Thank you, Thomas. Good morning, everyone. Let's straight away jump into the performance in the H1 of the current year. Here we go. Let's start with some of the non-financial items, the key deals, what we did in the first half of the year. I'm happy to present that on the key deals. We did two BSS deals in LatAm, two MVNX deals in Africa, three DevOps across MTN Opcos, and one DevOps with a tier 1 customer in Middle East. Also, on the go-lives, eight go-lives we did in this half year across North America, Africa, and Middle East. They're basically the key value-add modules and upgrades. Also, the industry recognition from the Gartner. We had recognition in four Hype Cycles, autonomous operations in the communications industry, emerging technologies in the communication industry, telco cloud services, and enterprise communication services.
What are the achievements we did in the first half of the year? We delivered 452 features in this half year. We also had BSS stack growth in LatAm, MVNX stack and cloud BSS, we had a consistent growth. AI operational efficiencies in effect across the different business units. AI embedded features in all the products with strong market-driven roadmap. We also won the Asian Telecom Awards 2026 for the AI Initiative of the Year, Digital Initiative of the Year. Also the Fast 100, we got the CX Catalyst, The Fast Mode award in this half of year. Now, let's get into the top-level financials for this half year. The key metrics are the free cash flow. We achieved almost similar number as of last year, EUR 2.1 million in the first six months of each year.
Even though the numbers look almost similar, I want to draw the attention to the first quarter of the current year, where we could achieve only EUR 200,000 as a positive free cash flow. The war had just then begun. We had lot of difficulties in the Q1, which is continuing still on the cash collection front, mainly due to the geopolitical situation in the Middle East.
On the revenue, we did a 7.5% increase over the last year in real currency at EUR 36.8 million, compared to EUR 34.2 million in the last year. Again, in a constant currency, if the currencies had not changed, compared to the last year end values, we would have still done a better at 10% at EUR 37.6 million compared to EUR 34.2 million in 2025. The EBIT, we had a fantastic growth at 38.1% to EUR 13.2 million against EUR 9.6 million in the last year.
Net income, which is after deducting all our expenses. We did pretty well at 73.5% growth at EUR 4.5 million, compared to EUR 2.6 million in the previous year. Further key metrics, the CapEx to sales. CapEx is basically the development investment, what we do on our stack. Current year, for first half of the year, the percentage of that to our revenue stood at 12.8%, down from 13.9% in the last year. The ARR, the recurring revenue, in the first half of the year, we clocked EUR 15.4 million against EUR 14.2 million in the last year, about 8.4% growth in the ARR. The DSO days, still at a high at 143, better than last year at 175. The order backlog, which is a combination of the new orders and the revenues, what we generate in a particular period.
At the end of the current half year, it stood at EUR 106.3 million, which is higher than the last year at EUR 105.7 million. This demonstrates that while we got some of the large deals last year, we are able to get the new orders as well to commensurate with our revenues at each point of time. I also want to draw the attention on the performance at each half of the year in the last four years. The revenues, as we can see, has been the highest in the first half of the year over the last four years. The EBIT has also been pretty high at EUR 13.2 compared to any of the previous four half years. The financial expenses, which we will discuss a little bit later as well, was high at EUR 7.6. Taxes, we had to accrue for about EUR 1.2 million.
This gave me a net income of EUR 4.5 compared to EUR 2.6 in the last and EUR 3.7 in 2024, but slightly lower than what we achieved in H1 of 2023. The cash collection continues to be a little bit worrying for us. We still collected EUR 27 million in the first half of the year, lower than last year's EUR 30.8. The war situation, which began in February of this year, continues to still be an ongoing event. We do have substantial business interests in the war zone, the Middle East countries. We are still facing difficulties in collection from those countries. The order received has been EUR 36.1, which is reasonably a high number compared to 2024 and 2023, and 2025 was an exceptional year. At EUR 74 million, we got three to four large orders in the first half of last year.
The order backlog, as we discussed earlier, it continues to be at a very high number at EUR 106.3, consistent with the last year's as well. The earning per share is at EUR 0.21 compared to EUR 0.15 in the last year, and EUR 0.22 and EUR 0.02 in 2023. In 2023, the numbers had to be recalibrated because of the reverse split of the shares. The highlights are the EBIT margin at 36%, which is compared to the 28% what we achieved last year. The revenue increased by 7.5%. In constant currency, the revenue grew at 10%. The free cash flow continues to be at EUR 2.1, similar to what we did last year. Let's only concentrate on the particular quarter, the last quarter of this year, the Q2.
The revenues, again, has been the highest in the last four years at EUR 19.9 million, and EBIT is also very high compared to earlier years, similar quarter at EUR 8.6 million. The financial items took a hit in the current quarter at EUR 5.7. The tax is at EUR 600,000. The net income is at EUR 2.4 compared to EUR 1 in the last year. Cash collection, as we mentioned earlier, continues to be stable, but not compared to the last couple of years, again, given the situation in where we have the businesses. The order received is at EUR 20.6. Substantially higher than what we did in 2024 and similar to what we did in 2023. But again, 2025 had been an exceptional year. Order backlog, we already discussed, and the EPS is also a derived number. The highlights of this particular quarter was our EBIT margins.
EBIT margin has been very high at 43.2% compared to 29.2% in the previous year. The revenues increased by 14.9% to EUR 19.9 million, and the free cash flow, which I spoke earlier, was at EUR 1.9 million compared to EUR 1.1 million in the same quarter last year. As we saw, one of the major contribution for our increase in cost is an impairment loss of EUR 5.2 million. I want to draw a little bit more attention to this particular impairment. We recognized an impairment loss of EUR 5.2 million in the Q2 of current year on two specific trade receivables. The majority of this amount relates to a customer in Australasia, and the other one is a customer in Middle East.
On the Australasian receivable, I want to call out that we had signed a contract with a customer a couple of years back and had completed the delivery and had the receivables due. However, due to the ForEx crisis in that particular country, it has been outstanding for a very long time. The old contract is now being restructured into a new contract, and this new contract is backed by the Australian sovereign government. In order to allow for the same, the condition was we had to write off the old receivables, and that is how we had to take a complete impairment of the receivable from that particular country. The second one was in the Middle East.
Due to the global slowdown in Middle East, due to the current geopolitical situation, we had delivered a product to a particular customer in that region, and due to this situation, we were not able to collect from them, and we assessed that we may not be able to collect that, and we need to take an impairment loss on that. The impairments really reflects the prudent and the conservative accounting practices which we follow. However, I want to call out that this does not reflect or affect the company's other customer relationships or any other ongoing programs. Again, I'll take a little bit deeper into these numbers. Let's look in H1 on the revenue highlights. The H1 revenue highlights, we had EUR 36.8 million. We have already spoken about it. EUR 37.6 million in constant currency, a growth of 10%. How did this happen?
Mainly, this is a delivery-led quarter driven by ongoing large transformations, for which we received contracts sometime back. If you look at the H1 2025 versus the H2 revenue by type, you can see that last year you had higher license revenue, and this year we have higher delivery revenue, and the ARR also, there is a slight increase. As we all know, the revenue cycles in Tecnotree is we first deliver license, then it gets into delivery, and then it moves into an ARR model. The large transformation, what we got the orders last year, we had the licenses revenue out of them in the last year revenue. As all of them move into a delivery mode, we will move more into a delivery revenue Over the period of time. Again, if look at the revenue in different region, it's almost stable.
The Europe and Americas continues to be around EUR 9 million. MEA and the APAC was slightly higher at EUR 28 million compared to EUR 25 in the last year. Let's look at the order backlog. How is it geographically spread? The Europe and Americas, because we started delivering there, has seen a slight reduction in the order backlog, but still have EUR 23 million to be delivered in Europe and Americas. MEA and APAC, last year we had EUR 78.6 million worth of orders to be delivered. It is at EUR 83.3 million. We'll spend a little bit of time on the EBIT highlights. As you can see, the H1 EBIT at EUR 13.2 million. It's an increase of some 38.1% year-on-year. The EBIT margin is 36% compared to 28% last year. What are the drivers for the increase in the EBIT? One, operational discipline and platform scalability.
Full period effect of the right-sizing and the cost efficiency programs that we undertook in 2024 and 2025. Increased automation of internal functions and maintenance through the company's AI operational capabilities. Personnel cost declined year-on-year, despite headcount increase, driven by lower cost of delivery and AI-augmented roles. If you look at the evolution of EBIT in 2026, the EBIT in first half of the year is EUR 13.2 compared to EUR 9.6 in the last year. The margin we called out is 36% compared to 28% in the last year. The other parameter we very closely monitor is the investment in the development cost compared to the revenue. As you can see, in 2022 it was about 11%. We increased it to 14% and then to 18% in 2024.
That is when a lot of investment was made into our product. That resulted in getting large transformation projects in 2025. We continue to make investment in our product. We are at almost a consistent level at 13% in H1 of current year. One of the things that we very closely monitor and worry some a little bit is on our AR. As you can see, the AR has slightly gone up from last year from EUR 32.5, which was in December, to EUR 34.5 in the June-end. In December, nearly one third of my receivable was not due. That means less than 30 days. That bucket has moved to mainly into 90-270 days, which was 3%. It has gone up to 21%. Above one year still continues to be very high at 31% last December and 36% now.
This again reflects some of the challenges what we are facing in collection in certain regions, especially due to the geopolitical issues and the war situation in certain countries. However, the DSO trend, as we collect more, is going to improve, and it's always been cyclical in Tecnotree. As you can see, we had 210 days in Q1 of 2023, came down to 146 in Q4 of 2025. Went up again Q1 2026, where we had lesser collection. It has come down again to 143. This is something where we monitor very closely. I also want to give a small update on the currency risks. H1 2026, we had favorable FX movements supporting the profitability.
The exchange rate difference in the financial items first half was EUR 1.5 million against negative EUR 4 million in the last year and EUR 0.5 million in the second quarter, driven by strengthening of USD and slight weakening of INR against euro. In H1, we reduced our frontier currency exposure to 4%, a 6-percentage point reduction from the previous year. Strategic focus on Tier 1 accounts and growth in mature and dollar-denominated markets continue as a part of our strategy. I also have a table how the USD to Euro trends has moved in the H1.
While last year, the dollar weakened by more than 13% against euro. What we have seen in the current year is it's almost stabilizing, even though there is a slight variation, but it is not as abnormal as it was last year. Percentage of revenue in volatile currencies, H1 last year, we had 10%.
As I mentioned, we are reducing our exposure to the frontier markets, now it has come down to 4% in this current half year. Let's go to the balance sheet. The balance sheet, minor growth in the intangible assets. This is my own developed products. The trade receivables has gone up slightly. Other receivable are holding onto the similar level what we had in December 2025. Same way, the cash and cash equivalent continues to be at a stable level of about EUR 20 million. As all of us know, we had issued convertible debentures, which was at EUR 23.1 million by end of December. In January, when there was a public tender offer, as per the terms of the convertible debentures, the debentures were converted into equity. Except for five notes, the entire CCDs got converted into equity.
The other non-current liabilities, which is a large amount, represents the retirement and other statutory accruals for our employees across the region. The trade payables continues to be slightly higher compared to the December 2025. The increase in the cash is driven by the free cash flow reduction in interest-bearing liabilities through loan repayments and lease liability repayments. Now, the 2026 guidance. The board continuously assesses the guidance, what we are given, the board has currently given this guidance. The revenue in constant currency to grow between low to mid-single digit percentage growth, and this is in constant currency. On a free cash flow, the guidance is above EUR 5 million in the year. The assumption for free cash flow is based on the company's current market outlook and exchange rate assumption. Especially last year, the US dollar devaluation against euro, their assumption is that remains stable.
I have one point on the one major event that happened in the first half of the year. As we all know, on 27 January 2026, we announced that Resilience Investment Holdings, acting on behalf of a consortium comprising of Helios, Fitzroy, and Padma Ravichander, had made a voluntary recommended public all-cash tender offer for all the issued and outstanding shares and certain other equity securities of the company. On 20th July, the final results of the public tender offer for the shares and equity shares of the company was announced. As the minimum acceptance condition has not been fulfilled, the offeror did not complete the tender offer. For any more information on this public tender offer, there is a dedicated webpage. The information can be found there. What are the key takeaway in H1 of the current year? Stable growth while delivering on promise on operating efficiencies.
Delivery-led quarter driven by ongoing large transformations in MEA, powered by AI-embedded BSS stack. The board has guidance maintained while keeping a close watch on the geopolitical challenges. As I called out, the challenges are still on. The Middle East continues to be a challenge for us. The war which started in February is still ongoing. There are some of the challenges which we face both for our business and the cash collection. We are keeping a close watch on that and the guidance the board has maintained what we had issued earlier. These are my presentation from the finance side. Back to you, Thomas.
Thank you, Indiresh, for that presentation. I have in the Q&A box below, you guys have sent some questions. The first question that has been sent, I can answer as the moderator of this session. Someone has wanted to know, what is the situation with the Canadian offer? What I can say is that any development that requires disclosure under the rules of the exchange would be announced as a stock exchange release, given fair equal to all, and will not be discussed or given out any information on this call. The second question that we have is, you've answered it in your slide, but I'll for the investor also ask it. He asks: why the EUR 5.2 million impairment and why now?
Sure. Thank you. As we explained in the slide, these results are basically due to two customers, one in the Australasia region, another one is in the Middle East region. The Australasia customer was located in a country which had huge local foreign exchange constraints. Now that the country is being supported by Australian government, we are going to get into a new contract, and one of the conditions for that contract is we had to forego the earlier receivable, and that is a reason, as a prudent one, we wrote off the earlier receivable from that customer. The other one was in Middle East. Because of the regional issues over there, we are not able to collect that, and we assessed the recoverability of each customer very closely, and as a conservative and prudent measure, we wrote that as well.
Thank you. The tender offer lapsed in July, of last month. What does this mean for shareholders and the strategy going forward?
From a company side, we know that the offer did not complete because the offeror, they did not meet the minimum acceptance condition. For the company, nothing changes operationally. We continue executing the strategy, and we continue to execute to ensure that we meet the 2026 guidance, what has already been presented to the shareholders.
Your guidance remain unchanged despite a strong H1. Isn't that conservative?
Yes, as you know that from finance, we want to be very conservative and prudent. As you know that in H1, we benefited with a favorable foreign exchange and some delivery timings. Given the Middle East background caution, we strategically decided to expand earlier in Middle East region, which is a dollar-denominated market. Given the current war situation, which started in February, which we thought could be a very short one, has been dragging on for so long. We do not know how the H2 is going to develop given the uncertain geopolitical situation. The Board has been keeping a close watch on the situation, and based on the assessment, the Board has decided to keep the current guidance. If that something changes in future, we'll definitely come back to the shareholders.
Your EBIT margin jumped to 36% from 28%. How much of that is structural versus one-off foreign exchange?
I'd like to say it's not just a one-off ForEx. There are a lot of structural things which we have been doing in the last couple of years, which is, in a way, bearing fruit now. There's a huge operational discipline and platform scalability, which showed how much we did the investment in development of the products. Full period effect of right sizing and cost efficiency programs, which we carried out in 2024 and 2025, is bearing fruits. The most important, in my view, is the increased automation of internal functions and maintenance through a company's AI operational capabilities. That is also evident if you see. My headcount has gone up in this half year.
But the personal cost has declined year-on-year despite the headcount increase, mainly driven by lower cost delivery and AI-augmented roles.
Okay. Let me just see if I got this question correct. Revenue grew 7.5%, but free cash flow was flat at EUR 2.1 million. Why isn't the profit converting to cash?
Good question. Yeah. Financial items cost rose to EUR 7.6 million. The receivables in the Middle East collection was very slow, especially in the first half of the year. Conversion normalizes as those balances come in, which underpins our above EUR 5 million full-year guidance. Just to reiterate, in Q1, we just had EUR 200,000 free cash flow, which means that we did EUR 1.9 million in the Q2 of the current year. We have maintained a full-year free cash flow guidance of EUR 5 million, which we are confident of achieving.
Okay. I'll just wait a little bit and see if there's any questions coming on. We still have a minute left booked for this webinar. Okay. As we don't have any further questions, I'd like to end the webinar. Thank you so much, Mr. Vivekananda, for being here with us today. Wait until we have something new to then release to the market, hopefully. If not, we'll see everybody at Q3 in end of October. Thank you.
Thank you very much. Thank you, everyone, for supporting the company. Have a great day. Thank you.
Bye-bye.