UK's Kooth H1 revenue falls on California tapering
Overview
UK digital mental health platform's H1 2026 revenue fell 3.9% yr/yr, impacted by FX and California tapering
Adjusted EBITDA more than doubled, driven by reduced marketing spend in California
Net profit turned positive, reflecting improved operational efficiency and user engagement
Outlook
Kooth expects full-year underlying results broadly in line with expectations before FX impacts
Company to focus on converting US state contract pipeline in H2 2026, supported by expanded funding
Kooth plans increased H2 investment to embed Soluna in California and pursue emerging opportunities
Result Drivers
CALIFORNIA MARKETING SPEND - Gross margin expansion and EBITDA growth were driven by reduced direct marketing expenditure in California following accelerated investment in H1 2025
FX HEADWINDS - Revenue declined due to a £0.7m negative FX movement, with 73% of Group revenues denominated in USD
MICHIGAN CONTRACT WIN - New statewide contract in Michigan contributed £0.5m of recurring revenue, partially offsetting declines elsewhere
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
H1 Revenue | GBP 30.82 mln | ||
H1 EPS | GBP 0.05 | ||
H1 Net Income | GBP 1.99 mln | ||
H1 Adjusted EBITDA | GBP 5.27 mln | ||
H1 Gross Margin | 74.10% | ||
H1 Annual Recurring Revenue | GBP 62.88 mln | ||
H1 Gross Profit | GBP 22.85 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"
The average consensus recommendation for the online services peer group is "buy"
Wall Street's median 12-month price target for Kooth PLC is GBp315.00, about 79% above its September 22 closing price of GBp176.00
The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 17 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)