Earnings call transcript: iOCO posts strong H2 2026 gains as stock stays muted

iOCO, a South African technology-services group, reported strong earnings for fiscal year 2026, despite the stock price remaining near its 52-week low. The company's revenue grew by 3% on a constant-currency basis to ZAR 5.8 billion, while profit after tax increased by 39% to ZAR 357 million, and adjusted EBITDA rose by 21% to ZAR 624 million.

Operating cash flow amounted to approximately ZAR 585 million for the year, and net interest-bearing debt fell to ZAR 480 million, down about ZAR 2 billion since FY21. Management highlighted over ZAR 2.1 billion in new contract wins and recurring revenue comprising more than 60% of total revenue. Despite higher infrastructure costs and some margin pressure, iOCO remains focused on maximizing sustainable gross profit and free cash flow.

The company aims to execute on its acquisition strategy, with management anticipating double-digit revenue growth for FY27 and a target of ZAR 680 million in adjusted EBITDA, as well as a free cash flow target of ZAR 650 million.