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Highlights

  • FY25 revenue and adjusted profit before tax expected in line with consensus forecasts.

  • Workday Products division surpasses £72m in Annual Recurring Revenue (ARR).

  • Public sector and healthcare segments rebound; cautious optimism in Workday Services.

Kainos Group plc (LSE:KNOS), the UK-based digital technology solutions provider, has issued a trading update for the financial year ended 31 March 2025. Following a solid fourth quarter, the Board expects to report revenue and adjusted profit before tax (PBT) in line with current market expectations.

Despite persistent macro-economic uncertainty, Kainos achieved low single-digit growth in Q4, driven by careful cost management and strategic investments. The company credits its ability to balance profitability with continued international expansion and long-term growth initiatives for its overall resilience.

Workday Products Division Continues to Shine

The standout performer in Kainos’ portfolio remains its Workday Products division, which delivered another year of robust growth. Annual Recurring Revenue (ARR) exceeded £72 million by the end of the financial year.

With an initial target of reaching £100 million ARR by 2026 and a long-term goal of £200 million by 2030, the company is well on track. The division's momentum highlights its critical role in the company’s future revenue generation and recurring income stream.

Recovery in Digital Services, Mixed Picture in Workday Services

Digital Services saw a return to growth in the second half of the year, particularly within the UK public sector, as projects picked up following delays caused by election activity. Kainos continues to position itself as a key player in government digital transformation initiatives.

International revenues from Digital Services also recorded significant gains. However, the commercial sector remained subdued, with activity levels still lagging behind those of the previous year.

The Workday Services division faced ongoing softness, with further reductions seen in the second half. However, market pressures are beginning to ease, and early signs of recovery are emerging. Kainos reported recent client wins in Australia and New Zealand, signalling the potential for a turnaround in this division moving into FY26.

Strategic Focus, AI Potential, and Organisational Changes

Kainos highlighted long-term market trends, such as the accelerating adoption of AI, as key opportunities for strategic growth. The company reaffirmed its commitment to investing in innovation and aligning with emerging technologies to deliver enhanced client outcomes.

During the period, Kainos underwent a significant organisational restructuring that resulted in the departure of 190 employees. Despite this, the company praised the resilience and dedication of its workforce, expressing gratitude to both its staff and loyal customers.