Bytes Technology Group (BYIT) Q4 2026 TU earnings summary

Executive summary

• FY 2026 results met expectations, with double-digit invoiced income growth, gross profit of ~£167m, and operating profit of ~£62m, showing sequential improvement in H2 versus H1 despite tougher comparatives.

• Cash conversion exceeded 100%, ending with over £98m in cash after returning £74m to shareholders via dividends and buybacks.

• Strategic realignment: Bytes Software Services will focus on the private sector, Phoenix Software on the public sector, enhancing specialization and leveraging group scale from July 2026.

• AI is a key growth driver, both in products sold and internal operations, with increasing customer demand for AI-enabled solutions and internal adoption of AI tools for efficiency.

• Positioned as a leading UK and Ireland provider of software, AI, cloud, and security services.

Financial highlights

• Gross profit for FY 2026 was approximately £167m, with operating profit around £62m.

• Cash balance at year-end exceeded £98m, after £74m was returned to shareholders.

• Gross profit grew ~6% year-over-year in January and February 2026, despite strong comparatives.

Outlook and guidance

• FY 2027 guidance: high single-digit to low double-digit percentage growth in gross profit; operating profit expected to be broadly flat due to ~£4.5m in additional costs from tech investments and normalized bonuses.

• If gross profit growth reaches 11-12%, there is potential upside to operating profit.

• FY 2028 expected to see normalized growth between operating profit and gross profit as one-off costs are absorbed.

• Continued investment in headcount and technology to support growth.