UK's S4 Capital 2025 revenue falls 11% as tech clients cut spending

S4 Capital

24/03/2026 07:09

Overview

UK digital ad agency's 2025 revenue fell 11% as client caution persisted, especially among tech clients

Operational EBITDA declined 7.5%, but margin improved to 12.1% due to cost controls

Company cut net debt and proposes 10% higher final dividend for 2025

Outlook

S4 Capital expects 2026 like-for-like net revenue to be slightly below 2025

Company targets 2026 operational EBITDA margin to increase by at least 100 basis points

S4 Capital targets 2026 year-end net debt between £60 mln and £90 mln

Result Drivers

TECH CLIENT CAUTION - Co said net revenue decline was driven by ongoing client caution, especially among technology clients shifting spend to AI infrastructure and away from marketing

COST MANAGEMENT - Improved operational EBITDA margin attributed to disciplined cost management, including headcount reduction and tight control of discretionary spending

NEW BUSINESS WINS - Second-half performance supported by new client wins and expanded relationships, particularly in AI-driven transformation work

Company press release: ID:nRSX7779Xa

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
FY Revenue
GBP 754.80 mln
FY Adjusted EBITDA
GBP 81.20 mln
FY Adjusted EBIT
GBP 74 mln
FY Adjusted EBITDA Margin
12.10%
FY Basic EPS
-GBP 0.04
FY Billings
GBP 1.91 bln
FY Dividend
GBP 0.01
FY EBIT
GBP 2.70 mln


Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the advertising & marketing peer group is "buy."

Wall Street's median 12-month price target for S4 Capital PLC is GBp25.50, about 24.7% above its March 23 closing price of GBp20.45

The stock recently traded at 4 times the next 12-month earnings vs. a P/E of 4 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)