S4 Capital (SFOR) Q1 2026 TU earnings summary

Executive summary

• Q1 2026 net revenue declined 8.9% reported and 5.0% like-for-like year-over-year, reflecting macroeconomic uncertainty and client caution, especially among technology clients reallocating spend to AI infrastructure.

• Operational EBITDA was in line with expectations, with improving operating margins and a targeted margin increase of at least 100 basis points for 2026.

• Net debt reduced to £111.8m (1.4x leverage) from £144.8m (1.7x) year-over-year, with a 2026 target range of £60–90m and medium-term leverage under 1.0x.

• Workforce reduced by 11% year-over-year to approximately 6,200 employees at quarter-end.

Financial highlights

• Q1 2026 revenue was £164.8m, down 7.5% reported and 3.7% like-for-like year-over-year.

• Net revenue was £149.2m, down 8.9% reported and 5.0% like-for-like.

• Billings were £419.8m, down 9.4% reported and 4.9% like-for-like.

• Net debt at quarter-end was £111.8m, down from £144.8m last year.

• Company repurchased €85.2m of Term Loan B at a discount, reducing the balance to €289.9m.

Outlook and guidance

• Full-year guidance reiterated; like-for-like net revenue expected in line with analyst consensus, slightly below 2025.

• Operational EBITDA margin targeted to increase by at least 100 basis points, mainly from 2025 cost actions.

• Net debt target for year-end 2026 remains £60–90m; medium-term leverage targeted under 1.0x operational EBITDA.

• Interim and final dividends of 1.1p each planned, subject to performance and liquidity targets.

• Dividend payout policy set at 50% of adjusted basic EPS over the medium term.