Shares in AIM-listed Eagle Eye (LON:EYE) soared to a new 12-month high after FY26 results beat its previously raised guidance. The AI-powered loyalty and promotions platform said EBITDA would ‘materially’ beat forecasts thanks to strong H2 trading.
Flying high
For the year to end-June, Eagle Eye posted underlying revenue of £46.1 million, up 21% on FY25. Within this, ARR (annual recurring revenue) increased 31% to £44.5 million driven by major customer wins.
The firm grew its relationships with existing customers and registered the first customer contracts from its global OEM partnership. Trading in H2 was materially ahead of expectations, matched by strong cash generation allowing the company to reinvest in sales and marketing.
Among new customer wins were one of the UK’s biggest health and beauty retailers, low-cost carrier easyJet (LON:EZJ) and food-to-go retailer Subway. The firm also started a proof of concept trial with a major French grocery retailer and extended its contracts with Auchan, Carrefour, Asda and Morrisons.
The firm expects to continue growing ARR and EBITDA at double digit rates in FY27 due to customer wins and ‘considerably strengthened’ routes to market. In the medium term, it remains on track to reach over £100 million of revenue and a 30%-plus EBITDA margin.
Analyst’s view
House broker Shore Capital commented: ‘Overall we are seeing an important development of Eagle Eye’s model. This provides a potentially high-quality revenue mix and scope for incremental profitability as the platform scales across the customer base.
‘The benefit is already coming through, noting the adjusted EBITDA performance and the margin strengthening in H2’, added the broker. While it kept its FY27 revenue target, it raised its margin forecasts and sees potential for ‘a significant re-rating’ in the medium term.
We flagged Eagle Eye in January, and again in our ‘Five small-caps with big growth potential’ piece in May, and the shares have soared 75% this year. The firm has an exceptional product, which its customers clearly value given the level of new wins and recurring revenue.
The only challenge the firm faces, in our view, is managing its growth trajectory, which is a nice ‘problem’ to have. Its OEM offering has already generated two contracts, but the firm expects between four and eight deals per year.
It has also signed partnerships with Deloitte and others, which increase its enterprise delivery, and it will need to manage these relationships. That means investing in personnel, even if it doesn’t lead to a direct increase in sales people.
The good news is the firm has the resources to invest, with net cash of £16 million at the end of June. As sales grow, and operational leverage kicks in, that cash pile will grow, giving it plenty of options including investing in new products.
Read the press release here: https://eagleeye.com/investors
