Softcat (LON:SCT) Announces Quarterly Earnings Results

Softcat (LON:SCT) released its earnings results on Wednesday. The company reported GBX 75.80 EPS for the quarter, Digital Look Earnings reports. Softcat had a net margin of 7.61% and a return on equity of 46.24%.

Here are the key takeaways from Softcat’s conference call:

• Softcat reported an exceptional FY 2026, with gross profit up 24.7% to £616.3 million and underlying operating profit up 19.4% to £215.1 million. Customer growth accelerated to more than 10,500, while gross profit per customer increased 20.6%.
• Underlying operating costs rose 27.7%, faster than gross profit, reducing the operating-profit-to-gross-profit ratio to 34.9% from 36.4%. Profitability was also affected by lower-margin product mix, Microsoft licensing changes, large lower-margin projects and one-off employee, advisory and incentive costs.
• For FY 2027, management expects high-single-digit underlying operating profit growth excluding GDT, with gross profit growth modestly moderated by tougher comparisons, the absence of unusually large projects and prior-year memory-related order pull-forward. Non-underlying costs are expected to rise roughly two to two-and-a-half times because of GDT acquisition and integration expenses.
• Management sees substantial long-term demand from AI-driven infrastructure investment, including data centers, networking, security, cloud and services. The GDT acquisition is expected to add U.S. and Americas fulfillment, infrastructure expertise and global cross-selling opportunities, although estimated post-deal leverage will initially rise to 1.3x net debt to EBITDA.

Softcat Price Performance

Shares of Softcat stock traded up GBX 3 during mid-day trading on Friday, reaching GBX 1,700. 1,339,130 shares of the stock were exchanged, compared to its average volume of 1,776,860. The company has a market cap of £3.66 billion, a price-to-earnings ratio of 24.25, a price-to-earnings-growth ratio of 11.51 and a beta of 0.58. The company has a current ratio of 1.39, a quick ratio of 1.38 and a debt-to-equity ratio of 10.41. The firm has a 50-day simple moving average of GBX 1,935.22 and a 200 day simple moving average of GBX 1,742.66. Softcat has a fifty-two week low of GBX 1,083 and a fifty-two week high of GBX 2,134.

Wall Street Analyst Weigh In

SCT has been the topic of a number of recent research reports. JPMorgan Chase & Co. lifted their price objective on Softcat from GBX 1,950 to GBX 2,300 and gave the company an “overweight” rating in a report on Monday, September 7th. Jefferies Financial Group reissued a “hold” rating and issued a GBX 1,700 target price on shares of Softcat in a report on Wednesday. Deutsche Bank Aktiengesellschaft downgraded Softcat to a “hold” rating and raised their target price for the stock from GBX 1,800 to GBX 2,140 in a research report on Wednesday, August 26th. Finally, Berenberg Bank reaffirmed a “buy” rating and issued a GBX 2,400 price target on shares of Softcat in a research note on Friday. Four analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of “Hold” and a consensus price target of GBX 1,993.75.

Insider Activity

In other news, insider Graeme Watt purchased 5,291 shares of Softcat stock in a transaction on Friday, October 16th. The shares were purchased at an average cost of GBX 1,890 per share, for a total transaction of £99,999.90. Also, insider Kathryn Mecklenburgh acquired 1,322 shares of the firm’s stock in a transaction on Friday, October 16th. The shares were purchased at an average cost of GBX 1,890 per share, for a total transaction of £24,985.80. Insiders purchased a total of 12,816 shares of company stock worth $24,246,219 over the last ninety days. Corporate insiders own 2.91% of the company’s stock.

About Softcat

Softcat plc operates as a value-added IT reseller and IT infrastructure solutions provider in the United Kingdom. The company advices, procures, designs, implements, and manages technology, such as software licensing, workplace technology, networking, security, and cloud and datacenter for businesses and public sector organizations. It also offers public cloud, collaboration, connectivity, data centre and private cloud, devices, and financial solution services. In addition, the company provides IT asset management, lifecycle solutions, modern management, security, software licensing, supply chain operation, and virtual desktop and application.