Hello everyone, and indeed, Welcome to the 2025 full year results for Tribal Group. I am here with Diane McIntyre, who is the CFO of Tribal. I will start with a few comments, then pass over to Diane to go through financial performance. I will round it off with a business outlook before we then indeed go to Q&A. Just a very brief orientation for those perhaps new to Tribal, we are a leading provider of software and services to education. We are an education-focused business, and we have set out our mission to be a pure play EdTech Software-as-a-Service company. Our strategy is about delivering on that overall strategy. Just a reminder, as we go through the presentation, that the group is essentially split between two separate businesses.
On the technology side, it is the so-called SIS business, Student Information Solutions. We will refer to SIS, not, by the way, to be confused with SMS, which is our Student Management System, the products themselves. SIS is the technology business. Our separate business, Etio, which is an education services business. I am very pleased to report a strong set of numbers for 2025. It is really good to be able to deliver a strong, stable performance that exceeded the market expectations that we had set out from the beginning of the year on our adjusted EBITDA. We had two upgrades during the year, and that we returned the group to a sustainable net cash position. This is very much the result of focusing on the delivery of the strategy that we set out to build a strong EdTech SaaS business.
Moving our customers along the journey to an as-a-service business, successfully delivering the internal operational changes needed across the group that help benefit the customer experience and drive our own internal efficiencies. It is good to see that our key metric about annual recurring revenue is up to GBP 63 million and constitutes then 86% of the SIS recurring revenue. Also important to note that our gross revenue retention stands at 95% and our net revenue retention, which then captures the upsell, the cross-sell, is at 108%. Effectively above 100% means that we are growing revenue within our existing customer base before we win a single new logo. But we did win new logos in the year. We won two new logo sites in the year at the London South Bank University and our Admissions product into Durham University.
We serve over 200 universities across all of our product sets in the main markets in which we operate, and indeed over 100 colleges. Delivering on our strategy, that was what 2025 was about, and creating a sound, solid foundation on which to look forward with confidence into the future. We believe we achieved both of those things. The proof points really for us are in, first, we had really positive trading with our EBITDA at GBP 17.5 million. Our statutory profit for tax reached GBP 12.5 million because we have now lower exceptionals than previously, and we expect that to continue. Critically, our net cash then improved from a net debt of GBP 3.2 million up to GBP 11.4 million of net cash position.
Secondly, a key plank of our strategy from last year was about moving our customers to a subscription model, so-called HEFS, our Higher Education Full-Service licensing model. We were successful in driving that cornerstone of our strategy. Over 70% of our customers who we wanted to move into our subscription pricing have already moved, and we will then expect the remaining customers over time to move into that licensing model. That has created over GBP 2.7 million of additional annual recurring revenue. Equally important to us, this is a structural shift in how we work with our customers, how we partner with our customers, how we create an as-a-service business to support our customers, simplifying pricing, increasing the recurring revenue, creating a pathway to cloud migration and our products as a service to the customers.
As a proof point of that as well, our cloud and subscription revenue grew 32% to nearly GBP 38 million. That growing is a sign of customers moving from a support and maintenance model into a cloud subscription model. If we just have a look at perhaps the context of the broader market, there is clearly a lot of change in higher education, a lot of change in technology. If we look at that broader context and consider, first of all, the scale of our reach. We have over 300 million student interactions in a year across the 3 million or so students that we have. Our systems are truly the backbone of our customers' institutions. We provide that single source of institutional truth, the system of record, from which the other institutional workflows draw their data. That is critical.
It makes displacement exceptionally difficult, of course, and costly. Critically, it makes our cloud platform a foundational element of AI innovation. AI will be disruptive, particularly around that user experience layer. AI needs good data, a strong data model, good processes, good cloud platform, and that is what our student management system products provide, the bedrock from which customers can build out their composable campus and indeed AI layers. Indeed, one of our Australian customers, who I was with a couple of weeks ago, have stated publicly that they have an end-to-end AI strategy. All of their user experience will be, over time, put through into AI, and they are one of the very first customers who are keen to sign up to Tribal Cloud and gain the benefits of having Callista on the Tribal Cloud platform. It is, though, difficult market conditions for our customers.
An estimated 40% or so of U.K. universities are expected to operate in deficit this year. Tuition costs frozen while their costs are rising. This gives a lot of challenges to customers. Cyber risk is really a huge issue for customers. That does, though, provide opportunity for us to then provide more value to our customers. They are often seeking cloud-based solutions from trusted vendors, and that gives us an opportunity then to drive more adoption of our cloud platform. If I perhaps consider a particular university as a case study and talk through that. This university has been a Tribal customer for some 25 years or so. That relationship has really evolved significantly, dramatically even, in the last few years or so.
If one goes back a couple of years, that customer had a support and maintenance stream with us, or contract with us, of around about GBP 300,000 or so, and on top of which they paid about GBP 200,000 in professional services. The graph that you see in front of you on the left-hand side, that represents that. That dark blue at the top is essentially the professional services, and the piece below represents the support and maintenance stream. That customer then moved to adopting the Tribal Cloud platform, and then after that they moved to take our subscription license. On top of that, they had something like GBP 800,000 in 2025 of professional services, meaning the revenue from that customer went from, two years ago, GBP 500,000 to, in 2025, GBP 2 million. Of which the GBP 1.2 million is annual recurring revenue.
That is four times what they were paying previously when it was a support and maintenance, and a higher professional services. Clearly, the professional services is not recurring, but it is indicative of the partnership that we have with customers in helping them evolve their implementations into a more as-a-service implementation and the work that we do with them to help them on that journey. This is a journey that we are looking to take our customers on, the two-stage process of moving into cloud and then adopting this subscription license model. Let me then also talk about AI. The opportunities of AI are significant, transformative to us, to the sector. We have an opportunity to transform both the productivity, the efficiency of our customers through adoption of AI in our products, and we do also have that opportunity internally.
From the customer perspective, a significant opportunity for us is the ability to automate processes within our products. This is where we can be transformative, that many processes in the student management journey are administrative tasks, validation, verification, certification tasks that can be automated over time. Our Tribal Admissions product, for example, is a good example of a pre-configured end-to-end solution with a really rock solid data model underneath it that, over time, can be automated to provide greater value for customers adopting it. We have already started pilots within our Etio business with actually three departments/ministries for education on how we might automate the school's assessment process, and make that more efficient for those different departments. However, I would say we are ensuring we take a measured approach. The education sector demands the highest standards of accuracy, accountability, data governance.
We are looking at how we implement AI internally to drive greater productivity, greater efficiencies internally in the different areas you see outlined there, and ensuring that we understand the benefits, the limitations of AI before we then fully take it out to our customers. We are still assessing the full impact, the potential gains that we can make, and we will come back at half year and provide more information on that. With that, I am going to pass over to Diane, our CFO, and she will take you through our financial numbers.
Thank you, Mark. I am now going to take you through the group's financial performance at FY 2025. I will cover headline results first, and then I will look in more detail at SIS revenue performance, ARR, product investment, cash generation, and then finally Etio. It is worthwhile saying from a CFO perspective, FY 2025 marks a really clear inflection point. Our financial strategy is focused on improving earnings quality, increasing visibility and predictability, and then translating that into really strong, repeatable cash generation whilst maintaining a disciplined investment and capital allocation policy.
I will start with these headline numbers. Group revenues increased 4% on a constant currency basis to GBP 92.5 million, and that is with growth across both of our divisions. Adjusted EBITDA has increased 8% to GBP 17.5 million, with margins improving to 19%, and that reflects both the quality revenue improvements in SIS and the recovery in Etio.
Statutory performance before tax increased to GBP 12.5 million. That is more than double the prior year, and that is driven by the higher underlying profitability and a significant reduction in exceptional costs. Statutory basic earnings per share increased to 4.2 pence, reflecting that step change in profitability. Cash performance was a real highlight in FY 2025. We delivered operating cash conversion of 142%, supported by strong working capital management and some advanced customer receipts, and we ended the year with net cash of GBP 11.4 million. That compares to a net debt of GBP 3.2 million last year. This materially strengthened our balance sheet and gives us flexibility to invest whilst continuing to return capital to our shareholders. In line with this improved financial position, the board declared a special dividend of 1.5 pence paid in January, and an interim dividend of 1.3 pence payable later this week.
This interim dividend replaced the usual final dividend for FY 2025, and that reflects our disciplined and flexible approach to capital returns. On the next slide, this page shows the performance of our SIS business, which remains the core of the group. SIS revenues increased 3.1% year-on-year, with revenue growth driven by subscription adoption, cloud services, and customer wins. We made further progress with our HEFS subscription model, which is materially increasing our recurring revenue streams and creates a clearer pathway to the cloud migration. We also secured important new wins, as Mark said, including London South Bank University and Durham University, and we delivered major cloud go lives at institutions such as Warwick and Wolverhampton. Subscription revenue grew strongly. It increased from GBP 15.6 million -GBP 23.2 million. Cloud revenue grew 13%, and that reflects our ongoing customer migration and expansion.
As expected, this growth was partially offset by a decline in the support and the professional services revenue, and that is consistent with our focus on HEFS in 2025. A central element of our strategy is the deliberate shift towards recurring contracted revenues, and that shift materially improves revenue visibility, margin resilience, cash conversion, and the sustainability of returns over the medium term. The quality of the revenue continues to improve.
Recurring revenue now represents 86% of SIS revenue, and that is up from 84% in the prior year. Retention metrics, as Mark said, remain strong. Our GRR number is at 95% and net revenue retention is at 108%. That demonstrates both our customer loyalty and our successful upsell. Key to our targeted investment to support HEFS adoption and cloud delivery, our SIS operating margin reduced slightly to 36.9%, and that investment will support our future margin resilience and our growth.
HEFS is both a commercial and a financial initiative. As we move customers onto HEFS, it converts that historic support and maintenance revenue into subscription-based revenue, and as I said, it enables a really good, clear pathway to the cloud and improves customer lifetime value. As cloud adoption increases, we expect improved gross margins over time, lower delivery friction, and a much more scalable cost base. Focusing now on annual recurring revenue. This is a key indicator of the business, and it looks forward over a 12-month time frame. ARR has increased 11%, up to GBP 63.3 million, and that is driven by a mixture of upsell and cross-sell to our existing customers and new customer acquisition. Within this, subscription ARR has increased 84.5%, reflecting the rapid adoption of our HEFS subscription model. Cloud ARR grew 14.5%, reinforcing the momentum in cloud migration.
As expected, support and maintenance ARR has declined as customers transitioned to subscription pricing. Now most importantly, our customer concentration remains low, with only 17% of ARR coming from our top 10 customers. Customer longevity is strong, with 81% of SIS customers being maintained for more than 10 years. This combination of ARR growth, high retention, and low concentration underpin the durability of our revenue base. On our next slide, this page illustrates our approach to product development investment. Following the successful development of our new SaaS products, including Engage, Submissions, and Admissions, our total product development spend has now reduced from a GBP 16 million peak in 2021 down to GBP 11.5 million. In FY 2025, our total product development represented 20% of our subscription support and cloud revenues. That is down from 29% in 2023. Capitalized development is now tightly focused on Admissions and TermTime.
We expect that capitalized development spend will remain flat in 2026, and then it unwinds to zero over 2027 as Admissions becomes fully embedded within EBITDA. This reflects a really clear shift from a heavy build investment to now optimization, enhancement, and monetization, whilst we continue to improve both product quality and customer satisfaction. Moving on to cash performance over 2025. This demonstrates the effectiveness of our strategy. We delivered free cash flow of GBP 16.1 million. That is more than double the prior year, and we have a cash conversion of 142%. This was driven by strong underlying performance, improved working capital discipline, and a one-off advanced customer payment of GBP 3.2 million, which relates to FY 2026. After dividends, product development CapEx, and financing movements, we exited the year with GBP 11.4 million of net cash. Forex does not have a material impact on our cash numbers.
However, given the group's international footprint, EBITDA does remain sensitive to foreign exchange movements. Recent global events have led to a bit more volatility and uncertainty, and at the start of FY 2026, we have seen an adverse Forex impact of approximately half a million pounds. As we flagged, we expect to return to modest net debt position in the first half of FY 2026. This is due to the normal seasonality of the business, dividend payments, and one-off supplier payments. However, the structural improvement in cash generation is clear. We ended FY 2025 with a strengthened balance sheet, which reduces our financial risk, it provides flexibility through the investment cycle, and it allows us to absorb short-term movements whilst maintaining our strategic momentum. Our capital allocation priorities are really clear. We are going to invest in our products where returns are attractive and visible.
We'll maintain a strong balance sheet, and we'll return surplus capital to shareholders where appropriate. The special dividend that we paid in January and the interim dividend payable this month reflects this balanced and disciplined approach. The next slide covers the performance of Etio, our education services business. Revenues increased 8.8% to GBP 18.6 million, and this is with growth across both the government services and the performance benchmarking areas. More importantly, this turnaround strategy has delivered, as you can see, a significant margin recovery. Adjusted operating profits increased to GBP 3 million. That's up from GBP 0.5 million last year. Operating margins improved to 16.2%, and that reflects improved contract margins, a well-established operating model, and cost discipline. FY 2025 has marked its final year of Etio's turnaround, and the business is really now positioned for sustainable, profitable growth going forward. My last slide summarizes here.
ARR is up 11% to GBP 63.3 million, with 86% high-quality recurring revenue. Group EBITDA is at GBP 17.5 million. Etio margins rebounded now to 16.2%. Net cash is at GBP 11.4 million, and that's supported by GBP 16.1 million of free cash flow. In summary, FY 2025 has demonstrated the group has strengthened the quality, the resilience, and the cash-generating ability of our business, whilst continuing to invest selectively to support our long-term growth. I'll now hand back to Mark, and he'll cover our outlook and growth strategy.
Great. Thank you very much, Diane. Yeah, let's look to the future and see how this sets us up for growth into the future. We continue our core strategic aim of moving to an EdTech Software as a Service business, so delivering that full-service student solutions through the cloud platform to our customers. 2025 was very much about that first plank of moving our customers to that subscription licensing model, which we have successfully executed on. As you saw, our annual recurring revenue has now increased up to that mid-60s level. How do we grow from here? The next plank is about focusing on customers moving into the cloud. We already have something like 30, just over 30% of our customers in the Tribal Cloud.
However, as we move customers onto our subscription licensing, we were focusing on that rather than moving customers onto the cloud. We now pick up that story with our customers now. We have a growing pipeline of customers, both in the U.K. and in Australia, who are then wanting to move to the Tribal Cloud. With some 70 or so customers yet to go to the cloud, if you work that through, there's sort of GBP 18 million-GBP 20 million of serviceable addressable market, let's say, to go for. We're not saying that every customer will necessarily go, but there is a clear path to grow our cloud revenues as customers more and more want to get onto that cloud platform to be able to deliver their overall digital strategy, and indeed, the AI strategy I referred to earlier on. That's our key path for growth.
Looking beyond that, it is about then expanding the opportunities to sell within our customer base. Clearly, we continue to look for new opportunities for new customers. In the sector in which we operate, there are not many universities that go to market in any one particular year. So it is focusing about how we can create greater value for our customers, and that is in areas, as I referred to, like AI, which will be transformative to the sector, and how we can build out agentic AI into our products for our customers. Creating value through partnerships. So monetizing partnerships with other EdTech providers around our student management system core. Then it is about whether we wish to build or buy to extend our product offerings. So a particular area, for example, of interest is in curriculum management.
We do, of course, do curriculum management in our products, but it is a scope of product that over recent years with statutory, regulatory changes, requires more focus and customers look for more value coming out of curriculum management products. So there is an opportunity there. To be clear, we are not, at the moment, looking to acquire any businesses. We are focusing on delivering our strategy of moving our customers to a cloud platform as a service, but there are opportunities beyond that to continue to expand. Finally, just to reiterate why we are confident in our continued trajectory. First, we believe we have some momentum. We have entered 2026 in a positive way with our customers moved to HEFS and a good pipeline for cloud. So we have a clear demand in the marketplace because customers are looking at what they do with their digital estates.
They are looking for opportunities to mitigate their cyber risk, opportunities to reduce their cost base, and we feel we are in a position to support them in doing that. We do have a high-quality business model with good quality recurring revenues. As we said, some 86% of our revenue in SIS comes from recurring revenues, and we have multiple avenues for growth. I think in summary, we feel we have a good financial position as well from 2025, a proven strategy, a growing customer base, and a clear sight of what our next phase of profitable growth is. We are looking confidently to the year ahead, and we look forward to updating you on our progress in another six months time. Thank you very much.