Alfa Financial Software Holdings Pl (LON:ALFA), a leading developer of mission-critical software for the asset finance industry, has provided a scheduled update on trading for the half year ended 30 June 2026 (H1).
Trading in line with expectations
Revenue of £33.2m for Q2 was up 6% year-on-year. This was in line overall with higher than expected Software Engineering revenues, driven by increased work for new implementations, offsetting lower Delivery revenues as a result of some customer implementation delays on projects.
Key H1 financial highlights:
● Revenue of £65.1m, up 4% on last year (5% at constant currency)
o Subscription revenues were £24.1mhttp://xx.xm, up 14% on last year
o Software Engineering revenues were £8.6m, down 17% year-on-year following an expected reduction in client-led enhancement work
o Delivery revenues were £32.4m, up 5%
● TCV saw strong growth, up 17% year-on-year and 6% in Q2, to £247.0m at 30 June 2026
Strong growth in TCV
We secured a win in the second quarter with a major European automotive manufacturer in the UK, adding to the momentum from the win we achieved in the first quarter. This helped drive TCV to £247.0m.
Strong TCV growth was a result of a combination of strong growth in Subscription TCV and Delivery TCV, up 21% and 22% respectively, offset by a drop in Software Engineering TCV of 29%.
There was one loss from the late-stage pipeline which was an existing v4 customer. This was replaced by two additions to the pipeline: an equipment finance implementation at a large US bank, for which we are already implementing the Auto finance book; and a new customer in UK equipment finance. In total, the late-stage pipeline remains strong, with nine prospects. Alfa is the preferred supplier with eight of the nine prospects and we are working under letters of engagement with three of these prospects.
The continued growth in TCV and strength of the late-stage pipeline provide good visibility over future revenue growth.
Excellent operational execution
H1 saw another excellent operational performance and the strength of our delivery teams remains a key competitive advantage. In the first half we had two go-lives, one in Q1 for an existing v4 customer upgrading onto Alfa Systems 6 and one in Q2 for a new marquee US Auto Finance customer.
This Q2 go-live was for a limited new-business pilot, with a ramp up in new business volumes expected over the coming months. Migrations of the existing finance book are expected to follow, resulting in due course in our largest Alfa Cloud implementation. We expect this customer to be an important part of our growth for the coming years.
We continually assess the resources we need to efficiently deliver to customers. In the first half, this resulted in 31 non-voluntary departures, mainly from Product Engineering. We incurred one-off costs in H1 of £1.6m but the savings in H2 will outweigh these costs to give a small favourable impact on operating profit for 2026 as a whole and with a more significant benefit in 2027. We have continued to recruit where demand is stronger, including into cloud hosting operations and delivery, with both graduate and experienced hire recruitment.
Andrew Denton, Chief Executive Officer
“We are delighted to have won a very prestigious European automotive manufacturer, which we believe will be an excellent proof point as we expand further into the fleet market and this win has contributed to a strong level of TCV. Our delivery teams have continued to execute successfully and we remain confident in the strength of our pipeline. We are well positioned to achieve our expectations for the year.”
Notice of results
Alfa intends to announce its results for the six-month period ended 30 June 2026 on Thursday 3 September 2026.
