Softcat has now grown its gross profits by double digits for 20 consecutive years, its CEO said as he unveiled “outstanding” full-year results showing a £3.6bn top line.
In its preliminary results statement, Graham Charlton also talked about the LSE-listed outfit’s growth among larger, more complex customers, and strongly hinted at further M&A following its maiden acquisition earlier this year.
Building M&A muscle
For its year to 31 July 2025, Softcat saw gross invoiced income (GII) hike 26.8% to £3.6bn following an “exceptionally strong” second half.
Gross profit and underlying operating profit followed suit, rising by 18.3% to £494.3m and by 16.9% to £180.1m, respectively.
These numbers exceed even the raised guidance Softcat issued this summer.
Charlton dropped a strong hint that Softcat will remain on the M&A trail following its April acquisition of data and AI specialist Oakland, which he claimed has enabled Softcat to expand its addressable market.
“The deal process has also allowed us to build our M&A muscle, as we develop capabilities and experience that can support future strategic acquisitions,” he said.
Hardware hike
Softcat struck it rich with some “large datacentre projects” during the year, which Charlton said reflects recent investments to deliver larger and more complex solutions.
Multinational presence remains “strategically important” to the Marlow-based outfit as it seeks to grow its share of large and complex customers, he added.
This underpinned a 74.5% hike in hardware GII to £992.2m. GII within Softcat’s core software business vaulted 14.8% to £2.07bn, with services GII up 15.5% to £550.3m.
Charlton also referenced the recent Microsoft incentive changes an analyst recently said has sapped “tens of millions of dollars” from EMEA channel profitability this year and that left their mark on peer Bytes Technology Group’s recent half-year numbers.
This – along with “ongoing subdued demand for devices” – led to “more modest” gross profit growth within Softcat’s workplace business, he said.
Softcat reiterated a relatively more cautious guidance for its full-year 2026, saying it expects to report high single-digit gross profit growth and low single-digit growth in underlying operating profit.
Marketshare marauder
Softcat’s average headcount grew by 7.3% to 2,639 year on year.
Its customer count grew by 1.6% to 10,200, with gross profit per customer vaulting 16.5% to £48,500, meanwhile.
Adding in Oakland, Softcat pegged its total addressable market in the UK and Ireland in 2025 at “more than £87bn” and growing an annual average rate of around 10%.
“We estimate that we serve approximately 20% of the customers in our target market in the UK, based on those who trade with us in two consecutive 12-month periods, with an average 20-25% share of wallet,” Charlton said.
“We therefore continue to see a significant future growth opportunity, which is supportive of our strategy to attract new customers and go deeper with our existing customers.”
