Pinewood Technologies Group PLC (PINE) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to our FY25 results presentation. I'm Bill Berman, CEO, and with me today is our CFO, Ollie Mann. 2025 marked our second year as a standalone, AI-embedded automotive technology company, and I'm genuinely proud of what we've achieved in that period. The past 12 months have been especially important for us, thanks to several key transactions and significant operational milestones. Ollie will walk you through the headline financials in a moment, but first I'll give you an overview of the strategic and operational progress we delivered during the period. Revenue has grown by 30%, fueled by strong growth among new customers, successful upselling to existing ones, and the revenue contributed by our Seez acquisition in March 2025. In July 2025, two events took place that were pivotal to Pinewood's future. First, we bought Lithia out of its share of the North American joint venture. That eliminated the competitive overhang that had existed and threatened to hold back our growth prospects in this key market. Second, we signed a long-term $60 million contract with Lithia to implement our system across all their US dealerships in the US and Canada. In the meantime, we've been testing the system in North America, and that work is progressing well.

The biggest initiative we've been concentrating on is integrating the North American OEMs, and that's moving forward as planned. By now, nearly every one of our OEM partners has been brought into the process, and the integration effort remains on target. Another significant milestone during the period was our March acquisition this year of Seez, the automotive AI company. We've made strong progress since then in folding Seez into the Pinewood Group and merging the two tech stacks, which substantially strengthens our AI capabilities. The contract signed with Global Auto Holdings in March 2025 brought in Lookers, among the UK's largest auto dealerships. Rollout of the system at Lookers began in July 2025, is going well, and remains on schedule. Completion is expected in Q4 of 2026. I'll now pass things to Ollie, who will walk us through the financial review.

Thanks, Bill. Morning, everyone. We achieved solid revenue growth, roughly 30%, reaching £40.5 million. Several factors drove that rise: contributions from new customers, upsells within our existing customer base, and revenue brought in by our AI acquisition, Seez. Another factor was FY25 covering a 12-month period while FY24 covered an 11-month period. Gross profits came to £34.7 million, which was 23% higher than last year. The gross margin rate of 85.7% declined as anticipated, reflecting the fact that Seez's gross margins are somewhat below those of the legacy Pinewood business. The main profit metric we track, both internally and externally, is underlying EBITDA. For 2025, it stood at £16.4 million, an increase of 17.1% over FY24. Recurring revenue at 83.2% is a key metric for us. The modest decline versus last year reflects the mix, now that Seez revenue is included. Net customer churn of 2.5%, though above FY24, remains at a very low level and shows how much customers value the Pinewood platform. One new metric we've introduced is total contract value. That represents the incremental annual recurring revenue from signed customers who haven't yet begun implementation of their Pinewood system.

When a customer is midway through implementation, the revenue counted within total contract value is only the portion from dealerships that haven't gone live yet. Beyond the revenue we already have, our total contract value of £64.5 million will deliver most of our FY28 EBITDA target of £58 to £62 million. Moving to slide 7, I'll walk you through the main cash flow movements for the year. In FY25, operations brought in £6.5 million of cash. We recorded a substantial non-cash gain of £60.8 million on buying out Lithia's stake in the North American JV. Among other notable cash movements, we received £1.1 million of bank interest during the period, plus £10 million from Lithia to settle a tax debtor. Capital expenditure in FY25 came to £11.4 million, which includes £10.5 million of capitalized development spend. Net spend on acquisitions and reseller buyouts over the year was £13.5 million. That breaks down as £26 million for the Seez acquisition and £2.5 million for the South Africa reseller buyout, partly offset by £15 million of cash received through the US JV buyout. Together with the Seez acquisition, we carried out an equity raise in March 2025, generating £34.1 million of cash.

Every one of those changes brought our cash balance at the close of December 2025 to £34.1 million. If you turn to slide 8, that shows the balance sheet as of the end of December 2025. Shareholders' funds at closing stood at £204.2 million, and the biggest factor behind the rise since the end of 2024 was the equity raise in March 2025 together with the July 2025 buyout of the North American JV. Goodwill now sits at £51.5 million on our balance sheet, reflecting the purchase of Lithia's stake in the North American JV, the Seez acquisition, and the buyout of the South Africa reseller. Other intangible assets climbed from £16.3 million to £168 million, and that was driven by the North America JV buyout and the Seez transactions, with £125 million of the year-end balance tied to the North America customer contract. Most of the tax liability on our books stems from the US JV buyout and will unwind as those intangible assets are amortized. Lastly, we hold £34.1 million in cash. Beyond that cash, we also have a £10 million RCF facility, and it remains undrawn. Moving to slide 9, we lay out the non-underlying items for FY25. Costs tied to FY25 acquisitions came to £4.6 million. The bulk of that expense was legal fees connected to the North America JV buyout and the Seez acquisition.

After Lithia’s stake in the North American JV was bought out in July 2025, our US subsidiary has taken £4.2 million in costs. As we said in prior guidance, those costs will be handled as non-underlying until the Pinewood system has been installed across 20 North American dealerships. In FY25, our share-based payment charge came to £3.6 million, and we recorded a £4 million amortization charge tied to intangibles that arose on acquisition. The last item I want to flag is a one-off gain of £60.8 million that we recognized on the North American JV buyout. Moving to slide 10, this confirms that our current FY28 guidance has not changed. That is underlying EBITDA of £58 to £62 million in FY28. Existing customers and signed contracts cover approximately £50 million of that figure. Turning to FY26, two of the three analysts who cover us issued notes after our recent business update on the 25th of March 2026. Their consensus FY26 underlying EBITDA number was £21.3 million. We expect FY26 underlying EBITDA to be in line with that. I’ll now pass it back to Bill to walk through the operating highlights and strategy.

Thanks, Ollie. I figured this would be a good moment to remind everyone of Pinewood.AI's core strengths and the things that distinguish us from rivals. First off, operating 100% in the cloud on a single codebase is really rare in our sector. Whether customers are located in the UK, US, Europe, Asia, or anywhere else on the planet, they all run the identical version of the Pinewood system. That brings us several significant benefits. On the security side, a cloud-based platform is far safer than self-hosting or relying on on-prem servers. On top of that, we can push out several software updates each week, during customer working hours, with zero disruption — something most of our competitors definitely cannot do. Our churn is remarkably low; typically, customers depart only because of M&A or network consolidation. Recurring revenue makes up the bulk of our business, generally sitting at around 85%. Implementation income accounts for the primary non-recurring portion. One more major point of difference versus competitors is that a fully embedded AI solution is built into what we offer customers. Having an AI offering is standard these days, but in most instances it's a layered app sitting on top of a system, or a basic API.

The results we've delivered with Seez look quite different from that — it's an AI solution that's fully embedded throughout our whole system, covering vehicle sales, aftersales, and back-office accounting alike. As margins get squeezed right across auto retail, the AI-driven offering we bring to the table packs a great deal of power. We keep innovating and bringing in new talent, and at the same time our seasoned team is the foundation of everything we deliver. Our 40 years' experience in the automotive industry has made an enormous difference in how we built the system that exists today. And lastly, our deep integrations with our OEM partners stay essential to us. We're still committed to ranking among the best partners for OEMs, thanks to our cutting-edge technology and our capacity to adapt as the auto retail landscape keeps shifting. I'll now walk you through how we've progressed against our strategy over 2025. In the UK and Ireland, the Lookers implementation began in July 2025, and the rollout will carry on through 2026, when we expect it to be finished. The combined Pinewood and Lookers teams have done a superb job on the rollout. At Marshall's request, we've shifted the start date of their implementation from Q1 2026 to the second half of 2026.

The purpose here is to let them line up the timing of the Pinewood rollout with several other projects they have underway. Turning to our international markets, the Porsche implementation in Japan got off to a successful start in December 2025, with the first dealerships going live. We're looking forward to bringing all the Porsche Japan dealers onto the Pinewood system, and after that, kicking off the Japan Volkswagen implementation. Talks are ongoing with a number of potential Central European groups. Our buyout of the reseller in South Africa and the Netherlands has now closed, and we're delighted to welcome those teams into the Pinewood team. Through these acquisitions, we gain full control of our sales and customer service function in those markets, which puts us in a stronger position to drive continued growth in both regions. The Seez acquisition in March 2025 has made a huge difference to our customer upsell offering, and it has also diversified our revenue streams. The Seez team focused a huge amount of effort on rolling out Seez products into the Lithia US and UK dealers, as well as on drawing in their wider customer base. North America — the final pillar of our strategy — is comfortably the largest automotive retail market in the world, and I'll walk you through our progress there on the slides that follow.

Slide 14 lays out how we plan to grow into North America and what headway we've made there. North America has 20,000 franchised dealers, making it easily the biggest market worldwide, and its total addressable market exceeds $9 billion. We believe our position is strong for scaling throughout the US and Canadian markets. As a reminder, we hold a significant foothold in that key market now, thanks to the $60 million contract we signed with Lithia to roll out the Pinewood system across all of their dealerships in the United States and Canada. Testing across several areas of the system in the US is well underway, and the full rollout is expected to begin no later than 2026. The biggest chunk of development work we have for North America is integrating our system with all the US and Canadian OEMs. We have now engaged with the majority of the OEMs that Lithia represent, and integration work is well progressed with a number of these. Our target is to have the majority of North American OEMs' integrations finished by the end of 2026. Having now bought Lithia out of their share of the North American JV, we are well placed to sign further customers in the US and Canada, and we have a number of leads from our official US launch at the February 2026 NADA conference that we are currently working through.

Now turning to slide 15 for an update on the UK system implementation we recently completed. So far, our team has performed brilliantly on the Lookers implementations, collaborating closely with the Lookers team to make the Pinewood platform rollout as smooth as it can be. That work began in mid-2025 and will carry on through 2026. It's great to see the Lithia UK team recognizing the advantages of having Pinewood AI across all their dealerships, and we're continuing to partner with them to help move their business forward. We're excited to kick off the Marshall's implementation during the second half of 2026. During this project's planning phase, the Marshall and Pinewood teams have collaborated exceptionally well. We keep broadening the range of products we offer, making all of them available to our current customers so they can move their business forward — boosting productivity and lifting efficiencies through the use of Pinewood products. Turning to slide 16, we lay out how we're progressing in our priority growth markets beyond the UK and the US. At our Capital Markets Day in 2024, we identified several key geographies in our strategy: Japan and Southeast Asia, Central Europe, and South Africa. The Porsche Japan rollout got off to a good start in December 2025, and we're working closely with the Japanese Porsche dealers to get through the remaining implementations over the course of 2026.

After we finish with the Porsche dealers, our attention turns to Volkswagen dealers in Japan. A number of European customers are in ongoing talks with us, and the majority of them are located in Central Europe. Following the buyout of our South African reseller in mid-2025, our South African business is now fully integrated into the group, and we're exploring various avenues for growing revenue streams in South Africa. Our last reseller in the Netherlands was bought out in February 2026, and the team is presently being integrated into Pinewood. To close out the operating highlights, I'd like to reiterate a few of the traits that make our market so compelling. Every car dealership requires not just a DMS but also layered apps connected to it. At Pinewood, we provide all of that, and we're able to give car retailers every piece of software they require. The 15 to 20 years our customers stay with us on average stands as proof of how deeply embedded our system is in their workstreams. Switching DMS is a lengthy process, which works to our advantage with existing customers, yet for potential new customers, we provide something nobody else does.

Having spent more than 25 years as part of an auto retail group, we've gained a competitive edge that no amount of money or investment could ever replicate. Beyond that, our AI features, which are now fully embedded, set us apart from everyone else. That puts us in a unique position to help our valued customers navigate a period that is increasingly demanding from a security and compliance standpoint. Pinewood AI delivers something nobody else is able to provide. Last, moving to slide 19, in the UK we'll keep working closely with the Lookers team to manage the rollout through to completion in Q4. We're also looking forward to getting the Marshall's rollout started later this year. As we've discussed, we've made significant progress in North America on both OEM integrations and on testing the system in the US. The opportunity in North America is considerably larger than any other part of the world, and scaling here as quickly as possible remains a top priority for us. Last, our FY28 guidance is unchanged at underlying EBITDA of £58 to £62 million, which is underpinned by our strong visibility from existing contracts, including the $60 million contract with Lithia North America, as well as a number of other signed contracts.

Thanks to each and every member of the Pinewood team for pushing us ahead together. I appreciate your being with us today. We'll be glad to take any questions.

Much appreciated, sir. Ladies and gentlemen, should you wish to pose a question by audio, kindly hit star one on your phone’s keypad. Star one to ask questions, and please confirm your line is unmuted so your signal can get through to our equipment. We’ll pause briefly to allow signals for questions. This morning’s first question comes from Oliver Tipping, on the line from Peel Hunt. Go ahead, Oliver. Your line is open.

Hi, everyone. Is my audio coming through okay?

That’s exactly right.

Oliver, I can hear you.

Perfect, thanks. Cool. I have roughly three questions, if that's alright. The first concerns your comment, I believe, that Lithia would go live revenue-wise at some stage during 2026 — I just want to pin down precisely where we stand on the capex spend needed to get that product ready for the North American market, and how you see capex trending across the coming two or three years. On top of that, are there any tools you're using internally that are lifting your development efficiency? Second, the general understanding is that billing in the US works on a per-rooftop basis, while the UK carries a bigger per-user component — so I was wondering what the approximate split was, for the Lookers and Marshall's deal, between per-rooftop and per-user. And finally, I spotted a court case that didn't involve you, where Asbury and CDK litigated over Asbury's switch to Tekion, and Tekion and Asbury prevailed in that case. Do you believe that precedent will make it simpler for you to take share in the US going forward from the incumbent North American suppliers?

Ollie, I’ll sort of take these in reverse order. We’re really not in a position to comment on another party’s litigation and that kind of thing. What I can say on that is — and as you’d expect, obviously — the ruling means they’re going to keep fighting it, they’re going to appeal. Ultimately, the dealer owns their data. That’s how we run our dealerships too; in our case, a dealership’s data belongs to them to use as they wish, and we let them do that and support whatever they need to do with it. As for opening it up, simply having open access to the data doesn’t automatically mean it’s in a form that’s easy to digest and move across. We’ve built technology, specifically through our AI offerings, that can handle that in real time, whether we’re pulling from a dealer group’s data cloud, their own data stack, or straight from another core system DMS provider. I do believe that going forward, you’ll see more and more open data stacks and similar things. On the pricing models, obviously, it varies a great deal depending on which part of the world you’re in.

In Europe, pricing is still mainly SaaS-based. Over time, all of our pricing will move to a rooftop and modular basis, and there are multiple good reasons for that. Some things are simply specific to a brand, and there is no way to actually charge it out on a per-user basis: OEM integrations, certain updates, certain facets of it. A lot of AI functionality would not be charged under a typical SaaS pricing model; it would have to be a rooftop charge. One of the key attributes that we bring into the marketplace is being able to help dealers reduce their costs, and oftentimes that is by automating certain non-revenue-generating, non-customer-facing processes and as such lowering a per-user count. It would be counterintuitive to sit here and continue with a per-user basis when one of your key tenets is to try to reduce the number of users that exist that way. As far as, we're not disclosing the exact amount that we spend in one market for development, but I just keep in mind that we are on a single codebase, and oftentimes things we do for one market transition and go into another market. And/or it can just improve the current functionality to the system that exists today.

We have identified several strong accounting systems and other tools that we came across in the Nordic countries and that we deploy in various parts of the world, dynamic accounting and similar offerings. North America has plenty of different technology solutions and business practices that we believe could benefit other regions, and we want to bring those across. Clearly, entering North America is a major undertaking, and while our capex has increased, from our standpoint we have just completed a replatforming effort over the last 24 months. We have moved up with hyperscaling, and all the certifications with the US OEMs are underway. That would be the piece specifically representing North America, but apart from that, I expect our capex to remain largely where it is, aside from chances to enter new markets and/or put investment into new, more dynamic products going forward.

Understood, thanks.

Much appreciated, sir. We’ll now take Damindu Jayaweera from Peel Hunt. Sir, please proceed—your line is open.

Thanks, guys. Sorry, Peel Hunt is probably firing off too many questions. Bill, what I wanted to ask is this: obviously I think you guys did the right thing by making that Seez acquisition at the right time. It's interesting to see Keyloop also making, or trying to make, a similar acquisition, or has done so, in MotorAI. Obviously, everybody's kind of trying to move towards AI, embed AI. I was listening to your Full Throttle podcast when you were over in the US for the NADA conference. In there, obviously, you were kind of reiterating the fact that you don't want to do what everybody else is doing, which is just putting chatbots on top, and the AI has to be embedded deeply. When you look at your product page, I saw there's a nice video about how Seez DNA is going to permeate through the full product stack. The thing that slightly kind of confused me, not listening to you, but listening to Jay at Tekion, is on their NADA conference, it almost felt like he was playing down kind of whiz-bang AI functionality, and he was trying to talk to the core of the single truth, the security layer, trying to preserve the importance of system of record.

I realize I'm going on a bit, but I'm really just trying to understand how you're positioning Pinewood when you talk to potential target opportunities, given that everyone is constantly talking about AI, AI, AI — from Nextlane to even the Constellation assets.

Sure. Honestly, I can’t speak for what any of our rivals might be saying out in the market. But here’s what I can tell you: in automotive—whether you’re talking retail, technology, or the OEM side—the strongest concepts frequently get copied. I’ll say this much: with Jay, I’m in total agreement about the system of record and the underlying core data stack that supports it, and about how much that matters. As for your point—maybe this is where we differ—I see AI as something that can draw on that core data stack and then accomplish fresh and compelling things with it. With a platform like ours, one thing that stands out is not needing a multitude of stacked applications, fragmented data stacks, fragmented capabilities, and 20 windows open at once—and, ideally, keeping the count of non-OEM integrations as low as possible so the transaction feels smooth and simple for both the customer and the dealer. That, I believe, is a genuine differentiator. Where I see AI fitting in is that AI will be capable of doing things akin to a system of record, a core enterprise-level accounting platform.

Our system may be straightforward to run, yet it can still get quite complicated. We’ve already integrated our AI into it, and at this point the AI is able to respond to a user’s questions and show them how the system works. The place where I see AI coming into play is predictive indexing — helping a customer schedule an appointment, perhaps to get the car serviced, but doing it in a way where not only does the shop have availability on the side of the individual writing up the service advisor and so on, but also making sure we have a technician available who has the right skill set for that car. Often appointments get made because there’s an hour free in the day, but that technician may not be qualified to work on an electric vehicle, for example — starting to do things like that, using predictive indexing to engage with a customer when their car will need its next servicing, or being able to engage directly when it comes to recalls and so on, without having to use phone rooms and operators and humans sitting here trying to facilitate things like that.

Sure, it could sit there and help along the customer journey, but when all is said and done, that foundational data stack — the system of record, the enterprise-grade accounting platform that fully integrates with the OEMs — is the heart of everything. No AI will ever outperform the data it can reach. Which ties back to what you said earlier: that's exactly why I'm not much of a believer in the layered-apps model, something perched on top like a chatbot, since ultimately those tools are all fairly alike and they're pulling from the same data streams. With a data set like ours, plus the sheer wealth of information that comes with it, the way operations run and the value AI can deliver really shift. AI will be additive — I genuinely believe it will be transformative — and I think what emerges over the next 12 to 18 months, as that gets represented with Pinewood and Seez, is going to impress you quite a bit.

I just want to ask one more thing. Clearly, the US is where your largest opportunity lies,