Shares in Pathos Communications Plc (LSE:NEWS) rose 11.5% to 34p after the company said revenue, earnings and cash were all ahead of expectations in its first financial year as a listed group.
Full-year revenue for 2025 is expected to come in at $13.2 million, up 16% on the previous year and 6% above forecasts, with adjusted earnings before interest, tax, depreciation and amortisation rising more than 50% to $2.9 million, according to broker Cavendish.
Adjusted post-tax profit is forecast at $2.1 million, nearly double the prior year and 11% ahead of estimates. Net cash at year-end stood at $6.2 million, $0.7 million above forecast.
The performance was underpinned by improved client conversion, high collection rates and a growing focus on placements in premium media outlets. Some 94% of second-half revenue has either been received or is not yet due.
Cavendish said Pathos has begun 2026 with momentum and expects the company to generate “material development” from its AI platforms, PathosMind and Pressella, as IPO proceeds are invested.
It noted that Pathos now trades on a 2026 forecast price-to-earnings multiple of 11.8, below the peer average of 12, despite projected earnings growth of more than double that of the sector. The broker maintained its 42p target price and reiterated a 'buy' rating.
Cavendish has raised its revenue forecast for 2026 by 4% to $14 million, while keeping earnings flat, citing margin impact from a shift to higher-quality placements.
Omar Hamdi, chief executive of Pathos, said earlier this week: “We are pleased to report an excellent start to our life as a publicly listed company, with our strong financial performance in 2025 speaking for itself.”
He added: “Our listing has already provided us with access to a number of potential new partnerships and growth opportunities which we plan to embed during the coming months.”