Kainos Group (KNOS) Trading Update summary

Financial performance and outlook

• Achieved low single-digit percentage growth in Q4, maintaining balance between growth, investment, and profitability amid volatile macroeconomic conditions.

• Revenues and adjusted PBT expected to be in line with consensus forecasts: revenue £365.6m, adjusted PBT £65.4m.

• Workday Products division delivered strong results, with ARR exceeding £72m and on track for £100m ARR by 2026.

• Digital Services saw public sector revenue growth in H2, strong healthcare and international revenue growth, but commercial sector activity remained below prior-year levels.

• Workday Services demand remained subdued but showed early signs of recovery, especially internationally.

Strategic initiatives and market positioning

• Built on Workday partnership progressing well, supporting ambitious ARR targets of £100m by 2026 and £200m by 2030.

• Focused on leveraging long-term structural drivers, including AI adoption, to drive future growth.

• Maintains robust backlog, pipeline, and strong balance sheet, supporting long-term value creation.

• Recent restructuring led to 190 staff departures, aiming to enhance organizational efficiency.

Divisional highlights and customer base

• Digital Services division supports digital transformation in public, commercial, and healthcare sectors, with a focus on security and user outcomes.

• Workday Services specializes in complex deployments for finance, HR, and planning, with a strong presence in Europe and North America.

• Workday Products suite enhances system security, compliance, and document management for over 450 global customers.

• International expansion continues, with recent customer wins in Australia and New Zealand.