Fonix returns to double-digit growth as payment products expand

Fonix plc, the AIM-listed mobile payments company, reported gross profit of £21.0m and adjusted EBITDA of £16.2m for the year ended 30 June 2026, both back in double-digit growth after a slower FY2025. The results, announced on 22 September 2026 under RNS number 6464V, follow a slower FY2025, when gross-profit growth had slowed to 3.9% and adjusted EBITDA growth to 6.6%.

For UK readers who hold Fonix shares, follow the payments sector, or work with premium-rate services, the numbers matter for two reasons. First, they show a company still overwhelmingly built on UK carrier billing — the system that lets a mobile network add a charge to a customer's phone bill — is growing again. Second, they test a strategic question Fonix itself has raised: whether international markets and newer products such as PayFlex are broadening that base, or whether growth is still coming from the same core.

The preliminary results contain financial information extracted from Fonix's audited statements, which the board approved on 21 September 2026. Under section 434 of the Companies Act 2006, this announcement does not itself constitute the statutory annual report. Fonix expects to publish that report on 16 October 2026 and to hold its annual general meeting on 18 November 2026.

Reported results versus Fonix's adjusted measures

Fonix, like many listed companies, presents both figures drawn directly from its accounts and a set of company-defined "adjusted" or alternative performance measures. The two should not be read as interchangeable.

Fonix defines adjusted EBITDA as profit before interest, tax, depreciation, amortisation and share-based payment charges, and it also excludes R&D tax credits from the measure. That definition strips out several real costs and one real tax benefit, so adjusted EBITDA growth of 11.0% sits above statutory profit-before-tax growth of 8.4% and should not be read as the headline profit number. A reader should treat £16.2m as management's preferred measure rather than a statutory one.

Where the growth came from

Fonix treats gross profit, not revenue, as its key measure of underlying performance, because revenue includes amounts collected on behalf of mobile networks and other partners that Fonix does not keep. The gross-profit breakdown by service line shows where FY2026's growth was concentrated.

Mobile payments remained the dominant line, but mobile messaging grew fastest and lifted its share of gross profit from roughly 15.8% to 17.8%, while mobile payments' own share slipped slightly from about 79.8%. Managed services shrank. Total payments volume — Fonix's measure of consumer spend processed through carrier billing, SMS billing and voice, plus card, Apple Pay, Google Pay and PayPal payments facilitated through third-party providers — rose 8.0% to £303.3m including VAT, a slower rate than gross-profit growth.

Blended reported gross margin fell slightly, from 25.6% to 25.2%.

International expansion has not yet reshaped the mix

Fonix's own commentary frames international markets as an increasingly important growth driver. The geographic split tells a more qualified story.

Rest-of-Europe gross profit grew 15.8%, from £2.360m to £2.734m, faster than the UK's 12.5% growth. But because both regions grew, the overseas share of total gross profit remained at approximately 13%, the same rounded proportion Fonix reported for FY2025 (when overseas activity was driven mainly by Ireland). International expansion is real in absolute gross-profit terms but has not yet moved the needle on the group's overall geographic concentration.

Within that overseas growth, Fonix said Portugal was the main new-market contributor to FY2026 performance. Switzerland is earlier stage: one Swiss broadcast customer went live before the year-end, and a second followed in August 2026. Fonix also established French and Swiss subsidiaries during the year; both were loss-making while operations were being set up. The company has not disclosed country-level revenue or gross profit for Portugal, Switzerland or France, so the scale of Portugal's contribution is a qualitative management assessment rather than a figure that can be independently checked. Fonix has separately indicated a target of launching in an unnamed sixth European market towards the end of FY2027.

What PayFlex changes, and what it doesn't yet show

PayFlex is a fallback payment product for SMS transactions that fail. When a text-based payment does not go through, PayFlex can send the customer a payment link and let them pay instead by card, Apple Pay, Google Pay or PayPal through third-party payment providers. Fonix said PayFlex was live with several major customers by the results date, including its first customer outside the UK.

That description matters because it clarifies what PayFlex is and isn't. It is a way of recovering failed transactions and customer payments that would otherwise be lost when carrier billing fails, and a route into card and wallet-based payments alongside SMS. It is not, on the evidence disclosed, a separate business line with its own reported revenue, gross profit, payment volume or conversion rate — none of those figures appeared in the FY2026 results. Fonix's March 2026 half-year statement had described PayFlex as making a "meaningful contribution" to gross-profit growth, but the full-year results discuss it mainly in terms of future potential rather than measured outcomes. Because no product-level financial data has been published, the materiality of that contribution cannot be tested from the outside, and readers should treat PayFlex's role in FY2026 growth as unquantified rather than established.

Concentration and regulatory context

Three customers each represented more than 10% of FY2026 gross profit, unchanged from FY2025. Fonix did not name these customers, disclose their individual shares, or say how their contributions split by service line or geography, so this customer concentration cannot be shown to overlap with the 78.5% mobile-payments share or the 87.0% UK share. Each nonetheless stands as its own concentration risk: profit depends on a small number of customer relationships, on one product line, and on one national market, without evidence disclosed as to how far those three risks coincide.

Fonix's core carrier-billing activity sits within a regulatory perimeter. Ofcom directly regulates controlled premium-rate services in the UK under the Regulation of Premium Rate Services Order 2024, a regime it took on from the Phone-paid Services Authority from 1 February 2025. Providers carrying out regulated activities generally must register with Ofcom and comply with its rules. The precise regulatory treatment depends on the specific service, and not every payment Fonix or its partners facilitate is necessarily regulated in the same way.

Some of Fonix's broadcaster customers use its payment rails for prize draws and competitions, a category that sits adjacent to gambling but is not itself regulated under the Gambling Act 2005 where it qualifies as a genuine prize draw or skill competition. Government-commissioned research published by the Department for Culture, Media and Sport in June 2025 estimated UK adult participants spent around £1.3bn a year on online prize draws and competitions, with a wide range of £700m to £2.1bn, based on participation data from November 2023. That figure covers the entire UK online market, not Fonix's own addressable segment, and should not be read as a measure of Fonix's opportunity.

Cash, dividend and buybacks

Fonix reported cash and cash equivalents of £28.579m at 30 June 2026. That figure includes money Fonix holds on behalf of customers as part of its payment-processing role, and is not a measure of cash freely available to the company. Fonix's own underlying-cash measure — a company-defined figure that strips out customer money — was £9.403m, down from £9.877m a year earlier, after the company spent £2.360m buying back its own shares during the year.

Fonix proposed a final dividend of 6.20p per share, taking the FY2026 ordinary dividend to 9.30p. Compared with FY2025's ordinary dividend of 8.80p, that is a rise; compared with FY2025's total shareholder distribution of 11.80p, which included a 3.00p special dividend, it is a fall. Both comparisons are arithmetically correct; they simply answer different questions, and a reader should note which base is being used before drawing a conclusion about the trend in payouts.

The company also capitalised £1.547m of software-development spending during the year, equivalent to 66% of development-team costs, with £1.112m of related amortisation charged in the period. Average headcount, including overseas contractors, rose from 52 to 58, and staff, contractor and incentive costs rose from £4.5m to £5.3m.

Risk context for shareholders

Fonix shares trade on AIM; share prices can fall as well as rise, and dividends are never guaranteed. Nothing in this article should be read as a recommendation to buy, hold or sell Fonix shares, or as a prediction of how they will perform. The adjusted measures Fonix reports — adjusted EBITDA, adjusted profit before tax, adjusted EPS and underlying cash — are useful for tracking management's own view of trading performance, but they are not substitutes for the statutory figures, and different companies define similar-sounding adjustments differently.

What to watch next

Fonix's statutory annual report, due on 16 October 2026, should carry the formal auditor's report, principal risk disclosures and any further detail on related parties or executive pay. Beyond that filing, the clearest tests of whether diversification is taking hold will be whether Fonix begins disclosing PayFlex-specific revenue, gross profit or volume figures; whether Portugal, Switzerland and France show up as a materially larger share of overseas gross profit in FY2027; and whether Fonix's targeted sixth European market launches towards the end of FY2027 as planned. Until then, the rest-of-Europe share of gross profit — still around 13%, as it was a year ago — remains the most direct evidence of how far international expansion has actually progressed.