Shares in ActiveOps (LON:AOM) plunged to a one-year low after the AIM-listed software firm warned FY28 results will be ‘significantly below’ market expectations. The Reading-based company blamed the profit warning on the loss of a major customer and lower new business activity in H1 FY27.
However ActiveOps, which provides decision intelligence software to customers across the banking, insurance, healthcare administration and business process outsourcing (BPO) sectors, expressed confidence in the size of the growth opportunity ahead. And the company stressed it remains ‘well capitalised, cash generative and debt free’.
Major customer walks away
ActiveOps’ AI-powered SaaS solutions help service operations make better decisions, faster. Unfortunately, the company has been notified by a major customer that it does not intend to renew its contract when it ends in March 2027.
‘Whilst notification of this non-renewal has only just been received and details are yet to be formally agreed, the board has adopted a prudent approach and removed the associated revenue in full from its FY28 expectations,’ said ActiveOps.
| Year to March | FY26A | FY27E | FY28E |
| Revenue (£m) | 45 | 48.3 | 52.6 |
| Net profit (£m) | (2.3) | 3.2 | 4.1 |
| EPS (p) | (0.5) | 4.1 | 5.3 |
Source: Stockopedia
The contract loss shaves some £3.8 million from the group’s FY28 revenue guidance. The board now expects FY28 revenue and adjusted EBITDA will be ‘significantly below market expectations’.
Analysts had been looking for FY28 revenue of between £50 million and £56.4 million and adjusted EBITDA in the £6.7 million to £9 million range.
H1 slowdown
The downgrade to FY28 guidance also reflects a slowdown in new business activity in the half to September 2026. While H1 revenue rose 21% to £25.3 million, performance was flattered by a one-off £1.5 million termination receipt related to an earlier customer loss.
Without it, growth was a more tepid 14% amid a year-on-year slowdown in customer implementations and new wins.
Nevertheless, ActiveOps maintained FY27 guidance. The market expects sales of between £47.4 million and £49.7 million and adjusted EBITDA in the £5 million to £6.4 million range.
What did the chairman say?
Richard Jeffery, executive chair, commented: ‘While the potential non-renewal by a major customer is a setback to our near term revenue growth, we remain strongly cash generative, with a robust balance sheet and a growing, global opportunity.’
Jeffery continued: ‘The need for organisations to measure productivity gains from AI is a compelling driver for our software and one which we are uniquely able to meet, given our deeply embedded position within the heart of the operations of our customers.’
There’s no glossing over the fact this is a bad day for ActiveOps, which has been forced to slash FY28 guidance.
We would avoid the shares for now given the potential for further downgrades. That said, today’s price reaction seems harsh to us. Keep in mind, ActiveOps continues to grow. And the AIM-listed firm benefits from an extensive global customer base, for whom its software delivers measurable returns on investment.
Furthermore, a balance sheet flush with almost £20 million in cash gives ActiveOps the financial strength to trade through short-term challenges.
