Kainos Group Trading Update Signals Revenue Growth; Shares Jump

Kainos Group plc (KNOS), the UK-based IT services provider, saw its share price jump at the open on Monday after it announced an upbeat trading update, projecting revenues for the year ending March 31, 2026, to reach the upper end of consensus forecasts.

The current company-compiled consensus for revenue is between £378 million and £393.4 million. The positive outlook is fuelled by robust sales performance across its key divisions.

Kainos shares have surged 15% following the update.

The consensus expectation for adjusted pre-tax profit is between £65.1 million and £74.7 million. Kainos anticipates adjusted PBT to align with current consensus forecasts, balancing growth with strategic investments and prudent financial management.

New projects are said to be mobilizing across Digital Services, Workday Services, and Workday Products, necessitating increased recruitment and short-term contractor utilization to manage both growth and a strong pipeline.

The Workday Products division continues to perform strongly, achieving over $100 million in Annual Recurring Revenue (ARR) in July.

The company stated that it is actively developing its next product, Pay Transparency, in collaboration with design partners such as Diageo and Linklaters, anticipating the EU Pay Transparency Directive's implementation in June 2026. The launch of this product in Q3 positions Kainos to capitalize on regulatory tailwinds.

Digital Services secured programs within the healthcare and public sectors, including contracts with the Home Office, NHS England, and the Driver and Vehicle Standards Agency.

These wins are expected to drive meaningful revenue increases in the second half of the financial year. North American revenue growth remains strong; however, commercial sector performance remains muted, lagging prior-year levels, indicating a mixed regional performance.

The Workday Services division is poised for a return to growth this year, driven by improved results in core European and North American markets, as well as advancements in Australia, New Zealand, and Mexico. This geographic diversification strengthens the division's resilience and growth potential.

Kainos acknowledged the persistence of macroeconomic volatility and continues to balance growth, international expansion, investment, and profitability within this context.

The company remains confident in its long-term strategy, particularly regarding emerging opportunities from wider AI adoption. The company highlights a robust backlog, a healthy pipeline, a solid balance sheet, disciplined capital allocation, and strong cash flow as the foundations for long-term shareholder value.

Kainos expects to announce its results for the six months ending September 30, 2025, on November 10.