SThree (STEM) Q3 2025 TU earnings summary

Executive summary

• Q3 FY25 net fees declined 12% year-on-year, with modest sequential improvement driven by growth in the U.S., Middle East, and Asia.

• Contract business, representing 83% of net fees, declined 13%, while Permanent net fees fell 5% but improved sequentially.

• Technology Improvement Programme (TIP) rollout is nearly complete, supporting digital transformation, operational efficiencies, and productivity gains.

Financial highlights

• Group net fees for Q3 FY25 were £81.5m, down from £92.7m in Q3 FY24, a 12% decline year-on-year on a constant currency basis.

• Contract order book at £156 million, down 6% year-on-year, equating to about five months' net fees.

• Net cash position of £42 million at 31 August 2025.

• Group headcount down 16% since FY24, reflecting selective hiring and efficiency gains.

Outlook and guidance

• FY25 profit before tax (PBT) guidance reiterated at £25 million, supported by cost discipline and operational efficiency.

• Persistent macro uncertainty and no broad market recovery expected in the near term; FY26 PBT consensus reduced by £20 million to £10–30 million.

• Further investments in next-generation AI and new cost optimisation programme planned for FY26.

• New share buyback programme to commence in FY26.