Alfa reports £126.7m revenue as SaaS growth accelerate

Alfa Financial Software Holdings (Alfa) has reported strong financial and operational performance for 2025, with revenue rising 15% to £126.7m and operating profit increasing 17% to £40.1m.

The asset finance software provider also achieved an operating margin of 31.6%, while profit before tax rose 18% to £40.1m. The company generated strong cash flow, with free cash flow conversion of 97%, and ended the year with £26.4m in cash and no bank debt.

Recurring revenue continued to be a major driver of growth. Subscription revenues increased 16% during the year, while annual recurring revenue rose 15% to £43.9m. Net revenue retention improved to 109%, reflecting expansion among existing customers as new implementations moved into production.

“Alfa’s culture is its superpower,” he said. “We’ve continued to invest in our software while the market conditions have allowed it, and that investment is now really starting to show through in the capability of the platform and the value we can deliver to customers.”

The company’s SaaS strategy remains a core focus, with subscriptions forming the backbone of Alfa’s long-term growth model. Denton said the move to cloud-based delivery provides both resilience and flexibility for customers operating mission-critical systems.

“Subscriptions are at the heart of our strategy. When you do cloud properly you end up with a very resilient platform, and that resilience is increasingly important for financial institutions running their core systems,” he said. “From both an investor and customer perspective, predictable recurring revenue makes for a very resilient business.”

Alfa’s technology strategy also centres on building an open ecosystem around its cloud-native platform, enabling customers to integrate emerging technologies and third-party applications.

“It’s all about ecosystem,” Denton said. “Being API-led is not enough. You need to enable customers to plug in new ideas, technologies and innovations quickly so they can adopt new capabilities with a very low time to value.”

Financially, Alfa continues to benefit from a strong balance sheet and cash generation.

“The good news is that we can fund all the growth we need with the cash we generate,” he said. “We actually generate more cash than we need, which is why we declared both an ordinary and a special dividend.”

The company also reported strong operational execution during the year, completing 35 system go-lives and increasing the number of Alfa Cloud customers to 22. Its pipeline remains healthy, with 10 prospects in late-stage discussions at the end of the year.

Alfa continued to invest heavily in product development, spending £37.7m on software enhancements during the year. Much of this work is focused on expanding capabilities in areas such as US auto originations, fleet management and commercial finance.

Denton noted: “Over the years we have made deliberate and considered technical architecture decisions so that we have a pure cloud-native product that is robust at volume, yet flexible enough to continue to benefit from integrating or interfacing with the latest technologies, including AI. This is not only driving improvements and innovation for our customers it is allowing us to increase our addressable markets and expand our competitive advantage.”

The company also grew its workforce to an average headcount of 516 employees, up 6% year-on-year, while maintaining staff retention of 97%.

Denton said Alfa’s culture and people remained fundamental to the business.

“If people are proud of the organisation they work for, you get an edge that other companies don’t have,” he said. “Innovation, inclusion and culture aren’t optional extras for us – they’re the bedrock of how we operate and the quality of people we attract and retain.”

Looking ahead, Alfa expects continued revenue growth in 2026, supported by a strong sales pipeline and rising demand for modern asset finance platforms. The company’s US business now accounts for around 45% of total revenue, which may create currency headwinds for reported results.

Despite wider macroeconomic uncertainty, Denton said the asset finance sector remained resilient.

“Asset finance is a very robust market,” he said. “Companies still need the kind of software we provide to manage new business and risk, and that resilience gives us confidence in the outlook for Alfa.”