Bytes keeps afloat thanks to recurring customer base in H1 results

The firm was impacted by internal and industry changes over the past six months

Surrey-based VAR Bytes Technology Group has published its interim H1 FY26 results, sharing gross invoiced income (GII) on the up as existing customers continued to invest in their IT needs.

This year, GII increased 9.1 per cent to reach £1.34bn, compared to £1.23bn at the same time last year.

This was driven by a rise in both software (8.9 per cent) and services (15.1 per cent).

Revenue reached £108.1m, a 2.5 per cent growth from £105.5m the year prior.

Gross profit edged up 0.4 per cent, from £82.1m to £82.4m.

Public sector gross profit rose 1.6 per cent, impacted by Microsoft's partner incentive changes.

On the other hand, corporate sector, which adjusted to Bytes’ sales structure launched at the start of the year, was down 0.6 per cent.

The corporate sales structure has now reportedly settled.

Software gross profit was also down 3.5 per cent, partly due to a 40 per cent rise in services, in line with the business’ strategy.

Existing customers, those that already traded with the company in the previous year, contributed to 98 per cent of Bytes’ gross profit.

Impacted by higher headcount, salary, and national insurance costs, operating profit fell seven per cent, from £36.7m to £33.1m.

It was partly mitigated by lower variable remuneration.

The organisation’s headcount rose 12 per cent year-on-year to 1,266, and up 1.7 per cent since the end of February 2025.

"We delivered a resilient performance, building positive momentum through the period as we settled into our new corporate sales structure,” said Sam Mudd, CEO of Bytes.

“Despite the challenging economic climate, and our internal and industry changes over the past six months, we have maintained our share of wallet amongst our existing customers as they continued to invest in their IT needs and we have continued to expand our client base in both the public and corporate sectors.”

She also highlighted high retention across both the firm’s sales team and customer base.

Looking forward

Despite results that were neither fish nor fowl, the organisation said it remains confident of delivering a full-year outcome within the range of market expectations.

It sees opportunities in cloud computing, cybersecurity, and AI likely supporting its performances for the rest of the financial year.

While the VAR has reportedly started H2 FY26 well with a strong pipeline, it remains mindful that comparatives will be impacted by its strong trading performance in the last few months.

The British VAR ranks number three in CRN’s Top VARs list.