Kainos chief Brendan Mooney says few clients run AI beyond pilots

Kainos, the Belfast-based IT services and software group, reported on 9 November that revenue from AI and data projects rose 40% to £28.5m in the six months to 30 September 2026. Presenting the interim results to analysts that morning, chief executive Brendan Mooney said few of the customers buying that work have taken it further than a trial.

“Customers continue to run proof of concepts and pilots that still dominates the work they’re undertaking, with very few organizations launching significant AI programs,” Mooney said.

“Customers have internal capability constraints and concerns over safety, security, cost and vendor lock-in,” he told the call. “These are hurdles to the wider spread adoption of AI.”

AI work is 18% of Digital Services revenue

The AI revenue sits in Digital Services, the division that builds custom software, which turned over £162.5m in the half. Kainos has delivered more than 475 AI and data projects for public sector, healthcare and commercial customers, 75 of them in the period, according to the results statement. Two further multi-million-pound AI contracts were awarded at the end of the half, Mooney said.

Kainos has also revised the figure it reported for the same six months of 2025, from £15.3m to £20.4m. A footnote says the earlier number “was previously understated”.

Actonomy signs four customers after July soft launch

Actonomy is a separate business that Kainos set up to move customers’ AI projects from pilot into live use. Ruth McGuinness, who previously headed AI operations at Kainos, is its chief executive, The Irish News reported when the business was announced on 21 September.

Mooney described the first four customers as “a specialist lender, a healthcare organization focused on dementia care, a water utility and a non-profit in the marine research environment”. The lender aims to reduce non-performing loans with it, Kainos says.

Its product, Actonomy Core, “provides data foundations, secure deployment, AI assurance and live service operations management”, Mooney said. The platform is built on Microsoft and Anthropic technology and includes Kainos’s own small language models for domain-specific tasks. Kainos says it reduces the time taken to deploy AI into production by up to 75%.

“It’s best to think of Actonomy as very much as early stage, lots of interest, lots of interesting conversations and a decent pipeline,” Mooney said. “But it’s only been operating for a few months.”

Mooney puts the engineering productivity gain at 20%

Kainos has deployed AI tools across its own workforce of 3,885 people. Mooney said the gains are most pronounced in engineering.

“We continue to believe that on the engineering side of our business, that 20% is the best way to think about the productivity gains we’re able to achieve,” he said.

In Workday Products, which sells software to more than 750 customers of the Workday finance and HR platform, Kainos reports that AI has “helped us accelerate product development and, in certain areas, deliver features that were previously impractical or uneconomic to develop”. Research and development spending in that division rose 33% to £11.4m. Its annual recurring revenue reached £96.0m, and Kainos expects it to pass £100m in the current quarter.

For Workday customers, Kainos is building AI agents for timesheet management, absence management and regulatory change tracking. It has run more than 200 sessions in recent months on the AI features built into Workday, and has begun applying what it calls “an AI-native way of working” to legacy system modernization for a small number of customers.

Contractor numbers more than double to 316

Group revenue grew 37% to £268.8m and adjusted pre-tax profit grew 30% to £41.7m. Digital Services revenue rose 57%, and Kainos had 316 contractors at the period end to staff that growth, up from 139 a year earlier, Mooney said. Group gross margin fell to 43.1% from 48.0%. Time-and-materials contracts now account for about 60% of group revenue, and 43% of Workday Services revenue came from fixed-fee projects, against 34% a year earlier.

“Margins for contractors are about half the margins we get on our own staff,” Richard McCann, chief financial officer and chief operating officer, told analysts.

Commercial-sector revenue in Digital Services fell to £4.9m from £6.4m. Kainos says it is “not currently targeting new opportunities” among commercial customers in that division and is “reviewing options for regrowing our commercial sector presence over time”. Actonomy’s first customers come from specialist lending, utilities, healthcare and academic research.

Kainos expects revenue and adjusted pre-tax profit to grow in the second half, in line with market expectations. It will pay an interim dividend of 10.4p a share on 11 December, and its provisional calendar lists a full-year trading update for 19 April 2027.