Kooth Plc (LON: KOO), a digital mental health provider, saw its shares fall sharply today after it reported a 3.9% drop in first-half revenue despite a swing to profit and a doubling of adjusted earnings. The AIM-listed company published unaudited results for the six months to the 30th of June 2026 earlier today.
Kooth shares opened today’s session at 177.5p and had fallen to 168.5p, down 4.26% from yesterday’s close of 176p, in early trading on AIM.
Reported revenue came in at £30.8m, down from £32.1m a year earlier, which Kooth attributed to currency headwinds and a planned tapering of marketing and product-development spending in California. Annual recurring revenue, a measure of contracted income, rose 1.9% to £62.9m from £61.7m. In the UK, revenue fell 3.7% to £8.3m, with net revenue retention easing to 96% from 97%.
The revenue dip masked a sharp improvement in profitability. Gross margin rose 11.3 percentage points to 74.1% as California marketing costs eased, while adjusted EBITDA, earnings before interest, tax, depreciation and amortisation, more than doubled to £5.3m from £2.6m. That drove a swing to a £2.0m profit after tax, versus a £1.3m loss a year earlier, with basic and diluted earnings per share of 5p against a 3p loss. Net cash rose to £23.1m from £15.3m, and the group remains debt-free with an undrawn $9.5m facility. No interim dividend was declared.
Chief executive Kate Newhouse said the group’s 2025 cost discipline was now paying off.
The foundations that we committed to strengthening in 2025 are now well-established and bearing fruit, with growth in profit and EBITDA demonstrating that it is possible to deliver on outcomes while remaining disciplined on costs and building long-term value for our customers and shareholders.
Kate Newhouse, Kooth Plc
Kooth’s US operations, where it supplies digital mental health support under state contracts, now span California, New Jersey and Michigan, reaching 20.2 million people; the Michigan contract contributed £0.5m of revenue in the period. Soluna, the platform replacing legacy Kooth services across all UK contracts, soft-launched in the UK through August and September, timed to the new school year, and the company has secured contracts with the UK Department for Work and Pensions to support young people not in education, employment or training, which are now in the launch phase.