Kainos Group (KNOS) Trading Update summary

Financial performance and guidance

• Adjusted PBT for FY2025 expected in line with consensus (£78.5m–£79.7m), but revenue growth will be modest and below consensus (£408.9m–£422.0m; consensus £415.5m) due to a tougher trading environment.

• FY2024 reported revenue was £382.4m; only a small increase is expected for FY2025.

• Board maintains focus on balancing profitability, investment for growth, and international expansion.

Divisional performance and outlook

• Digital Services saw sustained public sector demand but delays from the UK General Election and weak commercial demand; healthcare revenues are growing.

• Workday Services experienced robust win rates but lower contract values and increased pricing pressure, impacting short-term performance; growth expected in H2.

• Workday Products delivered strong growth, with a new strategic partnership increasing ARR target from £100m to £200m and accelerating recurring revenue.

Strategic initiatives and market positioning

• Enhanced partnership with Workday is expanding customer reach and expected to be a catalyst for further growth.

• Healthy pipeline, strong balance sheet, and significant contracted backlog support confidence for the remainder of the year.

• Well positioned in core markets with substantial growth opportunities across all divisions.