Softcat (SCT) H1 2026 earnings summary

Executive summary

• Delivered exceptional first-half FY26 results with gross profit up 22.6% and underlying operating profit up 27.3% year-over-year, outperforming expectations and prompting an upgrade to full-year profit guidance.

• Growth was broad-based across all technologies and customer groups, with notable strength in the corporate segment and continued investment in people, systems, and digital transformation.

• AI adoption is accelerating customer demand and internal efficiency, supported by the acquisition of Oakland and new internal AI tools.

• Customer base expanded to over 10,400, with high satisfaction scores and gross profit per customer up 19% to £52.2k.

• Market conditions have stabilized with moderating inflation and interest rates, but memory shortages and supply chain uncertainties persist.

Financial highlights

• Gross invoiced income rose 33.3% year-over-year to £2.01bn; revenue increased 53.5% to £837.5m.

• Gross profit reached £269.9m (+22.6%), with underlying operating profit at £93.8m (+27.3%) and statutory operating profit at £85.2m (+15.6%).

• Underlying basic EPS up 25.8% to 36.1p; interim dividend increased 11.2% to 9.9p per share.

• Cash balance at period end was £206m, up £65m year-on-year, with underlying cash conversion at 147.6% (or 102.4% excluding a large customer prepayment).

• Gross profit per employee up 15% to £199.2k; average headcount increased 10.5%.

Outlook and guidance

• Upgraded FY26 guidance to high single-digit underlying operating profit growth, up from low single-digit.

• Cautious on H2 due to tougher comparators, ongoing memory shortages, and macroeconomic uncertainty.

• Expect cash conversion towards lower end of 85%-95% range due to system implementation outflows.