‘Mid-market was this year’s top performer’: Softcat reaches £3.62bn GII in FY25 results

Soaring numbers across all segments, a datacentre push and the successful Oakland integration have strengthened the company’s top line

London-based VAR Softcat has reported double digit growth in FY25, fuelled by an increased customer demand across all sectors.

The company’s GII rose 26.8 per cent to £3.62bn, up from £2.85bn the year prior.

This was driven by a 14.8 per cent increase in software sales, which climbed from £1.8bn to £2.1bn.

Services revenue went up 15.5 per cent, from £476.2m to £550.3m, while hardware sales soared 74.5 per cent, reaching £992.2m, compared with £568.5m in FY24.

This hardware spike was driven by datacentre solutions projects, Graham Charlton, Softcat’s CEO, tells CRN.

“The investments we've made in the design, the advisory, the architecture services, the relationships, and top accreditations we have with key vendors in that space, puts us in a position to do this kind of work.

“As datacentres get reengineered, and new datacentres spring up to handle AI workloads, there's some great opportunities out there.”

The VAR intends to repeat that feat in the future, even though numbers could slightly slow down.

“Some of those very large deals are more volatile, but they are out there the opportunities to keep helping customers and new customers building these large datacentre environments.

“But I think it will slow down; it's possible that we could deliver that kind of performance again, but a few of those really large deals with a couple of different customers will be hard to lap.”

Gross profit ramped up 18.3 per cent, from £417.8m to £494.3m.

Revenue went through a substantial 51.5 per cent increase, reaching £1.46bn (FY24: £962.6m).

Mid-market as top performer

The mid-market space was this year’s top performer, driven by demand for datacentre reengineering, although the company reportedly also saw double-digit growth across enterprise and public sector.

“Public sector towards the end of the year was a bit slower, as we saw some of the challenges the governments have with balancing the books.”

Beyond expanding its customers base by 1.6 per cent year-on-year, the company has also sold more to its existing clients, as gross profit went up 16.5 per cent per head.

“We've overperformed in the run rate and in the volume business we've got, and we've overperformed by having these large deals on top,” explains Charlton.

“The growth with existing customers is thanks to both doing more work for existing customers, and some of the new big deals we’ve got.”

‘M&A muscle’ and global expansion

Following the purchase of Oakland, the company stated that is has built its “M&A muscle”, as it “develops capabilities and experience that can support future strategic acquisitions.”

On the other hand, Charlton explains he hasn't really changed the way he thinks about buyouts.

“Opportunities could come in one of two broad segments.

“First, to add capabilities to our core business, like Oakland, where we're adding data services, engineering, data engineering, data consultancy, into what we can do.

“The second option that we have is, as we're getting pulled overseas by our customers, we could consolidate our operations geographically.”

Softcat now runs that Charlton describes as “truly global” operations, as it employs around 20 people in its US office in Virginia, and has another office in Singapore.

In addition to these, it has branches in locations such as Canada, the Netherlands, Germany, and out into the Middle East.

Internal changes

The company intends to continue investing in its own technology to develop further momentum moving forward, something it has been working on “for a good number of years already.”

“We implemented a new finance system,” says the CEO.

“Three or four years ago, we overhauled our own database architecture and implemented new integration layers for our technology.

“We’ve also put in a new service management system last year.

“Currently, we are replacing the sales system that we use; we're putting Microsoft Dynamics in so that our main sales operation system will be Microsoft Dynamics.

“We're also replacing our HR platform.”

The business has also increased its workforce by 7.3 per cent to scale its sales operation, and has invested in technical service roles, and in support operations through finance and legal as well.

Its headcount currently sits at 2,639 people.