Big Technologies Reports 5% ARR Increase and 14% Adjusted EBITDA Growth in H1 2026 Trading Update

ARR Growth Driven by New Contracts and Geographic Expansion

Big Technologies reported Annual Recurring Revenue of a353.2m for H1 2026, up from a350.9m in H1 2025, marking a 5% increase on a constant currency basis. This growth stems primarily from the implementation of new contracts secured in 2025 and early 2026. The company emphasized that this revenue increase reflects successful contract deployments and strong customer acquisition momentum across multiple regions.

Operating a subscription-based, SaaS-like model via its Buddi platform, Big Technologies serves the criminal justice sector with advanced electronic monitoring solutions. This scalable technology has enabled tailored deployments across various use cases and geographies, supporting international expansion. Management highlighted recent major contract wins, including a Chile contract, a three-year renewal in Guatemala, and six new US contracts, underscoring growing global demand and potential continued revenue growth into 2027.

Revenue Growth Achieved with Cost-Neutral Leadership Restructuring and Operational Efficiency

Total revenue increased 6% on a constant currency basis to a326.9m in H1 2026 from a325.4m in H1 2025. Management described this growth as achieved through a "cost neutral approach to investment," indicating revenue expansion without significant cost increases. Acting CEO Charles Lewinton noted, "Over the past year, we have strategically strengthened the Group's leadership and operational structure on a cost-neutral basis, driving improved performance and profitability." This disciplined approach has generated notable operational leverage, reflected in profitability metrics.

Adjusted EBITDA rose 14% to a314.2m in H1 2026 compared to a312.5m in H1 2025, significantly outpacing revenue growth. The Adjusted EBITDA margin expanded by 3 percentage points to 53%, illustrating operational leverage. However, gross profit margin declined by 1 percentage point to 67%, influenced by margin mix changes including the full-service Northern Ireland contract, which carries lower gross margins but does not materially impact EBITDA.

Enhanced Cash Flow Despite Litigation Settlement Payments

Adjusted Free Cash Flow increased 42% to a39.6m in H1 2026 from a36.7m in H1 2025, driven by strong underlying cash generation and a reduction in exceptional Buddi litigation legal fees from a35.3m to a32.6m. The company made a333.4m in settlement payments related to Buddi litigation during H1 2026. Despite these significant outflows, operational cash generation remained robust.

Cash at bank stood at a367.1m as of 30 June 2026, down from a396.7m at H1 2025 end, reflecting litigation settlements partially offset by positive free cash flow. No guidance was provided on future litigation payments, leaving uncertainty around remaining obligations. The current cash position offers substantial financial flexibility for operations, growth investments, and managing litigation outflows.

Gross Margin Slightly Compressed Due to Customer Mix and Northern Ireland Contract

Gross profit margin decreased by 1 percentage point to 67% in H1 2026 from 68% in H1 2025, attributed to a shift in margin mix including the full-service Northern Ireland contract. Such contracts involve greater operational responsibilities, resulting in lower gross margins but supporting overall profitability through scale and EBITDA growth.

This modest margin compression has not significantly constrained profitability, as evidenced by the 14% Adjusted EBITDA growth. Management’s cost discipline and operational leverage have offset lower-margin contracts. The company did not provide forward margin guidance, with further details expected in the full interim results on 14 September 2026.

New Product Launches AlcoTag and AlcoBreath Bolster Growth Strategy

Big Technologies emphasized its strong position for growth in H2 2026 and beyond, supported by the Chile contract, Guatemala renewal, six US wins, and new products AlcoTag and AlcoBreath. These alcohol-monitoring solutions expand the Group’s criminal justice portfolio. The announcement did not disclose revenue impact, implementation timelines, or customer adoption, leaving commercial effects to be revealed in future disclosures.

Product innovation aims to broaden the addressable market and reduce reliance on traditional electronic monitoring. Management’s focus on these products alongside new contracts highlights their strategic importance for competitive differentiation and growth, although financial targets and market adoption remain undisclosed.

Litigation Cost Normalization Supports Cash Flow and Working Capital

Exceptional legal fees related to Buddi litigation decreased 51% year-on-year from a35.3m in H1 2025 to a32.6m in H1 2026, reflecting progress toward litigation resolution following a333.4m in settlement payments. While total settlement amounts and timelines remain undisclosed, reduced legal expenses positively impacted Adjusted Free Cash Flow.

If litigation concludes, the absence of exceptional legal fees could structurally improve cash flow for investments, dividends, or balance sheet strengthening. Investors will look to the full interim results for updates on litigation reserves and settlement outlook.

Global Contract Wins Indicate Expanding International Demand

Recent contract wins in Chile, Guatemala, and the US demonstrate Big Technologies’ expanding customer base beyond the UK. Although financial details and implementation schedules were not disclosed, these wins indicate growing global demand and competitive traction for the Buddi platform.

The Guatemala renewal signals strong customer retention, while six new US contracts highlight successful penetration into a major criminal justice market. Further details on contract values and ARR contributions are expected in the upcoming interim results.

Strong Balance Sheet Provides Flexibility Amid Litigation Risks

With a367.1m cash at bank as of 30 June 2026, Big Technologies holds substantial liquidity to support growth, operations, and litigation settlements. The cash position represents roughly 2.5 times trailing six-month revenue, underscoring financial strength.

Remaining litigation obligations pose tail risks, with no disclosure on total expected settlements or timelines. The reduction in legal fees suggests progress, but uncertainty remains. Management is anticipated to provide further updates in the full interim results.

Acting CEO Expresses Confidence in Growth Following Operational Restructuring

Charles Lewinton, Acting CEO, commented: "The Group has delivered strong progress in H1 2026 with accelerating revenue growth building on the return to growth in H2 2025. We have strengthened leadership and operations on a cost-neutral basis, enhancing performance and profitability. I thank our talented team for delivering market-leading services and launching new products that will drive future growth. These results provide a solid foundation, and I look forward with confidence to what we can achieve."

This statement highlights the return to growth momentum, successful leadership restructuring, operational execution, and new product innovation as key growth drivers. However, it does not include specific financial guidance. Investors will await the full interim results for detailed outlook.