Kainos Group plc (LON:KNOS), a UK-headquartered IT provider with expertise across three divisions – Digital Services, Workday Services and Workday Products – has announced its results for the six months ended 30 September 2026.
Financial highlights
| H1 27 | H1 26 | Change | |
| Revenue | £268.8m | £196.1m | 37% |
| Statutory profit before tax | £35.8m | £28.4m | 26% |
| Adjusted pre-tax profit([1]) | £41.7m | £32.0m | 30% |
| Diluted earnings per share | 23.1p | 16.7p | 38% |
| Adjusted diluted earnings per share | 27.4p | 18.9p | 45% |
| Interim dividend per share | 10.4p | 9.8p | 6% |
| Bookings([2]) | £402.3m | £317.0m | 27% |
| Product annual recurring revenue (ARR) | £96.0m | £77.5m | 24% |
| Contracted backlog(2) | £853.0m | £679.3m | 26% |
| Cash([3]) | £86.5m | £105.5m | -18% |
Continued momentum, with strong sales performance across the Group driving growth in adjusted pre-tax profit
| | Revenue increased 37% (36% organic, 37% ccy) to £268.8 million (H1 26: £196.1 million). |
| | Adjusted pre-tax profit grew by 30% (30% ccy) to £41.7 million, with the adjusted profit margin broadly unchanged at 16% (H1 26: 16%).A more detailed analysis of gross margin movements is provided in the Financial Review section. |
| | Robust period-end cash(3) of £86.5 million (31 March 2026: £89.1 million), with cash conversion of 62% (H1 26: 48%). |
Sales performance driving significant increase in bookings and contracted backlog
| | Strong sales momentum, driven by the award of several large, multi-year contracts, most notably in Digital Services, has delivered a significant step-up in bookings and contracted backlog, providing enhanced visibility of future revenue. |
| | At the same time, bookings and backlog calculations(2) have been updated to align with industry practice and reflect the full value of contracts secured by Digital Services. The revised methodology does not affect the value of bookings and backlog for Workday Products and Workday Services. |
| | On this basis, Group bookings grew 27% to £402.3 million (H1 26: £317.0 million), contributing to a contracted backlog of £853.0 million (30 September 2025: £679.3 million; 31 March 2026: £716.6 million). |
Operational highlights
Digital Services had an excellent six months, with revenue growth driven by significant contract wins during FY26 and during the period
| | Digital Services’ revenue increased by 57% (57% ccy, 54% organic) to £162.5 million (H1 26: £103.5 million). |
| | Revenue in healthcare grew by 85% to £54.7 million (H1 26: £29.6 million), while public sector revenue increased by 55% to £76.0 million (H1 26: £49.1 million([4])). Revenue in defence increased by 44% to £15.3 million (H1 26: £10.6 million). |
| | Bookings(2) were 44% higher at £296.5 million (H1 26: £205.3 million) and the contracted backlog(2) at the period end was £599.9 million, up from £456.9 million at H1 26. |
| | Gross margin declined by 3.9% to 31.9%, largely reflecting the ongoing use of contractors and supply partners to support rapid growth. As noted previously, this is a short-term staffing decision, and we expect margins to normalise as we replace third parties with employed staff as revenue growth moderates. Further detail is provided in the Financial Review section. |
| | Kainos was one of the top performing suppliers to the UK Government since the start of April 2026, by the total contract value of digital framework wins. Major awards included contracts worth up to £150 million with Defra signed during the period and £111 million with the Home Office and £84 million with the Foreign, Commonwealth & Development Office, due to be signed in H2. |
| | North America continued to grow well, with revenue up 50% (51% ccy, 13% organic) to £11.7 million (H1 26: £7.8 million). This primarily reflected a full period of ownership of Davis Pier, acquired in September 2025. |
Workday Products firmly on track to reach our ARR targets of £100 million by the end of 2026 and £200 million by the end of 2030
| | Workday Products’ ARR increased by 24% (23% ccy) to £96.0 million (H1 26: £77.5 million), resulting in revenue growing by 22% (22% ccy) to £48.0 million (H1 26: £39.2 million). |
| | The division now has over 750 customers (H1 26: more than 600), with around 40% taking two or more products (H1 26: around 40%). |
| | As noted in our FY26 results, we have recruited several highly experienced leaders for Workday Products, to ensure we have the skillsets and capacity to scale the business. This included Derek Brown, who joined us from Quantexa to be our Workday Products’ CEO in June 2026. |
| | We have continued to invest in our product portfolios, with research & development expenditure rising by 33% to £11.4 million (H1 26: £8.6 million), all of which was expensed in the period. Sales & marketing spend increased by 11% to £11.1 million (H1 26: £10.0 million). |
| | Gross margin declined by 3.4%, of which 1.1% reflected the reclassification of attributable bonus costs to cost of sales. Most of the remaining decline reflected negative margins on implementation services for Pay Transparency Analyzer and Employee Document Management. We expect these implementation margins to turn positive as our delivery approach matures. We launched a Conflict of Interest product in the period, to allow customers to use Workday to manage conflicts of interest, with further products in the pipeline. |
Workday Services delivered good revenue growth, driven by North America
| | Revenue in the period was 9% higher (9% ccy) at £58.3 million (H1 26: £53.4 million). |
| | North America grew revenue by 10%, while revenue in EMEA (including Australia) increased by 8%. |
| | Bookings were steady at £54.3 million (H1 26: £54.0 million), with a contracted backlog of £73.4 million at the period end (30 September 2025: £62.1 million). |
We continue to benefit from our geographical breadth, with international markets generating £101.4 million of revenue (H1 26: £84.9 million), up 19%
| | Workday Services and Workday Products have a particularly strong international client base, with 84% of their aggregate revenues coming from these international customers (H1 26: 83%). |
Excellent customer service drives customer satisfaction and retention
| | Our customers continued to rate our services as ‘excellent’, with a Net Promoter Score([5]) of 61([6]) (H1 26: 70). |
| | Existing customers generated revenue of £219.3 million (H1 26: £166.6 million), up 32%. |
| | Our total customer numbers increased to 1,371 (30 September 2025: 1,169). |
The commitment and engagement of our colleagues underpins our business performance
| | Rapid growth in our team, with 3,885 people at period end (30 September 2025: 3,132, 31 March 2026: 3,475). |
| | The number of employed staff rose from 3,216 at 31 March 2026 to 3,569 at the period end. |
| | Engagement levels remain high at 79% (H1 26: 75%) in our internal surveys, supporting continuing strong employee retention of 91% (H1 26: 92%). |
Demand for AI services continues to grow, as we help customers implement solutions responsibly
| | Revenues for AI and data-related projects increased 40% to £28.5 million (H1 26: £20.4 million([7])). |
| | We have delivered over 475 AI & Data projects across the public, healthcare, and commercial sectors, including 75 in the period. |
| | During the period, we joined the Cosine coalition to support the development of a UK sovereign AI model for organisations needing frontier capabilities in a secure environment. |
| | We have launched Actonomy, a new business dedicated to helping customers overcome the challenge of moving AI projects from pilot into production, with four customers already signed. |
| | We are now certified in the Claude Partner Network, Anthropic’s programme for firms that put Claude into production for customers. |
Current trading and outlook
Following the strong performance in FY26 and H1 27, we expect further growth in revenue and adjusted profit before tax in the second half of FY27, in line with current market expectations.
In Digital Services, a stronger second half comparative will result in the revenue growth rate moderating from the exceptional level achieved in the first half. Workday Products will surpass our £100 million ARR target in this quarter, while Workday Services is also set to perform well.
Beyond FY27, we see excellent opportunities for Kainos. Customers in each of our markets remain focused on deploying technology to improve their efficiency and effectiveness. AI is augmenting our capabilities, enabling us to accelerate productivity improvements for us and our customers. The Group has a substantial, multi-year backlog, a robust balance sheet and a proven strategy, giving us a solid platform for further success.
Commenting on the results, CEO Brendan Mooney said:
“This was an excellent six months for Kainos, building on our strong performance last year.
“Technology is central to the UK Government’s plans to transform public services and this is reflected in the outstanding growth in Digital Services, particularly across our public sector and healthcare clients. Industry data shows that we were one of the largest winners of Government digital contracts in the period, showing that we are one of the most-trusted suppliers to the UK Government and have a strong track record of delivering value.
“Workday Products reached £96.0 million of annual recurring revenue at 30 September 2026 and will pass our initial target of £100 million by the end of 2026. This is a significant achievement, with its ARR having nearly tripled since we set the target in May 2022. It remains firmly on track to achieve £200 million of ARR by the end of 2030.
“Workday Services had a good first half, with revenue growth driven by North America and our newer regions such as Australia. This reflects our focus on larger and more complex deployments, which play to our strengths.
“As always, I want to thank our customers for the trust they place in us and our people for their hard work and dedication. We look forward with confidence to the remainder of FY27.”
