Kainos lifts FY27 guidance after strong start to the year

Kainos raises the bar for FY27

Kainos Group plc has delivered the kind of trading update investors like to see: a strong start to the year, growth across all three divisions, and upgraded guidance for the financial year ending 31 March 2027.

In its original company announcement, the UK-headquartered IT services and software group said the momentum seen in the year ended 31 March 2026 has continued into the first months of the current financial year.

That matters because Kainos is not merely saying trading is in line. The Board now expects both revenue and adjusted PBT to be “comfortably ahead” of current market expectations. Adjusted PBT means profit before tax after excluding certain adjusting items, so it is a commonly used measure of underlying profitability.

The company has not provided a fresh revenue or profit forecast. Instead, it has disclosed the current company-compiled analyst range, which gives investors a useful benchmark for the scale of the upgrade.

The key numbers

Measure	Current analyst range for FY27	Consensus figure	Kainos update
Revenue	£498.0 million - £514.0 million	£509.3 million	Expected to be comfortably ahead of current market expectations
Adjusted PBT	£75.0 million - £84.0 million	£77.1 million	Expected to be comfortably ahead of current market expectations

The wording is important. Kainos has not stated a specific new target. It has also not said by how much it expects to beat the existing range. But “comfortably ahead” is stronger than a marginal upgrade, and the fact that both revenue and adjusted PBT are included makes this a broad-based positive update rather than a narrow sales-only beat.

What is driving the upgrade?

Kainos pointed to momentum that began in the previous financial year. During the year ended 31 March 2026, the company achieved double-digit percentage revenue growth, a very strong sales performance and record backlog levels.

That backlog point is worth dwelling on. A backlog is contracted work that has not yet been delivered or recognised as revenue. For services-led technology companies, a strong backlog can improve visibility over future revenue, although it does not remove execution risk.

Kainos says this strong momentum has continued in the first months of the current financial year. The upgrade appears to be driven by all three parts of the business, rather than a single one-off contract win.

Digital Services is doing the heavy lifting

Digital Services continues to grow “very strongly”, according to the company.

This division helps major public sector, commercial and healthcare customers build and support custom digital service platforms. In plain English, that means Kainos helps large organisations modernise how they serve users, cut costs, improve productivity and run digital systems that are secure, accessible and cost-effective.

The company said Digital Services has been supported by several significant contracts secured in the second half of FY26, plus further contract awards since the start of the current financial year.

That is encouraging for two reasons.

First, it suggests demand did not fade after the end of the last financial year. Second, new contract wins add substance to management’s confidence, especially when combined with the reference to a significant multi-year contracted backlog.

The limitation is that Kainos has not disclosed the value, margin profile or duration of those significant contracts in this update. Investors therefore have the direction of travel, but not the full detail.

Workday divisions are also growing

Kainos also reported good performance in both Workday Services and Workday Products.

Workday Services supports customers deploying Workday’s Finance, HR and Planning products. Kainos says its experience in complex deployments means it is trusted to launch, test, expand and support Workday systems.

Workday Products is Kainos’ proprietary software division. These products complement Workday by improving system security and compliance, as well as document generation and storage. The company says more than 600 global customers now use one or more of these products.

Both Workday Services and Workday Products recorded double-digit revenue increases compared with the same period in the previous financial year.

That is a useful detail. A guidance upgrade led purely by professional services contract wins could raise questions about sustainability and margin quality. Product revenue can be attractive, although Kainos has not provided divisional margins or recurring revenue figures in this announcement, so investors should avoid filling in the blanks themselves.

Why investors should care

This update is notable because it combines three attractive ingredients: growth, visibility and an earnings upgrade.

The positives are clear:

• Revenue and adjusted PBT guidance has been increased for FY27.
• Digital Services is growing very strongly.
• Both Workday divisions are showing double-digit revenue increases.
• The company points to a robust pipeline.
• Kainos has a significant multi-year contracted backlog.
• The previous financial year delivered double-digit percentage revenue growth and record backlog levels.

For a technology services business, that mix can be powerful. Contract wins feed backlog, backlog supports revenue visibility, and revenue growth that also lifts adjusted PBT expectations suggests the business is not simply buying growth at any price.

The update also reinforces that Kainos is operating in markets it describes as being driven by “clear structural trends”. The company does not spell those trends out in detail in this RNS, so investors should treat that as management commentary rather than a quantified market forecast.

The risks have not disappeared

This is a positive update, but it is not risk-free.

Kainos itself flags that the macroeconomic environment remains volatile. That is a broad warning, but a relevant one. Large IT projects can be affected by customer budget cycles, public sector spending decisions, corporate caution and implementation complexity.

There is also a disclosure gap. The company has not provided:

• Updated revenue guidance in pounds.
• Updated adjusted PBT guidance in pounds.
• Contract values for the significant wins.
• Divisional profit margins.
• Cash flow performance.
• Net cash or debt figures.
• Any update on staff numbers beyond the company profile.

None of that undermines the upgrade, but it does mean investors have an upbeat direction rather than a complete financial picture.

It is also worth remembering that “adjusted” profit measures can vary between companies. They are useful for understanding underlying trading, but statutory profit and cash generation still matter. Those details were not included in this trading update.

A cleaner read-through than many trading updates

Some trading updates require a bit of detective work. This one is relatively straightforward. Kainos had strong momentum entering FY27, that momentum has continued, and the Board now expects revenue and adjusted PBT to be comfortably ahead of the current analyst range.

That makes this a materially positive announcement for the investment case, at least based on the information disclosed today.

The next scheduled checkpoint is the announcement of results for the six months ending 30 September 2026, due on Monday 9 November 2026. That should give investors a fuller view of how the upgraded guidance is translating into reported revenue, margins and cash flow.

For now, the message from Kainos is simple enough: demand is strong, backlog is substantial, and FY27 expectations have moved higher.