Highlights

  • COSOL Limited (ASX:COS) released FY26 results following a period of Revenue and Margin pressure.
  • The company reported first-half FY26 revenue of A$49.6 million, down 14.1% year on year, with underlying EBITDA declining 57.0%.
  • COSOL implemented a cost reduction programme targeting approximately A$1 million in annualised savings.
  • OnPlan Recurring Revenue reached A$3.1 million, approximately double the level at acquisition.

COSOL Limited (ASX:COS) is entering FY27 focused on operational recovery, cost management and converting new customer opportunities into recurring revenue growth. The company continues providing technology-enabled asset management solutions across resources, energy, utilities, infrastructure and defence sectors.

What happened

COSOL released its FY26 full-year results on 19 August 2026 following a challenging first half period. The company provides asset management technology solutions through advisory services, operational support and proprietary software platforms.

The half-year results released on 25 February 2026 showed revenue of A$49.6 million for the six months ended 31 December 2025, down 14.1% compared with the prior corresponding period.

Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) declined 57.0% to A$3.5 million, while gross margin reduced to 28.8% from 31.5%.

Management attributed the decline to the completion of two major contracts, including one completed as planned and another terminated earlier than expected. The company also identified lower personnel utilisation and a softer sales pipeline as contributing factors.

Asset Management Services revenue declined by A$5.7 million, while Consulting revenue declined by A$2.5 million.

COSOL introduced a cost reduction programme targeting approximately A$1 million in annualised savings, restructured its Australian sales function and expanded Anthony Stokes’ responsibilities to include chief operating officer duties alongside his chief financial officer role.

The numbers investors need to know

The half-year results provided the latest detailed financial information ahead of the full-year update. During the first half of FY26, COSOL reported lower revenue and earnings as contract timing and utilisation levels affected operating performance.

The company has previously highlighted new digital and data services contracts expected to contribute during FY27.

COSOL’s recurring revenue platform OnPlan generated A$3.1 million in recurring revenue, approximately double the level at acquisition.

The company has also highlighted new customer opportunities involving QBuild, Horizon Power and a United States east-coast port authority.

The company’s previous financial performance included FY25 net profit of A$7.9 million, following a period of margin expansion.

Business outlook and key considerations

COSOL’s focus remains on restoring revenue growth, improving utilisation levels and increasing recurring revenue contribution. The company’s cost reduction programme and sales restructuring initiatives are designed to improve operational efficiency.

Future performance will depend on conversion of new contracts, customer retention, project delivery and stabilisation of margins across consulting and asset management services.

Key areas to monitor include FY27 trading performance, recurring revenue growth, contract wins and progress against cost-saving initiatives.

Bull case

COSOL continues operating across asset-intensive industries including resources, utilities, infrastructure and defence, where asset management requirements provide ongoing Demand opportunities.

The company’s OnPlan recurring revenue growth improves the earnings mix, while new customer engagements and digital service opportunities provide potential growth pathways.

Successful implementation of cost reduction measures and improved utilisation levels could support earnings recovery as new contracts contribute.

Bear case and risks

COSOL remains exposed to contract timing, customer concentration and utilisation levels across its services operations. The completion or early termination of major contracts has previously affected revenue and earnings performance.

The company’s acquisition-based growth strategy creates potential integration and Goodwill Impairment risks if acquired businesses do not meet expectations.

Additional risks include slower contract conversion, margin pressure, reliance on project-based revenue and limited visibility over the timing of future customer engagements.

What comes next

The next key milestones include further detail from the FY26 annual report, Appendix 4E, results presentation and investor briefing.

Investors will monitor FY27 trading updates, conversion of digital and data services opportunities into revenue, utilisation improvements, margin recovery and progress of the cost reduction programme.

Conclusion

COSOL Limited (ASX:COS) enters FY27 focused on improving operational performance following a period of revenue and margin pressure. The company retains recurring revenue through OnPlan, a broad industrial customer base and initiatives aimed at reducing costs.

The next stage of the turnaround will depend on contract conversion, improved utilisation, margin stabilisation and delivery of recurring revenue growth. These factors will determine the company’s ability to rebuild earnings performance.