Physitrack Plc (LON:PTRK) delivered a quarter that was modestly better than expected, according to Redeye’s latest research note, with growth improving, profitability holding up and two parts of the business moving in a more encouraging direction at the same time.
Revenue rose 8% year on year to EUR 3.4m in Q2 2026, while group annual recurring revenue increased to EUR 13.6m, ahead of the broker’s EUR 13.0m estimate. The update matters because it shows the business is starting to rebuild momentum after a period of weaker trading, and the revenue mix is becoming more subscription-led rather than dependent on less predictable income streams.
Redeye’s report said Remote Therapeutic Monitoring went live commercially in the US during June, with the first paying customers already on board. The company also achieved US medical-device status, which gives the rollout more commercial credibility as investment continues ahead of a broader ramp. A direct quote from analyst Jessica Grunewald was not included in the note’s narrative, but the tone of the report was clearly constructive on the operational progress.
Quarterly highlights
- Group revenue increased 8% year on year to EUR 3.4m.
- Group ARR reached EUR 13.6m, ahead of expectations.
- Lifecare ARR rose to EUR 12.7m, while Wellness ARR was EUR 0.9m.
- Adjusted EBITDA was EUR 1.2m, equal to a 34% margin.
- Adjusted EBITDA less capex was EUR 0.3m, about 9% of group revenue.
- Net operating cash flow from continuing operations was EUR 0.7m in the quarter.
- Wellness returned to profit with adjusted EBITDA of EUR 107k.
The Lifecare division remained the main engine of the group. Revenue grew 11% year on year to EUR 3.1m, and ARR climbed 8% quarter on quarter to EUR 12.7m. Redeye pointed to a return to growth in the licence base, which increased from 66,625 in March to 67,107 in June after fully absorbing the large Q1 churn event. Importantly, the new licences were sold at materially higher price points, suggesting the recent pricing actions have been absorbed without obvious strain on demand.
The pricing change also filtered through to monetisation. Average revenue per licence rose 10% year on year to EUR 189 after the May increase, while monthly churn stayed flat at 1.0% and net revenue retention came in at 99.3%. SaaS revenue accounted for 96% of divisional revenue, and gross margin recovered to 90.9%, which indicates a cleaner and more scalable mix than in earlier periods.
Wellness was a smaller contributor, but its improvement was notable. Champion Health generated adjusted EBITDA of EUR 107k, versus EUR 2k a year earlier, marking a clear return to profit. Revenue fell 14% year on year to EUR 338k as legacy founder-linked contracts expired, yet Redeye said two recently announced deals support the pivot towards a more scalable enterprise model. Monthly churn improved to 3.7% from 4.5% in Q1, and net revenue retention stood at 95.9%.
Cash generation remained positive. Net operating cash flow from continuing operations was EUR 0.7m in the quarter and EUR 1.6m for the first half, the seventh consecutive quarter of positive operational cash flow. Free cash flow was about EUR 0.1m before the one-off legal settlement, and the group ended the period with net debt of EUR 3.9m and available liquidity of EUR 1.7m. That combination suggests the business is still funding investment, but without losing sight of cash discipline.
Redeye also commented favourably on the capital allocation changes announced alongside the results. The planned share buyback is non-dilutive because it will be funded entirely from treasury shares, while the management LTIP includes around 253,000 options for the CEO, CFO and COO. Vesting is tied to a three-year revenue CAGR of 10% to 15% and an EBITDA underpin, which gives the package a more demanding structure than many incentive plans of this type.
The latest research note leaves Physitrack at an interesting point: the core Lifecare franchise is still growing, RTM has moved from strategy to commercial reality, and Wellness has shifted back into profit. Redeye expects only limited positive changes to its estimates, but the combination of better ARR, disciplined cash generation and the launch of a new revenue line gives the second half more operational markers to watch than the market has seen for some time.
