FY26 Q1 Trading Update
SThree plc reported a stable first quarter for FY26, with group net fees down 8% year-on-year to £71.7 million, reflecting continued stabilization and an improvement on the prior year's decline rate, supported by growth in the USA and Japan. Contract net fees decreased by 10% to £59.8 million, while permanent placements remained flat at £11.9 million. The contractor order book stands at £152 million, and the company maintains a robust balance sheet with net cash of £51 million. SThree reiterated its full-year profit before tax expectation of approximately £10 million and has launched a share buyback program of up to £20 million.
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SThree plc ("SThree" or the "Group"), the global STEM workforce consultancy, today issues a trading update covering the period 1 December 2025 to 28 February 2026.
Q1 Highlights
| · | Group net fees down 8% YoY (1) , reflecting continued stabilisation, supported by ongoing growth in the USA and Japan, and a significant improvement on the prior-year rate of decline. |
| · | Key contract renewal period concluded and new business activity broadly consistent year-on-year, with both performing in line with expectations. |
| · | Contract (83% of net fees) declined 10% YoY, whilst Permanent was flat YoY. |
| · | Contractor order book (2) of £152 million (down 7% YoY) continues to represent sector-leading visibility with the equivalent of circa five months' net fees. |
| · | Robust balance sheet with net cash of £51 million at 28 February 2026 (28 February 2025: £45 million). |
| · | Share buyback programme of up to £20 million launched in February, with £1.6 million purchased as at 16 March 2026. |
| · | FY26 cost optimisation programme progressing as planned, with costs to deliver weighted to H1 and savings expected from H2. |
| · | Performance for FY26 expected to be in line with the previously announced c.£10 million PBT guidance (3) . |
Timo Lehne, Chief Executive, commented:
"Trading in the first quarter of FY26 has started in line with expectations, with continued stability across our business and encouraging momentum in select markets, notably the USA and Japan. New business activity was consistent with the prior year, which is particularly encouraging given a lower sales headcount, demonstrating improved productivity and operational efficiency. This performance was achieved against a backdrop of ongoing macroeconomic volatility, including geopolitical uncertainty and rapid technological change, which continues to influence business priorities and investment decisions.
As workforce needs evolve, clients are increasingly seeking partners capable of managing the growing complexity of workforce solutions, a shift heightened by advances in AI. This trend is strengthening alignment with our proposition and is reflected in the resilience of the Employed Contractor Model (ECM), as organisations prioritise scalable, end‑to‑end workforce management over transactional hiring.
Our proposition is aligned to long‑term STEM workforce demand and is supported by a strong balance sheet and a scalable operating platform, with a unified digital and data backbone that enables us to innovate and deploy new technology at pace. Whilst remaining cognisant of the macro environment, we look ahead with cautious optimism."
Business performance highlights
Group net fees were down 8% YoY, with trading conditions remaining largely unchanged from the previous quarter. Contract net fees declined 10% YoY. New placement activity was broadly stable year-on-year and in line with expectations, despite a mid-teens percentage reduction in sales headcount. This reflects a strong improvement in productivity compared with the prior year, supported by the new technology platform. Contract extensions also continued to show resilience through the key renewal period and delivered as expected. The USA was a notable highlight in the quarter, with Contract net fees up 13% YoY, partially offsetting a weaker performance in the Netherlands.
Our Permanent business was flat YoY, supported by a strong performance from Japan. New placement activity was also broadly stable year-on-year.
Within our skill verticals, Engineering declined 5% YoY, although the Energy segment continued to grow, up 8%, driven by strong demand for roles in the USA. Life Sciences net fees were down 10% YoY, as strong growth in Japan only partially offset reduced demand across our other major markets. Technology saw a decline of 14% YoY, reflecting soft demand for roles, particularly in the Netherlands and Germany.
Among the Group's three largest markets, which accounted for 73% of net fees, growth in the USA was underpinned by strong demand for skills in Technology and Energy. In Germany, performance was largely driven by demand for Technology skills. In the Netherlands, which sustained positive performance for longer than our other larger countries, results continue to be compared against strong prior-year comparatives, particularly in its two largest skill verticals, Technology and Engineering.
Group period end headcount was down 4% from the end of the last financial year attributable to the careful management of natural churn, whilst being highly selective about where we choose to hire, and the realisation of cost optimisation actions.
| Q1 | Q1 | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | |
|---|---|---|---|---|---|---|---|
| Net fees | 2026 | 2025 | YoY (1) | YoY (1) | YoY (1) | YoY (1) | YoY (1) |
| Contract | £59.8m | £65.8m | -10% | -9% | -13% | -13% | -15% |
| Permanent | £11.9m | £12.6m | 0% | -2% | -5% | -13% | -13% |
| GROUP | £71.7m | £78.4m | -8% | -8% | -12% | -13% | -15% |
| Regions | |||||||
| DACH (4) | £23.7m | £26.2m | -13% | -14% | -21% | -16% | -14% |
| USA | £19.5m | £19.4m | 8% | 8% | 17% | 0% | -9% |
| Netherlands (incl. Spain) (5) | £13.0m | £16.2m | -23% | -12% | -31% | -24% | -16% |
| Rest of Europe (6) | £11.1m | £12.6m | -14% | -15% | -16% | -17% | -18% |
| Middle East & Asia (7) | £4.4m | £4.1m | 27% | 7% | 22% | 9% | -26% |
| GROUP | £71.7m | £78.4m | -8% | -8% | -12% | -13% | -15% |
| Top five countries | |||||||
| Germany | £21.5m | £23.1m | -11% | -13% | -21% | -14% | -13% |
| USA | £19.5m | £19.4m | 8% | 8% | 17% | 0% | -9% |
| Netherlands | £11.0m | £14.6m | -28% | -17% | -35% | -26% | -18% |
| UK | £5.8m | £6.9m | -17% | -26% | -27% | -27% | -30% |
| Japan | £3.3m | £2.3m | 57% | 33% | 20% | 34% | -7% |
| ROW (8) | £10.6m | £12.1m | -14% | -7% | -1% | -13% | -12% |
| Group | £71.7m | £78.4m | -8% | -8% | -12% | -13% | -15% |
| Service mix | Q1 2026 | Q1 2025 | |||||
| Contract | 83% | 84% | |||||
| Permanent | 17% | 16% | |||||
| Skills mix | Q1 2026 | Q1 2025 | |||||
| Technology | 44% | 46% | |||||
| Engineering | 30% | 30% | |||||
| Life Sciences | 16% | 17% | |||||
| Other | 10% | 7% | |||||
- All YoY growth rates expressed at constant currency.
- The contractor order book represents the value of net fees until contractual end dates, assuming all contractual hours are worked.
- As guided on 16 September 2025, the Board expects FY26 profit before tax to be c.£10 million.
- DACH - Germany, Austria and Switzerland.
- Netherlands (incl. Spain) - Netherlands and Spain, which is managed from the Netherlands.
- Rest of Europe - UK, Belgium, France.
- Middle East & Asia - Japan and UAE.
- ROW - All other countries we operate in.
Analyst conference call
SThree is hosting a conference call for analysts and investors today at 8.30am to discuss the FY26 Q1 Trading Update. If you would like to register for the conference call, please contact SThree@almastrategic.com.
The Group will issue its trading update for the six months ended 31 May 2026 on 16 June 2026.
Outpace tomorrow, together
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