Softcat (SCT) H1 2025 earnings summary

Executive summary

• Achieved strong first half performance with double-digit growth in gross profit (12.1%) and operating profit (10.4%), supported by strategic execution, a well-diversified customer base, and broad-based success across technology areas and customer segments.

• Customer base expanded 1.4% to over 10,250, with gross profit per customer up 10.7% to £43.1k.

• Maintained high customer satisfaction (98%) and employee engagement (88%), with continued investment in people, culture, and technology capabilities, particularly in AI, automation, and data.

• Zero debt and robust cash generation, enabling further dividend growth and significant returns to shareholders.

• Strategic focus remains on deepening customer relationships, expanding service offerings, and supporting future growth.

Financial highlights

• Gross invoiced income rose 19.3% year-over-year to £1.51bn; revenue up 16.8% to £545.6m; gross profit increased 12.1% to £220.2m; operating profit up 10.4% to £73.7m.

• Basic EPS grew 12.3% to 28.7p; profit after tax up 12.5% to £57.4m.

• Gross margin declined by 1.0ppt to 14.6% due to higher volume, low-margin sales, and software margin mix.

• Cash conversion at 110.9% (89% excluding a large customer prepayment); closing cash balance of £141.0m.

• Interim dividend of 8.9p per share, up 4.7% year-over-year; £77.9m paid in final and special dividends.

Outlook and guidance

• Upgraded FY25 guidance: now expects low double-digit operating profit growth (previously high single-digit), with continued double-digit gross profit growth.

• Management confident in second half pipeline, with strong demand in AI, security, and infrastructure projects.