sustained investment in product development and entry into new markets. We have maintained a strict control on costs, while selectively investing in revenue generating areas.

Our heritage in telecoms standards puts us at the forefront of innovation across sectors, with significant opportunities presenting themselves in government & defence and cloud computing & datacentres sectors. Our Network and Application Assurance products (NAA) are proving successful in these newer markets in particular, with orders having increased on the comparable period, as anticipated.

We have strengthened our operations and channel, and supported by a healthy balance sheet, continue to selectively invest in the people, products and partners needed to capitalise on future market opportunity.

We are confident in H2 performance and expect to deliver full year results in line with market expectations.

Market backdrop

As both the standards landscape and our products have evolved, so too has the breadth of our end markets and avenues of future growth. Our strategic approach to innovation is led by tracking the higher speeds and standards within the telecoms market - whose robust standards and technology are then adopted by other sectors using networking technologies, such as datacentres.

As a result, our offerings are now seeing increasing uptake across the government & defence and cloud computing & datacentres sectors, as well as telecoms. Reflecting this, our mix of orders across end markets has evolved over the past three years. Cloud computing & datacentres was our largest end market by proportion of orders for the first time in FY25 as customers invest in high-speed connectivity infrastructure. Government & defence, although a smaller percentage of overall orders, has grown steadily and is an area where we see long-term growth opportunity.

Telecoms

While the telecoms market remains subdued, we are seeing signs across all sub-applications that investment in test equipment is increasing, from the purchase of ultra-high-speed testing capabilities, to upgrades within our installed base, as well new sales to existing customers.

In the medium to long term, the underlying telecoms market drivers remain intact. The need for reliable test equipment increases in tandem with the evolution of network infrastructure and the testing requirements that new advances bring. Operators will be required to increase investment in their networks and services as they move towards increased 5G rollout and the emergence of 6G, navigate the changes that come with generative AI, and commence work around the 1.6Tb/s wavelength.

Meanwhile, standards development is continuing, guiding the application of these telecoms technologies into other sectors, such as the recently approved 'PTP profile' for timing in datacentres, presenting further opportunity for Calnex.

Cloud computing & datacentres

We are actively deploying resource into the fast-moving cloud computing & datacentre market to identify the optimal opportunities for Calnex. Global AI workloads are expected to increase datacentre demand by more than 50% by 2030, forcing substantial upgrades to network infrastructure.[1] This offers opportunity and challenge in equal measure, given the pace and scale of investment. We continue to enjoy repeat orders from existing customers and are exploring the potential for our products in areas such as edge computing and datacentre infrastructure.

Government & defence

The government and defence sector is proving an exciting opportunity for Calnex. The industry's need to ensure reliable application performance in high-stakes military environments is driving demand for our NAA products, with success in the US federal space as per the well-documented increase in government spending on defence technology in the US and Europe alike. We are starting to better understand the different characteristics and sales patterns of the market in contrast to our more established markets. Opportunities are largely tied to major projects for industry leaders, so order values tend to be large, but the decision-making process is difficult to predict, making order visibility challenging. The initial focus of the year has been actively pursuing opportunities in the US, with a dedicated resource to focus on federal accounts established in FY25. We are now exploring opportunities for greater European activity.

We continue to have a clear strategy for establishing our footprint in this evolving sector and we aim to maintain a consistent revenue profile, whilst building a sustainable business model.

Product innovation

In H1 FY26 we have continued to channel R&D spend into product innovation both within the telecoms market and within other market segments showing the most near-term resilience and potential, as described above.

Lab synchronisation driving growth in telecoms and adjacent markets

We have an active development program to track the higher speeds and standards within the telecoms market and produce next-generation capabilities to our solutions. Paragon neo-S, our 800Gb/s synchronisation testing solution launched in H2 FY25, received steady orders in H1 FY26, in line with our expectations. Paragon neo-S is the industry's first synchronisation testing solution to sub-billionth of a second accuracy for multiple rates, ensuring highly accurate timing. Designed to cater to the test requirements of enhanced 5G and O-RAN timing standards as well as datacentre requirements, the product feeds into both the core telecoms sector and the datacentre market, exemplifying the relevance of synchronisation testing, originally focused on telecoms, across other adjacent market segments. For example, post period-end, we were pleased to secure a significant repeat order for our Field sync solution from a major hyperscaler investing in its datacentre operations.

We continue to see opportunities for revenue growth from our substantial existing telecoms customer base through adoption of Calnex Support Service (CSS) maintenance agreements, providing customers with access to ongoing software updates, new feature releases and technical support, ensuring their installed platforms remain aligned to the latest standards and evolving testing requirements. With a large installed base of units, this presents an area of potential future incremental revenue.

Post-period end, we were pleased to announce a partnership with Viavi Solutions for a suite of solutions for Open RAN testing, to simply and cost-effectively pre-test Open RAN systems prior to validation. This increases our market penetration by selling joint solutions that offer a compelling case against other products available, providing us with access to Viavi's large installed base and the potential to upsell. The partnership has seen positive early customer feedback, not only positioning Calnex as a leader in telecoms infrastructure innovation but also pointing to a vertical within telecoms that is seeing growth.

In H1 FY26, Calnex commenced preparation to deliver a 1.6Tb/s synchronisation solution in calendar year 2027, and we are entering into an Early Access program for the cutting edge high-speed chip set necessary to support 1.6Tb/s optical interfaces. Crucially, we are seeing demand for high-speed synchronisation testing in both the telecoms market and other standards-driven market segments, as networks move to the next wave, underpinning our product innovation strategy which will in turn drive order growth.

NAA progress across cloud computing & datacentres and government & defence

Our NAA testing platforms performed well in H1 FY26, with success in the US government & defence sectors being the primary contributors to order growth. This includes the SNE emulation network range such as SNE-X supporting 400GbE interfaces, as well as NE-ONE application testing, which are proving relevant solutions applicable to a broad range of needs. The level of product innovation for our NAA platforms has continued in H1 FY26 in line with our go-to-market strategy, which is unlocking significant opportunity in the defence, federal and satellite markets, where multi-domain applications testing is increasingly necessary. SNE infrastructure validation is also relevant to the cloud computing industry and we continue to work closely with customers on the use of 400G SNE-X, to ensure alignment with the evolving customer requirements of the datacentre market.

Our market discovery activities increased in H1 FY26 and we have contracted an additional Product Management resource to support the AI wave and target emerging opportunities, such as modelling algorithms, inference testing and other AI-related opportunities.

Channel Partner Network and Operational Enhancements

We continue to strengthen and broaden our global partner network, scaling our market presence across both established and emerging sectors, and are benefitting from broadened sales coverage as a result. New North American partners were onboarded in the period and we have now moved in the enablement phase of partner onboarding.

We are refreshing our channel relationship with Viavi (formerly Spirent) in line with our new channel strategy. With the engagement with Viavi Wireless already underway, we look to continue to engage with the group who have recently joined Viavi from Spirent, in areas where we have traditionally been successful working together.

Operationally, we have strengthened our global sales and marketing infrastructure to support continued growth. Senior appointments across Sales, Marketing and Partner Management, including the addition of a US-based Partner Manager, are already demonstrating positive impact through new customer wins. Meanwhile, the additional Product Management resources across cloud computing & datacentres are generating opportunities to support the AI wave.

Outlook

We enter the second half of the year with encouraging momentum and a clear strategy to drive growth across both established and new market segments. The Board remains confident in delivering continued growth in the second half, with full year performance anticipated to be in line with market expectations.

The progress achieved in expanding the channel network and implementing operational enhancements provides a strong foundation for further progress. Supported by a robust balance sheet, Calnex will continue to invest in its people, products and partners to ensure it is well placed to capture the opportunities arising from the ongoing evolution of global network infrastructure and the increasing demand for test and measurement solutions across our end markets.

We remain well positioned to convert the telecoms sales pipeline once the trading environment fully recovers, but we are not reliant on this for continued growth, driven by strong traction in newer verticals such as US defence, which represents a significant long-term growth opportunity.

Financial Review

The Group experienced revenue growth of 9% in the Period which, alongside a two percentage point improvement in gross margin, resulted in an improvement in profitability compared to the prior period. Gross margins have remained strong at 76% and all costs are tracking to plan. We continue to benefit from a strong cash balance with the Period end cash balance of £10.3m.

Key performance indicators

1 EBITDA after charging R&D amortisation.

Revenue

Revenue generated in the first half of the year was £8.0m, representing a 9% growth on H1 FY25 revenue of £7.4m. All regions experienced growth in revenues, with Americas increasing revenues 5% on the prior period to £3.0m (H1 FY25: 2.9m), North Asia growing 18% to £2.1m (H1 FY25: 1.8m) and ROW improving by 9% to £2.9m (H1 FY25: £2.7m)

The split of revenues across the regions was broadly in line with the prior period. Americas accounted for 38% of total revenues (H1 FY25: 39%), ROW 36% (H1 FY25: 37%), and North Asia 26% (H1 FY25: 24%) in the year.

In H1 FY26, 75% (H1 FY25: 75%) of the Group's revenues were generated from the sale of bundled hardware and software products, with 25% (H1 FY25: 25%) of revenues coming from software support and extended warranty programmes. Bundled hardware and software revenues grew 9% on the prior period and revenues from software support and extended warranty programmes increasing by 10% on prior period revenues, demonstrating the value our customers place on ensuring they can continue to receive support on our offerings. 

Gross Margin

Gross Profit for the Period was £6.1m, an improvement of £0.7m on the prior period, as a result of the increase in revenue volumes and a two-percentage point uplift in margin. Gross margin remained robust at 76% (H1 FY25: 74%) driven by a strong product mix. Gross margin is net of commissions payable to our channel partners and can fluctuate with product mix and timing of the hardware and software bundles shipped in a Period.

The Board continues to monitor the effects of potential US tariff arrangements as we work with our customers and partners to navigate the new landscape effectively.

Underlying EBITDA

Underlying EBITDA is EBITDA stated after charging R&D amortisation. Underlying EBITDA was a £0.7m loss in the Period (H1 FY25: £1.1m loss), an improvement of £0.4m on the prior period, driven predominantly by the growth in revenue, improved gross margin and increased other income, offset partially by increases in administration costs and R&D amortisation. As a result, Underlying EBITDA margin improved from -15% in the prior period to -9%.

Other income

The new merged R&D expenditure credit (RDEC) scheme combines the previous RDEC and the SME R&D tax reliefs into a single scheme for accounting periods beginning on or after 1 April 2024. The merged scheme provides a 20% expenditure credit on qualifying expenditure, which is allocated to 'other income' in the profit and loss account and is taxable. The 86% rate on qualifying expenditure under the previous SME scheme is no longer available. 

The mechanics of the merged scheme allow for recognition to be more predictable and the Group has recognised £0.3m of RDEC income within other income for the Period.

Administration costs

Administration costs (excluding depreciation and amortisation) increased by £0.4m on the prior period to £4.9m (H1 FY25: £4.6m), with £0.3m of the increase coming from the planned increases to Sales, Marketing and Partner Management headcount and inflationary salary cost increases. The remaining £0.1m of the increase was as a result the fluctuations in the USD:GBP exchange rates at the start of the Period. Whilst cost controls have continued across all cost lines and departments, the Group continues to maintain investment in product development and customer engagement as the Board views this is fundamental to support future growth.

Amortisation of R&D Costs

Amortisation of R&D costs in H1 FY26 was £2.3m (H1 FY25: £2.1m). The increase on the prior period is due to the impact of the 5-year amortisation profile and growth in capital spend in prior years.

Loss before tax

Loss before tax was £0.9m in the Period (H1 FY25: £1.3m loss), with the Underlying EBITDA drivers detailed above resulting in a year-on-year improvement of £0.4m. Loss before tax margin was -12% compared to -18% in the prior period.

Tax

The Group's loss-making position resulted in a tax credit of £0.2m for the Period (H1 FY25: £0.3m), based on an effective tax rate of 25% for this point in the year.

Earnings per share

Basic earnings per share was a loss of 0.80p in the Period (H1 FY25: 1.13p loss), with the movement compared to the prior period attributed to the improvement in profitability in the current Period.

Cashflows

The Group experienced a cash outflow of £0.6m in the Period (H1 FY24: £3.3m), reflecting the loss made in the Period offset by positive movements in working capital.

Working capital in the Period decreased by £1.3m (H1 FY25: £1.3m increase), predominantly due to positive movements in trade receivables. The 31 March 2025 trade receivable balance of £5.3m was higher than prior periods due to the timing of shipments and increased trading in Q4 of FY25 and this cash was collected throughout H1 FY26, bringing the balance at 30 September 2025 to £2.4m.

Cash used in investing activities is principally cash spent on R&D activities which is capitalised and amortised over five years. Investment in R&D in the Period was £2.8m, slightly above prior period (H1 FY24: £2.6m).

The Group places surplus cash balances not required for working capital into high interest deposit accounts, either overnight, weekly or notice accounts.

Closing cash at 30 September 2025 was £10.3m (30 September 2025: £8.6m; 31 March 2025: £10.9m).

Dividend

The Board retains full confidence in future growth and accordingly has resolved to pay an interim dividend of 0.31 pence per ordinary share on 19 December 2024 to those shareholders on the register as at 28 November 2025, the record date (FY25 Interim dividend 0.31p). The ex-dividend date is 27 November 2025.

Calnex Solutions plc

Consolidated Statement of Comprehensive Income

For the period ended 30 September 2025

Calnex Solutions plc

Consolidated statement of financial position

For the period ended 30 September 2025

Calnex Solutions plc

Consolidated cashflow statement

For the period ended 30 September 2025

Calnex Solutions plc

Consolidated statement of changes in equity

For the period ended 30 September 2025

Calnex Solutions plc

Notes to the interim consolidated financial statements

For the period ended 30 September 2025

1. General information

The interim consolidated financial statements cover the consolidated entity Calnex Solutions plc and the entities it controlled at the end of, or during, the interim period to 30 September 2025 ("the Group").

Calnex Solutions plc ("the Company") is a public limited company and is domiciled and incorporated in Scotland.

The registered office is:

Oracle Campus

Linlithgow

West Lothian

EH49 7LR

The principal activity of the Group is the design, production and marketing of test instrumentation and solutions for network synchronisation and network emulation enabling its customers to validate the performance of critical infrastructure associated with telecommunications networks, enterprise networks and data centres.

The interim consolidated financial statements for the period ended 30 September 2025 are unaudited, and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. They do not therefore include all the information and disclosures required in annual statutory financial statements and should be read in conjunction with the Group annual report and accounts for the year ended 31 March 2025.

The Group annual report and accounts for the year ended 31 March 2025 were approved by the Board of Directors on 19 May 2025 and have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement made under Section 498(2) or (3) of the Companies Act 2006.

The interim consolidated financial statements for the period ended 30 September 2025 were approved by the Board of Directors on 17 November 2025.

2. Basis of preparation

The interim consolidated financial statements for the period ended 30 September 2025 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board, endorsed by, and adopted for use in, the United Kingdom.

The accounting policies and methods of computation adopted are consistent with those applied in the Group's consolidated financial statements for the year ended 31 March 2025 and have been applied consistently to all periods presented.

There have been no new standards or amendments to existing standards effective from 1 April 2025 that are applicable to the Group or that has had any material impact on the financial statements and related notes as at 30 September 2025.

Changes to IFRS18 Presentation and Disclosure of Financial Statements, are effective for reporting periods beginning on or after 1 January 2027, as such will not be represented until the presentation of the financial statements for the year ended 31 March 2028.

3. Going concern

The interim consolidated financial statements have been prepared on the basis that the Group will continue as a going concern.

In adopting the going concern basis, the Directors have considered the principal risks and uncertainties of the group, which remain unchanged from those reported in the Group annual report for the year ended 31 March 2025, a copy of which is available on the Company's website at: https://investors.calnexsol.com. The uncertainties arising from the macro-economic backdrop and inflationary pressures are covered by existing risks, and these continue to be closely monitored.

The Board has reviewed cashflow forecasts and availability of cashflow to fund the ongoing operations of the Group. Based on this review, along with regular oversight of the Group's risk management framework, the Board has concluded the going concern basis to remain appropriate.

4. Operating segments

Operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers) in assessing performance and determining the allocation of resources. As the Group has a central cost structure and a central pool of assets and liabilities, the Board of Directors do not consider segmentation in their review of costs or the balance sheet. The only operating segment information reviewed, and therefore disclosed, are the revenues derived from different geographies.

5. Revenue

6. Other income

7. Taxation

8. Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of Ordinary Shares in issue during the year.

Diluted earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the total of the weighted average number of Ordinary Shares in issue during the year and adjusting for the dilutive potential Ordinary Shares relating to share options.

9. Intangible Assets

Included within intangible assets are the following significant items:

10.  Goodwill

The Group tests goodwill for impairment annually, or more frequently if there are indications that the goodwill has been impaired. The Group has an annual impairment testing date of 31 March. As at 30 September 2025, management has reviewed goodwill for indicators of impairment, and has considered the Group's trading performance, the Group's principal risks and uncertainties, and the other assumptions utilised in the value in use calculation. Management has performed sensitivity analyses on the key assumptions both with other variables held constant and with the other variables simultaneously changed. Management has concluded that there are no reasonable changes in the key assumptions that would cause the carrying amount of goodwill to exceed the value in use for the cash generating unit.

No evidence of impairment was found at balance sheet date.

11.  Plant & equipment

12.  Leases

The Group has recognised a right-of use asset and a lease liability for the lease of land and buildings for its head office in Linlithgow, Scotland.

The Group leases IT equipment with contract terms ranging between 1 to 2 years. The Group has recognised right-of use assets and lease liabilities for these leases. 

The Group leases office space in Belfast and Stevenage, as well as one motor vehicle. These leases are low-value, so have been expensed as incurred. The Group has elected not to recognise right‑of‑use assets and lease liabilities for these leases.

Information about the right of use assets and leases for which the Group is a lessee is presented below: