U.K.’s Bytes Technology stock plunged over 27%. Here’s why

Bytes Technology's shares plummeted over 27% on Wednesday after the company announced that its operating profit for the first half of fiscal 2026 would be lower than expected. The IT firm attributed the decline to delayed customer decisions and longer-than-expected adjustments from internal restructuring. Macroeconomic pressures have led to deferred customer decisions, particularly among corporates, in the first few months of the year. Bytes is transitioning from a generalist sales model to specialized, customer segment-focused teams, a shift that has taken longer than expected. Changes to Microsoft's enterprise agreement program have also weighed on the company's performance in the first half. The impact of these changes is more pronounced in the first half due to high levels of renewals in March and April. Bytes had previously posted an operating profit of 35.6 million pounds for the first half of fiscal 2025 and had expected double-digit gross profit growth and high single-digit operating profit growth in fiscal 2025-26. However, the company now expects gross profit for the first half of fiscal 2026 to be flat. Investors were caught off guard by the more cautious statement, which contrasts with the company's previous guidance. The stock fell to its lowest level since April 2023 before paring some losses.