REG - Quartix Technologies - Trading Update

Quartix TechnologiesAnnouncement

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RNS Number : 0756O  Quartix Technologies PLC  08 January 2026

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 as retained as part of UK law by virtue of the European
Union (Withdrawal) Act 2018 as amended.

 

Quartix Technologies plc

 

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

 

Trading Statement

 

Strong growth in subscriptions, ARR, revenue, profit and cashflow

 

Quartix Technologies plc, a leading supplier of subscription-based vehicle
tracking systems, software and services, is pleased to provide an update on
trading for the year ended 31 December 2025 (the "Period").

Estimates provided in this Trading Statement may be subject to revision
following the finalisation of December's trading results and audit.

Financial results

The Board is pleased to report that it expects revenue and adjusted EBITDA
(under current accounting policies(2)) are expected to be ahead of current
market expectations(1).

Free cashflow is expected to have been £5.1m, despite significant outflows in
the Period for: (i) 4G upgrade programme in France (approximately £1.0m);
(ii) restructuring costs in the first half (approx. £0.4m); and (iii)  a
further pre-payment of £0.7m in corporation tax made in December (as the
Company's anticipated profit level means that it is now considered to be a
very large company for HMRC payment-on-account purposes).

The Company ended the year with a cash balance of £5.6m.

Dividend and dividend policy

The Board intends consolidating its separate ordinary and supplementary
dividends into a single ordinary dividend. The new policy governing this will
be detailed in the annual report, and it is also expected that a final
dividend payment of 7.5 pence will be recommended. The total ordinary dividend
for the year would therefore be 10 pence per share, subject to approval of the
new policy and this amount at the AGM.

Annualised recurring revenue ("ARR") and Net Revenue Retention ("NRR")

ARR is the key forward-looking measure of growth for the Company and an
important indicator of shareholder value. ARR reported by the Company relates
solely to committed software subscription revenues and does not include other
service revenues which may recur. The Company's ARR increased by £4.5m (+14%)
during the Period, representing an increase of 25% over the growth achieved in
2024 (£3.6m on constant currency). Measures of ARR and ARR growth are
calculated on a constant-currency basis(3).

For the year as a whole NRR was 98.1% (2024: 95.7%).

The Company aims to achieve further progress in these two key measures in
2026.

Customer acquisition

New customer acquisition during the Period increased by 9% to 7,501 and new
subscriptions increased by 7% to 79,576. The customer base increased by 9% to
32,942, and the total subscription base increased by 11% to 333,922.

The key metrics shown below include growth expressed as a % for the Period
compared to the same period in 2024.

 Country  ARR (£m)   %     Subscription Base (units)  %     Customer Base  %     New Subscriptions (units)  %     New Customers Acquired  %
 UK/EI    19.65      +11%  168,313                    +8%   11,984         +3%   31,125                     +2%   1,599                   +0%
 France   9.94       +15%  91,675                     +14%  9,784          +7%   24,370                     +6%   2,229                   -3%
 USA      3.28       +6%   29,787                     +0%   4,069          +4%   7,168                      +5%   930                     +17%
 Italy    1.96       +43%  20,715                     +42%  3,263          +43%  8,450                      +34%  1,371                   +44%
 Spain    1.27       +35%  15,004                     +31%  2,595          +25%  5,613                      +21%  913                     +13%
 Germany  0.86       +26%  8,029                      +21%  1,188          +24%  2,808                      -10%  456                     +11%
 Other    0.04             399                              59                   42                               3
 Total    37.0       +14%  333,922                    +11%  32,942         +9%   79,576                     +7%   7,501                   +9%

 

Regional commentary

UK

ARR growth of £1.9m was achieved in 2025 (+11% to £19.7m). New customer
acquisition marginally improved to 1,599 over the year whilst new
subscriptions increased by 2%.  An upsell programme involving the Company's
new dashboard camera option also made a significant contribution to this
record level of ARR growth in the UK.

 

France

ARR grew by 15% to £9.94m and the high levels of new installations achieved
in 2024 were maintained. The customer and subscription bases increased by 7%
and 14%, respectively.

 

USA

ARR increased by 6% to £3.28m and the higher levels of customer acquisition
and new installations achieved in 2024 were maintained in 2025. The customer
base increased by 4%. Further improvement is necessary and targeted for 2026.

 

Spain, Italy and Germany.

Progress in Italy and Spain accelerated, but performance in Germany was lower
than expected. Collectively, ARR in these territories grew by 36% to £4.1m;
new customer acquisition improved by 26% to 2,740; and new subscriptions grew
by 20% to 16,871. The Company will continue to develop and invest in its
channels to market in these countries, with a number of new recruitments
already underway at the end of 2025 for indirect channels to market.

 

The Board maintains its belief that there is significant scope for continued
growth in its existing six markets in 2026 and investment is planned and
underway to support this. In addition to further growth from incremental
investment the Company expects to achieve continued optimisation and
improvement of existing marketing and sales channels.

Product innovation

The Company made very significant progress in new product innovation during
2025:

Standardised core telematics architecture

The new TCSV17 telematics system continues to perform well and has now
completely replaced the previous generation system in production. The new,
plug-in OBD (user-installed) version of this architecture for UK/European
networks ("TCSV18") has completed type approval and is entering production. It
will play a significant role in the remainder of the 4G upgrade programme for
France, as noted below. A further derivative of the TCSV18 for the US market
is now at prototype stage, and it is anticipated that this will enter type
testing in Q1 2026. As well as 4G support these products offer significant
performance improvement and reduced cost compared to previous generations.

Standardised user interface and common code base for both web and mobile
applications

The reorganisation and consolidation of existing software teams and creation
of a new UI/ front-end application team referred to in July continue to foster
significant improvement in development progress. Feedback on the alpha release
of the Company's new web application user interface has been very positive. In
addition to further enhancements made towards the end of the year it will be
released in beta version to customers at the end of January. This code base
will form the basis of the next generation of mobile application, also
intended for release this year.

Connected dashboard cameras - fully integrated with the web application

Launched in 2024, the connected dashcam solution provides our customers with
detailed, high-resolution coverage of collisions and other significant events
during vehicle usage. The uploading of footage is either initiated by
accelerometer triggers in the telematics system or user requests. This
information is then attached to and integrated within the report suite,
supporting customers in driver training, insurance matters and in reducing
fraudulent claims against them. Options include both forward and driver-facing
cameras.

Further development of this option will include launch in selected new market
applications as well as the integrated use of tracking and location
information from the camera in our web and mobile applications.

4G upgrade programmes

Good progress has been made in carrying out the 4G upgrade programme in
France. Approximately 18,000 of the original 50,000 tracking systems now
remain to be upgraded by the end of 2026. Of these, two thirds are
user-installed units which have been purposefully left until this year; partly
in awaiting the availability of the TCSV18 (referenced above) and partly in
case of further delays in the network change programme. The Company is
confident of completing this project on time.

In the Company's trading update in October 2025 it expressed its then-held
view that sunsetting of the 2G network in the UK would not occur before 2030.
Since then its principal supplier of SIM cards and network services (with
which the Company has a successful 25-year relationship) has brought forward
the expected start of the programme to 2029. It has, however, provided
additional contractual support to the Company and, together with the Company's
plans to accelerate the natural replacement of 2G units, this means that the
associated replacement costs are not anticipated to result in any additional
material or exceptional impact on the Company's reported financial results.

Reporting review with the Financial Reporting Council ("the FRC") (2)

The Company is discussing certain aspects of its financial reporting with the
FRC and is co-operating fully with the FRC's review.

The review is principally concerned with the treatment of tracking system and
associated costs. Currently these costs are capitalised, and subsequently
amortised, under IFRS 15 as contract cost assets, using the weighted average
initial contract period (of approximately 20 months). As the tracking systems
remain under Quartix's ownership throughout their usage the discussion centres
principally on whether they should be dealt with under IAS 16 instead and
depreciated over the total useful economic life of the product (which is
typically much longer). This would affect both new tracking system
installations and replacement units fitted as part of repair or upgrade
programmes. It would have no impact on revenue or free cashflow reporting.

At this stage, no conclusions have been reached, and a further update will be
provided for investors as appropriate.

Andy Walters, Executive Chairman of Quartix Technologies plc commented:

"We are delighted with the progress made in 2025: ARR growth increased by a
record £4.5m to £37m. This is significantly ahead of our expectations at the
beginning of the year and stands us in excellent stead for further revenue
growth in 2026. Strong progress was made across our key markets. Free cashflow
was a particular highlight of the Company's financial performance.

I am immensely grateful to and congratulate all our colleagues and the
management team at Quartix for the achievement of these results. We look
forward to 2026 and beyond with confidence."

Notes:

1              The Company believes that, prior to this
announcement, market expectations for 2025 performance in terms of revenue,
adjusted EBITDA and free cashflow were £36.2m, £7.7m and £4.4m
respectively.

2              Adjusted EBITDA is expected to be impacted by any
revision to accounting policies considered appropriate as a result of the FRC
review.

3              Comparisons made on the basis of constant-currency
measurements are based on closing exchange rates applicable at 31/12/2025 of
€1.1454 and $1.3451 to pounds sterling.

 

 

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