Kainos Group (KNOS) CMD 2025 summary

Strategic Focus and Business Performance

• Emphasis on high-growth areas: Digital Services, Workday Services, and Workday Products, with strong performance in public sector and health care, and over GBP 200 million in contracts signed in these sectors since the start of the financial year.

• Shift in commercial sector strategy to focus on supporting existing customers rather than expanding new business, while recognizing future opportunities.

• Workday Services experiencing strong sales and revenue growth, especially from larger deals in the Americas and EMEA, with continued expansion in LATAM and Asia Pacific.

• Revenue growth is expected to translate to bottom-line results by fiscal 2027, as hiring and contractor costs are gradually replaced by internal capacity.

• FY26 revenue expected at the upper end of consensus (£378m–£393.4m), driven by strong sales and significant program wins in Digital Services and Workday Products surpassing $100m ARR in July 2025.

Diversification, Profitability, and Business Model Evolution

• Revenue mix has diversified: public sector and health care now represent a minority of business, down from 90% at IPO to under 50% last year; North America now over 30% of revenue.

• Client concentration has decreased, with top 10 customers now accounting for 45% of revenue, down from 62% at IPO.

• Margins have remained steady except for a temporary COVID-related spike; Digital Services and Workday Services are primarily time-and-materials or fixed-price, while Workday Products is a high-margin SaaS model.

• Cash reserves of £133.7m as of March 2025, debt-free status, and a progressive dividend policy with a FY25 total dividend of 28.4p.

• Share buyback program in progress, with average annual cash conversion of 101% since FY20.

Workday Partnership and Product Innovation

• Deepening partnership with Workday, including a multi-year, $10 million/year “Built on Workday” deal, granting access to Workday’s product team and marketplace, and first-mover opportunities in the Clear Skies program.

• Kainos is the leading Workday partner in product ARR, with a significant lead over competitors and privileged access to Workday’s support and roadmap.

• Workday Products achieved over $100m ARR in July 2025, with a pathway to £200m ARR by 2030, driven by product innovation and a strong partnership with Workday.

• Recent product launches include Employee Document Management and Pay Transparency Analyzer, the latter now sold exclusively by Workday across Europe.

• Selected as one of five partners for Workday's Agent System of Record, enabling innovation in AI and new applications.