The Mid-Year Question in 2026
By the first week of June, a December year-end company has five months of actuals to compare against the plan set the previous November or December. Five months is enough to see whether the plan's underlying assumptions have held, whether the trajectory is on track, and whether the drivers that were expected to inflect have started to inflect.
The reforecast question breaks into two levels. At the tactical level: are we hitting revenue, gross margin, opex and cash against plan? At the strategic level: are the assumptions we used to build the plan still true? A tactical miss with intact assumptions is a surgical revision. A tactical miss with broken assumptions is a full re-plan. Confusing these two is where most mid-year reforecasts go wrong.
The Six-Question Test
Before touching the model, run through six questions. Three or more "no" answers mean a full re-plan; two or fewer mean surgical revision. The questions are:
- Is our new-logo acquisition rate within 15 per cent of plan? Growth is the most sensitive variable in most start-up plans. A 15 per cent miss on new logos usually means the underlying market or channel assumption was wrong, not that execution slipped.
- Is our gross retention rate within 2 percentage points of plan? Churn is a leading indicator of product-market fit. A 2-point miss on gross retention is a signal something has changed in customer perception of value.
- Is our gross margin within 3 percentage points of plan? Gross margin absorbs COGS, hosting, payment processing and support cost. A 3-point miss is usually a mix or unit-economic issue that will not self-correct in H2.
- Is our opex per employee within 10 per cent of plan? This surfaces hidden cost growth in software, tools and vendor sprawl. A 10 per cent miss indicates the operating model has changed.
- Are our top three planning assumptions still directionally correct? Rate environment, competitor pricing, regulatory posture, whatever specifically underpinned the plan. If two of the three have moved, the plan is stale.
- Is our cash runway within 90 days of the H1 plan projection? The single most important variable. A 90-day drift means every downstream decision (hiring, fundraising, capex) needs re-timing.
The Surgical Revision: What Changes and What Does Not
A surgical revision changes the numbers without touching the story. The underlying assumptions and strategic direction stay intact; you update H2 forecasts to reflect what H1 has told you. Three things change:
The Landing Forecast
Re-forecast the full year using H1 actuals and updated H2 projections. The landing forecast should show plan versus revised, with the variance explained by named drivers. Not by tone ("performance headwinds") but by specifics ("new-logo bookings ran 12 per cent below plan, driven by a slower ramp of the outbound SDR team hired in Q2").
The Cash Trajectory
Update the cash flow to reflect the landing forecast, including the timing of receivables and payables adjusted for the H1 pattern. If H1 revealed slower collections or faster payment demands from suppliers, that pattern needs to persist in the H2 view unless there is a named reason it will not.
The Hiring and Investment Schedule
Adjust the H2 hiring plan to reflect the landing forecast. This is the single most useful lever in a surgical revision because hiring pace is the fastest control variable a CFO has. Cutting or delaying a Q3 hiring cohort by six weeks materially changes the H2 cash burn without touching product or strategy.
What does not change in a surgical revision: the annual plan targets, the strategic priorities, the board narrative. The board sees a landing forecast that has moved, not a plan that has changed.
The Full Re-Plan: What Actually Needs to Move
A full re-plan is warranted when the assumptions underpinning the original plan have broken. This is a very different exercise, and the CFO has to be honest with themselves and with the board about what is really happening. Three signals typically appear together and trigger a full re-plan:
- Growth model shift. The originally planned growth engine (self-serve, outbound sales, product-led) is not delivering, and the underlying reason is structural (competitor, market saturation, product gap) rather than executional.
- Unit economic degradation. Gross margin, CAC payback, or LTV/CAC has drifted in a direction that does not self-correct with time.
- Cash runway compression. Runway has moved from comfortable (18+ months) to constrained (12 or under) and requires a fundraising decision within H2.
A full re-plan takes four to six weeks and touches every functional plan (product, GTM, hiring, capex). It is disruptive, but the alternative — a surgical revision that papers over stale assumptions — creates a worse conversation with the board at the year-end pack when the miss compounds.
"The board's tolerance for a mid-year re-plan is much higher than most CFOs assume. What erodes credibility is not the re-plan itself; it is the surgical revision that quietly incorporates broken assumptions, and the board discovers three months later that the underlying business shifted in Q2 and no-one said so."
Communicating the Shifted Plan
How the reforecast is delivered to the board matters as much as the reforecast itself. Three patterns work.
Frame the Change Before Presenting the Numbers
Open the board conversation with the "why", not the numbers. What have we learned in H1 that changes what we think about the year? This might be two paragraphs. Only then present the revised numbers. Boards that see the numbers first without the framing anchor on the delta and spend the meeting relitigating the plan; boards that see the framing first understand the numbers as a consequence of what has changed.
Present a Bracketed View, Not a Point Estimate
A reforecast presented as a single new number invites the board to treat it as the new plan. A reforecast presented as a bracket (revised base case, plus a downside and upside) invites the board to engage with the assumptions behind the bracket. The revised base case then becomes a working forecast rather than a new commitment.
Name the Reversion Trigger
State explicitly what would cause H2 performance to revert toward the original plan (or fall further behind). This turns the reforecast from a static number into a live plan the board can track against monthly. "If Q3 outbound bookings return to the H1 monthly average of 24, we land at £12.5m ARR; if they fall further to 18, we land at £10.8m." The board now has a metric to watch and a decision trigger.
Timing: Why Early June Beats Late July
The reforecast conversation should happen before the H1 board meeting, not at it. The reason is that a reforecast delivered at the H1 board meeting looks like reactive management: something surprised us in H1 and we are reporting the news. A reforecast delivered before the meeting, and integrated into the meeting materials, looks like proactive management: we have already thought about H2 and here is the revised plan.
The practical calendar for a December year-end company is:
Key Takeaways
- Mid-year reforecasting for December year-ends should start on 3 June, not July. Delivering the reforecast into the H1 board pack, not at the meeting, is what proactive management looks like.
- Run the six-question test before touching the model. Three or more "no" answers mean the assumptions are stale and a full re-plan is warranted; two or fewer means a surgical revision.
- A surgical revision updates the landing forecast, the cash trajectory, and the hiring schedule. It does not change the annual plan targets or the strategic narrative.
- A full re-plan is warranted when the growth model has shifted, unit economics have degraded, or cash runway has compressed. It takes four to six weeks and touches every functional plan.
- Communicate the reforecast by framing the change first, presenting a bracketed view rather than a point estimate, and naming a reversion trigger the board can track against.
- Every downward revision needs a paired list of what management is doing differently to protect it. Otherwise the reforecast becomes the new floor, not the new working number.
- The board's tolerance for a mid-year re-plan is materially higher than most CFOs assume. What erodes credibility is a surgical revision that papers over broken assumptions.