Softcat (SCT) H2 2025 earnings summary

Executive summary

• FY25 delivered double-digit gross profit and underlying operating profit growth, with broad-based progress and larger data-center solutions contributing in H2.

• Gross profit rose 18.3% to £494.3m; underlying operating profit increased 16.9% to £180.1m, ahead of initial expectations.

• Continued investment in people, offices, systems, data and AI capabilities supports further organic growth and international expansion.

Financial highlights

• Gross invoiced income rose 26.8% to £3.6bn; revenue increased 51.5%, driven largely by the higher hardware mix reported gross under IFRS 15.

• Gross profit, the primary income measure, increased 18.3% to £494.3m, above expectations at the start of FY25.

• Underlying operating profit grew 16.9% to £180.1m; statutory operating profit rose 12.2% to £172.9m after £7.2m of non-underlying costs.

• Profit after tax grew 11.7%; net interest income was £5.3m, in line with FY24.

• Cash ended FY25 at £182.3m, up £23.8m YoY; £95.7m was returned to shareholders during the year.

Outlook and guidance

• FY26 guidance is unchanged: excluding FY25’s £10m incremental large-project operating profit benefit, expect low double-digit gross profit growth and high single-digit underlying operating profit growth.

• Including the FY25 benefit, FY26 growth is expected at high single digits for gross profit and low single digits for underlying operating profit; FY24–FY26 CAGR is ~12% and ~9%, respectively.

• FY26 underlying operating profit growth is expected to be H1-weighted, conditional on customer and vendor timelines for a large data-center deal; two-year growth rates are expected to be similar across H1 and H2.

• FY26 cash conversion is expected toward the lower end of the 85%–95% range, reflecting cash outflows for cloud-based sales and HR systems.

• FY26 non-underlying charges are expected at £20m–£25m, mainly system implementation; phase one continues into FY27, with FY27 spend roughly half of FY26 spend.