QinetiQ Group (QQ) H2 2026 earnings summary

Executive summary

• Delivered resilient performance in challenging markets, with decisive restructuring and portfolio actions, especially in the U.S., setting a foundation for sustainable growth.

• Achieved record order intake of GBP 3.6 billion and backlog of GBP 4.8 billion, up over 40%, providing multi-year revenue visibility.

• Enhanced earnings quality through cost efficiency, portfolio reshaping, and targeted investments.

• U.K. business grew 7-8%, offsetting stabilized U.S. performance; Australia pivoted to prime contractor role.

• Increased dividend payout and extended share buyback program, with all options under review for future value creation.

Financial highlights

• Revenue just over GBP 1.9 billion; operating profit GBP 218 million, up 18% year-over-year.

• Margin improved to 11.3%, at upper quartile benchmark levels.

• Free cash flow GBP 159 million, up 41%; cash conversion at 100%.

• EPS increased 21% to GBP 0.315; dividend up 24% to GBP 0.11; payout ratio increased to 35-40%.

• Shareholder returns reached GBP 183 million, up GBP 32 million year-over-year; net debt at GBP 159 million; leverage ratio 0.5x.

Outlook and guidance

• Revenue growth expected at 3%-5% for FY 2027, driven by EMEA Services; higher end dependent on budget clarity.

• Margin guidance at 11%-11.5%; EPS growth expected at 8%-10%; >90% cash conversion.

• Three-year free cash flow target set at over GBP 550 million (FY 2027–FY 2029).

• Majority of free cash flow to be returned to shareholders via enhanced dividend policy (35%-40% payout ratio) and extended buyback program at GBP 100 million per annum through FY29.