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ServiceNow reported its Q2 results Wednesday night, which were positive on several fronts.
The firm “significantly beat the high end” of its guidance for topline and profitability metrics. Subscription revenue was up 21.5% (constant currency) over the comparable quarter last year (to $3.11bn), while operating margin was 29.5% (c.2.5 points above guidance).
The firm ended the quarter with 528 customers with more than $5m in annual contract value (ACV), which is c.19.5% growth over last year. Meanwhile, the number of customers with more than $20m in ACV grew by more than 30% year-on-year. This means ServiceNow is “firmly on track” to hit its 2026 target of $1bn in ACV.
ServiceNow Chairman and CEO Bill McDermott said “ServiceNow has never been more differentiated as a full stack agentic operating system for the enterprise”.
ServiceNow acquired data.world, a cloud-native enterprise data catalogue and governance platform provider, in May. Its tech will be incorporated into the ServiceNow AI Platform to enhance AI agent understanding and deepen enterprise data intelligence and governance.
The company also announced agentic workforce management, which extends its end-to-end AI agent orchestration capability. It’s another step forward in enabling human employees and AI agents to work in unison. Members of our TechSectorViews programme can tap into our research identifying the best opportunities for IT Service providers around the Future of Work later this year.
President and CFO, Gina Mastantuono, said that with “robust pipeline and expanding market opportunities…we are well‑positioned for the second half of the year”. The expectation is for 19.5-20% growth (constant currency basis) in subscription revenue, with an expected operating margin of 30.5%.
Posted by: Kate Hanaghan at 10:31
Tags:
results
AgenticAI
This week sees the launch of the Digital Capability Exchange UK (DCXUK). The new platform-based not-for-profit initiative aims to create a collaborative resourcing facility across multiple tech services providers. The programme seeks to help participants better balance capacity and skills against the peaks and troughs of project delivery demands and it is designed to complement traditional recruitment and contracting models for talent acquisition and optimisation. Primarily focused on lower to mid-tier IT services suppliers, DCXUK's objective is to establish a flexible, scalable, pool of capability across its member ecosystem to improve utilisation and reduce costs.
DCXUK is the brainchild of three software development companies: public sector-centric Opencast (recently identified by TMV as "one to watch" in the vertical); AWS specialist Leighton; and Poland-based nearshore services provider Spyrosoft. The full-scale launch of the platform follows a successful pilot phase which has seen the network of participants increase to twelve organisations. All are reported to have seen early success in matching talent resource to their delivery needs.
The exchange will now undergo a phased roll-out as it continues to receive interest from tech business leaders from across the UK. Once their membership is approved, companies can provide talent for particular project opportunities won by fellow platform users and seek talent from others for their own confirmed engagements.
No IT services provider ever manages to sustain an optimum balance between demand, expertise supply and the aspirations and needs of its talent. Benches are invariably too big or too small, and their skills compositions are rarely in harmony with the flow of work as it is won, lost and completed. DCXUK certainly offers an additional mechanism for vendors, particularly those which lack scale, by which to better manage these perennial problems. How extensively it will be used, however, remains to be seen. In a market where its people play such a significant role in a supplier's differentiation and client stickiness, the decision to share capability --especially top talent - with competitors is far from an easy one to make.
Posted by: Duncan Aitchison at 10:11
Tags:
platform
digital
resourcing
non-profit
Public sector bodies and operators of critical national infrastructure, including the NHS, local councils and schools, would be banned from paying ransomware demands to criminals under new measures proposed by the UK government. The measures are designed to crack down on cyber-criminal gangs and safeguard the public. Under the proposals, businesses outside the ban's scope must also notify the government within 72 hours of any intent to pay ransoms. It remains unclear what organisations fall within scope, and whether third-party suppliers will be included.
Ransomware attacks cost the UK economy millions annually, with recent high-profile incidents affecting the likes of M&S (See - M&S cyber breach linked to Scattered Spider ransomware), Ingram Micro (See - Ingram Micro hit by SafePay ransomware attack and the British Library (See - Ransomware attack to cause major financial hit to British Library). The government hopes the ban will make vital public services less attractive targets. However, this could backfire, hackers may just pivot to alternative monetisation methods like data exfiltration and triple extortion, potentially blackmailing individuals whose data has been compromised rather than the organisations directly.
The government continues advocating for stronger operational resilience, including offline backups, IT-free operation plans, and rehearsed restoration strategies. However, they do not go far enough in addressing the root cause of so many breaches, poor security fundamentals, and a lack of investment. The government needs to put more focus on mandating minimum-security controls like two-factor authentication, identify and access controls and ransomware detection software. Certainly, for CNI and healthcare organisations the minimum levels of cyber spend and resilience against attacks needs to be much higher.
I would also like to see more protections and reparations for individuals affected by attacks. When organisations' poor cyber security practices expose personal data, victims currently have virtually no recourse, we simply just accept that our emails, addresses, even banking information is exposed for all to see, with not much more than an apology from the affected firms, and maybe a year’s subscription to Experian if the breach is really severe. Smaller suppliers exposed to some of these large organisations hit with major cyber-attacks are also in a similar boat, with the financial impact of operational disruption potentially even greater.
Posted by: Simon Baxter at 10:04
Given the timeline of its ongoing acquisition, this will likely be one of my last quarterly updates on business process specialist WNS. You can read about the rationale behind the deal here - Capgemini to buy WNS for $3.3bn, but it partly reflects how well WNS has focused and performed of late in a rapidly changing BPS landscape.
While FY results were not sterling, the business has shown resilience in tough market conditions and yesterday's Q1 2026 results look respectable with revenue climbing 9.5% year-over-year to $353.8m, driven by some new client wins and the Kipi.ai acquisition contributing 2.0% growth. However, the company faced headwinds from both healthcare client losses and continuing softer online travel volumes. The quarter's standout metric was constant currency revenue growth of 7.1%, demonstrating underlying business growth despite all of these challenges.
The pending Capgemini acquisition represents a strategic inflection point for WNS, positioning the combined entity to capitalise on the "Intelligent Operations" market opportunity. Time will tell whether this works for both, but given the direction of travel of the wider market and Capgemini's BPS ambitions, it certainly makes sense on paper.
Posted by: Marc Hardwick at 09:23
Tags:
acquisition
Whilst the challenging market conditions seen in Q1 (Sopra Steria contracts 4.7% in challenging first quarter) have not abated, Sopra Steria does appear to be making progress with the European IT services giant delivering a credible H1 2025 performance, despite the conditions, with revenue declining 3.6% (-3.8% organic) to €2.84bn.
Crucially, the firm is showing clear signs of sequential improvement. The company's organic revenue contraction of 3.8% masked a notable recovery, with Q2's -2.7% decline representing a significant improvement from Q1's -4.9% drop, suggesting the worst may be behind the French-headquartered firm as client sentiment slowly improves.
Geographically, the picture was mixed. The largest market, France, representing 42% of group revenue, saw an improvement in Q2 (-2.4%) compared to Q1 (-4.9%), with a return to more 'normal conditions' in public sector and in defence following a very slow start to the year. The UK (16% of revenue) faced tougher headwinds with -7.7% organic decline, though major contract extensions through 2027-2028 provide visibility going forward. Continental Europe struggled with -3.1% contraction, while the Solutions unit bucked the trend with 2.6% growth.
Overall margins are holding up, with operating margins down slightly to 9.2% from 9.7% year-on-year, demonstrating good cost management. Net profit increased 15.3% to €142m, aided by some favourable comparisons and improved efficiency. Strategically Management's focus on defence, cybersecurity, and European digital sovereignty appears a good place to be given current geopolitical tensions. The Aurexia acquisition also strengthens the firm's financial services consulting capabilities, while emphasis on GenAI should help position the company for growth opportunities.
The forward outlook looks cautiously optimistic. With full-year targets confirmed (organic growth -2.5% to +0.5%, operating margin 9.3%-9.8%), Sopra Steria appears positioned for a return to growth. Sequential improvements and strong client relationships in the right sectors should all help as long as market conditions improve.
Posted by: Marc Hardwick at 09:07
Tags:
IT+services
Posted by: UKHotViews Editor at 07:00
OneAdvanced has been awarded a 4-year contract worth £1.2m from the Ministry of Justice (MoJ) for its cloud-based Assessment & Learning solution (previously known as bksb). The solution will be deployed across 104 adult prisons in England to improve offenders’ functional maths, English and digital skills – with the aim of improving employability opportunities upon release.
The contract is part of a wider transformation effort at the MoJ, designed to enhance education delivery as part of its Prisoner Education Service (launched in September 2023).
OneAdvanced announced the successful completion of a £1.2bn refinancing deal earlier this month (see OneAdvanced completes £1.2bn refinancing). In our coverage, we noted that – as well as moving away from a product-led approach to a more sector-focused one – the company was also taking a considered approach to embedding AI in its offerings (it launched a sovereign AI service in April, for instance – see OneAdvanced launches sovereign AI service; and its Assessment & Learning solution uses AI and Machine Learning in its assessment functions). The MoJ is looking to these AI-powered assessment and screening capabilities to help it improve the accuracy and consistency of prisoners’ educational evaluations (assisting staff and offenders themselves in identifying the appropriate pathways of education, skills training, and work activities).
Posted by: Craig Wentworth at 10:28
Tags:
education
skills
assessment
prisoners
UK cloud services provider Iomart Group has reported revenues of £143.5m for the year ended 31 March 2025, up 13% yoy, though this growth was entirely driven by the acquisition of Atech. Organic revenues actually declined 7% as the company grappled with legacy customer losses, with significant churn outweighing new customer wins. Iomart's share price is down c.10% so far this morning, and now down c.80% over the past year.
I caught up this morning with Richard Last, Executive Chair and Scott Cunningham, CFO, who highlighted that it has been a “challenging year for the firm and some of those challenges will continue” but that there are also plenty of opportunities for growth as well. Last took over from former CEO Lucy Dimes who left the business in May (See - Times up for Dimes and iomart), but he was keen to stress it is a temporary appointment, with the search for a new CEO to begin very shortly.
The big hit to the share price this morning can possibly be attributed to the news that adjusted EBITDA fell 9% to £34.3m, whilst adjusted profit before tax was down 57% to £6.5m. The company attributed the profit decline to significant churn in self-managed infrastructure services, which saw revenues drop 17% organically, and disruption from Broadcom's VMware partner programme changes, which cost the business £1.4m. As the business has sought to reposition its product mix, the legacy dedicated server business has weighed on profitability. The group has initiated a cost reduction programme targeting £4m in annualised savings, with 40% already implemented in Q1 FY26. This includes a review of the group’s data centre footprint and the expansion of its Indian offshoring operations.
The £57m acquisition of Atech in October 2024 is seen as a key turning point for the business (See - iomart makes game-changing Atech acquisition), contributing £21.5m in revenue during its first six months under Iomart ownership. The business will be retaining the Atech, iomart and Easyspace brands, which it feels still hold strong value. A new sales structure has been put in place to unify its go-to-market to maximise upsell across its propositions, whilst multiple legacy brands have been consolidated under the “Iomart” business unit. Whilst Atech’s revenue contribution is modest, it is the opportunities it brings that Last and Cunningham were keen to highlight. Atech brings expertise, accreditation and importantly credibility in both public cloud and cybersecurity, with both seen as strong opportunities for upsell across iomarts existing customer base. Atech has continued to accelerate post-acquisition, with revenue growing 27% yoy to reach £40m on an annualised basis.
Iomart's focus for FY26 will be to improve the operating efficiency of the group, addressing customer churn, reducing debt and seeking to increase sales momentum in high-growth service areas like public cloud and security. There is no specific industry focus for the business at present, however Last highlighted there has been a stronger focus on being more proactive with customers and has identified its Top 200 customers to target with iomart's newly acquired capabilities. There are a lot of positives to take away from the recent reorganistion and the Atech acquisition, the next year will however continue to be one of change, but there is a clear strategy of what the business wants to achieve.
Posted by: Simon Baxter at 10:16
Google parent Alphabet's FY25 continued strongly with an above expectations Q2 performance. Revenues were up 13% yoy at constant currency to $96.4bn. Operating income rose 14%, with margins dipping by 160 bps qoq to 32.4% as the result of a charge related to a settlement in principle of certain legal matters. The company also reported that capital expenditures will climb to $85bn, up from the previously projected $75bn. Alphabet's shares rose by more than 1% in after-market trading.
The tech giant saw double-digit growth across all major divisions: Google Search, YouTube ads, subscriptions, and Google Cloud. Google Services generated $82.5bn, while Cloud revenues surged 32% to $13.6bn, fuelled by robust demand for AI infrastructure and generative AI solutions. Indeed, CEO Sundar Pichai believes that "AI is positively impacting every part of the business, driving strong momentum".
As we have noted before (see here), policy and regulatory pressures could cloud Alphabet's outlook. The company faces two major antitrust cases in the U.S., one already ruling it a monopoly in ad tech, and another challenging its dominance in search. A potential forced breakup could reshape the company's future.
On this side of the pond, the company continues to deepen its roots in the UK and across Europe. Kate Alessi took up the reins as Google's new UK managing director in June to oversee a 7,000-strong workforce (See - Google appoints Alessi as new UK MD). Google Cloud is also continuing to gain traction with large enterprises in the UK, which helped the business to climb two places in TMV's latest UK SITS Supplier Rankings (see here) on the back of revenue growth of more than a quarter in 2024.
Posted by: Duncan Aitchison at 10:10
Tags:
results
cloud
AI
BT Group has delivered a mixed Q1 2026 trading update, with revenue pressures offset by continued network expansion and customer experience improvements. For the quarter ended 30 June 2025, reported and adjusted revenue fell 3% year-over-year (yoy) to £4.88bn – a figure of £4.33bn for the UK only, once “International revenue” is stripped out – whilst adjusted EBITDA dipped slightly by 1% to £2.05bn.
The revenue decline was primarily driven by weaker handset sales in BT’s Consumer division (continuing the trend reported in its FY25 results, see Sales dip but profit inches up for BT in FY25) and persistent challenges in international trading, though these were partially mitigated by FTTP growth in Openreach (a sixth consecutive quarter of 1m+ premises reached, on track to deliver 5m in FY26) and recent price increases. Pre-tax profit dropped 10% to £468m, impacted by higher net finance costs and increased depreciation and amortisation.
Performance across divisions remained uneven. Openreach continued its growth trajectory with revenue up 1% to £1.57bn (EBITDA up 5% to £1.07bn), benefiting from strong demand for fibre connectivity. However, the Business segment saw revenue (down 6% to £1.80bn) and EBITDA (down 9% to £344m) fall, as corporate and public sector spending remained subdued – continuing the challenging trends highlighted in recent quarters (see BT dips in Q3 as transformation continues). Consumer revenue declined 3% to £2.33bn and EBITDA down 3% to £636m, affected by the seasonal impact of price changes and softer handset demand.
Despite near-term pressures, BT's transformation programme continues to deliver: Customer satisfaction improved markedly, with Group Net Promoter Score rising 5.6 points year-on-year to 30.4; and infrastructure rollout accelerated, with full fibre broadband now reaching over 19m premises and 5G coverage extending to 87% of the UK population.
CEO Allison Kirkby struck an optimistic tone, emphasising “strong customer demand for next-generation broadband” and BT's market-leading network investment. The company reconfirmed all FY26 guidance metrics (including adjusted EBITDA of £8.2-8.3bn and group revenue of approximately £20bn (flat from FY25), suggesting that the company is expecting to reap the benefits in its network investment more in terms of growth from FY27 onwards.
Posted by: Craig Wentworth at 10:00
Tags:
results
Having closed-out an "exceptional" FY25 with a very strong fourth quarter performance (see here), mid-tier offshore service provider Coforge has kicked-off the current financial year in even more impressive style. Firm-wide Q126 revenue leapt by over 50% yoy at constant currency to $442.4m, delivering a sequential improvement of 8%. The rapid expansion did not come at the cost of profitability with the EBITDA margin for the three months ended 30th June improving by 61 bps to 17.5%.
As has been the case for the preceding three quarters, the most significant contribution to Coforge's Q126 growth came from the firm's $220m acquisition of Cigniti Technologies last July. We estimate that, on an organic basis, the company's top line improved yoy by north of c. 20% for the period. This rate of increase is more than five times faster than that of the better performing offshore majors that have so far published their results for the same three months.
The impact of the Cigniti buy was again most marked on its new owner's Americas business with Q1 sales in the region jumping by almost three quarters yoy (13.7% qoq) to $250m. Coforge's progress in Europe, within which the UK accounts for around half of territory revenue, was less dramatic albeit still comparatively rapid. Turnover in this geography increased by around 23% yoy to $132m.
Strong, double-digit growth was evident across every facet of Coforge's vertical industry and horizontal service portfolio in the first quarter. The most eye-catching performances came in the Travel, Transportation & Hospitality sector and from the Engineering (applications development-centric) service line. Fuelled by the recent 13-year megadeal with Sabre (see here), sales in the former almost doubled yoy to account for over 20% of firm-wide revenue. Turnover in the latter were up by 121% against the first quarter of FY25 to more than $200m.
No forward guidance was provided, but the lead indicators for the company remain very positive. Five large wins in Q126 helped to drive a 47% yoy rise in the firm's executable order book for the next twelve months. Commenting on the outlook, CEO Sadhir Singh stated the latest set of numbers "are all pointers to what we believe will be an exceptional fiscal '26". You wouldn't bet on him being wrong.
Posted by: Duncan Aitchison at 09:58
Tags:
results
offshore
IT+services
SysGroup's full-year results tell a familiar tale of ambitious transformation meeting harsh market realities. Executive chairman Heejae Chae paints a confident narrative about building a "trusted technology partner," but the numbers tell a more sobering story.
Revenue fell 10% to £20.5m - a sharp reversal from 5% growth the previous year - whilst adjusted EBITDA collapsed 53% to just £0.9m (driven by investment in overheads to support the strategy to provide full technology solutions). A £10.6m fundraise did strengthen the balance sheet significantly - moving from net debt of £3.4m to net cash of £3.6m - whilst funding strategic investments. Most tellingly, though, existing customers reduced their service commitments, costing the company £1.7m in lost revenue, though management claims this trend has now stabilised.
SysGroup is attempting to transform itself from a traditional hosting provider into a high-value cybersecurity and AI consultant (see SysGroup whips through its FY24 To Do list | TechMarketView). Acquiring Crossword Consulting - bringing cybersecurity expertise, including virtual CISO services and expanding reach into FTSE clients - and forging partnerships with Zscaler, CyberArk, Rubrik, and Softcat (see SysGroup partner with Softcat to expand AI/ML services | TechMarketView) demonstrates serious intent. This positioning at the intersection of cybersecurity and AI targets genuine market needs.
However, execution proves more challenging than strategy. The massive organisational upheaval - replacing 11 senior leaders, including CEO and CFO - was always going to take time to bed in. Moreover, the "cautious SME spending and elongated decision cycles" that management acknowledges reflect fundamental constraints when businesses prioritise survival over transformation.
Unlike enterprises with dedicated IT budgets and strategic imperatives, smaller businesses often view technology spending as discretionary. AI and data opportunities remain volatile in this segment, particularly when geopolitical uncertainty compounds existing pressures. When cashflow tightens, digital transformation projects get deferred regardless of their long-term value.
SysGroup's shares are down 7.5% on these results, following December's 21% plunge on profit warnings (see SysGroup shares tank 21% on year-end warning | TechMarketView). The market appears to be questioning whether the model can scale profitably among cost-conscious smaller clients, particularly given the company's continued reliance on cost-conscious smaller clients despite efforts to expand into larger enterprise accounts.
The company's technical capabilities appear sound, and cybersecurity demand remains robust. But translating expertise into sustainable revenue requires navigating clients' economic realities alongside their technological needs.
Posted by: Georgina O'Toole at 09:46
Tags:
results
digital
cyber
AI
SMEs
IT+services
Three months ago, Michael Herron made headlines when he took the CEO role at Atos UK&I during one of the most turbulent periods in the company's history. Now, he's back for another "View from the Top" conversation with a notably different energy - more confident, more bullish, and armed with concrete evidence that his transformation strategy is gaining real momentum.
In this compelling follow-up conversation, TechMarketView's Chief Analyst Georgina O'Toole sits down with Herron to dissect his first 100+ working days at the helm, exploring both the victories worth celebrating and the challenges that tested his resolve. Rather than the usual corporate summary, this is a candid assessment of leadership decisions during a difficult period and the first encouraging signs that the transformation strategy is gaining traction.
What's changed since March? Herron points to significant contract wins across government and enterprise clients, a cultural shift that's becoming tangible across the organisation, and the rollout of Atos's ambitious "Genesis" strategy that promises to reshape how the company competes in the UK&I market.
But he doesn't shy away from the difficulties either. From restructuring decisions that balanced commercial necessity with his people-first philosophy, to building credibility in a market that had written off Atos's prospects, Herron offers unusually frank insights into the realities of corporate transformation.
The conversation explores his "Future is Here" value proposition, strategic investments in sovereignty and AI capabilities, and why he's now setting even more ambitious targets for the business. Perhaps most revealing is Herron's personal approach to leadership, including his commitment to keep running with
Atos colleagues as a way of staying connected to the organisation he's working to transform.
This follow-up episode captures a pivotal moment in a high-stakes turnaround story, offering valuable lessons for any leader navigating complex organisational change.
WATCH THE EPISODE HERE
Posted by: UKHotViews Editor at 09:45
Tags:
ViewFromTheTop
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The softer-than-anticipated end to FY25 for Infosys (see here) did not carry through into the start of the new fiscal year with the company's Q126 revenue increasing by 3.8% yoy at constant currency to $4.94bn. Operating margin for the three months ended 30 June eased back a tad both sequentially and against Q125 to 20.8%. First quarter large deal TCV was also down by over 7% yoy to $3.8bn, of which only 55% was net new business.
The most significant factor driving the improvement in Infosys's top line performance was a return to growth for its North America region. Having shrunk during the first quarter of FY25 and ended the year on a downward trajectory, Q126 turnover in the territory was up both qoq and yoy by 0.3% and 0.4% respectively. Infosys Europe delivered another double-digit sales growth quarter bolstered by the contribution from the in-tech acquisition in late spring 2024. The pace of quarterly yoy expansion in the geography did, however, slow from 15% in Q425 to just over 12% in Q126 and we'll get a better view of the organic progress being made in this region come the publication of the Q2 results.
Across Infosys's vertical industry portfolio, demand from the firm's manufacturing clients remained the most resilient in Q1 with their collective revenues up by 12.2% yoy to almost $800m. The quarter also saw notable upticks in momentum from the company's energy, utilities, resources & services and communications sectors. The pace of growth slowed materially in Infosys's financial services and life sciences verticals. Turnover in the latter shrank by just shy of 8% yoy (Q425: -3.4%).
Overall, however, it has been a positive start to FY26 for Infosys and one that compares favourably to those of its offshore peers which have published their results for the same period (see here). While remaining cautious regarding the outlook for the full year, the company has increased the bottom end of revenue growth guidance from flat to 1% with the top end held at 3%.
Posted by: Duncan Aitchison at 09:42
Tags:
results
offshore
IT+services
Recently published FY2024 results for Bango showed a business benefiting from scaling its platform offer – see Bango delivers strong FY24 with Digital Vending Machine growth. This morning’s H1 trading update from the Cambridge-based e-commerce platform provider reinforces this narrative with H1 2025 results suggesting that the Digital Vending Machine (DVM) platform is achieving meaningful scale, with active subscriptions doubling to 19.2m YoY. Momentum drove 21% Annual Recurring Revenue growth to $15.6m and Adjusted EBITDA up of over 60% to $6.5m.
The company secured seven new DVM customers in H1 with notable geographic expansion into South Korea, Japan, and India. Six of the top eight US telcos now use the platform, while Sirius XM's adoption for direct-to-consumer bundling suggests DVM's broader market opportunities.
While total revenue growth of 5% appears modest, the 15% increase in higher-margin DVM revenue and strong Net Revenue Retention of 108% indicate healthy fundamentals. The launch of an integrated Super Bundling platform with 116 content providers also positions Bango for continued expansion in the subscription space.
Posted by: Marc Hardwick at 09:39
Tags:
ecommerce
telco
trading update
Shares in IBM fell c.5% in after-hours trading despite most of the headline numbers exceeding expectations in yesterday’s Q2 results.
Indeed, looking at the numbers it’s hard to argue that IBM delivered anything other than a robust second quarter, with revenue climbing 8% to $17.0bn, driven primarily by accelerating AI adoption across its client base. The standout performance came from Infrastructure (+14%) and Software (+10%), while Consulting grew a modest 3%.
The company's generative AI book of business reached $7.5bn, underscoring IBM's positioning in the enterprise AI market. AI growth also fed through into significant margin expansion, with gross margins improving 200 basis points to 58.8% and operating margins reaching 18.8%.
Red Hat continues to be a growth engine, posting 16% revenue growth, while the mainframe business (IBM Z) surged 70% YoY. Free cash flow of $2.8bn in the quarter reflects operational discipline.
IBM looks well placed to capitalise on continuing AI-led transformation with management raising the FY free cash flow guidance above $13.5bn and now expecting constant currency revenue growth of 5%+. Indeed subscribers can read more about our assessment of IBM’s UK prospects in our recently published UK SITS Supplier Rankings 2025. So why is Wall Street taking a downer? Possibly something to do with the business not delivering above expectations in the software segment (its largest business) weighing on the stock after a strong recent rally. As such it’s a victim of very high expectations after its stock surged some 30% this year.
Overall, however, the results continue to validate the firm’s focus on hybrid cloud and AI, though Consulting's benign growth suggests continuing competitive pressures in services. A solid quarter that reinforces IBM's enterprise AI story.
Posted by: Marc Hardwick at 09:05
Tags:
results
After a bruising year in which we estimate that its UK financial services revenues suffered an estimated 17% decline to £1bn (see UK SITS Supplier Rankings 2025 | TechMarketView), Accenture's new five-year collaboration with NatWest Group comes at a welcome time for the firm's UK financial services business.
Accenture wasn't alone in struggling in the UK financial services sector last year—it proved challenging territory for many IT services providers, with Wipro down an estimated 11% and Cognizant sliding an estimated 8%, as weaker demand for consulting and solutions services hit the market.
The tie-up with NatWest and AWS sees the trio embarking on a comprehensive data and AI transformation across the bank's 20 million customer base—the type of transformational programme that plays to Accenture's strength and helps to validate its £2.4bn investment in AI capabilities.
The collaboration promises to deliver the "holy grail" of banking transformation: truly personalised customer experiences underpinned by real-time data analytics and AI-driven insights. This aligns with growing regulatory pressures around Consumer Duty compliance, where banks must demonstrate they're acting in customers' best interests—something that requires the kind of sophisticated data analytics and AI capabilities this partnership promises to deliver. NatWest's ambition to become a "simpler, more technology and data-driven bank" aligns with Accenture's Solutions.AI portfolio, and the firm's track record in customer experience transformation through its Song division.
The win comes against a challenging backdrop. Accenture's recent Q3 results (see Forward-looking concerns overshadow Accenture’s robust Q3 performance | TechMarketView) revealed healthy total revenue growth of 7% year-on-year. However, the company spooked investors with a significant miss on new bookings—down 7% to £15.5bn, some £1.4bn below analyst expectations. CEO Julie Sweet's comments about a slowdown in discretionary consulting contracts only added to shareholder concerns about future growth prospects.
Positively, the NatWest deal shows there's still appetite for major transformation programmes, even amid the broader market challenges. This aligns with our forecast that the financial services SITS market will grow at 6.3% CAGR to 2028, driven by core banking modernisation and regulatory pressures like Consumer Duty implementation.
Posted by: Georgina O'Toole at 09:00
Tags:
contract
cloud
banking
AI
data
CX
financial+services
contract award
SAP has delivered another quarter of robust cloud performance, with Q2 2025 (ended 30 June) cloud revenue climbing 28% year-over-year in constant currency to €5.13bn, accelerating from the 26% growth reported in Q1 (see SAP posts strong Q1 cloud growth).
Total revenue grew 12% ccy to €9.03bn, whilst Cloud ERP Suite revenue – the company's strategic focus area – jumped 34% ccy to €4.42bn. The company’s current cloud backlog expanded 28% ccy to €18.05bn, signalling continued momentum ahead.
The financial benefits of SAP's 2024 AI-focused transformation programme (see Double digit growth for SAP Q2 as AI-focused restructuring continues) are now flowing through emphatically – not just in terms of revenue growth, but also now profitability – with IFRS operating profit doubling to €2.46bn in Q2 compared with the same period last year (the non-IFRS metric grew 35% yoy ccy to €2.57bn). Operating cash flow was also up significantly – a 71% rise to €2.58bn.
CEO Christian Klein highlighted AI as a key differentiator, with SAP’s AI-powered assistant Joule becoming available “everywhere and for everything” alongside SAP Business Data Cloud as an AI accelerator.
Regional performance remained solid, with EMEA cloud revenue up 15%. Customer wins spanned industries, including GSK, Mercedes-AMG PETRONAS Formula One, and Bell Food Group taking the RISE with SAP journey to drive their end-to-end business transformations.
For the first half, cloud revenue grew 27% ccy to €10.12bn, keeping SAP on track to meet its full-year outlook of €21.6-21.9bn in cloud revenue (26-28% growth) and non-IFRS operating profit of €10.3-10.6bn. The sustained cloud acceleration and SAP’s margin expansion validate the company’s strategic pivot last year, positioning it strongly as enterprises increasingly embrace AI-powered transformation. However, notwithstanding these successes, CFO Dominik Asam injected a note of caution alongside the optimistic forward-looking assessment, alluding to “geopolitical developments and public sector trends” (we’ve seen longer decision cycles and project delays affect numerous suppliers in recent quarters) which could temper good fortune as the second half of the company’s fiscal year plays out.
Posted by: Craig Wentworth at 10:12
Tags:
results
growth
profitability
quarterlies
PwC UK has announced the launch of “Assurance for AI”, a suite of services which includes new formal independent assurance over relevant AI controls. The offering is described as complementary to, but distinct from, the firm’s existing advisory services. Assurance for AI will be delivered by multidisciplinary teams that combine technical knowledge of AI and expertise in audit, risk management, internal controls, attestation services, and external standards.
As both the enterprise-wide deployment of AI gathers pace and regulatory pressures on the domain increase, so a new ecosystem of assurance providers is emerging to validate, test, and certify these complex technologies. Unlike traditional software testing, AI systems require probabilistic rather than deterministic approaches, continuous monitoring for model drift, and sophisticated bias detection across protected attributes.
PwC is far from alone in identifying the significance of the opportunity which this segment represents. Its Big Four rivals have all developed offers to address this rapidly evolving space: Deloitte through its Algorithm Assurance Practice; EY via its AI Assurance Framework; and KPMG in the shape of its Trusted AI framework. The IT services heavyweights are also building on their traditional testing strengths to create capabilities designed to address the new needs created by AI systems. Examples of this include Infosys’s AI-First Testing platform. Wipro’s AssureNXT platform and TCS’s Smart Quality Engineering Platform.
In parallel, a new generation of pure-play AI assurance companies is emerging to address gaps left by traditional consulting approaches. These firms, such as Credo AI and Fiddler AI, offer purpose-built technology platforms specifically designed for AI governance, testing, and continuous monitoring, fundamentally changing how organisations approach AI validation.
The latest move by PwC is certainly timely and its provision for the first time of a formal independent assurance service ups the ante against its consulting competitors. It is unlikely that it will be too long before its rivals follow suit.
Posted by: Duncan Aitchison at 10:06
Tags:
AI
big+4
assurance
Second quarter results out last night from Temenos, the Swiss banking software vendor, showed the firm had a strong three months to the end of June.
The firm saw 24% growth in subscription and SaaS revenue for Q2, translating into growth of 12% for the whole of the first half. In Q1, Annual Recurring Revenue (ARR) was up 10% on a constant currency basis to $797m. In Q2, growth improved slightly, up 11% to $791m. It was also a good quarter for maintenance, largely due to strong sales of the Temenos premium maintenance offering. The performance at the overall top line helped to boost EBIT growth of 28% over Q2 in 2024. In all, the firm “significantly exceeded” the Q2 2025 guidance it issued back in April.
While there was “strong execution in a stable environment across the board”, management was “especially pleased” with the performance in Europe. For example, Temenos saw a number of new signings in the wealth space and good conversion of larger deals. It’s also been encouraging to see ongoing product advancement in AI, for example the development of a Microsoft Copilot-based financial crime prevention tool in collaboration with a “tier 1 European bank”.
Looking ahead, the company has upped full-year subscription and SaaS guidance to “at least 6%” growth from the previous 5-7% range. EBIT, however, has been notably raised from “at least 5%” to “at least 9%”. Solid execution and good progression against strategic objectives are both paying dividends.
Posted by: Kate Hanaghan at 10:00
Tags:
results
banking
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