Key results
Microlise Group, a UK-based transport software provider, disclosed a 10% decline in revenue on a year-on-year basis for the first half of the fiscal year, with total revenue of 39.50 million. The company attributed the fall mainly to softer OEM revenue and reduced non-recurring hardware sales, effects it said were linked to component shortages and timing issues across certain projects.
Recurring revenue and margins
On the recurring side, Direct Customer Annual Recurring Revenue expanded by 12%, supported by renewals, account growth and new customer wins. Microlise also reported an improvement in adjusted EBITDA margin to 13.2% for the half, up from 5.2% in the second half of fiscal 2025. The company recorded adjusted EBITDA of 5.20 million for the period, reflecting the benefits of restructuring and cost efficiency measures implemented during fiscal 2025.
Outlook
For fiscal 2026, Microlise expects adjusted EBITDA to be in line with market expectations, in the range of 10 million to 11.1 million. The company cautioned that ongoing component shortages could influence the timing of some OEM hardware deliveries in the fourth quarter, which may affect revenue recognition in the short term. Looking further ahead, Microlise anticipates a return to stronger growth in fiscal 2027, citing expansion in Direct Customer ARR as the underpinning for that recovery.
Context and implications
The first-half results show a divergence between hardware-driven revenue streams and recurring software income. While non-recurring hardware sales and OEM engagements weighed on top-line performance during the period, the underlying subscription-based Direct Customer ARR continued to grow, supporting margins and adjusted EBITDA.
Data points
- First-half revenue: 39.50 million (10% year-on-year decline)
- Direct Customer ARR growth: 12%
- Adjusted EBITDA: 5.20 million
- Adjusted EBITDA margin: 13.2% (up from 5.2% in H2 2025)
- Fiscal 2026 adjusted EBITDA guidance: 10 million to 11.1 million