Alfa Financial Software Holdings PLC
Annual Report and Accounts 2025
Broadening our opportunity
strengthening our lead
2025 was a year of outstanding financial and operational performance.
The momentum and excitement generated by 2024's launch of Alfa Systems 6, together with eight new customer wins, carried positively into 2025 and throughout the year.
Operational performance was excellent, with our Delivery teams successfully supporting new implementations while maintaining exceptional service for existing customers.
Following the major product launch we moved quickly to
the next phase of innovation, committing substantial further investment in key areas such as Originations, Fleet and Commercial Finance. These enhancements not only expand our ability to deliver value to current customers and markets, but also open up opportunities in new ones.
35 years after Alfa was founded, our passion for innovation and our commitment to our customers' growth remain as strong as ever - driven by an experienced, motivated and truly impressive Alfa team.
Awards
We're proud to have received several industry awards in 2025 recognising our innovation, growth, and impact.
page 27
Strategy in action
Our strategy comes to life through the actions, initiatives, and results that drive our business forward.
pages 13-17
35 year timeline
Discover the story behind our journey and the milestones that brought us here as we marked our 35th birthday.
page 2
Strategic report
Key highlights
Our story
About Alfa
Business model
Investment case
CEO review
10 Market overview
12 Alfa Systems 6
13 Strategy in action
18 Key performance indicators
20 Financial review
24 Environmental, Social and Governance
28 Streamlined Energy and Carbon Reporting
29 Non-financial and Sustainability Information Statement
30 Climate-related Financial Disclosures
34 Risk management
37 Principal risks and uncertainties
45 Engaging with our stakeholders and Section 172 Statement
52 Viability statement
Corporate governance
Chairman's introduction
Code of compliance
Board at a glance
Board of Directors
60 Company Leadership Team
61 Our governance framework
62 Board leadership and Company purpose
63 Culture and values
64 The Board in action
66 Division of responsibilities
68 Composition, succession and performance
71 Nomination Committee report
75 Audit and Risk Committee report
82 Remuneration Committee report
85 Annual report on remuneration
99 Directors' remuneration policy
103 Directors' report
107 Statement of Directors' responsibilities
Financial statements
109 Independent auditor's report
Consolidated statement of profit or loss and comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Company statement of financial position
Company statement of changes in equity
Notes to the Company financial statements
Additional information
Five-year history
Shareholder information
Alfa ESG: alfasystems.com/en-eu/ about/sustainability
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 1
Key highlights
Revenue
+17%1
Subscription revenue growth
NRR3
£126.7m +16%2024: +18%
109%2024: 103%
£83.2m
2021
2022 2023 2024 2025
Total contract value2
£227.5m+3%
3. Net Revenue Retention. Over the 12 months to 31 December 2025. See "Definitions" on page 18 for further information.
EBITDA margin
£93.3m
£102.0m
£109.9m
£126.7m
34.3At constant currencies. See "Definitions" on page 18 for further information.
Operating profit +17%
£40.1m2024: £221.3m
Total Contract Value. See "Definitions" on page 18 for further information.
%
2024: 33.7%
Operating profit margin
31.6%£24.7m
£29.6m
£30.1m
£34.3m
£40.1m
2024: 31.2%
Operating free cash flow conversion4
97%2024: 89%
2021
2022 2023 2024 2025
4. Operating free cash flow conversion. See "Definitions" on page 18 for further information.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 2
Our story
35 years of Alfa
With 35 years' experience in the auto and equipment finance industries worldwide, Alfa has grown and developed considerably as the decades have passed.
1990
Founded as CHP Consulting.
1992
First live customer
1995
Alfa Systems v3
2003
Alfa Systems v4
2004
First Asia-Pacific customer
2009
Alfa Systems v5
2010
First US customer
2011
First pan-European customer
2016
Rebranded to Alfa
Becoming Alfa
The present day
2021
Transition to subscription model
2024
100 colleagues in the US 500 colleagues globally
Alfa Systems 6
Single-tenant SaaS deployment Immediate availability
Alfa Start accelerators as a template Simplified, rich APIs
Broad market reach
The early
2017
First live Alfa Cloud customer
Alfa now
527 32
years
Listed on the London Stock Exchange
global headcount
37
countries
live customers
97%
retention
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 3
About Alfa
Our model:
how we create value
c
Total Addressable Market
Serviceable Addressable Market
Non-Addressable Market
Core functions
c
Powering future-ready asset finance
Alfa Systems' class-leading SaaS platform is at the heart of the world's most progressive asset finance operations across global markets.
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A single platform supports finance operations globally.
Alfa's business model combines powerful software, deep expertise and proven delivery to support today's markets while enabling future growth. Core functions serve today's
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Serviceable Addressable Market across wholesale, originations, servicing and collections, while also supporting fleet and US auto originations. Great people, strong culture and innovation enable expansion into Target Addressable Markets through continued investment and partnership.
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Customer type
52%
34%
Captives
Banks
14% Independents
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Customers' markets
60%
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Auto
Equipment
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 4
Business model in action
Customer journey -Performance through partnership
From definition to delivery, Alfa Systems enables customers to modernise operations, accelerate growth and build lasting value through a single, intelligent, global platform.
Illustrative customer revenue profile Software development
Contract signed
Final go live
Software Engineering DeliverySubscription
Customer revenues
Portfolio increases
Definition
Implementation, multiple go-lives
Ongoing services
Definition and partnership
Delivery work can start under Letters of Engagement and before full contracts are signed. This could be for paid for Project Readiness Assessments or Definition work.
Small subscription revenues may be generated from test environments.
Implementation and early go-lives
As the project gets fully underway client and Alfa teams increase in size so delivery revenues increase.
The client may identify some changes to the software they would like and so Software Engineering revenues are generated.
Assuming a Minimum Viable Product approach small portfolios may go-live so subscription revenues tick up.
Expansion and multiple go-lives
Building on the successful pilot, Alfa supports multi-country roll outs for the client.
The system scales effortlessly to handle increased volumes,
supported by our modular pillars.
Go-live completion and optimisation
All initial development is complete before final go-live so software engineering revenues drop to zero.
Delivery teams continue supporting post go-live.
Contracts have now reached the full run rate and so subscription levels now at ongoing levels.
Ongoing partnership Delivery revenues continue, supporting the client with regular upgrades, new module implementations, portfolio
migrations, supporting corporate activity (eg M&A).
Subscription revenues rise with CPI and also with increased volumes and incremental module sales
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 5
Investment case
A strong investment
Our differentiated model combines market opportunity, exceptional technology, delivery excellence and a culture that attracts and retains outstanding people.
A platform shaped by experience
Alfa Systems is the result of decades of focused development alongside the world's leading asset and automotive finance providers, empowering users to tailor processes to their business.
A proven, living asset
Our IP is not static; it grows in capability and value with every implementation. Insights gained from 35+ years of delivery inform each new release, creating a virtuous cycle of improvement.
Returns - delivering value
Revenue
£127m
+15%
Op. Profit margin
32%
+0%
Employee engagement
83%
+1%
Operating profit
£40m
+17%
Dividends paid
£26m
+18%
Product - Our exceptional IP
Recurring revenues from subscriptions now represent 34% of total, with continued strong growth.
Operating profit margin of 32% and consistent cash conversion (97%) underline financial strength.
Robust balance sheet supports regular dividends and investment in future growth.
Markets - enduring opportunity
Operates in a massive diversified global market with large, established customers and growing digital demand.
High barriers to entry: complex, regulated industries and mission-critical software with few credible competitors.
Growth supported by push and pull factors - regulatory change, sustainability
Our CTO on technology
A deep dive into Alfa's technology with CTO Andrew Flegg and CEO
Andrew Denton. alfasystems.com/news-and-insights/2025_cto_tech
Continuous innovation
We reinvest consistently in the product - £37.7 million in 2025 alone -to ensure Alfa Systems remains the benchmark for capability, efficiency and performance.
Technically outstanding
Alfa Systems is a cloud-native, secure SaaS and integrates seamlessly into customers' digital ecosystems. The platform is extensible and modular, meaning it can evolve without disruption as new functionality is required.
pressures, digital transformation, and customer expectations for cloud-based flexibility.
Proven across 37 countries, with both large and niche players operating successfully on a single system.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 6
CEO review
Delivery excellence and growing our addressable markets
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.
Business review
Strong strategic progress
Alfa is an enterprise software and delivery company. Our strategy for creating long-term, sustainable business value is to:
Strengthen - grow our differentiation of market leading people, product and delivery
Scale - increase our capacity for developing and delivering Alfa Systems and extend
our reach
Sell - enable profitable growth by focusing on Alfa Cloud, Subscription revenues and incremental sales in our chosen markets
Simplify - enable more concurrent implementations, more efficiently by simplifying our product, delivery and processes and utilising Alfa Start
In 2025 we continued to make significant strategic progress, at the same time as delivering strong results.
Subscription growth - our strong sequential growth in Subscription revenues has continued
Product development - continued progress particularly in the areas of US Auto Originations, Commercial Finance and Fleet, increasing the Target and Serviceable Addressable Markets
Delivering Alfa Systems 6 ("AS6") - we have shown the frictionless upgrade nature of AS6 for our customers, with 20 of them now live
Incremental sales - we have streamlined the process of module launches thereby enabling growth in incremental sales
CEO review continued
In 2025 we continued to increase our functional lead over our competition with further releases of Alfa Systems 6 and developing new modules to cover US Auto Originations, Fleet and Commercial Finance.
We have continued to grow the Company and have increased our access to talent pools by establishing a smart hub in Poland, while maintaining the extremely strong Alfa culture.
Our diversification across end markets and customers means that our top five customers now account for a third of our revenues, five years ago they were nearly two-thirds of
our business.
Our delivery excellence remains a key differentiator for us, and this has continued in 2025 with 35 delivery events in the year.
Our customer retention is extremely high. Since the cloud-native version of Alfa Systems was launched in 2010, no customer has ever moved off an implemented modern version of Alfa onto a rival system.
AI and Alfa - Focused, Practical and Value creating
Alfa views AI as an enabler of greater efficiency and customer value rather than a disruptor
of its business model. Our approach is deliberately pragmatic and grounded in real use cases that enhance productivity, delivery efficiency and product capability.
We focus our AI strategy on four areas:
AI literacy across the organisation, ensuring our people can responsibly and effectively leverage new tools.
Internal efficiencies, using AI to streamline processes, reduce manual effort and improve operational scalability, including in software development.
Delivery acceleration, applying AI to reduce implementation costs and timelines for customers.
Product enhancements, embedding AI where it solves specific customer challenges and improves automation, insight and decision support.
Alfa's business model and product architecture provide a strong foundation for long term AI resilience and Alfa is well placed to benefit from advances in AI technology:
Deep functional domain capability makes replication of Alfa Systems by generic AI models impractical.
Contract volume based pricing, rather than per user models, ensure AI driven headcount reductions at customers will not impact Alfa's revenues.
Advances in the use of generic AI automation tooling will be predicated on and governed by our enterprise software:
Alfa provides a vast, well-structured data framework that is based on a deep understanding of the complex enterprise context in which we operate. Our deeply embedded, enterprise-wide software provides encoded institutional knowledge and system of record. Alfa Systems serves
customers' line of business in an extremely complex market.
Our regulated customer base requires embedded, deterministic workflow and ledger transactions with clear audit trails and predictable interactions within a complex landscape. This does not favour ungoverned AI outputs acting alone. In this context standardisation, compliance, reliability, reversibility, integration, speed, authority models, security and specific industry practice matter much more than generic automation.
Enterprise software implementation projects within highly complex and regulated environments are necessarily huge business change exercises. We see AI increasing implementation efficiency, but not eliminating the process. At Alfa we have an unrivalled track record of delivery of these projects in intricate and interconnected contexts and where competitors consistently struggle. This is a key aspect of our differentiation.
Alfa's market-leading technology stack and architecture, alongside an expansive and culturally embedded innovation agenda ensure that Alfa Systems is well positioned to maximise the potential of AI technology as it evolves.
Strong growth driven by fast growing Subscription revenues
Financial performance was strong with continued growth in revenue and profit.
Revenue was up 15% to £126.7m
(2024: £109.9m) at actual exchange rates or up 17% at constant currency rates.
Subscription revenues continued to grow strongly, up 16% year on year, driven by growth from existing customers along with new customers. In 2025 we started to see strong growth in Subscription revenues from customers won in 2024.
Delivery revenues were up 15% to £63.5m (2024: £55.0m), with growth in 2025 accelerating from 2024 as the implementation of new projects we won in Q4 2024 ramped up.
Software Engineering revenue growth overall was up 13% versus 2024 finishing the year at
£19.6m (2024: £17.4m), but with a very different phasing than last year. This year revenue was stronger in H1 than H2, due to stronger demand for customer-led development, which was the opposite of 2024. Software Engineering revenues are dependent on the stage of implementation work and the maturity of the product in the markets it is being implemented into.
We delivered strong growth in operating profit, increasing 17% to £40.1m (2024: £34.3m) on the back of the 15% growth in revenues at a gross margin of 63.7% (2024: 64.5%). Slower growth in SG&A resulted in an improved operating margin of 31.6% (2024: 31.2%). Cash conversion in the year was 97% (2024: 89%) at the upper end of our expected range of 90% -100%.
We finished the period with cash of £26.4m (31 Dec 2024: £20.5m) and no borrowings.
Excellent level of TCV supporting future growth
Our definition of a "win" and consequently the stage at which projects are included in TCV is only once full contract packs are signed.
CEO review continued
Sometimes contract packs are signed before we start work with a new customer, sometimes they are negotiated as implementation is underway and in extremis they may only be signed shortly before go-live. Customer preference can therefore impact the number of wins in any one year and therefore impact the level of TCV.
During 2025 we signed contract packs with one customer, but we were working with - and being paid by - five out of the ten customers in the late-stage pipeline. Overall TCV of £227.5m was up 3% versus last year (2024: £221.3m) with particularly strong growth in our Subscription TCV. Demand for chargeable Software Engineering development can vary depending on the mix of business we are implementing at any point in time. In FY26 we expect a greater proportion of implementations to follow a simpler deployment pattern with less bespoke requirements, which reduces chargeable development but typically accelerates time
to full Subscription run rate.
Our top five customer concentration has significantly reduced to 33% of our revenues in 2025, compared with 61% in 2019. Our largest customer represented 9% of our revenues in 2025. The stickiness of our customers on our modern software is demonstrated by NRR of 109% (2024: 103%) and the fact that since we went live in 2010 with version 5 of our software we have only lost two customers after go-live, one was bought by another Alfa customer and the other exited asset finance.
Delivery and Software Engineering agility
2025 was a busy year for Delivery with 35 go-live events. At the end of 2025 we had 20
customers on Alfa Systems 6. We continue to focus on simplifying and increasing the speed of our implementations so that we can deliver more concurrent implementations and Alfa Cloud is a key factor in facilitating smooth
go-lives. To service this growing customer base and to ensure that we have a model that can scale with this growth we have opened a smart hub in Poland. While the initial focus for recruitment here is to support the growth in Cloud operations, we may also use it to find additional talent for Software Engineering
and Delivery.
The progress we have made with our simplification objective now enables us to have one team support multiple customers. We have established Central Delivery Teams in the UK and USA and these have grown in importance as part of our overall support to clients. For example, in EMEA we have nearly doubled the number of people in the team, they now support 13 clients and delivered eight of the upgrades in the year. This has halved the average age of client versions, providing a better service to the clients and at the same time making it easier for us to maintain.
A key lever in simplifying our implementations is Alfa Start both as a complete package but also as an accelerator for more complex implementations. In 2025 we continued to invest across UK Equipment, US Auto, US
Equipment and APAC Start. In 2026 we will also invest into Euro Start with an initial focus on Germany as we see this as a market of growing strategic importance for us.
Investment in product
We continue to invest to maintain and increase our technology leadership in the market. We invested £37.7m into the further development of our software in 2025 (2024: £37.1m).
Our investment was focused on US Auto Originations, Fleet and Commercial Finance. These will increase both the proportion of our market that we can access as well as the size of our total addressable market. We made good progress and benefited from working closely with customers in all three areas, which is our preferred way of making investments, as it ensures that we create software that is a great fit for the market as a whole.
Fleet and US Auto Originations functionality allows us to immediately access an additional part of our existing Target Addressable Market in asset finance, increasing the Serviceable Addressable Market.
The Commercial Finance market is something we have been developing for a while and investment in this area will continue into next year and beyond. Our initial focus is to work with customers in the asset finance market who have Commercial Finance offerings and we have seen keen interest in exploring our new syndications functionality. In the longer term, this will open up a brand new addressable market of stand-alone Commercial Finance customers, meaningfully increasing our Target Addressable Market.
We will continue to invest in all three areas in 2026 along with improving our Point of Sale and Portal capability along with investing in Architecture to simplify the process for expanding the use of AI by Alfa Systems customers to truly embed AI as part of our SaaS solution.
Headcount growth, supported by strong retention
To deliver the growth in the business we continued to recruit both graduates and experienced hires in 2025, with the biggest increase in the US, where average headcount was up 20% compared with 2024. Headcount in the UK has increased 38% over the last two years. The success in focusing on maintaining our culture across the business can be seen from continued high retention rates of 97% (2024: 96%). The combination of our recruitment and high retention has resulted in headcount at the end of the year being up
5% at 527 (2024: 502) with average headcount in
the period of 516 (2024: 485) up 6% on last year.
Capital return
We remain a highly cash-generative business, with cash conversion of 97% in 2025
(2024: 89%). We expect cash conversion to average 90 - 100% over time. We are
committed to investing in our product and people to ensure that we continue to offer market leading solutions and excellent delivery and service to our customers.
Our mechanism for returning capital is the payment of a regular, ordinary final dividend and we have a policy to grow this progressively. We will also consider special dividends when we have excess capital.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 9
CEO review continued
Notwithstanding the return of £26.0m excess cash to shareholders during the year through ordinary and special dividends, an increase of
£3.9m on 2024, we ended the year with cash increasing by £5.9m to £26.4m. As such, the Board has today proposed an ordinary dividend of 1.5 pence per share, up 7%, with an ex-dividend date of 28 May 2026, a record date of 29 May 2026 and a payment date of 26 June 2026. The ordinary dividend would amount to a total payment of c.£4.4m. In addition, the Board has decided to declare a special dividend of 3.1 pence per share, up 29% on the special dividend declared this time last year, with an ex-dividend date of 30 April 2026, a record date of 1 May 2026 and a payment date of 29 May 2026.
for our customers' businesses - in effect being heart and lungs software which cannot be easily replaced.
Strong pipeline
At the end of the year our late-stage pipeline remains strong with 10 prospects, up from eight at the start of 2025. We are the preferred supplier with eight of these and have started working under letters of engagement with five. The pipeline includes a good balance across all regions with four in EMEA (including UK), with three each in the Americas and AsiaPac. There is also a good spread across Auto and Equipment and between OEM and banks.
We also have invested in improving the accessibility of Alfa Systems, particularly for those using screen readers. This involved automated testing but also a lot of manual testing and judgement to gauge how understandable the screens are. Great progress has been made in 2025 but there is more work to be done to ensure all parts of the system are at the level we want.
Outlook
We continue to maintain a very healthy sales pipeline and are encouraged by the activity in the earlier stages of the pipeline. For 2026 we
expect strong Subscription revenue growth and good Delivery revenue growth. Over recent years we have been very successful in growing our US business so that it now accounts for 45% of our revenues, which at current exchange rates creates a headwind for growth in our reported results. Overall, despite the impact
of currency headwinds and wider macro uncertainty, we expect to see good revenue growth in 2026 and beyond.
Andrew Denton
Chief Executive Officer
11 March 2026
The special dividend would amount to a total payment of c.£9.2m.
2025 continued the trend of macro uncertainty but our pipeline remained strong and we
Customer Journey Case Study: Mercedes-Benz
Stable market conditions
We have seen over the last few years that despite a difficult and at times volatile macro-economic environment the asset finance market and demand for software within it has remained robust.
With regards to winning future customers,
we benefit by not being dependent on any one particular market. Alfa Systems is operational in 37 countries; in automotive finance, equipment finance and wholesale and loan finance; for OEMs, banks and independents and across all asset classes. This breadth and diversity has helped insulate us from any underlying economic uncertainty in any individual market.
The market itself is relatively robust and our software once installed with customers is even more resilient to changes as it is mission critical
continue to see good levels of activity in the early-stage pipeline, showing that the buying dynamics of the market remain largely unchanged.
We remain confident in both the demand for our best-in-class software and our ability to win work in the market.
Sustainability
We remain committed to our sustainability activities and this was recognised by winning the Corporate Social Award at the Asset Finance Connect Summer Awards and our inclusion in the FTSE4Good Index. We have provided work experience for a social mobility charity, social talks and events and fund-raising activities which were driven by the energy and enthusiasm of our Alfa Communities.
1 Mercedes-Benz began its Alfa Systems journey in North America in 2014, supporting its truck finance operations across the United States and Canada, before adding car finance in 2016.
3 Building on the strong partnership, product performance and delivery success for North American operations, Alfa Systems was then implemented for Mercedes-Benz Mexico in 2023, to support new car finance business.
2 In 2022, Alfa Systems was implemented in Germany to support new leasing business, establishing a modern platform and scalable blueprint.
4 Leveraging the proven German blueprint for new banking business, Alfa Systems enabled migration and consolidation of legacy systems onto a single platform.
1 2,4
3
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 10
Market overview
The asset finance market remains resilient across various macroeconomic environments. In contrast, the asset finance software market is more sensitive to specific industry push and pull factors.
What pushes customers to change systems?
Push factors
Software not fit for purpose with high cost of ownership
What pulls customers to choose Alfa Systems?
Pull factors
Software as a business enabler and driver of innovation
Regulatory and cybersecurity requirements Complying with regulatory changes and maintaining robust cyber defences is non-negotiable, forcing
companies off legacy systems.
Increased ownership cost Maintaining systems running on old equipment becomes increasingly expensive, forcing companies to seek ways to minimise their OpEx and CapEx costs.
Expedite digitalisation Customers expect modern systems with user-friendly interfaces and prompt response times.
Growth in AI and ML adoption
To maximise the benefits of new technologies, systems need to be well-architected with intuitive design.
Poorly integrated point solutions
Years of building around legacy systems create complex architectures, prone to errors and increasingly difficult to maintain.
Inefficient workflows and low automation
'Swivel-chair' entry across multiple systems with inefficient workflow drives up OpEx costs and is increasingly difficult to scale.
Business agility and flexibility
Modern businesses require flexibility and agility to launch new products and compete effectively.
Exposure to
green technologies Sustainable technologies drive the need for new revenue streams whilst accounting for their own carbon footprint.
Addressable software market
$3.4bn1
1. A Deloitte view of the asset finance software industry, 2022.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 11
Market overview continued
Existing Alfa markets Addressable Market Expansion Adjacent Market Expansion
Market
United States Europe Australia, NZ & RoW Originations Commercial Finance Automotive Automotive
One of the largest auto finance markets
Large auto finance players with high volumes and scale
In addition to asset finance servicing, originations is a substantial market
Larger, international players dominate the market and require multi-country and multi-jurisdictional features
Asset lifecycle and support for new sustainable business (e.g. fleet) models needed
The rest of the world, excluding Asia, makes up less than 4% of world asset finance volumes, with Australia and New Zealand making up the majority of this market
Finance companies willing to invest in Originations platforms to make use of new technology to increase automation and speed of response
Alfa currently supports end-to-end originations at scale globally
Multiple trillion USD market
Expanding into adjacent market with some of the same players who invest in asset finance who could be used as a soft route into the market
Modernisation of the commercial
Equipment Equipment
in diverse clients in Auto and
finance market is driven by the
Private credit entering this attractive market and partnering or acquiring older equipment finance
Diversification into more complex financial product structures related to commercial finance
Some larger, cross-border finance providers but more, smaller, local players within single countries
Ability to quickly adapt new pricing models is key
Support for sustainability features is important
Equipment
Alfa working alongside key customers in Auto and Equipment finance to enhance offering of key, flexible functionality in target markets with biggest opportunities
need for automation and increased efficiency of processes as private credit players increase competition
The variability and complexity associated with commercial loans and finance make Alfa Systems the ideal fit
Alfa clients
5 of the USA's top 10 auto lenders
2 of the USA's top
3 equipment lessors
3 of the UK's top 5 equipment lessors
2 of Australia's top 5 asset finance lenders
In live production in South Africa with
consumer and commercial finance portfolios
Strong interest in originations from existing clients and prospects, with some clients already using the product
Some of Alfa's largest equipment finance clients invest in wider commercial finance products, allowing us to learn and expand within this client base
Alfa position
Alfa is the de facto go-to company in US Auto and UK Equipment, with very strong presences in other markets
We use one system across all markets and are unique in having capability across all markets
We have different competitors in each market
Alfa provides exceptional high-volume asset support ensuring stability, scalability and robust performance
Multi-country and multi-jurisdictional capabilities make Alfa Systems ideal for international asset finance players, converting complex processes into efficient, configurable workflows
Alfa has launched originations product, which covers direct and indirect lending, from quoting
to funding
Alfa has invested in commercial finance revolving credit facilities and syndications functionality
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 12
Alfa Systems 6
Expansion of product and into new markets
Founded on six pillars, 2024's iteration of the Alfa Systems software platform delivers important changes in performance and function, helping finance providers tackle the significant challenges they face, and seize the lucrative opportunities that lie waiting.
Efficiency
Fully optimised user experience via Compose, Alfa's redesigned UX framework.
Personalised screen design and improved navigation for faster decision-making and reduced processing time.
Streamlines operational workflows across originations, servicing and collections.
Total capability Sustainability
End-to-end functionality across the full asset finance lifecycle - originations, servicing, collections and accounting.
Supports all asset types and finance products (retail, commercial, fleet, wholesale).
Embedded accounting engine providing financial coherence across processes.
Scalability
Cloud-native, always-on SaaS platform enabling global, multi-entity operations on a single system.
Handles multiple jurisdictions, currencies and accounting standards simultaneously.
Built for continuous availability and large volume processing without performance degradation.
Intelligent automation
Advanced workflow automation driven by AI and rules-based decisioning.
Includes AskThea, an AI assistant supporting customer service and operational queries.
Enables faster approvals, data validation and exception handling.
Functionality to model new ESG-linked business structures, such as usage-based finance and sustainability-linked assets.
Tools to help customers meet net-zero and regulatory reporting requirements.
Flexible data architecture enabling disclosure and analytics on sustainability metrics.
Collaborative ecosystem
Open, extensible architecture with modern APIs for seamless integration with third party tools.
Supports connectivity to data, analytics and payment platforms through Alfa's partner network.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 13
Strategy in action
Everything we do supports our growth and strategy
Our strategy for creating long-term, sustainable business value is:
Strengthen
Grow our differentiation of market-leading People, Product and Delivery by:
Investing in our smart, diverse team;
Investing in our product; and
Investing in our delivery
methodology and tooling.
Read more on page 14
Sell
Enable profitable growth by focusing on:
Alfa Systems on Alfa Cloud;
Subscription revenue;
Incremental sales;
Commitment to our chosen
target markets.
Read more on page 15
Scale
Increase our capacity for developing and delivering Alfa Systems, and extend our reach, by:
Developing our smart, diverse team;
Leveraging global talent sources to enhance our competitive position;
Growing our partner ecosystem;
Expanding our addressable market;
Enabling partner led delivery of Alfa Start.
Simplify
Enable more concurrent Alfa Systems implementations, more efficiently, by:
Simplifying our product;
Simplifying our implementations;
Simplifying our processes
across our organisation;
Expanding our Alfa Start offering.
Read more on page 17
Read more on page 16
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 14
Strategy
Strengthen
Grow our differentiation of market-leading People, Product and Delivery, by:
Investing in our smart, diverse team;
Investing in our product;
Investing in our delivery methodology and tooling.
# of live customers, over time1
2025 highlights
People This year we strengthened and expanded our diverse global team supporting the recruitment of 51 new hires. We
introduced Continuous Conversations, transforming our pay and promotion approach to deliver more meaningful, ongoing feedback and clearer career development pathways for all. We achieved the Investors in People re-certification at gold status and reinforced our culture through a global focus on Innovation, Inclusion and Collaboration. We also launched senior leadership development to grow capability across all regions.
Product During this year we have focused on increasing the resilience of
the Alfa Systems software to encourage clients to upgrade and
gain access to new functionality. By supporting broader product ranges and processes, this is key to increased client satisfaction. This also allows Alfa to benefit from economies of scale, as more customers move to the same version of the software.
Delivery Building on last year we have further strengthened our Delivery
capabilities by launching our new Alfa Recon tool to support
large portfolio migrations. We have also enhanced our Portfolio Load solution to facilitate portfolio acquisitions and low-volume migrations in further markets.
AskThea
Providing access to Alfa's rich product documentation, this GenAI tool now has over 300 monthly active users (MAU).
They use it to understand how to configure, operate and integrate with Alfa Systems to achieve their business outcomes, accelerating delivery.
Our Alfa Start capabilities have expanded significantly with the release of our EU and Australian Start products, while we
Plans
People
Next year we will launch a comprehensive listening strategy to deepen cultural alignment, strengthen two-way trust, and ensure employee feedback directly informs our approach to culture, leadership development and the wider Alfa experience for colleagues.
Product
In 2026 we will be investing in further increased performance and efficiency of the Alfa Systems platform. This will allow operational savings for Alfa and our customers running Alfa Systems.
Delivery
We intend to enhance our configuration management options to further streamline our implementations for our customers, as well as continuing to invest in our award winning
out-of-the-box solutions.
2023 27
2024 30
2025 32
Investment in product*
£38m
2024: £37m
Not including customers on v4 Alfa Systems.
continue to invest significantly in our UK Equipment and US Auto Start offerings. This has been supported by increased recruitment and investment in our Delivery workforce.
* This investment is calculated based on the total time spent by people in our Product Engineering team working on Alfa Systems product either for specific customer developments, which are largely chargeable, or internal investment and enhancement of the product. It does not include time spent on implementing or maintaining and supporting systems for customers. It includes salary costs and a full overhead allocation, and includes amounts shown as R&D expense and costs that have been capitalised.
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Additional information
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 15
Strategy continued
Sell
Enable profitable growth by focusing on:
Alfa Systems on Alfa Cloud;
Subscription revenue;
Incremental sales;
Commitment to our chosen
target markets.
Subscription revenue share
2025 highlights
Marketing 2025's global campaign was spearheaded by The SaaS Chronicles,
a branching-path story about digital transformation in book and
interactive form, and the centrepiece of a successful events programme. There were new campaigns for fleet finance, syndication and Alfa Start for European and Australasian markets, as well as extended media coverage for Alfa Cloud's data resilience concept, Data Guardian. Additional campaigns supported commercial finance, equipment finance and originations in US auto. All were enhanced by extensive thought leadership and podcast content.
New modules Over 2025 we have developed and launched four new modules
to meet our objective of selling into adjacent markets and
providing quality optional add-ons for current clients.
The Syndication product module was launched in the autumn and has received interest via a range of markets and
use cases, as increased capital requirements require clients to offset more risk.
The Master Agreement product module was launched in November as part of the initiative to sell into the Commercial and Fleet markets. This has been built primarily for auto fleets but has inbuilt flexibility to allow further use cases in commercial finance and bulk equipment.
Plans
The continued evolution of the Alfa Systems product, alongside the release of new modules in 2025, brings further opportunities for
our customers to adopt more of the latest features through incremental module sales. Additionally, we will look to capitalise on our investment in tangential markets, such as commercial finance and automotive fleet, delivering a strong go-to-market strategy.
2023
2024
2025
31%
34%
34%
Subscription Ensuring that our customers can upgrade regularly to the
Alfa Compose
We've continued to invest in Compose, adding three newly supported screen entities and growing the library of available screen components by over
a third. Finally, we've entered a new era of field-level composability, introducing functionality to enable our customers to build their own, fully bespoke
library cards.
latest version of Alfa Systems and benefit continually from our
ongoing investment in the platform is vital. We strive to make this process as smooth as possible operationally, and to support our customers in delivering regular upgrades. As part of this initiative, we have been developing a new subscription-based service, providing customers with Alfa expertise to support their upgrade activities when needed, with costs being spread on a subscription basis.
Strategic report
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 16
Strategy continued
Scale
Increase our capacity for developing and delivering Alfa Systems, and extend our reach, by:
Developing our smart, diverse team;
Leveraging global talent sources to enhance our competitive position;
Growing our partner ecosystem;
Expanding our addressable market;
Enabling partner-led delivery of Alfa Start.
Global headcount
2025 highlights
Market expansion In 2025, we made strong progress in developing Minimum
Demoable Products across fleet, commercial finance and
US auto originations, using demos mid-year to gather client feedback and iterate on development scope. Building on this, we have subsequently developed Minimum Sellable Products for these three key initiatives, working closely with clients
in each case to mitigate risk while expanding into adjacent markets to grow our Total Addressable Market in support of our 2030 objectives.
Recruitment We successfully scaled recruitment to support the launch of our
new Polish Smarthub, hiring our first colleagues in Poland and
expanding our global footprint. Our recruitment efforts aligned closely with our cultural priorities, helping us grow a diverse team. We ensure new joiners experience structured modular onboarding and meaningful feedback from the start.
Leadership development initiatives also improved readiness across teams, supporting sustainable growth as we continue to scale internationally.
Partnering In 2025 we increased our partner utilisation across both EMEA
and North America, and submitted two joint bids with Systems
Commercial Finance
In 2025 Alfa launched into the Commercial Finance market in EMEA and the UK. Building upon Alfa's powerful workflow and servicing platform, we marketed our syndication functionality and automation to drive efficiencies. We made our first incremental sales and are developing a
Go To Market strategy for further progress in 2026.
Integrations (SI) partners. To support the training needs of smaller or newer SI partners, we initiated partner training courses for mixed SI groups. In addition, we launched a new SI
Plans
Market expansion
In 2026 we will continue to invest in key initiatives to facilitate sales into the new, adjacent markets. This will focus on feedback from clients and prospects to enhance saleability of the product.
Recruitment
In the coming year, we will build on our global recruitment foundation by strengthening talent pipelines, continuously improving candidate experience and aligning hiring strategies with our cultural priorities and long-term growth plans.
Partnering
We intend to launch a tiered SI partner programme with formal accreditation, establish a technology partner ecosystem programme and roll out additional partner training modules. We also plan to commence our first Partner-Led Delivery and will actively evaluate potential new partners to further strengthen our partner ecosystem and expand market coverage.
2023
2024
2025
475
502
527
partner portal platform providing the latest information on the Alfa Systems product, our delivery methodology, upcoming training opportunities and product news.
Ongoing partner-assisted projects
12
2024: 8
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 17
Strategy continued
Simplify
Enable more concurrent Alfa Systems implementations, more efficiently, by:
Simplifying our product;
Simplifying our implementations;
Simplifying our processes across our organisation;
Expanding our Alfa Start offering.
2025 highlights
Alfa Start for US Auto Finance
Alfa Start for US Equipment Finance
We continue to invest in Alfa Start for US Auto Finance to further simplify projects and reduce implementation timeframes through both specific initiatives and continuous improvement. In 2025 we have applied feedback from project teams currently implementing Alfa Start, configured and documented new business processes, and created robust scripts on which process definition workshops can be run directly. We also progressed the planned initiative to create an integration library, complementing out-of-the-box industry integrations,
by identifying and documenting an initial tranche.
2025 has seen the continued development of our Alfa Start product for this market. Alfa Investment in master lease agreements, bulk asset, commercial loans and syndications has simplified and expanded support for key lines of business, allowing us to offer more out of the box. Our Portfolio Load functionality, a key component of simplified implementations, has been put into practice with a US equipment customer.
Plans
Alfa Start for US Auto Finance
In 2026 we will further reduce the work required to implement Alfa Start by configuring business processes to optionally use the integrations documented this year. Three Alfa Start clients moving into implementation will provide more feedback to further improve
the methodology.
Alfa Start for US Equipment Finance We intend to incorporate continued wider product improvements into our Alfa Start methodology, such as configuration management. We'll also explore expanding
our offering to include our latest originations functionality, offering our customers end-to-end support within Alfa Start.
Clients on long-term support branches
2023 16
2024 21
2025 27
Alfa Start implementations can reach live production in as little as 22 weeks
22
2024: 22
Data Migration In 2025, we launched Alfa Recon, a scalable tool that securely
European Alfa Start Accelerator In 2025 Alfa launched another Alfa Start Accelerator in Europe. This is designed to enable a faster implementation of a single country rollout in Germany or the Netherlands based on our experiences with European equipment clients. It is
available in German, with pre-configured processes and full documentation.
stores reconciliation data from the Alfa Migration Suite and
provides instant reporting and visualisation through Amazon Quick Suite. Users can filter, compare and categorise results, supporting up to a billion records per migration run. Migrations for Alfa-hosted clients are now part of a fully managed Alfa Cloud service, streamlining environment provisioning, secure data transfer and execution. Finally, we continued to simplify and enhance key elements of migration implementation.
Testing Alfa One adoption and regression reduction were key focus
areas in 2025. Alfa One is our standardised deployment
model, designed to bring consistency and predictability to implementations and upgrades. Alongside this, regression reduction initiatives introduced automated detection,
anti-pattern rules, and improved coverage insights, helping to reduce brittle tests and identify risks earlier.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 18
Key performance indicators
Total contract value
£227.5m
2023 2024 2025
2025 performance Following the very strong growth in TCV in 2024 following eight customer wins we saw more modest growth in 2025. Subscription TCV grew at 18%, continuing the strong growth we
have seen in recent years. Delivery TCV was down 14% however given the strength of the late-stage pipeline this is expected to increase as these are converted into wins. Software Engineering TCV was down 42% due to the mix of new projects requiring less development work.
Why do we measure this? Helps to predict revenue and the value of a contract over its lifetime, which will generally extend beyond the current financial year.
Linked to remuneration:
No
Links to strategic pillars:
1 2 3 4
Employee retention rate
97%
2023 2024 2025
2025 performance
Our continued focus on nurturing our culture, investing in our people and their career growth contributes to our high retention. Identifying interesting and challenging opportunities for growth provides variety and challenge that is a key contributor to retaining our people.
Why do we measure this? Our deep expertise in the industry and our ability
to service our customer relationships is driven by the quality of our people. A higher retention rate demonstrates sustained engagement and maintenance of key
skills and knowledge.
Linked to remuneration:
Yes
Links to strategic pillars:
1 3
Employee engagement
83%
2023 2024 2025
2025 performance Employee engagement has remained high through the year. We have continued to focus on maintaining the strong Alfa culture and
in 2025 we rolled out "Continuous Feedback" which ensures more timely and targeted feedback to our people. They feel listened to, informed, and alongside the work that our communities champion, invested in making Alfa a great place to work.
Why do we measure this? Measures levels of employee satisfaction and connection to the business. There is a positive correlation between employee engagement and business performance and the metric should be a lead indicator for retention
rate performance.
Linked to remuneration:
Yes
Links to strategic pillars:
1 3
Alfa measures a range of financial and operational metrics to help manage business performance.
Definition and KPI calculation method
In considering the financial performance of the business, the Directors and management use key performance indicators (KPIs), some of which are defined by IFRS and some of which are not specifically defined by IFRS.
We have amended some of the KPIs this year to recognise the transition to a SaaS business
model. We have deleted the Headcount KPI as a growing proportion of our business is unrelated to headcount. We have added Annual Recurring Revenue (ARR) and Net Revenue Retention (NRR), which are common KPIs used by SaaS businesses. We have decided to reduce the cash measures from two to one, retaining the Operating free cash flow conversion, but dropping the year end cash balance as a KPI.
We believe that ARR, NRR and operating free cash flow conversion are key measures required to assess our financial performance. These measures are not defined by IFRS.
The most directly comparable IFRS measure for operating free cash flow conversion is cash flows from operations. The measure is not necessarily comparable to similarly referenced measures used by other companies. There are no similar IFRS measures for ARR and NRR.
As a result, investors should not consider this performance measure in isolation from, or as a substitute analysis for, our results of operations as determined in accordance with IFRS.
Total Contract Value ("TCV"): TCV is calculated by analysing future contract revenue based on the following components:
an assumption of three years of Subscription payments assuming these services continued as planned (actual contract length varies
by customer);
the estimated remaining time to complete Delivery and Software Engineering deliverables within contracted software implementations, and recognise deferred licence amounts (which may not all be under
As TCV is a reflection of future revenues, forward looking exchange rates are used for the conversion into GBP.
Employee retention rate: Represents the retention of Alfa employees over the previous 12-month period, excluding any managed staff attrition.
£165.3m
£221.3m
£227.5m
97%
96%
97%
82%
82%
83%
Employee engagement: The overall employee engagement score is derived from quarterly employee Pulse survey ratings based on the questions "I am happy in my role" and "I would recommend Alfa to a friend as an employer". The figures shown are for the last survey of the year.
Annual Recurring Revenue (ARR): Represents the average value of customer subscription contracts in the six months to the reporting date, annualised.
Excludes any revenues that are one-time or, at contract inception, not expected to be recurring for a period more than 12 months.
Net Revenue Retention % (NRR): Measures the percentage of recurring revenue retained from customers over the last 12 months, including upsells and expansions, and net of customer losses.
Operating free cash flow conversion: Calculated as cash generated from operations, less capital expenditures, less the principal element of lease payments in respect of IFRS 16. Operating free cash flow conversion represents operating free cash flow generated as
a proportion of operating profit.
Constant currency: When the Company believes it would be helpful for understanding trends in its business, the Company provides percentage increases or decreases in its revenues to eliminate the effect of changes in currency values. When trend information is expressed herein "in constant currencies", the comparative results are derived by re-calculating comparative non-GBP denominated revenues using the average exchange rates of the comparable months in the current reporting period.
1
3
2
4
Our strategic pillars
a signed statement of work); and
Pre-implementation and ongoing Delivery and Software Engineering work which is contracted under a statement of work.
Strengthen Scale
Sell Simplify
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Financial statements
Additional information
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 19
Group revenue
£126.7m
2023 2024 2025
2025 performance
Group revenue grew by 15% (17% on constant currency basis), with strong growth across all of our revenue streams. Subscription revenues continued their strong growth over the last few years, up 16%, driven by a combination of growth with existing clients as well as new customers. Delivery revenue was 15% up on
last year, with Software Engineering up 13% both driven by new customers won in 2024.
Why do we measure this? Growing revenue is a measure of customer and business success. It is central to our objective of growing by maintaining our leading competitive position through differentiation of People, Product and Delivery.
Linked to remuneration:
Yes
Links to strategic pillars:
1 2 3 4
Annual Recurring Revenue (ARR)
£43.9m
2023 2024 2025
2025 performance
ARR grew strongly in the year up 15% to £43.9m. Our continued strategy of focusing the company on delivering subscription revenue growth is working.
Why do we measure this? It is a standard industry measure which software companies use showing
the performance in growing the subscription size of
the business.
Linked to remuneration:
Yes
Links to strategic pillars:
1 3
Net Revenue Retention (NRR)
109%
2023 2024 2025
2025 performance
NRR of 109% was driven by the loss of no customers along with growth with existing customers, particularly those new customers where revenues are continuing to ramp up before reaching full run rate.
Why do we measure this? It is a standard industry measure which software
companies use, showing the level of growth in existing customers, netted off the level of customer losses.
SaaS products are often associated with high churn rates, and this is a measure designed to assess that.
Linked to remuneration:
Yes
Links to strategic pillars:
1 3
Operating profit
£40.1m
2023 2024 2025
2025 performance Operating profit grew 17% from last year as a result of 15% growth in revenues
with slightly lower growth in net operating expenses.
Why do we measure this? Operating profit is an indicator of the Group's profitability. It can be used to analyse the Group's core operational performance without the costs of capital structure and tax expenses impacting profit.
Linked to remuneration:
Yes
Links to strategic pillars:
1 2 3 4
Operating profit margin
31.6%
2023 2024 2025
2025 performance Operating profit margin increased to 31.6% for the year. The margin benefited from the impact of the
£1.5m gain from FX hedges which impacted operating profit only and not revenue.
Why do we measure this? Operating profit margin is a measure of how effectively we sell Alfa Systems and manage our cost base. It also allows comparison across different companies and sectors.
Linked to remuneration:
Yes
Links to strategic pillars:
1 2 3 4
Operating free cash flow conversion
97%
2023 2024 2025
2025 performance Operating free cash flow conversion for 2025 was 97%, which is at the upper end of our guidance range of 90% - 100%.
Why do we measure this? A strong unencumbered balance sheet position is key to growing the business in the future. Our business has always been cash generative and this KPI allows us to monitor cash flows before investment in capital projects.
Linked to remuneration:
No
Links to strategic pillars:
1 2 3 4
£102.0m
£109.9m
£126.7m
£32.8m
£38.2m
£43.9m
N/A
103%
109%
£30.1m
£34.3m
£40.1m
29.6%
31.2%
31.6%
115%
89%
97%
Key performance indicators continued
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Corporate governance
Financial statements
Additional information
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 20
Financial review
Strong growth, Subscription revenues
up 16%
2025 was a year of strong growth across all revenue streams, generating high quality earnings and excellent cash generation.
£m
2025
2024 Movement
Revenue
126.7
109.9 15%
Gross profit
80.7
70.9 14%
Operating profit
40.1
34.3 17%
Profit before tax
40.1
34.1 18%
Taxation
(10.0)
(8.5) 18%
Profit for the period
30.1
25.6 18%
Basic EPS
10.19p
8.68p 17%
Diluted EPS
10.14p
8.56p 18%
Financial results
Revenues increased by 15% or £16.8m to
£126.7m in the 12 months ended 31 December 2025 (2024: £109.9m), with growth at constant currency stronger at 17%. Revenues grew very strongly in the Americas, up 23% on the back of some large customer wins over the last
18 months, and now account for 45% (2024: 42%) of revenues.
Gross profit increased to £80.7m
(2024: £70.9m) up £9.8m, with gross margin at 63.7% (2024: 64.5%) with the decrease in gross margin due to software capitalisation of £5.0m (2024: £5.3m) remaining in line with last year and so dropping as a percentage of revenue.
Financial review continued
Sales, general and administrative expenses increased to £41.0m (2024: £36.6m) largely due to increased headcount and salary increases along with increased profit share payout resulting from increased profits. Gains on foreign exchange forward contracts of £1.5m (2024: £0.3m gain) partially offset this.
Overall operating profit increased by 17% to
£40.1m (2024: £34.3m) with profit before tax of £40.1m (2024: £34.1m).
The Effective Tax Rate ("ETR") for 2025 was 24.9% (2024: 24.9%) in line with last year. Profit for the period was £30.1m (2024: £25.6m).
Revenue
Revenue - by type
£m
2025
2024
Movement
%
Subscription
43.6
37.5
16%
Software
Engineering
19.6
17.4
13%
Delivery
63.5
55.0
15%
Total revenue
126.7
109.9 15%
Subscription - Continuing strong growth in Subscription revenues Subscription revenues arise from revenues from SaaS and other recurring services.
Overall Subscription revenues increased strongly by 16% to £43.6m (2024: £37.5m) with the strongest growth arising from new customers not yet live along with growth from existing customers. Subscription customers now total 42 (2024: 39) of which 22 are on Alfa
Cloud, 15 are on their own private cloud, 2 are on v4 of Alfa and 3 are in the late-stage pipeline. Of the 22 customers on Alfa Cloud, six are not yet live as they are currently in implementation. Subscription revenues account for 34% of overall revenues
(2024: 34%).
Subscription revenue
£m 50
+16%
+18%
40
30
20
£31.8m
£37.5m
£43.6m
10
0
2023 2024 2025
We have a single-tenant SaaS solution. We and our customers benefit from a single standard code-set and database, but with multi-layer data segregation as opposed to code-based segregation used in multi-tenant SaaS models. One of the big benefits of this approach is that customers can control their release cycles rather than having an upgrade timetable dictated to them.
Our SaaS services are ISO 27001 and ISO 27018 certified and SOC1 and SOC2 audited to confirm compliance with controls around data security and availability. Given the mission-critical nature of our systems for our customers, having such third-party verification of our compliance with these standards is a key selling point.
Software Engineering - as expected a reduction in chargeable work in H2 following a very strong H1
Software Engineering revenues largely
arise from chargeable development work for new and existing customers, along with some perpetual licence recognition. Software Engineering revenues for the year increased by 13%. In 2025 the biggest growth came from chargeable development revenue from new customers up £2.8m to £8.7m (2024: £5.9m). Following the transition to SaaS only sales, perpetual customised licence
recognition is now a relatively small part of our business, with revenue of £2.8m in the period (2024: £3.3m). There were one-off licence revenues of £0.9m (2024: £0.8m).
Our strategy is to continue to develop our software, to ensure that we meet and exceed customer and market needs as they evolve and as the regulatory and commercial environment continues to change. We have the industry leading software and we continue to invest
to increase that lead, through a balance of customer funded development and self-funded development.
Delivery - Continuing strong delivery execution
Delivery revenues arise from work for
existing customers delivering new modules, upgrades, migrations and other services, as well as work with new customers on project definition and implementation of Alfa Systems.
We entered the year with a record level of TCV, and with the new implementation projects getting underway we saw strong growth
in Delivery revenues up 15% to £63.5m
(2024: £55.0m). This growth was driven by the 11 new customers in implementation not yet live where revenues were up £11.5m to £27.8m (2024: 16.3m). These projects are multi-year projects with go-lives in subsequent years and as customers progress from paid pipeline work through definition and into implementation, Delivery revenues increase.
Total revenues from existing customers, including V4 to V5/AS6 upgrades was £35.7m (2024: £38.7m). Revenue from V4 to V5/AS6 upgrades was £9.6m (2024: £6.4m). As V4 to V5/ AS6 projects are replaced by new projects this will further boost Subscription revenues due to the higher incremental Subscription revenues they will generate in the future.
We had 35 delivery events in the year which was significantly up on the 26 delivered in 2024 and matched the record 35 delivered in 2023. Customers continued to upgrade onto AS6 and by the end of 2025 there were 20 customers on AS6. There were three go-lives during the year.
Financial review continued
In September there was an important v4
to AS6 go-live in the Nordics for a European Equipment OEM who we hope to further roll out Alfa into new territories in the coming years. In October an existing Australian client opened their doors to a brand new business in New Zealand in under 10 months from starting definition work. This rapid implementation was only possible by using our new APAC Start accelerator. In December we went live with
a UK Bank, using UK Equipment Start as an accelerator, although there are further phases before it will have the full run rate of contracts loaded.
In 2025 staff augmentation partners accounted for 8% (2024: 8%) of the chargeable days delivered to clients. During 2025 we worked on our US Auto Start product using the knowledge gained from existing US auto projects, with an aim of targeting the Tier 3 US Auto Finance market with PLD.
Total Contract Value (TCV)
TCV - by stream
£m
2025
Movement
2024 %
Subscription
161.5
136.7 18%
Software
Engineering
14.2
24.6 (42)%
Delivery
51.8
60.0 (14)%
Total TCV
227.5
221.3 3%
Total contract value (TCV) at 31 December 2025 was £227.5m (31 December 2024: £221.3m).
There was strong growth in Subscription TCV which grew as Subscription revenues from customers in implementation started to increase. Software Engineering and Delivery TCV were down, as a lot of the new projects in
implementation have worked through their backlog. As contracts get converted out of the late-stage pipeline we will see increases in Delivery TCV, although the nature of the projects mean that we are not expecting a significant increase in the Software Engineering TCV.
TCV - by stream for next
12 months
£m
2025
Movement
2024 %
Subscription
49.5
41.9 18%
Software
Engineering
8.8
13.5 (35)%
Delivery
39.9
40.3 (1)%
Total TCV
98.2
95.7 3%
Of the TCV at 31 December 2025, £98.2m (2024: £95.7m) is currently anticipated to
convert into revenue within the next 12 months. The Subscription portion increased 18% to
£49.5m (2024: £41.9m). Software Engineering TCV, was down 35% to £8.8m (2024: £13.5m) and Delivery TCV slightly down 1% to £39.9m (2024: £40.3m). As noted above as new contracts convert from the late-stage pipeline we expect the Delivery TCV to increase.
Operating profit
The Group's operating profit increased by
£5.8m to £40.1m in 2025 (2024: £34.3m) reflecting the £16.8m increase in revenue offset by cost increases of £11.0m.
Headcount numbers were up 5% at
31 December 2025 at 527 (2024: 502), with average headcount of 516 up 6% on last year (2024: 485). Staff retention remained very high at 97%.
Expenses - net
£m
2025
Movement
2024 %
Cost of sales
46.0
39.0 18%
Sales, general and administrative
expenses
41.0
36.6 12%
Other income
(0.4)
0.0 -
Total expenses
- net
86.6
75.6 15%
Cost of sales increased by £7.0m to £46.0m (2024: £39.0m) to support the growth in the business. This was due to higher headcount and salary costs along with increased hosting costs from the increasing scale of that business. Capitalised investment into the product remained in line with last year.
Sales, general and administrative (SG&A) increased to £41.0m in the year (2024: £36.6m). Salary costs were up 9% in the period to
£15.7m (2024: £14.4m). Profit Share Pay, including employer's costs, in the period was
£5.0m (2024: £4.2m). Share-based payment charges increased from last year to £1.9m (2024: £1.4m). Depreciation and amortisation increased to £3.3m (2024: £2.7m) as a result of increased intangible asset amortisation. Gains on forward currency contracts increased to
£1.5m (2024: £0.3m). Other foreign currency gains/losses were a loss of £0.7m (2024: £0.2m gain). Other costs totalling £15.9m increased 10% on last year (2024: £14.4m) with employee benefits, principally healthcare costs, up 25% along with smaller increases elsewhere as a result of the growth in the business.
Other income increased from £0.0m last year to £0.4m this year due to increases in UK R&D Expenditure credit (RDEC).
Profit before tax
Overall profit before tax of £40.1m was up 18% on last year (2024: £34.1m). Net finance costs were £nil (2024: £0.2m).
Profit for the period
Profit after taxation increased by £4.5m, or 18%, to £30.1m (2024: £25.6m). The Effective Tax Rate for 2025 remained at 24.9%
(2024: 24.9%).
Earnings per share
Basic earnings per share increased by 17% to 10.19 pence (2024: 8.68 pence). Diluted earnings per share increased by 18% to
10.14 pence (2024: 8.56 pence).
Cash flow
Cash generated from operations was up to
£44.5m (2024: £37.3m) with the key factor being a very strong receivables performance, which reduced slightly from last year end despite increased revenues. Net cash generated from operating activities was
£37.2m (2024: £28.4m) with tax payments of
£6.6m down on the £8.2m for 2024 largely due to the recovery of Corporate Tax receivable from last year.
Cash (including the effect of exchange rate changes) increased by £5.9m to £26.4m
at 31 December 2025, from £20.5m at 31 December 2024. There was £37.2m of
net cash generated from operating activities (2024: £28.4m). Total dividends paid in the year,
Financial review continued
being the ordinary and two special dividends, increased by 18% to £26.0m (2024: £22.1m). Purchases of own shares in the period were
£0.9m (2024: £0.7m) purely for shares into the Employee Benefit Trust. Net capital expenditure of £5.4m was slightly down on last year (2024: £5.6m) with investment into
Operating free cash flow conversion
£m
2025
2024
Cash generated from
operations
44.5
37.3
Adjusted for:
Capital expenditure
(5.4)
(5.6)
Principal element of the
lease payments in respect
of IFRS 16
(0.1)
(1.3)
Operating free cash flow
39.0
30.4
Operating profit
40.1
34.3
Operating free cash flow
conversion
97%
89%
the product slightly down on last year to £5.0m (2024: £5.3m) and with other capex of £0.4m (2024: £0.3m).
with overdue debtors only £0.7m (2024: £0.5m) and these are all within 30 days overdue. All of the year end receivables have now been collected.
Accrued income was up on last year end at
£5.5m (31 December 2024: £4.7m). Corporation tax recoverable of £0.7m was down on last year (31 December 2024: £2.8m) due to settlements received related to R&D claims.
Trade and other payables balance increased by
£1.5m to £13.2m (31 December 2024: £11.7m) which was driven primarily increased amounts due relating to payroll, including profit share.
Contract liabilities relating to software licences increased slightly to £9.2m (31 December 2024: £8.1m). Contract liabilities from
Alfa's 2025 marketing campaign: The SaaS Chronicles
The Group's Operating Free Cash Flow Conversion (FCF) of 97% (2024: 89%) was up on last year and better than expected due to higher receipts at year end.
Balance sheet
The significant movements in the Group's balance sheet, aside from the cash balance which is described above, from 31 December 2024 to 31 December 2025 are detailed below.
Trade receivables decreased slightly from £8.6m at 31 December 2024 to £8.5m at 31 December 2025. They remain extremely tightly controlled
deferred maintenance decreased to £4.7m
(31 December 2024: £7.6m) as more customers moved onto monthly Subscription payments.
Going concern
The financial statements are prepared on the going concern basis. This is considered
appropriate due to the reasons stated in note
to the consolidated financial statements.
Subsequent events and related parties There have been no subsequent events that require disclosure. Details about related party transactions are disclosed in note 31 to the consolidated financial statements.
Duncan Magrath
Chief Financial Officer
11 March 2026
Our 2025 marketing campaign took on a creative departure this year. Its centrepiece, The SaaS Chronicles, is a 'branching path' adventure book that takes its reader through a digital transformation project, via a series of tricky decisions.
Placed in charge of an enterprise SaaS implementation, the reader must navigate ten chapters - on key areas such as delivery approach, architecture, integration, data security and more - and shape the outcome of their project.
Choices range from a detailed, fully bespoke implementation to a fast-tracked route powered by Alfa Start. Make the right calls and you deliver a successful transformation. Make the wrong ones and face the consequences…
Devised, crowdsourced, written and designed by Alfa colleagues, The SaaS Chronicles takes a playful, tongue-in-cheek approach while remaining genuinely informative; subtly weaving in the real-world experience and expertise that make up the Alfa proposition, and demonstrating that a successful transformation is about far more than just picking a platform.
Drawing exceptional and sustained positive feedback from prospects, customers and even competitors, Chronicles has helped us educate senior decision-makers, generate and rekindle leads, and stand out in a crowded market.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 24
Environmental, Social and Governance
ESG at Alfa: big company impact, small company feel
In 2025, we continued to integrate ESG principles into our strategy,
day-to-day operations and approach to innovation. Alfa takes a holistic view of sustainability, recognising that it is inseparable from the way we build our product, support people, and impact the planet.
In addition to the ESG overview in the next few pages of this Annual Report, we are pleased to release the third edition of our Sustainability Progress Report. Introduced in 2023, this report provides a deeper insight into the initiatives delivering meaningful impact across People, Planet and Product. Whether advancing an inclusive workplace, lowering our carbon footprint or developing sustainable technology solutions, the full report highlights the scale and reach of our efforts across the business.
To view the full Sustainability Progress Report for 2025 please visit: alfasystems.com/en-eu/about/ sustainabilityIn the following highlights pages you can read about:
Our ongoing alignment with the UN Sustainable Development Goals (SDGs) and continued commitment as a UN Global Compact (UNGC) signatory, reinforcing our role as responsible corporate citizens.
Details of People & Culture initiatives from across 2025, which support employee engagement, culture, recruitment and retention.
Gender Pay Gap reporting highlights, demonstrating our commitment to transparency, equity and inclusion.
Updates on our carbon reduction and energy efficiency progress, underscoring our determination to contribute to a
low-carbon future.
Disclosures aligned with TCFD (Task Force on Climate-related Financial Disclosures), CFD (Climate-related Financial Disclosures) and SECR (Streamlined Energy and
Carbon Reporting).
ESG Governance
All Alfa's ESG initiatives align with our five chosen UN SDGs. Oversight is provided by Alfa's ESG Steering Committee, made up of colleagues from across our global business, including our Chief Financial Officer and Chief People Officer. The committee meets monthly to review progress, remove barriers and guide the strategic direction of ESG at Alfa. We also focus on the key areas identified by SASB as materially impacting the software industry: Energy Management, Customer Privacy, Data Security, Employee Engagement, Diversity and Inclusion, Competitive Behaviour and Systemic Risk Management.
We have embedded ESG factors into supplier onboarding. Identifying suppliers, customers, and charity partners that align with the
SDGs enables us to identify shared priorities and values.
People
Employee sentiment remains strong with employee engagement at 83% in the final quarter of 2025. 86% of colleagues agree that Alfa fosters an inclusive environment and 84% feel they can be themselves at work.
Feedback continues to be invaluable and encouraged across Alfa. The quarterly engagement survey, Pulse, is continuously refreshed with rotating review group membership and new communications summarising feedback themes alongside actions taken. In 2026 we aim to expand our listening strategy and encompass culture themes throughout the year.
United Nations' Sustainable Development Goals and United Nations Global Compact
Our five chosen United Nations Sustainable Development Goals (UN SDGs):
Gender Equality. Achieve gender equality and empower all women and girls.
Decent Work and Economic Growth. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
Reduced Inequalities. Reduce inequality within and among countries.
Responsible Consumption and Production. Ensure sustainable consumption and production patterns. Climate Action Take urgent action to combat climate change and its impacts.
Participation in the UN Global Compact and the SDG Accelerator has broadened our sustainability insight. In mid-2025 we submitted our first Communication on Progress to the UNGC, which includes the CEO statement of continued support.
This reaffirms our commitment to the Ten Principles and the Sustainable Development Goals (SDGs).
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Additional information
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 25
Environmental, Social and Governance continued
Global Gender Pay Gap highlights
Median Pay Gap Mean Pay Gap
Pay Gap | 2024 | 2025 | 2024 | 2025 |
Alfa 16.4% | 18.2% | 13.1% | 15.0% | |
Our gender pay and bonus gap is largely influenced by the composition of our workforce and year-on-year changes driven by new joiners, leavers and organisational change. As a technology organisation, this has resulted in some fluctuation in our pay gap figures over time.
Across the company, there are more men than
Partnership with Code Your Future
In 2025 we launched a major new partnership in EMEA with Code Your Future (CYF), a UK nonprofit that provides free, volunteer-led software development training for refugees, asylum seekers and adults from disadvantaged backgrounds. This partnership is a powerful example of holistic sustainability in action.
CYF's mission aligns directly with Alfa's values and technical expertise. Our Product Engineering team has already collaborated to support CYF's launch of a Java curriculum, leveraging Alfa's unique internal Java course.
Opportunities extend beyond engineering; we
We were delighted to recruit 51 new hires in 2025, 7 of whom are based in our new Polish Smarthub in Gdansk.
Our employee-led Alfa Communities continue to play an important role in shaping our culture. Over the past year we've welcomed new chairs and co-chairs, and we now bring community leads together more frequently to support collaboration and intersectional initiatives.
Alongside our identity-based communities, our shared interest groups - including Reading for Change, Alfa Creative, and Alfa Fitness
- demonstrate how wellbeing, personal identity and professional life intersect to create meaningful connections across Alfa. Towards the end of 2025 we were delighted to announce a new support group for neurodiverse colleagues.
The People & Culture team worked to foster Alfa's culture throughout the year, focusing on innovation, collaboration and inclusion at company conferences and events.
Alfa introduced Continuous Conversations, transforming our pay and promotion approach to deliver more meaningful, ongoing feedback and clearer career development pathways for all. We also launched senior leadership development to grow capability across all regions.
women at all levels. This reflects a wider UK industry challenge, where fewer women enter technology and STEM-related roles. In line with this trend, women remain more highly represented in business and support functions than in technology roles.
In 2025, our global gender pay gap increased from 13.1% to 15.0%, and our UK gender pay gap rose from 14.2% to 16.2%. The global median pay gap increased from 16.4% to 18.2%, while the UK median pay gap remained broadly stable (2024: 18.5%; 2025: 18.6%).
For more detail, please see our full Gender Pay Gap report at alfasystems.com.
For information on the composition and diversity demographics of Alfa's Board, senior management and all colleagues, see page 70.
are expanding into CV support, mentoring and non-technical volunteering accessible to all Alfa colleagues.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 26
Environmental, Social and Governance continued
Volunteering
Everyone at Alfa receives three days each year to use for volunteering. Volunteering activity has accelerated organically across all regions this year and it's exciting to see the variety of initiatives and causes that colleagues support.
Global community-led volunteering events are coordinated across US and EMEA teams, and nature and biodiversity-focused activities are undertaken. Individuals also get involved
with numerous sporting, skills-based and other fundraising opportunities.
Charity Partnerships
Our EMEA partnership with Depaul UK continues to be our most successful charity collaboration to date. Depaul UK is a youth homeless charity providing emergency accommodation and shelter for young people facing homelessness across the UK.
In the US we commenced a partnership with Ronald Macdonald Charities House Detroit, an organisation dedicated to providing essential services that remove barriers, strengthen families, and promote healing when children need healthcare.
In Australia our partner is Women's and Girls' Emergency Centre, a specialist homelessness service for women and families escaping domestic violence.
Forest & Bird, the country's leading independent conservation organisation, is our charity partner in New Zealand.
The total raised for our charity partners across the year was: £35,596.
And the total including all other charitable fundraising was: £75,266.
Product
Embedding ESG into Alfa Systems
We are committed to ensuring that Alfa Systems and its associated SaaS capabilities reflect our values around inclusivity, responsibility and environmental impact.
While the Sustainability pillar of Alfa Systems 6 remains central, we have expanded our focus this year to include digital accessibility, responsible and inclusive AI, and environmentally efficient product operations.
Accessibility as a Strategic Priority In 2025 we intensified efforts to improve the accessibility of Alfa Systems. Our goal is to achieve meaningful compliance with WCAG
2.2 Level AA across key user journeys.
A significant number of identified accessibility issues have been resolved, with prioritisation driven by real data from Alfa Cloud on the most frequent user journeys. Accessibility automation is now being integrated into our test framework. In addition, accessibility training will be rolled out to colleagues that work with our product.
Accessibility improvements benefit all users and reinforce Alfa's leadership role in
driving inclusive digital product design across the industry.
Green Software and Sustainable Operations
As we transition further to cloud-first and expand AI adoption, we are focused on managing environmental impacts in line with our goal to reduce Scope 1, 2 and 3 emissions by 90% by 2050.
We are addressing key questions around AI and cloud sustainability, with plans for a green software and operations working group to deepen our sustainability expertise, set operational standards and guide decision-making.
Planet
Progress toward Net Zero
In 2025, we retired approximately 4,500 tCO2 of carbon offsets from accredited programmes, offsetting more than 100% of the Group's total reported emissions for the year.
These offsets are used as a complementary measure and do not replace the Group's ongoing focus on reducing absolute emissions in line with its decarbonisation strategy.
Alfa's other planet-friendly initiatives continue to support our goals. We recycle and repurpose office IT equipment via KOcycle. Our employee benefits align with ESG ambitions, such as the electric vehicle salary sacrifice scheme. We've conducted a Scope 3 supplier engagement pilot to improve data quality, and our membership in the UN Global Compact strengthens alignment with international standards.
Looking Ahead: 2026 and Beyond By 2026 we aim to demonstrate increased maturity across all ESG pillars. Alfa aims for more intentional intersectionality and
collaboration across communities, alongside continued focus on cultural inclusivity and equitable career development.
We expect to demonstrate improvements in Alfa Systems accessibility, inclusion and responsible AI, in tandem with further integration of sustainability into Alfa Cloud and internal product operations.
Alfa also aims to formalise a credible, detailed emissions reduction plan with clear pathways for Scope 3.
Alfa's goal is to progress from commitments to meaningful measurable outcomes, demonstrating leadership within both our sector and our client ecosystem.
Alfa's latest Sustainability Progress Report shares more on the great things we got up to across 2025.
Please visit: alfasystems.com/en-eu/ about/sustainabilityStrategic report
Corporate governance
Financial statements
Additional information
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 27
Environmental, Social and Governance continued
2025 Awards
We're extremely proud to have won a plethora of awards, both as an organisation and for individuals earning well deserved industry recognition.
Tech Business of the Year, plc awards 2025
Investors in People 2025: gold status
Best Technology Platform of the Year & Best Marketing Campaign of the Year for Alfa Systems 6 at the GlobalData Automotive Awards
EDI Trailblazer winner, LeasingWorld Going Further Gold Awards
Social Award, Asset Finance Connect Summer Awards 2025
Top 20 in the DIAL Global Index 2025
2025 Monitor Best Company - Innovation category
2025 Monitor NextGen Leader: Brittany Hamilton
2025 Monitor Most Influential People, Inclusivity: Kinna Pattani
2025 Monitor Top Women in Equipment Finance: Kirsten Fleming
The Leasing Foundation's 30 Under 30 2025: Selim Jedidi-Ayoub
Anti-Bribery and Corruption Policy Sets out our zero-tolerance approach to all forms of bribery and corruption and includes guidance on the giving and receiving of gifts and hospitality. In order to capture any concerns that employees or external parties may have in relation to bribery and corruption, the policy highlights internal contacts who can assist in any queries surrounding gifts and hospitality or concerns around bribery
and corruption.
Environmental Policy
Alfa is committed to minimising its environmental impact by complying with applicable environmental laws, measuring and transparently reporting its environmental performance, and operating its business in
a sustainable and responsible manner. This includes reducing energy consumption through technology, promoting resource efficiency across its offices and supply chain, and engaging employees and stakeholders to support sustainable practices.
Ethics and Code of Conduct
Alfa's Ethics and Code of Conduct sets out a zero-tolerance approach to dishonest and unethical behaviour and provides clear guidance on the legal and ethical standards expected of all employees when conducting Alfa business. The policy supports a positive and open culture, protects Alfa's reputation, and encourages colleagues to speak up about concerns without fear of retaliation.
Health and Safety Policy
Sets out the health, safety and welfare of our employees, contractors, visitors and other relevant stakeholders.
Modern slavery statement
Alfa is committed to respecting fundamental human rights, including the prohibition of child labour, forced labour and modern slavery, and the protection of freedom of association. The Group mitigates modern slavery risks through supplier due diligence, adherence to the Alfa Supplier Code of Conduct, and a focus on responsible business practices, data protection, inclusive product development
and sustainable supply chains.
Supplier Code of Conduct
Sets out the standards for our suppliers on compliance, human rights, environmental sustainability, business integrity, cybersecurity, confidentiality, and information security.
Whistleblowing Policy
Sets out our whistleblowing procedures and grievance mechanisms and is designed to ensure that colleagues and other parties, including contractors and third parties,
can safely report any instances of poor practice through internal channels or an independent organisation.
Strategic report
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 28
Streamlined Energy and Carbon Reporting
The table below discloses the Group's Streamlined Energy and Carbon Reporting.
2025
2024***
Global
(inc. UK)
UK only
Global
(not inc. UK)
Global
(inc. UK)
UK only
Global
(not inc. UK)
Energy Consumption (kWh)*****
Total Natural Gas Use
148,305
29,473
118,832
114,786
29,917
84,869
Total Company Fleet Use
2,252
2,252
-
1,063
697
365
Total Electricity Use
182,958
124,383
58,574
183,909
121,020
62,889
Total Energy Use
333,515
156,109
177,406
299,758
151,634
148,123
Scope 1 Carbon Emissions (tCO2e)*****
Natural Gas
27
5
22
21
5
16
Car Fleet (petrol/diesel/hybrid)
0.25
0.25
-
0.08
-
0.08
Total Scope 1 Emissions
27
6
22
21
5
16
Scope 2 Carbon Emissions (tCO2e)
Purchased Electricity - Buildings (Location-Based)
47
22
25
49
25
24
Purchased Electricity - Electric Vehicles (Location-Based)
0.22
0.22
-
0.14
0.14
-
Purchased Electricity - (Market-Based)**
-
-
-
0.39
0.14
0.25
Total Scope 2 Emissions (location-based)
47
22
25
49
25
24
Scope 3 Carbon Emissions (tCO2e)*****
Category 1 - Purchases Goods & Services
1,862
*
*
1,674
*
*
Category 2 - Capital Goods
69
*
*
45
*
*
Category 3 - Fuel & Energy Related Activities
17
*
*
18
*
*
Category 4 - Upstream Transportation and Distribution
5
*
*
9
*
*
Category 5 - Waste Generated in Operations
9
*
*
1
*
*
Category 6 - Business Travel (Flights, rail, grey fleet, hotels and taxis)
1,427
*
*
936
*
*
Category 7 - Employee Commuting and Work From Home
270
*
*
516
*
*
Category 8 - Upstream Leased Assets
33
*
*
73
*
*
Total Scope 3 Emissions
3,692 * *
3,271
*
*
Total Emissions (tCO2e)
Scope 1
27
6
22
21
5
16
Scope 2 (Location-Based)
47
22
25
49
25
24
Scope 2 (Market-Based)**
0.22
0.22
-
0.39
0.14
0.25
Scope 3
3,692
*
*
3,271
*
*
Total Carbon Emissions (tCO2e) (location-based)
3,767
3,341
Total Revenue (£m)
127
*
*
110
*
*
Carbon Intensity ratio (tCO2e per £million)****
0.6 * *
0.6 * *
* Breakdown beyond Global Emissions not calculated.
** Market-Based Scope 2 emissions are not included in final emissions inventory.
*** Our spend-based Scope 3 (Categories 1, 5 and 6) emissions for 2024 have been restated to reflect the use of the updated 2025 CEDA emissions factor database, which provides a more representative global dataset from 2023 onwards. In addition, supplier-specific emissions in Category 1 were updated, and a refinement was made to address an identified estimation issue.
**** Carbon Intensity figure includes only global Scope 1 and 2 emissions.
***** Breakdown of total figures are rounded to the nearest whole number and may cause minor discrepancies. Total figures are accurate.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 29
Streamlined Energy and Carbon Reporting continued
Methodology: As a quoted organisation, Alfa is required to report its energy use and carbon emissions in accordance with the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. The data detailed in the tables below represents emissions and energy use for which Alfa is responsible, including energy use on its sites and fuel used in the company fleet. Alfa has used the main requirements of the Greenhouse Gas Protocol Corporate Standard to calculate its emissions, along with the UK Government GHG Conversion Factors for Company Reporting 2025. Part of Alfa's Scope 3 emissions inventory was also calculated. This process included the use of UK Government GHG Conversion Factors for Company Reporting 2025,
IEA Emission Factors 2025 and CEDA 2025 Emission Factors. Any estimates included in Alfa's totals are derived from actual data extrapolated to cover missing periods or from benchmarks.
Energy Efficiency Statement: We are committed to responsible carbon management and will practise energy efficiency throughout our organisation, wherever it is cost effective. We recognise
that climate change is one of the most serious environmental challenges currently threatening the global community and we understand we have a role to play in reducing greenhouse gas emissions. During the year, we implemented the following initiatives to improve the Group's energy efficiency, support progress against our SBTi targets, and reduce avoidable energy related emissions:
Maintained renewable electricity supply across our offices, reflecting our continued focus on reducing the carbon intensity of our operations. This supports our longer term SBTi aligned emissions reduction trajectory by ensuring that a greater share of our operational energy demand is met through low carbon sources;
Ongoing support for virtual collaboration and consideration of travel requirements when hosting internal and external events, helping to reduce energy use associated with business travel; and
Continued availability of salary sacrifice electric vehicle schemes, contributing to lower emissions compared with traditional company car arrangements.
Non-financial and Sustainability Information Statement
Information as required by regulation can be found on the following pages:
Environmental matters Pages 26, 28 to 33
Our employees Pages 24, 25 and 45
Social matters Pages 25 to 26
Human rights Page 27
Anti-corruption and anti-bribery Page 27
Climate-related disclosures Pages 28 to 33
Business model Page 4
KPIs Pages 18 to 19
Principal risks Pages 34 to 44
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 30
Task Force on Climate-related Financial Disclosures (TCFD)/Climate-related Financial Disclosures (CFD)
Alfa has prepared these climate-related financial disclosures in accordance with the recommendations and recommended disclosures of the Task Force on Climate-related Financial Disclosures (TCFD) and in compliance with the UK's Climate-related Financial Disclosures (CFD) regulatory requirements (CFD applies to the Group for the first time in the current reporting period). We have based our disclosures on the TCFD 'Guidance for All Sectors' and note that we do not operate in an industry for which the additional supplemental guidance applies. In determining materiality for climate-related financial disclosures, the Group applies a qualitative assessment aligned with investor decision usefulness, and considers audit materiality thresholds (as disclosed on page 111) an appropriate benchmark for judging the significance of potential climate impacts, while recognising that disclosure materiality under TCFD/CFD may differ from statutory audit materiality. We will continue to assess our approach to ensure we remain relevant in what we measure and disclose. The organisational boundary for SECR reporting covers the entire Group, with all subsidiaries and operations included in the emissions and energy usage disclosures.
Area Recommended disclosure Alfa disclosure
Governance a) Describe the Board's
oversight of climate-related risks and opportunities.
b) Describe management's role in assessing and managing climate-related risks and opportunities.
The Board retains overall responsibility for climate oversight. The Audit and Risk Committee (page 75), considered climate matters at three 2025 meetings (March, June and December), covering: (i) scenario analysis outcomes; (ii) updates on ESG-related risks; (iii) SECR results and methodology; and (iv) regulatory developments (including the anticipated transition from TCFD to IFRS S2).
To support effective oversight, the Board keeps up to date on ongoing climate and sustainability training. In 2025, the Board attended a training session on succeeding in sustainability, which highlighted the growing complexity of sustainability reporting, particularly in Europe, with increasing expectations from investors and regulators.
The Board agreed with management's view that climate-related risks are not material for Alfa in the near term, but recognises their growing strategic relevance - particularly in relation to regulation, customer expectations and supply chain emissions. As these risks and opportunities evolve, the Board expects to increase the depth and frequency of its oversight.
The CEO has ultimate responsibility to the Board for climate-related matters. Day-to-day responsibility sits with the CFO, who is accountable for the Group's Environmental Policy, climate-related risk assessment and emissions reporting. The CFO reports regularly to the CEO and the Company Leadership Team (CLT), and provided updates to the Audit and Risk Committee at three 2025 meetings (March, June and December). In 2025, the CFO oversaw the work in a number of areas including the climate scenario analysis carried out (see page 32), a detailed review of the climate-related risks and opportunities in the risk register, and the purchase of carbon offsets for projects that aligned with Alfa's selected UN SDGs (page 24).
The CFO is supported by the ESG Steering Group, which comprises senior leaders from across the Group, including the Chief People Officer (CPO). The ESG Steering Group is responsible for developing and delivering the Group's ESG strategy, overseeing progress against key commitments, and ensuring climate-related considerations are appropriately embedded across business functions. The ESG Steering Group discussed climate-related issues in four meetings in 2025.
In addition, the Environmental Impact Team, a cross-functional group of employees from across the Group, supports the implementation of environmental initiatives and employee engagement activities. This team plays an important role in driving operational initiatives and fostering a culture of environmental awareness. Initiatives recommended by this team (and subsequently implemented at Alfa in 2025) include a variety of hands-on community clean-ups and planting projects across our regions.
Management regularly engages with external advisors to support climate-related risk assessment, regulatory compliance and emissions reporting, including in relation to SECR reporting, supplier emissions engagement and Science Based Targets initiative (SBTi) commitments. Management is kept up to date on ESG matters in a number of ways - these are tailored by individual and, in 2025, included attending working groups and accelerator sessions run by the United Nations Global Compact, as well as engaging in customer sustainability programmes (such as Supplier Sustainability Connect run by Lloyds Banking Group).
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 31
Task Force on Climate-related Financial Disclosures (TCFD)/Climate-related Financial Disclosures (CFD) continued
Area Recommended disclosure Alfa disclosure
Strategy a) Describe the climate-related
risks and opportunities the organisation has identified over the short, medium, and long term.
Describe the impact
of climate-related risks and opportunities on the organisation's businesses, strategy, and financial planning.
Alfa has identified and assessed climate-related risks and opportunities over the short, medium and long term, taking into account the nature of its operations and geographic footprint. In doing so, management considered the categories of climate-related risk set out in the TCFD Implementation Guidance, as well as industry specific materiality guidance from the Sustainability Accounting Standards Board (SASB) for the Software and IT Services sector.
Short term (2026-2028): In the short term (3 years from reporting date, in line with the viability assessment on page 52), the Group's primary climate-related risks relate to regulatory change, compliance and reputation. These included the risk of failing to keep pace with evolving climate-related reporting requirements and stakeholder expectations.
Medium term (2029-2033): In the medium term, the Group expects transition risks and opportunities to become more pronounced. Increased regulatory scrutiny, customer demand for transparency across value chains, and higher expectations around Scope 3 emissions management may increase compliance costs and operational complexity.
Long term (2034-2050): Over the long term, the Group expects climate-related considerations to be increasingly embedded in customer business models, regulatory frameworks and capital markets. Alfa's strategy is to position its products to support customers' long-term transition needs, including lifecycle asset management, emissions tracking and sustainability reporting.
Conversely, the transition to a lower-carbon economy is also expected to create opportunities for Alfa. The increasing cost of low carbon assets and the growth of sustainable finance are likely to drive demand for sophisticated asset backed finance and leasing solutions. In addition, more stringent ESG reporting requirements across customer value chains are expected to increase demand for flexible, data driven software solutions capable of supporting sustainability and emissions reporting.
While macroeconomic disruption arising from climate change presents a systemic risk to the global economy, Alfa's asset-light, SaaS-focussed business model is expected to be relatively resilient compared to more carbon intensive sectors.
Our two largest countries by revenue and employee numbers are the UK and USA (pages 132, 133 and 135), and therefore these geographies have the most impact on our climate-related risks and opportunities. We continue to be mindful of emissions, increasing the use of renewable energy across our offices, and factoring travel distance and mode into conference planning. For example, our 2025 EMEA conference was held in the UK rather than abroad to reduce travel-related emissions.
As part of its strategy, the Group invests in understanding customers' evolving sustainability requirements and prioritises product development accordingly. This supports long-term financial planning and future revenue growth through customer retention, market share opportunities and enhanced product functionality. Customer collaboration remains central to product development and has informed solutions such as our Environmental Accounting module. Sustainability is embedded as a core pillar of Alfa Systems 6, including enhanced lifecycle and emissions-related capabilities.
This strategic focus reduces the risk of product obsolescence and positions Alfa to capture climate-related opportunities as they arise.
Climate-related considerations are also reflected in the budgeting process. Costs for external advisors supporting climate and regulatory reporting, as well as the purchase of carbon offsets, are incorporated into annual financial budgets. In 2025, the Group purchased and retired approximately 4,500 tCO2 of carbon offsets from accredited programmes, offsetting more than 100% of the Group's total reported emissions for the year. These offsets are used as a complementary measure and do not replace the Group's ongoing focus on reducing absolute emissions in line with its decarbonisation strategy.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 32
Task Force on Climate-related Financial Disclosures (TCFD)/Climate-related Financial Disclosures (CFD) continued
Area Recommended disclosure Alfa disclosure
Risk management
Describe the resilience of the organisation's strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.
Describe the organisation's processes for identifying and assessing climate-related risks.
Describe the organisation's processes for managing climate-related risks.
Alfa undertook a qualitative climate scenario analysis during FY25. This approach is consistent with CFD guidance, which allows for qualitative scenario analysis where quantitative modelling is not yet feasible or would not meaningfully enhance decision-making, and is proportionate given that Alfa's overall emissions footprint is relatively small. Given the current scale, nature and geographic distribution of the Group's operations, management and the Board concluded that a qualitative assessment provides a proportionate and decision-useful basis for evaluating strategic resilience at this stage.
The assessment evaluated the resilience of our business model under two NGFS-aligned scenarios: an Orderly Transition (1.5°C) and a Disorderly Transition (3°C+), and across three timeframes - short-term (0-5 years), medium-term (5-10 years) and long-term (10+ years) - reflecting both operational and strategic planning horizons. These scenarios were selected to reflect a range of plausible transition pathways and associated risks. The 1.5°C scenario represents an orderly transition aligned with global climate objectives and provides insight into potential transition risks and opportunities arising from regulatory change, customer expectations and technological development. The 3°C+ scenario represents a more disorderly transition with delayed or insufficient policy action, enabling assessment of heightened physical and transition risks and the resilience of the Group's strategy under more adverse conditions.
The analysis considered key physical and transition risks that were most relevant to our operations - including cloud service disruption, reputational exposure, regulatory change and supplier emissions - alongside opportunities in ESG-linked product innovation and operational efficiency. In the short term, impacts under both the 1.5°C and 3°C+ scenarios are primarily transition-driven and relate to regulatory change, reporting requirements and stakeholder expectations. The difference in impact between scenarios at this stage is limited, reflecting the relatively short lead times and the Group's asset-light, SaaS-focussed operating model.
In the medium term, the divergence between scenarios becomes more pronounced. Under the 1.5°C scenario, risks are driven by an orderly transition, with increased regulatory complexity and customer demand for enhanced ESG data and reporting capabilities, partially offset by related product and market opportunities. Under the 3°C+ scenario, these transition risks are amplified by greater uncertainty, increased efforts associated with supplier engagement, and heightened reputational risk, resulting in a relatively higher overall risk profile.
In the long term, the 3°C+ scenario results in a higher risk relative to the 1.5°C scenario, reflecting the compounding effects of delayed transition, increased physical risk to global supply chains and customers, and broader macroeconomic disruption. While physical risks to the Group's own operations remain limited, the indirect impacts on customers, markets and regulatory frameworks are expected to be more significant. Under the 1.5°C scenario, impacts remain more gradual and predictable, supporting a more stable operating environment.
Across all time horizons and scenarios, the Group's resilience is supported by its flexible operating model, absence of energy-intensive assets, cloud-focussed operations, diversified customer base, value chain engagement, working with external climate advisors, and ongoing investment in
product functionality aligned to customers' sustainability and reporting needs. These mitigations are consistent with, and embedded within, the Group's principal risk management framework (see page 35).
While no quantitative financial impacts have been modelled to date, management expects the sophistication of this analysis to evolve over time as internal capabilities, data quality and market practice continue to develop.
Climate-related risks are identified and assessed within the Group's risk management framework, as set out on page 35. These risks are evaluated alongside other strategic, operational and financial risks, using the Group's standard methodology for assessing likelihood, potential impact and overall risk rating. Senior management, including the CFO and the Chair of the ESG Steering Committee, reviews climate-related risks at least annually as part of the Group's wider risk assessment process, with updates provided more frequently where emerging developments warrant reassessment.
Where climate-related risks are identified, management seeks to mitigate them through a combination of policy development, operational initiatives, supplier engagement and external advisory support. In the short term, the Group's focus is on regulatory compliance, emissions measurement and measuring progress against our SBTi targets.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 33
Task Force on Climate-related Financial Disclosures (TCFD)/Climate-related Financial Disclosures (CFD) continued
Area Recommended disclosure Alfa disclosure
Metrics and targets
Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation's overall risk management.
Disclose the metrics used by the organisation to assess climate related risks and opportunities in line with its strategy and risk management process.
Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the
related risks.
Describe the targets used by the organisation to manage climate related risks and opportunities.
Climate-related risks are fully integrated into the Group's risk register and wider risk management processes. The risk register is reviewed regularly and updated to reflect changes in the external environment, regulatory landscape and the Group's operations. This ensures that climate-related risks are considered consistently alongside other key risks to the business.
The Group monitors and reports a range of climate-related metrics to assess climate-related risks and opportunities in line with its strategy and risk management processes, including Scope 1, 2 and 3 greenhouse gas emissions (page 28); energy consumption across its office locations, and the carbon intensity ratio as disclosed on page 28 (which remains the same as prior year due to the higher Scope 1 and 2 emissions being offset by higher revenue).
These metrics are used to track the Group's emissions profile, identify key sources of climate-related risk, and inform actions to manage and mitigate those risks over time. Scope 3 emissions represent the majority of the Group's total emissions, with Purchased Goods and Services (Category 1) the largest contributor. We continue to work with our suppliers to encourage them to monitor and reduce their own emissions.
Detailed Scope 1, Scope 2 and Scope 3 greenhouse gas emissions data, together with the methodologies and assumptions used, are disclosed in the Streamlined Energy and Carbon Reporting (SECR) disclosures on pages 28 to 29. Total location-based greenhouse gas emissions increased by 13% between 2024 and 2025, driven primarily by an increase in Scope 3 emissions, reflecting growth in the Group's operations and higher business activity. The Group continued to improve the accuracy of its emissions reporting during the year, including the first-time use of supplier-specific emissions data for Amazon Web Services. This enhancement was applied consistently to both 2024 and 2025 to improve year-on-year comparability. Reported movements therefore largely reflect operational growth and improved data quality, rather than a material decline in the Group's carbon efficiency.
A risk associated with emissions reporting is the potential for inaccuracies arising from data quality, estimation methodologies or supplier-provided information. Alfa mitigates this risk by applying established calculation methodologies and working with external advisors to support the measurement and disclosure of its greenhouse gas emissions.
Alfa has committed to science-based emissions reduction targets aligned with the Science Based Targets initiative (SBTi), using a 2022 base year -specifically, a target to reduce Scope 1 and Scope 2 emissions by 42% by 2030, and a long-term target to reduce absolute Scope 1, Scope 2 and Scope 3 emissions by 90% by 2050. Progress against these targets is monitored annually. Compared with the 2022 SBTi base year (as updated for subsequent methodological and data accuracy improvements), total emissions in 2025 were approximately 19% higher, primarily reflecting increased Scope 3 emissions associated with the growth of the Group's operations. Scope 1 and Scope 2 emissions decreased by approximately 13% since 2022 and remain small relative to the overall footprint.
Scope 1 and 2 movements since 2022 are aligned with the Group's target to reduce these emissions by 42% by 2030, while the longer-term 90% reduction target by 2050 remains dependent on continued supplier engagement, improved Scope 3 data quality and decarbonisation across the value chain.
Management therefore considers the Group to remain on track against its SBTi commitments as the business continues to scale.
The Group is assessing the introduction of interim emissions reduction targets to support delivery of its longer-term targets and expects to focus on this during 2026 and 2027. In parallel, Alfa continues to prioritise reductions in emissions over time, with carbon credits used as a complementary measure rather than a substitute for direct emissions reductions.
Alfa recognises that climate-related financial disclosure expectations under the UK CFD regime and international sustainability reporting standards will continue to evolve. Over the coming years, the Group intends to further enhance the quality, consistency and decision-usefulness of its climate-related disclosures. The Group is monitoring the transition to IFRS S2 and will align disclosures as required when adopted, as disclosed on page 120.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 34
Risk management
Alfa's effective risk management provides a foundation for the safe pursuit of our strategic goals, innovation and opportunities.
Introduction
At Alfa, robust risk management is at the heart of our strategy for sustainable growth, allowing us to react with speed and agility to new and emerging risks, and ensuring that risks are mitigated to an acceptable level, given the Company's risk appetite.
The external risk environment continues to evolve and remains uncertain. Whilst macroeconomic pressures (interest rates and inflation) are down, there are a number of factors which have the potential to impact customer demand for our services, including increasing geo-political uncertainty, ongoing conflicts around the world, protectionist and populist trade policies with retaliatory actions, state-sponsored cyber security threats, accelerating AI disruption, increasing regulatory requirements and weak economic growth. There is a more detailed discussion of our principal risks on pages 38 to 44.
The resilience of the asset finance industry which we serve, and our diversification across regions and sectors of this industry, are strong mitigations against this backdrop of uncertainty.
We have an established governance structure in place for risk management (see page 36), which puts identifying, assessing and mitigating risks at the heart of our strategy.
During the year, the Company continued to strengthen its risk management and internal control framework, including undertaking a comprehensive and robust identification and assessment of material financial, operational, reporting and compliance controls, aligned to material risks. The Company is well placed to comply with the enhanced requirements of Provision 29 of the 2024 UK Corporate Governance Code.
Environment, Social and Governance (ESG) risk assessment
ESG-related risks are tracked in the Corporate Risk Register and assessed as part of our
six-monthly risk review. Currently, we do not have any ESG-related risks that are sufficiently high to be considered principal risks or uncertainties. Refer to pages 30 to 33 where specific risks related to our climate change responsibilities are discussed.
Focus for 2026
Embed a formal controls monitoring and assurance regime, to provide assurance over the adequacy and effectiveness
of material controls that mitigate the principal and material risks facing the Group.
Continuous improvement of risk management procedures, including maintaining awareness within the Company of our risk management best practices.
Information security, cyber security and data protection: maintain SOC1 Type 2, SOC2 Type 2 and ISO programme compliance, and continue to assess and strengthen our cyber security defences.
Business continuity and disaster recovery scenario testing exercises, covering our operational systems and Alfa Cloud.
Internal audit: provide assurance over risk management procedures, including the adequacy, effectiveness and governance of material controls monitoring and testing.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 35
Risk management continued
Our risk management process - how we identify and manage risks
Our risk management process is a four-step process for identifying and managing risk throughout our business, allowing the Directors to conduct a robust assessment of the principal risks facing the Group. We take the view that risk is not something that should be fully eliminated but, instead, identified, assessed, responded to and monitored in a timely manner.
Risk Management Process
Identify
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s
I
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f
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The Company Leadership Team and risk owners are responsible for identifying risks with the potential to threaten the achievement of strategic objectives or influence stakeholder decision-making. Six monthly, business owners perform a detailed bottom-up risk review, which is led by the Risk Officer. The CLT and Audit and Risk Committee review the identified risks to provide assurance over the completeness of the Corporate Risk Register
s
Assess
Risks are assessed to understand the likelihood and impact of the risk materialising. Level of impact is assessed in terms of financial, operational, legal, regulatory and reputational impact. The assessment considers inherent risk (gross risk before risk mitigation) and residual risk (net risk after current mitigations), to highlight the potential risk exposure if risk mitigation failed.
Respond
r
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t
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M
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Each risk is evaluated against our risk appetite, to ensure that the likelihood and severity of risks we are exposed to is acceptable. If a residual risk is outside the risk appetite for that category, additional risk mitigation actions are implemented to reduce the impact and/or likelihood of the risk to an acceptable level.
Monitor
The adequacy and effectiveness of material controls, to mitigate principal and material risks, is monitored by management and reviewed by the Audit and Risk Committee.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2025 36
Risk management continued
Governance and responsibilities
Our organisation has an open and accountable culture. The Board and Company Leadership Team set the tone for risk management activities, embedding risk management into the culture of the organisation.
The Board retains overall responsibility for risk management, including oversight of the risk management framework, setting the Group's risk appetite, and promoting a strong, top-down risk culture across the organisation.
The Audit and Risk Committee supports the Board to ensure that the risk management framework is effective, reviews and challenges the completeness and integrity of the Corporate Risk Register, assesses emerging risks and considers the internal audit plan and internal audit reports.
The Company Leadership Team (CLT) is responsible for the operational management of risk across the Group, ensuring that risk owners are responsible for identifying, assessing and mitigating risks in their respective areas.
1st Line of Defence: Management and business owners are responsible for identifying and managing risks, conducting
2nd Line of Defence: Risk Management coordinates risk management activities across the Group, leading the six-monthly bottom-up risk review, maintaining the Corporate Risk Register, promoting best practice across the organisation, and preparing reports for the CLT and Audit and Risk Committee.
3rd Line of Defence: Internal Audit provides independent and objective assurance over the adequacy and effectiveness of risk management, governance and internal controls, providing regular reports to the Audit and Risk Committee.
Further assurance is achieved through external audits, including SOC1 and SOC2 audits and ISO27001 and ISO27018 certifications.
Responsibilities Board
Provision 29
The Board recognises the enhanced requirements of Provision 29 of the 2024 UK Corporate Governance Code, which will require an annual declaration on the effectiveness of the Company's material controls for accounting periods beginning on or after 1 January 2026.
During the year, the Company continued to strengthen its risk management and internal control framework in preparation for this requirement, including undertaking a comprehensive and robust identification and assessment of material financial, operational, reporting and compliance controls, aligned to material risks.
A formal controls assurance programme has been established, including management self-assessment, independent testing and clear escalation and remediation processes for control deficiencies.
The Board receives regular updates on the design and operating effectiveness of these controls and the progress of remediation actions, supported by Internal Audit and external advisers where appropriate.
This programme is designed to ensure the Board will be able to make a robust, evidence-based declaration on the effectiveness of material controls when the provision comes into force.
Top down governance, identification and assessment
six-monthly risk reviews and implementing risk mitigation actions.
Company Leadership Team Audit & Risk Committee
1st line of defence: Management
2nd line of defence: Risk Management
3rd line of defence: Internal Audit
Bottom up identification, assessment and mitigation
Principal risk heat map
C
D
A
G
B
E
F
Rare
Likelihood
Unlikely
Possible
Likely Almost certain
Risks
Socio-economic and geo-political risk
People risks
IT security and cyber risks
Business continuity
Foreign exchange rate uncertainty
Pressure on margin due to competition or increased cost base
Competitive pressure may lead to loss of market share
Minor
Moderate
Major
Critical
Principal risks and uncertainties
Our risk appetite
Taking risks, if they are well controlled and managed, can help us achieve our strategic objectives. Our systems and processes are designed to manage our exposure to risk rather than eliminate the risk completely.
It is recognised that an element of risk-taking is necessary in order to seek out and pursue opportunities, including progressing our strategic objectives. However, the risks associated with the pursuit of such opportunities should be commensurate
with the level of reward expected from the opportunities.
Our risk appetite provides guidance on the levels of risk we are prepared to take in pursuit of our objectives and is a fundamental part of planning and executing our strategy. The Audit and Risk Committee considers the risks associated with the conduct of our business and delivery of our strategy, assessing the risks we are exposed to and evaluating whether this exposure is acceptable given the likelihood and severity of the risk.
Our risk appetite is assessed across the following categories: strategic, financial, operational, legal and ESG. Each area has different considerations, and it is important to set the correct tone for decision-making in each area. Overall, we take a cautious approach to risk, aiming to operate in a manner that is not expected to put the business at risk of significant financial, operational or reputational damage.
Principal risks and uncertainties in more detail
The Group faces a number of risks that may adversely affect our strategic and business objectives, operations, liquidity, financial position, reputation or future performance, not all of which are wholly within our control or known to us. Some such risks may currently be regarded as immaterial and could turn out to be material. We accept that risk is an inherent part of doing business.
Impact
Insignificant
The Board considers the following matters to be the principal risks and uncertainties (in no specific order) affecting our business at this time.
Principal risks and uncertainties continued
Risk A - Socio-economic and geo-political risk
Link to strategy
1 2 3
Movement compared to 2024:
Same level of risk
Potential impact
Major
Likelihood
Possible
Risk description
Economic and political conditions could have an adverse impact on the Group's markets and demand for its products and services.
Potential impact
Revenue disruption due to market access restrictions, customer budget cuts and longer sales cycles.
Increased costs including energy, compliance, insurance and taxation.
Lower company valuations.
This risk goes hand-in-hand with opportunity, as customers may seek to adapt to the changing economic environment, seeking operational efficiency or new solutions.
Risk mitigation
Diversification of customer base - geographically, by asset type (i.e. automotive, equipment) and by customer type (i.e. banking, OEM or independent).
Diversification of revenue streams and shift towards subscription revenue.
Financial robustness of Group, by retaining cash reserves and prompt invoicing and collection of fees, which are increased annually, taking into consideration increases in the cost base.
We maintain strong relationships with our customers in each market, with close collaboration on strategic aims and growth opportunities, to adapt to changing market conditions.
Progress in 2025
21 customers contributed more than £2m revenue (21 in 2024), reducing our reliance on our largest customers.
Subscription revenue has continued to grow, contributing 34% of our revenue (2024: 34%).
Geographical diversification continued, with successful go-lives in the US, EMEA and AsiaPac.
Emerging risks
Escalating geo-political tensions and uncertainty, affecting customer and investor confidence and IT spend.
Increasing protectionist, populist and retaliatory policies, affecting trade and tax policies.
War and conflict spillover, increasing the likelihood and severity of state-sponsored cyber attacks.
Lower global growth forecasts, especially in Europe.
Exposure to potential new taxes imposed by the US on software or services being supplied from outside the US.
Our strategic pillars
Strengthen - Grow our differentiation of market-leading People, Product and Delivery.
Sell - Focus on cloud-hosted, subscription sales to our target markets.
Scale - Increase our capacity for developing and delivering Alfa Systems.
Simplify - Simplifying our product, implementations and processes to enable more concurrent Alfa Systems implementations.