Summary

  • PCI Pal’s 16 September update put ARR at about £24.8m and Contracted ARR at about £27.9m, both subject to audit, while saying FY26 revenue and adjusted EBITDA would be no less than the earlier £24.6m and £1.1m indications.
  • The July figures came from unaudited management accounts: £24.4m ARR, £27.5m Contracted ARR, expected revenue of £24.6m, adjusted EBITDA of about £1.1m, £4.0m cash and no bank debt.
  • ARR annualises contracts already deployed at year end. Contracted ARR also includes signed contracts still awaiting deployment and may include amounts not yet invoiced or recorded as deferred revenue.
  • Statutory revenue depends on performance, go-live or customer takeover, usage, contract-term allocation and deferral. Neither run-rate metric answers those accounting questions.
  • PCI Pal has disclosed a delayed audit assessment and no revised results date. It has not announced fraud, a restatement or weaker results, and the update should not be made to imply any of them.

PCI Pal’s September announcement contains two statements that look uncomfortable together but are not contradictory. The company increased its estimate of the annual value of deployed contracts and of all signed contracts. It also said the annual report and accounts would take longer because the year-end audit needed more time to finalise the assessment of certain revenue-recognition and related matters.

The first statement describes the commercial run-rate at the edge of the financial year. The second concerns how transactions are assigned to accounting periods and when the auditor has enough evidence to sign. A larger signed base can coexist with an unresolved recognition judgement because the two measurements answer different questions.

What changed between July and September

On 28 July, based on unaudited management accounts, PCI Pal reported ARR of £24.4m and Contracted ARR of £27.5m. It expected FY26 revenue of £24.6m and adjusted EBITDA of about £1.1m, and reported £4.0m of year-end cash with no bank debt. Gross revenue retention was 96%.

On 16 September, the company described ARR of approximately £24.8m and Contracted ARR of approximately £27.9m, each £0.4m above July. Those figures were explicitly subject to audit. Revenue and adjusted EBITDA were not replaced with newly audited totals: PCI Pal said they would be no less than the earlier £24.6m and £1.1m indications.

The wording preserves three distinctions. July was an estimate from management accounts. September strengthened two operating estimates but still subjected them to audit. And “no less than” is a floor, not a completed income statement. The missing deliverables remained the auditor’s conclusion and a confirmed publication date.

Three recurring-revenue measures, not one

PCI Pal’s own definitions prevent ARR, Contracted ARR and reported recurring revenue from being collapsed.

ARR is the annual recurring revenue of contracts deployed at year end. It is a snapshot annualisation: useful for the scale of the live base, but not a count of revenue recognised during the twelve months.

Contracted ARR is further upstream. It covers annual recurring revenue from all signed contracts, including contracts not yet deployed and amounts that may not yet be invoiced or included in deferred revenue. The £3.1m gap between September Contracted ARR and ARR therefore represents contracted run-rate not yet inside the deployed ARR base; it is not automatically a receivable, cash balance or next-period revenue.

Reported recurring revenue is different again. PCI Pal defines it as recurring contract revenue recognised in the statement of comprehensive income during the period. That number belongs to accounting time, not merely contract status.

The seven clocks that cannot be merged

A signed contract establishes a commercial commitment. Deployment establishes that a solution is live or under the customer’s control. ARR annualises the deployed recurring value. Invoicing creates a claim for payment. Cash collection changes liquidity. Revenue recognition records performance in the relevant period. Audit completion provides independent assurance over the accounts.

PCI Pal’s stated policy makes the differences concrete. Monthly licence and usage fees are recognised when performance obligations have been met, generally from the earlier of go-live or customer takeover. Telephony usage is recognised as consumed. One-off setup, professional-services and installation fees are treated as part of the wider contract, deferred and normally released over an estimated four-year term, with stated exceptions.

Those rules require evidence about commencement dates, customer takeover, usage records, contract terms and deferrals. Contracted ARR can increase when a contract is signed before any of those conditions is satisfied. ARR can increase after deployment without showing how much of a one-off fee belongs in FY26. Cash can arrive before or after recognised revenue. Adjusted EBITDA then adds a separate layer because it excludes specified exceptional, non-operating, depreciation, amortisation, foreign-exchange and share-option items.

Why an audit can take longer without supplying a verdict

Revenue recognition was already a key audit matter in PCI Pal’s FY25 annual report. The auditor tested when over-time recognition began, how revenue was allocated over contract life, the estimate of average contract length, deferred balances and the completeness and accuracy of usage fees. That history shows that the work is judgement-heavy even in an ordinary completed audit.

It does not reveal the result of the FY26 review. The September statement does not identify affected contracts, jurisdictions or amounts. It does not quantify a possible adjustment. It does not say whether the final audited numbers will change. And it does not announce fraud or a restatement.

The disciplined reading is therefore narrow. Commercial momentum looks firmer than it did in July because the two run-rate estimates moved higher. Accounting certainty did not move at the same speed because the audit assessment and publication timetable remained open.

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