Glasgow-based Iomart Group saw its revenues surge by 25% over the first half of this year, according to the cloud provider’s latest trading update, reaching approximately £77.7 million.

The firm attributed the jump in revenue to the £21.7 million gained via its acquisition of Atech Cloud, a deal which Iomart closed last year in an effort to deepen its capabilities in Microsoft Azure infrastructure.

While the Atech acquisition boosted iomart’s bottom line, its core business saw a £6 million revenue dip, which the firm said was a hangover from prior-year customer churn that weakened its monthly run rate heading into this financial year.

However, Iomart reported that order bookings remain strong, matching last year’s elevated levels, and improved renewal rates have delivered consistently positive net bookings, supporting the Board’s expectation of a stronger second half, a positive outlook strengthened by £4 million in annualised cost savings. 

Meanwhile, Microsoft-linked revenue has surged to 30% of the Group total, up from 7% in just two years, which the firm said underscored the growing demand for its expertise in a high-growth market.

While adjusted EBITDA is expected to dip to £12.7 million from £17 million compared to the first half of last year, Iomart stressed that, though margins from its core operations might be lower, this reflects a deliberate move away from traditional private cloud and data centre services and toward these high-growth Microsoft services.

With H2 results set for release later next month (November 26th), Iomart shares climbed 13% on Thursday to close at 24.50 pence in London.

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Iomart’s shift away from traditional private cloud services is at odds with trends observed in numerous reports from across the industry. 

Barclays’ 2024 CIO survey revealed that 83% of enterprises plan to shift workloads from public cloud to private/on-prem, while a report from Citrix last year found that 94% of IT leaders have been involved with a cloud repatriation project in the last three years. 

Another recent survey of UK IT leaders by Illuminas found that more than half (57%) identified deploying new workloads in private cloud as their top priority for the next three years, with a third having already done so.