Alfa Financial Software Holdings reported first-half 2026 revenue of £65.1 million, a 4% increase year-over-year on a reported basis and 5% at constant currency. The company’s shares rose 6.77% in pre-market trading to $173.40 following the results.
Subscription revenue, which now represents 37% of total sales, climbed 14% to £24.1 million. Annual recurring revenue (ARR) advanced 17% to £48.5 million, while total contract value (TCV) grew 17% to £247 million. Net revenue retention remained robust at 110%, according to executives.
Operating profit for the period reached £18.4 million, with an operating margin of 28.3%. Cash conversion stood at 76%, below the full-year guidance range of 80% to 90%. The effective tax rate was 26% for H1 2026. Severance costs, including legal fees, totaled £1.6 million, split between cost of sales and SG&A.
The company paid £13.7 million in dividends during the half, comprising a £4.5 million ordinary dividend and a £9.2 million special dividend. Capitalized software investment amounted to £19.6 million, primarily directed toward originations, fleet, commercial finance, and AI capabilities.
Alfa’s customer base expanded to 44 subscription clients, up from 41 in the prior year. Among these, 24 were on Alfa Cloud or Alfa Systems 6 (AS6), with three additional prospects in the late-stage pipeline. Fifteen customers remained on Private Cloud, while two continued on the legacy V4 platform. Delivery revenue reached approximately £34.3 million, a 5% year-over-year increase.
Chief Executive Andrew Denton highlighted the shift toward recurring revenue, noting that subscription sales now account for 37% of total revenue. He added that much of the subscription growth remains in the implementation phase, describing it as "a lot of that revenue is in the oven, it's just not fully cooked."
The company also announced that Andrew Dickson will succeed Duncan Magrath as CFO, effective September 16. Magrath will retire from the board, with Dickson joining the board at the same time.
Alfa’s pre-tax foreign exchange hedging strategy resulted in a £0.3 million loss on U.S. dollar hedges in 2026, compared with a $1.7 million gain in 2025. The company’s perpetual license tail balance sheet value stood at £4.8 million at the half year, projected to decline to £3.9 million by year-end.
Shares of Alfa Financial Software, which trade under the ticker ALFAAL, have ranged between $140.40 and $252.00 over the past 52 weeks.
