iomart CFO Steps Down as Trading Softens and EBITDA Misses Expectations

FY2026 outlook vs market expectations: revenue in line, EBITDA below low end

The Board now expects:

• Group revenue to be broadly in line with current market expectations.
• EBITDA to be just below the lower end of current market expectations.

iomart also notes that cash performance and capital expenditure (capex) discipline remain strong, and the Group is operating within its existing bank facilities.

For context, the Company has compiled the latest known sell-side analyst estimates for FY26 as follows:

• Revenue: £157.6m to £159.1m
• Adjusted EBITDA: £27.7m to £28.5m
• Adjusted loss before tax: £(2.1)m to £(1.0)m
• Net debt: £98m to £107m

Given today’s guidance, revenue should track near that £157.6m-£159.1m range, while EBITDA is now seen just below £27.7m. The Company has not provided updated guidance on adjusted loss before tax or net debt beyond referencing market estimates and stating that cash performance and capex discipline remain strong.

Cost optimisation: over £5.0m annualised savings and more to come

iomart has banked annualised savings of over £5.0m and is pursuing further efficiency opportunities aimed at profit, operational efficiency and service quality. That is helpful in a year when mix and churn are pinching margins. Bear in mind “annualised” means the full benefit lands over a 12-month period, so not all of it may be reflected in the FY26 outturn depending on timing.

Why this matters: the good, the bad and the watchpoints

• Margin pressure is the headline negative. Higher churn in high-margin lines plus growth in lower-margin services drives the EBITDA miss. That mix needs rebalancing or offsetting with pricing and efficiencies.
• Revenue resilience is a constructive sign. Positive net order bookings and an encouraging pipeline point to demand that can be converted – but the margin of that demand matters.
• Execution on efficiencies is a tangible positive. Over £5.0m of annualised savings is meaningful, particularly if churn stabilises and new wins scale.
• CFO change introduces uncertainty. The handover looks orderly, but investors will want a timely appointment with strong sector and transformation credentials.
• Balance sheet discipline continues. Operating within bank facilities and emphasising cash and capex discipline is reassuring given market estimates put net debt in the £98m-£107m range. The Company has not provided updated net debt guidance today.

Key numbers and definitions from the RNS

Item	Figure / Guidance	Comment
Revenue (FY26 market range)	£157.6m – £159.1m	Company expects “broadly in line”
Adjusted EBITDA (FY26 market range)	£27.7m – £28.5m	Company expects “just below” the lower end
Adjusted loss before tax (FY26 market range)	£(2.1)m – £(1.0)m	Company did not update this today
Net debt (FY26 market range)	£98m – £107m	Operating within current bank facilities
Cost savings (annualised)	Over £5.0m	Further opportunities being pursued
CFO departure timing	Expected June 2026	After completion of March year-end reporting

Quick jargon buster

• Churn: the rate at which customers leave or reduce spend. Higher churn hurts growth and margins.
• EBITDA: earnings before interest, tax, depreciation and amortisation. A cash-profit proxy. Here it’s “adjusted” to exclude items like share-based payments, acquisition costs and non-recurring items.
• Pipeline: qualified prospective deals that could convert into orders.
• Net order bookings: the net increase in contracted business during the period.
• Net debt: total borrowings minus cash.

What I’ll be watching next

• Churn stabilisation in high-margin lines. If churn normalises, the EBITDA drag eases quickly.
• Mix improvement and pricing. Can iomart attach higher-margin managed services to Azure and Microsoft 365 growth to lift profitability?
• Conversion of the “encouraging” pipeline into higher-quality bookings in Q4 and early FY27.
• Further detail on cost actions and timing of benefits, especially into FY27.
• Appointment of a new CFO with relevant sector and transformation experience.

Bottom line

This update is a blend of resilience and realism. Revenue looks steady, but margin pressure and higher churn mean EBITDA will miss the low end of expectations. Cost savings and a positive bookings backdrop help, and cash discipline remains a comfort. The near-term task is clear: steady churn, sharpen margins and land a strong CFO successor to keep the transformation on track.