Key facts
- QinetiQ US brings around 800 skilled colleagues to Serco Inc., whose current workforce is around 10,000 people, translating to approximately one-fifth of Serco Group's global workforce.
- QinetiQ shares were down 2.0 percent at 512.50 pence each in London, while Serco was up 1.3 percent to 289.60 pence.
- Statutory results included GBP175 million in non-cash charges relating to impairment of the U.S. business, including a GBP166.4 million goodwill impairment charge.
- QinetiQ left its full-year outlook unchanged, targeting revenue growth of 3 to 5 percent and an operating margin of 11.0 to 11.5 percent.
Serco reached an agreement on Nov. 12, 2026 to purchase QinetiQ’s American operations for $292 million, growing its military space services work in the United States.
QinetiQ US’s defense and space portfolio moves to Serco under the deal. The package includes a technical services agreement with the Space Development Agency. That contract runs for five years through 2028. QinetiQ US backs the agency’s Proliferated Warfighter Space Architecture through a five-year, $224 million systems engineering and technical assistance deal won in 2023.
The work spans acquisition, launch and operations.
Serco’s purchase marks its second U.S. military space deal in under two years. The company bought a Northrop Grumman unit in May 2025. That unit handled mission training and software for satellite ground networks. The earlier transaction totaled $327 million.
For QinetiQ, the deal marks a strategic retreat from its American expansion push. The move comes four years after QinetiQ paid $590 million to acquire Avantus Federal in 2022. QinetiQ had previously sold its American services business to Vencore for $165 million in 2014. The company kept a product unit that included robotic systems.
QinetiQ bought Avantus Federal in 2022. The purchase supported a strategy centered around AUKUS. Later, the company sold its American federal IT services division to V2X during the fall of 2025. The American business represented 15 percent of QinetiQ’s overall revenue profile and faced challenges tied to the Trump administration’s scrutiny of government services contracts and other market headwinds.
Completion is expected in the first quarter of 2027. Adding QinetiQ US makes Serco Inc. a nearly $2.5 billion organization. Serco Inc. is based in Herndon, Virginia. The company has approximately 10,000 employees and recorded $2 billion in annual revenue before the acquisition.
QinetiQ US adds about 800 skilled colleagues to Serco Inc., which currently employs around 10,000 people. That figure equals roughly one-fifth of Serco Group’s global workforce. Barbara Supplee took over as Serco’s North America chief executive less than two months before the announcement. She said, “Serco Inc. is a trusted name for many of the most visible and crucial missions within the United States and Canada“.
A pretax loss of GBP86.8 million marked QinetiQ’s half-year that ended September 30, 2026. The result compares with a GBP57.3 million profit in the previous year. Statutory results carried GBP175 million in non-cash charges related to U.S. business impairment. A GBP166.4 million goodwill impairment charge made up part of that total.
On an underlying basis, pretax profit reached GBP114.4 million, up 11 percent from GBP102.2 million. Underlying earnings per share stood at 16.8 pence, compared with 14.2 pence. Basic loss per share came to 21.6 pence for the half-year, versus a profit of 7.1 pence a year earlier.
Organic revenue growth reached 3 percent, or 918.2 million pounds, for the six months ended September 30, 2026. Excluding non-cash charges, revenue rose 2.6 percent to GBP923 million from GBP900 million. Order intake increased 9.1 percent and reached GBP771 million, compared with GBP707 million previously.
QinetiQ raised its interim dividend by 33 percent, moving the payout to 4 pence per share from 3 pence. The company also plans to return roughly GBP200 million of sale proceeds to shareholders through added share buybacks once the sale completes. Serco’s current share buyback program, raised to GBP150 million in August and set to finish in December, will continue as planned.
London trading saw QinetiQ shares fall around the time of the announcement as one source reported the stock down 2.0 percent at 512.50 pence. Another put the shares at 513.00 pence on the LSE. That represented a drop of 1.91 percent. Serco shares rose 1.3 percent to 289.60 pence.
Serco expects the deal to add to underlying earnings per share in 2028, the first full year of ownership, and forecasts cost synergies totaling at least USD3 million by 2028. Serco Inc. touts pro forma revenue of $2.5 billion for 2027, equal to one-third of global sales and half of the parent company’s profit profile. QinetiQ US should add $370 million in revenue and $21 million in operating profit to Serco Inc. in 2027.
QinetiQ kept its full-year outlook unchanged, targeting revenue growth of 3 to 5 percent and an operating margin of 11.0 to 11.5 percent. It targets EPS growth of 8 to 10 percent and more than GBP550 million in free cash flow across financial 2027 to 2029. The company will increase spending on digital and AI technology and on its infrastructure, a commitment that accompanies the return of most sale proceeds to shareholders and planned share buyback increases for financial 2028 and 2029.
Nelson Mullins, Prosperity, Bass Berry, Renaissance Strategic Advisors, and RBC Capital Markets advised on the deal. Both Serco Inc. and QinetiQ US relied on these advisors for the transaction. QinetiQ repeated its full-year guidance alongside the announcement, and said the sale offers the best route to realize value for all stakeholders. The agreement resulted from a strategic review of its U.S. business that QinetiQ first announced in May 2026.
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