SysGroup Beats Market Expectations with Strong FY26 Results

SysGroup FY26 trading update: revenue up 7.6% and EBITDA beats expectations

SysGroup has posted a tidy finish to FY26, with revenue growth, stronger second-half momentum, and adjusted EBITDA landing ahead of market expectations. For a mid-cap IT services player focused on cloud, cybersecurity, and AI enablement, this is exactly the sort of steady execution investors want to see.

Management is leaning into demand for cybersecurity and has sharpened its go-to-market – essentially how it sells and packages services – with AI now woven into both sales and service delivery. Early benefits showed up in Q4, and they’ve entered FY27 with positive momentum.

Headline numbers at a glance

Metric	FY26	Prior period / note
Group revenue	£22.1m	FY25: £20.5m (+7.6%)
H2 revenue growth (YoY)	+17.2%	Includes £1.1m from Saxis (acquired Dec 2025)
H2 organic revenue growth	+7.0%	Excludes Saxis contribution
Adjusted EBITDA	£1.2m	FY25: £0.9m; H1 FY26: £0.2m
Gross cash	£7.7m	FY25: £8.7m
Net cash	£2.7m	FY25: £3.6m
Saxis cash consideration paid	£1.3m	Contingent consideration of £0.5m excluded from net cash

Second-half acceleration and what’s driving it

The big swing came in H2: revenue grew 17.2% year-on-year, with £1.1m from the Saxis acquisition and a solid 7.0% organic uplift. That mix tells us the core is moving in the right direction while M&A is adding sensible scale.

Management flagged “improved go-to-market effectiveness” and stronger cybersecurity demand. In plain English: better targeting and selling, plus a hot market for security services, lifted the top line. The company also deployed more AI across sales and service delivery in H2, with early benefits seen in Q4 – a potential margin lever as those gains build.

Saxis acquisition: early revenue, platform for more

Saxis completed in December 2025 and chipped in £1.1m of H2 revenue. That’s a decent first pass. The business also references “enhanced capabilities” following the deal, which likely broadens the offer set and cross-sell routes into the UK mid-market.

Cash out the door was £1.3m during FY26, and there’s a £0.5m contingent consideration noted (excluded from the net cash figure). We don’t have disclosed synergy targets yet – those will be worth watching in July’s full results.

Profitability: ahead of expectations, with H2 doing the heavy lifting

Adjusted EBITDA came in at £1.2m versus £0.9m in FY25 and ahead of current market expectations. Given H1 was £0.2m, that implies around £1.0m of adjusted EBITDA in H2 – a clear inflection.

On revenue of £22.1m, that’s roughly a 5.4% adjusted EBITDA margin. It’s not a high-margin model yet, but the direction of travel is positive. If the AI-enabled efficiencies and go-to-market improvements continue, there’s room for operating leverage in FY27.

Cash and balance sheet: still net cash after acquisition

SysGroup closed the year with £7.7m of gross cash and £2.7m of net cash, down from £8.7m and £3.6m respectively in FY25. The reduction is explained by the £1.3m cash payment for Saxis. Net cash is defined here as cash less bank loans and lease liabilities, which gives a fair view of financial headroom for a services business.

In short: the balance sheet remains sensible, even after M&A. That matters for flexibility – whether for bolt-ons, investment in delivery capability, or smoothing working capital as growth picks up.

Why this update matters for investors

• Delivery is improving: H2 organic growth of 7.0% and an EBITDA beat suggest the commercial engine is warming up.
• Cybersecurity tailwinds: demand remains supportive, and SysGroup is positioned as a trusted partner for the UK mid-market.
• Operational upgrades: more AI across sales and service is starting to show up in the numbers. If sustained, margins should benefit.
• Acquisitions adding value: Saxis provided tangible H2 revenue and broader capabilities without overstretching the balance sheet.

On the cautious side, the margin base is still modest and cash has dipped (for a good reason, but it has dipped). Execution on integration and continued organic growth are the levers that need to keep turning.

Josh’s take: a clean step forward, now show the compounding

This reads like a disciplined year of groundwork: sharpen the go-to-market, add scale and capability with Saxis, embed AI where it counts, and let the second-half do the talking. The fact EBITDA is ahead of expectations is the headline, but the quality of the beat – driven by operational changes and market demand rather than one-offs – is the more interesting point.

For FY27, the opportunity is to compound: keep organic growth mid-single digits or better, prove integration synergies, and nudge margins up from ~5% towards something sturdier. With net cash intact, SysGroup has options. The July results should add colour on outlook and the AI-driven efficiency story.

What to watch in the full-year results (July)

• Margin roadmap: evidence that AI-enabled efficiencies and sales effectiveness can lift adjusted EBITDA margins further.
• Saxis integration: cross-sell wins, cost synergies, and any commentary on pipeline quality.
• Organic growth run-rate: can H2’s 7.0% organic growth be sustained into FY27?
• Cash dynamics: working capital trends and any update on contingent consideration timing for Saxis (£0.5m noted).
• Segment detail: revenue mix by cloud, cybersecurity, and digital infrastructure to see where the outperformance sits.

Quick jargon buster

• Adjusted EBITDA: a profit measure before interest, tax, depreciation, amortisation, exceptional items, and share-based costs. It’s a proxy for underlying operating performance.
• Net cash: cash minus bank loans and lease liabilities. Positive net cash means more cash than debt/leases.
• Organic growth: growth from the existing business, excluding acquisitions like Saxis.
• Go-to-market: how a company targets customers, packages services, prices, and sells.
• Contingent consideration: future payments tied to deal performance milestones, excluded from the reported net cash figure here.

Bottom line

SysGroup has delivered a better-than-expected FY26, with a strong H2, healthy cybersecurity demand, and early benefits from AI-enabled operations. The balance sheet remains in net cash even after Saxis, and the business enters FY27 with momentum. Now it’s about proving this is more than a one-half bounce – consistent growth and margin progression will do the convincing.