Unaudited interim results for the six months ended 30 September 2022

Eckoh plc

(“Eckoh” or the “Group”)

Unaudited interim results for the six months ended 30 September 2022

- Trading in line with market expectations; on track to deliver material growth in FY23
- Group and North America ARR and total orders growing strongly
- Syntec integration progressing to plan
– New security solutions portfolio and expanded addressable market enhancing future growth opportunity

Eckoh plc (AIM: ECK) the global provider of Customer Engagement Security Solutions, is pleased to announce unaudited results for the six months to 30 September 2022.

Strategic highlights

• Results on track to deliver material growth in FY23, in-line with market expectations⁷
• Continued strong ARR¹ growth, driven predominantly by the North American market
• Integration of transformational Syntec acquisition and new product development progressing well and on plan
• Encouraging initial levels of cross selling from the new portfolio, which is extending the total addressable market
• Security Solutions sales activity continues to be driven by cloud deals and international mandates
  • Two large cloud deals signed in the half with a leading global hotel group and a large US retailer, both taking multiple products including voice security, digital payments and advanced speech
• Fundamental industry shift to remote working and ongoing migration to cloud supporting growth opportunity

Financial highlights

• Strong performance, as previously announced in Trading Update on 1 November 2022
• Group revenue grew by 33% to £19.6m from the addition of Syntec, and underlying, organic growth
• Group ARR¹ up 52%, reflecting the market opportunity, ongoing shift to cloud and successful renewals
• Recurring revenue² increased by 43% to £15.5m, representing 79% of total revenues (H1 FY22: £10.9m; 74%), reflecting the successful renewals in the North America territory in the period
• Adjusted operating profit⁴ up 52% to £4.2m (H1 FY22: £2.8m) driven by continued revenue growth, the ongoing impact of prior year cost savings and benefit from FX movements
• Total contracted business⁶ was £17.6m (H1 FY22 £11.5m), a strong recovery, increasing by 54%, with new business growing by 67% to £8.2m
• North America territory performed strongly:
  • ARR¹ of $13.8m, up 71% (H1 FY22: $8.1m) and 16% growth since end of March 2022 (which reflects like-for-like growth following the completion of Syntec)
  • Revenue of $10.6m, up 33%, (H1 FY22: $7.9m)
  • Recurring revenue up 9% to 73%, driven by successful renewals and continuing cloud adoptions
• UK, Ireland and ROW revenues returned to growth with single digit growth expected going forward
  • Revenue up 22%, to £10.9 m (H1 FY22: £9.0 m)
  • ARR¹ of £16.4m, up 32% from last year (H1 FY22: £12.4 m)
  • Excellent levels of successful renewals including the two largest this financial year
• Balance sheet remains strong following the £31m acquisition of Syntec in December 2021, with net cash of £4.4m at 30 September 2022 (H1 FY22: £12.7m)

Outlook

• Eckoh is trading in-line with market expectations⁷; on track to deliver material growth in FY23, without yet benefiting markedly from the new security solutions product set
• With an increasingly relevant product portfolio, resilient business model, high recurring revenues, and a robust balance sheet, Eckoh is well placed to continue the strong progress in the coming years

Nik Philpot, Chief Executive Officer, said: “These are a great set of results, showing the anticipated strong progress in key areas. I am particularly pleased with the increasing organic and overall levels of ARR and contracted orders. They reflect our organic growth, the successful integration of Syntec, strong growth in the key North American market, and the ongoing momentum from cloud deployments.

The customer engagement industry is already facing new security challenges from the permanent shift towards greater remote working, and a deteriorating global economic environment is likely to only exacerbate the number of security threats. Organisations who ignore these risks do so at their potential reputational and financial peril. We believe our enhanced set of security solutions will not only help companies to address these issues but also drive significantly better performance from their customer engagement and increase customer satisfaction.

Our addressable market, which was already significant, has been expanded further by our new solution set, and the global opportunity supported by our enhanced cloud platforms will help drive our ongoing growth and the future exciting prospects for Eckoh.”

For more information, please contact:

Eckoh PLC
Nik Philpot, Chief Executive Officer
Chrissie Herbert, Chief Financial Officer
Tel: +44 (0) 1442 458 300
www.eckoh.com

FTI Consulting LLP
Ed Bridges / Jamie Ricketts / Tom Blundell
Tel: +44 (0) 203 727 1017
eckoh@fticonsulting.com

Singer Capital Markets (Nomad & Joint Broker)
Shaun Dobson / Tom Salvesen / Alex Bond / Kailey Aliyar
Tel: +44 (0) 20 7496 3000
www.singercm.com

Canaccord Genuity Limited (Joint Broker)
Simon Bridges, Emma Gabriel
Tel: +44(0) 20 7523 8000
www.canaccordgenuity.com

1. _{ARR is the annual recurring revenue of all contracts billing at the end of the period. Included within Group ARR is all revenue that is contractually committed and an element of UK revenue that has proven to be repeatable, but not contractually committed.}
2. _{Recurring revenue is defined as on-going revenue on a transactional basis, rather than revenue derived from the set-up and delivery of a new service or hardware.}
3. _{Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is the profit before tax adjusted for depreciation of owned and leased assets, amortisation of intangible assets, expenses relating to share option schemes, restructuring costs and transactional costs.}
4. _{Adjusted operating profit is the profit before tax adjusted for amortisation of acquired intangible assets, expenses relating to share option schemes, restructuring and transactional costs}
5. _{Adjusted earnings pence per share – the Group issued 36.2m new ordinary shares during FY22 in connection with the acquisition of Syntec which results in an increase in the weighted average shares in issue across the period.}
6. _{Total contracted business includes new business from new clients and from existing clients as well as renewals with existing clients.}
7. _{Eckoh believes that consensus market expectations for the year ending 31 March 2023 is revenue of £40.25 million and adjusted operating profit of £7.45 million.}