Bytes Technology Group flags delayed customer spend in new update

The company expects “normalised growth” in H2

Bytes Technology Group has highlighted “some deferral of customer buying decisions” in a profit warning but expects to bounce back in the second half of the year.

Trading throughout the first months of the year was impacted by a challenging macroeconomic environment, leading to some deferral of customer buying decisions, particularly in the corporate sector.

The group’s FY25 results indicated an evolved corporate sales division, shifting from a generalist model to specialised, customer-segment-focused teams.

"In recent weeks, we've navigated a more challenging macro environment, compounded by the near-term effect of transforming our corporate sales team,” said Bytes CEO Sam Mudd.

The LSE-listed firm stated that while this transition has resulted in a longer than expected readjustment period, it positions the business to deliver “more relevant solutions” and drive sustainable services annuity income growth during H2 (ending 28 February 2026).

“While this has affected trading, our value proposition remains strong. We're seeing continued engagement, a healthy pipeline and remain confident that as these sales team changes bed in, we will be a stronger business, better aligned to meeting our customer needs and drive sustainable growth,” Mudd added.

Another impacting factor to Bytes’ business has been Microsoft’s changes to its enterprise incentives, which has mainly affected its first half of the year due to high levels of renewals in March and April around the public sector year end and June around Microsoft's year end.

Bytes noted that the benefit from services growth, where profit is spread over the contract term, builds up across the whole year.

Bytes now expects gross profit to be at a similar level to last year and operating profit marginally lower in H1.

Meanwhile the second half is forecast to see more normalised growth in both metrics.