UK's Kooth H1 revenue falls on California tapering

By Reuters News


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


Reuters Recommended Reads

  • Sept 22 - UK's Oxford BioMedica H1 revenue rises on increased manufacturing

  • Sept 22 - UK's Itim Group returns to profit as H1 revenue rises

  • Sept 21 - UK's Elixirr H1 revenue rises 25%, aided by AI demand


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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