Kainos (LSE:KNOS) reported a 17% increase in revenue to £431.1 million alongside a 19% rise in statutory pre-tax profit, supported by strong sales performance across all three of its operating divisions. The company said profitability margins were impacted by higher contractor, supplier and employee costs, as well as continued investment in its strategic partnership with Workday.
Workday and digital operations drive expansion
Bookings for the period climbed 32%, while contracted backlog increased 18%, reflecting sustained demand across the business. Kainos also maintained a strong cash position despite substantial investment in share buybacks, the development of its new Belfast headquarters and the acquisition of Davis Pier.
Within the Workday Products division, annual recurring revenue rose 23% to £89 million, placing the business on course to reach £100 million ARR by the end of 2026. Growth was supported by senior leadership appointments and an exclusive agreement with Workday to resell a new Pay Transparency product.
The company also reported that both Digital Services and Workday Services returned to growth during the year, benefiting from significant contract wins across the UK public sector and healthcare markets, alongside continued momentum in North America. Revenue linked to artificial intelligence initiatives also increased, with Kainos doubling the size of its Responsible AI team as it strengthens its position in government technology and enterprise cloud services.
Kainos’s outlook remains supported by strong profitability and a low-leverage balance sheet, although technical market indicators remain weaker, with the share price trading below key moving averages and momentum measures remaining negative. Valuation metrics are more mixed, combining a relatively high price-to-earnings ratio with a solid dividend yield.
More about Kainos Group plc
Kainos Group plc is a UK-based IT services and software company operating across Digital Services, Workday Services and Workday Products. The group provides digital transformation services, cloud-based Workday consulting and proprietary software solutions to public sector, healthcare and commercial clients, with expanding operations across Europe and North America.
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