Beeks Financial Cloud Group reported first-half revenue of £14.7 million for the six months ending December 31, a 7% decline from the same period last year, even as the company secured its largest batch of contracts to date.

Cloud Provider Beeks Burns Cash to Fund Record Pipeline of Exchange Deals

The AIM-listed cloud provider for financial firms (LSE: BKS) attributed the revenue drop to timing issues with its Proximity Cloud product and an ongoing transition to revenue-share arrangements with exchange clients. Those deals take longer to show up as recognized revenue but promise steadier long-term income streams.

"The first half of FY26 has seen strong commercial momentum across all offerings, securing multiple large-scale contracts, demonstrating the growing demand for our secure, high-performance cloud infrastructure across the global financial markets," CEO Gordon McArthur said in the statement.

Beeks closed several major deals late in the period, including two Exchange Cloud contracts and multiple Private Cloud and Proximity Cloud agreements worth a combined £7 million. About half that amount should convert to revenue in the second half of the fiscal year ending June 2026.

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Financial Snapshot

Recurring Revenue Base Grows as One-Time Sales Slow

The company's annual contracted monthly recurring revenue climbed to £32.8m from £28.5m a year earlier, reflecting 15% growth in its Private Cloud business. That metric tracks the predictable revenue Beeks can expect from ongoing client relationships rather than one-time implementations.

The shift mirrors a broader trend in financial technology infrastructure. Beeks posted 26% revenue growth for its full fiscal year 2025, driven largely by exchange contracts. But as those relationships mature, the revenue recognition pattern changes.

"We have entered the second half of the year with record levels of revenue visibility, underscoring our confidence in full year numbers, and our focus remains on executing against a strong pipeline,” the CEO added.

The company now works with seven exchanges globally under various arrangements. In December, it secured a £4 million five-year contract with a large FX broker and signed a deal with a Canadian bank.

Earlier that month, Beeks landed its fifth exchange client of 2025 through a revenue-sharing agreement with nuam, a Latin American holding company operating across Chile, Colombia, and Peru.

Cash Position Tightens on Infrastructure Spending

Net cash dropped to £3.3 million from £7.0 million in June 2025, a 53% decline driven by upfront investments in infrastructure to support the new contracts. The company tapped debt facilities to fund deployment of its Proximity Cloud, Exchange Cloud, and Private Cloud platforms.

Gross cash remained relatively stable at £7.0 million compared to £7.4 million six months earlier. The company said it needed to spend ahead of revenue recognition to get new exchange and proximity hosting sites operational.

Exchange Cloud contracts typically require Beeks to build out data center presence near trading venues before revenue starts flowing. Under revenue-share models, the company earns a percentage of client trading activity over time rather than collecting large upfront fees.

Last year, the company's first-half profit jumped 31% to £1.8m on revenue of £15.8m, with management saying performance was tracking board expectations.