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Published on
August 28, 2025
5 min read
UK Firm Softcat Raises Annual Profit Growth Forecast for the 3rd Time
UK-based tech company Softcat has raised its annual profit forecast. According to Yahoo Finance, this is the third time that the IT firm has raised its forecast in six months. Softcat’s six-month growth is driven by the conversion of larger solution projects in Q4.
Softcat Expected Mid-Teens Growth in 2025
Softcat, which is a tech solutions and services reseller, said activity in the fourth quarter was strong, supported by “further conversion of larger solution projects.” The company forecasts mid-teens growth in operating profit in 2025, which is slightly higher than the low-teen percentage growth estimation issued in May 2025.
The UK tech firm rewarded investors with an increase in guidance for the 2025 fiscal year. Shares of the company, which had drifted from a high of about £19 in late June to a low of £15.55 last week, rose 2.3% to reach the £16 mark. The Softcat shares rise on the FTSE mid-cap index pushed the stock to the top gainers list.
Corporate Spending Effect
The IT firm continues to benefit from the shift in corporate spending as increased corporate investment in AI and automation drives demand for its services. These factors enable the Softcat to sustain growth beyond one-off projects or recurring ones. In the 2026 fiscal year, The IT firm projects single-digit growth in its operating profit.
Additionally, Softcat said it will remain highly cash-generative, with its cash conversion expected to range between 85% and 95%. Softcat raises its profit projections months after NVIDIA CEO Jensen Huang criticized UK AI readiness.
While announcing the AI Sandbox partnership between UK regulator, Financial Conduct Authority (FCA) and NVIDIA, Huang said the country does not have the computing infrastructure needed to deliver its AI research base. Huang said that the UK is an ‘incredible place to invest’ and acknowledged Starmer’s plan to grow Britain’s computing capabilities 20-fold and offer $1.36 billion in investment.
Analysts Profit Projections
Softcat is expected to report preliminary annual results on October 22, 2025. Analysts expect Softcat to report operating profit of up to £174.2 million in 2025. The operating profit is expected to grow to £188.9 million in the fiscal 2026. In 2024, the UK IT firm reported £154.1 million in operating profit.
Shore Capital analyst Martin O’Sullivan said Softcat’s latest profit growth forecast places its 2025 earnings above the company’s compiled consensus. This means ‘the quantum of the upgrade is fairly small (around 25%) but very welcome nonetheless’.
Further, O’Sullivan projects a 32% growth in Softcat’s earnings per share from July 2024 to July 2027. This represents a 10% annual growth rate. According to him, this growth will be driven by the company’s consistent gains in market share and exposure to structural drivers like wider AI adoption and the early stages of the laptop PC refresh cycle.
‘We view Softcat as a high-quality, long-duration compounder in the UK tech space, and we continue to see meaningful upside over time,’ O’Sullivan says.
