Nigerian technology company CWG Plc — formerly known as Computer Warehouse Group and listed on the Nigerian Exchange — has released its financial results for the first half of 2026, reporting impressive revenue growth alongside a rising emphasis on the quality of that growth.

Total group revenue for the six months ending June 2026 rose 20.8% year on year to ₦44.4 billion. A significant driver of that growth was the IT Infrastructure Services segment, which surged 142.4%, climbing from ₦6.4 billion in the first half of 2025 to ₦15.5 billion in the same period of 2026. The company attributes the spike to major contracts won across the telecommunications, financial services, and public sector industries — the three customer groups that anchor CWG's core business.

The scale of the expansion is notable: the ₦15.5 billion generated from infrastructure in just six months accounts for 65% of the total revenue that segment recorded for the entirety of 2025, indicating both a robust inflow of contracts and the size of the projects undertaken.

On the profitability front, CWG reported profit after tax of ₦3.65 billion, a modest 2.4% increase over the ₦3.56 billion posted the previous year. The company also strengthened its balance sheet considerably, cutting debt from ₦4.6 billion at the end of 2025 to ₦6 million by June 2026 — an achievement that effectively eliminates a substantial borrowing obligation within six months and highlights the company's commitment to financial health.

Revenue up, margins squeezed

CWG's H1 2026 results show a pronounced contrast between revenue and profit: while revenue grew by more than 20%, profit barely increased. That disparity reflects the composition of the revenue CWG is generating. The bulk of it now comes from IT infrastructure contracts, which primarily involve selling hardware and physical technology products from well-known manufacturers such as Dell, Cisco, and HP. These transactions, known as OEM hardware reselling deals, can generate high sales figures but typically carry low profit margins, because a large portion of the revenue flows back to the original manufacturers as the cost of goods sold.

Software sales, by comparison, tend to offer much higher profit margins, yet CWG's software revenue actually declined 6.3% in H1 2026. With infrastructure contracts growing faster than software sales, the company's overall profit margins are being squeezed. Cost of sales rose 24.2% to ₦35.3 billion, causing gross margin to drop from 22.6% to 20.4%. In short, CWG is securing more business, but the new contracts are less profitable than its ideal expectations — not an alarming position, since infrastructure revenue remains valuable, but one that requires careful management to ensure a balanced profit structure moving into the second half of the year.

Forward-looking indicators

Two positive signs stand out. First, contract liabilities — money clients have already paid for services not yet delivered, such as software-as-a-service — increased to ₦4.1 billion. The company reads this deferred revenue as evidence that software is not disappearing and that the timing of its recognition is simply shifting. Second, project prepayments rose to ₦7.5 billion, suggesting CWG has a robust pipeline of ongoing work. Taken together, these two balances represent business already booked with clients that has yet to be recognized as revenue, making them useful indicators to track when the full-year results are published.

Record 2025 baseline

CWG entered 2026 on the back of record results from the previous year: ₦65.6 billion in revenue and ₦4.975 billion in profit after tax, marking its best performance in 20 years — although that record year coincided with operating cash flow turning negative. The H1 2026 figures indicate that this momentum is ongoing, even if profit growth is not keeping pace with revenue growth, and the near-absence of debt by June 2026 leaves the company with a cleaner balance sheet than it carried into the year. Even so, the divergence between top-line and bottom-line growth remains the central feature of the half-year report. The key question for the second half will be whether software margins can recover, leading to a more balanced earnings profile for CWG by the end of the year.

Related coverage: CWG Plc posts record ₦65.6bn revenue in 2025 but operating cash flow turns negative and CWG Plc's profit after tax grew by 87% YoY to ₦5.6 billion in 2025.