IT provider Kainos Group reported revenue up 37% to £268.8 million for the six months ended 30th September 2026, against £196.1m a year earlier.
However its share price fell 12% in one day following the announcement.
Analysts pointed to a potential slowing in revenue growth in H2 after unchanged guidance from the firm, which stated: “Following the strong performance in FY26 and H1 27, we expect further growth in revenue and adjusted profit before tax in the second half of FY27, in line with current market expectations.”
Statutory profit before tax for the half-year rose 26% to £35.8m, while adjusted pre-tax profit grew 30% to £41.7m.
Group bookings grew 27% to £402.3m, and contracted backlog stood at £853m, up from £679.3m at 30th September 2025.
Kainos said the increase reflected the award of several large, multi-year contracts, most notably in Digital Services, and that it had updated its bookings and backlog calculations to reflect the full value of contracts secured by Digital Services.
Digital Services revenue increased 57% to £162.5m, with healthcare up 85% to £54.7m, public sector up 55% to £76m and defence up 44% to £15.3m.
Gross margin in the division declined by 3.9% to 31.9%, which Kainos said largely reflected the use of contractors and supply partners to support rapid growth.
The company said it expects margins to normalise as it replaces third parties with employed staff as revenue growth moderates.
It named contracts worth up to £150m with Defra, signed during the period, and £111m with the Home Office and £84m with the Foreign, Commonwealth & Development Office, due to be signed in the second half.
Workday Products annual recurring revenue increased 24% to £96.0m, and revenue in the division grew 22% to £48.0m.
The division now has over 750 customers, compared with more than 600 a year earlier.
Kainos said Derek Brown, who joined from Quantexa, became Workday Products chief executive in June 2026.
Workday Services revenue was 9% higher at £58.3m, with North America up 10% and EMEA, including Australia, up 8%.
Period-end cash was £86.5m, compared with £105.5m a year earlier, while cash conversion was 62%.
Chief executive Brendan Mooney described the six-month performance as “excellent”.