Shearwater Group (AIM:SWG) now expects revenue of approximately £42m for the year to 30 June, ahead of market expectations of £35.5m.
Adjusted EBITDA is expected to reach £2.5m, also above the £2.4m the company identifies as current market expectations.
The cybersecurity, advisory and managed security services group attributed the beat to strong second-half trading, continued growth in its Services segment and momentum from previously announced contract wins.
On an annualised basis, revenue is expected to rise 33% and adjusted EBITDA 41%, against a prior year that covered a 15-month period with revenue of £39.5m and adjusted EBITDA of £2.2m.
That builds on FY25, which delivered annualised growth of 29% in revenue and 91% in adjusted EBITDA.
Net cash stood at £5.6m at period end, up from £5.1m the prior year.
The board plans to seek shareholder approval at a General Meeting for a reallocation of capital between reserves, which would give it flexibility to buy back shares or pay a dividend.
"We are delighted to have delivered a second consecutive year of strong trading performance, achieving further growth in both revenue and EBITDA and building on the momentum established in FY25," said chief executive Phil Higgins.
Higgins said the group's reputation and team capability position it well to capitalise on rising demand for cybersecurity services amid increasingly sophisticated threats facing public and private sector organisations.
The group said it enters FY27 with positive momentum and a strong pipeline of opportunities.
News Intelligence what this means for the company
Shearwater Group has upgraded FY26 guidance to £42m revenue (18% ahead of consensus at £35.5m) and £2.5m adjusted EBITDA (4% ahead of £2.4m consensus), driven by strong H2 trading and momentum from contract wins. This marks a second consecutive year of double-digit growth—annualised revenue up 33% and EBITDA up 41%—building on FY26's material recognition of a £25m telecoms contract extension, and the company enters FY27 with positive momentum and a strong pipeline.
The upgrade confirms execution on large contract wins and sustained momentum in managed security services demand, though the company faces concentration of near-term revenue in a small number of large programmes and execution risk in deploying resilient hardware platforms. The board's plan to seek shareholder approval for capital reallocation signals confidence in cash generation and optionality for returns, with net cash of £5.6m providing a modest buffer relative to the £42m revenue run-rate.
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