Cerillion PLC: A High-Margin Software Play with Record Backlog and AI-Driven Growth

In the ever-evolving landscape of enterprise software, companies that combine robust financial performance with strategic innovation often stand out as compelling long-term investments. Cerillion PLC (LON:CRL), a provider of billing and customer management solutions, has emerged as one such candidate. The company's FY2025 results, released on November 26, 2025, underscore its ability to deliver consistent revenue growth, margin expansion, and a rapidly expanding backlog, all while investing in cutting-edge AI capabilities to future-proof its offerings.

Financial Outperformance and Margin Expansion

Cerillion's FY2025 results, as stated in its final results announcement, reveal a company operating at peak efficiency. Revenue rose by 4% year-on-year to £45.4 million, driven by strong demand for its billing solutions in both existing and new markets. More impressively, adjusted EBITDA surged by 11% to £23.1 million, translating to an EBITDA margin of 50.9%-a significant jump from 47.4% in FY2024. This margin expansion highlights Cerillion's disciplined cost management and pricing power, traits that are rare in the software sector and often correlate with durable competitive advantages.

The company's cash generation is further bolstered by its high-margin model.

With operating cash flows expected to mirror EBITDA growth, Cerillion is well-positioned to fund its ambitious growth initiatives without overleveraging its balance sheet. For investors, this combination of revenue resilience and margin strength signals a business that can thrive even in macroeconomic headwinds.

Record Backlog and Strategic Contract Wins

Cerillion's order intake in FY2025 was nothing short of extraordinary. Total new orders reached £47.6 million, a 25% year-on-year increase, while the back-order book swelled by 21% to £56.9 million. These figures reflect not just short-term momentum but a structural shift in demand for Cerillion's solutions. The company's new customer sales pipeline now stands at a record £275 million, providing a clear line of sight to future revenue.

Strategic contract wins further validate this optimism. Cerillion secured two major deals in FY2025: a £25.3 million contract with an existing European customer and an $11.4 million (£8.5 million) agreement with Ucom, Armenia's leading telecom provider. These contracts not only diversify Cerillion's geographic exposure but also demonstrate its ability to scale solutions for large enterprises-a critical factor for long-term growth.

AI-Driven Innovation and Future-Proofing

While financial metrics are compelling, Cerillion's investment in AI underscores its commitment to staying ahead of industry trends. The company recently launched Cerillion 25.2, a platform featuring AI Agents and a Model Context Protocol Server. These tools enable conversational intelligence for financial and operational tasks, automating workflows and enhancing user productivity. In an era where AI adoption is reshaping enterprise software, Cerillion's early mover advantage could translate into a widening moat.

The strategic value of this R&D push cannot be overstated. By embedding AI into its core offerings, Cerillion is not only improving its product stickiness but also opening new revenue streams through premium features and services. This aligns with broader market trends, where AI-augmented software solutions command higher margins and customer loyalty.

A Compelling Long-Term Play

For strategic growth investors, Cerillion presents a rare trifecta: a high-margin business model, a robust backlog of future revenue, and a clear roadmap for innovation. Its EBITDA margin of 50.9% places it among the most efficient software companies in its peer group, while its £56.9 million back-order book ensures steady cash flows over the next 12–24 months. Meanwhile, the £275 million pipeline and AI-driven product roadmap position the company to capitalize on the next phase of digital transformation.

Risks, of course, exist. The software sector is highly competitive, and execution on AI integration will be critical. However, given Cerillion's track record of disciplined growth and its current momentum, these challenges appear manageable. For investors with a multi-year horizon, the stock offers an attractive entry point to participate in a company that is not only navigating today's market but also shaping tomorrow's.