Kainos Group (KNOS) H2 2025 earnings summary

Executive summary

• Fiscal year ended March 2025 delivered results in line with revised guidance, with strong performance in Workday Products and challenges in services divisions.

• Revenue declined 4% year-over-year to £367m, with strong Workday Products growth offset by subdued services markets.

• Workday Products achieved GBP 73 million ARR, on track for GBP 100 million in 2026 and GBP 200 million by 2030.

• Adjusted profit fell 15% to £66m, reflecting restructuring costs and margin pressures.

• AI revenues grew over 60% and now represent more than 20% of digital services revenue.

Financial highlights

• Revenue from new customers grew 85% to GBP 68 million, with total customers nearing 1,100 and international revenues at 41% of total.

• Healthcare sector revenue grew 14% year-over-year and 15% sequentially from H1 to H2.

• Public sector revenue declined 9% year-over-year but improved 2% sequentially; commercial revenue fell 32%.

• Workday Products revenue up 24% year-over-year (26% in constant currency), with all four products showing strong growth.

• Cash at year-end increased by GBP 8 million to £134m, maintaining a debt-free position.

Outlook and guidance

• Confident in achieving GBP 100 million ARR in 2026 and GBP 200 million by 2030 for Workday Products.

• Expecting improved performance as UK public sector market recovers and digital transformation accelerates.

• Continued international expansion in Workday Services and Digital Services, with focus on margin improvement.

• Launch of Pay Transparency product planned for late 2025 to align with EU directive.