• Consolidated revenue of $9.7m, down 12% due to lower Axsym revenue
• Core business revenue increased 8.2% to $6.6m
• Restructure undertaken to reduce cost base and invest in stronger sales capability

SOCO Corporation Ltd (ASX:SOC), a leading Australian information technology services consultancy, has announced its results for the half-year ended 31 December 2025 ('1H FY26'). The company reported consolidated revenue of $9.7m, down 12% from the prior corresponding period (pcp: $11.0m), with growth in the core business offset by lower Axsym revenue due to delayed federal government projects. Core business revenue increased 8.2% to $6.6m (pcp: $6.1m), while Axsym revenue decreased 39% to $3.1m (pcp: $5.1m). The company has undertaken a restructure to reduce its cost base and invest in a stronger sales capability. This has resulted in the strongest first-half contracted sales result on record, alongside a strengthened and expanding sales pipeline that is expected to flow to booked revenue in the second half. Gross margin decreased to 20.1% (pcp: 25.5%), primarily due to a strategic engagement that included a material pass-through revenue component, though the underlying services gross margin remained steady at 28.3%. The company reported an underlying EBITDA of ($0.6m) and a statutory NPAT of ($5.9m), reflecting a non-cash goodwill impairment of $4.6m related to the Axsym acquisition. The company's strategic focus areas include disciplined go-to-market and sales execution, growth in recurring and managed services revenue, and continued investment in data, AI, security, and delivery efficiency. The company expects a materially stronger second-half performance, supported by a rightsized cost base, higher utilisation, and improved delivery momentum from major projects mobilising from January 2026.

Subject to market conditions and project timing, the company expects a materially stronger second half performance relative to the first half, supported by a rightsized cost base, higher utilisation and continued focus on delivery discipline and cash conversion.

Trading conditions improved toward the end of the half, and the company enters the second half of FY26 with improved visibility over revenue, a stronger contracted pipeline, and increasing utilisation as previously delayed projects mobilise. The company expects margin recovery in 2H FY26 through improved utilisation and reduced impact from a low-margin engagement.