Netcall’s half-year shows the second sale is the one that pays

Netcall, the UK software company behind the Liberty automation and customer engagement platform and listed on London’s Alternative Investment Market (AIM), published interim results on 4 March 2026 for the six months to 31 December 2025. Revenue rose 15% to £26.5m, or 11% on an organic basis. Cloud annual contract value (ACV) rose 42% to £42.6m. The figure that explains both sat lower down the results statement: cloud net retention of 115%.

Net retention compares what the same customers pay now with what they paid 12 months earlier, after any churn or downgrades. At 115%, the annual contract value of Netcall’s existing cloud customers was 15% higher than a year before, without a single new logo counted. The company added around 30 new clients in the half. It describes expansion within the customer base as “the primary growth driver”.

The shape of that growth is worth a closer look than the headline. Netcall says its footprint reaches around 16% of target accounts in its core UK sectors, so the whitespace is large. Yet its main growth driver is the accounts it already holds.

For the chief executives and sales leaders of mid-sized UK software firms, that is the lesson. The first contract is an entry ticket. The second and third are where the business is built, and a go-to-market plan should be designed, staffed and paid around them.

Small first, bigger later

Netcall’s results give two worked examples. Lancashire County Council started with Liberty Create for a welfare rights use case in the second half of Netcall’s 2023 financial year. It then extended the platform across a wide range of citizen services, and in the latest half placed a multi-million-pound order for a “digital front door” built on Netcall’s ConverseCX product. The company puts that at around four times the original ACV in under three years.

The second example is private sector. After the period ended, an existing customer that Netcall describes as an S&P 500 global financial services firm signed a multi-year £3m expansion, lifting its annual subscription to £1m. That is about three times its ACV at first adoption.

Lancashire did not buy a platform on day one. It bought a single, bounded use case, then found further uses once the first one worked. Netcall describes a “start small, scale fast” adoption path. The phrase is marketing, but the numbers behind it are in a regulated results statement.

James Ormondroyd, chief executive, tied the half to that pattern: “Customer adoption of the Liberty platform continued to deepen, reflected in consistently strong Cloud net retention.”

The real cost of expansion

An expansion model is not free, and Netcall’s statement shows where the money goes. The company runs a user community that grew by around a fifth in the half to about 12,000 members, and customers completed more than 4,000 courses and learning paths. That is spending on the customer’s own staff, so that they can build the next workflow themselves. It is the unglamorous part of land-and-expand: the second sale depends on the first user becoming competent.

There is also the acquisition line. Netcall bought Jadu, a public-sector digital experience supplier, in December 2025 for up to £18.9m. The deal raised Netcall’s coverage of UK councils from about one in three to about one in two, and added a US partner network. It also lifted the headline figures. On an organic basis, total ACV grew 13%, not the reported 28%, and cloud ACV grew 25%, not 42%.

The statutory numbers carry the cost. Profit before tax fell 31% to £2.54m, from £3.69m, as acquisition-related charges and share-based payments rose; share-based payment charges alone went from £0.16m to £1m. Cash fell from £27.2m at 30 June 2025 to £14.8m at the half-year after £12.7m of acquisition-related payments, though the group remains debt-free. Adjusted profit before tax, which strips those items out, rose 11% to £5.43m.

None of that undermines the expansion story. It does show that buying a customer base is the expensive way to get more accounts to expand into. Organic net retention is the cheaper engine, and it is the one a smaller firm without a war chest can actually run.

Paying for the second signature

For a UK software company with tens of millions in revenue, three practical points follow from Netcall’s half.

• Price the first deal to be won. A small, specific use case with a short path to a result gets through a council or a mid-market buyer’s procurement faster than a platform pitch. The value is in what comes next.
• Measure net retention before new logos. If the board pack leads with logos won, the sales team will chase logos. Netcall reports cloud net retention in its highlights alongside revenue and ACV.
• Budget for customer competence. Training, community and enablement are part of the sales cost of an expansion model, not a support overhead to be cut when margins tighten.

Partners matter too, but on Netcall’s own figures they are not yet the main route: indirect channels contributed about a fifth of order bookings, the same share as a year earlier.

Netcall’s outlook points to a record contracted order book of £92.4m and says momentum has continued into the second half. Whether that holds will be judged at the full year. The model it describes is already clear, and it is one many UK software boards still underfund. The first signature puts a logo on the slide. The second one pays for the company.