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Investing.com -- Kainos Group PLC (LON:KNOS) reported a decline in annual profit and revenue, with its Workday Products division being the bright spot in an overall mixed year.
Revenue for the year ended 31 March 2025 fell 4% year-on-year to £367.2 million, reflecting a 4% organic decline and a 3% drop on a constant currency basis.
Adjusted pre-tax profit was down 15% to £65.6 million, impacted by a £5.2 million investment to support the group’s expanded Workday (NASDAQ:WDAY) partnership. The adjusted profit margin narrowed to 18% from 20% a year earlier.
Bookings declined 10% to £382.4 million, though Kainos noted improved momentum in the second half of the year. The year-end contracted backlog rose 3% to £368.2 million.
“Our results reflect a mixed year for Kainos, with strong growth in Workday Products and in our healthcare sector, set against broader market challenges in IT services – particularly in Workday Services and in the public and commercial sectors of Digital Services,” said Kainos Group CEO Brendan Mooney.
Kainos said its Workday-related products continued to deliver strong growth, increasing their share of Group revenue to 19%, up from 15% in 2024.
“Our enhanced partnership with Workday underpins our £100 million 2026 ARR target and our new 2030 target of £200 million,” the company noted.
Workday Products revenue rose 24% to £71.3 million, driven by 26% organic and constant currency growth. Annual recurring revenue (ARR) increased 20% to £72.6 million, up from £60.5 million the previous year.
Kainos’ cash conversion for the year was strong at 112%, boosting the company’s cash position to £133.7 million, up from £126.0 million, even after completing £30 million in share buybacks. The buyback programme concluded on 9 May 2025, with 3,993,382 shares repurchased.
The Board also announced plans to launch a new £30 million share buyback programme, set to be executed over the next six months.
Looking ahead to the financial year 2026, Kainos said it expects continued momentum in Workday Products, supported by its Built on Workday partnership, and remains on track to reach its ARR milestones of £100 million by 2026 and £200 million by 2030.