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Eagle Eye (EYE) - I hold a long position
Unlike other market commentators, I do not accept payments to talk positively about stocks. The below is purely my own opinion, which can also be wrong. It is not financial advice, please do your own research. I always disclose if I hold a position.
I first bought Eagle Eye almost 10 years ago.
Former CMO and Deputy CEO of Tesco Tim Mason (responsible for Clubcard’s growth), had just joined the board as Executive Chairman.
A bombed out loyalty stock where the man responsible for one of most well-known loyalty programmes in the UK had taken the helm in small company.
Fast forward a decade and a lot has happened.
The share price has been all over the shop, though in fairness, a lot has happened at the macro level too.
I’m a firm believer that shares are for buying and selling and not for falling in love with.
Risk/reward changes through a company’s journey, and ideally I want to be buying when that risk/reward is attractive to me, and selling when it is less so.
If I’d held since I bought my first ever shares, I’d now be up 400%. That’s around 17% CAGR. Not bad.
But in that period the stock went from 100p to 300p, and did the Grand Old Duke of York back to 100p.
It then went to 244p and back to 118p. To 665p in 2022, and back to 200p.
Stomach-churning volatility.
But now, I think the company is offering the most compelling risk/reward I’ve ever seen.
Eagle Eye is firmly in a stage 2 uptrend. So it ticks that box.
As you know, I don’t bother looking at stocks that aren’t.
I’m not Blackrock, so I don’t need the liquidity to be buying on the way down. I’d rather buy when the odds are on my side and the trend has changed.
Eagle Eye has just put out a materially ahead statement. Adjusted EBITDA came in at £9.8 million, which was over 40% of the £6.9 million forecast.
Cash is up, revenue is up, annual recurring revenue is up. The business is now showing healthy signs of scaling.
Basically, Eagle Eye sells the plumbing behind modern loyalty schemes.
When a supermarket app fires you a personalised offer in real time, or your points and coupons work at the till without falling over, there’s a fair chance Eagle Eye’s software is underneath.
The core product is AIR. This is a cloud-native, API-first SaaS platform that runs loyalty, promotions, offers and digital coupons at enterprise scale.
Bolted onto this is is EagleAI. This is the data-science engine (from the 2022 Untie Nots acquisition) that does the actual personalisation.
The platform hosts north of 500 million loyalty wallets, and the revenue model is one that I like. Mostly recurring subscription and transaction fees, with professional-services implementation on top. Recurring revenue is now more than 80% of the total.
Lots of companies like to brag about their client list, but Eagle Eye’s is something else. Its strategy of ‘land, transact, expand’ is working, and it works with Tesco, Asda, Sainsbury's, Morrisons, Waitrose, JD Sports, Loblaw in Canada and Woolworths in Australia, with EagleAI live at European grocers including Carrefour and Auchan.
Source: Eagle Eye’s website
It has recently added easyJet (the first in this new vertical), the sandwich chain Subway, and one of the UK's biggest health and beauty retailers.
The geographical spread here and growth in verticals is pretty much the bull case. Eagle Eye offers a proven platform with real switching costs, embedded in the operations of very large companies, steadily expanding its addressable market.
But you can't understand this share without understanding NRS, because it's the reason the stock’s share price collapsed.
In June 2025 Eagle Eye announced that Neptune Retail Solutions, a US partner, was terminating a contract worth around £9-10 million a year.
This was a big blow to the company as it was around 20% of the company’s revenue gone overnight.
The market reacted accordingly and the shares more than halved, dropping towards 200p.
Last year, management did a call where they said they were going to cut costs and go on the offensive to win new business.
Well, that’s exactly what they did.
The year to 30 June 2026 came in ahead of the expectations that had been lowered due to the NRS shock.
And it’s worth pointing out that NRS was not a real displacement by a better competitor.
NRS was acquired by another business, who had their own in-house loyalty program.
So they, quite understandably, decided to use their own for NRS rather than Eagle Eye’s.
Headline revenue for the year fell just 3% to £46.7 million despite losing NRS.
And if you strip NRS out then underlying revenue grew 21% to £46.1 million.
Annual recurring revenue jumped 31% to £44.5 million, driven by the new wins, expansion within existing customers, and the first contracts from a global partnership.
Net cash climbed to £16.1 million with no debt used from its facility, so the balance sheet is rock solid.
And again, adjusted EBITDA of £9.8 million landed materially ahead of the £6.9 million the market had pencilled in.
So what management said they were going to do, they achieved. Eagle Eye lost a fifth of its revenue yet still grew its exit ARR by nearly a third.
That said, this beat was against a cut forecast, not a raised one. And it’s in management’s best interests to guide everyone lower.
The one contract management calls “transformational” is a five-year global OEM agreement, signed in early 2025 with what described as one of the world's largest enterprise software vendors, which it has now revealed as SAP.
The company said this in the recent update:
“The partnership has moved beyond implementation, with the initial two contracts estimated to deliver approximately £2m of ARR in initial deployments and be revenue generating in FY27. The Group is focused on scaling the opportunity, with the OEM channel expected to become an increasingly important contributor to growth from FY27 onwards.”
I’m happy to trust what management is saying (for now).
It’s also worth coming back to this in the interim FY25 results:
“A Mexican subsidiary of one of the world's largest retailers, which has signed an initial six-month contract for AI-powered Personalised Challenges. Ensuring the success of this first engagement with this major retailer will be a key focus for the team, given the significant deepen potential.”
I notice that this wasn’t in the half year results for 2026. So did this not go well? A question for management, as one can assume that if it was going splendidly, then management would only have been too happy to mention it.
These shares are expensive on conventional metrics. The shares need to consistently outperform and growth needs to start ratcheting up if it’s going to retain its premium rating.
There was also a big director sell recently, with the managing director of Eagle Eye taking £500,000 from the table.
This is almost half of his holding, and he still retains 100,640 shares. Whilst this is not exactly positive news, he also clearly believes there is upside still as he’d sell the lot.
I think so too, and I’m happy to hold for now.
This is, of course, only a trade, and if the share price is weak and comes down to around 440-460p, then it’s eject time for me.
Given the news the share price should be strong, and if it’s not, well, I won’t be waiting to potentially find out why.
Speak soon!
Michael
