Artificial intelligence (AI) is the dominant theme of Softcat’s first-half results, with the channel player receiving a boost from being able to provide customers with a range of transformation support.
The firm’s numbers for the six months to 31 January 2026 show the benefits of offering AI infrastructure and the data foundations for transformation, as well as security. Gross invoiced income improved by 33.3% and underlying operating profits rose by 27%. Revenues climbed by 53% to reach £837.5m.
AI was the driving force, but the firm also benefited from completing some large solutions projects and getting pull-through on customers keen to order before component shortages drove prices up further.
Softcat executive director and chief executive Graham Charlton said the period had seen continued investment across its customer base towards AI as they looked to take advantage of the productivity and increased insights the technology could deliver.
“The analytics, the automation, the quality of outcomes that people can get from technology are being revolutionised by AI,” he said.
“AI is a very hungry technology. It needs compute power, huge amounts of data, storage, low latency, massive networks, strong devices. It takes security challenges and defence mechanisms to the next level. Whilst our customers are at different stages of working out how they use AI in their applications, it’s already and will continue to build demands on the infrastructure, and AI is only as good as the data you feed it and the expert use applied to it,” Charlton added.
The market is still only in the early stages of the AI adoption cycle, creating significant long-term opportunities for Softcat
Graham Charlton, Softcat
Softcat is also using AI to enhance its own operations, providing staff with Microsoft Copilot and the encouragement to use and develop the technology.
“We started modernising our own technology five or six years ago. We’ve been putting in place a whole new stack of enterprise systems. Those systems are getting AI built into them. We’re developing our own agents and tools. We’ve created our own proprietary databases,” he said.
“Everybody’s got Copilot, everybody’s using the other AI tools. We’re encouraging an environment of innovation and agent creation. We’ve got structures then to manage and productionise those good ideas. The way that we’re managing things like rebate flows, which are hugely complex, and fulfilment patterns and keeping customers informed. There’s some really good innovation coming up,” Charlton added.
“The other reasons for our strong growth in the first half are our strategy, which we consistently invested in over the past few years, while the market was a bit tougher, has stretched our advantage in the customer service and offering areas that we think differentiate us,” he said.
The first half also saw customers moving ahead of component shortage-driven price rises, and Charlton said it continued to be a challenge for the firm and users to navigate that evolving situation.
“It was definitely a net positive for us in our second quarter. How it will play out in the future is hard to predict. Lead times and prices will both continue to go up. In competitive terms, I think it’s good news for Softcat, because our ability with the vendor reaches the breadth of offering,” he said.
“We have the ability to work with customers wherever they might move that spend to. If they can’t get the products that they’re looking for immediately and have to wait, then we’ve got the best capability to swap customers and take advantage of that, but it will become increasingly challenging. The dynamic nature of pricing and delivery times is something that we’re spending a lot of time and effort helping customers win,” he said.
Last year, Softcat made its first acquisition, picking up Oakland. Charlton said the move had contributed to the business, and it could consider further merger and acquisition (M&A) activity where appropriate.
“The Oakland acquisition has been very positive for us, and for them. The credibility and extra capability that it gives us, particularly with some large and complex customers, has been terrific. The fact that we’re able to be in the conversations about how they organise their data leads us into a lot of other opportunities,” he said.
“We [have] the option to do more M&A, either to extend our capabilities or to extend our geographic reach into the US is still there,” Charlton added. “We don’t have to use it … but if it can accelerate our strategy in the right way, then we’ve got the financial firepower and the ambition to act as well. We’ll see what targets come up, and it’s a very high bar, though we don’t need to do it. And so, things that are genuinely accretive to our business and have an affinity for our culture as well.”
Since the close of its first-half trading period, there has been the outbreak of war in the Middle East involving Iran, and the future picture is now slightly harder to predict.
Softcat signalled to investors it was expecting to deliver growth as it went through the rest of its fiscal year, and Charlton said he remained optimistic about the future.
“The market is still only in the early stages of the AI adoption cycle, creating significant long-term opportunities for Softcat. With a compelling proposition aligned to the technologies that matter to our customers, and with the skills and capabilities demanded by our vendors, we remain in the very best position to deliver sustainable growth and further market share gains,” he said.
