**Summary of Kainos Group plc Interim Results for H1 2026**
**Overview**
Kainos Group plc, a UK-based IT provider specializing in Digital Services, Workday Services, and Workday Products, reported strong interim results for the six months ended 30 September 2025. The company highlighted robust sales performance, revenue growth, and strategic advancements despite challenges like cost increases and investment in partnerships.
**Financial Highlights**
**Revenue**Increased by 7% to £196.1 million (H1 2025: £183.1 million), driven by organic growth and currency benefits.
**Adjusted Pre-Tax Profit**Declined by 16% to £32.0 million (H1 2025: £38.2 million) due to increased investment in the Workday partnership, National Insurance costs, and short-term use of contractors.
**Bookings**Surged by 27% to £227.9 million (H1 2025: £179.5 million), reflecting strong sales across all divisions.
**Contracted Backlog**Grew by 12% to £396.9 million (H1 2025: £354.1 million).
**Cash**Decreased by 30% to £105.5 million (H1 2025: £151.6 million) due to restructuring costs, working capital increases, and shareholder returns.
**Interim Dividend**Increased by 5% to 9.8p per share (H1 2025: 9.3p).
**Operational Highlights**
1. **Workday Products**
Revenue grew by 14% to £39.2 millionwith ARR up 19% to £77.5 million.
Achieved $100 million ARR milestone in July 2025, a significant SaaS industry benchmark.
Launched "Pay Transparency Analyzer powered by Kainos" in partnership with Workday, targeting EU compliance requirements.
2. **Digital Services**
Revenue increased by 6% to £103.5 million, driven by healthcare sector growth (33%) and North American expansion (152% revenue growth).
Secured major contracts in the UK public sector, including a £73 million deal with the DVSA.
3. **Workday Services**
Revenue grew by 4% to £53.4 million, with strong performance in North America and emerging markets like Australia and Latin America.
Bookings increased by 35% to £54.0 million.
4. **International Growth**
International revenue rose by 13% to £84.9 million, accounting for 43% of Group revenue.
5. **Customer Satisfaction**
Net Promoter Score (NPS) improved to 70 (H1 2025: 58), reflecting high customer satisfaction.
6. **Employee Engagement**
Employee retention remained strong at 92%, with engagement levels at 75%.
Recognized as one of the "50 Best Places to Work in the UK" by Glassdoor.
7. **AI Initiatives**
AI-related revenue grew by 6% to £15.3 million.
Launched Microsoft AI Centre of Excellence and developed AI solutions for Workday and other platforms.
**Strategic Developments**
Acquired Davis Pier, a Canadian consultancy, to strengthen North American presence.
Deepened Workday partnership with exclusive resell arrangements and joint product launches.
Continued investment in R&D, with expenditure rising by 12% to £8.6 million.
**Outlook**
Expects continued growth in Workday Products, Digital Services, and Workday Services in H2 2026.
Maintains full-year profit expectations in line with consensus forecasts.
Focused on long-term growth drivers, including AI adoption and digital transformation.
**Shareholder Returns**
Completed £30 million share buyback programme and announced a new £30 million programme.
**Conclusion**
Kainos demonstrated resilience and growth in H1 2026, underpinned by strong sales execution, strategic partnerships, and expansion into key markets. Despite short-term profit pressures, the company remains confident in its long-term strategy and ability to deliver shareholder value.
| Metric | H1 2026 | H1 2025 | Change |
|---|---|---|---|
| Revenue | £196.1m | £183.1m | +7% |
| Statutory profit before tax | £28.4m | £34.2m | -17% |
| Adjusted pre-tax profit | £32.0m | £38.2m | -16% |
| Diluted earnings per share | 16.7p | 20.1p | -17% |
| Adjusted diluted earnings per share | 18.9p | 22.5p | -16% |
| Interim dividend per share | 9.8p | 9.3p | +5% |
| Bookings | £227.9m | £179.5m | +27% |
| Product annual recurring revenue (ARR) | £77.5m | £65.1m | +19% |
| Contracted backlog | £396.9m | £354.1m | +12% |
| Cash | £105.5m | £151.6m | -30% |
Note: Debt information is not explicitly mentioned in the provided text. However, the cash balance can be considered as a proxy for debt, with a decrease in cash potentially indicating an increase in debt or other liabilities.
Key Observations:
- Revenue increased by 7% year-on-year, driven by strong sales performance across all divisions.
- Profit metrics (statutory and adjusted) decreased by 16-17%, primarily due to increased costs associated with the Workday partnership, National Insurance, and contractor usage.
- Bookings and contracted backlog increased significantly, indicating strong future revenue potential.
- Cash balance decreased by 30%, partly due to share buybacks, acquisition of Davis Pier, and increased working capital requirements.