Sopra Steria has raised its annual revenue growth target after demand for artificial intelligence, cybersecurity, sovereign technology, defence, and critical infrastructure accelerated during the first half.
The French technology and consulting group generated first half revenue of €2.96bn, an increase of 4.1%. Organic growth reached 3%, while underlying organic growth was 4.9% after excluding the conclusion of the SFT programme.
Underlying growth accelerated from 4.4% in the first quarter to 5.3% in the second. Operating margin increased to 9.6% from 9.2%, while net profit rose by 3% to €146.3m.
Free cash flow was negative at €143.6m for the half, reflecting working capital movements and the cash profile of the group’s contracts. Sopra Steria nevertheless increased its annual organic revenue expectations following the stronger underlying performance.
Rajesh Krishnamurthy, chief executive of Sopra Steria, said: “Generative and agentic AI, cybersecurity and digital sovereignty are durably reshaping our clients’ needs and creating new growth opportunities.”
Revenue from aeronautics increased by 12%, while defence, security, and space grew by 10%. France, which accounts for approximately 44% of group revenue, delivered organic growth of 7.1%. The UK operation recorded revenue of €454.1m and organic growth of 2.5%.
The figures reveal a widening gap within the European technology services market. General transformation programmes remain exposed to cautious budgets and lengthy approval cycles, whereas projects connected to resilience, security, regulation, defence, and strategic autonomy continue to attract investment.
Artificial intelligence sits across both areas. Many organisations are experimenting with generative tools, but production deployments require integration with core systems, reliable data, access controls, cybersecurity, and governance.
Those requirements direct spending towards larger programmes involving cloud infrastructure, enterprise architecture, and operational redesign. They also favour providers capable of combining consulting, integration, security, and managed services rather than supplying isolated software tools.
An AI trust gap continues to slow adoption among smaller companies, while Sopra Steria’s performance suggests that demand is strongest among customers with defined use cases, substantial technology estates, and regulatory or strategic reasons to proceed.
Agentic AI adds further complexity. Systems that can initiate tasks, use tools, or make decisions within defined boundaries require stronger controls than conventional productivity software.
Customers must determine which actions can be automated, how exceptions are handled, and who remains accountable when an output affects employees, operations, or customers. The need for those controls increases the value of advisory and integration work around the underlying technology.
Cybersecurity demand is also being reinforced by the expansion of AI and cloud services. More interconnected systems create additional attack surfaces, while the use of sensitive information in AI models raises the consequences of weak access management or poorly governed third party technology.
Digital sovereignty has become a larger procurement consideration across Europe. Governments and regulated industries are seeking greater control over where data is stored, which legal jurisdictions apply, and whether critical systems depend too heavily on a small number of non-European suppliers.
In practice, sovereignty projects often involve hybrid architectures, local cloud environments, contractual controls, encryption, and greater portability between services rather than the complete replacement of global technology providers.
Integrators can benefit because customers need technical, legal, security, and operational requirements to be reconciled within one architecture. The work is complicated, but it can produce longer and more defensible contracts than general consulting assignments.
Defence and aerospace add another source of demand. Higher European expenditure is creating opportunities in secure communications, intelligence systems, data platforms, simulation, logistics, and industrial operations.
These contracts often have long procurement cycles and demanding assurance requirements, but they can provide greater revenue visibility than discretionary technology work. They also require specialist employees who are already in limited supply.
Sopra Steria’s geographic performance reflects the value of public sector and strategic industry exposure. Growth in France was materially stronger than in some other markets, supported by sectors where digital programmes remain linked to government priorities or essential infrastructure.
The improvement in operating margin shows that higher activity is supporting profitability, although negative first half cash flow leaves working capital conversion under scrutiny. Technology services groups can report rising revenue while cash collection is delayed by project milestones, contract structures, or investment in delivery capacity.
The upgraded outlook rests on continued demand in protected areas rather than a uniform recovery across consulting. Sopra Steria will need to maintain specialist recruitment, project delivery, and margin discipline as competition increases for cybersecurity, AI, cloud, and defence expertise.
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