Sparks - Kooth

Kooth’s H126 trading update is in line with expectations, with adjusted EBITDA expected at £5.0–5.4m against £1.6m in H125, implying a margin of around 17% versus 5% a year earlier. Revenue is expected to be £30.8m (H125: £32.1m), a 4% decline that reflects the planned tapering of California product development revenue and a £0.7m FX headwind, partially offset by first contributions from the new State of Michigan contract. Stripping out currency, the underlying top-line decline is closer to 2%. The margin step-up is attributed to strong California user engagement, against a prior-year comparative held back by accelerated investment in Kooth’s key areas of focus. Net cash stood at £23.1m at 30 June 2026 (H125: £15.3m), leaving the balance sheet unencumbered ahead of the stated ambition to extend the offer through acquisition and partnership.

Operationally, California remains the centre of the investment case. Now in year four of the contract, Soluna has exceeded its performance targets with 187k registrations by the end of June, and its impact has been independently validated by both the California Department of Health Care Services’ 2025 Impact Report and Northwestern University’s Lab for Scalable Mental Health. Soluna was also named as a core element of the Children and Youth Behavioral Health Initiative in Governor Newsom’s Legacy Report, and California’s balanced budget across 2026–27 and 2027–28 provides a more stable planning backdrop than the federal funding environment of the past year. In the UK, Kooth has launched an integrated employment and mental health pathfinder in the West Midlands and is rolling out Soluna by Kooth for the new school year. Interim results are due in September 2026.