Octopus Energy has seen a sharp fall in annual profit as it spent money on bringing in millions more customers, nearly doubling its workforce and installing renewable energy sources like solar panels.
Octopus’s customer base grew to 7.3 million across the UK during the year to April 2024, overtaking British Gas as the largest energy supplier in the country.
According to research group Cornwall Insights, it has grown its market share to just under a quarter of the UK’s retail energy market.
The sharp increase in customers was partly because it bought Shell’s retail energy arm, bringing 1.3 million more accounts onto its books in December 2023.
Octopus’s founder, Greg Jackson, has previously attributed its rapid growth to its proprietary tech platform, called Kraken, which allows it to monitor customers’ energy usage in real time and log their customer service phone calls, among other things.
The platform has been licensed to other energy companies, including rivals EON and EDF, and grew to 51 million accounts on its system, up from 32 million the year before.
Octopus said its international customer base tripled during the year to 1.2 million, while it nearly doubled its staff numbers to 8,500, up from 4,800 the previous year.
But the fast growth prompted a nearly three-quarters fall in pre-tax profit to £77.6 million over the 12-month period, down from £283 million the previous year.
It was its second consecutive year of profitability since it was founded a decade ago.
Part of the drop was down to the rapid expansion in staff and customer numbers, the company said, while it also spent money on installing clean energy appliances at customers’ homes.
The group made 744,000 installations of smart meters, heat pumps, solar panels and batteries in the UK.
And Octopus also spent £74 million on keeping its standard energy tariff below the energy price cap, as well as on its vulnerable customer bills support scheme and providing free electric blankets.
Revenue was £12.4 billion, down from about £12.5 billion the previous year, marking a more stable year of income after turnover more than tripled from £4 billion the year before.
Mr Jackson said the company had “absorbed millions of pounds” in energy costs to help customers during the energy crisis, calling the model “sustainable, responsible capitalism”.
He added: “At the same time, we’ve continued our rapid expansion in international markets, low carbon technologies like EVs and heat pumps, and building new generation.
“Octopus shows what’s possible with investors focused on the long term, rather than short-term profit maximisation.”
