A breakthrough year at Alfa with record growth in 2024

Alfa Financial Software Holdings PLC (Alfa), a leading software developer for the asset finance industry, has reported record-breaking financial results for the year ended 31 December 2024.

In 2024, Alfa achieved a record increase in total contract value (TCV) of £221.3 million, marking a 34% increase compared to 2023. The next 12 months’ TCV is projected at £95.7 million, up 43%, reinforcing strong growth expectations for 2025. Alfa’s revenue surged 8% year-over-year, largely driven by an 18% rise in subscription revenues. The company reported a 15% increase in profit before tax, supported by strong operational execution and disciplined financial management.

Other financial highlights include:

• Strong cash generation with 89% free cash flow conversion
• Robust balance sheet with £20.5 million in cash and no bank debt
• Increased shareholder returns with a 20% rise in special dividends to 2.4 pence per share
• Total final dividend up 15% to 3.8 pence per share

He also highlighted that in FY25, subscription revenue growth is expected to be in the mid-teens, slightly lower than the 18% growth recorded in 2024 but still demonstrating solid momentum. This growth is driven by strong TCV contracts signed in 2024, which will support Alfa’s continued expansion.

Magrath further noted that overall revenue is projected to grow by at least double digits in 2025, exceeding the pace of growth seen in 2024. The company anticipates strong performance across all business segments, with overall net growth accelerating in 2025.

SaaS transition and subscription growth

Alfa has successfully accelerated its transition to a Software-as-a-Service (SaaS) model, with subscription revenues growing 18% year-over-year, now contributing 34% of total revenues (compared to 23% in 2019). The company secured eight new customer wins in 2024, and continues to see strong momentum in late-stage pipeline engagements.

CEO Andrew Denton highlighted that the Alfa SaaS model has enhanced operational flexibility and security. He emphasised that “single-tenant SaaS” has been a key differentiator at Alfa, offering high security and independent upgrade cycles for clients. The market’s response has been overwhelmingly positive, with half of Alfa’s customers now hosted on Alfa Cloud.

Alfa Systems 6 and technological innovation

The full launch of Alfa Systems 6 in 2024 was a significant milestone, receiving strong client adoption. The new platform enhances data integration and configurability, with features like “Compose,” which allows users to design custom interfaces efficiently.

Alfa is also increasing its investment in artificial intelligence (AI), particularly in predictive AI for decision-making and automation. “AI as a service” is playing a growing role, with tools like AI-driven transcription and machine learning capabilities becoming standard features within Alfa Systems.

Strategic vision and future outlook

As Alfa celebrates its 35th anniversary in 2025, it remains committed to continuous growth and innovation. With a 96% staff retention rate and a high Net Promoter Score, the company attributes its success to a strong corporate culture and focus on excellence.

Andrew Denton noted that: “2024 was a breakthrough year for Alfa marked by the successful launch of Alfa Systems 6, a record number of wins across our major markets and, to meet the strong demand for our products we have continued to recruit high-quality people, ending the year with more than 500 people working for Alfa.

“The year’s strong sales, financial performance and operational execution, along with our very healthy pipeline has reinforced the strength of our strategy and we remain confident in the outlook for the business.”

Looking ahead, Alfa aims to expand geographically and broaden its product offerings, particularly in the fleet sector. CEO Denton reiterated Alfa’s commitment to “perpetual motion,” ensuring the company remains at the forefront of the asset finance industry.