Trading Update and Notice of Results

Tribal (AIM: TRB), a leading provider of software and services to the international education market, is pleased to provide an update on trading for the year ended 31 December 2024 ("FY24" or "the Year").

Trading performance

Tribal expects to deliver a positive trading performance in FY24 with adjusted EBITDA1 substantially ahead and revenue ahead of current market expectations2. A strong performance by the software-led Student Information Systems has offset a softening in markets for the Group's education consultancy business, Etio.

Tribal generated higher levels of cash in the Year, resulting in a materially improved net debt position of £3.2m which is well ahead of current market expectations2 (FY23: net debt of £7.2m), reflecting the continuing focus on cost control and operational efficiency.

Closing Annual Recurring Revenue (ARR)3 of the Core business increased by 9% to £54.8m (FY23: £50.3m at constant currency), reflecting growth in the Group's strategic products and cloud offering, more than offsetting the anticipated ongoing decline in non-core business ARR. The FY24 results include non-core legacy contract revenues of approximately £5m that are not expected to continue at the same level in FY25. Overall ARR increased by 6.5% to £57.0m (FY23: £53.5m at constant currency).

Subject to completion of the audit, the Board expects to recognise an impairment to the value of £1.4m related to Tribal Data Engine with an alternative Tribal product proving more cost effective for customers. This will have no future cash impact on the Group. This reflects the Board's prior decision to reduce overall R&D spend and focus sales efforts on a slimmed down product set, leading with Admissions.

Outlook

Tribal's positive trading performance in FY24, reduced debt levels and improved EBITDA margin have provided a strengthened foundation as the business enters FY25 which will help to offset the anticipated continued decline in the non-core business and £0.5m impact of higher employers' national insurance.

Whilst new customer generation was slower in FY24 than in prior years, the Group has a growing pipeline across the business, an effective cloud strategy, and continued ARR growth projected for FY25.

Notice of Results

The Group expects to announce its audited full year results on Thursday, 27 March 2025.

Mark Pickett, CEO of Tribal Group, commented: "I am pleased with the performance delivered in FY24 as we focus on the transformation of Tribal into a leading cloud provider to the education market. We have delivered EBITDA and revenue ahead of expectations, alongside a material reduction in our debt, all amidst a challenging market environment.

"The Group thrives on a strong customer base grounded in long-term relationships. With a growing proportion of that base having now committed to a cloud transition and structural improvements proving successful, we are confident that Tribal is well positioned for the future."

Notes

1 Adjusted EBITDA is stated before Exceptional items of £6m, reflecting NTU settlement, TDE impairment and redundancy costs.

2 In so far as the Board is aware, as 30 January 2025, consensus market expectations for FY24 were Revenue of £85.6m, adjusted EBITDA of £14.4m, and Net Debt of £9.4m.

3 'Core ARR' = Foundation, Cloud and Edge product sets.