24 March 2026

Gamma Communications plc

Results for the year ended 31 December 2025

Significant growth in line with expectations, driven by strong German performance. Continuing healthy cash generation. 

Gamma Communications plc ("Gamma" or "the Group"), a leading European provider of business-critical communication technology, is pleased to announce its results for the year ended 31 December 2025.

Andrew Belshaw, Chief Executive Officer, commented: "2025 was another successful year for Gamma. We delivered significant growth driven by our German business, with a resilient performance in the UK, where we are pleased to have won a number of blue-chip customers, despite the challenging macroeconomic backdrop. These results reflect the disciplined execution of our strategy and the strength of our highly cash-generative business model. We continued to expand our portfolio of business-critical solutions, including the launch of "Webex for Gamma" which has been our most successful UK product launch ever.

"The nature of our cash generative business model means that in 2025 we were able to both invest in our business and return £64m to shareholders. We intend to continue to return substantial amounts of cash to shareholders through FY 2026 and FY 2027, balancing investment in organic growth with enhanced cash returns.

"Although the UK SME market headwinds remain, it now forms less than half the Group and we are well positioned when conditions improve. Our strategy, supported by our increased scale in a growing German market, an improving Enterprise sales pipeline and the future growth potential of our Service Provider business, positions Gamma well for years to come."

Year ended 31 December

Key highlights

Outlook

The Board expects FY 2026 financial performance to be in line with market expectations, with Adjusted EBITDA and Adjusted EPS (fully diluted) within the consensus range.⁵

Enquiries

About Gamma

Gamma is a leading European provider of business-critical communications technology. Our extensive channel partner network connects major technology vendors with hundreds of thousands of SMEs, and we deal directly with large corporates and the public sector. Gamma combines its proprietary solutions with leading third-party cloud platforms, its own telecoms network and a high quality of service, to help customers communicate and collaborate more effectively.

Our broad and expanding portfolio - including cloud communications software (telephony, messaging, video, AI-driven customer experience), calling and network connectivity (including security) - enables customers of any size to deploy end-to-end communications and IT solutions via a single provider.

In mainland Europe, Gamma has its largest presence in Germany, delivering services to SMEs through both partners and its own self-service digital platform, and is recognised as one of the country's leading cloud communications providers.

Gamma Business serves UK SMEs via an extensive network of over 1,500 channel partners and its Service Provider business provides international calling capabilities for global communications platform and service providers.

For larger corporate and public sector organisations, Gamma Enterprise engages directly to design and support complex, integrated communications solutions.

With over 2,000 employees, Gamma is a FTSE 250 company listed on the London Stock Exchange (ticker: GAMA). More information can be found at: gammagroup.co

Cautionary Statement

Certain statements in this Full Year results announcement are forward-looking. Although Gamma believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements contain risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

Management and Financial Overview

2025 was another successful year for Gamma. We delivered significant growth, driven by our German business and continued resilience in the UK, despite a challenging macroeconomic backdrop.

Our increased scale across Europe, expanded product portfolio and the disciplined execution of our strategy have significantly strengthened the Group, supported by a continued focus on service quality and go‑to‑market execution. The completion of the Starface acquisition marked an important step in our shift to a genuinely pan‑European business, alongside actions to streamline the organisation and strengthen the long‑term resilience of the business model.

During the year, Gamma moved to the Main Market of the London Stock Exchange and, from June 2025, entered the FTSE 250 Index. We returned significant cash to shareholders and expect this to continue through 2026 and 2027, balancing investment in future growth with our commitment to deliver enhanced shareholder returns.

Thank you to our employees for their hard work and commitment throughout the year, including the integration of our largest acquisition to date, navigating the challenging UK trading conditions, and delivering key customer and partner projects across the Group.

Revenue increased by 11% to £645.8m (2024: £579.4m) and gross profit by 16% to £348.2m (2024: £300.3m). This significant growth was driven by our German business, in particular our acquisitions of Placetel and Starface. Under our first year of ownership, they delivered double-digit revenue growth*. Our UK performance was resilient despite the challenging UK business environment. As expected, the UK SME component of Gamma Business was impacted by headwinds ahead of the PSTN switch-off in January 2027 which reduced gross profit by a net c.£4m, while Gamma Enterprise experienced near-term competitive ethernet pricing pressure which reduced gross profit by c.£2m. Together these reduced UK gross profit by approximately £6m in the year. Following a review of the efficiency of our UK operations, we completed a restructuring programme in H2 2025 that will deliver annual operating expense savings of £7m from FY 2026.   

Adjusted EBITDAgrew by 13% from £125.5m to £141.7m. It grew at a lower rate than gross profit, as while Starface and Placetel have higher gross profit margins than the existing Group, they structurally have higher operating expenses.

Adjusted PBT increased by 7% from £111.9m to £119.4m. This reflects the £4.2m reduction in interest income and £3.5m increase in interest expense after we used a significant portion of our cash holdings and a drawdown on the RCF to fund the acquisition of Starface in February 2025.

Profit before tax decreased by 8% from £95.6m to £87.7m primarily because of £10.6m (2024: £Nil) of exceptional costs incurred in the year and an increase in amortisation of intangibles arising due to business combinations following the Starface acquisition. These exceptional costs were previously highlighted and comprised our costs to acquire Starface of £5.1m, the one-off costs incurred in our move to the Main Market of the London Stock Exchange of £2.2m and costs of £3.3m incurred in completing the UK restructuring in H2 2025.

Adjusted EPS (fully diluted) increased by 11% from 85.1p to 94.5p. This increase was driven by Adjusted PBT growth as above, supplemented by a 4% benefit from the reduced share count following the share buybacks in 2025 and 2024. EPS (fully diluted) decreased by 4% from 72.0p to 69.3p, reflecting the fall in profit before tax of 8% partially offset by the 4% benefit from share buybacks.

   * on a pro forma unaudited historical GAAP basis against 2024.

Market and strategy update

Gamma provides essential business communications technology across Western Europe, enabling organisations of all sizes to connect and collaborate effectively. Our portfolio supports businesses as they modernise their communications infrastructure - from cloud communications for SMEs to secure, complex networking solutions for larger enterprises - providing reliable, flexible platforms for today's digital environment.

Our solutions cover three core categories:

Market trends

Demand for modern, resilient communications solutions remains strong as organisations adopt cloud-based platforms, upgrade connectivity and invest in technologies such as AI, automation and cybersecurity. Gamma sees AI as an enabler. We are using AI to improve operational efficiency internally and for partners, to enhance customer service and security, and to accelerate product development. We are also embedding AI‑enabled solutions across our portfolio, leveraging leading hyperscaler technologies that deliver real ROI for partners and end users. The telecoms industry relies on physical infrastructure and regulatory frameworks that AI cannot replace, and our extensive channel‑partner relationships further strengthen this foundation.

In previous reports, we highlighted a number of structural market trends that we believe will drive Gamma's growth over the medium term. These themes remain firmly intact and, over the past year, have continued to develop in ways that reinforce our confidence in the long-term opportunity across our core markets.

Ongoing migration to cloud communications - a primary driver of Gamma's growth

Gamma provides cloud communications solutions for businesses of all sizes, combining its own platforms with leading third-party services, and extending popular collaboration tools such as Microsoft Teams, Google, Amazon and Zoom, with secure voice calling. Cloud platforms help companies to reduce complexity, improve reliability and enable flexible working, while avoiding the costs and maintenance of on-site communications hardware.

In Germany, where cloud adoption remains at an earlier stage than the UK, our product portfolios from our recent Placetel and Starface acquisitions have expanded our reach, and support the shift from legacy hardware to higher-value, long-term cloud subscriptions with higher recurring revenue. We are well positioned for significant long-term growth in a large, underpenetrated market.

In the UK, cloud adoption is more advanced. We continue to migrate customers from legacy telephony to higher‑value cloud services across both our own platforms and third‑party solutions such as Cisco Webex. As the market matures, growth is increasingly displacement-led and pricing remains competitive. As a result, growth in cloud user numbers is likely to be broadly offset by lower average margin per user ("AMPU"). To support future margin improvement, we continue to expand our portfolio of value-added services and to deliver more end-to-end managed services for larger organisations and partners.

The Coolwave acquisition in 2024 extended Gamma's international footprint, supporting voice and messaging services for service providers and hyperscalers, and creating further partner-led growth opportunities, particularly in APAC from 2026.

Customer experience ("CX") is an increasing focus for organisations

Part of the transition to cloud communications is driven by increasing consumer expectations of the services they receive from businesses. In response, businesses are increasingly prioritising CX, recognising its impact on customer loyalty, revenue and operational efficiency. This is driving demand for cloud-based contact centre platforms ("CCaaS"), which bring together voice, email, webchat and other channels into a single, flexible solution. These platforms enable organisations to respond faster to customer needs, scale more effectively and harness AI‑driven automation and personalisation to deliver higher‑quality service. While CX currently represents a small proportion of our portfolio, Gamma's products - including enhanced AI capabilities - support both small businesses and larger enterprises.

Full-fibre connectivity is a structural trend

High‑capacity, reliable internet access is now essential for modern business. As more applications and services move to the cloud, and hybrid working and AI-adoption increases data usage, demand for full‑fibre connectivity ("FTTP") continues to rise. Full‑fibre replaces traditional copper lines with fibre‑optic infrastructure, delivering faster speeds, lower latency and improved reliability - all critical for cloud services, video collaboration and the growing use of AI.

The UK's transition from the old analogue phone network to digital, IP‑based voice services by January 2027 - known as PSTN switch-off (Public Switched Telephone Network) - is accelerating the shift from copper to fibre. While full‑fibre offers faster, more reliable service, it carries a higher unit cost for Gamma than legacy copper. As a result, the migration of customers ahead of the switch‑off is creating a one-off gross profit headwind that is dependent on the pace of customer migration, with the full-year financial impact of 2026 migrations expected to be felt until the end of 2027. The headwind will cease once all customers have transitioned.

Gamma is seeking to mitigate this reduction in gross profit by actively capturing market share through structured migration programmes that move customers from legacy copper to fibre efficiently, and through our FibreXchange platform, which simplifies customer access and migration to the fragmented UK fibre market. As the fibre market continues to grow, these combined activities are expected to lead to medium-term connectivity gross profit improvement, once copper withdrawal is completed.

In Germany, while the move from the analogue to the digital phone network happened some time ago, connectivity remains largely on copper lines. Full‑fibre coverage remains relatively limited and fragmented, but is expected to expand, supported by government initiatives and operator investment. While connectivity is currently a small part of our German business, we are exploring ways to maximise this opportunity through partnerships with major local providers or via selective acquisitions.

International expansion of hyperscaler platform communications

As large technology platforms, such as Microsoft Teams, Amazon and Zoom, continue to grow internationally, they require communications partners capable of delivering consistent, compliant voice and messaging services across multiple countries. Only a small number of providers have the scale, regulatory expertise and operational capability to support this effectively. Through its Service Provider business, Gamma is well positioned to meet this demand, providing voice‑enabled, compliant services and multi‑country solutions for its international platform partners.

In addition to supporting global platform providers, Gamma's capabilities also address the needs of multinational enterprises seeking to simplify their communications estate, consolidate suppliers and ensure consistent service quality across geographic regions. Gamma's ability to deliver compliant, scalable solutions across multiple countries positions it as an attractive partner for enterprises looking to streamline their global communications footprint.

Cybersecurity is a critical requirement for businesses

The increasing use of cloud-based services and the growth of data stored in the cloud, have elevated the risk of cyber threat disruption for all businesses. Cybersecurity resilience investment continues to grow across businesses of all sizes as threat levels increase. Gamma's security capabilities provide enterprise‑grade protection in a simple, scalable way. Gamma currently provides cybersecurity products to a number of its enterprise customers and this will increasingly be extended to SMEs.

Adoption of the Internet of Things ("IoT") continues to expand

IoT lets devices like sensors, vehicles and equipment connect to the internet to share data in real time. This helps organisations work more efficiently, reduce risks and costs, and make better decisions. Adoption is accelerating as faster mobile networks and smarter data tools make it easier to use. A recent entrant to the IoT market, Gamma's Fusion IoT platform and embedded SIM ("eSIM") technology offer simple, reliable solutions that help businesses get the most from connected devices.

Taken together, these trends continue to shape demand across our core markets and support our confidence that the current UK SME headwinds are cyclical rather than structural. Gamma's differentiated portfolio, strong partner relationships and continued investment in technology innovation leave us well positioned as market conditions improve.

Strategic Priorities

Gamma's strategy remains focused on strengthening our position as a leading provider of business communications solutions across Western Europe. Five strategic priorities guide our approach:

Together, these priorities position us to capture market growth opportunities, supported by a robust business model and disciplined capital allocation, as well as skilled, committed people. Our commercial model is based largely on subscription contracts which have high rates of renewals. This means the Group has high recurring revenues of 89% (2024: 89%) and high levels of cash generation (93% cash conversion in 2025 (2024: 96%)).

1.   Migrate customers to modern platforms

The PSTN switch-off in the UK is scheduled for January 2027. Our operational focus is to ensure that existing customers migrate to Gamma's core modern platforms, ensuring they remain with us as their technology needs evolve. In addition, there is the continuing migration of hardware on-premise users in the UK, with customers who have been using Gamma SIP - the internet‑based method that connects on‑premise phone systems to the public telephone network - able to move to our Cloud Communications or our voice-enabled Calling products (such as Microsoft Teams).

2.   Grow the core business

Business communications are becoming more complex, combining voice, video, messaging, collaboration tools, AI and customer relationship management systems. Gamma's core strength is enabling organisations to adopt and manage these technologies in a simple, secure and scalable way.

We continue to invest in new product development and delivery, broadening our core customer proposition to offer a comprehensive suite of cloud-based communications solutions for organisations of all sizes across Europe - from micro‑businesses to large enterprises. These are delivered through our own platforms and in partnership with leading global technology providers, including Cisco, Microsoft, Amazon and Ericsson‑LG, whose products we adapt to meet the specific needs of our customers. By integrating these solutions with our telecoms network and service portal, we simplify deployment and management, increase cross-sell and up-sell opportunities, improve margins and deepen long-term customer relationships.

Our pan‑European portal architecture streamlines partner ordering and provisioning and allows new devices to be added within hours (previously days). Gamma Plus, our new approach to launching new value-added services, enables faster delivery of margin-accretive, add-on products. During the year, we launched standalone AI voice agent products in the UK and Germany, and are further developing AI in our products. These upgrades simplify and reduce the cost of product adoption, strengthen loyalty and increase share of customer spend.

In Germany, we expect continued double-digit revenue growth as businesses transition from on-premise systems to the cloud. We are well positioned to capture this shift by scaling Starface through our channel partners and Placetel through our direct online model.

The successful launch of Cisco's Webex cloud communications platform in the UK further strengthened our position across all customer segments. As the UK market consolidates, we see opportunities to acquire substantial customer bases from exiting providers, strengthening our scale and reinforcing our market position.

Across Europe, we see further opportunities to roll out Cisco's Webex as well as in full-fibre connectivity and the growing demand for IoT solutions.

3.   Expand into adjacent markets

We are extending our capabilities into new geographies and services, focusing on organic growth with selective accretive M&A as appropriate.

Within Gamma Business UK SME, we are expanding our Managed Service offer to provide customer service, first‑line support and operational services on behalf of certain Channel Partners. This creates a new revenue stream while strengthening partner relationships and expanding the value we provide. We will also grow our higher-margin value-added solution set, including AI Agents, IoT and cybersecurity, to increase share of wallet and customer loyalty.

Our Service Provider business provides numbering, voice and SMS capabilities for large, global communications platform providers who do not have their own telephone networks. Supported by structural demand and largely insulated from UK SME market headwinds, the continued international rollout of our Service Provider capability remains an important growth driver. We now offer fully compliant phone numbers in around 27 countries and are working to expand this further. This global capability enables us to support customers with international operations and generate additional revenue streams beyond the UK market, including our recent expansion into APAC.

We are expanding Placetel, our German digital-direct business, into the Netherlands and Austria, and in Gamma Enterprise our multi‑country capability will allow us to scale across Europe.

Globally, we see further opportunities developing our Microsoft proposition and launching new mobile services through digital and Mobile Virtual Network Operators ("MVNO") models.

4.   Enhance operational efficiency

Operational efficiency remains an important focus for Gamma and our customers. We will continue to review our UK and German operating models and cost base while protecting the investment required to capture growth opportunities. Increased use of automation and AI will reduce our costs and improve customer experience, by simplifying their purchase and provisioning journeys.

For customers, our cloud platforms reduce the need to maintain complex on-premise systems, lowering operational overheads. For partners, our portal's self-service and automation features streamline how they can interact with our solutions. Data-driven insights from Gamma Edge, our partner experience programme, are already informing improvements to order journeys, reducing friction in key support workflows and strengthening onboarding. All of this helps partners operate more effectively and deliver better outcomes.

5.   Deliver exceptional customer service

Across all routes to market, we remain focused on delivering consistently high‑quality service that supports retention, strengthens partner relationships and underpins our recurring revenue model. Our regulated calling infrastructure, secure connectivity and operational support all ensure reliability at scale. We continue to simplify deployment and management through enhancements to our portal, improving the experience for partners and end users. Targeted investment in our people and customer‑experience programmes will further reinforce service quality and operational resilience.

These five strategic priorities provide a clear and disciplined framework for the Group as we continue to expand our portfolio, grow our presence across Europe and strengthen operational efficiency.

Business Unit performance

Business unit share of Group gross profit

Gamma Germany

Gamma Germany serves over 75,000 SME customers with a comprehensive product portfolio of cloud communications platforms, on-premise calling, connectivity and IoT products. Delivered through multiple routes to market, including a partner network of c.4,500 partners and our digital channel in Placetel, Gamma Germany now accounts for nearly a quarter of the Group, at 23% of Group gross profit (2024: 9%) following our recent acquisitions of Placetel and Starface.

Overall growth in Germany was significant, led by our acquisitions of Placetel and Starface, acquired in September 2024 and February 2025 respectively. Both performed strongly, increasing cloud seats (to c.600k) and under the first year of our ownership they delivered double-digit revenue growth*: this was despite an ongoing weak macroeconomic backdrop. Organic gross profit growth was 11% on a constant currency basis, of which 8% was driven by Placetel's Q4 2025 trading which was organic given its acquisition in September 2024. The remainder reflected continued growth in higher margin cloud services partially offset by lower renewals in certain low margin Calling products. Gross margin increased significantly as Starface and Placetel generated meaningfully higher gross margins than our existing German business, as neither incurred significant third‑party licensing cost for their products and currently do not sell mobile through their channels which is at lower margin.

The acquisitions of Placetel and Starface have given us the necessary scale - and around a 15% cloud seat market share - to establish Gamma as the leading challenger in Germany, Europe's largest business communications market, and one where cloud adoption remains at an early stage. Integration is progressing well, with a single German management structure and a country-wide sales team, bringing together our existing German business with Starface with a unified approach to Channel Partner sales.

   * on a pro forma unaudited historical GAAP basis against 2024.

Gamma Business

Gamma Business comprises our UK SME and Service Provider businesses, and accounts for 55% of Group gross profit (2024: 65%).

UK SME - accounting for 42% (2024: 51%) of Group gross profit - sells a broad range of Calling, Cloud Communications and Connectivity products that support small UK businesses typically with fewer than 250 employees.

Service Provider - accounting for 13% (2024: 14%) of Group gross profit - provides Calling products (voice services, numbering and SMS capabilities) in c.27 countries for large, global communications platform providers, network operators and Mobile Virtual Network Operators who do not have their own telephone networks.

UK SME - delivered a resilient performance despite challenging UK market conditions. Cloud volumes increased, supported by continued growth in our cloud communications portfolio, although gross profit declined by 3%. This was primarily due to expected one-off headwinds ahead of the PSTN switch-off in early 2027 (which includes the impact of customers migrating from higher margin legacy copper products to lower margin fibre replacements), which reduced gross profit by a net c.£4m. We estimate that gross profit will be further reduced by a similar amount in FY 2026, with the full-year financial impact of FY 2026 migrations expected to be felt until the end of FY 2027, depending on the speed of customer migration. Gross profit was also impacted by a slight decline in other traditional voice traffic, which was partially offset by higher cloud volumes and inflationary price rises.

Despite these headwinds, product volumes and customer engagement remained strong. Our broader portfolio - including the lower‑cost PhoneLine+ solution - helped us maintain market share. The successful UK launch of "Webex for Gamma" in Q4 2025 further strengthened our position and, since the October launch, we already have nearly 20,000 seats from a standing start in the UK.

We continue to attract Channel Partners wanting long‑term, strategic alignment and, to maximise opportunities created by migrations, we are offering a fully managed end-to-end migration service:

These partnerships demonstrate our ability to deliver complex, high‑value deals and long‑term, scalable growth.

Service Provider - now contributes 25% (2024: 21%) of revenue and 23% (2024: 19%) of gross profit in Gamma Business. It saw healthy growth in Calling products leading to a 3% increase in gross profit, benefitting from structural demand and remaining insulated from UK SME market headwinds. While to date most of its revenue has been generated in the UK and Ireland, we are also well positioned internationally to meet the demand of global platform providers and multinational enterprises who seek to streamline their global communications footprint, as we now offer Calling products in c.27 countries, and in Q1 2026 we launched services in the higher‑growth Asia-Pacific region (starting in Australia, Singapore and the Philippines). This enables global communications platforms and service providers to access compliant calling capabilities locally without becoming licensed telecommunications operators or building their own infrastructure.

Gamma Enterprise

Gamma Enterprise sells cloud communications platforms (including contact centre solutions), connectivity, mobile, security and complex managed networks to mainly large corporate and public sector organisations. It accounts for 17% (2024: 20%) of Group gross profit.

Gamma Enterprise delivered growth, with the acquisition of BrightCloud, completed in July 2024, contributing £4.4m (2024: £3.3m) of inorganic revenue and £2.4m (2024: £1.9m) of inorganic gross profit. On an organic basis, gross profit reduced by approximately £2m (4%) in 2025 compared to 2024. This was due to near-term competitive ethernet pricing pressure, as long-term customer contracts came up for renewal and we had to apply discounts to the pricing of fibre connectivity in order to retain the business, given the number of alternative networks now competing to provide fibre. We expect this ethernet pricing competition on renewals to continue, reducing gross profit by a further c.£3m in FY 2026, after which we believe pricing will stabilise as the market reaches an equilibrium. This impact is expected to be offset by notable contracts won late in 2025 for roll-out during 2026, as the pipeline continues to improve. These wins include:

Our shift to a new go-to-market operating model focused on Secure Networking, Cyber, Collaboration and Customer Experience better reflects customer needs. We remain confident in the medium‑term growth potential for Gamma Enterprise across our core markets.

Financial review

Operating expenses

Operating expenses grew from £210.0m in 2024 to £257.3m. We break these down as follows:

Operating expenses excluding research and development costs, depreciation, amortisation and exceptional items increased by £30.8m (20%), comprising the following:

Research and development costs decreased £0.3m (2%) to £19.4m (2024: £19.7m). The acquisition of Starface increased research and development costs by £0.5m, without which costs reduced by 4%.

Depreciation and amortisation on tangible and intangible assets (excluding business combinations) increased to £21.4m (2024: £20.4m), driven by an increased level of leased right-of-use assets from Starface and Placetel.

Amortisation of intangibles arising due to business combinations increased to £18.6m (2024: £13.4m). This reflected a higher level of acquired intangible assets, principally from the Starface acquisition, as well as the full‑year impact of amortisation on the Placetel intangible assets.

Exceptional items

There were three items classified as exceptional in the year (2024: £Nil) given their size and nature, totaling £10.6m (2024: £Nil). These were the costs associated with the acquisition of Starface of £5.1m, the one-off costs incurred in the Group's move to the Main Market of the London Stock Exchange of £2.2m and costs of £3.3m incurred in completing a UK restructuring in H2 2025. These were previously highlighted at the 2024 Full-Year results presentation on 25 March 2025 and the Half-Year 2025 results presentation on 9 September 2025. The cash cost of these items in the year was £9.4m (2024: £2.7m), with the remainder payable in 2026.

Starface acquisition costs

The acquisition of Starface was of significant scale and so the Group incurred material one-off costs. These principally related to adviser fees, including significant deal contingent success fees, and costs incurred to cap the amount of GBP potentially payable given the acquisition consideration was Euro denominated and subject to German regulatory approval.

Costs associated with the move to the Main Market of the London Stock Exchange

The Group's move of its listing from the AIM to the Main Market of the London Stock Exchange resulted in significant one-off costs, comprising adviser and admission fees.

Restructuring costs

Following a review of the efficiency of our operations, we completed a UK restructuring programme in H2 2025 which resulted in one-off severance costs of £3.3m. This will deliver annual operating expense savings of £7m across both Gamma Business and Gamma Enterprise from FY 2026.

Adjusted EBITDA

Adjusted EBITDA grew from £125.5m to £141.7m (13%) driven by our recent German acquisitions, which performed strongly. It grew at a lower rate than gross profit, as while Starface and Placetel have higher gross profit margins than the existing Group, they have relatively higher operating expenses. Excluding acquisitions, Adjusted EBITDA was flat on an organic constant currency basis, as defined in the APM section. Adjusted EBITDA also benefitted from a net contingent consideration release of £1.9m (2024: £1.3m) related to the Satisnet, Pragma and BrightCloud acquisitions, following an assessment of current trading compared to earn out related thresholds and the expected timing of such payments.

There was also a net gain of £1.6m on mark to market movements on USD forward exchange contracts and the foreign exchange movement on Placetel deferred consideration. We have excluded this net gain from Adjusted EBITDA, treating it as an other adjusting item, as it reflects external market factors and not the Group's trading performance.

We continue to exclude the costs of the implementation of the new UK Finance ERP system from Adjusted EBITDA. We have recorded them as an other adjusting item as the total cost of c.£3m for the implementation across 2024 and 2025 was considered significant. These incremental costs in the year were £1.8m (2024: £1.4m). The implementation is now completed in the UK, with the new Finance ERP in use in 2026. In the medium-term, we also plan to implement the new Finance ERP system in our German operations which will facilitate synergies in the long-term.

Profit before tax and Adjusted PBT

Profit before tax decreased from £95.6m to £87.7m (-8%) while Adjusted PBT grew from £111.9m to £119.4m (7%).

Adjusted PBT was similarly impacted by the items which impacted Adjusted EBITDA above. It grew less than Adjusted EBITDA as net finance costs increased following the use of a significant portion of our cash holdings and a drawdown on the Revolving Credit Facility ("RCF") to fund the acquisition of Starface in February 2025. This led to a corresponding £4.2m reduction in interest income and £3.5m increase in interest expense. Interest on borrowings resulting from the RCF was £2.6m (2024: £Nil).

Profit before tax was also impacted by £10.6m of exceptional costs incurred in the year and an increase of £5.2m in amortisation of intangibles arising due to business combinations following the Starface acquisition, as previously described.

Taxation

The effective tax rate for 2025 was 26% (2024: 27%). This was higher than the 25% statutory UK average rate due primarily to professional fees incurred on the Starface acquisition and the move to the Main Market that were not deductible in determining taxable profit, as well as increased profits generated in Germany that were taxed at a higher rate. These were partly offset by the recognition of a successful £1.9m historical multi-year patent box claim and assumption true ups following the submission of the 2024 UK tax computations.

Net debt, financing and cash flows

As at 31 December 2025, the Group had Net debt of £9.3m (2024: Net cash £153.7m). Net debt comprises borrowings of £33.0m (2024: £Nil) less cash and cash equivalents of £23.7m (2024: £153.7m).

In January 2025, the Group agreed a three-year £130m multicurrency RCF, with an option to extend for a further year. Net of repayments, £33m was drawn down during the year, of which £30m was initially drawn down in February 2025 to part fund the Starface acquisition.

Cash generated by operations was £115.1m (2024: £116.8m). This reduction was after the £9.4m (2024: £2.7m) one-off cash impact of exceptional items previously described and after an overall increase in working capital cash outflows of £6.0m. These outflows were offset by the additional cash generated from our Placetel and Starface acquisitions.

The increase in working capital cash outflow was largely due to a one-off £4.0m of Starface maintenance revenues where the billing and cash collection took place prior to acquisition and so formed part of net cash used in investing activities rather than cash generated by operations. Working capital was also impacted by the one-off payment of an acquired £1.7m non-trading-related Placetel liability.

Adjusted cash generated by operations, which excludes the one-off cash impacts of the exceptional and other adjusting items and the Starface and Placetel working capital matters described above, increased by £11.4m to £131.8m (2024: £120.4m). Adjusted cash conversion remained strong at 93% (2024: 96%).

Adjusted free cash flow which is Adjusted cash generated by operations after capital spend and taxes paid (both as described below), increased by £3.5m to £80.8m (2024: £77.3m), funding amongst other things, £64.0m of returns to shareholders.

Taxes paid increased to £26.7m (2024: £23.9m). This includes a £1.9m partial payment of the tax liabilities acquired with Starface as well as amounts related to Starface's 2025 post acquisition trading.

The primary cash items which are not directly related to trading were:

Capital spend

Capital spend in 2025 was £24.3m (2024: £19.2m), which is 3.8% (2024: 3.3%) as a percentage of revenue. This is broken down as follows:

Adjusted EPS (fully diluted) and EPS (fully diluted)

Adjusted EPS (fully diluted) increased from 85.1p to 94.5p (11%). This increase was primarily driven by Adjusted PBT growth of 7% as previously described, supplemented by a 4% benefit from the share buybacks in 2025 and 2024. As explained in the later APM section, we have amended Adjusted EPS (fully diluted) to exclude the benefit of a successful historical multi-year patent box claim of £1.9m recognised in the year, given its multi-year nature which does not reflect current period trading performance. EPS (fully diluted) decreased from 72.0p to 69.3p (4% decrease) primarily reflecting the fall in profit before tax of 8%, which was partially offset by the 4% benefit from share buybacks.

Return on capital employed ("ROCE")

ROCE measures the efficiency of the Group's profit generation from the capital we deploy. It is an important measure of efficiency, newly introduced as a KPI in 2025. ROCE for 2025 was healthy at 27.8% (2024 pro forma: 27.4%). Pro forma explanation included in the APM section.

Acquisitions

The acquisition of Starface in February 2025 was the main driver of a £207.5m increase in intangible assets from £189.3m to £396.6m. This included acquisition-related intangible asset additions of £198.0m comprising customer relationships intangibles of £87.7m, development cost intangibles of £14.9m, brand intangibles of £6.6m and goodwill of £88.8m. The smaller acquisitions of Desatel and Allnet contributed a further £4.3m of intangible assets. In addition, £34.0m of deferred tax liability was recognised on acquired Starface intangible assets.

As at 31 December 2025 the acquisition of Starface had also increased Group contract liabilities by £5.8m (which include the deferred maintenance revenue amounts referred to previously), leased right-of-use assets by £5.9m, lease liabilities by £6.1m (included within other financial liabilities), trade and other receivables by £4.6m and trade and other payables by £3.7m.

Share buyback

In total 3,736,038 ordinary shares were acquired by the Company for an aggregate £45.1m over the course of the H1 2025 share buyback. This represented approximately 4% of the Company's ordinary share capital at commencement of the buyback. The shares purchased were cancelled resulting in a £45.1m reduction in retained earnings.

Dividends

The Board is proposing a final dividend of 14.8p (2024: 13.0p). This is an increase of 14% and is in line with the progressive dividend policy we have applied in respect of FY 2025. Subject to shareholder approval, the final dividend is payable on Thursday 18 June 2026 to shareholders on the register as at 5.00pm on Friday 29 May 2026.

Capital allocation policy

Gamma has a strong balance sheet and a high level of recurring revenues. It continues to generate significant operating cash flow with liquidity supported by its £130m multicurrency RCF, of which £97m remained undrawn at 31 December 2025. The Company is committed to maintaining balance sheet efficiency and providing the appropriate returns to shareholders, while also balancing investment in the development of the business and selective M&A, as appropriate.

In January 2026, following a review of the Company's capital structure, liquidity and cash generation, the Board announced the launch of a share buyback programme within existing shareholder authorities of up to £42.5m in FY 2026 and an intention to launch a further £42.5m share buyback in FY 2027, returning up to £85m in aggregate.

In parallel, the Board also announced that it intends to pay a dividend per share for the next two years fixed at FY 2025 levels. The intended dividends would continue to be structured as 1/3rd : 2/3rds across interim and final payments. The first such dividend would be the interim dividend declared alongside the 2026 interim results in September 2026.

The Board will continue to keep its capital allocation policy under review.

Going concern

In making its assessment on going concern the Directors have considered: 

The Directors are satisfied that the Group and Company have adequate financial resources to continue in operational existence for the foreseeable future, being a period of at least 12 months from the date of this report. Accordingly, the going concern basis of accounting continues to be used in the preparation of the Annual Report for the year ended 31 December 2025.

Other matters

Sustainability

Gamma remains committed to proactively minimising its environmental impact, delivering further progress against our sustainability strategy in 2025, including our 20th consecutive year of CarbonNeutral® certification. Scope 1 and 2 emissions reduced again during the year, supported by the removal of gas heating, improved datacentre efficiency and continued sourcing of renewable electricity. With purchased goods and services accounting for 92% of Scope 3 emissions, we expanded supply‑chain assessments to 81% of suppliers by spend to enhance data quality and inform reduction plans. Governance remains strong, with Board‑level oversight through the ESG Committee and carbon‑reduction metrics embedded into long‑term incentives.

Board changes

Gamma is pleased to announce the appointment of Damien Maltarp as Chief Financial Officer and Executive Director, following a comprehensive search and selection process. Damien will succeed Bill Castell, who, as previously announced, will be leaving the Group on 31 March 2026 to take up an executive role at a private equity backed business.

Damien will join the Group and the Board at the latest in September 2026, with the exact date to be confirmed.

Supplementary information on product volumes 

The following reporting of data is consistent with the past. Gamma will host a capital markets day later this year where we will explain how we will report progress going forward.

The table below shows the number of Cloud seats in UK and Europe 

*UK Cloud seats excludes seats resulting from the migration of the O2 Daisy base and are at a lower margin.  

+On a proforma basis, including Starface seats at 31 December 2024, Cloud seats in Germany were 536,000 and therefore 2025 growth was 11% 

 The table below shows the number of CCaaS seats:   

*CCaaS seats for Horizon Contact users also take a "Base Horizon" seat (therefore 32,000 seats are separately disclosed within Cloud PBX seats).  

The table below shows the increase in the number of SIP Trunks which provide voice enablement to various hardware PBXs and voice applications: