**Summary of Kooth PLCs Unaudited Half Year Results (H1 2025):**
Kooth PLC, a global leader in youth digital mental wellbeing, reported its unaudited half-year results for the six months ended June 30, 2025, highlighting continued user growth and strategic advancements despite financial headwinds.
**Business Highlights**
**User Growth** Significant progress in California with over 130,000 users registered on Soluna since launch, exceeding Department of Health Care Services (DHCS) targets for 2025.
**Strategic Investments** Increased marketing spend in California to drive long-term sustainable usage, with this investment largely complete by H1 2025.
**Operational Expansion** Successful launch and delivery of a contract in New Jersey, maintaining the UKs largest digital mental health provider status for under 18s.
**Strategic Evolution** Evolution of the strategy to solidify successes from the transformational period in 2024, focusing on expanding services and accessing diverse funding sources.
**Financial Highlights**
**Revenue** On a constant currency basis, revenue increased by 1.3% compared to the prior period. Reported revenue marginally decreased by £0.4m to £32.1m due to FX movements and UK contract changes.
**Annual Recurring Revenue (ARR)** On a constant currency basis, ARR grew by £0.7m, driven by expansion in New Jersey, partially offset by UK contract changes. Reported ARR fell by £2.5m to £61.7m due to negative FX movements.
**Gross Margin** Decreased by 19.6 percentage points to 62.8% due to front-loaded investment in California marketing, expected to moderate in H2 2025.
**Adjusted EBITDA** Decreased to £1.6m from £7.8m in H1 2024, reflecting accelerated investment in key areas.
**Loss After Tax** Reported a loss of £1.3m compared to a £3.9m profit in H1 2024.
**Balance Sheet** Robust with net cash of £15.3m, supporting long-term growth initiatives.
**Strategic Update**
**Market Leadership** Strengthened position by widening access to support and connecting users with diverse services, positioning Soluna as a digital front door for public services.
**Service Expansion** Plans to expand services within the platform to access funding from a broader range of customers, including further development of clinical, operational, and product capabilities.
**Go-to-Market Approach** Refreshed approach leveraging State funding and partnerships with public and private payers to offer personalized solutions.
**Outlook**
**US Pipeline** Active pipeline with increasing demand for accessible youth mental health solutions, aligned with State budget cycles.
**UK Market** Strong position with a regained contract and a diverse pipeline, supported by policy tailwinds.
**Soluna Launch** On track for UK launch in 2026, with regulatory compliance efforts underway.
**Financial Outlook** Expects revenue and adjusted EBITDA in line with expectations, with potential FX impact reducing full-year revenue by 2-3% and adjusted EBITDA by 6-8%.
**CEOs Perspective**
Kate Newhouse emphasized the period of significant investment, particularly in the US and product development, which is expected to yield benefits in H2 2025 and beyond. The company remains committed to its mission of providing accessible mental health support, supported by a strengthened leadership team and evolved strategy.
**Financial Review**
The CFO highlighted the impact of FX movements on revenue and ARR, with underlying growth on a constant currency basis. The decrease in gross margin and adjusted EBITDA was attributed to planned investments in California marketing, with expectations of moderation in H2 2025. The balance sheet remains robust, supporting long-term investment strategies.
**Conclusion**
Kooth PLCs H1 2025 results reflect a strategic focus on growth and market leadership, despite short-term financial challenges. The company is well-positioned to capitalize on policy tailwinds and expanding market opportunities, particularly in the US, while maintaining its commitment to accessible mental health support.